Mjd 12 by Brother Roger

LEADING DEVELOPER IN HIGH-END CONDOMINIUMS MAJOR DEVELOPMENT PUBLIC COMPANY LIMITED

ANNUAL REPORT 2012 Major Development Public Company Limited

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Annual Report 2012

Vision

To be Thailandâ&#x20AC;&#x2122;s top high-end real estate Development Company and a first choice to those seeking a superior class and higher standard of living. To focus on providing luxurious and exclusive accommodation with attention given to international standards of building and interior design, top quality materials, while meeting leisure, security and convenience needs. As a leading developer in high - end condominium, we focus on creating innovative project for a world - class lifestyle. We develop condominiums that people are proud to own.

Contents

Message from the Chairman Audit Committee Report Financial Highlights The Board of Director General Information of the Company and Subsidiary Nature of Busness Risk Factors Shareholders Structure Management and Internal Control Related party Transactions Last Year Activities Financial Explanation and analysis of financial statement and Performance

4 5 6 10 14 27 32 35 47 51 58 99

Major Development Public Company Limited â&#x20AC;&#x201A;

Message fromThe Chairman In 2012, the overall Thai economy appeared to have quickly recovered from the flood disaster with the growth rate expected to be 5.5%.

Mr. Chumroen Poolvoralaks

Chairman Major Development Public Company Limited

This remarkable recovery to normalcy was due to a vast

improvement in the industrial sector after the flood disaster. As for the property sector, from the beginning of 2012, the property market has shown different vigor depending on the location. The property market in the provinces was particularly vibrant because a number of major developers from Bangkok had developed a number of residential projects into major cities. In 2012, Major Development Public Company Limited (MJD) and its affiliated companies continued to earn revenue from the transfer of ownership close to the level of 2011. This was the results of the complete property development and services and the continued improvement in management efficiency. As for the transfer of ownership in 2013 and 2014, the company has a backlog ready to transfer ownership, which will create higher revenue recognition than in 2012. The company continues to expand the business by launching new projects, which under the business plan there will be at least 2-3 new projects launched. The company also launched a new hotel business service since February 2012, which had received good response. These reasons have resulted in a sustainable

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Annual Report 2012

growth for the business. We are certain that existing and new projects will continue to receive good response from the customers, which in turn will result in continued sales growth, in relation to the continuing growth of the real estate sector. With over 10 years of experience, integrity in management, international standard management system, good corporate governance, transparency and quality control in all the projects, the company has a proven record of its commitment to provide quality products for its customers for the stable and sustainable growth in the future and to meet the companyâ&#x20AC;&#x2122;s vision to become the leading property developer in the country. Finally, on behalf of Major Development Public Company Limited and the Board of Directors, I would like to thank our shareholders, investors, customers, financial institutes, business partners and the companyâ&#x20AC;&#x2122;s employees for their continuing supports. The company promises to continue to develop quality projects, build our reputation and create the greatest benefits, including fairness for all, which have always been of the greatest importance.

Audit Committee Report Audit Committee of Major Development Public Company Limited comprised three independent persons as follows: Mr. Chanin Roongsang (Chairman of the Audit Committee Member), Mr. Smith Banomyong (Audit Committee Member) and Mr. Sanguankiat Lewmanomont (Audit Committee Member) In year 2012, the Committee met 17 times in meetings that included the Head of Internal Audit, external auditors and senior management, depending on the agenda. In summary , the significant matters addressed included.

Reviewing the quarterly and year end financial statements before submission to the Board for approval, where

Reviewing the Internal Control from internal and external audit report with major items of concern being brought to the attention of the Board to ensure timely remedial action was taken. Overall,the Committee was of the opinion that the Company had adequate internal control.

The Committee considered the elections of the auditor the Committee paid close attention to their compliance with generally for year 2012 by reviewing the qualification, professional accepted accounting principles, adequacy of information disclosure experiences, and the appropriateness of audit fee and has a particularly in the areas of connected party transactions and conflicts resolution to the Companyâ&#x20AC;&#x2122;s Board of Directors and shareholderâ&#x20AC;&#x2122;s meetin for approval. of interest.

Reviewing connected transactions to ensure they were identified, accounted for and disclosed in accordance with

the requirements of the SEC and SET

Considered and placed important emphasis on the

audit activities that met good auditing practice of the Stock Exchange of Thailand that would create confidence among shareholders, investors and all relevant persons. Mr. Chanin Roongsang Chairman of the Audit Committee Member

Major Development Public Company Limited â&#x20AC;&#x201A;

Financial highlights Unit: Million Baht

2012

2011

2010

Financial Highlights Total Assets Total Liabilities Shareholders Equity Revenue from condominiums sold Total Revenues Gross Profit Net Profit Basic Earning per Share (Baht) Basic Earning per Share ( Baht)(Fully Diluted)

10,389.34 8,297.62 2,091.72 2,471.26 2,568.03 566.70 (84.22) (0.13) (0.13)

8,332.14 6,156.21 2,175.94 2,704.50 2,721.75 818.59 172.25 0.26 0.25

8,085.35 6,080.68 2,004.66 4,396.79 4,430.11 1,140.04 529.94 0.76 0.64

1.53 0.18 3.97 2.05

1.49 0.11 2.83 1.44

1.58 0.08 3.03 1.37

Financial Ratio Liquidity ratio Quick ratio Debt to equity ratio Interest bearing debt to equity ratio

Since 1st January 2011, The Company has changed the method of revenue recognition from the percentage of completion method to the transfer of the ownership method, which is the new accounting standard as per revised and proclaimed. The Company also adjusted the financial statement retrospectively from the date of 31st December 2010 to the end of the same fiscal year so that the new accounting standard will be implemented in accordance with the new accounting policy.

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Annual Report 2012

Unit: Million Baht

Project

Watermark chaophraya River Tower A Watermark chaophraya River Tower B Aguston sukhumvit 22 Marrakesh Hua Hin Residences Reflection Jomtien Beach Pattaya Royce Private Residences Collezio Sathorn-Pipat M Silom M Phyathai Equinox Phahol-Vibha M Ladprao The Marvel Residence Thonglor 5 Manor Sanambinnam Total Remark

2012

2011

Contractual Recognized Contractual Recognized Sale Revenue Backlog Sale Revenue Backlog

3,756.46 3,744.46 12.00 3,619.72 3,560.97 58.75 1,417.46 1,394.26 23.19 1,311.71 1,276.61 35.10 1,545.42 1,483.92 61.50 1,442.80 1,356.05 86.75 2,257.10 2,206.24 50.86 1,938.64 1,718.311 220.33 2,625.43 - 2,625.43 2,203.58 - 2,203.58 1,897.12 1,211.01 686.11 1,588.71 - 1,588.71 220.60 129.84 90.76 210.70 - 210.70 648.04 - 648.04 359.91 - 359.91 915.50 - 915.50 585.59 - 585.59 1,551.20 - 1,551.20 1,111.35 - 1,111.35 909.44 - 909.44 628.70 - 628.70 192.70 157.00 35.70 84.50 - 84.50 17.03 - 17.036 - - 17,953.50 10,326.73 7,626.77 15,085.91 7,911.94 7,173.97

: Developed by MJAI Development Co.,Ltd. : Developed by MJR Development Co.,Ltd.

The Presales: in 2012, the Company was successful in offering and selling products to the customers. The revenue arisen out of the presales, amounted to Baht 17,953.50 Million from 13 projects. This amount is deemed to be the increase of presales for Baht 2,867.59 Million or of 19.00 percent, compared to the fiscal year of 2011. With regard to the increase of the presales, not only because of the presales value of one new projects at which the Company launched in the previous year, but the completed projects and the nearly completed projects also take a part in such increase and make the presales booking diversified to every project of the Company and the brand new projects have supported the increase of the Sale.

The Revenue Recognition: In 2012, the Company has revenue of Baht 2,471.30 Million under the revenue recognition method of the transfer of the ownership. The main source of revenue is from the Royce Private Residences ,The Marvel residence Thonglor 5, Collezio Sathorn-Pipat Project: having been the completed project and ready to have the ownership transferred and move in since this year. Furthermore, there are other seven projects where the sale revenue has been recognized continuously since 2011 such as, Watermark Choaphraya River Project Tower A, Watermark Choaphraya River Project Tower B, Aguston Sukhumvit 22, Marrakesh Hua Hin Residences Backlog: at the end of 2012, the Company has the amount of unrealized revenue (Backlog) for the amount of Baht 7,626.77 Million, which is the upward trend and counts as an increase of Baht 452.8 Million or 6.31 percent, compared to 2011. The Company was able to sell the condominium units in the completed projects and the projects under construction more than the previous year. In addition, the Company has two new projects where they had a satisfactory feedback as can be seen from the total Sale amount of which is carried forward to be the backlog. As a result, the backlog in total increases strongly, and can be deemed as a good risk diversification and a positive effect to the growth of the company. This makes the Company more invulnerable in revenue recognition.

Major Development Public Company Limited â&#x20AC;&#x201A;

2012/7,626.77

Annual Report 2012

WTM-A WTM-B AGT MRK RFT Royce COL M_SL M_PT EQN M_LP Mavel Manor

2011/7,173.97

1.18%

8.76%

15.49%

22.15%

30.72%

2012/10,326.73

2.94% 5.02% 8.16%

11.92%

20.34%

34.42%

WTM-A WTM-B AGT MRK RFT Royce COL M_SL M_PT EQN M_LP Mavel Manor 0 0 0 0 0 0 0 0 0

16.14% 17.14% 21.72%

WTM-A 36.26% WTM-B 13.50% AGT 14.37% MRK 21.36% RFT 0 Royce 11.73% COL 1.26% M_SL 0 M_PT 0 EQN 0 M_LP 0 Mavel 1.52% Manor 0

45.01%

2012/17,953.50

9.00%

8.50% 12.00%

0.82% 0.49% 1.21% 3.07%

0.47% 0.22%

1.19%

0.16% 0.30% 0.81% 0.67%

WTM-A WTM-B AGT MRK RFT Royce COL M_SL M_PT EQN M_LP Mavel Manor

1.40% 2.39% 3.88% 7.37% 4.17% 0.56% 0

8.69% 9.56% 12.85% 14.61% 10.53%

1.23% 3.61% 5.10% 8.64% 5.07% 1.07% 0.09%

7.90% 8.61% 12.57% 14.62% 10.57%

20.92%

23.99%

The Presales

2011/15,085.91

The Revenue Recognition

ปี 2011/7,911.94

Backlog

Gross Profit (Unit : Million Baht) 818.59 2011 2010

2010

1,140.04

Net Profit (Unit : Million Baht) 172.25

2011 2012

2010

566.70

2011 2012

2012

529.94

84.22

Gross Profit and Net Profit: For 2012, the Company had the gross profit yielded from the sale of the units for the amount of Baht 566.70 Million, which is a decrease of Baht 251.89 Million, compared to 2011. In other words, such reduction counts for 30.77 percent of the previous year Sale. The Company had the Net Profit of Baht (84.22) Million, which is a decrease of Baht (256.47) Million or 75.36 Percent. The decrease of Gross Profit occurred because in 2012, there were fewer projects which were completed and ready to have the ownership transferred less than the year of 2011. Furthermore, in 2011, the Government launched a campaign to promote the real estate industry by reducing the rate of Specific Business Tax and the transferring fee. As a result, this campaign encouraged customers to complete the transfer of ownership in 2011 more than the other years. The Net Profit was decrease because the Specific Business Tax and the transferring fee returned to charge on the normal rate. These incidents caused more expenses to the Company compare to 2011, which had a campaign to reduce the tax rate to a special rate. While there were expenses in 2012 related to the sale marketing and promoting new projects, and the Company also started to run a hotel business. Thus the Company had more expenses to manage the hotel business. Current ratio/ Quick ratio

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.0 2010 2011 2012 Current ratio Quick ratio

Debt to equity ratio/ Interest bearing debt to equity ratio

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.0 2010 2011 2012 Debt to equity ratio Interest bearing debt to equity ratio

Liquidity Ratio and the Appropriatedness of the Equity Structure With regard to the liquidity ratio and the appropriateness of the financial structure at the end of 2011, the liquidity ratio of the Company was 1.53 times and the quick ratio was 0.18 times, which is less than the year of 2011 because the Company engaged in larger numbers of the project development. As a result, the Company required more working capital and subsequently it led to more current liabilities. The Debt to Equity Ratio increased from 3.97 times at the end of 2011 to 2.83 times in 2012 because the loan has been repaid by the transfer of unit ownership in the following projects: Watermark Choaphraya River Project Tower A, Watermark Choaphraya River Project Tower B, Aguston Sukhumvit 22 , Marrakesh Huahin , The Marvel residence Thonglor 5, Royce Private Residences, Moreover, the Company has been approved for additional loan to develop the projects under the construction and spent a part of the loan on purchasing more portions of land to development more projects. However, the repayment ratio was higher than the withdrawing rate in the previous year. Additionally, the proportion of the shareholder’s equity was increased as a result the Debt to Equity Ratio in the year of 2012 increased. Interest coverage ratio of the Company at the end of 2011 that The Company’s total liabilities to its total shareholders’ equity was increased from 1.44 times to 2.05 times in 2012 because the Company drawdown more loan to develop the projects under the construction and purchase more interesting lands for further project developments. Major Development Public Company Limited

The Board of Directors

Mr. Chumroen Poolvoralaks

Chairman of the Board of Directors and Chairman of the Executive Committee

Mr. Suriya Poolvoralaks Director, Executives Director and Managing Director

Mr. Sanguankiat

Lewmanomont Committee AnnualAudit Report 2012 â&#x20AC;&#x201A;

Mrs. Prathin Poolvoralaks

Vice Chairman of the Board of Directors and Deputy Chairman of the Executives Committee

Ms.Petrada Poolvoralaks Director, Executives Director and Executive Vice President

Mr. Chanin Roongsang

Chairman of the Audit Committee Member

Mr. Suriyon Poolvoralaks Director, Executives Director and Chief Executive Officer

Mrs. Jitradee Poolvoralaks Director, Executives Director and Executive Vice President

Mr. Smith Banomyong Audit Committee

Mr.Chumroen Poolvoralaks (Age 81) Chairman of the Board of Directors and Chairman of the Executive Committee Education and Training • More than 30 years of experience in real estate business • DAP Course, Class of 50, on 25 January 2006 Working Experience • Chairman of the Board of Directors and Chairman of the Executives, Major Development Public Company Limited. • Director, M J A I Development Company Limited. • Director, Major Development Hotels and Resorts Company Limited. • Director, Major Development Residences Company Limited. • Director, MJR Development Company Limited. • Honorary Chairman, Major Cineplex Public Company Limited. • Director, MJP Property Company Limited. • Director, MJC Development Company Limited. • Director, Major Residences Company Limited. • Director, Majors Manor Company Limited. • Director, Major Development Property Partners Company Limited.

Mrs. Prathin Poolvoralaks (Age 70) Vice Chairman of the Board of Directors and Deputy Chairman of the Executives Committee Education and Training • More than 15 years of experience in real estate business • DAP Course, Class of 50, on 25 January 2006 Working Experience • Vice Chairman of the Board of Directors and • Vice Chairman of the Executives ,Major Development Public Company Limited. • Director, Major Development Hotels and Resorts Company Limited. • Director, Major Development Residences Company Limited. • Director, MJR Development Company Limited. • Director, MJP Property Company Limited. • Director, MJC Development Company Limited. • Director, Major Residences Company Limited. • Director, Majors Manor Company Limited. • Director, Major Development Property Partners Company Limited.

Mr. Suriyon Poolvoralaks (Age 40) Director, Executives Director and Chief Executive Officer Education and Training • Master of Civil Engineering, Massachusetts Institute of Technology (MIT) • Master of Business Administration (MBA), Depaul University • DAP Course, Class of 50, on 25 January 2006 Working Experience • CEO, Major Development Public Company Limited. • Director, M J A I Development Company Limited. • Director, Major Development Hotels and Resorts Company Limited. • Director, Major Development Residences Company Limited. • Director, MJR Development Company Limited. • Director, MJP Property Company Limited. • Director, MJC Development Company Limited.

Major Development Public Company Limited

Mr. Suriya Poolvoralaks (Age 37) Director, Executives Director and Managing Director Education and Training • Doctor of Philosophy, Economics, University of Southern California (USC) • DAP Course, Class of 59, on 24 October 2006 Working Experience • Managing Director, Major Development Public Company Limited. • Director, M J A I Development Company Limited. • Director, Major Development Hotels and Resorts Company Limited. • Director, Major Development Residences Company Limited. • Director, Major Residences Company Limited. • Director, Majors Manor Company Limited. • Director, Major Development Property Partners Company Limited.

Ms. Petrada Poolvoralaks (Age 46) Director, Executives Director Executive Vice President Education and Training • Master of Business Administration ( MBA),lllinois State University • DAP Course, Class of 49, on 2 December 2005 Working Experience • EVP-Marketing Division, Major Development Public Company Limited. • Director, Major Development Hotels and Resorts Company Limited. • Director, Major Development Residences Company Limited. • Director, Major Residences Company Limited. • Director, Majors Manor Company Limited. • Director, Major Development Property Partners Company Limited.

Mrs. Jitradee Poolvoralaks (Age 38) Director, Executives Director and Executive Vice President Education and Training • BA in Marketing, Faculty of Commerce and Accountancy, Chulalongkorn University • DAP Course, Class of 51, on 22 February 2006 Working Experience • EVP-Marketing Division, Major Development Public Company Limited. • Deputy Managing Director, GC Distribution Company Limited. • Director, Major Development Hotels and Resorts Company Limited. • Director, Major Development Residences Company Limited. • Director, MJR Development Company Limited. • Director, MJP Property Company Limited. • Director, MJC Development Company Limited.

Annual Report 2012

Mr.Chanin Roongsang (Age 46) Chairman of the Audit Committee Member Education and Training • MA in Political Science, Kasetsart University • Certificate in Mini MPA, Thammasart University • Certificate in state Budget Management, • University of California, Los Angeles (UCLA) • DAP Course, Class of 50, on 25 January 2006 Working Experience • Chairman of the Audit Committee Member, Major Development Public Company Limited. • Member of Parliament for Bangkok Metropolitan

Mr. Smith Banomyong (Age 40) Audit Committee Education and Training • Master of Economics, The London School Economics and Political Science, London, UK • DAP Course, Class of 76, on 7 November 2008 Working Experience • Audit Committee Member, Major Development Public Company Limited. • Executive Vice President, Head of Corporate Strategy, Siam Commercial Bank Public Company Limited. • Board Member, SCB Securities Company Limited.

Mr. Sanguankiat Lewmanomont (Age 36) Audit Committee Education and Training • MSc in information Technology, Boston University • Master of Business Administration (MBA, Mathematical Finance) Boston University • Certificate in Internet Law, Harvard Law School, Harvard University • Certificate in Practical Approaches to Arbitration and conciliation in IP & Int’l Trade disputes, The central Intellectual Property and Int’l Trade Court, Thailand • DAP Course, Class of 50, on 25 January 2006 Working Experience • Audit Committee Member, Major Development Public Company Limited. • Committee, Chow Steel Industries Public Company Limited. • Committee , Manomont Real Estate Company Limited. Sub committer of Trademark Appeal Board, Intellectual Property Dept., Ministry of Commerce • Managing Director, Legal advisor Lewmanomont International Law Office & Auditor

Major Development Public Company Limited

General Information Of The company and subsidiary Thai Name English Name Type of Business Head Office Registration No. Telephone Fax Website Securities Depository Center Auditor

: : : : : : : : :

บริษัท เมเจอร์ ดีเวลลอปเม้นท์ จ�ำกัด (มหาชน) Major Development Public Company Limited Real Estate Development 141 Soi Sukhumvit 63 (Ekamai) Sukhumvit Rd., Kwang Klongton Nua,Khet Wattana, Bangkok 10110 0107548000692 0-2392-1111 0-2392-2255 www.majordeveloment.co.th Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, Rachadapisek Road,Klongtoey, Bangkok 10110, Thailand Tel: (66 2) 229 2800 Fax: (66 2) 359 1259 : Ms. Sumalee Leewarabandit CPA (Thailand ) No. 3970 Ms. Rungnapa Lertsuwankul CPA (Thailand ) No. 3516 Ms. Wissuta Jariyathanakorn CPA (Thailand ) No. 3853 Ernst & Young Office Limited 33th Fl. Lake Rajada Office Complex Rajadapisek Rd. Klongtoey, Bangkok 10110 Tel : 0 2264 0777 Fax: 0 2264 0789-90

ข้อมูลทั่วไปบริษัทในเครือ

ชื่อและที่อยู่ เลขทะเบียน ประเภทธุรกิจ

M A J I Development Company Limited 141 Soi Sukhumvit 63 ( Ekamai ) Sukhumvit Rd., Kwang Klongton Nua, Khet Wattana, Bangkok 10110 Tel/Fax : 0-2392-1111/ 0-2392-2255

0105550111062

Real Estate Development

ทุนจดทะเบียน (บาท) 25,000,000

Major Development Hotels and Resorts Company Limited 0105551063258 Hotel, 100,000,000 141 Soi Sukhumvit 63 ( Ekamai ) Sukhumvit Rd., Resort & Spa Kwang Klongton Nua, Khet Wattana, Bangkok 10110 Tel/Fax : 0-2392-1111 / 0-2392-2255 โทรศัพท์ / โทรสาร : 0-2392-1111 / 0-2392-2255 Major Development Residences Company Limited 0105551128686 Real Estate 100,000,000 141 Soi Sukhumvit 63 (Ekamai ) Sukhumvit Rd., Development Kwang Klongton Nua, Khet Wattana, Bangkok 10110 Tel/Fax : 0-2392-1111/ 0-2392-2255 MJR Development Company Limited 0105553061490 Real Estate 238/83 16th Homeplace Building,Sukhumvit 55 Rd., For sale/lease release 600,000,000 Klong ton Nua, Wattana, Bangkok 10110 And/or a consultant, Tel / Fax : 0-2185-3100 / 0-2712-9992 management, Real estate agents MJP Property Company Limited 0105554082181 Operate the business of 238/83 16th Homeplace Building, Sukhumvit 55 Rd., property management and 600,000,000 Klong ton Nua, Wattana, Bangkok 10110 advisory services in Tel / Fax : 0-2185-3100 / 0-2712-9992 real estate and property including other related business MJC Development Company Limited 0105554082199 Operate the 238/83 16th Homeplace Building, Sukhumvit 55 Rd., business of Construction 1,000,000 Klong ton Nua, Wattana, Bangkok 10110 and Other Construction Tel / Fax : 0-2185-3100 / 0-2712-9992 and including other relate business

Annual Report 2012

สัดส่วน การถือหุ้น (%) 51

New project

Type Location Project Value Completion

4 Residential Buildings 25 stories (Tower A and B) and 35 stories (Tower C and D) Sanambinnam Road, next to Ministry of Commerce and on the bank of Chao Phraya River Easily accessible by Rattanathibet Road, Tiwanon Road and Nonthaburi By Pass 3,600 million baht Expected completion in Q4/2015 Major Development Public Company Limited â&#x20AC;&#x201A;

On going project

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Annual Report 2012

Type 42- storey condominium with 490 units Location on Vibhavadi-Rangsit & Phoholyothin Road Easily to access from both roads Project value Around 2,400 million THB Project status Expected to completed by Q4 2013Â

On going project Type Location Project value Project status

53- storey condominium with 161 units on Naradhiwas Rajanagarindra Road Near BTS station and MRT route Around 2,200 million THB Expected to completed by Q1 2014

Major Development Public Company Limited â&#x20AC;&#x201A;

On going project Type 35 - storey condominium with 213 units Location on Phyathai Road Near BTS station Airport Link and Expressway Project value Around 1,850 million THB Project status Expected to completed by Q3 2014

Annual Report 2012

On going project

Type 2 Buildings of 42 and 55 storey high-class condominium With 335 units Location 60 minutes drive from Bangkok 2 Accesses from Na-Jomtien Road and Sukhumvit Main Road Project value Around 3,300 Million THB Project status Expected to be completed by Q3 2013

Major Development Public Company Limited

On going project Type 44- storey condominium with 289 units Location on Phoholyothin Road Opposite Central Plaza Ladprao Near BTS station and MRT route Project value Around 1,500 million THB Project status Expected to completed by Q3 2014

20 Annual Report 2012

Type Neo-Moroccan Style Resort 76 guestrooms Location Hua Hin Beachfront Resort between Soi. Hua Hin 83/1 and 85 Reservation Tel. 032 616 777 Project Value 2,600 million baht Project status Newly opened

Welcome to Marrakesh Hua Hin Resort and Spa

Journey of mystic hideaway Major Development Public Company Limited

Readymove to in Type 8- storey condominium with 95 units Location on Â Sathorn Road Easy to access from Sathorn road, Silom road and Naradhiwas Rajanagarindra Road Project value 600 million THB Project status Construction completed

â&#x20AC;&#x201A; 22 Annual Report 2012

Type 25- storey and 35- storey condominiums with total 269 units Location on Sukhumvit Road Near Emporium Department Store Project value 2,000 million THB Project status Construction completed

Readymove to in

Major Development Public Company Limited

Readymove to in

Type 25- storey and 39- storey condominiums with total 160 units Location on Sukhumvit Road, Soi 31 Easy to access from Sukhumvit road, Petchaburi road and Asok Montri Road Project value 3,000 million THB Project status Construction completed

24 Annual Report 2012

Readymove to in Type 6- storey condominium with 9 units Location on Sukhumvit Road, Soi Sukhumvit 55 (Thong Lor) Project value 366 million THB Project status Construction completed

Major Development Public Company Limited

Complete project

â&#x20AC;&#x201A; 26 Annual Report 2012

Nature Of Business Competitive Strategy and Strength

Professionalism of the Team The company places great importance in its managerial professionalism with high quality management team and vision. The management team comprises highly experienced and educated individuals in the field of real estate. This has contributed to the transparency of its internal management. The company also continues to use new ideas in organisation and product developments, including the selection of highly professional teams, such as architects, interior designers and quality management teams that are all leading companies in their fields . Prime Locations The company puts the foremost importance in the selection of location when developing all the projects, as location is considered to be the most important factor in real estate business, particularly for condominium projects. Great location should be within the city centre, close to transportation systems and easily accessible. The company also has the policy of developing projects at locations with tourist attractions, such as Hua Hin, Jomtien Beach Pattaya etc. High Networth Customers & Customer Relationship Management The company always has a clear target customer group for every project with the emphasis on high-end customers. This group of customers has high purchasing power and good taste. They also have the ability to buy whether for their own use or for investment. They are also resilience to the fluctuation of the economy. This group of customers has high reliability when purchasing condominiums. Due to these reasons, the company has placed great importance in creating the highest of customer satisfaction by introducing customer relationship management system. The company will keep important customer records for use in organising events, such as workshops or customer networkings or seminars about decorating condominium etc. On-time Construction Completion & Innovation The company has a policy to develop and deliver the project to the customers on time, which allows the company to manage its cash flow and construction cost effectively and create good customer satisfaction. In the past, the company was able to deliver projects to the customer on schedule. The company also has the policy to focus on development and to utilise new innovations, including design, selection of materials or various technologies, such as detached wall concept to improve privacy, reduce noise, improved ventilation and lighting. The private lift concept allows improved privacy and comfort for the customers. The company uses ozone treated swimming pool in its projects to promote healthcare for the customers. The latest technology in earthquake resistant design has also been used in the design of the building structure to protect from earthquake damages. The company also uses through ventilation system to provide better air circulation within the living units and common areas. There is also virtual golf simulators and putting green.

Major Development Public Company Limited â&#x20AC;&#x201A;

Brand Image and Pricing Strategies

The company clearly places its brand image and marketing position by using the image of the company managed by a group of young generation that combines new innovations and creativities in the management and development of high-end projects. These strategies ensure that the customers can truly associate the brand “Major Development” with high-end residential property developer and high quality products. In term of pricing, the company sets the prices at a high level to maintain its image and marketing position in the high-end market segment. The price of each unit will be set according to the location of the unit, scenery from the unit and appropriateness of each project to maintain an appropriate profitability for the company.

Marketing and Public Relation Strategies

The company is considered to be the leader in new media and marketing tools utilization, such as the use of real life mock up room so the customers can experience the room layout, materials and atmosphere of the project to help the customers in making an informed decision in a timely manner. The company also uses various media channels to promote the projects, such as billboards, newspapers, magazines, to inform the consumers about project information and to build brand image widely. Most importantly, the company emphasises in direct marketing, which is an effective marketing channel in reaching the high-end customer group and with the least cost compared to other marketing channels. This allows the company to effectively manages its marketing expenses. In addition, the company also conducts road shows or events in high-end shopping malls and co-organises events with similar branded products, such as credit cards. The company also conducts direct mail campaign to target customers. The company is in the process of conducting overseas road shows, which will provide access to overseas customers.

Industry Overview and Trend

The Thai economy in 2012 is expected to expand by 6.4%. The domestic demand both in term of consumption and private investment have received support from the government, such as the increase of wages for both daily and monthly rate officials, rice pledging scheme, first car buyer scheme, first house buyer scheme and the gradual reduction of personal income tax. The export sector witnessed a slowdown due to the slowdown in the global economy together with the slow recovery of certain export related industries. The inflation in 2012 is expected to be around 3.0%, a reduction from previous year in line with the slowdown in the growth rate of the oil and commodity prices due to the weak global oil demand. In 2012, the Thai industrial sector faced two major obstacles. The first was the devastation of the flood in late 2011. The second was the economic slowdown of Thailand’s major trading partners, particularly the European Union. The impact to the industrial sector can be seen from several industrial indices, such as the manufacturing product index (MPI). In 2012, the real estate sector grew by 4.4% with the demand for residential continued to expand, as reflected by the growth in outstanding personal housing loan of commercial banks of 9.8%. On the supply side, the outstanding loans for property developer grew by 15.6%. While pricing level continues to increase. The Economic Growth (GDP) 10.00 5.30%

6.00

-2.00

1999

6.40% 6.20% 5.00% 4.80%

4.00 2.00

7.80%

7.00%

8.00

4.50% 2.20%

2.60% 2001

2003

2005

-4.00 Source: National Economic and Social Development Board(NESDB)

28 Annual Report 2012

2007

1.50% 2009 -2.30%

2011

2013

In 2013, the economic growth is expected to continue at a rate of 5.2% with the main drivers being the growing demands from the public sector and overseas markets. There are still some risks from the global economy, which is, however, expected to make a recovery towards the end of 2013. This should help the export sector to return to the growth level of 7.3%. As for the internal economic stability, it is expected that the inflation rate will be around 3.5% in 2013 (estimated range between 3.0-4.0%), following the demand of world oil that is expected to increase with the growth in Asian economies. The unemployment rate is expected to remain at a low level of 0.6% of the total workforce. Construction Materials Price Index

155 150 145 140 135 130 125 120 115 110 105 100 2006

All Commodities wood Products Cement Concrete

2007

2008

2009

2010

2011

2012

2013

Source: Bureau of Trade and Economic Indices

Although the Thai economy expanded by 5.7% in 2012, the construction materials price index increased from 120.4 points in 2011 to 124.7 points in 2012, while wood and wood product price index increased from 139.8 points in 2011 to 143.0 points in 2012. The cement price index decreased from 115.1 points in 2011 to 113.1 points in 2012. The concrete products price index increased from 106.9 points in 2011 to 124 points in 2012. The iron and iron products price index decreased from 123.7 points in 2011 to 122.2 in 2012. The construction materials price index increased in 2012 from 2011 by 3.6%. The reason for the increase was due to the increases in wood and wood product price index by 2.3%, concrete product index by 16.0%, tile index by 1.9%, surface finishing materials by 1.1% and other building materials by 9.4%. These increases were due to higher production costs from higher raw material cost and the increase in minimum wages in mid April 2012 together with the increase in demand for building materials for building and repairing houses, constructions according to water management plans and various infrastructure constructions.

Real Estate Market Trend According to the data from Thai Property Research and Valuation Data Centre, the trend is for real estate developers to develop areas on the outskirt surrounding Bangkok. In the provinces, the big cities in the North East and the North near neighboring countries with supporting transport infrastructures offer good business potentials. The announcement of the new city planning will help developers to establish their business plans. The shortage of labour continues to be an obstacle alongside the European economy. The domestic political situation continues to be the main factor that contributes to the real estate sector remaining a fragile business. In the past three years between 2010 and 2012, there were 169,000 new units in the market. These projects are mostly under construction or have yet to start construction. The shortage of labour continues to be the main obstacles for the residential market in 2013. The developers have turned to prefabrication technology to offset the reliance on labour. In 2013, the risks remain the fragile European economy and domestic political environment. However, ASEAN countries will continue to grow, particularly countries that has small economic bases, such as Myanmar and Laos. The confidence index survey among property developers in the last quarter of 2012 reports that the developers have high confidence on the current situation with better expectations in the next 6 months, particularly large developers which have high market share. The developers will continue to develop residential projects, which will attribute to good growth in the residential sector in 2013 within Bangkok and its vicinity and the provinces. Major Development Public Company Limited â&#x20AC;&#x201A;

Company’s Projects (as of 31 December 2012) 1. Fullerton Sukhumvit Project Location Between Sukhumvit 59 and 61. Project value Baht 1,600 million 138 units. Project status Completed ownership transfer. 2. Manhattan Chidlom Project Location New Petchburi Road between Chidlom Road and Rajaprasong Road. Project value Baht 1,250 million 190 units. Project status Completed ownership transfer. 3. Wind Sukhumvit 23 (Soi Prasarnmitr) Project Location Soi Sukhumvit 23 (Soi Prasarnmitr). Project value Baht 1,200 million 220 units. Project status Construction completed. 4. Wind Ratchayothin Project Location Ratchayothin near Major Cineplex Ratchayothin. Project value Baht 1,700 million 390 units. Project status Construction completed. 5. Mykonos Hua Hin Project Location Petchkasem Road, Hua Hin, Prachuabkirikhan. Project value Baht 450 million 122 units. Project status Completed ownership transfer. 6. Watermark Chaophraya River Tower A and B Project Location Charoennakorn Road between Charoennakorn 39 and 41. Project value Baht 5,700 million 486 units (Tower A and Tower B). Project status Construction completed. 7. Aguston Sukhumvit 22 Project Location Sukhumvit 22 near Emporium Department Store. Project value Baht 2,000 million 269 units. Project status Construction completed. 8. Marakesh Hua Hin Residences Project Location Petchkasem Road, Hua Hin, Prachuabkirikhan. Project value around Baht 2,600 million 8 buildings a total of 345 units. Project status Construction completed. 9. Collezio Sathorn-Pipat Project Location Soi Pipat, Sathorn Road. Project value around Baht 600 million 95 units. Project status 42% of construction completed.

30 Annual Report 2012

10. Reflection Jomtien Beach Pattaya Project Location Jomtien Beach, Pattaya. Project value around Baht 3,300 million 2 buildings a total of 334 units. Project status 30% of construction completed. 11. M Silom Project Location around Narathiwat Ratchanakarin Road near BTS Station and BRT route. Project value around Baht 1,777 million 161 units. Project status 16% of construction completed. 12. M Phyathai Project Location Close to Phayathai Road 100 metres from BTS Station near Airport Link and expressway Project value Project value: around Baht 1,491 million, 215 units Project status Construction 15% completed 13. Equinox Phahol-Vibha Project Location Around Vibhavadirangsit Road, accessible from Vibhavadirangsit Road and Phaholyothin Road. Project value around Baht 2,300 million 490 units. Project status 15% of construction completed. 14. M Ladprao Project Location Phaholyothin Road, Jatujak, Bangkok, opposite Central Ladprao Department Store Project value around Baht 1,500 million 313 units. Project status Construction preparation. 15. Manor Sanambinnam Project Location Sambinnam Road, next to the Ministry of Commerce by the Chaophraya River Project value around Baht 3,645 million, 1,848 units Project status Project status: Construction preparation Condominium Project developed under a joint venture company (MJAI Development Co Ltd) 16. Royce Private Residences Location Soi Sukhumvit 31. Project value around Baht 3,000 million 2 buildings 160 units. Project status Project status : 75% of construction completed. Condominium developed under a subsidiary company (MJR Development Co Ltd) 17. The Marvel Residence Thonglor 5 Location Soi Sukhumvit 55 (Thonglor Soi 5). Project value around Baht 366 million 1 building 9 units. Project status Project status : 40% of construction completed.

Overview of past operations

In 2002, the company started the development of Hampton Thonglor 10 Project, which was the first high-end condominium project of the Company. As of the end of 2012, the company has completed the development of projects with all the units ready for transfer of ownership, such as Hampton Thonglor 10, Fullerton Sukhumvit, Manhattan Chidlom, Mykonos Hua Hin, Wind Sukhumvit 23, Wind Ratchayothin. There are 6 projects, which have completed the construction, such as Watermark Chaophraya River Tower A, Watermark Chaophraya River Tower B, Aguston Sukhumvit 22, Marakesh Hua Hin Residences, Collezio Sathorn-Pipat and Royce Private Residences. There are 7 projects under construction. They are Reflection Jomtien Beach Pattaya, M Silom, M Phyathai, Equinox Phahol-Vibha, M Ladprao, the Marvel Residences Thonglor 5 and Manor Sanambinnam. All of the 13 projects that have not completed the ownership transfer are worth around Baht 17,845 million in total. The details are as follows:

Summary of the Companyâ&#x20AC;&#x2122;s Condominium Project as of 31 December 2012 Project Watermark Chaophraya River Tower A Watermark Chaophraya River Tower B Aguston Sukhumvit 22 Reflection Jomtien Beach Pattaya Marrakesh Hua Hin Residences Royce Private Residences Collezio Sathorn-Pipat M Silom M Phyathai Equinox Phahol-Vibha M Ladprao Project The Marvel Residence Thonglor 5 Manor Sanambinnam

Note

Project Avg. Sales Construction Realised Value Sales Area Price Progress1 Progress2 Revenue Ratio (Baht million) (sq.m.) per sq.m. % 3,900.00 1,800.00 2,000.00 3,300.00 2,600.00 3,000.00 600.00 1,710.00 1,491.00 2,300.00 1,500.00 366.30 3,605.47

49,269.17 26,433.27 21,713.17 41,365.00 23,371.82 25,884.65 4,302.36 11,507.00 10,641.00 21,369.00 13,311.00 2,464.37 65,554.14

79,157 68,096 92,110 79,776 111,245 115,890 139,458 148,605 140,132 107,633 112,689 148,638 55,000

96.32 78.75 77.27 79.56 86.81 63.24 36.77 37.90 61.40 67.44 60.63 52.61 0.47

100 100 100 90 100 100 100 32 15 40 21 100 -

96.01 77.46 74.20 84.86 42.86 21.64

43.03

: 1 Percentage of Project Salable Area : 2 Percentage of Project Construction Cost : 3 Percentage of Project Value

Major Development Public Company Limited â&#x20AC;&#x201A;

Risk Factor Risks from Business Operation

Risk from land procurement policy for future project development

The company does not have a policy to hold assets or lands, which are not ready to be developed. The company would plan to procure sufficient lands for a development cycle (2-3 years). The company would consider the location of each plot of land to suit the target customer before starting the development. The company therefore does not have many plots of land in stock for future development. By using this policy, there is a risk that the company might have some problems in procuring land for future developments. However, the company believes that holding lands in stock for future development might create direct risk and increase the development cost from the fund required to procure the lands. Also the development of a condominium project required less amount of land than other residential projects and was therefore easier to procure the required land. The wide network that the company has also helps in the procurement of land in good location at a reasonable price. The company also places great importance in market research, including analysing the results of the market research to efficiently lessen the risks from the land procurement. The company also has a policy to develop projects in prime area that was not limited to the CBD area, such as Hua Hin and Pattaya. The risk in procuring land is therefore at an acceptable level. Risk from the fluctuation in the building material prices From the trade economic statistics, if the price index of building materials in 2005 is 100, the average building materials price index would be 124.8 in 2012, which has increased from 122.2 in 2011. Overall the price of building materials increases from the previous year. The prices of building materials may continue to increase in the future in line with the increase in oil prices and the production costs of these materials. The increased in building material costs had a direct impact on the companyâ&#x20AC;&#x2122;s construction cost and profit. However, the procurement of the main building materials, such as bricks, aggregate, Also the development of a condominium project required less amount of land than other residential projects and was therefore easier to procure the required land. The wide network that the company has also helps in the procurement of land in good location at a reasonable price. Risk Factor Annual Report 2011 36 cement, sand and steel etc., will be procured by the contractor, calculated as part of the construction contract. Therefore, if the costs of the main building materials increased during the construction period, it would not have any impact to the company. The contractor would take all the risks. As for the building materials procured by the company, such as countable items with high per unit price liked lift, sanitary wares, generators etc., they accounted for only 8%-10% of the total construction cost for each project. Therefore if the prices of these items increase, it would only have a minimal impact on the companyâ&#x20AC;&#x2122;s operating profit, particularly the items that the company has not agreed to the procurement contract. Risk from having one product At the moment, the company only developed high-end high rise residential condominiums. There are therefore risks from the changing buying behavior of the customers to other property types. However, the company does not have the policy to only develop only high-end high-rise residential condominium but also see opportunities to develop other kinds of project that could contribute to the growth of the company. The company was ready to develop other type of projects, such as serviced apartment or hotel etc. The company had therefore established subsidiary companies to pursue business opportunities in these projects to support the changing needs of the customers, including a company to manage hotel or serviced apartment. The company will soon be ready to begin the hotel business. The company also continued to follow the market closely and to seek market opportunities for other types of projects.

â&#x20AC;&#x201A; 32 Annual Report 2012

To reduce risks from having a lone business, the company establishes a subsidiary company to support the hotel and service apartment business. The company also establishes more subsidiary companies to support new customer groups. The company has developed new mid-level condominium, which will increase the customer base and increase sales and will lead to better completion time. The company should therefore realised revenue quicker, which should result in increase profit. Risk from having the Poolvoralaks Group as the major shareholder The Poolvoralaks Group was the major shareholder of the company, holding 71.63% of the total shares (as of 5 April 2012). The Poolvoralaks Group therefore controlled almost all of the decisions at the shareholders meeting, except those requiring three quarter majority. It was therefore difficult for other shareholders to collectively mount check-and-balance votes on issues proposed by the shareholders. However, the company had appointed 3 independent directors that have experiences, knowledge and wide ranging capabilities and auditor committee to review and check so that there was no conflict of interest and for the transparency in the management of the company. The majority shareholding by a group also lessened the risk of take over by other persons, even though other shareholders might see an opportunity to increase the company’s worth.

External Risk Factors Risk from interest rates as of 31 December 2012, the company had a total debt of Baht 8,297.62 million (consolidated), with interest bearing debt accounted for Baht 5,148.34 million. The company’s interest bearing debt to equity ratio was 2.05 times, that is higher than the previous year. The loans, which were used to develop various projects, had floating interest rates. The future interest rates were on a declining trend, which may reduce the project development costs. The company has risks from interest rates relating to bank deposits, loans to others, long term investment, overdraft, debt from financing leases, bonds and loans with interests, financial assets and debts with interest rates that mostly fluctuates with the market rates or have fixed rates close to the current market rates. Important financial assets and debts can be classified according to the types of their interest rates. The financial assets and debts that have fixed interest rates can be classified by their due dates or the established dates for the new interest rates. Risk from providing credits The company has risks from credit lines that relate to account receivables, other debtors and loans to others. The management controls these risks by establishing appropriate policies and procedures to control these credit lines. The company therefore does not believe that there will be any significant damages from these credit lines. In addition, these credit lines are spread across a variety of customer base and in large number. Risk from the change in policies from relevant government agencies The changes in policies from relevant agencies such as city planning law, useable area for housing estate, floor area ratio (FAR) or environmental impact assessment, especially for high-rise building attributed to the project risk. The Company reduced these risks by studying in detailed the changes in the policies of relevant agencies and conducted feasibility studies of every projects, taking into account the new rules and regulations. All of the company’s projects under construction had received necessary permission from all relevant government agencies. Any changes in relevant laws should not impact those projects that the construction had already started.

Major Development Public Company Limited

In 2013, the Bangkok Metropolitan Administration plans to announce the new city planning before the existing city planning expires in min May 2013. This should clarify how the company should set its business plan. The new city planning will be more stringent in some areas, which will result in the developers not purchasing land to far in advance. When the developers have a clear plan, they will purchase the lands and develop them immediately. Risk from the economic impacts In 2012, the property market in the Bangkok Metropolitan Area has improved from the personal income tax reduction measure for first house buyers and credit measure for low income earners. The three years 0% interest rate measure ended on 31 December 2012. Although the flood disaster of 2011 has worried the potential house buyers, it also makes the potential house buyers consider flood - free locations, which resulted in improving growth rate in the property market. The uncertainty of the world economy is still an important factor that may have a short term impact to the property market. The new median land price for 2012 - 2015, which has been in effect since 1 July 2012, has seen new land price assessment. This will result in higher land purchasing cost. The operating cost of the property development business continued to increase. Apart from the increase in the minimum wage from 1 April 2012, the property developers also faced pressures from other costs, such as: The price of building materials, which increased with the domestic demands, such as concrete products, asphalt, sand and bricks. In 2012, land prices continued to increase resulting from the new median land price. Today, land prices in certain areas have increase dramatically, particularly in important business districts in Bangkok. The major factor for the increased in land prices in 2012 is the development of the mass transit system. This resulted in the increase in land prices along the routes of the mass transit system in the Bangkok Metropolitan Area. As the cost of the property business increases, the property development has become more challenging. There will be a need to implement a marketing strategy that will maintain the current selling prices of the residential units or increase them slightly. There are a number of factors that are not conducive to the growth of the property business in 2012, particularly from the consumers, which are facing problems from increasing living costs. This will have an impact on their decision to purchase property.

â&#x20AC;&#x201A; 34 Annual Report 2012

Shareholders Structure,Management And Internal Control Shareholders Structure As at 31 December 2012. The company has registered capital of 1,050,000,000 Baht ( Issued and paid-up 704,381,500 Baht ) Registered 1,050,000,000 ordinary shares of Baht 1 each . The names and shareholding ratio of the top 10 shareholders as of 5 April 2012 are as follows. Name shares % 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Mr. Chumroen Poolvoralaks Mrs. Prathin Poolvoralaks Mr. Suriyon Poolvoralaks Mr. Suriya Poolvoralaks Miss Petrada Poolvoralaks Mr. Ekachai Satabongkoch Mr. Itthi Chavalitdhamrong Mrs. Plangjai Chayawlwatkul Mr. Surachai Prachasithisak Thai NVDR CO.,LTD. Others Total

255,390,000 36.26 174,000,000 24.70 25,000,000 3.55 25,000,000 3.55 25,000,000 3.55 12,000,000 1.70 10,391,900 1.48 10,000,000 1.42 9,870,000 1.40 5,536,900 0.79 152,192,700 21.60 704,381,500 100.00

Dividend Policy The Company has a policy of paying dividend to the shareholder at the rate of not less than 40% of the annual netprofit after deduction of legal reserves and other reserves. The dividend may vary according to performance, expansion plan, liquidity, necessity and other appropriate plans of the Company in the future as considered by the Board of Directors that will have the greatest benefits to the shareholders

Major Development Public Company Limited â&#x20AC;&#x201A;

Organization

Board of Director Risk Management Committee

Audit Committee Executive Committee

Nominating Compensation Committee

Chief Executive officer

Internal Audit and Control Department

Managing Director Corporate Marketing Division

Finance & Accounting Division

Corporate Development Division

Poject Development Division 1

Poject Development Division 2

Business Development

Corporate Marketing Division

Finance & Accounting Department

Human Resources & Administrative Department

Product Development & Quality Control Development

Investor Relation Development

Management Accounting Department

Legal Department

Construction Management Development

Purchasing Development

Sales Department

Marketing Development

â&#x20AC;&#x201A; 36 Annual Report 2012

Information Technology Development

Management structure The management structure of the Company comprised 5 committees: the Board of Directors, the Executives Committee, the Audit Committee, Selection and Remuneration Committee and Risk Management Committee. The Board of Directors and the Executives of the Company comprised of qualified persons according to Section 68 of Public Company Act 1992 and the notifications of the Securities and Exchange Committee. The committees of the Company were as follows:

Board of Directors As of 31 December 2012, Selection and Risk Board of Executives Audit Remuneration Management Directors Committee Committee Committee Committee 9 6 3 5 4

1. Mr. Chumroen Poolvoralaks 2. Mrs. Prathin Poolvoralaks 3. Mr. Suriyon Poolvoralaks 4. Dr. Suriya Poolvoralaks 5. Miss Petrada Poolvoralaks 6. Mrs. Jitradee Poolvoralaks 7. Mr. Chanin Roongsang 8. Mr. Smith Banomyong 9. Mr. Sanguankiat Lewmanomont

Note

I I I

- - - - - - - - - - - - -

Chairman Vice Chairman I Independent Director Director

Mr. Sithipon Ratanaporn as Secretary to the Board of Directors/the Executives Committee/the Selection and Remuneration Committee/the Risk Management Committee and Miss Montakarn Thiennetinunt as Secretary to the Audit Committee Note: Please see details of responsibilities of committees and sub-committees in the Company’s annex 56-1

Authorised signatory directors of the Company were Mr. Chumroen Poolvoralaks together with Mrs. Prathin Poolvoralaks or Mr. Suriyon Poolvoralaks with the Company’s seal.

Major Development Public Company Limited

Executives Committee As of 31 December 2012, the Company had 6 directors No.

1. 2. 3. 4. 5. 6. 7.

Name

Mr. Suriyon Poolvoralaks Dr. Suriya Poolvoralaks Miss Petrada Poolvoralaks Mrs. Jitradee Poolvoralaks Mr. Sithipon Ratanaporn Mr. Jamorn Wongsathaporn Mrs. Intira Chanthong

Position

Chief Executive Officer Managing Director Executive Vice President - Corporate Development Division Executive Vice President - Marketing Division Vice President - Finance and Accounting Division Vice President - Project Development 1 Vice President - Marketing and Sale Division

Note: Please see details of responsibilities of the Chief Executive Officer in the Companyâ&#x20AC;&#x2122;s annex 56-1

Other details of non-board executives Mr. Sithipon Ratanaporn (Age 51) Vice President - Finance and Accounting Division Education BA in Business Administration with accounting major, Ramkhamhaeng University Mr. Jamorn Wongsathaporn (Age 50) Vice President - Project Developent 1 Education MBA University of the Thai Chamber of Commerce BSc in Civil Engineering, Prince of Songkla University Mrs. Intira Chanthong ( Age 40) Vice President - Marketing and Sale Division Education BA Business Administration with Marketing Major, Assumption University

Selection of Board of Directors and Executives The Company had appointed the Selection and Remuneration Committee to consider and propose qualify persons for the positions in the Board of Directors and the high level executives of the Company to the shareholders for approval. The Committee was also responsible for the consideration of policy pertaining to the remunerations and benefits of the Board of Directors, the Executives Committee, the Audit Committee, Selection and Remuneration Committee and Risk Management Committee and the employees. The criteria for the selection, appointment, impeachment or resignation of the Board of Directors were listed in the rules and regulations of the Company, which could be summarised as follows: The Board of Directors comprised at least 5 persons. At least half of the Directors must have their residence in Thailand. The Directors could be either shareholders or not. The Selection and Remuneration Committee would process the selection and appointment of the Board of Directors and propose its findings to the shareholders using the following regulations and procedures: (1) Each shareholder had 1 vote per 1 share (2) Each shareholder could use the votes as in 1 to select one or more directors but could not give more votes to one candidate than other candidates (3) The number of persons with the most votes respectively would be selected as the Directors according to the required number of Directors. In the case of more than one person had the same number of votes, the Chairman of the meeting would decide.

â&#x20AC;&#x201A; 38 Annual Report 2012

At every annual shareholders meeting, at least one third of the member of the Board of Directors must resign. If the number of Directors could not be divided by 3, the closest number to one third would be used. The past Directors could be reelected. The Directors that had to resign in the first and second year after the registration of the Company must draw lots. After that the Director that served the longest must resign. Any Directors wished to resign must submit resignation letter to the Company. The resignation would take effect on the day that the Company received the resignation letter. The Director that resigned must also inform the registrar. At the shareholders meeting, any director could be voted to leave the position before his term ends with at least three quarter of the total number of shareholders with the voting rights and the total number of shares must be at least half of the total number of shares held by the shareholders attending the meeting.

Remuneration for the Directors and the Executives 2012 2011 Remuneration Type Position Amount Amount No. (Baht) No. (Baht)

Director Remunerations 1. Mr. Chumroen Poolvoralaks Chairman 240,000 240,000 2. Mrs. Prathin Poolvoralaks Vice Chairman 180,000 180,000 3. Mr. Suriyon Poolvoralaks Director 180,000 180,000 4. Dr. Suriya Poolvoralaks Director 180,000 180,000 5. Miss. Petrada Poolvoralaks Director 180,000 180,000 6. Mrs. Jitradee Poolvoralaks Director 180,000 180,000 7. Mr. Chanin Roongsang Independent Director and 240,000 240,000 Chairman of the Audit Committee 8. Mr. Sanguankiat Lewmanomont Independent Director and 180,000 180,000 Director of the Audit Committee 9. Mr. Smith Banomyong1 Independent Director and 180,000 180,000 Director of the Audit Committee Total 1,740,000 1,740,000 Other remunerations: - None -

Major Development Public Company Limited â&#x20AC;&#x201A;

Financial Remuneration for the Executives 2012 2011 2010 Remuneration Type Amount Amount Amount No. (Baht Million) No. (Baht Million) No. (Baht Million)

Salary Bonus Provident Fund Other Total

7 16.17 6 14.52 6 14.31 3 1.23 3 0.60 3 1.51 6 1.22 6 1.12 6 1.08 7 5.24 6 0.60 6 0.60 7 23.864 6 16.84 6 17.50

Other remunerations: - None -

Principles of Good Corporate Governance The Company has prescribed the Principles of Good Corporate Governance in accordance with the guidelines provided by The Stock Exchange of Thailand in order to ensure efficient, transparent and able to be audited management systems, thus fostering trust and confidence among shareholders, stakeholders, and all other related parties. The Good Corporate Governance is a means to add a firm’s value and contribute to sustainable growth of the Company. The details of the Good Corporate Governance are as follows:

Chapter 1: Rights of Shareholders

The Company protects the rights of shareholders and supports basic shareholder rights as stipulated by law. To illustrate, shareholders have right to share in the profit of the Company; buy, sell or transfer share; obtain relevant and adequate information on the Company; participate and vote in the shareholders meetings to elect or remove members of the board; determine the remuneration for members of the board; appoint an auditor; determine audit fee; and make decisions on any transactions that affect the Company. The Company has created a website to provide important information and news such as financial reports, the Company’s annual and quarter results, annual reports, etc. In addition, in shareholders meetings, the Company shall provide facilities and meeting venues that can be conveniently reached and allocate adequate time for meeting. During the meeting, shareholders shall be treated in an equal way. That is, they have right to express their opinions and ask questions equally. Moreover, any questions, issues, opinions or suggestions by the shareholders shall be noted down in a minute of meeting.

Chapter 2: Equitable Treatment of Shareholders

The Company has a policy to treat shareholders and facilitate them in an equal way in terms of opportunities to attend meetings, the supply of information and their rights to vote in the shareholders meeting. The Company shall send a meeting invitation letter approved by the board of directors as well as all information regarding the meeting to the shareholders at least 7 days before the date of meeting (pursuant to the stipulations of the Securities and Exchange Commission and The Stock Exchange of Thailand). Moreover, a notice of the meeting shall be posted in a newspaper no less than 3 days prior to the date of the meeting whereby no new issues for consideration in the meeting other than the ones already specified in the invitation letter are allowed to add to the notice. This is in order that the shareholders will have sufficient time to consider and study about the meeting agendas in order to vote properly. In case that any shareholders cannot attend the meeting, they can nominate other persons to participate in the meeting. Shareholders are provided with an option that they may appoint an independent director as their proxy to attend the meeting and vote, whereby a name list of nominated directors are specified in a letter of attorney attached to the meeting invitation letter. The Company has managed to supervise the use of corporate information. That is, the Company has right to prohibit any directors, executives, managers of departments and employees of the Company from using the corporate material information, including information about purchase of securities that has not been disclosed to the public and might have an effect on the stock’s price of the Company, for personal benefits. In the event that the Company finds that any shareholders, directors, executives, managers, and employees violate the regulations specified herein, the Company shall precede an action against and punish the violators.

40 Annual Report 2012

Chapter 3: Roles of Stakeholders

The Company has prescribed business ethics with the following details:

1. Conflict of Interests Code The Company’s directors and employees are encouraged to avoid engaging in any situation in which there is any conflict of interests between the Company and them. The guidelines are as follows: A conflict of interests include any effort to disclose the Company’s confidential information to the third party during the period of employment by the Company and thereafter or while one’s taking a position in the Company. Directors or employees shall avoid a conflict of interests between self-advantage and the benefit of the Company when dealing with the government sector or government agencies, partners and any related persons. The board of directors and employees are prohibited from using corporate information for their own or others’ benefits. During the period of time working for the Company and the time after work, directors and employees shall not disclose any corporate confidential information for other people’s benefits. Directors and employees are prohibited from taking a position as a member of the board of directors or consultant for any other companies, which may result in the conflict of interests and conflict in business provided that the management team or shareholders have already been informed about this (as the case may be). Directors and employees must use the Company’s resources for the sake of the Company and must not use them for personal benefit. Directors or employees must inform the Company in writing immediately in the event that their family members engage in the business of other companies which may lead to a conflict of interests. In the event that any employee wants to act as a director or consultant for another company, organization or business society, the act must have no conflict of interests in regard to their duties in the Company and they must obtain prior permission from the board of directors. Directors and employees must fully devote themselves and their time to the Company’s activities without doing any other activities that are irrelevant to their duties for their own or others’ benefits. 2. Code of Ethics for Shareholders Any work, activities and decision-making carried out by directors and employees should be done for the utmost benefits of the shareholders. Shareholders have right to obtain any necessary information. Therefore, the Company shall provide a clear and accurate report on the management of the Company, its financial status and operating results to the shareholders on a regular basis in accordance with the regulations of the Securities and Exchange Commission and The Stock Exchange of Thailand. The Company shall treat all shareholders equally in shareholders meetings. 3. Code of Ethics for Clients In order to find out a method to respond to the needs of their clients more effectively and efficiently, the Company has set up a policy and guidelines as follows: Customers shall be provided with quality products and services that correspond to their need. Customers shall be provided with accurate and adequate information that is the most recent so that they learn about the Company’s products and services. The provided information shall not be exaggerated to avoid making them misunderstand about the products and services. Customers shall be treated politely and efficiently. A person acting as the Company’s representative shall be reliable. In addition, there should be a complaint handling process available for customers. Moreover, customers shall be treated with fast action and best efforts to serve their needs. Information about customers shall be kept in secret and not to be abused for personal or others’ benefits. Advice about products and services should be provided effectively for the best benefit of customers.

Major Development Public Company Limited

4. Code of Ethics for Partners The provision of products and services by the Company must represent the highest standards in order to develop and preserve good relationship with suppliers, government sector or government agencies, and parties to the contract. In addition, directors and employees are prohibited from accepting any personal benefits offered by suppliers, government sector or government agencies, and parties to the contract. 5. Code of Ethics for Commercial Competitors The Company’s policy supports a fair competition in doing business yet it shall engage in competitions with strong determination. The Company shall not use an illegal or unethical method to take advantage from the competitors. In addition, it is not permissible to steal information or use others’ important information that is either commercial information or commercial secret, without prior permission from its owner. Moreover, tricking present or former employees of another company into disclosing confidential information is prohibited. 6. Code of Ethics for Creditors The Company has a policy to obey the terms and conditions of the credit agreement that the Company has with all creditors. 7. Code of Ethics for Employees Through good cooperation from all employees, the Company shall prevent all employees from any accident, injury or sickness in connection with their work. The Company shall continue doing research and managing to cope with any harmful risks concerning work. The Company shall provide instruments, tools, equipment and trainings about safety for workers and property of the Company. In addition, in the case of any emergency or incident resulting from work, the Company shall get involved and take care of the incident efficiently. The Company shall strictly follow applicable laws, rules and regulations. Moreover, it shall develop and organize trainings to ensure that all employees have good understanding and obtain adequate information concerning working environment, work processes and sickness in connection with work. 8. Code of Ethics for Environment According to the Company’s policy, its business shall be carried out without sacrificing the obedience of the law and regulation about environment.

Chapter 4: Disclosure and Transparency

The Company shall disclose important information relevant to the Company correctly and completely in a timely manner in accordance with the regulations of the Securities and Exchange Commission and The Stock Exchange of Thailand via different channels and corporate website both in Thai and English so that the information can be accessed equally by users. Actually, the Company disclosed its information in the Annual Registration Statement (Form 56-1) and Annual Report (Form 56-2) in accordance with the regulations of the Securities and Exchange Commission and The Stock Exchange of Thailand.

Chapter 5: Responsibilities of the Board

The board of directors comprise 9 members: 4 management directors, 2 non-management directors, and 3 independent directors, all of whom are knowledgeable and expert in various professional fields which contribute to the growth of the business of the Company and are qualified to possess the position of director of listed companies in compliance with applicable law and the rules and regulations of the Company. The board of directors performs a leading role in determining the Company’s policies and taking part in making consideration and approval for the Company’s vision, mission, strategies, objectives, business plans and budgets as well as supervising the management team in implementing the policy effectively and efficiently.

42 Annual Report 2012

The board of directors is responsible for supervising important business and corporate governance, as well as the Companyâ&#x20AC;&#x2122;s financial statement and financial information to be disclosed to the public in the Annual Registration Statement (Form 56-1) and Annual Report (Form 56-2). The arrangement of the said forms shall be consistent with accounting standards used nationwide and shall be audited by a certified public account that is certified by the Securities and Exchange Commission. An appropriate financial policy shall be selected and practiced regularly with careful discretion. In addition, important information shall be adequately disclosed and specified in Notes to Financial Statement. The board of directors shall provide and maintain an effective internal control system to rationally ensure that financial data is recorded accurately and completely in order to prevent any dishonesty or wrongful act while audit committee comprising non-management directors and independent directors are responsible for the quality of the financial report. Meanwhile, the department of Internal Audit and Supervisory oversees and examines different businesses of the Company to ensure that the Company follows the rules and regulations of the government and those of the Company itself. To ensure their independent and objective audit and to balance power, the said department shall directly report their audit results to audit committee, develop measures to manage risks effectively, and follow up audit work regularly by themselves. The board of directors appoints sub-committee to carry out work in different areas as assigned. Moreover, the board defines the scope of responsibilities of committee, sub-committee and the management team by determining clearly the levels of authority regarding financial issues. The Company has 3 groups of the sub-committee as follows: Audit committee comprises 3 members appointed on 3 December 2011 with 3-year term of service starting from 3 December 2011 until 2 December 2014 Nomination and remuneration committee comprises 5 members appointed on 4 May 2010 with 3-year term of service. Risks management committee comprises 4 members appointed on 4 May 2010 with 2-year term of service. A board of directors meeting shall be organized every 3 months and special meetings may be arranged as needed. To organize a meeting, a meeting invitation letter and information necessary for the meeting shall be provided to the committee no less than 7 days prior of the date of the meeting in accordance with the regulations of the Company. No. of Meetings Attended No.

Name

Position

No. of Meetings Attended 2012 2011 2010

Chairman 20/20 23/23 Vice Chairman 20/20 22/23 Director 20/20 23/23 Director 20/20 23/23 Director 15/20 23/23 Director 20/20 22/23 Chairman of the 20/20 22/23 Audit Committee Member Independent Director and 20/20 23/23 Audit Committee Member Independent Director and 20/20 23/23 Audit Committee Member

17/17 17/17 17/17 17/17 17/17 17/17 17/17 17/17 17/17

Note: 1. Mr. Sirot Setabandhu had resigned as Independent Director and the Audit Committee Member and Mr. Smith Banomyong was appointed as Independent Director and the Audit Committee Member effective as of 15 September 2008 Major Development Public Company Limited â&#x20AC;&#x201A;

The Company prescribes good practices concerning the code of ethics for directors and employees so that all related parties shall use it as guidelines for performing duties and doing assignments of the Company with care, integrity, honesty and justice when dealing with the Company itself and all groups of stakeholders. The code of ethics has been announced to all related parties to acknowledge and follow. The Company provides measures to prevent conflict of interests whereby the Company strictly follows the Securities and Exchange Act, as well as regulations, announcements, orders or requirements of the Securities and Exchange Commission. In the event that any director, executive, shareholder or any other person with potential conflict of interests has interest in a transaction, that person shall have no right to vote and approve the related transaction. The said transaction shall be undertaken to support the main business of the Company whereby related prices and terms and conditions shall be determined according to the market to ensure that they are comparable to those commonly offered. Moreover, the policy requires directors and executives to report any changes in securities holdings to the board of the directors and the Securities and Exchange Commission in accordance with Section 59 of the Securities and Exchange Act B.E. 2535. The Company provides investors-protecting measures the process of which can be examined. The Company shall disclose related transactions in Notes to Financial Statement that have already been audited by an auditor and certified by audit committee members. The audit committee members shall express their opinions about the need and rationality of the related transactions in the financial statement audited by the auditor. Nomination and remuneration committee are responsible for determining clearly and transparently the remuneration for directors in an amount that is suitable for the responsibilities of each member of the board and that is comparable to the same industry. Managing directors are subject to an extra amount of remuneration due to their executive position that relates to the operating results of the Company and their work performance. The Company requires that the remuneration paid to directors and executives be disclosed in accordance with the regulations of the Securities and Exchange Commission. The Board of Directors always put great importance to the disclosure of financial and other relevant information that was correct, complete, transparent, trustworthy and on-time to investors and other relevant persons. The information was disseminated via the website of the Stock Exchange of Thailand and the Companyâ&#x20AC;&#x2122;s owned website. The Company also set up an Investors Relation Unit to provide information and other news to the investors, analysts and the general public. Investors Relation Unit could be contacted at tel: 0-2392-1111 ext. 111 or www.majordevelopment.co.th.

Internal Control Audit committee is responsible for investigating the carrying out of work to ensure that the work is performed correctly in accordance with the policy and rules of the Company as well as applicable law, and the regulations of the office of supervisory. The audit committee shall have duties to promote the development of the financial report and accounting system to be consistent with common audit standards, and ensure that the Company has strict, appropriate, modern and efficient internal control, internal audit and risks management systems. The audit committee able to perform their investigation and express their opinions independently whereby the department of Internal Audit and Supervisory reports to them. By having a preventive audit policy that the Company can benefit from, the department of Internal Audit and Supervisory is responsible for evaluating the internal control in accordance with the regulations prescribed by the audit committee. The department checks the accuracy and reliability of financial reports, discloses adequate information in order to achieve transparency, monitors the practices of the Good Corporate Governance, and enhances the effectiveness and productivity of work by following audit guidelines of international standards. Taking into consideration the evaluation of internal control system of the Company in 5 areas, i.e. organization and environment, risks management, the supervision of work practices of the management team, information technology and communication, and follow-up system, the board of directors deem that the Company has adequate internal control system to oversee transactions undertaken with major shareholders, board of directors, executives and related persons. The board of directors also considers that the internal control system is efficient enough to oversee other aspects of management. The Companyâ&#x20AC;&#x2122;s internal control system is briefly explained as follows:

â&#x20AC;&#x201A; 44 Annual Report 2012

1. Organization and Environment The Company has an appropriate organizational structure, enabling effective internal control. In addition, it has clear policies, work plans and business targets that can be evaluated, and shows efforts in promoting clear and transparent Good Corporate Governance and code of ethics. It is thus considered that the internal control system is adequate and practiced appropriately. Furthermore, the Company’s policies, work plans and targets are developed by taking into consideration fair treatment for employees, clients and commercial competitors, and responsibilities that the Company has for shareholders, the society and environment. What’s more, employees of the Company share good values and work guidelines continuously whereby they are prohibited from engaging in activities that may cause conflict of interests. Moreover, it is found that the Company’s written policy and rules and regulations concerning financial transactions, purchasing activities and good management can help prevent any dishonest act effectively. 2. Risks Management The board of directors focuses on risks management. The risks are determined and evaluated in order to provide preventive measures and efficiently manage risks including those having an impact on the performance of the Company. Risks management is supervised by the Company’s audit committee while its guiding policies are approved by the board of directors in order to provide guidelines and get the Company ready to cope with changing situations appropriately and timely. According to the risks management policy, The board of directors and executives are responsible for evaluating, tracking and supporting the carrying out of effective risks management process; The Company has risks management process in place, and evaluates and follows up the process continuously and systematically. The process is thus constantly improved to suit changing business situations; and Audit committee has duties of evaluating risks management and proposing suggestions to the board of directors. The Company constantly determines internal and external risks that may affect its business by analyzing causes, providing guidelines and management measures to reduce risks. It also reviews risk management policy for improvement. Furthermore, the Company ensures that related employees are well informed of risks management measures and all divisions follow the risks management plan. 3. The Supervision of Work Practices of the Management Team The Company defines the scope of duties and responsibilities as well as approval authority of the members of the management team in different levels clearly in writing whereby the duties of making approval, making accounting records, managing information and looking after the Company’s property are clearly separated in order to balance power and enable effective examination. In the event that the Company makes transactions with directors and executives, common commercial terms and conditions shall be followed and the rights bestowed upon the Company’s employees shall be taken into consideration. In addition, the Company always sticks to its own measures in controlling such transactions. To undertake a transaction, prior approval shall be obtained from the management division or the board of directors or shareholders meeting according the regulations specified by The Stock Exchange of Thailand. In doing so, the Company shall also disclose the information in accordance with the said regulations. The approval for each transaction shall be made by those who are not interested persons as the utmost benefit for the Company is always taken into consideration. Such transactions are treated in the same way as transactions made with the third party. The Company constantly oversees the business of its subsidiary companies and joint venture companies, and provides directions and guidelines for those appointed as directors and executives in those companies. In addition, the Company ensures that the management teams have followed related laws in order to reduce risks in doing business and preserve the good reputation of the Company.

Major Development Public Company Limited

4. Information Technology and Communication The Company collects information and constantly provides important information to executives in each level by processing it through the reporting system in an adequate and timely manner so that executives can use it when making decisions. What’s more, the Company provides a network for supplying information to ensure that all employees have good understanding about the Company’s policies, rules and regulations, that the communication reaches all levels in the Company. The directors and executives shall obtain meeting invitation letters for a meeting of the board of directors and necessary documents in advance within the minimum period of time as stipulated by the law except in the event of an urgent meeting. Besides, minutes of directors meetings always contain adequate details that enable shareholders to check the work practices of directors. The Company arranges all documents about accounting systematically and has never been informed of any mistakes regarding this issue by an auditor. It has been deemed by the board of directors that the Company applies the accounting policy that is consistent with common accounting principles and appropriate for its business. 5. Follow-up System The Company monitors and compares business performances to see whether it achieves the target or not. In the event that corrections and improvements are required, the Company shall take action in a timely manner by analyzing and investigating the causes of the problem to initiate preventive measures and improve the situation. Moreover, the Company works to ensure that its internal audit system is strictly followed. In case of any mistake found, a report shall be made and submitted to the board of directors and audit committee for improvement. According to the Company’s policy, the management team is required to report to the board of directors any dishonesty or suspected dishonesty, illegal or wrongful act that may affect the Company’s reputation and financial status. Audit committee has examined internal control system and has it evaluated by executives and internal audit division. It is found that the Company’s internal audit control is sufficient and efficient enough; there are no significant problems or major mistakes. The Company ensured that the Executives at all level were aware and understood their responsibility in reporting the holding of shares by themselves, their spouses and under-aged children, including any changes in the share holding, to the Securities and Exchange Commission. The Company established regulations for the employees regarding the disclosing or gaining benefits of any confidential news, the protection of confidential information and the use of their position in the Company or information received for their own benefits or reduction of benefits to the Company. The Company had clear disciplinary procedures for breaching of these regulations. The Company had a policy that would not allow the Directors of the Executives to use important internal information, which had not been publicly disclosed for their own benefits or other persons’ benefits. This included the trading of the Company’s shares by Directors, Executives and employee within the department that had the internal information. They should avoid or refrain from trading the Company’s shares during the 1-month period prior to the public disclosure of the financial report.

46 Annual Report 2012

Related Party Transactions

The related party transactions as are as follows:

Individuals juristic persons Transactions that may have Description of for Details of conflict of interest Relationships transactions 2012 transactions

Audit Committee’s comments on necessity and reasons

MJAI Development A subsidiary company The Company On 1 November 2007, the Company MJAI Development Co Ltd., is a joint Co., Ltd, with the Company • long-term loan 441.45 gave a loan to MJAI Development venture between the Company and • Advance Received 4.157 Co., Ltd, which was a subsidiary, Invesco Asian Real Estate partner II holding 51% of the paid-up • interest receivable 84.48 company to develop Royce Private Estate Partner II with the shareholding • interest earned 27.32 Residences Sukhumvit 31with in MJAI Development Co Ltd registered capital. • Account Receivable 13.32 TISCO Bank standard interest rate as follows: at MLR and the loan payback date of The Company holds 51% of the 1 November 2011 or when the project shares (amounts to Baht 12.75 million), is completed and the subsidiary Best Lead Investment Limited holds 21% company has paid the loan back to of the shares (amounts to Baht 5.15 million), TISCO Bank, whichever comes first. T Milestone Limited holds 28% of the shares (amounts to Baht 7.10 million). During 2011, the Company and Development Co Ltd extended MJAI As for the long-term loan, it is being the loan payback period to 1 used as part of the fund to develop November 2013. projects around Sukhumvit 31. Approved because the said transaction was for the necessity and benefit of the company and the loan conditions was in accordance with general trading practice and the interest rate was at the market rate. The Company The company also entered into Approved the said transaction for • management fees 10.50 a management contract with the management fee for MJAI • Other Revenue 1.15 MJAI Development Co., Ltd. Development Co Ltd. A subsidiary company The Company On 26 December 2012, the company Major Development 1.0 provided a loan to Major Development Hotels and Resorts with the Company • long-term loan Co., Ltd. holding 99.99 % of • interest receivable 0.14 Hotels and Resorts Co Ltd, which was 2.56 an affiliated company, to use as cash the paid-up • interest earned 13.93 flow to the operate Marakesh Hua Hin registered capital. • cash advance Hotel at an interest rate of 5.5% with the due date of 25 December 2013.

Major Development Hotels and Resorts Co., Ltd is a subsidiary company with the Company holding 99.99% of the shares. The long-term loan was part of the fund used to pay for the land and construction of the hotel within the Marakesh Project. Approved because the said transaction was for the necessity and benefit of the company and the loan conditions was in accordance with general trading practice and the interest rate was at the market rate.

Major Development Public Company Limited

Individuals juristic persons Transactions that may have Description of for Details of conflict of interest Relationships transactions 2012 transactions

Audit Committee’s comments on necessity and reasons

Major Development A subsidiary company The Company On 22 December 2012, the company Approved because the said transaction entered into a land purchase contract with was for the project development of Residences Co., Ltd. with the Company • cash received 119.14 holding 99.99 % of in advance Major Development Residences Co Ltd at Major Development Residences 0.642 an at-cost value of Baht 119.1 million. On Co Ltd. the paid-up • cash advance registered capital. • cash-Short-term loan 133.50 the contract date, the company received • interest paid 3.95 a deposit of Baht 119.1 million and would • Advanced Interest 5.16 transfer the ownership within 30 April 2013. The company entered into a long-term loan contract with Major Development Residences Co Ltd to the amount of Baht 133.5 million for the purchase of land for Sukhumvit 39 project.

MJR Development A subsidiary company The Company The company received an advanced Approved because the said transaction Co., Ltd. with the Company • cash advance 2.62 payment from MJR Development Co Ltd was for the necessity of the company. 3.19 for expenses between each other. The holding 99.99 % of • Commission Fee registered capital. and Expenses company entered into a contract with MJR • Account Payable 3.41 Development Co Ltd to provide service to the company. MJP Property Co., Ltd. A subsidiary company The Company with the Company • Deposit Received 277.83 holding 99.99 % of registered capital. • Advance Paid 26.87

On 29 June 2012, the company entered into a land purchase contract with MJP Property Co Ltd at an at-cost value of Baht 370 million and transferred some land title deeds with only deposits for the land remaining to be paid. The company received an advance payment from MJP Property Co Ltd to clear any future expenses between each other.

Approved because the said transaction was for the necessity of the company.

A subsidiary company The Company with the Company • cash advance 0.11 holding 99.99 % of registered capital.

The Company advanced the payment of expenses for MJC Construction Co., Ltd.

Approved because the said transaction was for the necessity of the company.

Mr. Chumroen The shareholders The Company The company received a loan from • long-term loan 135.00 Mr Chamroen Poolvoralaks to use as Poolvoralaks and directors • interest paid 1.32 working capital with an interest rate • cash advance 3.41 of 8.125% (based on interest rate of TISCO Bank).

Approved because the said transaction was for the necessity and benefit of the company and the loan conditions was in accordance with general trading practice and the interest rate was at the market rate.

Mr. Suriya The shareholders The Company The Company received a loan from • short-term loan 5.0 Mr. Suriya Poolvoralaks as cash flow Poolvoralaks and directors • Accrued Interest 0.11 for Marakesh Resort and Spa Hua Hin • interest paid 0.08 with an interest rate of 5.875% and the payback date within 2012.

MJC Construction Co., Ltd.

48 Annual Report 2012

Individuals juristic persons Transactions that may have Description of for Details of conflict of interest Relationships transactions 2012 transactions

Audit Committee’s comments on necessity and reasons

Mr. Pisal The father of Mrs. The Company Ungkasekvilai Jitradee Poolvoralaks • Revenue from 10.00 who is the shareholder transfer of ownership and director (Mrs. • Advance payment Jitradee Poolvoralaks received for condominium is the wife of Mr. Suriyon Poolvoralaks.

On 1 September 2009, the Company entered into a contract with Mr. Pisal Ungkasekvilai who was related to the shareholder and director of the Company for the purchase of two condominium units at Collezio Sathorn-Pipat at the contractual prices of Baht 6.00 million and Baht 4.00 million as of 31 December 2011. The ownership of the said condominium unit has been transferred.

The said transaction was approved because the said contractual price was within the framework of a normal business transaction in accordance with the general trading practice and pricing that was appropriate, fair and within reason.

Mr. Sanguankiat Audit Committee The Company Lewmanomont Member. • cash received in 3.96 advance for the condominium

On 12 June 2008, the Company entered into a contract with Mr. Sanguankiat Lewmanomont for the purchase of two condominium units at Marakesh Hua Hin at the contractual prices of Baht 13.21 million and Baht 8.03 million as of 31 December 2011. The transfer of ownership of the said condominiums has not been made.

Mrs. Chanyarach The wife of Mr. The Company On 29 August 2010, the Company Panomyong Smith Panomyong • cash received in 0.65 entered into a contract with who is the Audit advance for the Mrs. Chanyarach Panomyong who Committee Member. condominium was related to the Audit Committee of the Company for the purchase of a condominium unit at Equinox Phahol-Vibha at the contractual price of Baht 2.96 million as of 31 December 2011. The transfer of ownership of the said condominium has not been made.

Mrs. Prathin The shareholders Guarantee for bank 10.29 Poolvoralaks and directors. overdraft from financial Mr. Suriyon institution with a credit Poolvoralaks line of Baht 12.3 million Miss Petrada Poolvoralaks

The loan of the amount of Baht 12.3 million guaranteed by three shareholders and directors comprising Mrs. Prathin Poolvoralaks, Mr. Suriyon Poolvoralaks and Miss Petrada Poolvoralaks with personal properties of the directors as collateral.

The said transaction was approved to improve the cash flow of the Company’s operation.

Mrs. Prathin The shareholders Advising Fee 2.40 Poolvoralaks and directors. The Company • cash received in 0.20 advance for the condominium

The Company hired Mrs. Prathin Poolvoralaks as the Management and Marketing Advisor since March 2009. In 2011, the advising fee was Baht 200,000 per month. On 17 March 2008, the Company entered into a purchase agreement with Mrs Prathin Poolvoralaks who was related to the shareholder and director of the Company for a condominium unit at Royce Private Residences Sukhumvit 31 at a price of Baht 50.15 million.

The said transaction was approved for the benefit of the Company’s operation.

Lewmanomont The directors of the Professional Fee 0.95 The Company hired Lewmanomont International Legal Office said company are International Legal Office as its Ltd. the Audit Committee legal advisor with advising fee Member of the according to actual services. Company.

The said transaction was approved because the said price was within the framework of a normal business transaction in accordance with the general trading practice and pricing that was appropriate, fair and within reason.

Major Development Public Company Limited

Related transactions policy and future trend In the future, the Company may need to enter into related transactions as necessary. The Company will comply with the Securities Exchange Act, rules, notices, orders or regulations of the Stock Exchange of Thailand and in accordance with accounting standards regarding the disclosure of information pertaining to person(s) or related activities as stipulated by the Institute of Certified Accountants and Auditors of Thailand. Normal related transactions For normal related transactions of the Company that continues to occur in the future, the Company has established the following frameworks for these transactions. These transactions must be in accordance with general trading practices with reference to general pricing and conditions that are appropriate, fair, reasonable and accountable without conflict of interest. The frameworks has been submitted and approved by the Audit Committee so that the Company can record the transactions that fall within these frameworks. In the case of transactions that fall within the above policy, the management of the Company can proceed with the transactions without prior approval from the Audit Committee. However, to comply with the principles of good governance practice, the Company must report these normal related transactions to the Audit Committee for acknowledgement every quarter. These normal transactions of the Company must be normal trade transactions in accordance with the definitions of the Stock Exchange of Thailand. It should be transactions that the Company would normally conduct with other persons that are not related to the Company, such as procuring building materials and hiring construction contractors. The conditions of these transactions must be the same as normal general trade conditions with pricing and conditions that do not create a conflict of interest. These conditions include the following pricing and conditions: 1) The pricing and conditions that the Company receives are similar to those given to others. 2) The pricing and conditions that the related person(s) receive are similar to those given to the others. 3) The pricing and conditions that the Company could show that other companies would give to the others. Unusual related transactions In cases of unusual related transactions, the Company must submit them to the Audit Committee for approval on a case by case basis. If the Audit Committee does not have the expertise regarding the related transactions, the Company must identify an expert, such as an independent auditor or asset assessor to advise about the transactions. The comments of the Audit Committee or the expert will be used for consideration by the Board of Directors or shareholders as the case may warrant. This will ensure that there is no conflict of interest between the Company or shareholders but the transactions occur for the greatest benefits of all shareholders. As for the personal guarantee by shareholder(s) and/or director(s) for loans from financial institutions in the past and in the future, the Company will not pay any remuneration in any forms for these personal guarantees. As for loans that the Company borrows from director(s) or shareholder(s) who have a conflict of interest with the Company in the past and in the future, the Company must submit these transactions to the Audit Committee for approval to ensure that these transactions are necessary and appropriate. The loans must also receive approval from the Board of Directors. These transactions must also comply with the Securities Exchange Act, rules, notices, orders or regulations of the Stock Exchange of Thailand. The Company will also comply with the accounting standards regarding the disclosure of information pertaining to person(s) or related activities as stipulated by the Institute of Accountants and Auditors of Thailand. In addition, the interest rate paid to the person(s) with the conflict of interest must be at the rate not higher than the rate the Company receives from the financial institutions.

â&#x20AC;&#x201A; 50 Annual Report 2012

01 Aguston Chinese New Year

AGUSTON Sukhumvit 22 held a Chinese New Year Celebration Event on 28-29 January 2012. Customers that book a unit in the event will receive solid gold weight up to 120 Baht. This is one of the successful marketing campaigns by Major Development.

Last Year Activities Phahol - Vibha hosted 02 EQUINOX splendor Become a Brilliant Star of Dragon Year

Condominium, Office Space & Community Mall on Phaholyothin & Vibhavadi road, easy to access two ways both Phaholyothin & Vibhavadi road. Listening to good Feng Shui in Rabbit year by Master Katha Shinabunchor, Feng Shui Guru, with delicious food on 28 - 29 January 2012

Silom and M Ladprao The Signature 03 MValentine’s Event

In February 2012, the month of love, M Silom and M Ladprao has held The Signature Valentine’s Event at both of the projects’ sales studio. On 11-14 February, 2012, special Valentine’s Gifts were given to all the sweet couples that came to visits the site during the event period. And the client who reserved the unit in the event got Free Furniture Package valued up to 900,000 Baht and also received an Extraordinary Romantic Dinner Voucher @SIROCCO. Major Development Public Company Limited

Opening “Marrakesh Hua Hin Resort and Spa”Magic of Marrakesh 04 Grand Comes to Hua Hin Dr. Suriya Poolvoralaks, managing director of the resort’s developer Major Development Public Company Limited has recently launched the New Moroccan Style Beachfront Resort at the heart of Hua Hin Town “Marrakesh Hua Hin Resort and Spa” on 25th February 2013. The Grand Celebration in style with an Arabian Night Party was presided over by Abderrazaq Nabil, Charge d’Affaires of the Embassy of the Kingdom of Morocco and his wife and also attended by Chumroen Poolvoralaks, Prathin Poolvoralaks , Suriyon Poolvoralaks.

Major Development Living in The Front Row

Major Development held an event called, Major Development Living in The Front Row at Hall of Fame, M Floor, Siam Paragon, On 27 March - 2 April, 2012. The event was to promote 5 of the quality projects by Major Development, AGUSTON Sukhumvit 22, Reflection Jomtien Beach Pattaya, M SILOM, M PHYATHAI, and M LADPRAO with a big Extraordinary offered such as Free Signature Furniture Package, Free Trip package from Marrakesh HuaHin Resort and Spa and many more.

Development Public Company 06 Major Limited’s 2011 General Shareholders’ Meeting

Mr Chamroen Poolvoralaks, Chairman of Major Development Public Company Limited or MJD, presided over MJD’s 2009 general shareholders’ meeting, which was also attended by the management team including Mr. Prathin Poolvoralaks - Vice Chairman, Mr. Suriyon Poolvoralaks - Chief Executive Officer and Director - Dr. Suriya Poolvoralaks, Managing Director and Director and Ms. Jitradee Poolvoralaks - Director, Mr Chanin Roongsang - Chairman of the Audit Committee Member, Mr Smith Banomyong - Audit Committee Member and Mr Sanguankiat Lewmanomont - Audit

Committee Member at Ballroom A, Anantara Bangkok Riverside resort & Spa

52 Annual Report 2012

Refection 07 Summer Festival

Reflection Jomtien Beach Pattaya, has decorated the sales gallery with an old-fashioned Songkran Festival Theme during the month of Thai New Year, April 2012. A very special promotion was offered to all customers during the month such as a trip package to W Hotel Norh Ari Atoll, Maldives and also a trip package at Marrakesh Huahin Resort& Spa. There are a lot of customers that come visited, and Reflection has achieved a high level of sales during the months.

08 EQUINOX

Phahol-Vibha at Siam Paragon Luxury property Showcase 2012 EQUINOX Phahol-Vibha, condominium, office space & community mall, join Siam Paragon Luxury property Showcase 2012 at M Floor, Hall of Fame Siam Paragon in May 2012 with a very special promotion offered. This event received a great response from customers and sales volume met object in the event.

Private Residences, Sukhumvit 31 at Siam Paragon Luxury Property 09 Royce Showcase 2012

Royce Private Residences, ready to move in super luxury condominium on Sukhumvit 31 join Siam Paragon Luxury property Showcase 2012 at M Floor, Hall of Fame Siam Paragon in May 2012 with a very special promotion offered. This event received a great response from customers and sales volume met object in the event. Major Development Public Company Limited â&#x20AC;&#x201A;

10 Major Living Showcase

Major Development held an event “Major Living Showcase” at Central Ladprao on 28 June - 4 July, 2012. 5 of the quality project were brought to the event including Aguston Sukhumvit 22, Reflection Jomtien Beach Pattaya, M SILOM, M PHYATHAI, and M LADPRAO with a very special promotion offered. This event received a great response from customers and all the projects have made a lot of sales in the event.

The Highlight of High Living, episode IV, 2012

Suriyon Poolvoralaks, CEO - Major Development Plc. Held the annual condominium expo - The Highlight of high living, episode IV, 2012, with a very special privilege & the best price of the year at M Floor, Hall of Fame Siam Paragon in July 2012 MJD join with business partner such as SCB, Nok Air, Intercontinental hotel, for treat customer as a special person. This event received very good feedback from cuatomer.

54 Annual Report 2012

Sathorn - Pipat at 12Collezio Siam Paragon

Collezio Sathorn - Pipat, ready to move in condominium, held the mini event at M Floor, Hall of Fame Siam Paragon in May 2012 with a special promotion offered. This event received a great response from customers.

Private Residences, 13 Royce Sukhumvit 31 at Emporium

Royce Private Residences, ready to move in super luxury condominium on Sukhumvit 31 held the mini event at 2nd Floor, Emporium in September 2012 with a special promotion offered. This event received a great response from customers.

Royce Private Residences, Sukhumvit 31, celebrating Season’, Welcome Home Party exclusive with UOB & Thanachart bank Royce Private Residences, Sukhumvit 31 held the exclusive event in “Royce Private Residences, celebrating Season’, Welcome Home Party Exclusive offer for UOB & Thanachart bank customers”. Tantalize your taste buds with finest delicacies known around Sukhumvit neighborhood, pamper yourself with hand spa from Mulberry Spa and let us entertain your kids with the workshop of My Dream My Small World by Monkey Club. There are a lot of customers that come visited, and have achieved a high level of sales during the months. Major Development Public Company Limited

15 AGT and RFT Showcase

Aguston Sukhumvit 22 and Reflection Jomtien Beach Pattaya went to the road show event at Mega Bangna on 27 October - 4 November, 2012 which received a great response from customers.

16 Manor Sanambinnam

Celebration PRE SALES day on 17-18 November 2013 To expand the sub-branded project “Manor Sanambinnam” in Nonthaburi province, Dr. Suriya Poolvoralaks,managing director has launched before yearend the latest project “Manor Sanambinnam” which is well located along the Chao Phraya river and next to Ministry of Commerce. The riverbank project features Classic Colonial decoration style, functional units for every lifestyle and comes with double facilities and Community Mall. The starting price is 1.25 million baht and the pre-sales promotion for those who bought units at the event was the iPhone5.

Special Offer : Free iPhone5

56 Annual Report 2012

Sathorn Pipat, Your Exclusive 17 Collezio Choice of Smart Living exclusive with UOB & Thanachart bank

Collezio Sathorn Pipat held the exclusive event for viewing show suite and tasting Italian food in Collezio : Your Exclusive Choice of Smart Living Exclusive offer for UOB & Thanachart bank customers”.

18 CSR

Major Development Public Co., Ltd. held luncheon for the elderly including donated to the elderly people as celebrated mother’s day at the Royal Festival, Nakhon Pathom province on last August.

Major Development Public Company Limited

Report of Independent Auditor To the Shareholders of Major Development Public Company Limited I have audited the accompanying consolidated financial statements of Major Development Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2012, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Major Development Public Company Limited for the same period.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s 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.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Major Development Public Company Limited and its subsidiaries and of Major Development Public Company Limited as at 31 December 2012, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.

Sumalee Reewarabandith

Certified Public Accountant (Thailand) No. 3970 Ernst & Young Office Limited Bangkok: 28 February 2013

58 Annual Report 2012

Statement of Financial Position Major Development Public Company Limited and its subsidiaries As at 31 December 2012 (Unit: Baht)

Consolidated financial statements Note 2012 2011

Separate financial statements

2012 2011

Assets Current assets Cash and cash equivalents 7 128,826,862 99,843,793 87,826,486 80,543,471 Trade and other receivables 6, 8 48,825,338 81,035,302 154,971,014 183,172,192 Current portion of long-term loans to related parties 6 - - 442,456,000 - Inventories 1,067,333 5,901,677 - - Land and construction in progress 9 7,650,292,273 6,493,374,999 5,207,924,720 4,485,418,184 Advances for construction 340,389,397 255,102,468 306,213,524 224,024,129 Deposits for purchase of land 446,131,528 40,000,000 446,131,528 - Other current assets 49,970,962 40,861,309 12,176,206 13,927,557 Total current assets 8,665,503,693 7,016,119,548 6,657,699,478 4,987,085,533 Non-current assets Pledged deposits at banks 31.3 2,092,300 2,602,300 2,092,300 2,602,300 Investments in subsidiaries 10 - - 799,048,610 323,248,640 Other long-term investment 11 5,000,000 - 5,000,000 - Long-term loans to related parties 6 - - - 318,260,154 Investment properties 12 806,011,743 557,598,075 422,392,292 557,598,075 Property, plant and equipment 13 859,484,835 746,603,094 124,130,975 134,234,336 Intangible assets 14 6,167,022 7,053,233 5,306,302 6,061,840 Other non-current assets 15 45,076,595 2,165,068 1,440,000 1,440,000 Total non-current assets 1,723,832,495 1,316,021,770 1,359,410,479 1,343,445,345 Total assets 10,389,336,188 8,332,141,318 8,017,109,957 6,330,530,878 The accompanying notes are an integral part of the financial statements.

Major Development Public Company Limited â&#x20AC;&#x201A;

Statement of Financial Position

(Continued)

Major Development Public Company Limited and its subsidiaries As at 31 December 2012 (Unit: Baht)

Consolidated financial statements Note 2012 2011

Separate financial statements

2012 2011

Liabilities and shareholdersâ&#x20AC;&#x2122; equity Current liabilities Overdrafts and short-term loans from financial institutions 16 382,052,681 352,988,671 371,993,467 345,514,885 Trade and other payables 6, 17 694,781,887 627,651,598 451,607,206 318,501,091 Current portion of long-term loans 18 701,084,661 1,866,719,335 534,888,580 646,519,335 Current portion of long-term loans from related parties 6 424,144,000 - - - Short-term debentures 19 520,000,000 - 520,000,000 - Short-term loans from unrelated parties 20 772,049,884 48,740,352 - Short-term loans from related parties 6 135,000,000 20,200,000 265,580,309 - Current portion of liabilities under finance lease agreements 21 2,654,676 2,324,426 1,869,687 1,816,644 Income tax payable 24,214,722 - 24,214,722 - Retention payables 202,128,966 197,129,456 118,476,098 146,520,662 Deposits and advances from customers 6 1,740,847,563 1,534,887,260 1,566,914,240 1,115,526,521 Advances received from sales of land 6 - - 396,964,559 100,000,000 Other current liabilities 59,168,686 47,119,577 54,381,327 44,679,720 Total current liabilities 5,658,127,726 4,697,760,675 4,306,890,195 2,719,078,858 Non-current liabilities Long-term loans from financial institutions 18 2,629,949,507 1,200,500,000 1,405,905,000 1,200,500,000 Long-term loans from related parties 6 - 248,724,000 - - Liabilities under finance lease agreements 21 5,550,359 7,145,346 4,018,336 5,653,733 Provision for long-term employee benefits 22 3,989,640 2,076,165 2,718,945 1,896,474 Total non-current liabilities 2,639,489,506 1,458,445,511 1,412,642,281 1,208,050,207 Total liabilities 8,297,617,232 6,156,206,186 5,719,532,476 3,927,129,065 The accompanying notes are an integral part of the financial statements.

â&#x20AC;&#x201A; 60 Annual Report 2012

Statement of Financial Position

(Continued)

Major Development Public Company Limited and its subsidiaries As at 31 December 2012 (Unit: Baht)

Consolidated financial statements Note 2012 2011

Separate financial statements

2012 2011

Shareholders’ equity Share capital Registered 1,050,000,000 ordinary shares of Baht 1 each 1,050,000,000 1,050,000,000 1,050,000,000 1,050,000,000 Issued and paid-up 704,381,500 ordinary shares of Baht 1 each (2011: 704,378,500 ordinary shares of Baht 1 each) 23 704,381,500 704,378,500 704,381,500 704,378,500 Premium on ordinary shares 23 719,236,500 719,233,500 719,236,500 719,233,500 Retained earnings Appropriated - statutory reserve 24 95,939,000 95,939,000 95,939,000 95,939,000 Unappropriated 577,350,437 668,220,150 778,020,481 883,850,813 Equity attributable to owners of the Company 2,096,907,437 2,187,771,150 2,297,577,481 2,403,401,813 Non-controlling interests of a subsidiary (5,188,481) (11,836,018) - Total shareholders’ equity 2,091,718,956 2,175,935,132 2,297,577,481 2,403,401,813 Total liabilities and shareholders’ equity 10,389,336,188 8,332,141,318 8,017,109,957 6,330,530,878

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

Major Development Public Company Limited

Income Statement Major Development Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht)

Consolidated financial statements Note 2012 2011

Separate financial statements

2012 2011

Revenues Sales of units in condominium projects 2,471,256,476 2,704,499,614 1,102,540,520 2,704,499,614 Management fee income - - 10,500,000 7,500,000 Revenues from hotel operations 60,902,146 3,658,322 - - Other income 35,874,559 13,593,876 62,799,400 35,220,538 Total revenues 2,568,033,181 2,721,751,812 1,175,839,920 2,747,220,152 Expenses Cost of units in condominium projects sold 1,946,021,726 1,900,544,702 859,851,469 1,900,544,702 Cost from hotel operations 55,310,239 2,621,041 - - Selling expenses 246,677,051 290,903,378 165,857,416 278,389,944 Administrative expenses 251,206,853 248,387,286 174,151,709 192,399,945 Total expenses 2,499,215,869 2,442,456,407 1,199,860,594 2,371,334,591 Profit (loss) before finance cost and income tax expenses 68,817,312 279,295,405 (24,020,674) 375,885,561 Finance cost (116,470,794) (79,167,530) (45,240,934) (72,863,614) Profit (loss) before income tax expenses (47,653,482) 200,127,875 (69,261,608) 303,021,947 Income tax expenses 26 (36,568,724) (27,875,110) (36,568,724) (27,875,110) Profit (loss) for the year (84,222,206) 172,252,765 (105,830,332) 275,146,837 Profit (loss) attributable to: Equity holders of the Company (90,869,713) 184,090,143 (105,830,332) 275,146,837 Non-controlling interests of a subsidiary 6,647,507 (11,837,378) (84,222,206) 172,252,765 Earnings per share 28 Basic earnings per share Profit (loss) attributable to equity holders of the Company (0.13) 0.26 (0.15) 0.39 Diluted earnings per share Profit (loss) attributable to equity holders of the Company (0.13) 0.25 (0.15) 0.38 The accompanying notes are an integral part of the financial statements.

â&#x20AC;&#x201A; 62 Annual Report 2012

Statement of Comprehensive Income Major Development Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht)

Consolidated financial statements Note 2012 2011

Separate financial statements

2012 2011

Profit (loss) for the year

(84,222,206)

172,252,765

(105,830,332)

275,146,837

Other comprehensive income for the year

Total comprehensive income for the year

(84,222,206)

172,252,765

(105,830,332)

275,146,837

Total comprehensive income attributable to: Equity holders of the Company (90,869,713) 184,090,143 (105,830,332) 275,146,837 Non-controlling interests of a subsidiary 6,647,507 (11,837,378) - (84,222,206) 172,252,765 (105,830,332) 275,146,837 The accompanying notes are an integral part of the financial statements.

Major Development Public Company Limited â&#x20AC;&#x201A;

Statement of Changes In Shareholder’s Equity Major Development Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht)

Consolidated financial statements Equity attributable to owners of the Company Retained earnings Total equity Equity attributable Issued and Advance receipts Appropriated attributle to to non-controlling Total paid-up for share Premium on statutory owners to interests of shareholders’ share capital subscription ordinary shares reserve Unappropriated the Company a subsidiary equity

Balance as at 1 January 2011 704,058,000 Ordinary share capital increase from warrant exercised 320,500 Cash receipts from non-controlling interests of a subsidiary - Total comprehensive income for the year - Unappropriated retained earnings transferred to statutory reserve (Note 24) - Balance as at 31 December 2011 704,378,500

441,000 718,913,000 82,181,600 (441,000) 320,500 - - - - - - - - - 13,757,400 - 719,233,500 95,939,000

Balance as at 1 January 2012 704,378,500 Ordinary share capital increase from warrant exercised (Note 23) 3,000 Cash receipts from non-controlling interests of a subsidiary - Total comprehensive income for the year - Balance as at 31 December 2012 704,381,500

497,887,407 2,003,481,007 1,340 2,003,482,347 - 200,000 - 200,000 - - 20 20 184,090,143 184,090,143 (11,837,378) 172,252,765 (13,757,400) - - 668,220,150 2,187,771,150 (11,836,018) 2,175,935,132

- 719,233,500 95,939,000 668,220,150 2,187,771,150 (11,836,018) 2,175,935,132 - 3,000 - - 6,000 - 6,000 - - - - - 30 30 - - - (90,869,713) (90,869,713) 6,647,507 (84,222,206) - 719,236,500 95,939,000 577,350,437 2,096,907,437 (5,188,481) 2,091,718,956

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

(Unit: Baht)

Separate financial statements Issued and Advance receipts Premium on Retained earnings Total paid-up for share ordinary Appropriated shareholders’ share capital subscription shares - statutory reserve Unappropriated equity

Balance as at 1 January 2011 704,058,000 441,000 718,913,000 82,181,600 622,461,376 2,128,054,976 Ordinary share capital increase from warrant exercised 320,500 (441,000) 320,500 - - 200,000 Total comprehensive income for the year - - - - 275,146,837 275,146,837 Unappropriated retained earnings transferred to statutory reserve (Note 24) - - - 13,757,400 (13,757,400) Balance as at 31 December 2011 704,378,500 - 719,233,500 95,939,000 883,850,813 2,403,401,813 Balance as at 1 January 2012 Ordinary share capital increase from warrant exercised (Note 23) Total comprehensive income for the year Balance as at 31 December 2012

704,378,500

3,000 - 704,381,500 The accompanying notes are an integral part of the financial statements.

719,233,500

95,939,000

883,850,813 2,403,401,813

- - -

3,000 - 719,236,500

- - 6,000 - (105,830,332) (105,830,332) 95,939,000 778,020,481 2,297,577,481

64 Annual Report 2012

Statement of Cash Flows Major Development Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements

2012 2011

Separate financial statements

2012 2011

Cash flows from operating activities Profit (loss) before tax (47,653,482) 200,127,875 (69,261,608) 303,021,947 Adjustments to reconcile profit (loss) before tax to net cash provided by (paid from) operating activities Depreciation 62,826,768 55,149,935 25,319,550 44,275,530 Amortisation of intangible assets 1,076,028 789,467 780,040 764,693 Equipment and intangible assets written-off 11,174 17 3,103 17 Loss on sales of equipment 970,724 653,335 579,400 653,335 Gain on sales of investment properties - (2,311,798) - (2,311,798) Provision for long-term employee benefits 1,882,829 897,399 822,471 717,708 Actuarial loss 30,646 - - - Interest income (1,901,945) (1,351,217) (30,725,111) (22,827,541) Interest expense 107,693,230 73,230,830 37,698,601 68,563,282 Profit (loss) from operating activities before changes in operating assets and liabilities 124,935,972 327,185,843 (34,783,554) 392,857,173 Operating assets (increase) decrease Trade and other receivables 32,209,963 5,121,459 (298,138,532) (5,968,177) Inventories (505,522) (3,543,315) - - Land and construction in progress (1,001,024,779) 294,067,287 (612,910,971) 1,040,295,120 Advances for construction (37,386,929) (85,001,602) (34,289,395) (124,496,053) Deposits for purchase of land (446,131,528) (14,211,000) (446,131,528) 25,789,000 Other current assets 4,675,574 (14,221,033) 1,751,351 2,705,943 Operating liabilities increase (decrease) Trade and other payables (18,731,772) (240,306,169) 29,764,372 (350,563,757) Retention payables 4,999,510 (4,297,421) (28,044,564) (32,908,337) Deposits and advances from customers 205,960,303 60,647,082 451,387,719 (70,842,591) Advances received from sales of land - - 283,353,559 - Other current liabilities 12,049,109 9,523,406 9,701,607 9,606,350 Cash flows from operating activities (1,118,950,099) 334,964,537 (678,339,936) 886,474,671 Cash paid for interest expense (272,769,844) (219,104,811) (159,591,255) (162,002,526) Cash paid for income tax (26,210,006) (70,746,210) (12,354,002) (70,737,185) Net cash flows from (used in) operating activities (1,417,929,949) 45,113,516 (850,285,193) 653,734,960 The accompanying notes are an integral part of the financial statements. Major Development Public Company Limited â&#x20AC;&#x201A;

Statement of Cash Flows (Continued)

Major Development Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements

2012 2011

Separate financial statements

2012 2011

Cash flows from investing activities Decrease in pledged deposits at banks 510,000 18,076,500 510,000 18,076,500 Acquisition of investment properties (335,496,026) (10,315,528) - (10,315,528) Acquistion of property, plant and equipment (51,507,994) (290,720,485) (16,490,135) (18,385,447) Acquisition of intangible assets (196,689) (1,121,528) (24,503) (212,877) Decrease (increase) in deposit for purchase of equipment and office rental 725,068 (439,908) - - Cash received from sales of investment properties - 8,500,000 156,698,441 8,500,000 Cash received from sales of equipment 1,492,733 1,298,174 1,492,733 1,298,174 Cash payment for investments in subsidiaries - - (59,350,000) (499,980) Cash received from non-controlling interests for investment in a subsidiary 30 20 - Cash payment for other long-term investments (5,000,000) - (5,000,000) - Cash paid for long-term loans to related parties - - (267,580,000) (236,624,744) Cash received from long-term loans to related parties - - 125,384,154 217,166,590 Interest income 1,901,945 1,351,217 9,549,959 853,933 Net cash flows used in investing activities (387,570,933) (273,371,538) (54,809,351) (20,143,379) Cash flows from financing activities Increase in overdrafts and short-term loans from financial institutions 29,064,010 309,077,741 26,478,582 261,267,415 Cash received from short-term debentures 620,000,000 - 620,000,000 - Repayment of short-term debentures (100,000,000) - (100,000,000) - Cash received from short-term loans from unrelated parties 1,295,000,000 - - - Repayment of short-term loans from unrelated parties (560,000,000) - - - Cash received from short-term loans from related parties 135,000,000 237,200,000 386,000,000 - Repayment of short-term loans from related parties (20,200,000) (217,000,000) (139,500,000) - Repayment of liabilities under finance lease agreements (3,616,392) (1,652,352) (1,820,963) (1,371,891) Cash received from long-term loans from financial institutions 3,126,920,832 2,765,478,555 2,105,027,325 1,636,436,655 Repayment of long-term loans from financial institutions (2,863,105,999) (2,680,241,994) (1,983,808,885) (2,303,059,094) Cash received from long-term loans from related parties 175,420,000 - - Repayment of long-term loans from related parties - (185,000,000) - (185,000,000) Dividend paid (4,500) - (4,500) - Cash advance received for share subscription 6,000 200,000 6,000 200,000 Net cash flows from (used in) financing activities 1,834,483,951 228,061,950 912,377,559 (591,526,915) Net increase (decrease) in cash and cash equivalents 28,983,069 (196,072) 7,283,015 42,064,666 Cash and cash equivalents at beginning of year 99,843,793 100,039,865 80,543,471 38,478,805 Cash and cash equivalents at end of year (Note 7) 128,826,862 99,843,793 87,826,486 80,543,471 - The accompanying notes are an integral part of the financial statements.

â&#x20AC;&#x201A; 66 Annual Report 2012

Statement of Cash Flows

(Continued)

Major Development Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements

2012 2011

Separate financial statements

2012 2011

Supplemental cash flows information Non-cash items Purchased equipment under finance lease agreements 2,351,657 4,620,573 238,610 2,514,357 Advances for construction payable 47,900,000 42,312,420 47,900,000 42,312,420 Dividend payable 71,528 76,028 71,528 76,028 Transferred inventories to property, plant and equipment 5,339,866 - - - Transferred land and construction in progress to investment properties 6,353,111 119,371,407 6,353,111 119,371,407 Transferred land and construction in progress to other non-current assets 3,636,595 - - - Transferred deposits to other non-current assets 40,000,000 - - - Transferred investment properties to land and construction in progress - 215,009,615 - 215,009,615 Transferred investment properties to property, plant and equipment 119,371,407 - - - Transferred property, plant and equipment to land and construction in progress - 3,974,429 - 3,974,429 Transferred property, plant and equipment to inventories - 2,358,362 - - Adjustment of deposits to property, plant and equipment 70,777 - - - Adjustment of property, plant and equipment to trade and other payables 1,028,111 - - - Transferred assets to investments in subsidiaries - - 416,449,970 - Transferred long-term loans from financial institutions to advance received from a related party - - 27,444,195 - Adjustment of provision for long-term employee benefits to the beginning balance of retained earnings - 1,178,766 - 1,178,766

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

Major Development Public Company Limited â&#x20AC;&#x201A;

Notes to consolidated Financial Statements Major Development Public Company Limited and its subsidiaries For the year ended 31 December 2012

1. General information Major Development Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company and its subsidiaries are principally engaged in the development of properties for sales, hotel business and rental and service business. The registered office of the Company is at 141 Soi Sukhumvit 63 (Ekamai), Sukhumvit Road, Klongton Nua, Wattana, Bangkok.

2. Basis of preparation 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of Major Development Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”). Country of

Percentage of Company’s name Nature of business incorporation shareholding 2012 2011 Percent Percent

M J A I Development Company Limited Major Development Hotels and Resorts Company Limited Major Development Residense Company Limited MJR Development Company Limited MJP Property Company Limited MJC Development Company Limited (Formerly known as

“MJC Construction Company Limited”)

68 Annual Report 2012

Development of properties for sales

Thailand

Hotel

Thailand

100

100 100 100

100

Property rental Development of properties for sales

Thailand Thailand Development of properties for sales, Thailand

rental and lease, including other related business Construction and repair of buildings, Thailand including other related business

b) Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company. d) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements. e) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position. 2.3 The separate financial statements, which present investments in subsidiaries under the cost method, have been prepared solely for the benefit of the public.

3. New accounting standards not yet effective The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12 Income Taxes Accounting for Government Grants and Disclosure of Government Assistance TAS 20 (revised 2009) TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates Financial Reporting Standard: TFRS 8 Operating Segments Accounting Standard Interpretations: SIC 10 Government Assistance - No Specific Relation to Operating Activities SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets SIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders The Company’s management believes that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied, except for the following accounting standard.

TAS 12 Income Taxes

This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset and liability in the accounting records and its tax base, and to recognize deferred tax assets or liabilities under the stipulated guidelines. The management of the Company expects the adoption of this accounting standard to have the effect of increasing the Company and its subsidiaries’ brought-forward retained earnings of the year 2013 by approximately Baht 108 million (the Company only: approximately Baht 96 million). In addition, the Federation of Accounting Professions has issued Notification No. 30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of accounting treatment guidance and accounting standard interpretations as follows. Effective date Accounting Treatment Guidance for Transfers of Financial Assets 1 January 2013 Accounting Standard Interpretation: SIC 29 Service Concession Arrangements: Disclosures 1 January 2014 Financial Reporting Standard Interpretations: TFRIC 4 Determining whether an Arrangement contains a Lease 1 January 2014 TFRIC 12 Service Concession Arrangements 1 January 2014 TFRIC 13 Customer Loyalty Programmes 1 January 2014 Major Development Public Company Limited

The Companyâ&#x20AC;&#x2122;s management has assessed the effect of the above accounting treatment guidance and standard interpretation accounting and believes that they are not relevant to the business of the Company.

4. Significant accounting policies 4.1 Revenue recognition a) Sales of units in condominium projects Sales of units in condominium projects are recognised as revenue when the ownership has been transferred to the buyer. b) Revenues from hotel operations Revenues from hotel operations comprise room sales and food and beverage sales, from which income are recognised when services have been rendered and are presented at the invoiced value, excluding value added tax, after deducting discounts. c) Rendering of services Service revenue is recognised when services have been rendered taking into account the stage of completion. d) Interest income Interest income is recognised on an accrual basis based on the effective interest rate. 4.2 Cost of units in condominium projects sold In determining the cost of units in condominium projects sold, the total anticipated development costs (which include considerations of actual costs incurred) are allocated to the units already sold on the basis of the selling price. Development costs are stated at cost, consisting of cost of land, design fees, utilities, construction and related interest.

4.3 Cash and cash equivalents

Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of 3 months or less and not subject to withdrawal restrictions.

4.4 Trade accounts receivable

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging.

4.5 Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined by the weighted average method. 4.6 Land and construction in progress Land and construction in progress are valued at the lower of cost and net realisable value. The details of cost calculation are as follows: Land - Land consists of the cost of land and the related expenses for acquired land on the actual cost incurred, calculating it separately for each project. Construction in progress - Construction in progress consists of the cost of design fees, construction, public utility costs and interest capitalised to cost of projects. The Company and its subsidiaries record cost of construction in progress based on the actual cost incurred.

4.7 Investments

a) Investments in debt securities, both due within one year and expected to be held to maturity, are recorded at amortised cost. The premium/discount on debt securities is amortised/accreted by the effective rate method with the amortised/accreted amount presented as an adjustment to the interest income. b) Investments in subsidiaries are accounted for in the separate financial statements using the cost method.

â&#x20AC;&#x201A; 70 Annual Report 2012

4.8 Investment properties Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and allowance for loss on impairment (if any). Depreciation of investment properties is calculated by reference to their costs on the straight-line basis over estimated useful lives of 20 years. Depreciation of the investment properties is included in determining income. No depreciation is provided on land and construction in progress. On disposal of investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in the income statement in the period when the asset is derecognised. 4.9 Property, plant and equipment/Depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the following estimated useful lives: Office building 4 years Temporary buildings and temporary building improvement 5 years Hotel building and condominium units 20 years Office building improvement and other equipment 5 and 10 years Depreciation is included in determining income. No depreciation is provided on land and construction in progress. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in the income statement when the asset is derecognised. 4.10 Intangible assets Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses (if any). Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to the income statement. Amortisation of intangible assets, which are computer software, is calculated by reference to their costs on the straight-line basis over the estimated useful lives of 10 years. 4.11 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors, and officers with authority in the planning and direction of the Companyâ&#x20AC;&#x2122;s operations.

4.12 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Major Development Public Company Limited â&#x20AC;&#x201A;

4.13 Long-term leases

Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the lease period. The assets acquired under finance leases is depreciated over the useful life of the asset. Leases of property, plant or equipment which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term. 4.14 Impairment of assets At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of the property, plant and equipment, investment properties, investments and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in the income statement. 4.15 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company, its subsidiary and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiary. The fund’s assets are held in a separate trust fund and the Company’s and its subsidiary’s contributions are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiary have obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company and its subsidiary treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised immediately in the income statement. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011.

4.16 Provisions

Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 4.17 Income tax Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on the taxable profits determined in accordance with tax legislation.

72 Annual Report 2012

5. Significant accounting judgments and estimates The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgments and estimates are as follows: Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Property plant and equipment/Investment properties/Depreciation In determining depreciation of plant and equipment and investment properties, the management is required to make estimates of the useful lives and residual values of the plant and equipment and investment properties and to review estimated useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment and investment properties for impairment on a periodical basis and record impairment losses when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Intangible assets The initial recognition and measurement of intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present value of those cash flows. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Litigations The Company and its subsidiaries have contingent liabilities as a result of litigations. The Companyâ&#x20AC;&#x2122;s management has used judgment to assess of the results of the litigations and believes that no loss will result. Therefore no contingent liabilities are recorded as at the end of reporting period.

Major Development Public Company Limited â&#x20AC;&#x201A;

6. Related party transactions

The relationships between the Company and its related parties are summarised below.

Name of related parties

Relationship

Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Non-controlling interest of a subsidiary Non-controlling interest of a subsidiary

During the year, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties.

Consolidated Separate financial statements financial statements 2012 2011 2012 2011

Transaction with subsidiaries (Eliminated from the consolidated financial statements) Interest income - - 30 22 Management fee income - - 11 8 Other income - - 1 - Interest expense (partly charged to project costs) - - 4 - Transactions with related persons and related parties Sales of units in condominium projects 10 12 10 12 Interest expense (partly charged to project costs) 28 26 1 7 Consulting fee 3 6 3 3

â&#x20AC;&#x201A; 74 Annual Report 2012

(Unit: Million Baht)) Transfer pricing policy

5.50% to 7.625% per annum (2011: 4.75% to 7.625% per annum) Mutually agreement Mutually agreement 5.0% to 5.5% per annum Contract value 5.875% to 8.625% per annum Contract value

As at 31 December 2012 and 2011, the balances of the accounts between the Company and those related parties are as follows: (Unit: Thousand Baht) Consolidated financial statements

2012 2011 Trade and other receivables - related parties (note 8) Subsidiaries Related persons (Directors and person who is related to management) Trade and other payables - related parties (Note 17) Subsidiaries Director Non-controlling interests of a subsidiary Deposits and advances from customers Related persons (Director and person who is related to management) Advances received from sales of land Subsidiaries

Separate financial statements

2012 2011

114,723

140,176

3,583 3,583

3,741 3,741

3,414 118,137

3,580 143,756

- 5,114 81,413 86,527

- 536 55,072 55,608

37,768 5,000 - 42,768

4,814

14,260

4,614

14,060

396,965

100,000

On 22 December 2008, the Company entered into a contract to purchase and to sell land with a subsidiary (“Major Development Residense Company Limited”). Selling price set at Baht 119 million, which was cost of land. On the agreement date the Company received a deposit of Baht 100 million. In May 2012, the Company received full remaining amount and expect to transfer the possessory right in April 2013. On 29 June 2012, the Company entered into a contract to purchase and to sell land with a subsidiary (“MJP Property Company Limited”). Selling price set at Baht 370 million, which was cost of land. In 2012, the Company received a deposit of Baht 366 million and assigned the ownership of some title deeds to such subsidiary totaling Baht 88 million, the balance of deposit was Baht 278 million. The Company will receive the remaining amount and transfer the land ownership to the subsidiary in December 2013. In addition, in September 2012, the Company sold an investment property of “Equinox Office and Mall Project” which has been constructed on such land with a selling price at cost of Baht 69 million.

Major Development Public Company Limited

Loans to related parties and loans from related parties As at 31 December 2012 and 2011, the balances of loans between the Company and those related companies and the movements are as follows: (Unit: Thousand Baht) Separate financial statements Balance as at Increase Decrease Balance as at Interest rate Principal 31 December during during 31 December Long-term loans to (% per annum) repayment 2011 the year the year 2012 M J A I Development Company MLR (a) 258,876 182,580 - Limited Major Development Hotels and MLR - 1.75 Within December Resorts Company Limited and 5.50% 2013 59,384 85,000 (143,384) Total 318,260 267,580 (143,384) Less: Current portion - Long-term portion 318,260

441,456 1,000 442,456 (442,456) -

(Unit: Thousand Baht) Consolidated financial statements Balance as at Increase Decrease Balance as at Interest rate Principal 31 December during during 31 December Long-term loans from (% per annum) repayment 2011 the year the year 2012 Tmilestone Limited MLR (a) 144,260 101,744 - 246,004 Base Lead Investment MLR (a) 104,464 73,676 - 178,140 Total 248,724 175,420 - 424,144 Less: Current portion - (424,144) Long-term portion 248,724 (Unit: Thousand Baht) Consolidated financial statements Balance as at Increase Decrease Balance as at Interest rate Principal 31 December during during 31 December Short-term loans from (% per annum) repayment 2011 the year the year 2012 Director 8.125% (2011: Within 5.875% and 8.625%) November 2013

â&#x20AC;&#x201A; 76 Annual Report 2012

20,200

135,000

(20,200)

135,000

(Unit: Thousand Baht) Separate financial statements Balance as at Increase Decrease Balance as at Interest rate Principal 31 December during during 31 December Short-term loans from (% per annum) repayment 2011 the year the year 2012 Director 8.125% Within - 135,000 - 135,000 November 2013 Major Development Residense 5.00% - 5.50% Within Company Limited December 2013 - 273,000 (139,500) 133,500 Total - 408,000 (139,500) 268,500 Less: Deferred interest - (2,920) Net - 265,580

(a) Long-term loans to M J A I Development Company Limited and long-term loans from non-controlling interests of the subsidiary are for using in Royce Private Residence Sukhumvit 31 condominium project. They carry interest at the rate of TISCOâ&#x20AC;&#x2122;s standard loan (MLR) and mature at the earlier of 1 November 2013 or the date of the development of the project is completed and all liabilities are completely discharged to TISCO Bank Public Company Limited.

Directors and managementâ&#x20AC;&#x2122;s benefits During the year ended 31 December 2012 and 2011, the Company and its subsidiaries had employee benefit expenses payable to their directors and management as below. Short-term employee benefits Post-employment benefits Total

(Unit: Million Baht) Consolidated financial statements/ Separate financial statements 2012 2011 26 21 2 1 28 22

Guarantee obligations with related parties The Company has obligations in respect of guarantees of the following loans of subsidiaries obtained from banks and unrelated parties, for which no guarantee fee has been charged.

Major Development Public Company Limited â&#x20AC;&#x201A;

(Unit: Million Baht)

Subsidiaries

Credit guarantees

Major Development Hotels and Resorts Company Limited Major Development Residense Company Limited MJR Development Company Limited MJP Property Company Limited

410 881 1,387 1,120

7. Cash and cash equivalents (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012 2011

Cash Bank deposits Total

347 87,479 87,826

813 128,014 128,827

758 99,086 99,844

286 80,257 80,543

As at 31 December 2012, bank deposits in savings accounts and fixed deposits carried interests between 0.125% and 3.00% per annum (2011: between 0.50% and 3.00% per annum).

8. Trade and other receivables (Unit: Thousand Baht) Consolidated financial statements

2012 2011 Trade receivables - related parties Aged on the basis of due dates Past due Up to 6 months Total trade receivables - related parties Trade receivables - unrelated parties Aged on the basis of due dates Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total trade receivables - unrelated parties Total trade receivables

â&#x20AC;&#x201A; 78 Annual Report 2012

Separate financial statements

2012 2011

- -

167 167

- -

167 167

11,103 562 1,062 192 12,919 12,919

12,241 1,575 504 32,695 47,015 47,182

5,648 328 193 192 6,361 6,361

9,833 1,575 504 1,216 13,128 13,295

(Unit: Thousand Baht) Consolidated financial statements

2012 2011 Other receivables Accounts receivable and advances related parties Accrued interest - related parties Advance payments Total other receivables Total trade and other receivables

3,583 - 32,323 35,906 48,825

3,574 - 30,279 33,853 81,035

Separate financial statements

2012 2011

33,660 84,477 30,473 148,610 154,971

80,288 63,301 26,288 169,877 183,172

9. Land and construction in progress (Unit: Thousand Baht) Consolidated financial statements

2012 2011 Land cost Construction in progress Capitalised interest Total Less: Accumulated transferred to cost of sales Transferred to investment properties Net

Separate financial statements

2012 2011

5,172,636 12,056,809 988,298 18,217,743

4,317,048 9,977,077 822,416 15,116,541

3,735,973 10,169,128 790,726 14,695,827

3,731,528 8,702,279 674,777 13,108,584

(10,561,098) (6,353) 7,650,292

(8,623,166) - 6,493,375

(9,481,549) (6,353) 5,207,925

(8,623,166) 4,485,418

Land and construction thereon with carrying values as at 31 December 2012 amounting to Baht 7,424 million (Separate financial statements: Baht 5,189 million) (2011: Baht 5,804 million, Separate financial statements: Baht 3,937 million) have been mortgaged with local commercial banks as collateral against credit facilities received from banks. During the year 2012, the Company and its subsidiaries capitalised interest amounting to Baht 166 million (Separate financial statements: Baht 116 million) (2011: Baht 129 million, Separate financial statements: Baht 70 million) to the costs of land and construction in progress. The capitalisation rates of interest are based on the borrowing costs of the specific loans, as described in Notes 6, 16, 18, 19 and 20 to the financial statements.

Major Development Public Company Limited â&#x20AC;&#x201A;

10. Investments in subsidiaries

10.1 Details of investments in subsidiaries as presented in the separate financial statements are as follows:

Paid-up capital Company’s name 2012 2011

Shareholding percentage 2012 2011 Percentage Percentage

(Unit: Thousand Baht) Cost 2012 2011

M J A I Development Company Limited 12,750 12,750 51 51 12,750 12,750 Major Development Hotels and Resorts Company Limited 100,000 60,000 100 100 99,999 59,999 Major Development Residense Company Limited 100,000 100,000 100 100 99,999 99,999 MJR Development Company Limited 435,300 150,000 100 100 435,300 150,000 MJP Property Company Limited 150,750 250 100 100 150,750 250 MJC Development Company Limited (Formerly known as “MJC Construction Company Limited”) 250 250 100 100 250 250 Total 799,048 323,248

10.2 Major Development Hotels and Resorts Company Limited On 27 November 2012, a meeting of the Board of Directors of the Company approved an increase in the registered share capital of Major Development Hotels and Resorts Company Limited from Baht 60 million to Baht 100 million, by issuing an additional 0.4 million ordinary shares with a par value of Baht 100. The Company acquired all of the new shares. The subsidiary registered the increase in its share capital with the Ministry of Commerce on 14 December 2012. 10.3 MJR Development Company Limited On 22 March 2011, a meeting of the Board of Directors of the Company approved an increase in the registered share capital of MJR Development Company Limited from Baht 150 million to Baht 600 million, by issuing an additional 45 million ordinary shares with a par value of Baht 10. The Company acquired all of the new shares. Subsequently, such subsidiary called up Baht 285 million, or 63.4% of total new shares. The subsidiary registered the increase in its share capital with the Ministry of Commerce on 28 November 2012. 10.4 MJP Property Company Limited On 21 May 2012, a meeting of the Board of Directors of the Company approved the additional paid-up 0.1 million ordinary shares of MJP Property Company Limited with Baht 7.50 per share, totaling Baht 0.7 million and approved an increase in the registered share capital of MJP Property Company Limited from Baht 1 million to Baht 600 million, by issuing an additional 59.9 million ordinary shares with a par value of Baht 10, of which Baht 150 million, or 25% is to be initially paid-up. The Company acquired all of the new shares. The subsidiary registered the increase in its share capital with the Ministry of Commerce on 11 June 2012. 10.5 MJC Development Company Limited (formerly known as “MJC Construction Company Limited”) On 15 March 2012, MJC Construction Company Limited registered the changed name to be MJC Development Company Limited with the Ministry of Commerce.

11. Other long-term investment As at 31 December 2012, the balance represents the long-term investment in subordinated debentures that are unsecured and nonconvertible, with a holder representative from a local commercial bank, carrying interest rate at 4.60% per annum, mature in November 2022.

80 Annual Report 2012

12. Investment properties The net book value of investment properties as at 31 December 2012 and 2011 is presented below. (Unit: Thousand Baht) Consolidated financial statements Separate financial statements Land and Land and Land construction Land construction in awaiting Condominium in progress - awaiting Condominium progress development units office building development units office building /sales for rent for rent Total /sales for rent for rent Total

31 December 2012 Cost 12,140 9,210 785,622 806,972 12,140 9,210 402,002 423,352 Less: Accumulated depreciation - (960) - (960) - (960) - (960) Net book value 12,140 8,250 785,622 806,012 12,140 8,250 402,002 422,392 31 December 2011 Cost 131,511 9,210 417,274 557,995 131,511 9,210 417,274 557,995 Less: Accumulated depreciation - (397) - (397) - (397) - (397) Net book value 131,511 8,813 417,274 557,598 131,511 8,813 417,274 557,598

A reconciliation of the net book value of investment properties for the year 2012 and 2011 is presented below. (Unit: Thousand Baht) Consolidated financial statements

2012 2011 Net book value at beginning of year Transferred to land and construction in progress Transferred to property, plant and equipment Transferred from land and construction in progress Acquisition of assets Disposals - net book value Capitalised interest Depreciation charged Net book value at end of year

Separate financial statements

2012 2011

557,598 629,133 557,598 629,133 - (215,010) - (215,010) (119,372) - - 6,353 119,372 6,353 119,372 335,496 10,315 - 10,315 - (6,188) (156,698) (6,188) 26,500 20,555 15,702 20,555 (563) (579) (563) (579) 806,012 557,598 422,392 557,598

The fair values of the investment properties as at 31 December 2012 and 2011 stated below. (Unit: Thousand Baht) Consolidated / Separate financial statements

2012

Land awaiting development/sales Condominium units for rent

29,340 12,020

2011

212,311 12,020

The fair values have been determined based on valuations performed by an accredited independent valuer. As at 31 December 2012, Baht 402 million investment properties are the land which will be transferred to two subsidiaries for construction of office building for rent and hotel. The office building and hotel are under construction; therefore no fair value is determined. Investment properties with carrying values as at 31 December 2012 amounting to Baht 806 million (2011: Baht 438 million) (Separate financial statements: Baht 303 million, 2011: Baht 438 million) have been mortgaged with commercial banks as collateral against credit facilities received from banks. Major Development Public Company Limited â&#x20AC;&#x201A;

13. Property, plant and equipment

(Unit: Thousand Baht) Consolidated financial statements Buildings, Furniture, condominium fixtures, Land and land unit and building vehicles and Construction in improvement improvement office equipment progress

Total

Cost 1 January 2011 273,228 124,350 102,406 122,847 622,831 Additions - 3,940 29,676 261,725 295,341 Disposals - - (5,628) - (5,628) Write off - - (2,353) - (2,353) Transfer in (out) 2,538 347,988 37,884 (388,410) Capitalised interest - - - 11,591 11,591 Transfer to land and construction in progress - - - (3,974) (3,974) Transfer to inventories - - - (2,358) (2,358) 31 December 2011 275,766 476,278 161,985 1,421 915,450 Additions 311 10,371 33,740 9,438 53,860 Disposals - (55,708) (2,714) - (58,422) Write off - (12,180) (5) - (12,185) Transfer in (out) - - 400 (400) Transfer from investment properties 119,372 - - - 119,372 Transfer from inventories - - 5,339 - 5,339 Adjustments - (909) (102) - (1,011) 31 December 2012 395,449 417,852 198,643 10,459 1,022,403 Accumulated depreciation 1 January 2011 - 62,349 57,955 - 120,304 Depreciation for the year 85 34,394 20,093 - 54,572 Depreciation on disposals - - (3,676) - (3,676) Depreciation on write off - - (2,353) - (2,353) 31 December 2011 85 96,743 72,019 - 168,847 Depreciation for the year 571 31,482 30,211 - 62,264 Depreciation on disposals - (54,628) (1,330) - (55,958) Depreciation on write off - (12,180) (1) - (12,181) Depreciation on the adjustments - (40) (14) - (54) 31 December 2012 656 61,377 100,885 - 162,918 Net book value 31 December 2011 275,681 379,535 89,966 1,421 746,603 31 December 2012 394,793 356,475 97,758 10,459 859,485 Depreciation for the year 2011 (Baht 5 million included in cost from hotel operations, and the balance in administrative expenses) 54,572 2012 (Baht 31 million included in cost from hotel operations, and the balance in administrative expenses) 62,264

â&#x20AC;&#x201A; 82 Annual Report 2012

(Unit: Thousand Baht) Separate financial statements Buildings, Furniture, condominium fixtures, Land and land unit and building vehicles and Construction in improvement improvement office equipment progress

Total

Cost 1 January 2011 65,625 115,380 82,419 9,346 272,770 Additions - - 11,926 8,974 20,900 Disposals - - (5,628) - (5,628) Write off - - (2,353) - (2,353) Transfer in (out) - 12,926 - (12,926) Transfer to land and construction in progress - - - (3,974) (3,974) 31 December 2011 65,625 128,306 86,364 1,420 281,715 Additions - - 10,357 6,372 16,729 Disposals - (55,708) (2,202) - (57,910) Write off - (12,180) (5) - (12,185) Transfer in (out) - - 400 (400) 31 December 2012 65,625 60,418 94,914 7,392 228,349 Accumulated depreciation 1 January 2011 - 60,400 49,412 - 109,812 Depreciation for the year - 29,779 13,918 - 43,697 Depreciation on disposals - - (3,676) - (3,676) Depreciation on write off - - (2,353) - (2,353) 31 December 2011 - 90,179 57,301 - 147,480 Depreciation for the year - 12,345 12,412 - 24,757 Depreciation on disposals - (54,628) (1,210) - (55,838) Depreciation on write off - (12,180) (1) - (12,181) 31 December 2012 - 35,716 68,502 - 104,218 Net book value 31 December 2011 65,625 38,127 29,063 1,420 134,235 31 December 2012 65,625 24,702 26,412 7,392 124,131 Depreciation for the year 2011 (Included in administrative expenses) 43,697 2012 (Included in administrative expenses) 24,757 During the year 2011, a subsidiary capitalized interest of Baht 12 million to the cost of hotel building. The weighted average rate

used to determine the amount of borrowing costs eligible for capitalisation was 4.75% to 5.875% (2012: none). As at 31 December 2012, the Company and its subsidiaries had vehicles and equipment under finance lease agreements with net book values amounting to Baht 9 million (2011: Baht 10 million) and in separate financial statements amounting to Baht 6 million (2011: Baht 8 million). As at 31 December 2012, certain building and equipment items have been fully depreciated but are still in use. The gross carrying amount (before deducting accumulated depreciation) of those assets amounted to Baht 53 million (2011: Baht 46 million). Land, buildings and a condominium unit with carrying values as at 31 December 2012 amounting to Baht 629 million (2011: Baht 656 million) (Separate financial statements: Baht 86 million, 2011: Baht 105 million) have been mortgaged with local commercial banks as collateral against credit facilities received from banks. Major Development Public Company Limited â&#x20AC;&#x201A;

14. Intangible assets

The net book value of intangible assets as at 31 December 2012 and 2011 is presented below. (Unit: Thousand Baht) Consolidated Separate financial statements financial statements

As at 31 December 2012: Cost Less: Accumulated amortisation Net book value As at 31 December 2011: Cost Less: Accumulated amortisation Net book value

9,259 8,090 (3,092) (2,784) 6,167 5,306 9,086 8,066 (2,033) (2,004) 7,053 6,062

A reconciliation of the net book value of intangible assets for the year 2012 and 2011 is presented below. (Unit: Thousand Baht) Consolidated financial statements

2012 2011 Net book value at beginning of year Acquisition of computer software Write off during the year - net book value Amortisation for the year Net book value at end of year

7,053 197 (7) (1,076) 6,167

6,721 1,121 - (789) 7,053

Separate financial statements

2012 2011 6,062 24 - (780) 5,306

6,614 213 (765) 6,062

15. Other current assets (Unit: Thousand Baht) Consolidated financial statements

2012 2011 Other receivable Deposits Total

Separate financial statements

2012 2011

43,637 - - 1,440 2,165 1,440 1,440 45,077 2,165 1,440 1,440

In 2011, a subsidiary (MJR Development Company Limited) entered into a contract to purchase and to sell land with a partnership

(â&#x20AC;&#x153;Sellerâ&#x20AC;?). The subsidiary paid a deposit of land and design expense of the project amounting to Baht 44 million. Subsequently, such subsidiary was aware that such land had certain restrictions on project development. Therefore, the subsidiary negotiated to request for refund of deposit and damages from the Seller. However, the Seller denied the request. The subsidiary therefore filed a lawsuit against the Seller. The lawsuit is currently being investigated by the Court of First Instance. The management and the legal consultant of the subsidiary believe that the subsidiary is able to refund the deposit and claim for damages of this project. Therefore, it is presented in other receivables under the non-current assets in the consolidated statement of financial position.

â&#x20AC;&#x201A; 84 Annual Report 2012

16. Bank overdrafts and short-term loans from financial institutions

(Unit: Thousand Baht) Interest rate Consolidated financial statements Separate financial statements (% per annum) 2012 2011 2012 2011

Bank overdrafts MOR Short-term loans from banks 3.75% - 7.25% Bill of exchanges 5.10% - 5.45% Total

25,553 16,500 340,000 382,053

25,489 52,500 275,000 352,989

15,493 16,500 340,000 371,993

18,015 52,500 275,000 345,515

Bank overdrafts and short-term loans from financial institutions are secured by the mortgage of land and construction in progress, investment properties, the land of a director and by the guarantees of the Company and the Companyâ&#x20AC;&#x2122;s directors.

17. Trade and other payables (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012 2011 Trade payables - unrelated parties Advance received from related parties Advance received from unrelated parties Interest payable to related parties Other payables - unrelated parties Other payables - related parties Accrued expenses - unrelated parties Accrued expenses - related parties Total

496,284 5,005 4,833 81,522 81,244 - 25,894 - 694,782

496,002 3 9,285 55,105 50,951 500 15,806 - 627,652

2012 2011

374,822 39,298 1,239 58 15,019 584 17,759 2,828 451,607

273,326 9,285 27,969 7,921 318,501

Major Development Public Company Limited â&#x20AC;&#x201A;

â&#x20AC;&#x201A; 86 Annual Report 2012

The Company (1) 608 MLR - 0.25%, Within May 2015 471 471 137,000 137,000 137,000 137,000 (2) 721 MLR - 0.25%, Within December 2014 435 478 286,000 243,000 286,000 243,000 (3) 207 MLR - 0.25% Within June 2012. - 92 115,425 114,700 115,425 114,700 (4) 813 MLR - 0.25% Within December 2015 431 517 382,405 296,200 382,405 296,200 (5) 642 MLR - 0.25% Within 31 December 2019 by three-month installment - 367 - 274,600 - 274,600 payments of principal (6) 566 MLR + 0.25% Within July 2013 - 1 - 285,328 - 285,328 (7) 778 MLR - 0.50% for the first Within April 2014 592 643 186,300 135,000 186,300 135,000 and second years and MLR from the third years onwards (8) 952 (2011: Baht 752 million) MLR + 0.50% Within July 2014 5 117 339,108 361,191 339,108 361,191 (9) 1,300 MLR - 0.25% for the first Within October 2014 886 1,300 414,200 - 414,200 and second years and MLR from the third years onwards (10) 450 MLR + 0.50% Within December 2014 313 - 29,200 - 29,200 (11) 179 MRL + 0.50% Within April 2014 - - 51,155 - 51,155 Subsidiaries (12) 948 MLR Within July 2013 - 128 155,596 820,200 - (13) 400 5.75%% for the first and Within June 2025 - - 397,000 400,000 - second years, MLR -1.25% for third to fifth years and MLR -1% for the sixth to thirteenth years (14) 930 MLR - 0.25% Within December 2019 by three-month installment 541 - 389,232 - - payments of principal (15) 553 MLR - 1% Within November 2014 403 - 150,000 - - (16) 374 MLR - 1% Within November 2014 241 - 133,000 - - (17) 186 MLR - 1% Within December 2018 by installment payments of 21 - 165,413 - - principal not less than Baht 2.6 million per month (18) 2,089 MLR - 0.75% for the first Within June 2016 2,089 - - - - and second years MLR-0.50% from the third years onwards (19) 530 MLR - 1.75% Within August 2026 530 - - - - Total 6,958 4,114 3,331,034 3,067,219 1,940,793 1,847,019 Less: Current portion (701,085) (1,866,719) (534,888) (646,519) Long-term portion 2,629,950 1,200,500 1,405,905 1,200,500

Credit facilities which have Consolidated Separate Principal repayment yet to be drawn down financial statements financial statements Total credit facilities Interest rate condition 2012 2011 2012 2011 2012 2011 (Million Baht) (% per annum) (Million Baht) (Million Baht) (Thousand Baht) (Thousand Baht) (Thousand Baht) (Thousand Baht)

18. Long-term loans from financial institutions

Long-term loans of the Company and its subsidiaries have principal repayment conditions with the rates stipulated in the loan agreements when the collaterals mortgaged with the banks are redeemed. The interests are repayable monthly. The Company and its subsidiaries have mortgaged the land and construction thereon of condominium projects, investment properties and the land and buildings with banks to secure the long-term loans. In addition, long-term loans of the Company are guaranteed by the Companyâ&#x20AC;&#x2122;s directors. Long-term loans of subsidiaries are guaranteed by the Company. Some loan agreements contain covenants that, among other things, require the Company and subsidiaries to maintain certain debt to equity ratio.

19. Short-term debentures Details of approval to issue the debentures are as follows.

Approved by Amount Term Type Method of issuance

The Annual General Meeting of the Companyâ&#x20AC;&#x2122;s shareholders held on 24 April 2008 Revolving amount of Baht 1,500 million Not over one year Unsecured and unsubordinated bearer Offered to no more than 10 specific investors in every 4 months

As at 31 December 2012, the Company has unissued debentures under the above mentioned approval totaling Baht 880 million (2011: Baht 1,500 million). The outstanding balance of debentures as at 31 December 2012 and 2011 are detailed below. Interest rate No. (% per annum) Term

Principal and interest repayment

Consolidated / Separate financial statements Number of debenture Amount (Shares) (Thousand Baht)

2012

2011

2012

2011

3/2012 4.90% 9 months 14 January 2013 140,000 - 140,000 4/2012 4.90% 9 months 21 January 2013 60,000 - 60,000 5/2012 4.90% 9 months 24 May 2013 320,000 - 320,000 Total 520,000 - 520,000 -

20. Short-term loans from unrelated parties

(Unit: Thousand Baht)

Interest rate (% per annum) Consolidated financial statements 2012 2011 2012 2011

Bills of exchange 4.60% - 5.30% 5.50% Less: Deferred interest expenses Net

785,000 (12,950) 772,050

50,000 (1,260) 48,740

The balance represented bills of exchange from unrelated parties which issued by subsidiaries. They are due within one year and

guarantee by the Company.

Major Development Public Company Limited â&#x20AC;&#x201A;

21. Liabilities under finance lease agreements (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012 2011 Liabilities under finance lease agreements Less: Deferred interest expense Total Less: Portion due within one year Long-term portion

9,204 (999) 8,205 (2,655) 5,550

10,653 (1,184) 9,469 (2,324) 7,145

2012 2011 6,600 (712) 5,888 (1,870) 4,018

8,440 (969) 7,471 (1,817) 5,654

The Company and its subsidiaries have entered into finance lease agreements with leasing companies for rental of vehicles and equipment for use in their operations, whereby they are committed to pay rental on a monthly basis. The terms of the agreements are generally between 3 and 5 years. As at 31 December 2012 and 2011, future minimum lease payments of the Company and its subsidiaries required under the finance lease agreements were as follows. (Unit: Thousand Baht)

Consolidated financial statements 2012 2011 Less than 1-5 years Total Less than 1-5 years Total 1 year

Future minimum lease payments Deferred interest expense Present value of future minimum lease payments

3,069 6,135 (414) (585) 2,655 5,550

1 year

9,204 (999) 8,205

2,691 (367) 2,324

7,962 (817) 7,145

10,653 (1,184) 9,469

As at 31 December 2012 and 2011, future minimum lease payments of the Company required under the finance lease agreements were as follows: (Unit: Thousand Baht)

Separate financial statements 2012 2011 Less than 1-5 years Total Less than 1-5 years Total 1 year

Future minimum lease payments Deferred interest expenses Present value of future minimum lease payments

â&#x20AC;&#x201A; 88 Annual Report 2012

2,185 4,415 (315) (397) 1,870 4,018

1 year

6,600 (712) 5,888

2,122 (305) 1,817

6,318 (664) 5,654

8,440 (969) 7,471

22. Provision for long-term employee benefits

Provision for long-term employee benefits, which is compensations on employeesâ&#x20AC;&#x2122; retirement, was as follows: (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012 2011 Defined benefit obligation at beginning of year Current service cost Interest cost Actuarial loss Provisions for long-term employee benefits at end of year

2012 2011

2,076 1,769 114 31

1,179 840 57 -

1,897 742 80 -

1,179 668 50 -

3,990

2,076

2,719

1,897

Long-term employee benefit expenses included in the income statement was as follows: (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012 2011 Current service cost Interest cost Actuarial loss Total expense recognised in profit or loss

1,769 114 31 1,914

840 57 - 897

2012 2011 742 80 - 822

668 50 718

Line items under which such expenses are included in administrative expenses. Principal actuarial assumptions at the valuation date were as follows: (Unit: Thousand Baht)

Consolidated financial statements Separate financial statements 2012 2011 2012 2011 (% per annum) (% per annum) (% per annum) (% per annum)

Discount rate Future salary increase rate Staff turnover rate (depending on age)

3.73% - 4.30% 5% - 7%

4.25% 5%

0% - 31%

Major Development Public Company Limited â&#x20AC;&#x201A;

Amounts of defined benefit obligation for the current and previous four periods are as follows:

(Unit: Thousand Baht) Defined benefit obligation Experience adjustments arising on the plan liabilities Consolidated Separate Consolidated Separate financial financial financial financial statements statements statements statements Year 2012 Year 2011 Year 2010 Year 2009 Year 2008

3,990 2,076 1,255 710 404

2,719 1,897 1,179 710 404

(36) - - - -

23. Share capital

During 2012, movements of the number of issued and paid-up ordinary shares, issued and paid-up share capital and premium on ordinary shares are as follows:

Number of issued Issued and and paid-up paid-up shares share capital

Premium on ordinary shares

(Thousand shares) (Thousand Baht) (Thousand Baht)

Balance as at 1 January 2012 Increase from warrants No. 1 exercised Balance as at 31 December 2012

704,379

719,234

3 704,381

3 719,237

24. Statutory reserve

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5% of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10% of its registered share capital. The statutory reserve is not available for dividend distribution. As at 31 December 2011, the Company has transferred profit for the year amounting to Baht 14 million, to the statutory reserve.

â&#x20AC;&#x201A; 90 Annual Report 2012

25. Expenses by nature

Significant expenses by nature are as follows: (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012 2011 Purchase of land and payment of construction during the year Changes in land and construction in progress Salary, wages and other employee benefits Depreciation Commission expenses Advertising and promotion expenses Specific business tax Surcharges of income tax

3,102,939

1,606,477

2012 2011

1,582,358

860,250

(1,156,917) 65,362 (722,507) 871,156 149,992 123,585 95,229 93,105 62,827 55,151 25,320 44,276 29,098 37,861 23,172 33,974 84,170 84,963 71,554 77,471 85,831 93,033 40,433 93,033 9,458 10,038 9,458 10,038

26. Corporate income tax Corporate income taxes for the years 2012 and 2011 have been calculated at the rate of 23% and 30%, respectively, of net

taxable profits.

27. Warrants

On 29 June 2010, the Company issued warrants to purchase the Companyâ&#x20AC;&#x2122;s ordinary shares No 1. (MJD-W1) to its existing

shareholders at the ratio of 2 existing ordinary shares per 1 unit of warrant, the category of which is registered and transferable. The details of the warrants are summarised below. Number of warrants : 349,999,983 units Offering price : Baht 0 per unit 1 unit of warrant per 1 ordinary share, at a price of Baht 2.00 per share Exercise ratio and price : Term of the warrant : 3 years from the issuance date (29 June 2010 to 28 June 2013) with the first exercise date being 30 September 2010

The Company lists the warrants on the Stock Exchange of Thailand, with the trading permitted to commence from 15 July 2010. During the year 2012, shareholders exercised warrants to purchase ordinary shares No. 1 as follows. Exercise period

Number of ordinary shares Exercise price Amount

Date registered Date trading with the Ministry commenced on the of Commerce Stock Exchange of Thailand

(Million shares) (Baht per share) (Million Baht)

30 September 2012 Total

0.003 2.0 0.003 0.006

0.006

15 October 2012

19 October 2012

Major Development Public Company Limited â&#x20AC;&#x201A;

During the year 2012, movements of warrants are as follows: Units

The balance as at 1 January 2012 Number of warrants exercised during the year The balance as at 31 December 2012

345,621,483 (3,000) 345,618,483

28. Earnings per share Basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued. The following table sets forth the computation of basic and diluted earnings per share.

Basic earnings per share Profit (loss) attributable to equity holders of the Company Effect of dilutive potential ordinary shares Warrants to be allotted to existing shareholders Diluted earnings per share Profit (loss) of ordinary shareholders assuming the conversion of warrants to ordinary shares

â&#x20AC;&#x201A; 92 Annual Report 2012

Consolidated financial statements

Weighted average Profit (loss) for the year number of ordinary shares Earnings (loss) per share

2012 2011 2012 2011 2012 2011 (Thousand Baht) (Thousand Baht) (Thousand shares) (Thousand shares)

(90,870) -

(90,870)

184,090 -

184,090

704,379 -

704,379

704,354

(Baht)

(0.13)

0.26

(0.13)

0.25

24,115

728,469

Separate financial statements Weighted average Profit (loss) for the year number of ordinary shares Earnings (loss) per share 2012 2011 2012 2011 2012 2011

(Thousand Baht) (Thousand Baht) (Thousand shares) (Thousand shares)

(105,830) -

(105,830)

275,147 -

275,147

704,379 -

704,379

704,354

(Baht)

(0.15)

0.39

(0.15)

0.38

24,115

728,469

No calculation of diluted earnings per share in the consolidated financial statements and the separate financial statements for the year ended 31 December 2012 since the effect of diluted earnings per share is anti-dilutive.

29. Segment information

The Companyâ&#x20AC;&#x2122;s and its subsidiariesâ&#x20AC;&#x2122; business operations involve 2 principal segments: (1) development of properties for sales (2) hotel business and related services and (3) rental and service business. These operations are mainly carried on in Thailand. Below is the consolidated financial information of the Company and its subsidiaries for the year ended 31 December 2012 and 2011 by segment. (Unit: Million Baht)

Development of Hotel business and Rental and Elimination Consolidated properties related service of inter- financial for sales services business segment revenues statements 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

Revenue from external customers 2,471 2,704 61 4 - - - - 2,532 2,708 Intersegment revenues 11 8 - - - - (11) (8) - Total revenues 2,482 2,712 61 4 - - (11) (8) 2,532 2,708 Segment operating profit 498 804 6 1 - - 27 - 531 805 Unallocated income and expenses: Other income 36 13 Selling expenses (247) (291) Administrative expenses (251) (248) Finance cost (116) (79) Income tax expenses (37) (28) Non-controlling interests of a subsidiary (7) 12 Profit (loss) for the year (91) 184

Major Development Public Company Limited â&#x20AC;&#x201A;

(Unit: Million Baht)

Trade and other receivables 252 216 4 5 - - (207) (140) 49 81 Inventories - - 1 6 - - - - 1 6 Land and construction in progress 7,695 6,549 - - - - (45) (56) 7,650 6,493 Investment properties 12 132 - - 794 426 - - 806 558 Property, plant and equipment 257 148 607 603 - - (5) (5) 859 746 Unallocated assets 1,024 448 Total assets 10,389 8,332

Transfer prices between business segments are as set out in Note 6 to the financial statements.

30. Provident fund

The Company, its subsidiaries and their employees have jointly established provident funds in accordance with the Provident Fund Act B.E. 2530. Employees, the Company and its subsidiaries contributed to the fund monthly at the rates of 3% to 10% of basic salary. The funds which are managed by Thai Military Bank Public Company Limited and Tisco Asset Management Company Limited will be paid to employees upon termination in accordance with the fund rules. During the year 2012, the Company and its subsidiaries contributed Baht 4 million (2011: Baht 4 million) (Separate financial statements: Baht 3 million, 2011: Baht 3 million) to the fund.

31. Commitments and contingent liabilities 31.1 Capital commitments a) As at 31 December 2012, the Company and its subsidiaries had outstanding commitments of Baht 2,244 million (Separate financial statements: Baht 1,496 million) (2011: Baht 1,792 million, Separate financial statements: Baht 1,103 million) with respect to construction costs of condominium projects. b) As at 31 December 2012, the Company and its subsidiaries have outstanding commitments of Baht 1,350 million (Separate financial statements: Baht 1,350 million) (2011: Baht 632 million, separate financial statements: none) with respect to the purchases of land under contracts to purchase and to sell. c) As at 31 December 2012 and 2011, the Company and its subsidiaries had a piece of mutually held land with servitude over the land of approximately 2 rai of which the cost is included in the cost of projects. Some part of the land has been mortgaged with a local commercial bank as collateral against a credit facility of Baht 179 million. 31.2 Operating lease commitments A subsidiary has entered into several lease agreements in respect of the lease of office building space. The terms of the agreements are 3 years. Future minimum lease payments required under these non-cancellable operating leases contracts were as follows. (Unit: Million Baht) Consolidated financial statements

Payable: In up to 1 year In over 1 and up to 5 years

â&#x20AC;&#x201A; 94 Annual Report 2012

2012 1 -

2011 1 1

31.3 Bank guarantees As at 31 December 2012 and 2011, there were outstanding bank guarantees issued by the banks on behalf of the Company and its subsidiary in respect of certain performance bonds as required in the normal course of business as follows. (Unit: Million Baht) Consolidated financial statements

2012 2011 Bank guarantee for electricity use Bank guarantee for payments due to creditors Total

11 36 47

6 - 6

Separate financial statements

2012 2011 8 36 44

3 3

The Company placed deposits at banks of Baht 2 million (2011: Baht 3 million) with the banks to secure the issuance of bank guarantees.

31.4 Litigations As at 31 December 2012, the following lawsuits have been filed against the Company and its subsidiaries. a) Seven of the Company’s customers sued the Company and its subsidiary, seeking refunds of payments totaling Baht 51 million made for condominiums purchased from the Company and its subsidiary’ projects. The lawsuits are currently in the process of being investigated by the Court of First Instance and the Appeal Court. b) A creditor sued the Company for payment of construction expenses and compensation totaling Baht 25 million. However, the Company countersued the creditor, claiming Baht 39 million on the grounds that creditor could not perform the work that met the quality and deadlines. The lawsuits are currently in the process of being investigated by the Appeal Court. c) The Company sued a subcontractor of the Company’s project, claiming Baht 241 as the subcontractor could not perform the work that met the quality and deadlines. Subsequently, the subcontractor submitted a statement of defence and countersued the Company, claiming Baht 307 million. The lawsuits are currently in the process of being investigated by the Court of First Instance. d) Other company and other third party sued the Company as a joint defendant with the subcontractor in 2 cases, claiming damages of Baht 31 million for damaged properties. Currently, the cases are being investigated by the Court of First Instance. The Company’s management and its legal consultant are of the opinion that no material liabilities are likely to arise as a result of the above litigations and therefore no provision has been made in the accounts.

32. Financial instruments 32.1 Financial risk management The Company’s and its subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 107 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable and payable, other receivables and payables, loans lending, other long-term investment, debentures, liabilities under finance lease agreements, and borrowings. The financial risks associated with these financial instruments and how they are managed are described below. Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable and other receivables. The Company manages the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentrations of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivable and other receivables as stated in the statement of financial position. Interest rate risk The Company’s and its subsidiaries’ exposure to interest rate risk relates primarily to their deposits at banks, loans lending, other long-term investment, overdrafts, liabilities under finance lease agreements, debenture and interest-bearing borrowings. These financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the current market rate, the interest rate risk is expected to be minimal. Significant financial assets and liabilities classified by type of interest rates are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date or the repricing date if this occurs before the maturity date. Major Development Public Company Limited

(Unit: Million Baht)

Consolidated financial statements As at 31 December 2012 Floating Non Fixed interest interest interest interest rate rates rate bearing Total (% p.a.) within 1 year over 1 year

Financial assets Cash and cash equivalents Trade and other receivables Pledged deposits at banks Other long-term investment Financial liabilities Bank overdrafts and short-term loans from financial institutions Trade and other payables Short-term debentures Short-term loans from related parties Short-term loans from unrelated parties Liabilities under finance lease agreements Long-term loans from financial institutions Long-term loans from related parties

- - 2 - 2

- - - 5 5

128 - - - 128

1 49 - - 50

129 49 2 5 185

0.50 - 3.00 0.50 - 3.00 4.60

340 - 520 135 785 8 - - 1,788

- - - - - - - - -

42 - - - - - 3,331 424 3,797

- 695 - - - - - - 695

382 695 520 135 785 8 3,331 424 6,280

4.10 - 7.60 4.90 8.125 4.60 - 5.30 2.60 - 5.50 5.75 - 8.125 7.375 - 7.625

Consolidated financial statements As at 31 December 2011 Floating Non Fixed interest interest interest interest rate rates rate bearing Total (% p.a.)

Financial assets Cash and cash equivalents Trade and other receivables Pledged deposits at banks Financial liabilities Bank overdrafts and short-term loans from financial institutions Trade and other payables Short-term loans from related parties Short-term loans from unrelated parties Liabilities under finance lease agreements Long-term loans from financial institutions Long-term loans from related parties

â&#x20AC;&#x201A; 96 Annual Report 2012

within 1 year over 1 year

- - 2 2

- - - -

99 - - 99

1 81 - 82

100 81 2 183

0.50 - 3.00 0.50 - 3.00

275 - 20 50 10 - - 355

78 - - - - - - 78

- - - - - 3,067 249 3,316

- 627 - - - - - 627

353 627 20 50 10 3,067 249 4,376

4.25 - 8.00 8.125 5.50 2.60 - 5.50 4.75 - 8.125 6.50 - 7.625

(Unit: Million Baht)

Separate financial statements As at 31 December 2012 Floating Non Fixed interest interest interest interest rate rates rate bearing Total (% p.a.)

Financial assets Cash and cash equivalents Trade and other receivables Pledged deposits at banks Long-term loans to related parties Other long-term investment Financial liabilities Bank overdrafts and short-term loans from financial institutions Trade and other payables Short-term debentures Short-term loans from related parties Liabilities under finance lease agreements Long-term loans from financial institutions

within 1 year over 1 year

- - 2 1 - 3

- - - - 5 5

87 - - 441 - 528

- 155 - - - 155

87 155 2 442 5 691

0.50 - 3.00 0.50 - 3.00 5.50 - 7.625 4.60

340 - 520 269 6 - 1,135

- - - - - - -

32 - - - - 1,941 1,973

- 452 - - - - 452

372 452 520 269 6 1,941 3,560

4.10 - 7.60 4.90 5.0 - 8.125 2.60 - 5.50 6.63 - 8.125

(Unit: Million Baht) Separate financial statements As at 31 December 2011 Floating Non Fixed interest interest interest interest rate rates rate bearing Total (% p.a.)

Financial assets Cash and cash equivalents Trade and other receivables Pledged deposits at banks Long-term loans to related parties Financial liabilities Bank overdrafts and short-term loans from financial institutions Trade and other payables Liabilities under finance lease agreements Long-term loans from financial institutions

within 1 year over 1 year

- - 2 - 2

- - - - -

80 - - 318 398

1 183 - - 184

81 183 2 318 584

0.50 - 3.00 0.50 - 3.00 5.875 - 7.625

275 - 8 - 283

- - - - -

71 - - 1,847 1,918

- 318 - - 318

346 318 8 1,847 2,519

4.25 - 7.60 2.60 - 5.50 4.75 - 8.125

Foreign currency risk As at 31 December 2012 and 2011 the Company and its subsidiaries have no significant financial instruments in foreign currency.

Major Development Public Company Limited â&#x20AC;&#x201A;

32.2 Fair values of financial instruments Since the majority of the Company’s and its subsidiaries’ financial instruments are short-term in nature, loans receivable and payable bear interest rates which are close to the market rate, their fair values are not expected to be materially different from the amounts presented in the statement of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

33. Capital management

The primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure in order to support its business and maximize shareholder value. In managing its capital position the Group refers to its debt-to-equity ratio, in order to ensure compliance with a condition of long-term loan agreements with financial institutions, which require the Group to maintain a minimum of debt-to-equity ratio of 2.5:1. For the purpose of calculating this financial ratio, equity consists of shareholders’ equity, short-term loans from related parties and long-term loans from related parties, and debt is defined as interest-bearing debt. As at 31 December 2012, the Group’s debt-to-equity ratio was 2.10:1 (2011: 1.44:1) and the Company’s was 1.21:1 (2011: 0.92:1).

34. Events after the reporting period 34.1 On 2 January 2013, a meeting of the Board of Directors of the Company approves to jointly invest in a subsidiary with Must International Trading PTE Ltd. and Lionpath Ltd. by setting up Major Residences Company Limited, with registered capital of Baht 25 million, with issuance of 250,000 ordinary shares at a par value of Baht 100 per share. The Company has 80% shareholding while Must International Trading PTE Ltd. and Lionpath Ltd. had 18% and 2% shareholding, respectively. The Company registered the incorporation of Major Residences Company Limited with the Ministry of Commerce on 4 January 2013. 34.2 On 15 January 2013, the Company’s Board of Directors’ meeting passed the following resolutions. a) The meeting approved the Company to set up Majors Manor Company Limited, with registered capital of Baht 1 million, by issuing 10,000 ordinary shares at a par value of Baht 100 per share. The Company has paid up 25% of the registered shares. The Company holds 9,996 ordinary shares of this company, representing a 99.96% shareholding. The meeting approved the Company to set up Major Development Property Partners Company Limited, with registered capital of Baht 1 million, by issuing 10,000 ordinary shares at a par value of Baht 100 per share. The Company has paid up 25% of the registered shares. The Company holds 9,996 ordinary shares of this company, representing a 99.96% shareholding. The Company registered the incorporation with the Ministry of Commerce on 16 January 2013. b) The meeting approved the Company to issue unsecured and unsubordinated bearer debentures no. 1/2556 of Baht 150 million. The debentures carry fixed interest rate at 4.80% per annum, mature within nine months. The Company fully received payment from debenture issuance in January 2013. 34.3 On 11 February 2013, a meeting of the Board of Directors of the Company approved to issue unsecured and unsubordinated bearer debentures no. 2/2556 of Baht 130 million, carrying fixed interest rates at 4.90% per annum, mature within nine months. The Company has fully received payment from debenture issuance in February 2013. 34.4 On 19 February 2013, the Company’s Board of Directors’ meeting passed resolutions to approve the Company to set up Major Development Estate Company Limited, with registered capital of Baht 1 million, by issuing 10,000 ordinary shares at a par value of Baht 100 per share. The Company has paid up 25% of the registered shares. The Company holds 9,996 ordinary shares of this company, representing a 99.96% shareholding. The meeting approved the Company to set up Major Development Hospitality Company Limited, with registered capital of Baht 1 million, by issuing 10,000 ordinary shares at a par value of Baht 100 per share. The Company has paid up 25% of the registered shares. The Company holds 9,996 ordinary shares of this company, representing a 99.96% shareholding. The Company registered the incorporation with the Ministry of Commerce on 21 February 2013. 34.5 In February 2013, the Company to enter into credit facility agreement with two commercial banks. The loan facilities of Baht 610 million are to be used for working capital and project construction. The interest rate and collateral for these loans are as stipulated in the agreements.

35. Approval of financial statements

The financial statements were authorised for issue by the Company’s Board of Directors on 28 February 2013.

98 Annual Report 2012

Explanation and analysis of financial statement and Performance (1) Past performance overview In 2002, the company started developing Hampton Thonglor 10, our first high-end condominium project. By the end of 2012, we have finished projects with full ownership transferred units as Hampton Thonglor 10, Fullerton Sukhumvit , and Manhattan Chidlom. As for finished projects, there are 6 of them, namely, Watermark Chao Phraya River Tower A, Watermark Chao Phraya River Tower B, Mykonos Hua Hin, Wind Sukhomvit 23 (Soi Prasarnmit), Aguston Sukhumvit 22, Wind Ratchayothin, and Marrakesh Hua Hin Residences., Royce Private Residences, Collezio Sathorn – Pipat The company, meanwhile, has 6 projects under construction, namely Reflection Jomtien Beach Pattaya, M Silom, M Phyathai, Equinox Phahol-Vibha, M Ladphrao, and Manor.Sasambinnam The 13 projects with some ownership yet to be transferred are worth altogether about 17,845 million baht, details of which are as follows: Summary of the Company’s condominium projects as of 31 December 2012 Project Average Sale Construction Revenue by Project Value Sale Area Price per Progress1 Progress2 Unit right Transfer ( Baht Million) (sq.m) sq.m. ร้อยละ Ratio3

Watermark chaophraya River Tower A 3,900.00 49,269.17 79,157.00 Watermark chaophraya River Tower B 1,800.00 26,433.27 68,096.00 Aguston sukhumvit 22 2,000.00 21,713.17 92,110.00 Reflection Jomtien Deach Pattaya 3,300.00 41,365.00 79,776.00 Marrakesh Hua Hin Residences 2,600.00 23,371.82 111,245.00 Royce Private Residences 3,000.00 25,884.65 115,890.00 Collezio Sathorn-Pipat 600.00 4,302.36 139,458.00 M Silom 1,710.00 11,507.00 148,605.00 M Phayathai 1,491.00 10,641.00 140,132.00 Equinox Phahol -vibha 2,300.00 21,369.00 107,633.00 M Ladprao 1,500.00 13,311.00 112,689.00 The Marvel residence Thonglor 5 366.30 2,464.37 148,638.00 Manor Sanambinnam 3,605.47 65,554.14 55,000.00

96.32 78.75 77.27 79.56 86.81 63.24 36.77 37.90 61.40 67.44 60.63 52.61 0.47

100.00 100.00 100.00 80.00 100.00 100.00 100.00 32 15 40 21 100

96.01 77.46 74.20 84.86 42.86 21.64

43.03

Note : 1 Percentage of contracted area to total sales area 2 Percentage of total construction value 3 Percentage of total project value

Major Development Public Company Limited

(2) Operating result and financial status

Past operating results of the business

The company’s net income in 2012 decreased by 153.22 million baht, compared to the year 2011, and net income in 2011 decreased from that in 2010 by 1,708.36 million baht. The net income of the company comprises income from the sale of units in condominium projects, income from hotel operation and other incomes. Revenue from sales of condominium unit

Revenue

2012 Consolidated Financial Statement

2011 Consolidated Financial Statement M. Baht

2010 Consolidated Financial Statement

M. Baht %

M. Baht

Revenue from sales Watermark Chaophraya River Tower A Manhattan Chidlom Watermark Chaophraya River Tower B Wind Sukhumvit 23 Wind Ratchayothin Aguston Sukhumvit 22 Mykonos Hua Hin Marrakesh Hua Hin Residences Reflection Jomtien Beach Pattaya Royce Private Residences Sukhumvit 31 Collezio Sathorn-Pipat M Silom M Phayathai Equinox Phahol -vibha M Ladprao The Marvel residence Thonglor 5 Revenues from hotel operations Other Income Total revenues

183.00 7.13 344.41 12.65 736.58 16.63 - 4.90 0.18 65.91 1.49 117.70 4.58 172.43 6.34 262.20 5.92 27.30 1.06 144.51 5.31 658.77 14.87 26.15 1.02 71.46 2.63 1,553.11 35.06 127.66 4.97 238.88 8.78 1,099.80 24.82 4.2 0.16 9.80 0.36 20.42 0.46 487.00 18.96 1,718.11 63.12 - - - - - - - - 1,211.01 47.16 - - - - 129.54 5.04 - - - - - - - - - - - - - - - - - - - - - - - - - - 157.70 6.15 - - - 60.90 2.37 3.66 0.13 - 35.87 1.40 13.59 0.50 33.32 0.75 2,568.03 100.00 2,721.75 100.00 4,430.11 100.00

Remark: 1. Accounting period 1 January to 31 December 2 Other revenues of the company were mainly from, deposit interest earned, rental and services revenue, deposit from the customer cancellation and revenue from sales of construction bids.

Revenue from the sale of units in condominium projects In 2010, income from the sale of units in condominium projects amounted to 4,396.79 million baht, an increase from 2,958.10 million baht in 2009, representing a 48.64 percent increase, with continuous recognition of incomes from Watermark Chao Phraya River Tower A, Manhattan Chidlom, Watermark Chao Phraya River Tower B, Wind Sukhumvit 23 and Mykonos Hua HIn projects. Moreover, the company was able to recognize additional incomes from 2 finished projects with ownership started to be transferred in 2010, namely, Wind Ratchayothin and Aguston Sukhumvit 22. To sum up, the company earned income from the sale of units in altogether 7 condominium projects in 2010.

100Annual Report 2012

In 2011, income from the sale of units in condominium projects amounted to 2,704.50 million baht, a decrease of 4,396.79 million baht from that of 2010, representing a 38.49 percent decrease, with continued recognition of incomes from Watermark Chao Phraya River Tower A, Manhattan Chidlom, Watermark Chao Phraya River Tower B, Wind Sukhumvit 23, Mykonos Hua Hin, Wind Ratchayothin, and Aguston Sukhumvit 22 projects. The company largely recognized incomes from these projects in the previous year, therefore the ratio of income recognition from the projects in 2011 decreased from the year earlier However, the company was able to recognize additional income from one finished project with ownership started to be transferred in 2011, namely Marrakesh Hua HIn Residences project. In all, the company earned income from the sale of units in altogether 8 condominium projects in 2011. In 2012, income from the sale of units in condominium projects amounted to 2,471.26 million baht, a decrease of 2,704.50 million baht from that of 2011, representing a 8.62 percent decrease, with continued recognition of incomes from Watermark Chao Phraya River Tower A, Watermark Chao Phraya River Tower B, Wind Sukhumvit 23, Mykonos Hua Hin, Wind Ratchayothin, and Aguston Sukhumvit 22 projects. The company largely recognized incomes from these projects in the previous year, therefore the ratio of income recognition from the projects in 2012 decreased from the year earlier However, the company was able to recognize additional income from one finished project with ownership started to be transferred in 2012, namely Royce Private Residences Sukhumvit 31 , Collezio Sathorn-Pipat, The Marvel residence Thonglor 5 project. In all, the company earned income from the sale of units in altogether 16 condominium projects in 2012. Sold Units (at the end of 2012) Project Watermark Chaophraya River Tower A Watermark Chaophraya River Tower B Wind Sukhumvit 23 Wind Ratchayothin Aguston Sukhumvit 22 Mykonos Hua Hin Marrakesh Hua Hin Residences Collezio Sathorn-Pipat Reflection Jomtien Beach Pattaya Royce Private Residences Sukhumvit 31 M Silom M Phayathai Equinox Phahol -vibha M Ladprao The Marvel residence Thonglor 5 Manor Sanambinnam Total

Total Sold (Units) (Units) 282 204 220 390 269 122 345 95 334 160 161 215 490 286 9 1,848 5,430

273 164 220 390 190 122 332 39 225 110 69 131 360 178 5 6 2,814

When considering income structure of the company in 2010, 2011 and 2012, the main income of the company came from the sale of units in condominium projects at 99.25, 99.37and 96.23 percent of net incomes respectively. As for the policy in income recognition, the company originally recognized income at the conclusion of the sale and purchase agreement by no less than 40 percent of the offered area on sale and with a preliminary payment of no less than 20 percent of the agreed price in the agreement, the development work completed by no less than 10 percent of the projected work in accordance with the Percentage of Completion Method, taking the ratio of completed work to calculate in comparison with the cost of the construction work up to each phase and the expected cost of the entire development, with the exclusion of the land cost. The company will stop recognizing income for any sale and purchase agreement in which the purchaser miss the payment date for 3 consecutive periods while the ratio of completed work is higher than the paid period. In the current year, the company complies with the Accounting Standards issue 18 (revised 2010) on Major Development Public Company Limited â&#x20AC;&#x201A;

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income, set by the Federation of Accounting Professions. This Accounting Standards requires an enterprise to recognize income from the sale of goods, including real estate developed for sale, when major risks and returns to the purchaser, Therefore, the company will recognize the full amount of an income from the sale of a unit in the condominium after the ownership is transferred to the purchaser. As such, the company has adjusted the operating results of the previous year retroactively to be presented in comparison in the table, so that income recognition can be made in the same method as that used in the current year.

Income from hotel operation

In November 2012, the company’s subsidiary began the operation of Marrakesh Hua Hin and Spa. Thus in 2012, the company earned an income of 60.90 million baht from hotel operation. The Other incomes The Other incomes of the company in the year 2010 amounted to 33.32 million baht, an increase of 11.99 million baht from that of 2009, due to incomes from the sale of parking rights, bank deposit interests, and from the sale of tender documents for bidding, which increased in accordance with the number of new projects. Other incomes of the company in the year 2011 amounted to 13.59 million baht, an increase of 19.73 million baht from that of 2010, due to the forfeited deposits in cases of terminations of reservation forms or sale and purchase agreements, bank deposit interests, and .from the sale of tender documents for bidding, which increased in accordance with the number of new projects. As for other incomes of the company in the year 2012, the amount was 35.87 million baht, a increase of 22.28 million baht from that of 2011, due to the increase in the forfeited deposits in cases of terminations of reservation forms or sale and purchase agreements and income from land lease.

Cost of sales of units in condominium projects

In 2010, the cost of sales of units in condominium projects on the company was 3,256.75 million baht, an increase of 1,318.84 million baht, or 68.05 percent from that of 2009, as the company began recognizing income from the sales of two additional projects, Wind Ratchayothin and Aguston Sukhumvit 22, with increased recognized cost of sales at 2,063.89 million baht. In 2011, the cost of sales of units in condominium projects on the company was altogether 1,900.54 million baht, a decrease of 1,356.21 million baht or 41.64 percent from that of 2010, because the company sold less units in the projects. In 2012, the cost of sales of units in condominium projects on the company was 1,964.02million baht, an increase of 45.47 million baht, or 2.39 percent from that of 2011, as the company began recognizing income from the sales of three additional projects, The Marvel residence Thonglor 5, Royce Private Residences Sukhumvit 31, Collezio Sathorn-Pipat Gross profit As for 2010, the company’s gross profit was 1,140.04 million baht, or 25.93 percent decrease from that of 2009, because of higher competition in the business and the company offered more discounts to customers to stimulate sales. In 2011, the company’s gross profit amounted to 803.96 million baht, or 29.73 percent, close to the gross profit rate of 2010. In 2011, the company’s gross profit amounted to 525.23 million baht, , close to the gross profit rate of 2010.

Selling and administrative expenses

Selling and administrative expenses comprise mostly expenditure in marketing, including fee for brokers in the sales, expenditure concerning personnel, depreciation cost, tax and fee in the transfer of units, and office expenditure. Selling and administrative expenses in 2010 amounted to 471.72 million baht, an increase of 66.54 percent from that of 2009 and 10.65 percent of net income. The adjustment of selling and administrative expenses was due to the expiration of the measures to reduce specific business tax and real estate transfer fee in the first quarter of the year, therefore the company had to absorb an increased specific business tax from 0.11 to 3.3 percent, and transfer fee from 0.1 to 2.0 percent. Moreover, the company launched more new projects in the past period, resulting in more selling and administrative expenses.

102Annual Report 2012

In 2011, selling and administrative expenses amounted to 539.29 million baht, an increase of 14.28 percent from 2010, and 19.81 percent of net income. This was due to the launches of 2 new projects, namely, M Ladphrao and The Marvel Residence Thonglor 5, as well as the stimulation of sales for the existing projects to be faster, therefore the company had to bear more advertising and selling expenses. Moreover, during the year 2011, the company started the hotel operation, resulting in more administrative expenses of the hotel. In 2012, selling and administrative expenses amounted to 497.89 million baht, an increase of 7.68 percent from 2011, and 19.39 percent of net income. This was due to the launches of 1 new projects, namely, Manor Sanambinnam, as well as the stimulation of sales for the existing projects to be faster, therefore the company had to bear more advertising and selling expenses. Moreover, during the year 2012, the company started the hotel operation, resulting in more administrative expenses of the hotel.

Financial expense

Financial expense of the company in 2012 was 116.47 million baht, representing 4.54 percent of net income, compared to the year 2011 and 2010, at 79.17 and 86.02 million baht respectively. Financial expense in 2012 increased from 2011, because the company the projects under the construction and purchase lands for further project developments.

Operating profit

As for profit before financial expense and income tax of the company in 2010, the amount was 701.64 million baht, a decrease from 762.69 million baht in 2009. As a result, the rate of operating profit of the company in 2010 was 15.84 percent of the net income, a decrease from the year 2009, as the company had the increased ratio of sale cost, selling and administrative expenses. In 2011, the company’s profit before financial expense and income tax amounted to 279.30 million baht, a decrease from 701.64 million baht in 2010, resulting in the rate of operating profit of the company in 2011 at 10.26 percent of net income, a decrease from the year 2010, as the company had the increased ratio of sale cost, selling and administrative expenses. In 2012, the company’s profit before financial expense and income tax amounted to 68.82 million baht, a decrease from 279.30 million baht in 2011, resulting in the rate of operating profit of the company in 2012 at 2.67 percent of net income, a decrease from the year 2011, as the company had the increased ratio of sale cost, selling and administrative expenses Net profit (loss) In 2010, the company’s net profit was 529.94 million baht, or 11.96 percent, a decrease from the previous year at 18.04 percent, as the company had the increased ratio of sale cost, selling and administrative expenses. The company’s net profit in 2011, meanwhile, was 172.25 million baht, or 6.33 percent, a decrease from the previous year at 11.96 percent, as the company had the increased ratio of sale cost, selling and administrative expenses. The company’s net profit in 2012, meanwhile, was (84.22)million baht, or (3.28) percent, a decrease from the previous year at 6.33 percent, as the company had the increased ratio of sale cost, selling and administrative expenses.

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Shareholders’ rate of returns

From 2010-2011, the company maintained the rate of returns for shareholders in accordance with the increase of net profits, with the rate of returns at 26.44 percent in 2010, and 7.92 percent in 2011 respectively. As for the year 2012, the rate of returns for shareholders was 4.03 percent.

(3) Financial status

Asset - Components and quality of asset

Net asset of the company as of 31 December 2010, 2011, and 2012, the company had net asset of 8,085.35, 8,332.14 and 10,389.34 million baht respectively. The increase of net asset in 2012 was in support of the growth and expansion of the company’s projects., with the details of main assets listed as follows:

Land and costs of projects under construction

As of 31 December 2010, the company had land and costs of projects under construction worth altogether 6,558.74 million baht, comprising the ratio of projects of Watermark Chao Phraya River Tower A and B at 6.06 and 8.58 percent, Manhattan Chidlom at 0.07 percent, Wind Sukhumvit 23 at 2.07 percent, Wind Ratchayothin at 1.49 percent, Aguston Sukhumvit 22 at 11.23 percent, Mykonos Hua Hin at 0.09 percent, Reflection Jomtien Beach Pattaya at 6.46 percent, Marrakesh Hua Hin at 25.85 percent, M Phyathai at 2.20 percent, M Silom at 6.15 percent, Collezio Sathorn – Pipat at 3.47 percent, Equinox Phahol – Vibha at 6.22 percent, M Ladphrao at 1.73 percent, Royce Private Residences Sukhumvit 31 at 16.97 percent and Soi Thonglor Area, making up 1.36 percent. As of 31 December 2011, the company had land and costs of projects under construction worth altogether 6,493.37 million baht, comprising the ratio of projects of Watermark Chao Phraya River Tower A and B at 2.98 and 6.54 percent, Wind Sukhumvit 23 at 0.47 percent, Wind Ratchayothin at 0.50 percent, Aguston Sukhumvit 22 at 8.35 percent, Mykonos Hua Hin at 0.03 percent, Reflection Jomtien Beach Pattaya at 11.10 percent, Marrakesh Hua Hin at 7.59 85 percent, M Phyathai at 3.62 percent, and M Silom at 7.53 percent, Collezio Sathorn - Pipat at 4.78 percent, Equinox Phahol – Vibha at 8.73 percent, M Ladphrao at 3.49 percent, Royce Private Residences Sukhumvit 31 at 28.74 percent, The Marvel Residence Thonglor 5 at 2.19 percent and Sanam Bin Nam Area, making up 3.36 percent. As of 31 December 2012, the company had land and costs of projects under construction worth altogether 7,650.30 million baht, comprising the ratio of projects of Watermark Chao Phraya River Tower A and B at 5.52 percent, Aguston Sukhumvit 22 at 5.97 percent, Reflection Jomtien Beach Pattaya at 19.74 percent, Marrakesh Hua Hin at 1.67 percent, M Phyathai at 3.95 percent, and M Silom at 7.82 percent, Collezio Sathorn – Pipat at 5.07 percent, Equinox Phahol – Vibha at 10.05 percent, M Ladphrao at 4.6 percent, Royce Private Residences Sukhumvit 31 at 20.44 percent, The Marvel Residence Thonglor 5 at 1.73 percent and Sanam Bin Nam Area, making up 2.99 percent.

104Annual Report 2012

Land and costs of project

As of 31 Dec 2012 Consolidated financial statement

Baht million

As of 31 Dec 2011 Consolidated financial statement Baht million

As of 31 Dec 2010 Consolidated financial statement Baht million

Cost of lands 5,172.64 28.39 4,587.81 29.78 4,420.86 30.07 Construction in progress 12,056.81 66.19 9,986.58 64.82 8,547.04 65.08 Interest paid recorded as costs 988.30 5.42 831.31 5.40 702.21 4.85 Total 18,217.75 100.00 15,405.70 100.00 13,670.11 100.00 Add: Transfer from property,plant and equipment 3.97 Transfer from investment properties 215.01 Less:Accumulated transferred to cost of sales (10,561.10) (8,623.17) (6,722.61) Transferred to investment properties (6.35) (508.14) (388.76) Total 7,650.30 6,493.37 6,558.74

Deposit payment for construction

As of 31 December 2010, the company had advance payment for construction at the amount of 127.79 million baht, increased from at the yearend of 2009, because the projects of Reflection Jomtien Beach Pattaya and Royce Private Residences Sukhumvit 31 had structural construction work started, thus more advance payment was required. As of 31 December 2011, the company had advance payment for construction amounting to 255.10 million baht, an increase from at the yearend 2010, because the projects of Equinox Phahol - Vibha, Collezio Sathorn - Pipat, Reflection Jomtien Beach Pattaya and M Silom had structural construction work started, thus more advance payment was required. As of 31 December 2012, the company had advance payment for construction amounting to 340.39 million baht, an increase from at the yearend 2011, because the projects of Equinox Phahol - Vibha, , Reflection Jomtien Beach Pattaya and M Silom M Phayathai M Ladprao had structural construction work started, thus more advance payment was required.

Down payment for land purchase

As of 31 December 2012, the company entered into a contract to purchase and to sell land with a Major Development Residense Company Limited a deposit of Baht 100 Million . In May 2012, the Company received full remaining amount and expect to transfer the possessory in April 2013. As of 31 December 2012, the company entered into a contract to purchase and to sell land with a MJP Property Company Limited a deposit of Baht 366 Million , the Company received full remaining amount and expect to transfer the possessory in December 2013.

Trade debtors

Net trade debtors of the company as of 31 December 2010, 2011 and 2012, value 87.37, 81.04 and 48.83 million baht respectively, at the ratio of 108, 0.97 and 0.47 percent of net assets calculated on 31 December. The details of account receivables according to debt period as of 31 December 2012 and 2011 were as follows:

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Trade receivables-related parties Aged on the basis of sue dates Past due Up to 6 months Total trade receivables-related parties Trade receivables-unrelated parties Aged on the basis of due dates Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total trade receivables - unrelated parties Total trade receivables Other receivables Accounts receivable and advances related parties Accrued interest - related parties Advance payments Total other recivables Total trade and other receivables

(Unit : Thousand Baht )

2012 2011

- -

167 167

11,103 562 1,062 192 12,919 12,919

12,241 1,575 504 32,695 47,015 47,182

3,583 - 32,323 35,906 48,825

3,574 30,279 33,853 81,035

Additional information of trade accounts receivable - sale of property

Total estimated project value Total value of contracts signed Percentage to total project Value

(Unit : Million Baht)

2012 2011 32,725.38 22,506.13 68.77%

29,241.85 19,611.91 67.07%

Property ,Plant and equipment

As of 31 December 2010, net Property, Plant and equipment were 502.53 million baht. Main net Property, Plant and equipment comprise land, temporary buildings and improvement sections, residential units, office equipment, decorations and installations, vehicles and others, 56.79, 0.26, 7.20, 6.36, 1.68, 5.54, 1.62 and 20.55 respectively. As of 31 December 2011, net Property, Plant and equipment were worth altogether 746.60 million baht. Main net Property , Plant and equipment comprise land, temporary buildings and improvement sections, residential units, office equipment, decorations and installations, vehicles and others, 36.92, 44.48, 2.58, 3.09, 3.74, 6.94, 1.37 and 0.88 respectively. As of 31 December 2012, Property,Plant and equipment were worth altogether 859.48 million baht. Main net Property,Plant and equipment comprise land, temporary buildings and temporary building improvement sections, residential units, office equipment, decorations and installations, vehicles and others, 45.93, 41.47, 11.37, and 1.22 respectively.

â&#x20AC;&#x201A; 106Annual Report 2012

Liabilities As of 31 December 2010, short and long-term loans from financial institutions were worth altogether 3,075.89 million baht, a decrease, because during the year 2010, the company had completed projects with additional ownership transferable, and thus was able to repay more loans. Moreover, the company obtained additional bank overdraft for use in developing projects with construction started, and with part of the loans to purchase land for developing more projects. However, the ratio of loan repayment during the year was higher than the disbursement of the loans. Therefore, the company’s loan rate had reduced. As of 31 December 2011, short and long-term loans from financial institutions were worth altogether 3,470.21 million baht, an increase, because during the year 2011, the company aimed to disburse more overdraft for use in developing projects with construction started, and with part of the loans to purchase land to develop more projects. As of 31 December 2012, short and long-term loans from financial institutions were worth altogether 3,713.09 million baht, an increase, because during the year 2012, the company aimed to disburse more overdraft for use in developing projects with construction started, and with part of the loans to purchase land to develop more projects. The Company has Liabilities from financial institution structure as follows: Debt from Financial Institutions

As of 31 Dec 2012 Consolidated financial statement

Baht million

As of 31 Dec 2011 Consolidated financial statement Baht million

As of 31 Dec 2010 Consolidated financial statement Baht million

Short-term loands Bank overdrafts Short-term loans from banks Long-term loans Long-term loans from banks - Current portion of long-term loans - Long-term loans from financial institutions

701.09 2,629.95

Total

3,713.09 100.00 3,420.21 100.00 3,075.89 100.00

25.55 0.68 25.49 0.74 41.41 1.34 356.50 9.61 327.50 9.58 52.50 1.71 18.88 70.83

1,866.72 1,200.50

54.58 35.10

1,713.44 1,268.54

55.71 41.24

Deposit and advanced received from customersา

As of 31 December 2010, deposit and advanced received from customers amounted to 1,474.24 million baht, a decrease from yearend of 2009, because the company had more projects with income recognition and ownership transfer compared to 2009. Thus, down and advance payments were more recognized as the company’s revenues. As of 31 December 2011, deposit and advanced received from customers amounted to 1,534.89 million baht, an increase from yearend of 2010, because the company launched more projects . Thus the deposits for reservation, agreement conclusion and down payments had increased. As of 31 December 2012, deposit and advanced received from customers amounted to 1,740.85 million baht, an increase from yearend of 2011, because the company launched more projects . Thus the deposits for reservation, agreement conclusion and down payments had increased.

Trade creditors

As of 31 December 2010, the company’s trade creditors increased by 191.28 million baht, compared to yearend 2009. Most trade creditors were from projects of Watermark Chao Phraya River Tower A and Watermark Chao Phraya River Tower B, Wind Sukhumvit 23, Wind Ratchayothin, Aguston Sukhumvit 22, Mykonos Hua Hin, Marrakesh Hua Hin, Royce Private Residences Sukhumvit 31, Reflection Jomtien Beach Pattaya, Equinox Phahol-Vibha, and other projects,.

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As of 31 December 2011, the company’s trade creditors reduced by 165.38 million baht, compared to yearend 2010. Most trade creditors were from projects of Watermark Chao Phraya River Tower A and Watermark Chao Phraya River Tower B, Wind Sukhumvit 23, Wind Ratchayothin, Aguston Sukhumvit 22,Marrakesh Hua Hin, Royce Private Residences Sukhumvit 31, Reflection Jomtien Beach Pattaya, Equinox Phahol – Vibha, M Silom,Collezio Sathorn-Pipat, The Marvel Residence Thonglor 5, Marrakesh Resort and Spa Hua Hin, and other projects, As of 31 December 2012, the company’s trade creditors reduced by 67.13 million baht, compared to yearend 2011. Most trade creditors were from projects of Aguston Sukhumvit 22, Marrakesh Hua Hin, Royce Private Residences Sukhumvit 31, Reflection Jomtien Beach Pattaya, Equinox Phahol – VibhaM Silom, Collezio Sathorn-Pipat, The Marvel Residence Thonglor 5, Marrakesh Resort and Spa Hua Hin, and other projects,

Obligations and likely liabilities

As at 31 December 2012, the Company and its subsidiaries had outstanding commitments of Baht 2,244 million As at 31 December 2012, the Company and its subsidiaries have outstanding commitments of Baht 1,350 million As at 31 December 2012 and 2011, the Company and its subsidiaries had a piece of mutually held land with servitude over the land of approximately 2 rai of which the cost is included in the cost of projects. Some part of the land has been mortgaged with a local commercial bank as collateral against a credit facility of Baht 179 million.

Shareholders’ part

By yearend 2010, shareholders’ part was worth 2,004.66 million baht, an increase of 433.49 million baht from 2009, or an increase rate of 27.59 percent. The increase was resulted from the better performance of the company, bringing accumulated profits already allocated up to 82.18 million baht, and profits not yet allocated of the company to 499.07 million baht. Moreover, common stocks and premiums on common stocks of the company increased at the amount of 8.12 million baht, due to the fact that during the year 2010, shareholders used their rights to purchase the company’s first lot of common stocks at 4.2 million shares. By yearend 2011, shareholders’ part was worth 2,175.94 million baht, an increase from yearend 2010 by 171.28 million baht, or an increase rate of 8.54 percent. The increase was resulted from the better performance of the company, bringing accumulated profits already allocated up to 95.94 million baht, and profits not yet allocated of the company to 668.22 million baht. Moreover, common stocks and premiums on common stocks of the company increased at the amount of 0.64 million baht due to the fact that during the year 2011, shareholders used their rights to purchase the company’s first lot of common stocks at 0.10 million shares. By yearend 2012, shareholders’ part was worth 2,091.72 million baht, an increase from yearend 2011 by 84.22 million baht, or an increase rate of 3.87 percent. The increase was resulted from the better performance of the company, bringing accumulated profits already allocated up to 95.94 million baht, and profits not yet allocated of the company to 577.35 million baht. Moreover, Appropriateness of capital structure The company has the ratio of liabilities to shareholders’ part at 31 December 2010 to 2012 equaling 3.03, 2.83, and 3.97 times respectively. Such a ratio reduced in 2012, the Company drawdown more loan to develop the projects under the construction and purchase more interesting lands for further project developments. If considering only the Interest Bearing Debt of the company, it would be found that the ratio of debt per shareholders’ part equaled 1.37 times by yearend 2010, 1.44 times by yearend 2011 and 2.05 times by yearend 2012. The reason for the decrease of the rate from 1.44 times by yearend 2011 to 2.05 times by yearend 2012 was because the Company drawdown more loan to develop the projects under the construction and purchase more interesting lands for further project developments.

108Annual Report 2012

Statements of cash flows In 2010, the company had cash flow for the operation at 788.88 million baht, because in 2010, the company had ownership transfer for units to a large number of customers, bringing up the amount of cash received. The company used that cash to buy land for more project development, namely Equinox Phahol-Vibha, and M Ladphrao projects, and in loan repayment, as well as investment in the construction of hotel for subsidiaries and the company’s assets. Therefore, in 2010, the company had increased net cash of 46.04 million baht. In 2011, the company had cash flow for the operation at 45.11 million baht, because in 2011, the company had ownership transfer for units to a large number of customers, bringing up the amount of cash received The company used that cash in the construction to develop more projects, namely Equinox Phahol – Vibha, Collezio Sathorn-Pipat, Reflection Jomtien Beach Pattaya, M Silom, Royce Private Residences Sukhumvit 31, The Marvel Residence Thonglor 5, and as investment in the construction of hotel for subsidiaries and the company’s assets.Thus, in 2011, the company’s net cash flow decreased to 0.20 million baht. In 2012, the company had cash flow for the operation at (1,417.93) million baht, because in 2012, the company had, bringing up the amount of cash received The company used that cash in the construction to develop more projects, namely Equinox Phahol – Vibha, Collezio Sathorn-Pipat, Reflection Jomtien Beach Pattaya, M Silom, Royce Private Residences Sukhumvit 31, The Marvel Residence Thonglor 5, and as investment in the construction of hotel for subsidiaries and the company’s assets.Thus, in 2011, the company’s net cash flow decreased to 0.20 million baht.

Liquidity rate

In 2010, the company’s liquidity rate was at 1.58 times, with the fast liquidity rate at 0.08 times, an increase from 2009, as the result of more ownership transfer of units to customers, enabling more loan repayment. Therefore, the liquidity rate had increased. In 2011, the company’s liquidity rate was at 1.49 times, with the fast liquidity rate at 0.11 times, as the result of more project development, requiring more circulated capital and resulting in more circulated debts. In 2012, the company’s liquidity rate was at 1.53 times, with the fast liquidity rate at 0.18 times, as the result of more project development, requiring more circulated capital and resulting in more circulated debts.

Major Development Public Company Limited

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LEADING DEVELOPER IN HIGH-END CONDOMINIUMS MAJOR DEVELOPMENT PUBLIC COMPANY LIMITED

MAJOR DEVELOPMENT PUBLIC COMPANY LIMITED

141 Soi Sukhumvit 63 (Ekamai), Sukhumvit Rd., Kwang Klongton Nua, Khet Wattana, Bangkok 10110 Tel. +66(0) 2392 1111 Fax. +66(0) 2392 2255

110 Annual Report 2012