Pf 09

Content 2 Message from the Board of Directors

53 Details of Directors

4 Company Information

54 Executives’ Remuneration

6 Financial Information

56 Corporate Governance

7 Nature of Business

65 Reference

15 Shareholder Structure and Management

66 Connected Transactions with Related Persons

25 Board of Directors

69 Risk Factors

26 Organization Chart

73 Explanation and Analysis of Financial and Operating Results

28 Project

85 Report of Independent Auditor

32 Map

86 Balance Sheets

33 Marketing and Competition

94 Note to Consolidated Financial Statements

41 Property Development Business Trend in 2009

123 The Board of Directors’ responsibilities for financial reports

45 Other Information

124 Audit Committee Report 2008

49 Management and Authorized Person of the Company

126 Auditor Fee Accuracy Sanctification Form

Property Perfect Public Company Limited

Message from Board of Directors To maintain revenue growth in the future, the company also plans to provincial expansion, beyond Bangkok and peripheral provinces where competition is intensifying. Focus will be placed on major cities in the North, the South, the East and the Northeast, for example.

Series of crisis in the US financial market had affected the US and global economy. Lack of political stability in Thailand also caused social turbulence, aside from the outbreak of the 2009 flu which severely hurt the tourism industry. Meanwhile, large-sized investment projects worth over Bt280,000 million in Map Ta Phut, Rayong, stumbled on growing concerns on the impact of industrial development to community environment and health, which dented local and foreign investor confidence. These negative factors led to the 2.3% contraction in the Thai economy in 2009.

In the year, the company and subsidiaries generated Bt5,073 million from the sale of land and house. The company experienced a hiccup on revenue from condominium sale, which fell to Bt779 million in the year. This resulted in the net profit of Bt400 million.

However, the Board recommended the dividend payment of Bt0.25 per share. Total assets at the end of the year stood at Bt14,477 million while total liabilities and shareholders’ equity were valued at Bt7,657 million and Bt6,820 million, respectively. The debt to equity ratio stood at 1.12:1.

In 2010, many research houses expect an improvement in the property development industry, upon the economic growth forecast of 3.5-4.5 per cent. Financial institutions are likely to lend more project financing loans, while consumer confidence should head upward. The Airport Rail Link project is expected to start commercial operations in 2010, to accommodate travelling to Suvarnabhumi Airport. In 2011, the extended BTS routes, On Nut-Baring and Wongwian Yai-Bang Wa, should be operational in 2011. Meanwhile, the construction of the Purple Line electric train (Bang Sue-Bang Yai) will start soon. All the mass transit routes should help propel improvement to the company, as it stands to benefit largely from the development with a large number of projects along the routes.

In accommodating the condition, the company will emphasize on launching more residential products to meet the growing demand. A number of 14 new projects will be unveiled in 2010, with combined sale value of over Bt20,000 million. Of total, four will cover single detached house projects, 5 townhouses and 5 condominium projects.

The ratio of products is designed in accordance with the Real Estate Information Center’s data. It showed that of 160,600 residential units transferred in 2009, 56,100 units were condominiums. Following were townhouses, 51,500 units; single houses, 33,100 units; and shophouses and duplexes forming the balance. The transfers of condominium units increased 22% from the previous year, while townhouses’ rose 7% and single houses notched up by only 2%. The figures reflected higher demand for condominiums and townhouses, thanks to the cheaper prices than single houses. The demand for residential units at affordable price is expected to remain high in 2010.

Annual Report 2009

The new strategy to produce products in demand, particularly residential units priced below Bt3 million per unit through projects of smaller sizes which allows revenue realization within 1 year, should limit the increase in the company’s debts as revenue can be realized at the end of the year.

In this year, the company introduces two new brands: The Villa, featuring two-story townhouses with the price tag of about Bt2 million per unit; and UNILOFT, featuring condominiums near universities or density areas with the price tag of about Bt1 million. To maintain revenue growth in the future, the company also plans to provincial expansion, beyond Bangkok and peripheral provinces where competition is intensifying. Focus will be placed on major cities in the North, the South, the East and the Northeast, for example.

The new strategy to produce products in demand, particularly residential units priced below Bt3 million per unit through projects of smaller sizes which allows revenue realization within 1 year, should limit the increase in the company’s debts as revenue can be realized at the end of the year. At end-2010, the company’s debt to equity ratio should fall to 1:1. The company will also try to maintain cash at the end of each quarter at around Bt1,000 million, to reduce financial management risks.

The property tax incentives which had been availabled for two years to boost the industry came to an end on 31 May 2010 after the governor extended from 31 May 2010 . The absence of the incentives will increase buyers’ burden by 1.985% due to higher transfer and mortgage registration fees. Many buyers should be encouraged to complete the transfers in the first quarter of 2010. After March 28, developers would see their cost rise 4.195%, on higher special business tax and mortgage registration fee. As some developers are expected to pass the burden onto buyers, housing prices could rise at least 5% due to the end of the incentives as well as an increase in the construction material and land prices.

The company’s business plan should promise a leap growth. The Board is hopeful that all employees would remain dedicated and committed to push the company towards the goals. Lastly, we thank all supporters, be they customers, business partners, financial institutions, or investors, for their trust in the company. We strongly hope that your positive feeling will remain forever.

Dr. Twatchai Nakata Mr. Chainid N. Sirimanee

Chairman Chief Executive Officer

Property Perfect Public Company Limited

Company Information Name Head Office

Type of Business

No. of Paid-up Share Par Value Paid-up Capital

Annual Report 2009

: :

:

: : :

Property Perfect Public Company Limited 17th Flr. Vorasombat Bldg.

100/1 Rama IX Road, Huaykwang Bangkok 10310 Tel. 0 2245 6640-7 Fax. 0 2247 3328 Real Estate Development, with focus on housing development for sale in Greater Bangkok under brands “Maneerin Park”, “Maneerin Lake & Park”, “Perfect Park”, “Perfect Place”, “Perfect Masterpiece”, “The Metro”, “The Villa”, “Metro Park”, and “Metro Sky”.

787,721,620 Share (on 31 December 2009) Baht 6 Baht 4,726,329,720

Investment in Other Companies

Name and Address

Registered Capital (MB)

Estate Perfect Co., Ltd. 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok Tel. 0 2245-6640-7 Fax. 0 2645-1976

Bright Development Bangkok Co., Ltd. 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok Tel. 0 2245-6640-7 Fax. 0 2645-1976

Centre Point Shopping Mall Co., Ltd. 3th Flr. Zuellig House, 1-7 Silom Road, Bangrak, Bangkok

Perfect Satellite Services Co., Ltd. 19th Flr. Vongvanich B Bldg 100/52 Rama IX Road, Huaykwang, Bangkok Tel. 0 2645-1406-8 Fax. 0 2645-1409

Krungthep Land Plc. 21th Flr. Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok Tel. 0 2645-0960-3 Fax. 0 2645-0380

Real Estate Development 100/9 Soi Ta-it, Rattanathibet Road, Nonthaburi Tel. 0 2594-4001-5 Fax 0 2594-4021

Paid-up Capital (MB)

Percentage of Type of Business Investment

1,000

1,000

100.00% Real Estate Development

1

1

99.94% Real Estate Development

1

1

59.99% Real Estate Development

1

1

99.98%

2,230

1,780

40

40

Manage Fitness and Clubhouse.

20.22% Real Estate Development

19.00%

Home Service

Property Perfect Public Company Limited

Financial Information Unit : Million Baht

Financial Position Total Assets Project Development Cost and Land for Development Total Liabilities Shareholders’ Equity Operation Results Sales Total Revenue Gross Margin Net Income Financial Ratio Return on Total Revenue Return on Equity Return on Total Assets Current Ratio Quick Ratio Per Share Data Net Income per share Dividend

Annual Report 2009

Consolidated The Company Only 2009 2009 2008 2007 14,477 13,099 11,525 11,91 12,332 9,866 8,670 9,405 7,657 6,674 5,203 6,233 6,820 6,425 6,322 5,718

5,852 4,846 6,834 5,713 5,948 4,977 6,935 5,778 30.51% 30.91% 31.09% 29.57% 400 386 798 369

6.72% 7.76% 11.51% 6.38% 5.91% 6.06% 13.26% 6.66% 2.92% 3.14% 6.80% 3.06% 2.38 2.45 4.19 2.56 0.19 0.21 0.25 0.24

Unit : Baht 0.51 0.49 1.01 0.47 0.25 0.25 0.36 0.24

Nature of Business Background and Major Milestones Property Perfect Public Company Limited was established on 14 August 1985 by the group of Maneeya Estate’’s operators, with initial registered capital of Bt300,000. On 19 October 1993, the company was registered as a public company and on 1 June in the same year, it was listed on the Stock Exchange of Thailand in the Property Sector. The company was moved to the REHABCO Sector in 1997 and resumed share trading as a company under rehabilitation on 22 November 2001. Following the success to meet the Stock Exchange of Thailand’’s financial criteria, the company returned to the Property Sector on 19 June 2002. Once completing all conditions under the business rehabilitation and debt restructuring plan, the company won the Central Bankruptcy Court’’s approval to exit the rehabilitation process on 12 April.

The company has extensively expanded the business and undergone capital increases and reduction. As of 31 December 2009, the company’’s registered capital stood at Bt6,552 million with 1,092 million shares at Bt6 par value while the paid-up capital totaled Bt4,726.33 million or 787.72 million shares at Bt6 par value.

Overview of Property Perfect Group of Companies The company’s investment in subsidiaries and affiliates can be put into 2 main categories.

1. Property development, consisting of 3 subsidiaries and 1 affiliate 2. Services, consisting of 1 subsidiary and 1 affiliate

Investment Structure Property Perfect Public Company Limited Real Estate Units

99.94 % Bright Development Bangkok Co., Ltd

59.99 % Centre Point Shopping Mall Co., Ltd. *

Services-oriented units 99.98 % Perfect Satlelite Service Co., Ltd.

100 % Estate Perfect Co. 20.22 % Krungtep Land Plc.

19 % real Service Co., Ltd.**

51 % Riverside Homes Development Co.***

Note: *

Not operational yet The Board of Directors at the 1/2010 meeting on 22 January 2010 approved the purchase of Centrepoint Shopping Mall’’s 4,000 shares at Bt100 apiece from Timberline Investment Pte Ltd, to raise the company’’s stake to 99.98%. ** Business operation discontinued *** Develop “The Pano” condominium. The remaining 49% stake is owned by a Singaporean group, represented by Fraser (Thailand) Pte Ltd.

Property Perfect Public Company Limited

1. Business units focusing on development for sale The company, subsidiaries, affiliates are mainly involved with the property development for sale. The projects involve the development of single detached houses, townhouses, and low-rise condominiums. The company, subsidiaries and affiliates normally put the construction of designed houses in the hands of contractors, but the construction process will be inspected by in-house engineers and architects at all stages.

The company, subsidiaries and affiliates’ projects are located in Bangkok and peripheral areas. The company has a plan to expand into potential provinces in North, South, East and North-East. The feasibility study is underway.

Property Perfect Public Company Limited (Company) Developing housing estates and low-rise condominiums. As of 31 December 2009, a total of 12 projects are under development with outstanding value of Bt17,638 million. Six new projects will be launched in 2010, with total value of Bt12,795 million.

Estate Perfect Co.,Ltd. (Subsidiary) Located at 100/1 Vorasombat Building (17th flr), Rama IX Road, Huay Kwang, Bangkok, Estate Perfect carries out housing estate development with the focus on the east of Bangkok. Estate Perfect is capitalized at Bt1,000 million, all paid-up. The company owns 100 per cent of the 100 million shares (at Bt10 par value).

Estate Perfect is now developing two projects as of 31 December 2009, of which outstanding value was Bt2,675 million.

In 2010, the company plans to invest in 5 small townhouse projects, with 30-50 rai in total area, at various potential locations for a higher share in the townhouse market. With unit prices of Bt1.8-Bt2 million, the projects’ value is estimated at Bt3,713 million.

Property Perfect’s Board at the 1/2010 meeting on 22 January 2010 approved Estate Perfect’s capital increase from Bt1,000,000,000 to Bt1,200,000,000, through the issuance of 20,000,000 new shares at Bt10 apiece.

Bright Development Bangkok Co.,Ltd. (Subsidiary) Located at 100/1 Vorasombat Building (17th flr), Rama IX Road, Huay Kwang, Bangkok, Bright Development was established on the Board’s resolution at the 4/2007 meeting on 30 April 2007 for condominium development. The company owned 99.94% of Bright’s Bt1,000,000 capital.

Annual Report 2009

As of 31 December 2009, Bright is capitalized at Bt500,000,000, as the Board at the 6/2009 meeting on 12 November 2009 approved the company’s investment in Bright’s 4,990,000 new shares at Bt100 apiece.

Bright is developing 1 project of which sale is underway. Metro Sky Ratchada’s outstanding value as of 31 December 2009 was Bt753 million. It plans 3 low-rise condominium development projects in 2010. With combined value of Bt4,500 million, the projects will be located on densely-populated areas and near universities.

Krungthep Land Public Company Limited (Affiliate) Krungthep Land Public Company Limited (Krungthep Land) was established in 1984, to develop projects in Greater Bangkok.

Successful projects included Maneeya 2, Maneeya 3 and Ratchaphreuk-Kaset Nawamin. As of 31 December 2009, Krungthep Land has 10 projects under development with outstanding value of Bt7,696 million. It will open new projects worth Bt2,160 million in 2010.

As of 31 December 2009, Krungthep Land’s registered capital was Bt2,230 million and Bt1,780 million was paid-up (178 million shares at Bt10 par value). The company owns 20.22% of the shares.

Krungthep Land’s Board consists of 13 directors, including Mr. Chainid Ngowsirimanee, the company’s director who represents the company – a shareholder

Centre Point Shopping Mall Co.,Ltd. (Affiliate) Centrepoint Shopping Mall Co.,Ltd’s address is at 100/1 Vorasombat Building (17th flr.) Rama IX Rd., Huay Kwang, Bangkok.

Established in December 2007 on the company’s Board resolution at the 8/2007 meeting on 24 September 2007, it was capitalized at Bt1,000,000, all paid-up. Centrepoint focuses on commercial development like shopping malls and rental office buildings.

On 22 January 2010, Property Perfect’s Board approved the company’s purchase of 4,000 shares of Centrepoint, or 40%, from Timberline Investment Pte.Ltd to make it a wholly-owned subsidiary. The company as a result owned 9,999 shares in Centrepoint, or 99.99%. At present, Centrepoint is not yet operational.

Property Perfect Public Company Limited

2 Services-oriented units

Perfect Satellite Services Co.,Ltd. Perfect Satellite Services was established in March 2004 to operate the fitness and Club House of the Group’s property projects. It is capitalized at Bt1 million, which is 99.94% owned by the company.

Real Service Co.,Ltd. Real Service was established in 1995 to provide the construction and maintenance services for the company’s projects. After main contractors completed their jobs, it mainly gave finishing touches before the transfer of the completed units to clients. Real Service acted as the sub-contractor of the projects’ contractors, allowing the contractors to complete their obligations in a faster manner. This also allowed the company to realize revenue from the projects faster. The affiliate’s registered capital was Bt40 million with 400,000 shares at Bt10 apiece. The company owned 19% in the affiliate which has discontinued the operations.

Total revenue structure from sales by product type The company’s main revenue derives from sales of land and houses, most of which are single-detached houses. The company’s revenue structure over the past three years were as follows:

Consolidated financial statements

2009 2008 2007

Million Baht % Million Baht % Million Baht % Revenue from sales of land and houses 5,073.4 85.3% 5,420.1 71.2% 4,697.1 74.3% Revenue from sales of condominium units 778.5 13.1% 2,109.5 27.7% 1,469.5 23.2% Revenue from sales of land held for development - - 8.6 0.1% 99.3 1.6% Other revenues

Receivable interest 0.6 - 1.6 - 1.4 - Revenue from deposits 8.5 0.1% 14.5 0.2% 11.6 0.2% Reversal of allowance for loss on diminution in value of projects - - - - - - Others

86.8 1.5% 63.3 0.8% 42.6 0.7% Total revenue 5,947.8 100.0% 7,617.6 100.0% 6,321.5 100.0% During 2007-2009, the company’s consolidated land and house sale revenue accounted for 74.3%, 71.2% and 85.3% of total revenue, respectively. During the 3-year period, revenue from condominium sale accounted for 23.2%, 27.7% and 13.1% of ottal revenue, respectively. Under the equity method, the company also reaped affiliates’ contributions of Bt12 million, Bt8 million and Bt3 million, respectively. The item appeared in the financial statement, below the item on financial expenses.

House and condominium sale revenue from various projects are as follows;

Annual Report 2009

10

Land and Houses Sales Revenue Structure by Product Type

Project

Brand “Perfect Masterpiece” Maneeya Masterpiece Maneeya Masterpiece Exclusive Zone Perfect Masterpiece Ekamai-RamIndra Perfect Masterpiece Rattanathibet Perfect Masterpiece Ramkhamhaeng - Suvarnabhumi Perfect Masterpiece Rama IX Perfect Masterpiece Sukhumvit 77** Brand “Perfect Place” Perfect Place Rattanathibet Perfect Place1 Rattanathibet Perfect Place Ramkhamhaeng (Phase 1-3) Perfect Place Ramkhamhaeng (The Lakeside Home) Perfect Place Ramkhamhaeng-Suvarnabhumi (Colonial Zone) Perfect Place Ramkhamhaeng-Suvarnabhumi (Garden Zone) Perfect Place Ramkhamhaeng-Suvarnabhumi (The Private Zone) Perfect Place RamaV – Rachapreuk Perfect Place2 Rattanathibet Perfect Place Rachapreuk Perfect Place Ramkhamhaeng-Suvarnabhumi (Lake Zone) Perfect Place Sukhumvit 77-Suvarnabhumi ** Brand “Maneerin” and Brand “Perfect Park” Maneerin Lake & Park Rachapreuk -Tiwanon Maneerin Exclusive Rangsit Maneerin Lake & Lagoon Maneerin Park Rangsit Maneerin Park Rattanathibet Maneerin Park 2 Rangsit Perfect Park Rattanathibet Perfect Park Ramkhamhaeng-Suvarnabhumi Perfect Park Rama V- Bangyai Perfect Park Suvarnabhumi ** Other Maneeya 4 Nantana Garden Rangsit Brand “The Villa” and “The Metro” The Villa Rattanathibet The Metro RamaIX The Metro Sathorn Total Revenue from the Sale of land and houses Remark :

Product Type

SDH SDH SDH SDH SDH SDH SDH

SDH/Land SDH SDH/Land SDH SDH SDH SDH SDH SDH SDH SDH SDH

SDH/Land SDH SDH/ Land SDH SDH SDH SDH SDH SDH SDH

SDH TH

TH TH TH

2009 MB %

MB

- 12 169 202 52 455 160

- 423 - - - - 301 57 17 279 166 483

212 - - - - 11 - 8 599 363

5 -

477 512 110 5,073

- - 412 407 - - -

- 504 - 9 224 - 612 486 - - - 638

300 4 - 6 10 145 - 146 684 67

- 3

590 173 173 5,420

- - 3% 4% 1% 9% 3%

- 8% - - - - 6% 1% - 6% 3% 10%

4% - - - - - - - 12% 7%

- -

10% 10% 3% 100%

2008

%

- - 8% 7% - - -

- 9% - - 4% - 11% 9% - - - 12%

6% - - - - 3% - 3% 13% 1%

- -

11% 3% 3% 100%

2007 MB %

76 101 845 147 - - -

22 292 8 - - 26 223 461 - - - 553

377 - - 93 51 135 158 243 462 -

- -

424 - - 4,697

2% 2% 18% 3% - - -

0% 6% 0% - 1% 5% 10% - - - 12%

8% - - 2% 1% 3% 3% 5% 10% -

- -

9% - - 100%

SDH = Single Detached House, TH = Townhouse, Land = Land ** Developed by 100%-owned subsidiary Estate Perfect Co., Ltd .

Property Perfect Public Company Limited

11

As shown in the balance sheet, total revenue from projects developed by Property Perfect Public Company Limited with the amount of Bt4}144million in 2007,Bt4,715million in 2008 and Bt4,067million in 2009. In the same period, subsidiaries’ revenue is Bt553million , Bt705million and Bt1,006million, respectively.

Sales of Condominium Units Revenue Structure by Product type

Project

Product Type

2009 MB %

MB

Brand ‘Metro Park”

Metro Park Sathorn CONDO Total Revenue from the Sale off Condominium Units

779 100% 779 100%

2,109 2,109

2008

%

100% 100%

2007 MB %

1,470 100% 1,470 100%

Revenue from sales of condominium units presented in the consolidated financial statements came from total revenue from projects developed by Property Perfect Public Company Limited with the amount of Bt779million in 2009 ,Bt2,109 million in 2008 and Bt1,470 million in 2007.

Financial Developments Like other developers, the company plunged into business problems after the 1997 financial crisis. On 19 February 2001, the Central Bankruptcy Court ordered us to fall through business rehabilitation. On 2 October 2001, the court approved the rehabilitation plan, with Asian International Planners Co Ltd as the planner and plan administrator. The company had followed through the plan and fully restructured the loans. The company consequently exited the plan on the court order on 12 April 2004, and the management power has been returned to the old management team since then.

In 2008, the company repaid Bt383 million debts to creditors under the rehabilitation plan. In 2009, additional Bt138 million were paid on 27 February 2009, another Bt65 million on 2 April and Bt26 million later. Debt repayments during the year totaled Bt229 million. As of 31 December 2009, outstanding debts totaled Bt37 million. The company is in the process to make possible the debt repayment.

The Important Development 2008 : At the 2008 Annual General Meeting of Shareholders on 30 April 2008, resolutions were as follows :

• The issuance of all types of debentures (secured or unsecured) worth up to Bt2,000 million, with no more than 5 years of maturity, for the offering to the general public and/or institutional investors and/or investors under a partial or whole private placement in domestic and/or foreign markets.

• On 21 January 2008, the company set up Property Perfect Fund (Fund) at the value of Bt520 million. The fund invests in 64 units of two-story houses and enjoys minimum revenue guarantee for 5 years. The company raised its stake in the fund from 5.73% to 6.24% (as of 31 December 2008).

At the 2008 Extraordinary General Meeting of Shareholders on 20 June 2008, resolution were as follows :

• Abolish the offering of remaining convertible debentures worth US$15 million, which were endorsed at the 1/2005 extradinary shareholder meeting on 19 September 2005.

• Cancel the issuance of 39,000,000 shares, reserved for the warrants under ESOP.

Annual Report 2009

12

•

•

•

Reduce the registered capital from Bt6,213.56 million to Bt5,589.56 million or 931.59 million shares at Bt6 par value.

Endorse convertible debentures worth no more than US$30 million or no more than Bt1,000 million in Thai baht. The debentures, with no more than 5 years of maturity, were to be offered to local or foreign institutional investors.

Increase the registered capital from Bt5,589.56 million to Bt6,552.00 million, by the issuance of 160.40 million shares at Bt6 par value, to accommodate the exercise of warrants approved at an extraordinary meeting

2009 : Resolutions of shareholders at the 1/2009 shareholder meeting on 30 April 2009

• Allocate partial profit worth Bt40 million as legal reserve and approve dividend of Bt0.36 per share or a total of Bt283,579,783.20. Shareholders eligible to receive the dividend were specified under the Securities and Exchange Act BE2535’s Article 225 on 14 May 2009. Shareholder registration for the dividend payment closed on 15 May 2009.

Dividend was paid within 30 May 2009.

• Approve no more than Bt15 million in bonus payment to directors for the performance in year 2008. Chairman was tasked to allocate the amount.

• Approved - Reappoint Mr. Vidhya Nativivat, Miss Sirirat Wongwattan and Mr. Ooi Boon Aun, who completed their terms, as directors for another term.

- Reappoint Mr. Somsak Toraksa who ended his term as a director, an independent director, and a member of the Audito Committee. He will serve a 3-year term from the appointment date at the 2009 shareholder meeting.

• Approve meeting allowances of no more than Bt7.5 million to directors for the year 2009.

• Appoint the auditor of Ernst & Young Co.,Ltd for the 2009 audit. The auditor could be Mr. Narong Pantawong, certified public accountant No.3315; and/or Miss Thipawan Nananuwat, certified public accountant No.3459; and/or Miss Siraporn Ouaanunkun, certified public accountant No. 3844. The auditor fee is set at no more than Bt1.65 million.

Property Perfect Public Company Limited

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Board’s resolutions at the 4/2009 meeting on 14 July 2009 • Approve the due diligence of a company, which the Board considered a good takeover target. The company was approved to invest no more than Bt500 million in the acquisition.

Board’s resolutions at the 5/2009 meeting on 14 August 2009 • Approve the issuance of Bill of Exchange to institutional investors, high-networth investors or the general public, at the value of no more than Bt1,000 million. The BE with maturity of no more than 1 year quoted the market interest rate at the issue date. Proceeds were used to increase the company’s working capital.

Board’s resolutions at the 5/2009 meeting on 12 November 2009 • Approve the issuance of Bill of Exchange to institutional investors, high-networth investors or the general public, at the value of no more than Bt1,000 million. The BE with maturity of no more than 1 year quoted the market interest rate at the issue date. Proceeds were used to increase the company’s working capital.

Annual Report 2009

14

Shareholder Structure and Management 1. Shareholder Major shareholders The first 10 largest shareholders as of 31 December 2009 are;

Rank Name No. of shares %

1 Thailand Securities Depository Co., Ltd. For Depositor 491,800,238 62.43

2 Japan Asia Group Co., Ltd./1 84,776,944 10.76

3 Thailand Securities Depository Co., Ltd. For Depositor 51,691,553 6.56

4 MJL Intertrade Co., Ltd. /2 45,910,827 5.83

5 Natee International Law Office Co.,Ltd./3 37,018,928 4.70

6 Japan Asia Group Limited 12,467,224 1.58

7 Ms.Sumalee Wangprakorbsuk 11,385,000 1.45

8 Mr. Pramote Rermyindee 11,385,000 1.45

9 Mr. Vidhya Netivivat 10,580,000 1.34

10 Krungthep Land Plc. 9,200,000 1.17 Data from Thailand Securities Depository Co,. Ltd. Note : /1 Japan Asia Group Co Ltd became a shareholder as it, as a creditor in the rehabilitation plan, converted debts to equity.

/2 MJL Intertrade Co Ltd became a shareholder as it, as a creditor in the rehabilitation plan, converted debts to equity.

/3 Natee International Law Office became a shareholder as it, as the lawyer of a creditor in the rehabilitation plan who converted debts to equity

Foreign shareholders who hold the company’s shares through Thai NVDR Co., Ltd. are entitled to the same returns as other shareholders, but not the voting right (except in the voting to revoke the company’s listing status in the Stock Exchange of Thailand). To trace the number of shares issued in the form of NVDR, investors should check the SET’s website, www.set.or.th.

Holdings by nationalities as of 31 December 2009.

Shareholders No. Shares

Thai 223 637,238,095

Foreign 8 150,483,525

Total 231 787,721,620 Data from Thailand Securities Depository Co,. Ltd.

Corporate

% No. Shares 80.90 12 588,517,012 19.10 3 148,935,721 100.00 15 737,452,733

Individuals % No. Shares % 74.71 211 48,721,083 6.19 18.91 5 1,547,804 0.19 93.62 216 50,268,887 6.38

2. Management Management structure

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

Property Perfect Public Company Limited

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A. The Board of Directors As of December 31, 2009, the board consists of :

No. Name Position 1 Dr. Tawatchai Nakhata Chairman 2 Mr. Chainid Ngow-Sirimanee Chief Executive officer 3 Mr. Phairat Senachack Director 4 Mr. Vidhya Nativivat Director 5 Mr. David Bryce Van Oppen Director 6 Mr. Ooi Boon Aun Director 7 Ms. Sirirat Wongwattana Director 8 Mr.Veerayuk Panpet Director / Independent Director and Chairman

of the Audit Committee 9 Mr. Somsak Toruksa Director / Independent Director and Auditing Director 10 Dr. Thamnoon Ananthothai Director / Independent Director and Auditing Director 11. Mrs.Nuanual Swasdikula-Na-AyudAyudhaya Director / Independent Director With Mr. Pramote Rermyindee as secretary of the board *Appointed in accordance with a resolution of the company’s Board of Directors on 19January 2009.

Authorised directors Authorized signatory directors are 1) Dr.Tawatchai Nakhata and Mr. Chainid Ngow-Sirimanee are duly authorized to sign documents and affix the company’s seal.

2) Any one of the following directors - Dr.Tawatchai Nakhata or Mr. Chainid Ngow-Sirimanee - is authorized to co-sign documents with one the these directors - Mr. Phairat Senachack or Miss Sirirat Wongwattana – and affix the company’s seal.

3) Dr. Tawatchai Nakhata, or Mr. Chainid Ngow-Sirimanee, or Mr. Phairat Senachack, or Ms. Sirirat Wongwattana can sign and affix the company’s seal on the following matters; a. Actions related to the transfers of rights to use tap water, electricity, and telephone b. Actions related to the applications for building construction licenses and house registration numbers, the linkage of roads and wastewater network, as well as the obtaining of licenses to use the buildings. c. Applications to the Lands Department or other government agencies for land trade, allocation, revision on allocation plan and the allocation method, land measurements, the specification and verification of land territory, the merging and separation of title deeds, and the registration of condominiums. d. Submission of papers and other actions related to the Revenue Department

Annual Report 2009

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Board of Directors’ authority and scope of responsibility

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

A. Audit Committee As of 31 December 2009, the Audit Committee consists of 3 independent directors.

No. Name Position 1 Mr.Veerayuk Panpet Chairman of the Audit Committee 2 Mr.Somsak Toruksa Auditing Director 3 Dr.Thamnoon Ananthothai Auditing Director With Ms. Doungporn Rermyindee as the secretary

Audit Committee’s authority and scope of responsibility 1. Supervise the company’s operations to ensure honesty, transparency, and responsibility to shareholders.

2. Ensure that the executive board and executives handle their responsibilities in an accurate, complete and standard manner.

3. Ensure the accuracy, sufficiency, and credibility of the financial results, as well ensure the accurate and sufficient disclosure through coordination with external auditors and executives who take responsible for preparing quarterly and yearly financial statements as requested by the company’s board of directors and/or the executive board.

4. Ensure appropriate and effective internal control, through the coordination with the internal auditors and auditors.

5. Appoint the auditor and set the auditor fee, which must be approved by the shareholders and based on reliability and adequacy of human resources, audit job volume made by the audit firm and experience of staffs who are in charge of the company’s accounting audit.

6. Make sure that the company follows the legal conditions set by the Securities and Exchange Commission, the Stock Exchange of Thailand and other related agencies.

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7. Prevent conflicts of interest through the inspection of the transactions of the company with connected parties and through coordination with the auditor as well as consider disclosing accurate and adequate information for connected transactions and any transactions that might cause conflicts of interest.

8. Prepare the audit committee’s report and disclose the report in the annual report, which includes at least following issues.

• Opinion related to prepare the company’s financial reports and accurate and reliable information disclosure.

• Opinion concerning to sufficiency of the company’s internal control system.

• Reasons that the company’s auditor is appropriate for another term appointment.

• Opinion to comply with the Securities and Exchange Act, the Stock Exchange of Thailand’s rules and laws relevant to the company’s business.

• Other reports that should be acknowledged by shareholders and investors under scope of duty and responsibility assigned by the company’s directors.

9. Review the internal control’s reports.

10. Review the internal control’s findings. If finding or suspecting of any misconduct, or the insufficiency of the internal control, they must ask for the Board of Directors’ judgment.

11. Review the internal control’s inspection and the auditor’s recommendations, and follow through the improvements.

12. Authorize to examine, audit, call executive directors, executives, advisors, and accounting auditors to attend meeting to acknowledge information and seek independent opinions from other professional advisors if necessary to achieve in tasks under responsibility.

13. Perform other tasks assigned by the company’s board such as review of financial and risk management policy, and business ethics conducted by executives.

The audit committee has a three-year term and it will be elected by the company’s board when their terms are ended by rotation.

Independent Directors’ qualifications

Independent directors must meet qualifications set by the Securities and Exchange Commission’s announcement at Kor Jor.12/2000 governing asking for permission and approving newly issued share offering, and audit committee qualifications required by the Stock Exchange of Thailand’s regulations.

On 14 December 2008, the SEC’s Board of Directors meeting resolved to revise rules governing independent directors and audit committee of newly listed companies, effective from the 2009 Annual General Meeting of Shareholders. The company’s executives then amended qualification of independent directors in compliance with the SEC’s Board of Director revised rules to create good governance.

B. The Director Selection Committee

The Director Selection Committee consisted of 3 persons as of 31 December 2009.

No Name Position 1 Dr. Thamnoon Ananthothai Chairman of the Selection committee 2 Mr. Somsak Toruksa Selection committee 3 Mr. Vidhya Nativivat Selection committee With Mr. Pramote Rermyindee as secretary

Selection Committee’s scope of authority and responsibility 1. Review the individuals who are fit to be the company’s directors and nominate the list to the board of directors and/or present the list to shareholders for official appointment.

2. In reviewing the individuals’ qualifications, the committee must consider their expertise, knowledge, ability and relevant experiences to ensure that the individuals’ qualifications would be useful for the company’s operations. Besides, the committee must consider that the nominations follow the legal framework particularly when it involves the nominations for independent directors and the audit committee members.

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3. In selecting independent directors and the audit committee members, the committee must take into account; (A) The nominated individuals must hold no more than 5% of the paid-up capital of the company, affiliates or subsidiaries. The percentage is inclusive of the shareholding of related individuals - their spouses and underage children.

(B) The nominated persons must not be related to the company’s executives or major shareholders.

(C) The appointed persons must not have conflicts of interest, directly or indirectly, in terms of finances or management of the company and affiliates. They must not be the company’s major shareholders.

(D) The nominated persons must have no any relationship with the company and associates in ways of vested interest, or financial or management benefit at present and over the past two years before appointed as independent directors.

Such relations include • Being directors who take part in the company’s management, employees, staff members, advisers who receives a regular salary, or control authorities.

• Being professional service providers such as auditors, legal Consultants, financial advisors or price appraisers.

• Having business relationship such as buy/sell goods, provide asset buy or sell service, give or receive financial assistance etc.

(E) In case that the nominated persons serve as independent directors of other companies in the group, they must disclose such information and remuneration received from those companies.

(F) The nominated persons must not seat as any director in other listed companies in the group.

(G) Listed companies must immediately inform the Stock Exchange of Thailand once any audit committee resigns or is sacked before term ends.

4. The appointed persons must be able to work and present their views with independence, free from the control from executives or major shareholders as well as their relatives.

Director Selection Committee’s authority, duty and responsibility could not be transferred to others in a way that those who are authorized by the committee can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or subsidiaries, or he/she has vested interest with exception that those transactions are regarded as normal course of business with the clear scope.

To present the selected persons to the board of directors, the Selection Committee must nominate only those who will fill the available director seats. Except when the committee members could not reach an agreement, they are allowed to present all the nominated names to the board for their consideration.

(D) The Remuneration and Human Resources Committee The Remuneration and Human Resources Committee consisted of 3 persons as of 31 December 2009.

No. Name Position 1 Dr Tawatchai Nakhata Chairman of the remuneration committee 2 Dr. Thamnoon Ananthothai The remuneration committee 3 Mr. Vidhya Nativivat The remuneration committee

With Mr. Pramote Rermyindee as secretary.

The Remuneration and Human Resources Committee’s scope of authority and responsibility 1. Consider the company’s policies and criteria in paying the Chief Operation Officer, directors, and the company’s advisors.

2. Consider the annual salary, annual pay increase, and the interim pay increase, as well as other benefits to award all employees.

3. Consider the employment terms, regulations, and penal clauses which should be appropriate and fair.

4. The committee will report directly to the board of directors, to whom they will explain and answer all questions regarding the pays for employees at all levels.

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Remuneration and Human Resources Committee’s authority, duty and responsibility could not be transferred to others in a way that those who are authorized by the committee can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or subsidiaries, or he/she has vested interest with exception that those transactions are regarded as normal course of business with the clear scope.

(E) Executive Board

Executive Board contains 11 individuals, as of 31 December 2009.

No. 1 2 3 4.

5.

6.

7.

8.

9.

10.

11.

Note: : *

**

Annual Report 2009

Name Dr. Tawatchai Mr. Chainid Mr. Phairat Mr. Vichai Ms. Supee Mr.Surasak Mr.Wicharn Mr.Pornswat Mr.Wongsakorn Mr.Tongchai Miss Sirirat

Nakhata Ngow-Sirimanee Senachack Singvicha* Reodacha* Vacharapongpreecha* Siriwetwarawut * Katechulasriroj ** Prasitvipat ** Peyasantiwong** Wongwattana

Position Chief Executive Officer Deputy Chief Executive Officer Executive Director

Executive Director Executive Director Executive Director Executive Director Executive Director Executive Director Executive Director Executive Director and Secretary

(Authorized signatory Directors) (Authorized signatory Directors) (Authorized signatory Directors)

(Authorized signatory Directors)

Appointed in accordance with a resolution of the company’s Board of Directors on 27 February 2009.

Appointed in accordance with a resolution of the company’s Board of Directors on 12 November 2009 .

Effective since 1 January 2010.

20

Executive Committee’s authority and scope of responsibility 1. Run the company’s daily operations under the guidelines set by the Board of Directors and within the scope of rules and regulations, as well as the company’s objectives and regulations. They are barred from transactions related to project opening and investment, not related to the company’s core business.

2. Appoint high-ranking executives to manage the company.

3. Set the annual budget for the Board of Directors’ approval.

4. Consider investment projects for the Board of Directors’ approval.

5. Review and approve land acquisition worth over Bt200 million but not more than Bt800 million. The amount must not exceed the sum approved by the Board. Any approved land purchase must be attached with the preliminary development plan and project feasibility, for the Board’s consideration.

6. Consider and approve borrowings and the financing of normal transactions.

• Project financing – approved the project financing worth not over Bt1,000 million per project, excluding infrastructure guarantee • Working capital – approved the borrowing of no more than Bt800 million for the working capital 7. Prepare, recommend and set business strategies for the Board of Directors.

8 Consider and approve the corporate marketing and public relations plans.

9. Evaluate the company’s performance in terms of asset management and financial management to ensure efficiency and effectiveness.

10. Conduct other tasks assigned by the Board of Directors.

Notably, the executive board has no authority in handing its power to any member or others to approve a connected transaction (as prescribed by the Securities and Exchange Commission) or a transaction which could pose conflicts of interest with the company or subsidiaries with exception of approval for normal course of business transactions as policy and criteria resolved by the board of directors under the Securities and Exchange Act, and the Stock Exchange of Thailand’s regulations, announcements and instructions or rules.

Note: Revised by Board’s resolutions at the 5/2009 meeting on 14 August 2009

Chief Executive Officer

Chief Executive Officer is the highest authority in the company’s management. perform duties and report operating performance to the Executive Committee, Board of Directors and shareholders as follows : 1. Set policies, direction, and strategies for the company’s business operation.

2. Set business planning, budget and authority of the company’s internal units which up to management department to seek the board’s approval.

3. Manage normal course of business activities under policies set by the company’s board, laws, conditions, regulations, memorandum of association, and the company’s rules.

4. Appointed Management Board, advisor and other directors to give advices concerning the company’s management.

5. Review and approve land acquisition worth no more than Bt500 million. The purchase must be notified to the Executive Committee, to proceed with the registration at the Lands Department.

6. Perform other tasks assigned by the company’s board.

Chief Executive Officer authority, duty and responsibility could not be transferred to others in a way that those who are authorized by Chief Executive Officer can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or the subsidiaries and affiliates, or he/she has vested interest with exception that those transactions are regarded as normal course of business as policies and principles set by the company’s board. . in compliance with laws governing securities and stock exchange, regulations, announcements, instructions or rules of the Stock Exchange of Thailand.

Note: Revised by Board’s resolutions at the 1/2010 meeting on 22 January 2010.

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(F) Risk Management Committee

Risk Management Committee consisted of 5 persons as of 31 December 2009.

No. Name Position 1. Mrs. Nuanual Swasdikula-Na-Ayudhaya * Chairman of Risk Management Committee 2. Mr. Boonliam Luangnakthongdee * Risk Management Committee 3. Dr.Thamnoon Ananthothai Risk Management Committeer 4. Mr.Chirdsak Kukiattinun ** Risk Management Committee 5. Dr. Theerathorn Tharachai Risk Management Committee and Secretary Note : * Appointed in accordance with a resolution of the company’s Board of Directors on 14 May 2009.

** Appointed in accordance with a resolution of the company’s Board of Directors on 14 July 2009.

Risk Management Committee’s scope of authority and responsibility (1) Review and present risk management policy and acceptable risk to the company’s board for approval.

(2 )Supervise development and practice throughout organization to comply with risk management framework.

(3) Review risk management reports to monitor important risks and proceed to ensure that the organization has sufficient and appropriate risk management.

(4) Present risk of the company in overall picture, and sufficiency of internal control system to manage risk in all important aspects to the company’s board.

(5) Provide suggestion about risk management to the company and revise any information concerning risk management system development.

(6) Authorizes to appoint the company’s risk evaluation and monitoring working group.

(7) Perform other tasks about risk management assigned by the company’s board

Meeting allowances of the company’s board and 4 units of subcommittees in 2008-2009 .

Board of Directors

2009 2008 Dr.Tawatchai Nakhata 6 5 Mr. Somsak Toruksa* 6 5 Dr. Thamnoon Ananthothai * 6 5 Mr. Chainid Ngow-Sirimanee 6 5 Dr. Theerachon Manomaiphibul **

5 Mr. Phairat Senachak 6 5 Mr. Vidhya Nativivat * 6 5 Mr.Virayuk Puntupetch * 6 5 Miss Sirirat Wongwattana 6 3 Mr.David Bryce Van Oppen 6 3 Mr.Ooi Boon Aun 6 3 Mrs. Nuanual Swasdikula-Na-Ayudhaya * 6

Ms. Supee Reodacha ***

Mr.Surasak Vacharapongpreecha ***

Mr. Boonliam Luangnakthongdee

Mr.Chirdsak Kukiattinun

Dr. Theerathorn Tharachai

Total 6 5

Note:

Name

Audit Remuneration Selection Committee Committee Committee

2009 2008 2009 2008 2009

1 1

8 8

1 8 8 1 1 1

1 1 1 8 8

8 8 1 1 1

Risk Management Committee 2009

4

4 5 5 6 4 9 9

* Independent Directors ** Resigned as a director on 18 January 2009 to become Bangkok deputy governor. *** No longer a member of the Risk Management Committee as of 14 May 2009, following the appointment of the new committee.

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Company’s secretary

The Securities and Exchange Act (the fourth issue)’s article 89/15 on 2008 prescribed that the company’s board must appoint the company’s secretary to act on behalf of the company or the company’s board. Meeting of the company’s board on 11 August 2008 approved to appoint Mr. Pramote Reumyindee as the secretary.

Secretary’s scope of authority and responsibility 1) Prepare and collect documents as follows (A) Director registration (B) Board meeting notice, minutes of board meeting and the company’s annual report.

(C) Shareholders’ meeting notice and minutes of shareholders’ meeting.

2) Collect vested interest reports informed by directors or executives and submit copy of the reports to Chairman of Board of Directors and Chairman of Audit Committee within 7 days after the company received such reports.

3) Prepare storage system for documents and evidences related to information presentation as stated below and handle collecting such documents and evidences accurately and completely to allow examination to track back to at least 5 years after document or information preparation date.

Storage of documents and evidences mentioned above includes storage with computer and other systems, which can read without change in wording.

(1) Information presented to seek an approval from shareholders’ meeting.

(2) Financial statements and reports regarding financial position and the company’s operating performance or other reports required to be disclosed in pursuant to the Securities and Exchange Act’s articles 56, 57, 58 and 199.

(3) Opinion of the company when tender offer or proposes to buy the company’s shares from shareholders.

(4) Information or other reports regarding to business arranged by the company to publicize to shareholders or public as required by the Capital Market Development Committee.

4) Perform other tasks as required by announcement of the Capital Market Development Committee.

5) Perform duty with responsibility, carefulness, integrity and in compliance with laws, objectives, the company’s regulations and resolutions of shareholders’ meeting. Don’t do any thing in a manner of significant conflict of interest with the company.

6) Perform duty with responsibility and carefulness in a way that operators in the industry will do under the same situation.

(1) Decision made in good faith and deemed appropriate that it is done for the company’s optimal interests.

(2) Decision made in good-faith that it is based on sufficient information and (3) Decision made by those who directly and indirectly have not had vested interest with the decided issues.

In case that the secretary’s seat is vacant, the company’s board is authorized to appoint a new one within 90 days. Miss Sirirat Wongwattana is assigned to perform duty during the vacancy.

Nomination of board and executives

The company’s Director Selection Committee shall nominate the names of board members by selecting the nominated candidates who are appropriate for the positions and proposing to the company’s Board of Directors meeting and/or shareholders’ meeting to approve the appointment later.

The Board of Directors shall consider the qualification and competence and related experience of the nominated persons.

The nomination shall partly benefit the company’s operation (see details in Director Selection Committee’s scope of authority and responsibility).

Structure and appointment of the company’s Board of Directors The company’s Board of Directors contains at least 5 members of which shall be directors under three categories.

1. Independent director

The number of independent directors must not less than one-third of the board or not less than 3.

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2. Executive director

3. Non-executive director

At least a half of the board members must reside in the Kingdom.

In voting at the shareholders meeting, one share is entitled to one vote. Each shareholder must cast the entire votes to each nominated person or many but the votes must be equally divided.

Majority vote standard is applied to the election of board members. In case of equal votes, Chairman of the meeting determines.

One-third of directors, or the number nearest to but not exceeding one-third, must retire at each Annual General Meeting of Shareholders.

Directors are prohibited from doing the same business which can be competitor to the company or hold shares in ordinary partnership or being shareholders with unlimited liability in limited partnership or servicing in the director seat of any other corporate entity with the similar business nature with the company and can be the company’s business competitor, except for the case where the general shareholders’ meeting has been informed prior to the appointment resolution.

Directors shall immediately inform the company if they have vested interest in any contract signed with the company or their holding in securities or debentures issued by the company or associates has been changed.

3. Dividend policy of the company and subsidiaries

Meeting of the company’s Board of Director No. 5/2008 resolved to amend the company’s dividend payout ratio from at 50% of net profit after deducting corporate income tax and the dividend payment was subject to shareholders’ meeting to not less than 50%of net unconsolidated profit after deducting legal reserve.

Financial position, liquidity, business expansion and other factors related to the company’s management are also taken into dividend payment consideration. The amendment came after the company changed record method of investment in subsidiaries from cost to equity method.

The company’s subsidiaries have dividend payout policy of at least 50% of unconsolidated net profit after deducting legal reserve. Besides, financial position, liquidity, business expansion and other factors related to the company’s management are also taken into dividend payment consideration.

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Board ofOfDirectors Board Directors

Dr.Tawatchai Nakhata

Mr.Chainid

Mr. Phairat Senachack

Mr.Virayuk Puntupetch

Dr. Thamnoon Ananthothai

Mr. Vidhya Nativivat

Mr. Somsak Toruksa

Mr. David Bryce Van Oppen

Mr.Ooi Bun Aun

Mrs.Nuanual Swasdikula- Ms Sirirat Wongwattana Mr. Pramote Rermyinde Director Company Secretary Na-Ayadhya

Chairman Director Ngow-Sirimanee Chief Executive Director Deputy Chief Operating Officer Chief Executive Officer/ Chairman of the remuneration Deputy Chief Executive Director Executive Director committee

Director Independent Director Audit Committee Chairman of Selection committee Remuneration committee Risk Management Committee

Director

Director Selection committee Remuneration committee

Director Independent Director Chairman of Risk Management Committee

Director Independent Director Audit Committee Selection committee

Asst. Chief Business Development officer Executive Director& Secretary of Executive Director Committee

Director Independent Director Chairman of the Audit Committee

Director

Secretary of selection committee Secretary of Remuneration committee

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Organization Chart Property Perfect Public Company Limited

Chief Advisor to the Board

of Directors

Board Of Directors

Nominating committee

Executive Committee

Audit Committee

Chief Executive Officer(CEO)

Internal Audit

Chief Financial Officer (CFO)

Chief Business Development Officer (CBO)

Deputy Chief Financial Officer (Dep.-CFO)

Deputy Chief Business Development Officer (Dep.-CBO)

Assistant Chief Financial Officer (Asst.-CFO)

Assistant Chief Business Development Officer (Asst.-CBO)

Finance & Treasury Division

.Investor Relation & Information System Division

Accounting Division

Property Business Development Division

Budgeting Office

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Research & Business Development Division Project Planning Division

Public Relations Division Advertising Division

Remuneration Committee Company Secretary Legal Human Resources Division Office of the Chief Executive Officer

Chief Operating Officer (COO) Deputy Chief Operating Officer (Dep.-COO) Assistant Chief Operating Officer (Asst.-COO) Design & project Development Division General Administration Division Legal Procedure & Ownership Transfer Division Sales Management Division Customer Service Division Construction Management Division

Product Development & Quality Control Division Project Management Division Zone I Project Management Division ZoneII Project Management Division Zone III Project Management Division Zone IV Project Management Division Zone V

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Projects of Property Perfect Plc. and Subsidiary’ on 31 December 2009.

1. Perfect Masterpiece Rattanatibet Phase 1-2

2. Perfect Masterpiece Ekamai-Ram-intra

4. Perfect Place Rattanatibet

5. Perfect Place Rattanatibet Phase 2

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

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2007-2011 SDH 145 1,439 MB. 62 606 MB.

2005-2010 SDH 396 1,652 MB. 41 145 MB.

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

3. Perfect Masterpiece Rama IX

2004-2010 SDH 233 3,437 MB. 36 446 MB.

2009-2012 SDH 349 1,467 MB. 333 1,384 MB.

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2008-2014 SDH 277 3,400 MB. 224 2,732 MB.

6. Perfect Place Ramkhamhaeng-Suvarnabhumi

Private Zone

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2005-2010 SDH 301 1,730 MB. 16 119 MB.

Masterpiece Zone

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2008-2010 SDH 6 160 MB. 3 68 MB.

Lake Zone

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2009-2010 SDH 83 720 MB. 66 539 MB.

7. Perfect Place Sukhumvit77 - Suvarnabhumi *

Phase3

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2007-2010 SDH 348 1,760 MB. 101 513 MB.

Masterpiece Zone

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2008-2010 SDH 19 279 MB. 7 100 MB.

Phase 4

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2010-2013 SDH 350 1,715 MB. 350 1,715 MB.

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8. Perfect Place Ratchapruek Phase1 Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2009-2012 SDH 402 1,945 MB. 334 1,598 MB.

11. Perfect Park Suvarnabhumi * Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

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2007-2010 SDH 194 789 MB. 85 347 MB.

9. Maneerin Lake&Park Ratchapruek-Tiwanon Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2003-2011 SDH 702 2,966 MB. 146 565 MB.

12. The Villa Rattanatibet.

Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2006-2012 TH,DH 1,427 3,420 MB. 685 1,864 MB.

10.Perfect Park RamaV-Bangyai Phase1-4 Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2006-2011 SDH,DH 1,198 3,761 MB. 622 1,969 MB.

13. Metro Park Sathorn Phase 3 Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2009-2012 CD 2,155 4,075 MB. 1,976 3,711 MB.

14. The Metro Rama IX Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

Note:

2008-2011 TH 543 1,970 MB. 357 1,262 MB.

15. The Metro Rama Sathorn Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2009-2010 TH 250 1,010 MB. 159 629 MB.

16. Metro Sky Ratchada phase 1** Time to Develop Product Total Units Total project Value Remaining Units Remaining Project Value

2010-2011 CD 441 1,111 MB. 293 753 MB.

Exclude Project’s remaining value less than 5% of all project value. * Subsidiary’s Project ( Estate Perfect6 Co., Ltd) ** Subsidiary’s Project (Bright Development Bangkok Co., Ltd.) SDH = Single Detached House TH = Town House DH = Duplex House CD = Condominium

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Map

Annual Report 2009

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Marketing and Competition

Marketing

1. Marketing Strategy The company sets marketing strategies in line with competition, , taking into consideration location, competition situation, target and internal factor which effect to product development , the strategy as follow:

Product Strategies

• Environment Impact Assessment

Aside from the houses, the company also emphasises home design and the focus on the environmental management in the projects, security system, and after-sale services to ensure a perfect community for all clients to add value to residents in projects. With the focus, the company won EIA Monitoring Award from the Natural Resources and Environment Ministry for three consecutive years between 2005 and 2007. The three projects received the awards were Perfect Place Rattanathibet, Perfect Place Ramkhamhaeng phase1 and Perfect Place Ramkhamhaeng phase 2 and 3. Perfect Place Ramkhamhaeng Phase II also won the EIA Monitoring Awards from the Natural Resources and Environment Ministry in 2008

In addition, the company provides public gardens, lakes, large and perfect club houses and shops in the club house areas to facilitate customers. The company has teamed up with business partners to open their shops in the club house areas such as Black Canyon, Clark Hatch Fitness Center, V Shop Convenience Store, These facilities differentiate the company’s projects from others’, creating the friendly ambience to residents who have warmly welcomed the concept.

• Location

The company’s projects are mostly located in high-potential locations, set along the electric train routes or new roads.

Comparatively to competitors’ products, the projects are of higher potential and offer greater traveling convenience.

• In the North and West of Bangkok, the projects are located near the Purple Line (Bang Sue-Bang Yai) and the Red Line (Bang Sue-Taling Chan). Others are on Ratchaphruek Road, with connections to Rama IV Bridge (Pak Kret) and Chaeng Wattana Road.

• In the East, the projects are near the Airport Rail Link, Suvarnabhumi Airport, and the outer ring road (East) that links the North and South of Bangkok, as well as the Motorway that leads to Chon Buri and Pattaya.

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• City projects are in business areas like the Ekamai-Ram Intra Road, near Airport Rail Link, BTS and MRT subway as well as the routes to be opened soon. They are mostly up-scale housing units, condominiums and townhouses.

The company and subsidiaries aim to build market shares in potential locations. In 2010, altogether 14 projects will be launched: 4 single housing projects, 4-5 townhouses and 5 condominiums.

• Quality

The company controls construction works, by having contractors complete the designed works with quality materials within the specified period. The construction pattern and methods are jointly formulated to meet the company’s standards. Since 2008, the company has applied new construction technology like the prefabrication, and rigid frame or skeleton system with the construction of single houses, duplex houses and townhouses of Perfect Place, Perfect Park and The Villa projects which have been warmly welcomed. In 2009, the company also developed the Site Management system, to put the comprehensive control on all construction steps to ensure complete products before delivery.

In 2010, the prefabricated house capacity will be expanded for higher growth, as the system shortens the construction period from 6-8 months to 4-5 months. To highlight emphasis on construction materials, the company also teams up with SCB Building Materials Co.,Ltd., a unit of Siam Cement Group, for the supply of most materials, to assure clients of the durability and beauty. Throughout the process, cost control is in focus. Materials are sourced in huge volume, to control the production cost, while the supply chain management system is prepared.

• Design

The company applies data from the research and development department in designing to ensure the right products for customers. The product designs cover the entire range of products – from condominiums, townhouses to single houses – with focus on the look and space which fits target customers’ needs and lifestyles as well as Thailand’s weather condition. The designs are also completed with help from outside interior designers and architects, for perfection. Target customers have warmly welcomed the home designs and functions. The company also realizes the need to conserve the environment and customers’ concerns in electricity bill. In the past years, several home designs have accordingly won the energy-saving awards from the Department of Alternative Energy and Efficiency, the Ministry of Energy. The award-winning home designs are as follows.

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• • • • • • • • • •

Carina Euro home design in Perfect Place Rattanathibet-Ratchapruek project won the best practice award in the category of small-sized single-detach house with usable space not exceeding 200 square meters.

Patio Nature home design in Perfect Place Rattanathibet-Ratchapruek project won the good practice award in the category of small-sized single-detached house with usable space not exceeding 200 square meters.

Polar home design in Perfect Place Rattanathibet-Ratchapruek project won the good practice award in the category of small-sized single-detached house with usable space not exceeding 200 square meters.

Eak-Amphorn home design in Perfect Masterpiece Rattanathibet-Ratchapruek project won the best practice award in the category of medium-size single-detached house with usable space of 200-300 square meters.

Eak-Indra home design in Perfect Masterpiece Rattanathibet-Ratchapruek project won the good practice award in the category of medium-sized single-detached house with usable space of 200-300 square meters.

Metro home design in the Villa Rattanathibet-Ratchapruek project won the honorable award in the category of townhouse with usable space not exceeding 120 square meters.

Euro home design in the Metro Rama 9 project won the honorable award in the category of townhouse with usable space over 120 square meters.

Maneerin Park 2 Rangsit won the best practice award in the category of small residential project with not exceeding 99 title deeds.

Perfect Masterpiece Ekamai-Ramindra project won the good practice award for medium residential project with 100299 title deeds.

Perfect Place Sukhumvit 77-Suvarnabhumi won the good practice award for large residential project with over 300 title deeds.

The company and subsidiaries have the policy to sell completely-built housing units, which match the need of customers who want to move in after purchases. They can view the complete units before making a decision. Within 1 month after purchases, the units can be transferred to customers who can immediately move in. The construction works of condominium units will however start after pre-sales.

Condominium The company launched low-rise condominium, namely Metro Park, near the city center and along the electric train route. The project’s price tag is between Bt1.2-Bt3 million per unit.

In 2009, high-rise condominium Metro Sky was introduced, to lure home buyers looking for city units near the electric train routes. The units are priced between Bt2-Bt5 million per unit.

In 2010, UNILOFT condominium is in the plan. The low-rise project will be carried out by subsidiary Bright Development Bangkok Co., Ltd. It will be located near high-density area and a university. At the price of Bt1-Bt2 million, the project will help raise the company’s share in the cheap condominium segment.

The condominiums are designed to possess higher central area than legally required, to add the greenery ambience. The project design renders the single house atmosphere and the projects boast a swimming pool, a fitness and strict security system, to meet the new generation’s lifestyle.

• Pricing

The company has policy to set prices based on the economic condition, market demand and competition. These factors are jointly considered with costs, locations, project types and market conditions when compared with competitors. There are several guidelines for price setting such as setting higher price than rivals but better designs, and environmental and convenient facilities. The company has explored new markets, in which no property developers offer products to serve demand, and this

Property Perfect Public Company Limited

35

helped improve the company’s operating results in response to customers’ different specifications .The company has offered various project types and prices starting from aBt1.5 million to the luxurious projects with prices in a range of Bt7 million up to serve different demand as follows

The table described residence prices by brand

Type

Pricing (Unit: Mb.) 1.0 – 2.0 2.0 – 3.0 3.0 – 4.0 4.0 – 5.0 5.0 – 6.0 6.0 – 7.0

7.0 - up

7.0 MB Up SDH

3.5 – 7.0 MB

2.5 – 5.0 MB 3.0 – 5.0 MB

TH / DH 1.7 – 3.0 MB

2.5 – 5.0 MB

CD

Annual Report 2009

36

1.2 – 3.0 MB Uniloft 1.0 – 2.0 MB

• Advertising & Placement

The company has applied the integrated communications as newspaper, TV Scoop, radio spot , Billboard, Direct mail etc, in selling the products. Mass media is exploited for the one-time advertisement to advertise a number of projects to target customers in lower advertising cost. Complimenting the strategy is the direct marketing, whereby a specific media is chosen for a particular target group and a particular campaign. The company also resorts to new communications channels like the Internet, marketing events and customer relationship management (CRM) to take care of existing customers. The Perfect Friend Club is launched to thank existing customers who introduce the projects to their friends, as a means to effectively reach out to target customers at a low cost. The ratio of units sold under the scheme has been significantly rising, thanks to clients’ recommendations to their friends and relatives.

In 2009, the company also embarked on social network marketing, which embraced Facebook and Twitter. A speciallydesigned marketing campaign is created specifically for customers who track the company’s information on the Internet. In the fourth quarter, the company was the first property company to launch an online mini-series. Titled “The Happy Living Story”, the romantic comedy series contain five 8-minute episodes. Shooting took place at the company’s development projects including Perfect Masterpiece Rama IX and the lake of Perfect Place Ramkhamhaeng-Suvarnabhumi, to guide buyers through the projects’ exclusive ambience and environment. (They are available for viewing on www.thehappylivingstory.com) The series won warm response, reflected through the higher number of walk-in clients.

• Promotion

The company has devised appropriate promotions for target groups with varied demands, to speed up their decisions. The promotion is designed in accordance with customers’ demand and economic circumstances at a time; for example, a cooperation with financial institutions to offer low-interest loans, longer repayment periods, or step repayments to clients who are searching for complete units. The company also teams up with leading furniture makers in designing and decorating, resulting in a special decoration cost for customers who also save time in finding the right interior designers and financing for the decoration. Notably, the decoration loan carries higher interest rate than mortgage loans. The company has forged alliance with other business operators in the security and communications, in introducing higher-value services and maximizing customer satisfaction.

• Brand Building Strategies

The company’s brand has been differentiated from competitors’. The Brand DNA is created under the “Happy Living” concept, to underline the company’s focus in creating the new living standards for all residing in the Property Perfect projects.

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Happy Living contains 4 main happiness-supporting components • House (Happy with Perfect Quality) Residing in high-quality houses, which are well-designed for maximized functions and pleasant look as well as for energy saving and environmental friendly purposes. The construction works are closely and thoroughly monitored and applied modern technology like the prefabrication which ensures short construction period but standard quarter. All the units are also subjected to the QC Pass system before delivery to customers.

• Security (Happy with Peace of Mind) Deriving from maximum security. Through cooperation with Thai Secom Pitakkij Co., Ltd. (SECOM), a leader security system provider in Japan, the trustworthy Home Security system is designed for all projects to cover from the entrance, guard booths and the overall projects’ space to customers’ home.

• Lifestyle (Happy with Healthy Lifestyle) Property Perfect is more than just a home. Here, activities are created to meet customers’ lifestyles. The projects are fully equipped with facilities like a giant club house, where fitness, swimming pools, gyms, shops and other services. The central area is also open for relaxing and exercising purposes as well as family activities, something that they need not to find outside the projects.

• Green Environment (Happy with Friendly Environment) Near-nature environment is provided, with the larger central space which offers floral trees and large lakes for cool living amid fresh air.

The company believes that a successful brand is built upon customers’ good experiences, which will lead to the company’s sustainable image. The construction works, design and project planning are thus properly designed, along with emphasis on environment management, infrastructure and security inside the projects. Activities are also hosted for better relationships among residents, to create a warm community and happy environment to all residents. Favorable communities spark words of mouths among residents, and this will lead to sustainable brand building.

• Target Group

The company has specified products accordingly to their brands, taking into account the locations, and area’s growth potential, competition and development cost.

The company has the policy to launch projects of different price tags in each area to cover different targets.

The company’s projects are developed under the following 8 brands, to cover all market segments.

Condominiums 1. “Metro Park” covers low-rise condominiums near mass transit routes, where 70% of central area, including the lake and the club house, is provided.

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38

2. “Metro Sky” focuses on high-rise downtown condominiums, which also boasts the green space, the Sky Lounge and other facilities.

3. Low-rise UNILOFT condominium will be carried out by subsidiary Bright Development Bangkok Co.,Ltd. It on denselypopulated locations near universities, with the price tag of Bt1-Bt2 million. The project will be launched in 2010.

Townhouses 3. “The Villa” , 2-storey townhome and new twinhouses near electric train routes for start-up families.

4. “The Metro”, the 3-storey modern townhome in city areas, near electric train routes, with full facilities.

Single detached houses 5. “Perfect Park”, a multi-design single detached house and twinhouses that offers green space and Club House to start-up families.

6. “Perfect Place”, a single detached house on convenient locations, completed with lavish green space, lakes and Club House for medium-sized families 7. “Perfect Masterpiece”, a spacious single detached house for larger families, standing amid huge green space and Club House.

• Competition

In 2009, the domestic economy showed improvement in the second half, thanks to the global economic recovery and the government’s Thai Khemkhaeng stimulus package. Exports, industrial manufacturing, tourism, employment, income, and confidence levels improved, in line with the recovery in private consumption and investment.

Still, domestic political stability limited the upside, as well as the Map Ta Phut crisis, the increasing oil price, baht appreciation and the upward interest trend. The economy ended the year with the 2.3% contraction, which was better than the original estimate, thanks to the global economic recovery.

In 2010, property developers will further face recovery risks, due to political instability and the pace of recovery in the global economy. The interest rate is also likely to increase, along with the construction cost. The end of property tax incentives would also affect the buying decision.

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In this year, the market will be dominated by major developers, trying to snatch bigger shares in each product category.

Pricing and product strategies will be rolled out, including collaboration with busines partners in launching promotions to speed up the buying-decision process. The company will maintain the product differentiation policy, as well as focus on the appropriate locations and reasonable pricing in each area mainly to satisfy customers.

The company entirely devotes its resources on residential property development, offering single detached houses, townhouses and condominiums. By location, they are put into 4 categories.

Group 1: Excellent locations downtown (within 15km radius)

In 2010, the company will increase the condominium products, priced Bt1-Bt3 million, following the success of Metro Park Sathorn, a condominium near the extended Green Line electric train route which welcomed warm response. The new project, offering traveling convenience, will be located along the BTS skytrain and the MRT subway. It wil also feature cozy environment and facilities, which are the company’s highlights. New project in this range will be unveiled. Metro Sky will be unveiled on Ratchadapisek and Sukhumvit Road. As oil prices should continue to rise, this will push skyhigh the demand for condominiums near mass transit routes.

Group 2: Good locations (within 15-20km radius from downtorwn)

Most of the company’s projects are in this group, which shows fierce competition due to relatively closeness to downtown and traveling convenience due to continued mass transit development. The prices of land along the mass transit routes are increasing, as they are the development areas for residential units priced from Bt3 million. The areas include Ratchaphruek Road, Rattanathibet Road, new Rama IX Road, the outer ringroad and On-Nut Road. These areas house the company’s projects under the Masterpiece, Perfect Place, Perfect Park, the Metro and the Villa brands.

Group 3: Suburban projects (20-30km radius)

The projects have faced intensifying competition, due to relatively low land prices. The area can be developed into housing estates with price tag below Bt4 million. Most of the developers are concentrated in the area, as buyers in this income group are the biggest. However, concentration results in oversupplies. That led to a price war and pressures the selling price as well as margins. The company has plans to develop projects in this area to increase the market share and expand brand awareness of the Perfect Park and the Villa brands.

Group 4: Poor locations or out of town

Some homebuyers are ready to buy houses far away from the city areas due to the cheap prices. All expect the housing value to rise in tandem with infrastructure and the upward trend in oil prices. Demand for housing units in the area shows a significant growth, and the company is considering to expand into this segment.

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40

Real Estate Industry Overview and Outlook In 2009, Thailand suffered from the global economic crisis. The economy was expected to contract 2.3 per cent, as the export industry set to suffer the most as well as the manufacturing sector, private consumption and private investment. Expanding was only the government spending. However, late third quarter, economic indicators showed improvement and the recovery continued in the fourth quarter.

In 2010, several houses anticipated the Thai economy to expand 3-5%, thanks to the global recovery which will benefit the export sector, manufacturing sector as well as employment. In light of political stability, budget disbursement, particularly the disbursement under the Thai Khemkhaeng stimulus package, would meet target and this would stabilize the economy and boost consumer confidence in spending on items including new houses. Despite positive signs, risk factors persist. For example, the global economic recovery is on fragile path. 2. The cost of oil and manufacturing materials tends to hike, affecting the operating cost, inflation and cost of living. 3. The interest rate has bottomed out and may rise late this year.

In 2009, though economic conditions dented overall demand, but the property industry benefited dearly from the property tax incentives (a reduction of transfer and mortgage registration fees from 2% and 1%, respectively, to 0.01%, as well as maximum personal income tax deduction upto Bt300,000 from home purchase value and maximum interest allowance of Bt100,000). Buoying the demand were marketing campaigns and extra low interest rates. The recovery was more apparent in the second half, thanks to higher consumer confidence.

New housing registration in Greater Bangkok in 2009 increased 10% from 2008, mostly consisting of condominium units. The portion of low-rise development contracted. In the year, the number of units transferred also went up 10% from 2008. (Source: Real Estate Information Centre, Government Housing Bank) Coupled with the 15% drop in new supplies (according to the Agency for Real Estate Affairs), oversupplies were well absorbed. The demand and supply were more balanced, allowing ongoing projects to continue with the construction works and transfers. The overall market witnessed continued improvement, against the backdrop in overall economy. Largesized companies, in particular, enjoyed hefty sales and extra low inventories due to the adjustment in demand and supply.

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The real estate industry tends to rise in 2010 in tandem with the recovery in overall economy and consumer confidence. The interest rate, meanwhile, is expected to stay low until late this year. Importantly, the Cabinet’s resolution on 23 February not to extend the tax incentives which expired end-March also encouraged buyers to make haste decisions to enjoy the privileges. However, in the rest of the year, some home buyers may delay their purchases, particularly those who are buying units for speculative or investment purposes.

However, the influence on real homebuyers should be limited as the transfer and mortgage registration fees are raised only 2%. The end of tax incentives will pose heavier burden on developers, as their expenses will rise about 4%. As the market has not yet fully recovered, a price hike to fully cover the higher expenses seems impossible. Developers may need to reduce other expenses and downsize some marketing campaigns. Housing prices, meanwhile, should rise slightly due to higher development cost and lower inventories. Yet, more new projects are expected and with shaky demand, this will pressure down housing prices.

The real estate market will remain hotly competitive, particularly among large-sized developers with relatively higher fund mobilization ability as well as advantages in terms of cost maintenance, development and brand. Competition should be mostly focused on internal efficiency enhancement as well as brand and image strengthening. This will in turn increase the competitiveness and give them the advantage in price hikes. Price wars will be avoided as all seek to maintain profit margins amid higher pressure and limitations.

Small-sized residential units will enjoy greater prominence, thanks to apparent change in affordability and consumer behaviors.

Affordability tends to fall, as housing prices have continually advanced against the growth rate of consumer income. Meanwhile, consumers prefer smaller residential units as the family size shrinks. Some get married at older age while others prefer units that offer traveling convenience. These factors will boost demand for small-sized units like condominiums, twinhouses and townhouses.

Nevertheless, single houses better fit Thai culture, promising greater environment. Demand for single houses will remain substantial, though they tend to be located in remote areas. Suburban projects in particular should benefit from the recovery in the economy and consumer confidence. The expansion of infrastructure, like new roads, expressways and river bridges as well as mass transit routes, would help spur the demand.

The number of registered residential units in 2009 (see Graphic 1) rose 10.4% from 2008. The number of condominium units showed the 47.3% increase, against contraction in the low-rise development segments as a result of delayed investment and inventory releases.

However, in the year, a large number of condominium projects launched in the previous few years were completed. As more units were transferred, the condominium segment apparently continued the growth momentum despite slowdown in demand and supply. Overall, most developers showed impressive performance in 2009.

New housing registration in Bangkok Metropolis and Vicinity in 1995-2009 (Jan-Nov) - By category

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

SDH

48,909

44,877

41,305

23,985

17,469

23,128

24,041

24,973

34,592

44,248

46,643

42,764

38,599

34,525

29,721

Duplex House

1,089

791

1,009

196

178

539

227

80

1,144

945

678

965

1,556

2,276

1,128

TH & Shop H.

61,944

60,373

43,480

11,895

2,319

2,728

5,062

7,011

12,950

15,418

13,858

17,421

17,837

14,101

13,670

CD

66,911

70,575

62,837

30,978

9,063

6,679

4,650

5,118

7,399

8,439

10,893

16,966

16,229

31,535

46,452

Total

178,853 176,616 148,631

67,054

29,029

33,074

33,980

37,182

56,085

69,050

72,072

78,116

74,221

82,437

90,971

Note: SDH (single detached houses), Duplex House (twinhouse), TH&Shop H. (townhouse and shophouse), CD (condominium) Source: Real Estate Information Center, Government Housing Bank

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42

Graphic 1: New housing registration in Bangkok Metropolis and Vicinity in 1995-2009 (By Category) 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

10.4% 47.3% -13.9% -3.1% -50.4% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

SDH

SGH

SGH

SGH

SGH

In terms of new project launches in 2009 (see Graphic 2), the number of new condominium projects dropped 23.4% from 2008 thanks to massive expansion in the previous few years. The number of new condominium units put on sale declined 14.6%. In the year, most big developers with huge backlog emphasized the need to finish the construction and speed up transfers, rather than launching of new projects. Despite a drop in the number of new units, competition remained high due to the huge supply of complete and underconstruction units. The number of new townhouse and single house units slightly dropped 5.8% and 4.7%, respectively, mostly because of the aggressive marketing late last year. Then, developers, which successfully balanced the inventories, were encouraged to renew the aggressive move. In a way, they may not yet kick off the construction of the units available for sale now or some units could be under construction, which somewhat showed their investment flexibility.

New units for sale

SDH

Duplex House

TH

CD

Total Source: Agency for Real Estate Affairs

2008 11,707 3,354 20,243 31,322 66,626

2009 11,157 2,665 19,079 23,993 56,894

Change% -4.7% -20.5% -5.8% -23.4% -14.6%

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Graphic 2: New units for sale in 2008 and 2009 (By Category) 70,000

2008

60,000

-14.6%

2009

50,000 40,000

-23.4%

30,000

-5.8%

20,000

-4.7%

10,000

-20.5% SDH

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44

Duplex House

Town House

Conco

Total

Other Information Financial structure

The company’s securities

Accounting year 31 Dec.2007 31 Dec.2008 31 Dec. 2009

Registered capital

- Value (Bt) 6,213,565,176 6,552,000,000 6,552,000,000

- No. of shares 1,035,594,196 1,092,000,000 1,092,000,000

Registered capital

- Value (Bt) 4,724,947,164 4,726,329,720 4,726,329,720

- No. of shares 787,491,194 787,721,620 787,721,620

- Par value (Bt. /Shares) 6.00 6.00 6.00

As of 31 December 2008, the company’s registered capital stood at Bt6,552,000,000 (1,092,000,000 shares at Bt6 par value), up

by Bt338,434,824 (56,405,804 shares at Bt6 par value) from Bt6,213,565,176 million (1,035,594,196 shares at Bt6 par value) at end-2007.

Shareholders at the 1/2008 extraordinary meeting on 20 June 2008 approved the company’s capital reduction from Bt6,213,565,176 (1,035,594,196 shares at Bt6 par value) to Bt5,589,565,176 (931,594,196 shares at Bt6 par value), by canceling 104,000,000 unallocated shares at Bt6 par value worth Bt624,000,000 which were reserved for the conversion of convertible debentures. The shareholders also approved the capital increase from Bt5,589,565,176 (931,594,196 shares at Bt6 par value) to Bt6,552,000,000 บาท (1,092,000,000 shares at Bt6 par value) to accommodate the debenture conversion to common shares. The capital decrease and increase was registered with the Commerce Ministry on 1 July 2008 and 2 July 2009, respectively.

As of 31 December 2009, the company’s registered capital totaled Bt6,552,000,000 (1,092,000,000 shares at Bt6 par value) and paid-up capital totaled Bt4,726,329,720 (787,721,620 shares at Bt6 par value).

Warrants

(a) Warrants issued to uncollateralized creditors

Under the Rehabilitation Plan, the company must issue free warrants to creditors with uncollateralized loans, at the ratio of 7 warrants per every Bt1,000 debt. Each warrant can be exercised for 1 share, at the price of Bt0.01. The company won the Securities and Exchange Commission to offer 53,000,000 warrants, with 10-year maturity, on 7 November 2002. The exercise date is fixed for the last day of the second and fourth quarters of each year, starting from the fourth quarter in 2002. Receivership officers later abolished some creditors’ claims. The company had issued only 50,930,000 warrants, and 2,070,000 were left unallocated. Shareholders at the 1/2005 meeting approved the cancellation of the remaining warrants. As of 31 December 2009, the number of remaining warrants which are not yet exercised stood at 8,870,076 units.

(b) Warrants to directors and/or employee (ESOP)

Shareholders at the 2005 general meeting on 7 April 2005 approved the employee stock option program (ESOP), by which 39,000,000 free warrants would be issued to directors and/or employees. The warrant holders can exercise one warrant for one share at the price of Bt6, within the 5-year exercise period. The company has not yet issued any warrants.

The extraordinary shareholders meeting No.1/2008 on 20 June 2008 approved the the cancellation of the offering of 39,000,000 shares, reserved for the exercise of warrants issued to directors and/or employee (ESOP). The ESOP program was approved at the 2008 annual general meeting on 7 April 2005.

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Convertible debentures : 1/2005 Issue Issue date : 25 November 2005 Type : unsecured holder-bearing convertible debentures, without trustee Offered to : Foreign institutions through a private placement, in US dollar, fully hedged at all cost by investors No. of debentures : 200,000 Units Price : US$100 Maturity : 5 years from issue date (25 November 2005) Interest rate : fixed 3.50% Coupon rate payment : on 25 February, 25 May, 25 August and 25 November every year until maturity. The first interest

payment was made on 25 February Principal payment: Principal payment : The unconverted debentures will be redeemed in US dollar, with 31.60% premium from the issue

price. The redemption is fixed with the foreign exchange rate as of the issuance date.

(Bt 41.15 : US$1) Conversion price : Bt6.25 Conversion period : 18 months after offering, until the redemption date with the minimum conversion of US$1 million Conversion conditions : The company withholds the right to call holders to convert 1 third of the original number of

debentures when 1. Over 10 million shares are traded on average during the 45 days before the company would exercise the right, and 2. The company’s average share closing price during the 60-day period and the closing of the 5 days before the company would exercise the right accounts for - 130% of conversion price in Year 1-2 - 150% of conversion price in Year 3 - 175% of conversion price in Year 4-5

Then, the company can ask the bearers to convert one third of the original number of debentures under

these conditions.

1. The bearers who were forced to convert the debentures sold out all the common shares, or 2. The company can exercise the right again at least 60 days after the first right exercise.

Under this condition, the number of shares traded and the average share closing must fit the earlier conditions.

Bearers’ conditions : The company would hold a meeting to appoint an individual, nominated by any foreign institutional

investor who bought and paid US$20 million upwards for the debentures, a director.

As of 31 December 2009, the company booked provisions worth Bt812.56 million for the unsubordinated convertible debentures which have not yet been converted on maturity, in the item “Convertible debentures-liabilities component”, and Bt202.91 million provisions against the remaining convertible debentures.

Debentures

Outstanding debentures as of 31 December 2009 are as follows;

(a) Secured debentures #1/2009 Specific name Type No. of debentures

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46

: “Secured debentures of Property Perfect Public Company Limited #1/2009, maturing in 2012” : Holder-bearing, secured debentures with trustee : 520,000 units

(b)

Face value : 1,000 Baht Issue size : Bt520 million Offering method : Public offering to the general public and institutional investors Issue date : 3 June 2009 Maturity : 3 years from issue date Maturity date 3 June 2012 Interest rate : Fixed 6% per annum Interest payment schedule : 3 March, 3 June, 3 September and 3 December of every year throughout the debentures’ life Principal repayment : Principal payment maturity date, 3 June 2012 Early redemption : None Other significant condition : Debt to equity ratio must be maintained to no more than 175:1 Credit rating : “BBB+” by Fitch Ratings (Thailand) Trustee : TMB Bank Public Company Limited Registrar : TMB Bank Public Company Limited Secondary market : Thai Bond Market Association

Two series of secured debentures #2/2009 Specific name :

Type : No. of debentures :

Face Value : Issue Size :

Offering method : Issue date :

Maturity :

Maturity date :

Interest rate :

Interest payment schedule : Principal payment :

Early redemption : Other significant condition : Credit rating : Trustee : Registrar : Secondary Market :

1. Series 1: Secured debentures of Property Perfect Public Company Limited #2/2009 (Series 1), maturing in 2011” 2. Series 2: Secured debentures of Property Perfect Public Company Limited #2/2009 (Series 2), maturing in 2012” Holder-bearing, secured debentures with trustee 1. Series 1 : 300,000 units 2. Series 2 : 800,000 units 1,000 Baht 1. Series 1 : Bt 300 Million 2. Series 2 : Bt 800 Million Public offering to the general public and institutional investors 1. Series 1 : 14 August 2009 2. Series 2 : 14 August 2009 1. Series 1 : 1 years and 6 months from issue 2. Series 2 : 3 years from issue date 1. Series 1 : 14 February 2011 2. Series 2 : 14 August 2012 1. Series 1 : Fixed 4.85% per annum 2. Series 2 : Fixed 6% per annum 14 February, 14 May, 14 August, and 14 November of each year throughout the maturity 1. Series 1 : Payment on maturity, 14 February 2011 2. Series 2 : Payment on maturity, 14 August 2012 None Debt to equity ratio must be maintained at no more than 1.75:1 “BBB/Stable” by Tris Rating Co., Ltd. Bank of Ayudhya Public Company Limited Bank of Ayudhya Public Company Limited Thai Bond Market Association Property Perfect Public Company Limited

47

Secured debentures of Bright Development

On 18 August 2008, Bright Development Co.,Ltd, a subsidiary, issued 462,150 units of secured debentures, as approved

by Bright Development’s shareholders at the extraordinary meeting on 15 May 2007 . At face value of Bt1,000 apiece, the issue size totaled Bt462,150,000. The debentures were issued to a financial institution. The maturity date of the debentures, which carry THBFIX plus 5.55256% interest rate, was 28 November 2008. The debentures were guaranteed by the company, partial land and buildings of the company and Bright Development, and the mortgage of Bright shares which are owned by the company.

On 26 February 2009, Bright amended the borrowing contract with the financial institution, to redeem the debentures in lots with total redemption scheduled within May 2009. The debentures carried THBFIX rate plus 8.55256% per annum. On 27 May 2009, Bright sought another amendment, to redeem the debentures in lots with total redemption scheduled within February 2010. The THBFIX coupon rate carried differential of 8.55256% per annum until November 2009 and the differential of 10.05256% during December 2009 and February 2010. Bright had redeemed all the debentures

Debentures are subjected to normal business practices and limitations of the company and subsidiaries.

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48

Management and Authorized Person of the Company Career experience within the past 5 years Name-Title

Age

Academic Qualifications

Holding

Rela tion

ship

Company / Business Type

Timing

Designation

0.001 %

1992 - Present

2006 - Present 1995 - 2006 1995 - Present 1984 - 1995

1978 - 1984

Property Perfect Public Company Limited

Ceda Co., Ltd. Ceda Co., Ltd. The Engineering Institute of Thailand Ceda Co., Ltd.

Public Works Department, Ministry of the Interior

0.844%

1985 - Present

2007 - present

2002 - Present

1999 - Present 1995 - Present

Chairman / Chief Executive Director / Chairman of the remuneration committee Chairman Managing Director Fellow Member Consultant Engineer/ Managing Director Head of Construction Resource Section Chief Executive Officer / Deputy Chief Executive Director Director

Director

Director

Director Director

Non Executive Director / Selection committee/ Remuneration committee Managing Director

Property Perfect Public Company Limited

Bunchong and Vidhya Law Office Ltd. / Law

1 Dr.Tawatchai Nakhata Chairman / Chief Executive Director/ Chairman of the remuneration committee/ Authorized signatory directors

62

•

•

2 Mr.Chainid Ngow-Sirimanee Chief Executive Officer/ Deputy Chief Executive Director/ Authorized signatory directors

55

• Bachelor of Laws Chulalongkorn University • Thai Barrister-at-Law Thai Bar Association

3 Mr. Somsak Toruksa Director / Independent Director / Audit Committee / Selection committee

58

•

•

•

Master of Laws Ramkhamhaeng University Audit Committee Program (ACP) 13/2006 ; Director Accreditation Program (DAP) 52/2006 ; Thai Institute of Directors(IOD)

0.0000 %

4 Mr. Vidhya Nativivat Non Executive Director / Selection committee/ Remuneration committee

55

•

•

•

Master of Laws The George Washington University, USA Bachelor of Laws Thammasat University Director Accreditation program (DAP)77/2005; Thai Institute of Directors(IOD)

1.343%

Ph.D. University of Illinois Audit Committee Program (ACP) 13/2006 ; Director Accreditation Program (DAP) 52/2006 ; Thai Institute of Directors; IOD

Equity

Property Perfect Public Company Limited

Bright Development Bangkok Co., Ltd. / Real Estate Centrepoint Shopping Mall Co., Ltd. / Real Estate Krungthep Land Public Company Limited / Real Estate Estate Perfect Company Limited / Real Estate Thai Property Public Company Limited / Real Estate (Formerly known as “Rattana Real Estate Public Company Limited”) 1998 - Present Director / Independent Director Property Perfect Public Company Limited

/ Audit Committee / Selection

Committee

1993 - Present Managing Director Somsak Toruksa Law Office Co., Ltd. / Law

2004 - Present

1986 - Present

Property Perfect Public Company Limited

49

Career experience within the past 5 years Name-Title

5 Mr.Virayuk Puntupetch Director / Chairman of the Audit Committee

Age

Academic Qualifications

Equity Holding

Rela tion

ship

63

• •

•

•

•

Master of Science 0.000 % Bachelor of Arts (Political Science), Certificate in Financial Policy Analysis Program International Monetary Fund, Washington DC, USA. Certificate in Stock Market Development Program Securities and Exchange Commission, Washington DC, USA Certificate in Executive Program, Harvard University, USA .

6 Mr. Phairat Senachack 60 Director / Executive Director / Deputy Chief Operating Officer / Authorized signatory directors

• •

•

Mini MBA Thammasat University Bachelor of Business Administration Assumption University Director Certification Program (DCP)74/2006, Director Accreditation Program (DAP)30/2004; Thai Institute of Directors(IOD)

0.000 %

7 Mr. David Bryce Van Oppen Non Executive Director

•

•

M.A. International Economics and Asian Studies The Johns Hopkins University, U.S.A., Bachelor Degree in Arts (International Relations), Pomona College, U.S.A.

0.000 %

Annual Report 2009

43

50

Company / Business Type

Timing

Designation

2007 - Present

2007 2005 - 2006

2004

2000 - 2004 1998 - 2000

1996 - 2000

1994 - 1998

1994

1989

1986

1979 - 1980

1972

1996 - Present

Committee / Independent Director/ Chairman of Audit Committee Retired Government Officer Advisor to the Prime Minister

Head of advisor to the Prime Minister Inspectors-General / Director Deputy Director -General / Director

Director

Specialist Expert for Debt Management Director

Director

Director

Assistant to Country Executive Director of SEA Group second-class specialist/ Division Chief Director / Executive Director / Deputy Chief Operating Officer

Property Perfect Public Company Limited

The Secretariat of the Prime Minister Office Government officials in charge of international trade affairs The office of Thai Trade Representative Office of the Civil Service Commission

Ministry of Finance / Vayupak Fund Fiscal Policy Office / Office of General Administration for 33rd Annual Meeting of the Board of Governors of Asian Development Bank Office of the Neighboring Countries Economic Development Cooperation Fund Fiscal Policy Office

Saving & Investment Policy Division, Fiscal Policy Office Capital Market Development Policy Division, Fiscal Policy Office Financial and Financial Institution Policy Division, Fiscal Policy Office World Bank Washington DC, USA.

Bureau of Tax Policy, the Fiscal Policy Office

Non Executive Director Director

Director / Investment Manager

Senior Financial Analyst Manager

Property Perfect Public Company Limited General Enterprise Management Services Ltd., Hong Kong Lazard Asia Ltd., HongKong Lazard Asia Investment Management Ltd., HongKong.

Smith Barney, Inc., Hong Kong.

Sunmar Shipping, Inc., U.S.A.

Property Perfect Public Company Limited

2007 - Present 1998 - Present

1995 - 1998

1993 - 1995 1988 - 1991

Career experience within the past 5 years Name-Title

Age

Academic Qualifications

8 Dr. Thamnoon Ananthothai Director / Independent Director / Audit Committee /Chairman of Selection committee / Remuneration committee /

52

9 Mr.Ooi Bun Aun Non Executive Director

51 •

•

•

•

•

•

Equity Holding

Rela tion

ship

Designation

Company / Business Type

Ph.D., International Management, Walden University, Naples, Florida U.S.A. A.C.A. Certificate, American Accreditation Council for Accountancy, U.S.A. M.B.A., Management, The University of Sarasota- Sarasota Florida, U.S.A B.A., Accountancy & Management, Eckerd College-St. Petersburg, U.S.A. Audit Committee Program(ACP) 10/2005, Director Accreditation Program(DAP) 48/2005, Director Certification Program (RCP) 14/2006, Understanding the Fundamental of Financial Statement (UFS) 7/2007; Thai Institute of Directors.

0.000 %

2005 - Present

2008 - Present 2007 - Present

2007 - Present

2006 - Present

2005 - Present 2004 - Present 2001 - Present

2001 - Present

1997 - Present

2002 - 2003

1998- - 2002

Director / Independent Director / Audit Committee / Chairman of Selection committee / Remuneration / Committee Director / Audit Committee Vice Chairman / Chairman of the Audit Committee Director / Chairman of the Audit Committee Director / Chairman of the Audit Committee Director / Audit Committee Executive Director Executive Board Member / Sub-Committee Director of the Investment Management Sub-Committee Director of Economic Sector Sub-Committee Dean of College of Business Administration Managing Director/ Chief Executive Officer- President & CEO

Property Perfect Public Company Limited

Bangkok University , Bangkok, Thailand Better World Green Public Company Limited

IFS-Capital (Thailand) Public Company Limited

Eastern Printing Public Company Limited

Ua WIthaya Public Company Limited Merchant Partners Securities Limited Clearing House of The Agricultural FuturesExchange of Thailand The National Social Security Fund.

The Federation of Thai Industries.

Dhurakij Pundit University / University

DBS Thai Danu Securities Limited / Securities

Bachelor of Business Administration National University of Singapore

0.000 %

2008 - Present 2007 - Present

2004 - 2007 2003 - 2004 1998 - 2003 1989 - 1998

Non Executive Director Financial & Management Consultancy Managing Director Executive Director Group Vice Chairman / President Executive Director / Chief Executive Officer

Property Perfect Public Company Limited East Alliance Assets Limited (“EAAL”)

Depfa Investment Bank Ltd., Standard Bank Group and the Group Subsidiary Standard Bank Asia Ltd., TCC Group of Companies London Forfaiting Company PLC (“LFC”) LFC’s Asian operation

2008 - Present

2003 - 2006

2000 - 2003

1999 - 2000

1998 - 1999 Jan 2009 – Present

1996 - 2008 1994 – 1996

1992 – 1994 1991 – 1992

1990 – 1991

Director/ Executive Director& Secretary of Executive / Asst.

Chief Business Development officer Director of Investor Relation & Information System Division Head of Research

Sub- Marketing Director

Asst. Vice President Director / Independent Director / Chairman of Risk Management Committee Executive vice president senior manager for commercial and construction finance Commercial finance manager Industrial and commercial finance manager Business development manager

Property Perfect Public Company Limited

Property Perfect Public Company Limited

Research Dept. / BFIT Securities Limited / Securities Marketing Dept./ BOA Asset Management company limited Provident Fund Management Dept./ BOA Plc. Property Perfect Public Company Limited

TMB Bank Public Company Limited TMB Bank Public Company Limited

TMB Bank Public Company Limited TMB Bank Public Company Limited

TMB Bank Public Company Limited

10 Ms Sirirat Wongwattana 48 Director / Executive Director / Assistant Chief Business Development Officer / Authorized signatory directors

•

•

M.A. of Science- Finance, university of Houston –Clearlake, Texas , USA. B.A. of Science , Economics& Business Administration-Finance, Kasetsart University

0.000 %

11 Mrs.Nuanual Swasdikula-Na- Ayudhaya Director / Independent Director / Chairman of Risk Management Committee

• Bachelor of Laws , Thammasat University • Thai Barrister-at-Law Thai Bar Association

0.003 %

60

Timing

Property Perfect Public Company Limited

51

Career experience within the past 5 years Name-Title

Age

Academic Qualifications

12 Mr. Pramote Rermyinde Company Secretary

56

•

•

•

13 Mr. Vichai Singvicha Executive Director / Chief Business Development Officer

54

• •

•

•

14 Mrs. Wanida Waiyawajamai Deputy Chief Operating Officer

55

•

•

15 Ms. Supee Reodacha Executive Director Asst. Chief Financial Officer 16 Mr.Wongsakorn Prasitvipat Executive Director / Assistant Chief Operating Officer

50

•

•

• •

•

17 Mr.Wicharn Siriwetwarawut Executive Director / Assistant Chief Operating Officer

49

49

Bachelor of Laws Chulalongkorn University Thai Barrister-at-Law Graduate Diploma in Business Law Thammasat University Director Certification Program(DCP) 69/2006 Director Accreditation Program DAP) 43/2005 Finance for Non-Finance Director ; Thai Institute of Directors MBA Kasetsat University Bachelor of Laws Chulalongkorn University Direct Certificate Program (DCP) 74/2006, Direct Accreditation Program (DAP) 54/2006 ; Thai Institute of Directors(IOD) Bachelor of Accountancy Chulalongkorn University Director Accreditation Program (DAP) 50/2006 ; Thai Institute of Directors (IOD

Equity Holding

Rela tion

ship

0.025 %

1988 - Present Chief Business Development Officer

Property Perfect Public Company Limited

0.000 %

1988 - Present Deputy Chief Operating Officer 1988 - 2007 Director /Executive Director 1985 – 1988 Chief of Accounting Division / Internal Audit and Planning Manager

Property Perfect Public Company Limited Property Perfect Public Company Limited Dhananan Finance and Securities Co., Ltd./ Finance

0.000 %

2008 - Present Executive Director / Asst. Chief Property Perfect Public Company Limited

Financial Officer

1996 - 2000 Business Development manager Chai Talay Co., Ltd. / Hotel

MBA. Chulalongkorn University 0.034 % Bachelor of Architect Chulalongkorn University Real Estate Course (RECU#10) Chulalongkorn University

2008 - Present Executive Director / Asst. Chief Property Perfect Public Company Limited

operating Officer

1993 - 2008 Design & Project Development Property Perfect Public Company Limited

Division Director

MBA Roosevelt University, USA Bachelor of Economic Thammasat University

• MBA. Chulalongkorn University • Bachelor of Civil Engineer Chulalongkorn University

0.032%

• •

•

0.126 %

MBA Thammasat University Bachelor of Accountancy Thammasat University Certified Public Accountant

Note

46

• MBA Edgewood Collage, Madison, Wisconsin, USA

52

Property Perfect Public Company Limited Thammatit Law Office Group of Persons/ Law Supthamrong Finance House Co., Ltd./ Finance Credit Fancier Srinakorn Co.,Ltd. / Finance

2003 - Present Executive Director / Asst. Chief Property Perfect Public Company Limited

operating Officer

1995 – 2001 Managing Director Baanpan Engineering & Holding Co., Ltd.

2008 - Present

2005 - 2007

1993 - 2004

Executive Director / Asst. Chief Financial Officer Executive Director / Accounting Division Director Executive Director / Deputy Accounting Division Director 2002 - Present Executive Director / Asst. Chief

operating Officer 2001 - 2001 Area Director

- No. 16 Mr.Wongsakorn Prasitvipat

- No. 18 Mr.Surasak Vacharapongpreecha - No. 19 Mr.Tongchai Peyasantiwong

Annual Report 2009

0.000 %

Company Secretary Management Partnership Executive Director Executive Director

Company / Business Type

1998 - Present 1992 - Present 1994 - 1997 1993

19 Mr.Tongchai Peyasantiwong Executive Director / Assistant Chief Operating Officer

Designation

1.445 %

18 Mr.Surasak 46 Vacharapongpreecha Executive Director / Asst. Chief Financial Officer

Timing

Appointed as an Executive Director on 1 January 2010 Appointed as Asst. Chief Financial Officer 1 January 2010 Appointed as an Executive Director on 1 January 2010 Appointed as Assistant Chief Operating Officer on 1 January 2010

Property Perfect Public Company Limited

Property Perfect Public Company Limited

Property Perfect Public Company Limited Property Perfect Public Company Limited

Interlife John Hancock Assurance Public Co., ltd.

Details of directors, executive directors and directors of Property Perfect Plc., subsidiary company and affiliates as of 31 December 2009.

Subsidiary Company’ s

name

Director’s Name

1. Dr.Tawatchai Nakhata 2. Mr.Chainid Ngow-Sirimanee 3. Mr.Virayuk Puntupetch 4. Mr.Phairat Senachack 5. Mr.Somsak Toruksa 6. Dr.Thamnoon Ananthothai 7. Mr.Vidhya Nativivat 8. Mr.David Bryce Van Oppen 9. Ms.Sirirat Wongwattana 10. Mr.Ooi Boon Aun 11. Mrs.Nuanual Swasdikula-Na-Ayudhaya 12. Mr.Pramote Rermyindee 13. Mr.Vichai Singvicha 14. Mrs.Wanida Waiyawajamai 15. Ms.Supee Reodacha 16. Mr.Surasak Vacharapongpreecha 17. Mr.Wicharn Siriwetwarawut 18. Mr.Pornswat Katechulasriroj 19. Mr.Wongsakorn Prasitvipat 20. Mr.Tongchai Peyasantiwong 21. Mr.Nantachart Kliebphipat 22. Ms.Rassamee Metavikul 23. Ms.Sureeporn Pipatwattanapong 24. Mrs.Tanida Surathamrong 25. Mrs.Janet marian Geddes 26. Dr.Bhichit Rattakul 27. Mrs.Uraiwan Bhatarakarnt 28. Mr.Thongchai Kunakornporamut 29. Ms.Wilawan Leongnarktongdee 30. Mr.Prasong Wararattakul 31. Mr.Keangkai Jiwanant 32. Mr.Seang Fuke Seng 33. Mr.Chia khong Shoong 34. Mr.Lim EE Seng 35. Mr.Chan Kin Fai 36. Mr.Attapong Pornthiti 37. Mrs.Unchalee Chawanitch 38. Mr.Purit Prapawadee 39. Mr.Chainarong Ngernsopha Remark : 1. PF

PSS

ESTPF

Bright

Center Point

KL

REAL

Company PF

X, XX /, //, /// *, / /, //, /// *, / *, / / / /, //, /// / *, / @ //, /// /// //, /// //, /// //, /// // //, /// //

PSS

Other Associated Subsidiary Company Company Company ESTPF Bright Centre Point KL REAL

/

/

/

/

/

/, ///

/

/

/

/, // /, XX / *, / *, / / / / /, // / *, /

X

/

/ / /

= Perfect Satellite Services Company Limited = Perfect Seattleite Services Company Limited = Estate Perfect Company Limited = Bright Development Bangkok Company Limited = Centre Point Shopping Mall Company Limited = Krungthep Land Public Company Limited = Real Service Company Limited (REAL cease operations)

2.

X XX * / // /// @

/

= Chairman = Chief Executive Director = Independent Director = Director = Executive Director = Executive = Company Secretary

Property Perfect Public Company Limited

53

Executives’ remuneration Financial benefits

Meeting allowances and director fees paid out by the company in 2008 and 2009 are as follows: A)

Director remuneration of 2008 - 20099 (Unit: Million Baht) Name

Dr. Tawatchai Nakhata

Position

Chairman / Chairman of the remuneration committee / Chief Executive Director Mr. Somsak Toruksa* Director / Audit Committee / Selection committee Dr. Thamnoon Ananthothai * Director / Audit Committee / Remuneration committee / Chairman of Selection committee / Risk Management Committee Mr. Chainid Ngow-Sirimanee Chief Executive Officer and Deputy Chief Executive Director Dr. Theerachon Manomaiphibul ** Director Mr. Phairat Senachak Director Mr. Vidhya Nativivat Director / Selection committee / Remuneration committee Mr. Virayuk Puntupetch * Director / Chairman of Audit Committee Miss Sirirat Wongwattana Director / Executive Director Mr. David Bryce Van Oppen Director Mr. Ooi Boon Aun Director Mrs. Nuanual Swasdikula-Na- Director / Ayudhaya * Chairman of Risk Management Committee Ms. Supee Reodacha *** Risk Management Committee Mr. Surasak Vacharapongpreecha*** Risk Management Committee Mr. Boonliam Luangnakthongdee Risk Management Committee Mr. Chirdsak Kukiattinun Risk Management Committee Dr. Theerathorn Tharachai Secretary of Risk Management Committee Miss.Somsri Kiattirarat Assistance company secretary

Total

Note

2009 Meeting Pension Allowance

2008 Meeting Pension Allowance

0.650

2.336

0.550

0.940

0.570

1.168

0.430

0.940

0.740

1.168

0.450

0.940

0.300

1.168

0.250

0.940

- 0.300 0.360

1.168 1.168 1.168

0.250 0.250 0.270

0.940 0.940 0.940

0.700 0.300 0.300 0.300 0.450

1.168 1.168 1.168 1.168 -

0.600 0.150 0.150 0.150 -

0.630 - 0.520 - -

0.025 0.025 0.170 0.120 0.025 - 5.335

- - - - - 0.484 14.500

- - - - - - 3.500

- - - - - - 7.730

( Some directors, aside from meeting allowance, are receiving salaries as executives and members of the Executive Board) * Independent Director ** Resigned as a director on 18 January 2009 to become Bangkok deputy governor. *** No longer a member of the Risk Management Committee as of 14 May 2009, following the appointment of the new

committee.

Annual Report 2009

54

B)

The remunerations for the executives in 2008-2009 . Details are as follows: Types of expenses

Amount (person)

Salary

Bonus/ Others

Total

C)

2009 (Bt. million) 10 30.90 5.50 36.40

2008 (Bt. million) 10 29.29 10.3 39.59

Other payments - None

Property Perfect Public Company Limited

55

Corporate governance

The Board of Directors recognized the value of good corporate governance, in enhancing transparency, the company’s competitiveness, trust from shareholders, investors and other stakeholders, and the long-term business merits. Stakeholders and society’s benefits were taken into account. The company has followed through the 5 sections of corporate governance practices as prescribed by the Stock Exchange of Thailand.

Section 1: Shareholders’ rights

The Board of Directors emphasized shareholders’ rights and ensured equitable treatment to all, as prescribed in the company’s rules and regulations and relevant laws. Shareholders hold the rights to attend annual meetings, the rights to appoint their proxy to vote at the meetings, the rights to vote on the appointment or removal of individual directors, the rights to cast votes in significant matters, the rights to dividend, the rights to raise opinions and questions at the meetings, and the rights to sufficient and timely information.

The Board sets the annual shareholder meeting (AGM) once a year, within 4 months after the end of each accounting year. If necessary, an extraordinary shareholder meeting will be called where shareholders can vote on issues which could affect their interests, or legal issues which need shareholders’ approval.

In organizing the AGM, the Board puts forward the shareholders’ rights. Invitation containing agenda in details and the Board’s opinions was dispatched at least 15 days prior to the meeting date, with the proxy form, the list of independent directors and proxy advice. With timely information, shareholders can make decisions prior to the meeting date or could appoint independent directors as their proxy. The AGM was published in daily newspapers for at least 3 consecutive days and at least 3 days ahead of the meeting. The meeting details and agenda were also posted on the company’s website 30 days before the meeting, so that shareholders or investors can submit their questions in advance.

During the meeting, the Board facilitates shareholders’ attendance and voting, and refrains from any actions which will limit their attendance. All shareholders are given full freedom to raise their questions and opinions.

Section 2: Equitable Treatment to Shareholders

The company values equitable shareholder treatment. Shareholders’ rights are covered in the corporate governance policy and all are treated in a fair manner through these measures:

• The process to organize AGM is transparent and efficient, in line with the company’s rules and regulations and relevant laws. Shareholders are given fair chance to raise opinions and questions, with sufficient time allocation.

• Shareholders are asked to review and vote on directors on the individual basis, and to approve the directors’ remuneration, auditor’s appointment, auditor fee and other agenda as described in the meeting invitation.

• Ballots are issued for all agenda.

• Shareholders-cum-executives are barred from proposing extra agenda without notifying others in advance, so that all shareholders have sufficient time in reviewing details of each agenda.

• Shareholders who cannot attend the meeting can appoint independent directors or other persons as their proxy, who will cast votes on behalf of them. The company’s proxy form is designed to allow shareholders to state their voting opinions.

• The meeting is thoroughly recorded. The meeting minutes contain all significant information like the resolutions and votes, questions, explanations and opinions raised.

Annual Report 2009

56

•

•

Measures against insider trading among directors and executives are in place. All must report their shareholding, as well as the holdings of spouses and under-aged children. They must report on any change in the shareholdings, after acquisition, disposal or transfer, to the Securities and Exchange Commission under the Securities and Exchange Act BE1992’s Article 59, within 3 days after the acquisition, disposal or transfer.

In place are the measures and procedure in approving transactions with possible conflict of interest or connected transactions, with full compliance with the Stock Exchange of Thailand’s regulations on connected transactions, for the equitable benefits of shareholders. Moreover, the Audit Committee also thoroughly screened connected transactions and transactions with possible conflict of interest, before submission to the Board, as required by the SET.

Section 3: Stakeholders’ rights

The company realizes the significance of all stakeholders - shareholders, employees, customers, competitors, creditors (suppliers and contractors), relevant government agencies, society and environment. The policies are geared towards fairness to all groups of stakeholders.

Shareholders

The company is concerned about transparency in important information disclosure to all shareholders accurately, completely and timely through channels including the SET’s electronic media, the company’s website, announcement in newspapers, press releases and written notices.

The company’s staff

The company has appointed the remuneration committee to perform duties in considering proper salary to employees and preparing manual for all staff to inform them about welfare policies clearly with respect to their interests, establishing provident funds, and promoting them with appropriate procedure to create fairness for all parties.

Customers

The company has determined to not only quality construction but also code of conducts by taking care and responsible for customers, offering quality and standard services, and solving customer complaints or providing advices as the earliest.

Competitors

The company has adhered to good competition rules and avoided dishonest practices to destroy competitors.

Creditors

Product distributors - The company has a clear period for placing invoice and check payment after handing over/ inspecting works, informs contractors before they are hired and proceed payment to be in line with regulations strictly to ensure confidence of creditors.

Contractors - The company has a criteria for contractor selection to have efficient contractors and offer them equal opportunity. The company has set fair price as the reference. Even though prices of some items are greater than agreed prices, the company can maintain the average price on par with the market price. Occasionally, the company has taken degree of difficulty of working condition into account for pricing and authorised each hiring sub-committee to consider the matter properly based on objectives and success in transparent procurement. To ensure contractors’ confidence and let them growth along with the company, the company has stated the clear construction progress and fair construction payment installment, inspection, and invoice placing in agreements with contractors for equal treatment, and set payment period in compliance with the company’s regulations.

Property Perfect Public Company Limited

57

Society and environment The company is aware of quality of life and living in society, Thai culture, and environment as substantial matters for the company’s land development. Designs for all projects not only comply with the Land Appropriation Act and regulations of related agencies but also are concerned about living quality in society after the project development. This fact is highlighted from greater space for the public areas than required by law to make project perfect with lush trees, place of exercise, and sport field for residents.

The company also undertakes the following corporate social responsibility programs.

• On Buddhism, the company is hosting ceremonies at all projects so that residents can offer alms to monks, and hosting religious ceremonies on different occasions.

• On cultural campaign, the company promotes cultural events such as the Thai classical dance contest for the youth, and events to celebrate major festivals like Songkran and Loy Krathong, etc.

• On sports promotion, the company arranges tournaments on futsol, tennis, badminton, swimming and others at Club House, aside from the provision of financial supports and prizes.

• On promoting professional skills, the company hosts a photography contest.

• The company also collects donations for earthquake victims in Haiti as well as contributes its own donation.

• Financial supports are also granted for educational institutions’ educational and sport activities.

Section 4: Information Disclosure and Transparency

The Board puts emphasis on information disclosure and transparency, with sufficient information released to all stakeholders and measures to ensure the disclosure of accurate, cmoplete and credible information in a timely manner for equal access.

Key financial information is sufficiently disclosed in the financial statements, in line with the regulations. They are disclosed via the SET system and the company’s website. The financial statements are reviewed/audited, with unconditional opinions from the auditor and the Board’s approval before the release to shareholders. The Board also expresses its responsibility for the financial statements in the annual report.

The company discloses significant financial and non-financial information through the SET system and the company’s website, for accurate, complete, equitable, fair, transparent and timely dissemination to the general public. The Investors Relations and Information Technology Unit is in charge of the dissemination and communicate with local and foreign shareholders, investors, stock analysts accurately, equitably and timely. Investors can contact the Investor Relations Unit for the company’s information at Tel: 0-2247-7500, Fax: 0-2247-7399, e-mail: jirawan@pf.co.th, or www.pf.co.th/ir.

The Board discloses its role and scope of responsibility as well as those of sub-committees, as well as the number of meetings each director attended under item “Management”. Remuneration of the directors and top executives are shown in item “Directors’ Remuneration”.

The company has pursued the Stock Exchange of Thailand’s rules and regulations governing connected transactions or acquisition and disposal of assets of listed companies, whichever is the case. Besides the company has set policies and guidelines to prohibit executives and related persons from using inside information for their own interests.

The company has regarded an importance of efficient internal control system for both executives and operational levels.

Practices of operational staff and executives are determined and clearly written. The company has set up an internal audit office to exclusively take responsible for efficient operational examination. The internal audit reports the result directly to the Audit Committee.

Annual Report 2009

58

Section 5: Board of Director’s Responsibility

Board of directors’ structure

The company has required at least 3 independent directors in the Board of directors. At present, the company’s Board of Directors contains 11 experienced, knowledgeable and competent members as follows :

- Executive director 3 persons

- Non-executive director 4 persons

- Independent director 4 persons

The chairman does not serve as the CEO, to segregate their supervisory and executive roles. All directors possess full independence in giving opinions.

Much emphasis is placed on the opinions of the independent directors. In any issue that draws any suggestions or disagreement from independent directors will be reviewed for transparency.

The Board abides by the minimum requirements of the SEC and SET in formulating independent directors criteria.

1. They must hold no more than 1% of all voting shares in the company, subsidiaries, affiliates, or in the companies which are major shareholders or have controlling power over the company. The shareholding includes that of those related to the particular independent director.

2. They must not have been or are not involved in the management, or employees, wage earners, or advisors on the payroll, or controlling persons of the company, its subsidiaries, affiliates, or equivalent companies, or juristic persons now and at least 2 years before their appointment as independent directors. Former civil servants for advisors of government agencies which are major shareholders or controlling persons are not included.

3. They are not related by blood or registration as parents, spouses, siblings, or children, spouses of any of the children to members of the management, major shareholders, those exercising control, or those about to be nominated as members of the management or controlling entities over the company or subsidiaries.

4. Have absolutely no vested interests in the company, its subsidiaries, affiliates, or major shareholders or controlling entities of the company, which could obstruct their independent judgement. They are not either a significant shareholder or a controlling shareholder who has business relationship with the company, subsidiaries, affiliates now and at least 2 years before their appointment.

5. They do not serve as the auditor of the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant shareholder (with over 10 per cent of voting shares including connected persons’) of the company, controlling entities, or a partner of the audit firm of which auditors perform their jobs on the company, subsidiaries, affiliates, the parent companies or controlling entities at least 2 years before their appointment 6. They do not serve as a professional service provider, including legal or financial services of which fees more than Baht2 million per year are levied on the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant, controlling shareholder or a partner of the professional service provider at least 2 years before their appointment.

7. They are not appointed to represent the directors of the company, major shareholders, or shareholders who are related to major shareholders.

8. They do not operate a company with the similar nature to and significant competition with the company, subsidiaries or affiliates, or hold a significant ownership in a partnership or act as a director with management power, employees, wage earners and advisor on payroll, or hold over 1% of voting shares of other companies which operate in the same industry or present significant competition against the company or subsidiaries.

9. Have no other characteristics that could bar the expression of their free views on the company’s operations.

Property Perfect Public Company Limited

59

Sub-Committees

The Board has appointed directors accordingly to their credentials to support the supervisory role and enhance supervisory efficiency. Five sub-committees are established with clear role and scope of responsibility.

1. Audit Committee

2. Executive Board

3. Director Selection Committee

4. Remuneration and Human Resources Committee

5. Risk Management Committee

The five sub-committees carry out their tasks in a transparent manner. Details of their names and scope of responsibility are included in item “Management Structure”.

Responsibilities of the Board of Directors

The Board consists of knowledgeable, capable, skilled and experienced persons who realize their roles and responsibilities, which resulted in efficient operations. The Board takes part in formulating the vision, mission, strategies, goals, business plans and resource allocation, to ensure the management’s efficient and effective implementation.

The Board values good corporate governance, to enhance transparency and the company’s competitiveness. To instill trust among shareholders, investors and all stakeholders, there is the written corporate governance policy which is reviewed once a year to fit the environment, business direction and international standards. The Code of Conduct is in place so that employees perform in accordance with the corporate governance policy.

To prevent conflicts of interest or connected transactions, the Board assigned sub-committees with clear segregation of roles. There are policies, code of practices and the procedure to approve transactions which might carry conflict of interest, as guidelines to executives, employees and relevant parties. Such cover the criteria in endorsing connected transactions, the use of inside information and information disclosure. The Board also demands the management to regularly assess business risks and formulate risk preventing and mitigation measures, and report them to the Board. These include the risks that may affect the company’s performance, as specified in item “Risk Factors”.

Board Meetings

The Board holds quarterly meetings, aside from extra meetings as necessary, with clear and prepared agenda, to review the quarterly results as well as monitor progress. The chairman and CEO will jointly review the issues, before brining them up to the Board’s meetings. Each director is allowed to propose their own agenda.

In each meeting, the chairman allocates sufficient and ample time for discussion. Meeting minutes are written and the minutes, approved by the Board, are stored for inspection by the Board and relevant parties.

Board of Directors’ self assessment

Executive directors conduct a quarterly evaluation to assess performance in part of their responsibility and the performance evaluation is presented to the company’s Board of Directors to compare with performance in the past.

Remuneration

The company has appointed the Remuneration and Human Resource Committee to consider remuneration principles and policies for Chief Executive Officer, directors and advisors and determine bonus, salary adjustment annually and during the year, and other benefits to staff in each level. Remuneration determination is based on experience, duty and scope of responsibility, and compare with other companies in the same industry (see details in heading remuneration of directors and management).

Annual Report 2009

60

Directors and Management improvement

The company is concerned about the importance of Directors and Management improvement for management succession in the future.

The company is aware of the importance of human resources in management level by organizing training “Real Estate Business Management”, contents of which include real estate knowledge, law, finance, accounting and good corporate governance to prepare the company’s high-level executives for being directors in the future. For the company’s directors, they participated in trainings held by Thai Institute of Directors and aimed to develop and support directors to take practices of good corporate governance in organization.

Surveillance on use of inside information

The company has policy to prohibit directors and management from directly and indirectly using inside information for their own benefits. Directors, management and employees who learn about the company’s financial information must not exploit the information one month before announcement of such information to the public. The company informs directors, management and staff mentioned above to avoid trading the company’s securities before the financial statements are disclosed to the public. It also explains directors and management about duties in reporting their holding and change in holding in the company’s securities to the SEC as stipulated in article 59 and punishment in article 275 of the Securities and Exchange Act B.E 2535.

The company has also stipulated discipline penalty for the company’s staff who breach the company’s rules and regulations or announcement as stated in rules and regulations governing staff’s operating practices.

Internal Control

The company has put continued emphasis on internal control. The Board ensures sufficient internal control, which is appropriate for the operations, for efficiency and effectiveness in guarding asset and the accuracy and trustworthiness of the accounting system and financial statements. The company has also complied with laws and relevant rules. The internal control sufficiency is reviewed for the sufficiency on an annual basis. The review focuses on the 5 elements: 1) Organization and environment 2) Risk Management 3) Control Business 4) Information System and Communications and 5) Monitoring and Evaluation. The Board at the 2/2010 meeting on 26 February 2010 had the following opinions on the appropriateness and sufficiency of the internal control.

1. Control Environment

The Board sets clear and assessable performance target. The target is reviewed and the management’s annual business plan is thoroughly considered. The Board ensures the organizational environment is supportive to the efficient internal control, with clearly-specified scope of power and responsibilities of executive directors and CEO. The organizational structure is properly designed, with the provision of policies and procedures that cover financial, procurement and managerial activities, to prevent corruption. The Board also requires all directors and executives to report their shareholding and that of related individuals, so that the company has sufficient information in reviewing connected transactions. Directors and executives are also monitored, to ensure fiduciary duties.

2. Risk Management

The company clearly specifies organizational objectives and assesses business risk factors, internal and external, which could obstruct the company from achieving business goals under the specified budget. There is the process to analyze the causes of risk factors and prepare strategies to handle the risk factors. The Board also sets up the Risk Management Committee to increase the board’s efficiency in handling the risk management.

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3.

Control Activity

The internal control and evaluation are segregate for cross examination. The scope of duty and the amount of money each can endorse is clearely specified. The appropriate internal control is placed on the management, and the Board also reviews the management’s performance. The Board also reviews and approves the annual business plan, to ensure that core activities are covered. The Board also endorses the company’s transactions with major shareholders, directors, executives, and related individuals. Transactions with these individuals are treated as transactions with outsiders.

4.

Information and Communications System

The company has continually improved the information and communications system, with sufficient information to support the Board and management’s decision-making process. Before meetings, directors duly receive sufficient and clear information, with appropriate time slot for reviewing. Board of Directors’ meeting minutes contain directors’ questions, remarks and opinions, and all are documented. The accounting procedure is also in compliance with the generally-accepted standards and appropriate to the nature of business.

5.

Monitoring and Evaluation

The company has monitored and evaluated the performance. Business procedures are properly drawn up, to ensure the continuity in internal control. The procedures become part of the normal functions of executives and relevant persons. The company has outlined the constant monitoring and evaluation plans, to ensure achievements in specified periods. The internal control unit reports directly to the Audit Committee and the internal control is reviewed on an annual basis.

Regarding the company’s 2009 financial statements, the auditor did not point any significant flaws in the internal control which may cause damage to the company. However, during the year, the auditor filed some remarks he encountered during the auditing to the Board, so that the internal control can be improved for higher efficiency. The key remarks concern:

The company had made advance and downpayments for a land plot for a long time and the land price was significantly higher than the Treasury Department’s valuation. On advance payment, the company had recouped some. Regarding land prices, the company took into consideration of the market value as well as marketing opportunities for the development. The valuation price by an independent appraiser was also higher than what the company paid for.

The Audit Committee had already completed the report of the Audit Committee for the year 2009.

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Human Resources

Number of staffs

At the end of 2008 and 2009, the company and subsidiaries employed 481 and 470 employees, respectively. The employees tend the following departments.

Department Number of staffs Number of staffs

31-Dec-09 31-Dec-08

1 Directors and Consultant 10 10

2 Office of the Chief Executive Officer 11 11

3 Project Planning Division 18 16

4 Design & project Development Division 17 17

5 Construction Management Division 14 15

6 Product Development & Quality Control Division 8 9

7 Advertising Division 13 13

8 Public Relations Division 5 5

9 Accounting Division 13 14

10 Internal Audit 3 3

11 Legal Procedure & Ownership Transfer Division 41 45

12 Sales Management Division 8 7

13 Finance & Treasury Division 14 16

14 Budgeting Office 3 5

15 Investor Relation & Information System Division 8 8

16 Product Development & Quality Control Division 5 1

17 Research & Business Development Division 4 5

18 Human Resources Division 6 6

19 General Administration Division 21 21

20 Customer Service Division 21 20

21 Project Management Division Zone 1 - 5 227 234

Total 470 481

The company over the past 3 years did not have any legal case about labor dispute.

Employee Remuneration

The Remuneration and Human Resource Committee is in charge of formulating the remuneration policy and criteria for CEO, directors and advisors of the company. It fixes the annual pay, annual pay adjustment, interim pay adjustment, and other rewards to employees in all levels. It also takes care of the employment policy and ensures appropriate and fair penalties on employees.

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The company’s employee remuneration (excluding executives’ remuneration) consists of salary, bonus, welfares, overtime, allowances and contribution to the provident fund. At the end of 2008 and 2009, the remuneration stood at Bt305.25 million and Bt236.72 million, respectively.

Employee Remuneration (2008-2009)

Item

Salary

Bonus/others Total

2009 (Bt. million) 204.86 31.86 236.72

2008 (Bt. million) 237.05 68.2 305.25

Human resource development policy

The company is concerned about the importance of human resource development, so human resource development policy is a commitment of the company to pay attention on human resources. Guidelines for knowledge management in organization are available to enhance and reinforce competency development of employees to allow them perform efficiently to pave the way for creating the company’s product quality later.

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Referencet Auditors

Legal Advisor

Share Registrar

Property Valuation

Mr.Narong Puntawong Mr.Tippawan Nananuwat Miss Siriporn Aueanankul Ernst & Young Office Limited 33 rd Floor, Lake Rajada Office Complex 193/136-137 New Rajadapisek Road, Bangkok 10110

Tel. 0-2264-0777, 0-2661-6190 Fax. 0-2264-0790, 0-2661-9192 Banchong and Vidhya Law Office 33/35, 33/39-40 Wallstreet Tower 9th Flr. Surawong Road, Kwaeng Suriyawongse, Bangrak, Bangkok Tel. 0 2236-2334 Fax. 0 2236-3916 Thailand Securities Depository Co., Ltd. 4, 6-7th Flr. The Stock Exchange of Thailand Bldg., 62 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Tel. 0-2359-1200 Fax. 0-2359-1259 Agency for real estate affairs Co., Ltd .

10 Nonsi Rd., Yannawa, Bangkok 10120 Tel.66-2295-3905 Fax. 0-2295-1154

Brooke Real Estate Limited 20th Fl., Unit 2005-6, The Millennia Tower, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Thailand Tel. 0-2652-6300 Fax.0-2652-6399

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Connected Transactions with Related Persons 1.

Connected transactions with Estate Perfect Co., Ltd (“Estate”) Relationship - Property Perfect is major shareholder of Estate, holding 100% stake.

- Property Perfect and Estate share 1 director – Mr. Chainid Ngow-Sirimanee.

- Property Perfect ‘s executive- Mr. Pramote Rermyindee is a Estate’s director Details of transactions

Description

2009 Note (Unit : Bt. Million)

Loan

Debtor

311.61

Interest income

14.93

Accrued interest

5.31

Guarantee

Credit line

Pledged-asset mortgage

land held for development Vacant land marked for development

2.

2,132

2-3-21 rai 3-2-7.1 rai

Property Perfect loaned to Estate with promissory notes represented for partial loan disbursement. The loan carried 1.5% on top of Property Perfect’s weighted average financial cost.

On 26 February 2010, the audit committee’s meeting resolved Property Perfect to provide additional credit line of Bt825 million to Estate to purchase land and develop project. The loan carried 0.75% on top of Property Perfect’s weighted average financial cost.

Property Perfect entered into a guarantee contract for loans borrowed from a financial institution to Estate without premium. The guarantee’s details are as follows : Loan for Romklao project with credit line of Bt 377 million Loan for Perfect Place project with credit line of Bt 1,350 million.

Cash flow loan amounted to Bt 20 million.

Property Perfect guaranteed the Bt385 million promissory notes, issued to finance the purchase of a land plot in Rom Klao area. The promissory notes are avaled by a financial institution.

Property Perfect mortgaged land held for development and land title deeds with a combined of vacant land as collaterals for Estate’s borrowing from financial institutions.

Audit Committee’s Opinion

The loan is the necessary financial assistance for Estate’s project development and expansion as planned. In addition, Property Perfect needed to provide the guarantee as it owns a 100% stake in Estate.

Connected transactions with Bright Development Bangkok Co., Ltd. (Bright) Relationship - Property Perfect is the major shareholder of Bright, holding a 99.94% stake.

- Property Perfect and Bright share 1directors – Mr. Chainid Ngow- Sirimanee Details of transactions

Description

2009 Note

(Unit : Bt. Million)

428.29

Loan and advance Debtor payment

Interest income

Accrued interest

30.77

Advance payment

1.50

Credit line

462

Guarantee

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26.15

Property Perfect transferred advance for purchases of land and expenses related to Ratchadapisek project to Bright to comply with conditions required by financial institutions which loaned to Property Perfect in establishment of Bright to develop the project. Therefore, Bright was a debtor of Property Perfect. Property Perfect loaned to Bright for further project development with promissory notes represented for partial loan disbursement. The loan carried 0.75-1.5% on top of Property Perfect’s weighted average financial cost.

Property Perfect entered into a guarantee contract without premium for debentures issued by Bright to financial institution.

3

Audit Committee’s Opinion

The loan is the necessary financial assistance for Bright’s project development and expansion as planned. Moreover, Property Perfect needed to provide the guarantee as it owns a 99.94% stake in Bright.

Connected transaction with Perfect Satellite Services Co., Ltd. (“Satellite) Relationship - Property Perfect is the major shareholder of Satellite, holding a 99.98% stake.

- Property Perfect’s 4 executives – Miss Rasamee Metavikul, Mr. Thongchai Piyasantiwong,

Miss Sureeporn Pipatwattanapong and Mrs. Thanida Surathamrong – are Satellite’s directors.

Details of transactions

Description

2009

Note

(Unit : Bt. Million)

4.

Hire to manage club houses

Expenses Creditor

11.42 Property Perfect hired Satellite to manage club houses and golf 1.25 courses in the company’s projects as follows : - Club house management fee was charged at Bt138,000/project - Golf course management fee was collected at Bt50,000/project and Satellite charged service fee on providing service staff at the actual expenses.

Audit Committee’s Opinion

The transaction is a normal course of business transaction whereby both companies jointly set the price.

Connected transactions between Centre Point Shopping Centre Co., Ltd. (Centre Point) Relationship: - Property Perfect is the major shareholder of Centre point, holding 59.99% stake. The Board’s 1/2010

meeting on 22 January 2010 approved the purchase of 4,000 common shares of Centrepoint, or 40%

from Timberline Investment Pte.Ltd, to raise the company’s shareholding to 100%

- Property Perfect and Centre Point share 1 director – Mr. Chainid Ngow-Sirimanee..

Details of transactions

Description

2009 Note (Unit : Bt. Million)

Deposit receive

Other creditors

Loan

Debtor

Interest income Accrued interest

80.00 Property Perfect entered into a leasehold right transfer contract for 7-3-62.1 rai of land with Centre Point in the amount of Bt200 million, Bt80 million of which was deposited.

15.20 Property Perfect lent Centre Point at an interest rate of 1 - 1.5% 0.81 on top of its weighted average financial cost.

0.87

Audit Committee’s Opinion

The transaction is a normal course of business transaction whereby both companies jointly set the price but not less than appraisal price set by two independent appraisers. In addition, the loan is the necessary financial assistance for Centre Point’s project development and expansion as planned.

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5.

6.

Connected transactions with Krungthep Land Co., Ltd. (“KLand”) Relationship - Property Perfect is the one of major shareholder of Kland, holding a 20.22% stake.

- Property Perfect and KLand share a direct – Mr. Chainid Ngow-Sirimanee.

No Details of transactions

Connected transactions with Real Service Co., Ltd. (“Real Service”) Relationship - Property Perfect is a major shareholder of Real Service, holding a 19% stake.

- An employee of Property Perfect – Mr. chainarong Ngernsopha – is Real Service’s director.

- Property Perfect’s executives – Mr. Surasak Watcharapongpreecha, – own a combined stake of 10%

in Real Service.

- Property Perfect’s executives – Mr. Pornsawat Ketchulasriroj, Mr. Surasak Watcharapongpreecha,

Mr. Thiti Inklinphan and Mr. Somkid Chidtrakul – own a combined stake of 38% in Real Service.

- KLand’s executive – Mr. Thosaporn Jirakiatdeekul – holds a 5% stake in Real Service.

No Details of transactions

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Risk Factors Factors that could lead to risks to investors and the issuer are as follows:

1. Risk on liquidity and funding access

Real estate development is a capital-intensive business, Huge capital is required for the acquisition of land plots, the development, the construction, and sale and administrative activities, before revenue can be realized. The activities require huge capital and each project take more than 1-2 years to complete, depending on the sizes. The company realized the need to maintain sufficient cashflow to carry out the operations.

The company has operated in the industry for more than 25 years. Thanks to executives who had survived economic crises, we foresee obstacles and therefore adopt cautious development strategies. The company has emphasized on transparent operations, being careful throughout the process from the selection of locations and land purchases. Project feasibility study is carried out, with focus on all details. The results are submitted to the executive board for the 360-degree approval process. The company has so far won trust and supports from financial institutions for both project finance as a premium client and mortgage loans for individual buyers. In raising funds, the company also resorts to equity and debt instruments, like promissory notes, bill of exchange, debentures and unsubordinated convertible debentures which could reduce the financial cost and allow flexible repayment periods.

In 2009, upon the Board of Directors’ resolution on 14 August 2009, the company issued debentures and the Board also resolved on 12 November 2009 for the issuance of no more than Bt2,000 million bill of exchange. The company and subsidiaries have issued four issues of secured bonds (details appear in Note to Financial Statements No. 22) worth a total of Bt1,793 million.

Of total, Bt187 million is maturing in a one-year time.

The company has reviewed and put emphasis on controlling the debt to equity ratio. The ratio wil be maintained at no more than 1.75:1. Consolidated liabilities as of 31 December 2009 amounted to Bt7,656.65 million: Bt4,052.17 million as current liabilities (details appear in Note to Financial Statement No.22 for the year ending 31 December 2009). The debt to equity ratio stood at 0.92:1 in 2008 and 1.12:1 at the end of 2009.

The company has the confidence that thanks to the track record, it will further win premium financial supports from local financial institutions. This will keep risks on funding access and liquidity shortage at the low level.

2. Risk from minimum revenue guarantee to property fund

On 28 February 2008, the company sold properties worth Bt520 million to the Property Perfect Fund (the fund), on condition that the fund’s minimum revenue is guaranteed for 5 years, ending on 31 December 2012. The company thus shoulders the risk from the guarantee for 5 years. The guarantee value is based on the curent cashflow and the company expected to pay out a total of Bt73.8 million to the fund. The amount was booked in the balance sheet for the year ending 31 December 2008. The loss stemmed from the fact that the fund was in the first year of operations. Political and economic instability also prevented it from reaping target revenue. The fund reaped rents only Bt12.6 million in 2008 and the company must pay Bt33.4 million to the fund (the guarantee for the year was Bt46 million as the fund was established and operated in March.)

In 2009, the company paid additional Bt20.5 million to the fund and set aside another Bt9.4 million for the payment which boosted the provision to Bt28.5 million. The amount should be sufficient to cover losses in the remaining 3 years. In 2010, the company believed that the economic growth momentum would continue from the fourth quarter of 2009. This should lead to a significant boost to rents. The properties’ location by an international school, its environment ambience and excellent services will help reduce the compensations later on.

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3.

4.

5.

Risk from demand for higher working capital to finance housing development and debt repayment

The company has maintained the policy to sell completed houses, to meet demand and convince consumers of scheduled delivery. The policy requires higher working capital to complete the houses, and the company addresses the issue by selling the houses while the construction works take place. The number of houses under construction is also kept at an appropriate level, based on the average sale figures (moving average). In several projects, demand outpaces supply and to satisfy customers, the company allows them to place reservations for the under-construction units. The company has started sale of under-construction units in high-potential projects and won warm response thanks to consumers’ trust in getting complete units on schedule. This helps narrow the risk in finding working capital, to kick off the presale of new projects. Fnancial institutions consequently approve project financing on confidence that the projects with some advance sales lower the risks in finding customers.

The company has also applied prefabrication as well as the rigid frame or skeleton technology to reduce the construction period and demand for skilled labour. The construction period is shortened from 6-8 months to 4-5 months, allowing efficient inventory management. In 2010, the company plans to expand the number of prefab houses to cope with increasing demand.

Higher need for working capital in line with business expansion do not obstruct ability to repay loans. As sale revenue is collected from different projects that require different periods in development and sale, the company ably manages the cashflow.

It also bucks any risk by tapping additional funds from financial institutions. As of 31 December 2009, the company and subsidiaries were able to withdraw Bt3.917.8 million under long-term financing contracts. The company also puts into place the system to monitor sale and construction orders, to ensure the balance in the number of complete houses or inventories and marketing campaigns.

Risk from construction cost volatility

The volatile oil prices throughout 2009 directly buoyed the prices of construction materials, and pushed up the operating cost in the property and construction industries. The company has emphasized on reducing the volatility in the prices of construction materials, which are the main component of the construction cost, through direct and indirect strategies.

Direct strategies: The company upholds the policy for advance procurement of major materials like piles and strengthened steel, at least 6-12 months, to reduce the volatility. Contractors also help in negotiating for the prices of other materials, allowing higher bargaining power to the company in negotiating for a lower price and delivery schedules. In 2009, the company partnered with SCG Building Materials Co.,Ltd, a subsidiary of Siam Cement Public Company Limited, in introducing the supply chain management system to manage the construction works and lower the construction cost in the long term.

Indirect Strategies: Shifting focus to complete house development rather than building on orders allows the company to manage the construction plans. This boosts the company’s price negotiation power and ability to control the cost to some extent. The company learns in advance the total cost, before putting units on sale. This helps increase the cost management efficiency to some extent, and reduce volatility on the construction cost.

Risk from the shortage of contractors

The growing number of government and private construction projects could lead to shortage of quality contractors.

Construction quality has been the company’s priority. The company has applied fair practices to old and new contractors. All are registered and documented, to rate their abilities. The company also issues work guidelines to ensure the desired quality.

The company realized the importance of connection with contractors. The construction works assigned to each contractor is appropriately and constantly rationed, taking into account their readiness in terms of labour and financial capacity. The company also opens door wide for new contractors, to cope with growing projects.

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6.

7.

Fair construction cost pricing, disbursement on completion levels, and assurance that foremen and the company’s engineers work together in the harmonious environment lead to standard and quality works. In 2009, the company introduced the Site Management system to standardize the construction quality at all projects. The system will raise contractors’ trust in the company and encourage them to grow together. Cooperative environment between contractors and the company will keep the risk from contractor shortage at the low level.

Risk from higher competition in the residential market

On recognition of this risk, the company charts the plan to maintain the market share and penetrate in the less competitive segments to increase the market share. The company also focuses on introducing the right products to meet market conditions, as well as expanding into major provincial cities that demonstrate high growth potential.

In 2009, the company directed its focus towards products priced Bt1.2-Bt20 million, to cope with the economic crisis and oil prices. Product types are categorized accordingly to brands, to meet each customer’s demand. All projects are located near the existing and planned mass transit routes to attract buyers in all segments. At all projects, the company invests hugely to create the green environment, which had earned the company the EIA Monitoring Awards for four consecutive years (2005-2008. for the outstanding environment management. In 2008, the company also won 10 energy-saving awards from the Department of Alternative Energy Development and Efficiency, Ministry of Finance, for 7 home designs and 3 property projects.

Thanks to continued progress, the company has high confidence in the capability and readiness to sustain growth story.

The consolidated revenue from the sale of complete houses, condominium units and land amounted to Bt4,477 million and Bt6,266 million in 2006 and 2007, respectively, which represented a 39.95% increase. In 2008, the consolidated revenue reaped on complete houses, condominium units and land sale totaled Bt7,538 million, or a growth rate of 20.30% from 2007. In 2009, the company and subsidiaries reaped Bt5,851 million from the sale of complete houses, down 22.38% on year as the company sold 64 houses worth Bt510 million to Property Perfect Fund in the first quarter of 2008.

In 2010, the company and subsidiaries plan to launch new products in each price range to increase market shares: in the single detached house category, 4 projects with price range of Bt3-Bt5 million, worth totally Bt6,240 million; townhouse, 4-5 projects with price range of Bt1.8-Bt2 million, worth totally Bt3,713 million; 2 Metro Park and Metro Sky condominiums projects, at price of Bt2-Bt5 milion per unit, worth totally Bt6,555 million; 3 UNILOFT condominium projects, at Bt1-Bt2 per unit or totally Bt4,500 million. Altogether, 14 new projects will be launched at various locations with combined value of Bt21,000 million.

Combined with the 15 ongoing projects with outstanding value of Bt21,066 million, the total number of projects under the development of the company and subsidiaries will grow to 29 in 2010 with the combined value of Bt42,066 million. The company is confident that the projects will help boost its market share in each segment, thanks to the company’s experience and strong image. This should significantly reduce the risk from competition.

Risk incurring from unsubordinated convertible debentures On 25 November 2005, the company issued 200,000 unsubordinated convertible debentures, carrying US$100 in face value or a total of US$20 million. Details are as follows;

First conversion date : 25 May 2007 Maturity Date : 25 November 2010 Interest rate : 3.50% per annum Conversion ratio : 1 to 658.4 common shares, at the share price of Bt6.25 apiece.

Other conditions : Each existing debenture after maturity is redeemed at US$130.6 at the US$/Bt41.15 exchange rate. As of 31 December 2008, provisions of Bt809.15 million were set aside to accommodate the redemption.

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8.

The company’s debt to equity ratio as of 31 December 2009 was 1.12:1. The unsubordinated convertible debentures accounted for 11.26% of consolidated debts. As the company has continued business expansion, financial liquidity should be sufficient to repay principal and interest of the unsubordinated convertible debentures. Meanwhile, the unsubordinated convertible debenture holders do not have the Put Option for early redemption.

Risk from guarantees to subsidiaries

The company issued guarantees to the 2 following subsidiaries. The first is wholly-owned subsidiary Estate Perfect Co.,Ltd, capitalized at Bt1,000 million, the developer of single house projects like Perfect Place Sukhumvit 77-Suvarnabhumi and Perfect Park Suvarnabhumi. The company guarantees loans worth Bt2,132.4 million to the company. As of 31 December 2009 , its outstanding debts to financial institutions amounted to Bt272.2 million and it owed another Bt355 million from promissory notes. The other company is Bright Development Bangkok Co.,Ltd, in which the company owns 99.94% of the paid-up capital of Bt1 million. The company develops condominiums like Metro Sky Ratchada. The company guarantees debentures worth Bt462 million to the subsidiary. As of 31 December 2009, the outstanding value of the debentures was Bt187.15 million.

The company’s guarantees are provided accordingly to the shareholding ratios. So far, Estate Perfect’s projects have generated constant revenue to the company. Perfect Place Sukhumvit 77-Suvarnabhumi has been 60% sold while Perfect Park Suvarnabhumi has been 56% sold. Their remaining value as of 31 December 2009 reached Bt2,675 milion. The project under Bright Development Bangkok’s development, Metro Sky Ratchada Phase I, has been 32% sold. The outstanding value as of 31 December 2009 amounted to Bt753 million.

Though the risk from guarantees to subsidiaries will directly affect the company, as a shareholder, but the debt burden incurred from the guarantees to all subsidiaries were included in the consolidated financial statement. As of 31 December 2009, the consolidated debts of the company and subsidiaries totalled Bt7,656.65 million. Against shareholders’ equity of Bt6,820.10 million, the debts accounted for 1.12 times of equity, up from 0.93% at end-2008, due to land investment to accomodate business expansion. However, the ratio is lower than the financial covenant which allows the ratio to rise to no more than 1.75:1.

Moreover, the increasing debts did not affect the conditions attached with financial institutions’ loans. In guaranteeing debentures of a subsidiary (Bright Development Bangkok), the company as the guarantor is allowed to maintain the debt to equity ratio at no more than 2:1.

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Explanation and Analysis of Financial and Operating Results

Property Perfect Public Company Limited’s consolidated financial and operating results for year 2007-2009 were as follows :

The change in accounting policy for investments in subsidiary and affiliated companies in the separate financial statements

In 2007, the company changed accounting policy for investments in subsidiary and affiliated companies from equity method to cost method in compliance with Accounting Standard No. 44 (amended in 2007), regarding to consolidated and separate financial statements, under which investments in subsidiaries, jointly controlled entities and affiliates are to be presented in the separate financial statements under the cost method.

In this regard, the company restated the previous period’s separate financial statements as though the investments in the subsidiaries and affiliate companies had originally been recorded using the cost method. The change had the effect of decreasing net income in the separate income statements for the year ended 31 December 2007 and 2006 by Bt42.8 million (Bt 0.05 per share) and Bt 21.9 million (Bt 0.03 per share), respectively. The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the change in accounting policy for recording investments in subsidiary and associated companies” in the separate statements of changes in shareholders’ equity.

Such change in the accounting policy affects only the accounts related to investments in subsidiary and affiliate companies in the separate financial statements, but does not affect the consolidated financial statements.

Subsidiary Establishment

In 2007, the company established Bright Development Bangkok Co.,Ltd. with a registered capital of Bt1 million, for the development of Metro Park Sky Ratchada. The company now holds 99.94% of the registered and paid-up capital.

The company also established a joint venture with Singapore’s Timberline Investments Pte Ltd, a shopping complex developer.

Centrepoint Shopping Mall Co.,Ltd was established with a registered capital of Bt1 million, held 59.99% of the registered and paid-up capital by the company, to handle commercial development like shopping malls and office buildings. On 22 January 2010, the Board approved the company’s purchase of all shares from Timberline Investments (amounting to 400,000 shares at Bt100 par value). After the acquisition, the company owns 99.99% in Centrepoint. The Board also approved the plan to raise Centrepoint’s registered capital from Bt1 million to Bt500 million.

Performance Overview

In 2007, the company showed an improvement from 2006, thanks to the new projects launched by the company and subsidiaries to meet consumer demand. In 2007, two new projects were launched, along with the new phases of 3 existing projects. In 2008, 4 new projects were launched: 1 each covering single detached houses and townhouses, and two condominiums. In 2009, 4 new projects were unveiled - 3 covering single houses and 1 townhouse, and the expansion phase of an existing condominium project. To date, the company and subsidiaries have 15 projects under development.

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Consolidated Operating Results

• Sales revenue

The company realizes sales of land and house and condominium units as revenues in statements of income when ownership rights are transferred to buyers.

In 2007, consolidated sales revenue generated from land and houses sales amounted to Bt4,697.13 million, up Bt219.85 million from 2006. The company in the year had sales revenue from condominium units of Metro Park Sathorn in the tune of Bt1,469.49 million. The condominium project’s sales were available in late 2005 and its units have been transferred to customers from the first quarter of 2007.

Besides, the company sold land amounted to Bt99.31 million, accounting for 1.58% of the total sales revenue at Bt6,265.93 million – an increase of Bt1,788.64 million or 39.95% year-on-year.

In 2008, consolidated sales revenue contributed from land and houses sales was Bt5,420.14 million, an increase of Bt723.01 million from 2007. The stunning sales revenue was attributable to the sales of 74 units of land and houses with a combined value of Bt510 million to Property Perfect Fund and a Bt639.97 million year-on-year increase in sales revenue of Metro Park Sathorn’s condominium units after the company started transferring condominium units of Metro Park Sathorn Phase 2 in late 2007.

In 2009, the consolidated revenue on land and house sales totaled Bt5,073.42 million, down Bt346.72 million from 2008.

Attributing to the 2008 revenue was the sale of 64 houses worth Bt510 million to Property Perfect Fund. In 2009, the value of sold condominium units in Metro Park Sathorn dropped to Bt778.47 million, against Bt1,330.99 million in 2008 as the company started to transfer the units in Phase II late 2007. Transfers continued throughout 2008 and only some units were left for transfers in 2009. Units in Phase III of the project are expected to be transferred and generate revenue late 2010.

Consolidated sales revenue between 2007 and 2009 by project is presented in table of sales revenue structure .

• Cost of sales and gross margin

Calculation of costs of land and house sales and condominium units, which is the company’s and subsidiaries’ main cost, takes into account all project development costs that estimated to arise proportionately to land sold (and also actual costs) and the costs of sales are realized after the company books revenue from the sale of a particular unit.

The above project development costs are presented at net cost from provision of losses from a write-down in project value. The cost covers the price of land, designs, infrastructure, construction and related interest.

Consolidated costs in 2007 were as follows: - Cost of land and houses sales rose by Bt203.31 million or 6.57% to Bt3,297.30 million. The cost of sales represented 70.20% of the sales revenue, up from 69.10% in the previous year.

- Cost of condominium unit sales were Bt1,041.59 million. The cost of sales accounted for 70.88% of the sales revenue.

- Cost of land sales stood at Bt56.58 million. The cost represented 56.97% of the sales revenue.

For 2008, consolidated cost of sales were as follows : - Cost of land and houses sales amounted to Bt3,767.92 million, up Bt470.62 million or 14.27%. Cost of sales accounted for 69.52% of the sales revenue, below 70.20% in 2007.

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-

Cost of condominium unit sales totaled Bt1,395.41 million, rising by Bt353.82 million from the previous year or 33.97%. Cost of sales represented 66.15% of the sales revenue, down from 70.88% in 2007.

- The higher cost of sales of both land and houses and condominium units resulted from higher revenue while cost of sales to sales revenue ratio fell from the previous year due to price hikes in early 2008.

- Cost of land sales dropped by Bt49.99 million from the previous year to Bt6.59 million. Cost of sales accounted for 76.24% of the sales revenue, up from 56.97% in the previous year.

In 2009, the consolidated sale cost is as follows; - Cost of land and house sales totaled Bt3,514.25 million, down Bt253.67 million or 6.73% from the previous year.

The amount represented 69.27% of sale revenue, down from 69.52% in 2008.

- Cost of condominium totaled Bt551.95 million, down Bt843.46 million or 60.44% from the previous year. It accounted for 70.90% of sale revenue, against 66.15% in 2008.

- The cost of house and land sale dropped due to lower sale revenue. Comparatively, the cost against sale revenue was not changed from the previous year. Meanwhile, the condominium sale cost rose, due to discounts on remaining units of Metro Park Sathorn Phase I and II.

Consolidated gross margin from land and houses sales in 2007, the company’s and subsidiaries’ gross margin from land and houses sales was 29.80%, down from 30.90% in 2006, as costs increased but the company still maintained the price tags.

Gross margin from condominium unit sales was 29.12%.

In 2008, consolidated gross margin rose, thanks to higher consolidated gross margin from land and houses and condominium units sales representing 30.48% and 33.85% respectively. The increase in consolidated gross margin could be attributed to the increase in price tags of housing in early 2008 and condominium phase 2 in late 2007.

In 2009, the consolidated gross profit margin on land and house sale slightly rose to 30.73%, while the condominium gross profit margin dropped to 29.10% due to discounts for Metro Park Sathorn Phase I and II projects.

• Other revenue

Most of other revenue came from utilities, Club House management fee, and confiscated down payments. During 2007 and 2009, other revenue on the consolidated basis totaled Bt55.56 million, Bt79.37 million and Bt95.93 million, respectively. In 2009, asset disposal also raised Bt18.54 million in other revenue.

• Selling and administrative expenses

In 2007, consolidated selling and administrative expenses rose by Bt198.57 million or 18.26% to Bt1,286.33 million as an increase of Bt1,788.64 million or 39.95% in sales revenue to Bt6,265.93 million pushed up expenses for specific business tax and ownership right transfer fee.

The company’s and subsidiaries’ selling and administrative expenses in 2008 increased by Bt12.83 million or 1.04% only to Bt1,244.10 million due to the government’s real estate stimulus measures that cut the specific business tax from 3.3% to 0.11% and the transfer fee from 2% to 0.01%.

Note : Selling and administrative expenses in 2007 presented in comparative financial statements for 2008 fell from the previous ones by Bt55.06 million as the 2008 financial statements presented expenses on provision for the unconverted debentures by maturity of the unsubordinated debentures. Write-off premium on debentures (Bt50.48 million in 2007 and Bt55.25 million in 2008) and finance charges are presented in an item of financial expenses.

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In 2009, sale and administrative cost on the consolidated basis totaled Bt1,034.58 million, down Bt209.52 million or 16.84% from 2008. Sale cost dropped Bt136.52 million, thanks to the Bt67 million decrease in the special business tax and transfer fee. The advertising, public relations and marketing cost also dropped Bt70 million. Meanwhile, administrative cost also declined Bt77.62 million, due to more efficient expense control.

• Other expenses

The company in 2008 sold 64 units of land and houses with a combined value of Bt510 million to Property Perfect Fund.

Under the agreement, the Company agrees to guarantee the minimum revenue of the fund (rental and service revenues before deducting expenses) at Bt55 million for a period of five years, ending 31 December 2012. However, the amount of guaranteed revenue depends on the ratio of the value of the outstanding properties to the value of the properties in which the Fund initially invested, as determined by an appraisal company for the purpose of the initial investment. The company has estimated provision for loss from such guarantee at the present value of the cash flows which it expects to pay to the fund with a total of Bt73.8 million, and recorded it as a separate item under the heading of “loss arising from minimum revenue guarantee” in the income statements for the current period ended 31 December 2008.

In 2009, the company booked Bt9.4 million losses from minimum return guarantee as expense, as the rental revenue under Property Perfect Fund was below expectation.

• Financial expenses

It comprises interest expenses, expenses for provision for unconverted debentures according to maturity of the unsubordinated debentures, write-off premium on debentures and financial charges.

Interest expenses during 2007 to 2009 amounted to Bt225.44million, Bt192.29million and Bt178.96million, respectively.

Expenses for provision for unconverted debentures according to maturity of the unsubordinated debentures and write-off premium on debentures between 2007 and 2009 were Bt50.48 million, Bt55.25 million and Bt60.47million, respectively .

Financial charges during 2007 to 2009 were Bt4.59 million, Bt24.50 million and Bt47.16 million, respectively. In 2009, the fees increased due to the greater issuance of financial papers like secured debentures and bills of exchange.

•

Net profit The consolidated net profit during 2007-2009 were

(Unit : Million Baht) 2008 2007 802.57 411.61

2009

Net profit 399.75

In 2007, the consolidated net profit was Bt411.61 million, up Bt399.61 million or 3,332.34%, due to higher land and houses sales. It realized revenue from transfer condominium units and land sales. Gross profit from land and houses sales fell slightly from 30.90% to 29.80%.

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In 2008, the consolidated net profit shot up Bt390.96 million or 94.99% year-on-year to Bt802.57 million on higher land and houses and condominium units sales revenue and gross margin. Benefits from the government’s real estate stimulus measures which cut the special business tax from 3.3% to 0.11% and the transfer fee from 2% to 0.01%, and the declined interest rate in the second half of 2008 also gave a boost to the consolidated net profit.

In 2009, the consolidated net profit stood at Bt399.75 million, down Bt402.81 million or 50.19% from the previous year, due to lower sales of houses and condominium units as mentioned above. The gross profit margin consequently dropped Bt582.62 million, while sale and administrative cost and other expenses dropoed Bt273.90 million on year due to greater efficiency in controlling expenses. The company also shouldered a Bt91.27 million increase in corporate tax.

Financial Status

Overall Picture of Financial Status

Table presented consolidated financial status

(Unit :Million Baht) Assets Liabilities Shareholders’ equity

As of 31 December 2009 14,476.74 7,656.65 6,820.09

As of 31 December 2008 12,932.87 6,229.64 6,703.23

As of 31 December 2007 12,911.03 6,823.84 6,087.19

Assets

The consolidated assets stood at Bt12,911.03 million, Bt12,932.87 million and Bt14,476.74 million during 2007 and 2009, respectively. In 2008, the assets slightly rose Bt21.84 million or 0.17% on year, while the 2009 assets increased Bt1,543.87 million as the company acquired additional land for condominium and townhouse development. Based on asset structure as of 31 December 2009, project development costs accounted for the largest portion at Bt 8,708.71 million or 60.16% of total assets. Land held for development was the second at Bt3,623.64 million representing 25.03% of total assets. Cash and equivalents was the third largest, at the value of Bt740.59 million or 5.12%, while investment in affiliates was the fourth, at Bt419.74 million or 2.90%. The asset structure is in line with the company and subsidiaries’ business pattern, as shown below.

Project development costs (Unit : Million Baht)

2009 2008 2007

Company – unconsolidated 7,151.91 82.12% 7,085.15 79.33% 6,425.48 80.40%

Subsidiaries 1,556.80 17.88% 1,845.93 20.67% 1,566.37 19.60%

Total* 8,708.71 100.00% 8,931.08 100.00% 7,991.85 100.00%

Note * Project development cost in consolidated financial statements as of 31 December 2007 and 2009.

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• Non-consolidated development cost in 2008 rose by Bt659.67 million, due to the launch of 4 new projects. The cost slightly increased in 2009. Project development costs in 2009 amounted to Bt7,151.91 million, Bt68.81million of which was net allowance for loss on diminution in value of projects booked as required by accounting standard when accounting cost exceeds independent appraisers’ evaluation price.

• Project development costs of the company’s subsidiaries were as follows: - Estate Perfect Co., Ltd. had two projects under development. The costs in 2009 were Bt1,043.84 million, Bt4.647 million were net allowance for loss on diminution in value of projects.

- Bright Development Bangkok Co., Ltd. had 1 project under development. The costs in 2009 amounted to Bt511.40million.

- Centrepoint Shopping Mall Co., Ltd. had project development costs of Bt1.55 million in 2009.

Net land bank 2009 2008 Company – unconsolidated 2,713.86 74.89% 1,585.30 85.21% Subsidiaries 909.78 25.11% 275.07 14.79% Total * 3,623.64 100.00% 1,860.37 100.00% Note * Net land bank mentioned in financial statements at 31 December 2007 and 2009.

(Unit : Million Baht) 2007 2,979.84 100.00% - - 2,979.84 100.00%

• The company’s and subsidiaries’ net land held for development at the end of 2007, 2008 and 20089 had value of Bt2,979.84 million ,Bt1,860.37 million and Bt3,623.64 million,, respectively. The costs incorporated land costs, land development costs, construction costs, capitalized interest, less transferred to costs of sales, land transferred to settle debts under rehabilitation plan and allowance for loss on depreciation of land held for development. The company and subsidiaries recorded allowance for loss on depreciation of land held for development amounting to Bt127.35 million in 2007 and Bt103.99 million during 2008 to 2009. Land plots were purchased in 2009 to accommodate condominium and townhouse development.

The company and subsidiaries will consider reverting land bank to book as project development cost only when the development starts - for example, when the land is being cleared or when development plan is plotted.

Cash and Equivalents 2009 2008 Company – unconsolidated 668.54 90.27% 426.61 93.75% Subsidiaries 72.05 9.73% 28.44 6.25% Total * 740.59 100.00% 455.05 100.00% Note: * Cash and equivalents as appeared in consolidated financial statements as of 31 December 2007-2009

(Unit: Bt million) 2007 397.60 93.76% 26.46 6.24% 424.06 100.00%

Investments in associates

The company recorded profit sharing from investment in associates following profit adjustment of associates as the difference in accounting policy on sales revenue recognition of condominium units.

Investments worth Bt300 million in Krungthep Land Public Company Limited represented a 20% stake in Krungthep Land Plc. (as of 31 December 2005, Krungthep Land’s paid-up capital was Bt1,500 million) and the Board of Directors’ meeting on 18 January 2007 approved the company to subscribe to Krungthep Land’s 6,000,000 capital increased shares at the par value of Bt10 each totaling Bt60 million to retain its shareholding ratio.

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On 16 November 2007, Krungthep Land’s 1/2007 extraordinary shareholders meeting resolved to decrease the registered capital from Bt2,100,000 million to Bt1,780,000,000 by canceling 32,000,000 unissued shares at the par value of Bt10 each for Bt320,000,000. The meeting also approved the recapitalization of Bt450,000,000 from Bt1,780,000 to Bt2,230,000,000 by issuing 45,000,000 capital increased shares at the par value of Bt10 each to reserve for exercise of convertible debentures .

On 31 January 2008, Krungthep Land issued 188,806 units of 5-year, name-registered, unsecured convertible debentures with a face value of USD 100 or total value of USD 18,880,600, to an overseas company. In accordance with the conditions of the convertible debentures resolved by Krungthep Land’s Extraordinary General Meetingof shareholders No.1/2551 on 14 January 2008, Krungthep Land is to pay interest semi-annually at a rate of not exceeding 3% per annum or a dividend yield (whichever is higher) only in years in which Krungthep Land declares a dividend based on the conditions of the convertible debentures and mature on 31 January 2013. They are convertible upon the listing of Krungthep Land’s shares on the Stock Exchange of Thailand (SET) or the Market for Alternative Investment (MAI), or one year from the issue date (whichever is earlier), at a conversion price of Bt13.85 per a common share, on quarterly basis. In case that no interest is paid until the maturity date, Krungthep Land is to redeem the outstanding convertible debentures at a price equal to 1.311651 times in the baht equivalent of the face value. Such redemption is subject to change dependent upon the interest payment made during the life of the debentures.

According to the consolidated financial statements, the company recorded profit sharing under the equity method and realized profit of Bt11.75 million in 2007, Bt7.82 million in 2008 and Bt3.00million in 2009 as revenue in the income statements.

Investments in associates under the equity method were Bt401.45 million in 2007, Bt416.74 million in 2008 and Bt419.74million in 2009.

Other guarantee obligations

The company has guaranteed obligations to its subsidiaries, Estate Perfect Co., Ltd. worth Bt2,132.20million and Bright Development Co., Ltd. worth Bt462.15 million with financial institutions. The company is no need to honour the obligations as the subsidiaries have not yet defaulted on the loans.

Asset quality

The company and subsidiaries have policy to realize revenue from sales of land and houses, land, and condominium units only when ownership rights are transferred to buyers. Thus, the company and subsidiaries record down payment and installments as liabilities in the item of deposits and clients’ advance payment. The overdue installments are booked in the item of trade debtors.

Though the company focuses on selling pre-built houses, some clients prefer to buy houses under construction. The company then sold such houses to customers who are required to pay down payment in installments. The installments are included in trade debtors. Mostly, the debts in this item is cleared in less than a year.

In 2009, consolidated trade debtors receivables totaled Bt41.29million and consolidated allowance for doubtful debts for debtors who unpaid for over 12 months worth Bt11.19million. Thus, net consolidated trade debtors totaled Bt33.10 million. The company believes that the allowances are sufficient for the current situation. Consolidated trade debtors can be broken down into 2 groups.

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79

Customers with overdue installments

Customers with overdue installments are those who failed to pay installments for houses under construction. They had overdue installments of Bt26.90million or 65.14% of total overdue loans.

Customers with overdue transfer fee

Customers with overdue transfer fee are those who did not pay all debts on the transaction date, accounting for 34.86%.

However, the overdue loan worth Bt14.39 million representing 0.10% of total assets, an insignificant ratio. The company also made allowance worth Bt11.19 million.

For clients who fail to pay the debts for 6 months or longer, the company has contacted them to pay their obligations and some cases have been brought to court. The company believes that the allowance for doubtful debts is sufficient under the present circumstances.

Liquidity

Statements of cash flow between 2007 and 2009 were as follows :

(Unit: Million Baht)

Item 2009 2008 2007

Cash flow from operating activities 1,233.59 1,330.43 1,265.06

Cash flow from investment activities (2,000.86) (414.31) (333.62)

Cash flow from financing activities 1,052.81 (885.13) (820.13)

Net cash flow increase (decrease) 285.54 30.99 111.31

The operating cashflow on the consolidated basis stayed in the positive levels at Bt1,265.05 million, Bt1,330.43 million adn Bt1,233.59 million during 2007 and 2009, respectively. This allowed net cash flow to stay in the positive level of Bt111.31 million, Bt30.99 million and Bt285.54 million during the years.

Cash flow from investment activities has been in the negative area, totaling Bt333.62 million, Bt414.31million and Bt2,000.86 million during 200-2009, due to the company’s land bank purchases to prepare for the company’s projects. Details as follow: - In 2007, the company’s advance payments for land purchases and the land bank purchases amounted to Bt45.26 million, deposits pledged as collateral amounted to Bt225.28 million. The company in 2007 also invested additional Bt60 million in Krungthep Land to retain its shareholding ratio.

- In 2008, the company’s and subsidiaries’ cash flow from investment activities came from advances for purchases of land and acquisition of land for development with a combined amount of Bt502.88 million. The company and subsidiaries invested in Property Perfect Fund amounting to Bt32.5 million or 6.24% of its registered capital and Quality Hospitality Leasehold Property Fund with the amount of Bt20 million or 1.1% of its registered capital. Besides, bank deposit with guaranteed obligations decreased to Bt217.27 million.

- In 2009, consolidated payments and advance payment for more land plots totaled Bt1,939.15 million. Another Bt60 million was put as downpayment for a company’s shares worth Bt507 million.

Regarding cashflow from financing activities during 2007 and 2008, in 2007 debt repayment totaled Bt470.13 million aside from bond redemption worth Bt350 million. In 2008, debt repayment rose to Bt696.12 million while dividend payment totaled Bt189.01 million. In 2009, the company raised Bt1,329.40 million from the issuance of debentures and Bt1,612.10 million from bills of exchange and promissory notes. Debt repayment totaled Bt1,6015.16 million while dividend payment topped Bt283.54 million

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80

Dividend payment

The company has paid dividends as follows:

- For the 2007 performance, shareholders received Bt0.24 per share, totaling Bt189.01 million, as of 30 May 2008.

- For the 2008 performance, shareholders received Bt0.36 per share, totaling Bt283.54 million, as of 29 May 2009

Source of Funds

Liabilities

In 2009, consolidated liabilities totaled Bt7,656.65 million (Bt6,674 million belonging to the company and Bt982.65 million to subsidiaries), up by Bt1,427.01 million from 2008. Major changes concern; - Liabilities rose on the net issuance of Bt1,331.78 million debentures, Bt1,266.26 million bill of exchange, Bt355 million promissory notes, as well as the overdue corporate tax of Bt76.27 million and Bt57.07 million reserves against convertible unsubordinated debentures which were not converted on maturity.

- Liabilities declined due to the net loan repayment of Bt817.30 million: to retire short-term loans worth Bt559.27 million, repay creditors under the restructuring plan worth Bt228.60 million, and provisions against possible loss from return guarantee worth Bt30.87 million.

Meanwhile, of total consolidated liabilities in 2009, long-term loans represented 27.91%, secured bonds 23.43%, bill of exchange 16.54%, convertible unsubordinated debentures 10.61%, and promissory notes issued for land purchases 4.64%.

Details are as follows;

Long-term loans

In 2009, long-term loans amounted to Bt2,137.14 million, of which Bt21,865.03million were borrowed by the company (Bt148.68million is due within one year) and Bt 272.11 million were borrowed by subsidiaries. (Bt45.54 million is due within one year). The loans were to finance project development and land purchases for future project development. The loan details are:

(Unit : Million Baht) 31 December 2009 31 December 2008

The The

Company Only Subsidiaries Total Company Only Subsidiaries Total

Long-term loans 1,865.03 272.11 2,137.14 2,564.97 389.47 2,954.44

Less : loans due within 1 years 148.68 45.54 194.22 228.88 4.22 233.10

Long-term loans (net) 1,716.35 226.57 1942.92 2,336.09 385.25 2,721.34

In addition, the company guaranteed loans extended by financial institutions to subsidiaries with a combined amount of Bt2,594.4 million. • Secured debentures

As of 31 December 2008, outstanding secured debentures with full redemption on maturity were worth Bt1,793.926 million; Bt1,606.776 million issued by the company to fund land purchases and increase working capital. The remaining Bt187.15 million was issued by wholly-owned subisidiary, Bright Development Bangkok Co.,Ltd, to finance the purchae of a land plot on Ratchadapisek Road (around Suthisarn-Huay Kwang area). Details of the debentures are as follows:

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Secured debentures issued by Property Perfect Public Company Limited

Issue Value (Bt million) Issue Date Maturity Date Secured debentures # 1/2009 506.776 3 June 2009 3 June 2012 6% rate, payable every 3 months

Secured debentures # 2/2009 300.000 14 Aug 2009 14 Feb 2011 Series 1 4.85% coupon rate,

payable every 3 months

Secured debentures # 2/2009 800.000 14 Aug 2009 14 Aug 2012 Series 2 6% coupon rate, payable

every 3 months

Total

1,606.776

Conditions - The ratio of collateral (exclusive of collateral on bank guarantee) against outstanding debenture value must be maintained at 1.6:1.

- The debt to equity ratio must be maintained below 1.75:1.

- Collateralized assets must be at least 1.6 time of outstanding debenture value.

- The debt to equity ratio must be maintained below 1.75:1.

- Collateralized assets must be at least 1.6 time of outstanding debenture value.

- The debt to equity ratio must be maintained below 1.75:1.

Secured debentures issued by Bright Development Co., Ltd. Issue Secured Debentures

Total

Value (Bt million) Issue Date Maturity Date 462.15 18 Aug 2009 28 Nov 2009

462.15

Conditions - Outstanding debentures must not exceed 65% of collateralized assets.

- The debt to equity ratio of the guarantor (the company) must not exceed 2:1.

On 18 August 2008, Bright Development Bangkok Co., Ltd (“Bright”), the company’s subsidiary, issued and offered 462,150 units of secured debentures with a face value of Bt1,000 or total value of Bt462,150,000 to a financial institution in accordance with a resolution of Bright’s Extraordinary General Meeting of Shareholders on 15 May 2007. The debentures’ maturity date was slated on 28 November 2008. The debentures carried a coupon rate of 5.55256% per annum on top of Thai Baht Interest Rate Fixing (THBFIX). It was guaranteed by the company, mortgaged by partial land and construction of the company’s and Bright’s projects, and pledged by Bright’s shares held by the company.

On 26 February 2009, Bright entered into an agreement to amend details of the debentures with the financial institution. Under the amended agreement, redemption and interest payment is made on installment, repayment must be done within May 2009 and it has a coupon rate of 8.55256% per annum on top of THBFIX On 27 May 2009, Bright Development sought amendments to the issue with the financial institution, with schedules to redeem the debentures with interest payment in small lots. All debentures were redeemed within February 2010. The coupon rate was fixed in Thai baht, plus 8.55256% per annum in differential until November 2009 and the differential during December 2009 and February 2010 was 10.05256%.

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• Bill of Exchange

In 2009, bills of exchange worth Bt1,266.26 million were issued entirely by the company, carrying the interest rate of 4.55% per annum. They will mature during June and September 2010.

• Unsubordinated convertible debentures

The issuance objective was to refinance loans and reserve as working. Debentures details are:

Issue Value Issue date Maturity date Condition

(Million Baht))

Unsubordinated convertible 823.00 25 November 25 November - Conversion ratio of 1 debenture to 658.4

Debentures (200,000 units at

2005 2010 common shares or at Bt6.25 per share

face value of US$ 100)

- Unconverted debentures will be

redeemed at

US$131.60 per unit at the exchange rate

of Bt41.15/US$

- One individual nominated by foreign

investors must be appointed a director.

- The 1/2005 unsubordinated convertible debentures (only liabilities part) as at 31 December 2009 valued Bt812.56 million (On 25 November 2005, the company issued US$20 million convertible debentures for sales). Booking convertible debentures in balance sheets will be divided into two parts – liabilities and equity – as follows : • Convertible debentures- liabilities component is computed from cash flow of principal and interest rate to be paid in future less the current market interest rate • Convertible debentures-equity component is calculated from outstanding convertible debentures less liabilities. The difference between the liabilities’ book value and convertible debentures’ face value will be amortized based on convertible debentures’ maturity

• Promissory notes

Outstanding value as of 31 December 2009 totaled Bt355 million. They were issued to finance land purchase, without any interest. The P/N were avaled by a financial institution, to mature on 4 March 2010.

• Shareholders’ equity

Consolidated shareholders’ equity in 2009 totaled Bt6,820.09 million, increase Bt 116.86 million from 2008. resulted from the entire net profit in 2009.

Shareholders’ equity structure incorporates Bt4,726.33 million paid-up capital at Bt6 par value, Bt(44.09 )million discount on share, unsubordinated convertible debentures’ equity component worth Bt31.01million (issued by the company worth Bt23.54 million and by associates worth Bt7.47 million), The unrealized loss incurred by the Bt4.75 million drop in investment value, legal provisions of Bt179.10 million, unallocated accumulated earning of Bt1,937.95 million, and minority shareholder’ equity in subsidiaries which dropped Bt5.46 million.

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In 2008, outstanding unconverted warrants issued to creditors without collaterals were 8.87 million units. Each warrant is entitled to a 1 common share conversion at the price of Bt0.01 per share. The 10-year warrants can be exercised on the last day of the second and fourth quarter, starting from the fourth quarter of 2002.

Debt to equity ratio

The debt to equity ratio in 2007 stood at 1.12:1, before falling to 0.93:1 in 2008 and rising to 1.12:1 in 2009 due to more land acquisition to accommodate expansion.

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Report of Independent Auditor To the Shareholders of Property Perfect Public Company Limited

I have audited the accompanying consolidated balance sheet of Property Perfect Public Company Limited and its subsidiaries as at 31 December 2008and2009, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the year then ended, and the separate financial statements of Property Perfect Public Company Limited for the same period. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Property Perfect Public Company Limited and its subsidiaries and of Property Perfect Public Company Limited as at 31 December 2008 and 2009, the results of their operations, and cash flows for the year then ended, in accordance with generally accepted accounting principles.

Siraporn Ouaanunkun

Certified Public Accountant (Thailand) No.3844

Ernst & Young Office Limited Bangkok: 26 February 2010

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85

Property Perfect Public Company Limited and its subsidiaries

Balance sheets As at 31 December 2009 and 2008

(Unit: Baht)

Note

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Assets Current assets Cash and cash equivalents 740,586,086 455,045,559 668,539,373 428,606,931 Trade accounts receivable 41,293,226 44,096,309 37,265,493 40,481,559 Less: Allowance for doubtful accounts (11,193,299) (10,293,299) (11,193,299) (10,293,299) Trade accounts receivable, net 7 30,099,927 33,803,010 26,072,194 30,188,260 Account receivable - land 8 30,958,000 35,358,000 30,958,000 35,358,000 Project development costs, net 9 8,708,711,350 8,931,082,106 7,151,912,394 7,085,145,739 Leasehold rights awaiting sale, net 18 - - 64,923,228 60,717,672 Other current assets Advances to contractors, net 86,230,565 44,745,733 86,230,565 42,216,371 Prepaid expenses 14,125,428 14,679,752 14,125,428 14,679,752 Others 29,428,369 15,683,741 25,420,517 12,105,102 Total current assets 9,640,139,725 9,530,397,901 8,068,181,699 7,709,017,827 Non-current assets Restricted deposits 10 1,448,880 8,857,942 1,448,880 8,857,942 Advances to related company 6 - - 1,500,000 1,500,000 Loans to related companies and interest receivable 6 - - 792,040,997 412,052,946 Investments in subsidiaries 11 - - 541,057,356 541,057,356 Investment in associate 12 419,736,574 416,738,479 359,999,240 359,999,240 Other long-term investments, net 13 53,726,160 51,695,442 53,726,160 51,695,442 Land held for development, net 14 3,623,641,774 1,860,368,585 2,713,863,099 1,585,301,544 Advances for purchases of land 15 128,775,752 476,159,648 79,020,752 388,904,213 Property, plant and equipment, net 16 341,693,881 400,586,425 290,676,270 347,716,575 Leasehold rights, net 17 117,805,081 119,566,744 52,881,853 58,849,072 Other non-current assets Withholding tax deducted at source 37,088,340 40,932,044 36,715,792 36,715,792 Deposit for purchase of shares 11 60,000,000 - 60,000,000 - Others 52,688,129 27,569,334 48,176,865 23,379,946 Total non-current assets 4,836,604,571 3,402,474,643 5,031,107,264 3,816,030,068 Total assets 14,476,744,296 12,932,872,544 13,099,288,963 11,525,047,895

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

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86

Property Perfect Public Company Limited and its subsidiaries

Balance sheets (continued) As at 31 December 2009 and 2008

(Unit: Baht)

Note

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Liabilities and shareholders’ equity Current liabilities Short-term loans from financial institutions 19 - 528,268,062 - 508,000,000 Trade accounts payable 485,171,615 472,883,812 408,011,684 402,828,046 Note payable 20 355,000,000 - - - Loan from individual 21 - 31,000,000 - - Bills of exchange payable 22 1,266,264,051 - 1,266,264,051 - Current portion of debentures 23 187,150,000 462,150,000 - - Creditors per rehabilitation plan 24 37,037,390 265,633,156 37,037,390 265,633,156 Unsubordinated convertible debentures - liability component 25 812,558,417 - 812,558,417 - Current portion of long-term loans 26 194,222,860 233,096,097 148,683,961 228,880,399 Amounts due to related companies 6 - - 81,246,015 83,954,452 Advance from director 6 80,000,000 80,000,000 - - Deposits and cash received in advance 7 107,467,518 112,235,496 88,889,110 103,684,414 Short-term provisions 27 212,467,366 26,483,178 212,467,366 26,483,178 Other current liabilities Accrued interest 16,055,682 22,933,411 14,803,034 17,406,514 Accrued expenses 159,997,229 193,251,857 114,746,406 150,017,814 Accrued corporate income tax 76,274,504 - 53,373,063 - Others 62,509,571 53,720,080 58,016,130 53,568,664 Total current liabilities 4,052,176,203 2,481,655,149 3,296,096,627 1,840,456,637 Non-current liabilities Unsubordinated convertible debentures - liability component 25 - 809,153,899 - 809,153,899 Debentures, net of current portion 23 1,606,776,162 - 1,606,776,162 - Long-term loans, net of current portion 26 1,942,916,047 2,721,339,526 1,716,346,538 2,336,094,030 Deposits and cash received in advance for sublease agreement 54,783,437 57,712,083 54,783,437 57,712,083 Long-term provisions 27 - 159,782,083 - 159,782,083 Total non-current liabilities 3,604,475,646 3,747,987,591 3,377,906,137 3,362,742,095 Total liabilities 7,656,651,849 6,229,642,740 6,674,002,764 5,203,198,732

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

Property Perfect Public Company Limited

87

Property Perfect Public Company Limited and its subsidiaries

Balance sheets (continued) As at 31 December 2009 and 2008

(Unit: Baht)

Note

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Shareholders’ equity Share capital 28 Registered 1,092,000,000 ordinary shares of Baht 6 each 6,552,000,000 6,552,000,000 6,552,000,000 6,552,000,000 Issued and fully paid 787,721,620 ordinary shares of Baht 6 each 4,726,329,720 4,726,329,720 4,726,329,720 4,726,329,720 Share discount 29 (44,093,444) (44,093,444) (44,093,444) (44,093,444) Share subscriptions received in advance 29 25 - 25 - Unsubordinated convertible debentures - equity component 25 31,011,986 31,011,986 23,535,270 23,535,270 Unrealised loss Revaluation deficit on changes in value of investments (4,750,330) (5,396,570) (4,750,330) (5,396,570) Retained earnings

Appropriated - statutory reserve 30 179,100,000 159,100,000 179,100,000 159,100,000 Unappropriated 1,937,950,688 1,837,858,815 1,545,164,958 1,462,374,187 Equity attributable to the Company’s shareholders 6,825,548,645 6,704,810,507 6,425,286,199 6,321,849,163 Minority interest - equity attributable to minority shareholders of subsidiaries (5,456,198) (1,580,703) - - Total shareholders’ equity 6,820,092,447 6,703,229,804 6,425,286,199 6,321,849,163 Total liabilities and shareholders’ equity 14,476,744,296 12,932,872,544 13,099,288,963 11,525,047,895

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

Annual Report 2009

88

Property Perfect Public Company Limited and its subsidiaries

Income statements

For the years ended 31 December 2009 and 2008

(Unit: Baht)

Note

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Revenues Revenues from sales of land and houses 5,073,423,380 5,420,143,581 4,067,577,404 4,715,701,794 Revenues from sales of residential condominium units 778,469,844 2,109,457,909 778,469,844 2,109,457,909 Revenue from sale of land - 8,644,000 - 8,644,000 Other income Interest income 606,892 1,578,989 42,494,943 30,730,466 Revenues from forfeiture of down payments 8,488,292 14,535,519 8,017,699 13,554,546 Others 86,834,101 63,252,281 80,445,648 56,410,041 Total revenues 5,947,822,509 7,617,612,279 4,977,005,538 6,934,498,756 Expenses Cost of sales of land and houses 3,514,251,255 3,767,924,462 2,796,302,041 3,307,202,035 Cost of sales of residential condominium units 551,946,601 1,395,411,661 551,946,601 1,395,411,661 Cost of sale of land - 6,589,828 - 6,589,828 Selling expenses 262,386,598 398,904,663 236,867,700 363,181,650 Administrative expenses 700,697,148 778,316,723 601,055,593 674,045,826 Management benefit expenses 6 71,497,059 66,876,730 56,235,043 53,088,203 Loss arising from minimum revenue guarantee 27 9,422,551 73,800,000 9,422,551 73,800,000 Total expenses 5,110,201,212 6,487,824,067 4,251,829,529 5,873,319,203 Income before share of income from investment in associate, finance cost and corporate income tax 837,621,297 1,129,788,212 725,176,009 1,061,179,553 Share of income from investment in associate 12 2,998,095 7,815,893 - - Income before finance cost and corporate income tax 840,619,392 1,137,604,105 725,176,009 1,061,179,553 Finance cost (286,591,111) (272,035,652) (230,722,567) (231,064,340) Income before corporate income tax 554,028,281 865,568,453 494,453,442 830,115,213 Corporate income tax (154,276,756) (63,002,412) (108,127,524) (31,846,488) Net income for the year 399,751,525 802,566,041 386,325,918 798,268,725

Net income (loss) attributable to: Equity holders of the parent 403,627,020 804,546,744 386,325,918 798,268,725 Minority interests of the subsidiaries (3,875,495) (1,980,703)

399,751,525 802,566,041 Earnings per share 32 Basic earnings per share Net income attributable to equity holders of the parent 0.512 1.021 0.490 1.013 Diluted earnings per share Net income attributable to equity holders of the parent 0.507 0.957 0.485 0.951

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

Property Perfect Public Company Limited

89

Property Perfect Public Company Limited and its subsidiaries

Cash flow statements For the years ended 31 December 2009 and 2008

(Unit: Baht)

Note

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Cash flows from operating activities Income before tax 554,028,281 865,568,453 494,453,442 830,115,213 Adjustments to reconcile income before tax to net cash provided by (paid from) operating activities: Share of income from investment in associate (2,998,095) (7,815,893) - - Depreciation and amortisation 66,381,957 67,761,368 57,176,936 58,976,422 Amortisation of prepaid expenses 22,235,190 30,791,634 20,098,965 14,924,392 Amortisation of premium on debentures 3,404,517 3,272,503 3,404,517 3,272,503 Provision for unconverted debentures 57,067,834 51,976,915 57,067,834 51,976,915 Amortisation of deferred debenture issuing costs 2,376,162 - 2,376,162 - Rental received in advance recognition (4,128,646) (4,334,204) (4,128,646) (4,334,204) Allowance for loss on impairment of investments (reversal) (229,578) 352,082 (229,578) 352,082 Loss arising from minimum revenue guarantee 9,422,551 73,800,000 9,422,551 73,800,000 Loss on impairment of assets 4,143,880 - 4,143,880 - Loss (gain) on sales of property, plant and equipment (18,415,498) 6,630,452 (18,415,498) 6,630,452 Doubtful accounts 900,000 - 900,000 - Dividend income (5,240,888) - (5,240,888) - Interest income (606,892) (1,578,989) (42,494,943) (30,730,466) Interest expenses 178,957,075 192,290,335 138,043,527 171,712,724 Income from operating activities before changes in operating assets and liabilities 867,297,850 1,278,714,656 716,578,261 1,176,696,033 Decrease (increase) in operating assets Trade accounts receivable 2,803,083 (350,572) 3,216,066 2,342,578 Account receivable - land 4,400,000 - 4,400,000 - Project development costs 909,619,614 524,638,582 596,869,953 970,895,636 Advances to contractors (41,484,832) (11,828,859) (44,014,194) (9,299,497) Prepaid expenses (21,680,866) (40,031,254) (19,544,641) (24,164,012) Other current assets (13,744,628) (1,234,942) (13,315,415) (717,120) Other non-current assets (25,118,795) (1,544,035) (24,796,917) (1,228,869) Increase (decrease) in operating liabilities Trade accounts payable 12,287,803 52,848,217 5,183,638 27,917,124 Amounts due to related companies - - (2,708,437) 2,977,174 Deposits and cash received in advance (4,767,978) (106,357,797) (14,795,304) (112,777,724) Cash paid for minimum revenue guarantee (40,366,736) (13,568,415) (40,366,736) (13,568,415) Other current liabilities (20,138,711) 53,042,948 (28,779,010) 30,149,562 Cash from operating activities 1,629,105,804 1,734,328,529 1,137,927,264 2,049,222,470 Cash paid for interest expenses (319,525,273) (365,347,351) (250,725,228) (320,856,507) Cash paid for corporate income tax (80,053,101) (97,461,068) (54,754,461) (68,562,280) Cash received for interest income 606,892 1,578,989 - 1,529,626 Return of withholding tax 3,459,197 57,329,685 - 57,329,685 Net cash from operating activities 1,233,593,519 1,330,428,784 832,447,575 1,718,662,994 The accompanying notes are an integral part of the financial statements.

Annual Report 2009

90

Property Perfect Public Company Limited and its subsidiaries

Income statements

For the years ended 31 December 2009 and 2008

(Unit: Baht)

Note

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Cash flows from investing activities Decrease in restricted deposits 7,409,062 217,265,217 7,409,062 217,265,217 Decrease in advances to related company - - - 51,620,271 Increase in loans to related companies - - (350,992,429) (129,911,998) Cash received for interest income - - 13,499,321 22,522,811 Cash received for dividend income 5,240,888 - 5,240,888 - Increase in deposit for purchase of shares (60,000,000) - (60,000,000) - Increase in other long-term investments (1,154,900) (52,458,150) (1,154,900) (52,458,150) Increase in land held for development (1,487,097,620) (88,787,146) (1,278,141,421) (88,787,146) Increase in advances for purchases of land (112,053,552) (414,089,013) (63,798,552) (376,296,213) Increase in leasehold rights (1,449,432) (1,438,452) (1,449,432) (1,438,452) Increase in property, plant and equipment (36,283,003) (74,848,070) (29,084,083) (67,799,879) Proceeds from sales of property, plant and equipment 24,531,388 49,000 24,531,388 49,000 Net cash used in investing activities (1,660,857,169) (414,306,614) (1,733,940,158) (425,234,539) Cash flows from financing activities Increase (decrease) in bank overdrafts and short-term loans from financial institutions (528,268,062) 206,627,484 (508,000,000) 201,359,422 Increase in note payable 15,000,000 - - - Increase (decrease) in loans from individual/other company (31,000,000) 21,000,000 - - Increase in bills of exchange payable 1,257,099,868 - 1,257,099,868 - Decrease in long-term loans (817,296,716) (553,117,950) (699,943,930) (441,984,819) Increase (decrease) in debentures 1,329,400,000 12,150,000 1,604,400,000 (450,000,000) Decrease in creditors per rehabilitation plan (228,595,766) (382,777,076) (228,595,766) (382,777,076) Dividend paid (283,535,147) (189,014,648) (283,535,147) (189,014,648) Net cash from (used in) financing activities 712,804,177 (885,132,190) 1,141,425,025 (1,262,417,121) Net increase in cash and cash equivalents 285,540,527 30,989,980 239,932,442 31,011,334 Cash and cash equivalents at beginning of year 455,045,559 424,055,579 428,606,931 397,595,597 Cash and cash equivalents at end of year 740,586,086 455,045,559 668,539,373 428,606,931

Supplemental cash flow information Non-cash transactions Transfer advances for purchases of land to project development costs and land held for development 459,437,448 89,392,000 373,682,013 9,392,000 Transfer land held for development to project development costs 480,418,666 1,212,647,661 480,418,666 1,487,714,703 Transfer property, plant and equipment to project development costs 21,898,776 - 21,898,776 - Transfer advances to related company to loans to related companies - - - 28,379,729 Issue promissory notes to pay land costs 340,000,000 - - -

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

Property Perfect Public Company Limited

91

Annual Report 2009

92

Consolidated financial statements Equity attributable to the parent’s shareholders

Minority interest -

Unsubordinated

Total equity attributable Issued and Share subscriptions convertible Revaluation deficit Retained earnings equity attributable to minority Total fully paid Share received debentures - on changes in Statutory reserve Unappropriated to the parent’s shareholders share capital discount in advance equity component value of investments shareholders of subsidiaries

(Unit: Baht)

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

Balance - as at 31 December 2007 4,724,947,164 (42,713,192) 1,938 23,535,270 - 119,100,000 1,262,326,719 6,087,197,899 - 6,087,197,899 Expenses recognised directly in equity: Investments in available-for-sale securities Loss recognized in shareholders’ equity - - - - (5,396,570) - - (5,396,570) - (5,396,570) Net expenses recognised directly in equity - - - - (5,396,570) - - (5,396,570) - (5,396,570) Net income (loss) for the year - - - - - - 804,546,744 804,546,744 (1,980,703) 802,566,041 Total income and expenses for the year - - - - (5,396,570) - 804,546,744 799,150,174 (1,980,703) 797,169,471 Dividend paid (Note 35) - - - - - - (189,014,648) (189,014,648) - (189,014,648) Unappropriated retained earnings transferred to statutory reserve - - - - - 40,000,000 (40,000,000) - - - Additional ordinary shares as a result of exercised warrants 1,382,556 (1,380,252) (1,938) - - - - 366 - 366 Increase in unsubordinated convertible debentures - equity component - - - 7,476,716 - - - 7,476,716 - 7,476,716 Minority interest - equity attributable to minority shareholders of subsidiaries - - - - - - - - 400,000 400,000 Balance - as at 31 December 2008 4,726,329,720 (44,093,444) - 31,011,986 (5,396,570) 159,100,000 1,837,858,815 6,704,810,507 (1,580,703) 6,703,229,804

Balance - as at 31 December 2008 4,726,329,720 (44,093,444) - 31,011,986 (5,396,570) 159,100,000 1,837,858,815 6,704,810,507 (1,580,703) 6,703,229,804 Income recognised directly in equity: Investments in available-for-sale securities Gain recognized in shareholders’ equity - - - - 646,240 - - 646,240 - 646,240 Net income recognised directly in equity - - - - 646,240 - - 646,240 - 646,240 Net income (loss) for the year - - - - - - 403,627,020 403,627,020 (3,875,495) 399,751,525 Total income and expenses for the year - - - - 646,240 - 403,627,020 404,273,260 (3,875,495) 400,397,765 Dividend paid (Note 35) - - - - - - (283,535,147) (283,535,147) - (283,535,147) Unappropriated retained earnings transferred to statutory reserve - - - - - 20,000,000 (20,000,000) - - - Share subscriptions received in advance - - 25 - - - - 25 - 25 Balance - as at 31 December 2009 4,726,329,720 (44,093,444) 25 31,011,986 (4,750,330) 179,100,000 1,937,950,688 6,825,548,645 (5,456,198) 6,820,092,447

For the years ended 31 December 2009 and 2008

Statements of changes in shareholders’ equity

Property Perfect Public Company Limited and its subsidiaries

(Unit: Baht)

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

6,321,849,163

1,462,374,187

- 25 6,425,286,199

366 6,321,849,163

- 1,462,374,187

(20,000,000) - 1,545,164,958

-

(40,000,000)

646,240 646,240 386,325,918 386,972,158 (283,535,147)

(5,396,570) (5,396,570) 798,268,725 792,872,155 (189,014,648)

- - 798,268,725 798,268,725 (189,014,648)

- - 386,325,918 386,325,918 (283,535,147)

5,717,991,290

893,120,110

Separate financial statements Revaluation

Unsubordinated Issued and Share subscriptions convertible deficit Retained earnings Total fully paid Share received debentures - on changes in Statutory Unappropriated share capital discount in advance equity component value of investments reserve

Balance - as at 31 December 2007

4,724,947,164 (42,713,192) 1,938 23,535,270 - 119,100,000 Expenses recognised directly in equity: Investments in available-for-sale securities Loss recognized in shareholders’ equity

- - - - (5,396,570) - Net expenses recognised directly in equity - - - - (5,396,570) - Net income for the year

- - - - - - Total income and expenses for the year - - - - (5,396,570) - Dividend paid (Note 35) - - - - - - Unappropriated retained earnings transferred to statutory reserve - - - - - 40,000,000 Additional ordinary shares as a result of exercised warrants 1,382,556 (1,380,252) (1,938) - - - Balance - as at 31 December 2008

4,726,329,720 (44,093,444) - 23,535,270 (5,396,570) 159,100,000

Balance - as at 31 December 2008

4,726,329,720 (44,093,444) - 23,535,270 (5,396,570) 159,100,000 Income recognised directly in equity: Investments in available-for-sale securities Gain recognized in shareholders’ equity - - - - 646,240 - Net income recognised directly in equity - - - - 646,240 - Net income for the year - - - - - - Total income for the year - - - - 646,240 - Dividend paid (Note 35) - - - - - - Unappropriated retained earnings transferred to statutory reserve - - - - - 20,000,000 Share subscriptions received in advance - - 25 - - - Balance - as at 31 December 2009

4,726,329,720 (44,093,444) 25 23,535,270 (4,750,330) 179,100,000

For the years ended 31 December 2009 and 2008

Statements of changes in shareholders’ equity (Continued)

Property Perfect Public Company Limited and its subsidiaries

Property Perfect Public Company Limited

93

Property Perfect Public Company Limited and its subsidiaries

Notes to consolidated financial statements For the years ended 31 December 2009 and 2008

1. General information

Property Perfect Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in the property development and its registered address is 100/1 Vorasombat Building, 17th Floor, Rama 9 Road, Huaykwang, Bangkok.

2. Basis of preparation 2.1

2.2

The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession 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 30 January 2009, 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 such financial statements in Thai language.

The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

Basis of consolidation a) The consolidated financial statements include the financial statements of the Company (“the Company”) and the following subsidiary companies (“the subsidiaries”):

Country of

Company’s name Nature of business incorporation

Estate Perfect Company Limited Property development Thailand Perfect Satellite Services Company Limited Clubhouse management Thailand Bright Development Bangkok Company Limited Property development Thailand Centrepoint Shopping Mall Company Limited Property development Thailand

Company’s name

Estate Perfect Company Limited

Perfect Satellite Services Company Limited

Bright Development Bangkok Company Limited

Centrepoint Shopping Mall Company Limited b) c) d) e)

Annual Report 2009

Percentage of shareholding 2009 2008 Percent Percent 100.00 100.00 99.98 99.98 99.94 99.94 59.99 59.99

Assets as Revenues as a percentage a percentage to to the consolidated total the consolidated total assets revenues for the years as at 31 December ended 31 December 2009 2008 2009 2008 Percent Percent Percent Percent 14.58 13.74 17.01 9.34 0.04 0.05 - - 3.65 4.06 - - 0.05 0.02 - -

Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent significant accounting policies.

Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements.

Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet.

94

F)

2.3

The Board at the 12 November 2009 meeting resolved to raise registered capital of Bright Development Bangkok Co.,Ltd from Bt1 million (10,000 common shares at Bt100 par value), to Bt500 million (5 million shares at Bt100 par value). The capital increase, solely by the company’s injection, is pending for registration.

The separate financial statements, which present investments in subsidiaries and associate presented under the cost method, have been prepared solely for the benefit of the public.

3. The enforcement of new accounting regulations

In June 2009, the Federation of Accounting Professions issued the regulations No.12/2009 on accounting numbering to meet the international standards. Accounting references in this financial statement are in compliance with the regulations.

The Federation of Accounting Professions also issued regulations No.86/2008 and No.16/2009, requiring the enforcement of the following guidelines in accounting and financial statements.

3.1 The accounting and financial statement standards and accounting guidelines which are effective

in this financial year

Accounting Framework (amended in 2007)

Accounting Standard # 36 (amended in 2007) Asset depreciation

Accounting Standard # 5 (amended in 2007) Non-current assets reserved for sale and cancelled

operations

Accounting guidelines on leasehold rights

Accounting guidelines on business consolidation under single control

The standards on accounting and financial statements as well as guidelines have been applied with the financial year, which starts on or after 1 January 2009. The company’s management considered that the guidelines on business consolidation are irrelevant to the company’s operations. Meanwhile, the Accounting Framework (amended in 2007), and Accounting Standards #36 (amended in 2007) and #5 (amended in 2007) as well as the guidelines on leasehold rights do not incur significant impacts on the current year’s balance sheet.

3.2 Accounting standards not yet in effect

Effective Date

Accounting Standard # 20 Concerning government financial supports and disclosure 1 January 2012

of government supports.

Accounting Standard # 24 Disclosure on connected individuals or juristic entities 1 January 2011

(amended in 2007)

Accounting Standard # 40 Property for investment 1 January 2011

Companies can enforce Accounting Standard #24 (amended in 2007) and Accounting Standard #40 ahead of effective date.

The company’s management considered Accounting Standard #20 is irrelevant to the operations, while the Accounting Standard #24 (amended in 2007) and Accounting Standard #40 will shed no significant impact on the company’s balance sheet when they are effective.

4. Significant accounting policies

4.1

Revenues recognition Revenues from sales of land and houses / residential condominium units / land Revenues from sales of land and houses / residential condominium units / land are recognized as revenues when the ownership has been transferred to the buyer.

Interest income Interest income is recognized on an accrual basis based on the effective interest rate.

Property Perfect Public Company Limited

95

4.2

4.3

4.4

4.5

4.6

4.7

4.8

Cost of sales of land and houses / residential condominium units / land In determining the cost of sales of land and houses / residential condominium units / land, the anticipated total development costs (after recognizing the costs incurred to date) are attributed to units already sold on the basis of the salable area and then recognized as costs in the income statement.

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

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

Project development costs Project development costs are stated at cost less allowance for loss on diminution in value of projects.

Project development costs consist of the costs of land, land development, construction and related interest.

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 capitalized 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.

Advances for purchases of land Advances for purchases of land will be recognized as part of land costs when the title to the related land is transferred to the Company and its subsidiaries.

Property, plant and equipment and depreciation Property, plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any).

Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the estimated useful lives:

Office buildings and clubhouses 10 and 20 years

Furniture and equipment for offices and clubhouses 5 years

Motor vehicles 5 years

Others 5 years

Depreciation is included in determining income.

No depreciation has been provided on land and construction in progress.

4.9

4.10

Leasehold rights and amortization / Leasehold rights awaiting sale Leasehold right is stated at cost less accumulated amortization and allowance for loss on impairment of assets (if any).

Amortization of leasehold right is calculated by reference to its cost on a straight-line basis over the leasehold period.

Amortization is included in determining income.

Leasehold rights awaiting sale is stated at the lower of cost and net realizable value.

Investments a) Investment in associate is accounted for in the consolidated financial statements using the equity method.

Annual Report 2009

96

b) c) d)

Investments in subsidiaries and associate are accounted for in the separate financial statements using the cost method.

Investments in available-for-sale securities are stated at fair value. Changes in the carrying amounts of securities are recorded as separate items in shareholders’ equity until the securities are sold, when the changes are then included in determining income.

Investments in non-marketable equity securities, which the Company classified as other investments, are stated at cost net of allowance for loss on impairment (if any).

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 associate 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 Company’s operations.

4.12 Unsubordinated convertible debentures

Unsubordinated convertible debentures are classified into liability and equity components and these are presented separately in the balance sheets. In separately presenting such components, the Company determines the liability component by discounting the stream of future payments of principal and interest at the prevailing market rate, while the carrying amount of the equity component is determined by deducting the liability component from the total face value of the unsubordinated convertible debentures and amortizing the difference over the life of the debentures.

4.13 Impairment of assets

At each reporting date, the Company and its subsidiaries perform impairment reviews in respect of the property, plant and equipment whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognized 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. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company and its subsidiaries could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognized in the income statement.

4.14 Employee benefits

Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognized as expenses when incurred.

4.15 Provisions

Provisions are recognized when the Company and its subsidiaries have a present obligation as a result of a past event, they are probable that outflow of resources embodying economic benefits will be required to settle the obligation, and reliable estimate can be made of the amount of the obligation.

4.16 Income Tax

Income tax is provided in the accounts based on taxable profits determined in accordance with tax legislation.

5. Significant accounting judgments and estimates

The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates

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affect reported amounts and disclosures and actual results could differ. 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.

Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial instruments.

Impairment of equity investments The Company treats available-for-sale investments and other investments as impaired when the management judges that there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgment.

Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and salvage values of the Company’s and its subsidiaries’ plant and equipment and to review estimate useful lives and salvage values when there are any changes.

In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review.

Project development costs estimation In recognizing revenue from real estate sales, the Company and its subsidiaries need to estimate all project development costs, including land costs, land improvement costs, design costs, construction costs, and borrowing costs for construction. The management estimates these costs based on their business experience and revisit the estimation on a periodical basis or when the actual costs incurred significantly vary from the estimation.

Provision for unconverted debentures In recording provision for unconverted debentures, the management projects the exercise of the rights to convert the debentures to ordinary shares based on the tenor of the debentures, the Company’s market share price and current economic conditions. The estimation is reviewed whenever circumstances change.

Provision for loss arising from minimum revenue guarantee In recording provision for loss arising from minimum revenue guarantees, the management estimates the cost of the expenses expected to be incurred as a result of providing minimum revenue guarantees based on the present value of the cash flows to be paid to the Fund, calculated on the basis of assumptions that are appropriate to the current operating results and circumstances of the Fund. The estimate is reviewed whenever circumstances changes.

Litigation

A subsidiary may incur debts from a damage claim. The management reviewed the legal case and is confident that it would not cause any damage. The future debts were thus not included in the financial statement.

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6. Related party transactions

During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarized 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 financial Separate financial

statements statements

2009 2008 2009 2008

Transactions with subsidiaries

(Eliminated from the consolidated financial statements)

Interest income - - 41.9 29.2

Clubhouse management expenses - - 11.4 10.5

(Unit: Million Baht) Transfer pricing policy 8.34 to 9.37% per annum Contract price

The balances of the accounts as at 31 December 2009 and 2008 between the Company and those related companies are as follows:

(Unit: Thousand Baht)

Consolidated Separate

financial statements financial statements

2009 2008 2009 2008

Advances to related compan

Bright Development Bangkok Company Limited - - 1,500 1,500

Advances to related company - - 1,500 1,500

Loans to related companies and interest receivable

Loans to subsidiaries

Estate Perfect Company Limited - - 311,606 298,713

Bright Development Bangkok Company Limited - - 428,294 100,294

Centrepoint Shopping Mall Company Limited - - 15,200 5,100

- - 755,100 404,107

Interest receivable

Estate Perfect Company Limited - - 5,308 3,271

Bright Development Bangkok Company Limited - - 30,768 4,616

Centrepoint Shopping Mall Company Limited - - 865 59

- - 36,941 7,946

Loans to related companies and interest receivable, net - - 792,041 412,053

Amounts due to related companies

Perfect Satellite Services Company Limited - - 1,246 1,065

Centrepoint Shopping Mall Company Limited - - 80,000 80,000

Bright Development Bangkok Company Limited - - - 2,889

Amounts due to related companies - - 81,246 83,954

Advance from director

Director 80,000 80,000 - -

Advance from director 80,000 80,000 - -

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99

During the year 2009, movements of loans to related companies were as follow:

(Unit: Thousand Baht)

Balance as at During the year Balance as at

1 January 2009 Increase Decrease 31 December 2009 Subsidiaries Estate Perfect Company Limited 298,713 433,000 (420,107) 311,606 Bright Development Bangkok Company Limited 100,294 328,000 - 428,294 Centrepoint Shopping Mall Company Limited 5,100 10,100 - 15,200

Directors’ and management’s remuneration In 2009 the Company and its subsidiaries paid salaries, bonuses, meeting allowances and gratuities to their directors and management totaling Baht 71.5 million (Separate financial statements: Baht 56.2 million) (2008: Baht 66.9 million (Separate financial statements: Baht 53.1 million)).

Guarantee obligations with related parties The Company has outstanding guarantee obligations with its related parties, as described in Note 36.4 a) to the financial statements.

7. Trade accounts receivable / deposits and cash received in advance

Trade accounts receivable balances as at 31 December 2009 and 2008 are detailed below.

Total value of contracts signed

Percentage of total project sale value

Installments due

Less: Cash received

Installments receivable

Less: Allowance for doubtful debts

Installments receivable, net

Consolidated financial statements 2009 2008 55,019,352,991 49,187,840,012 59.13 65.60 53,042,354,574 47,195,229,327 (53,001,061,348) (47,151,133,018) 41,293,226 44,096,309 (11,193,299) (10,293,299) 30,099,927 33,803,010

(Unit:Baht) Separate financial statements 2009 2008 50,691,609,835 45,984,494,128 60.39 68.11 49,115,224,716 44,283,972,772 (49,077,959,223) (44,243,491,213) 37,265,493 40,481,559 (11,193,299) (10,293,299) 26,072,194 30,188,260

Deposits and cash received in advance as at 31 December 2009 and 2008 are detailed below.

Consolidated financial statements 2009 2008

Installments due Less: Accumulated sale recognition Deposits and cash received in advance

Annual Report 2009

100

(Unit:Baht) Separate financial statements 2009 2008

53,042,354,574 47,195,229,327 49,115,224,716 44,283,972,772 (52,934,887,056) (47,082,993,831) (49,026,335,606) (44,180,288,358) 107,467,518 112,235,496 88,889,110 103,684,414

As at 31 December 2009 and 2008, trade accounts receivable were classified by aging as follows.

(Unit: Baht)

Consolidated financial statements As at 31 December 2009

Less than 3 - 6 6 -12 Over

3 months months months 12 months Total

Accounts receivable - installments 13,022,427 2,290,000 4,695,000 6,891,500 26,898,927

Accounts receivable at transfer date 2,398,400 - 900,000 11,095,899 14,394,299

Total 15,420,827 2,290,000 5,595,000 17,987,399 41,293,226

Less: Allowance for doubtful debts - - (900,000) (10,293,299) (11,193,299)

Trade accounts receivable, net 15,420,827 2,290,000 4,695,000 7,694,100 30,099,927

(Unit: Baht)

Consolidated financial statements As at 31 December 2008

Less than 3 - 6 6 -12 Over

3 months months months 12 months Total

Accounts receivable - installments 15,035,892 5,369,818 6,108,500 2,496,200 29,010,410

Accounts receivable at transfer date 3,740,000 50,000 50,000 11,245,899 15,085,899

Total 18,775,892 5,419,818 6,158,500 13,742,099 44,096,309

Less: Allowance for doubtful debts - - - (10,293,299) (10,293,299)

Trade accounts receivable, net 18,775,892 5,419,818 6,158,500 3,448,800 33,803,010

(Unit: Baht)

Separate financial statements As at 31 December 2009

Less than 3 - 6 6 -12 Over

3 months months months 12 months Total

Accounts receivable - installments 10,568,694 1,647,000 4,030,000 6,875,500 23,121,194

Accounts receivable at transfer date 2,198,400 - 900,000 11,045,899 14,144,299

Total 12,767,094 1,647,000 4,930,000 17,921,399 37,265,493

Less: Allowance for doubtful debts - - (900,000) (10,293,299) (11,193,299)

Trade accounts receivable, net 12,767,094 1,647,000 4,030,000 7,628,100 26,072,194

(Unit: Baht)

Separate financial statements As at 31 December 2008

Less than 3 - 6 6 -12 Over

3 months months months 12 months Total

Accounts receivable - installments 12,341,142 5,249,818 6,108,500 2,496,200 26,195,660

Accounts receivable at transfer date 3,040,000 - - 11,245,899 14,285,899

Total 15,381,142 5,249,818 6,108,500 13,742,099 40,481,559

Less: Allowance for doubtful debts - - - (10,293,299) (10,293,299)

Trade accounts receivable, net 15,381,142 5,249,818 6,108,500 3,448,800 30,188,260

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8. Land debtors

The debtor promised to make installments for the land cost, with the first installment due on 30 April 2009 and the last in December 2009. However, the debtor asked for payment delay and it made first payment worth Bt4.4 million (on 6 November 2009). It planned to make the second payment within December 2009, but on 11 February 2010 it delayed the second payment to May 2010, together with the submission of its equity restructuring plan. The company endorsed the delay and believed that it would not cause any damage.

9. Project development costs

Consolidated

financial statements

2009 2008

Land costs 15,236,926,057 14,217,301,525

Development costs 7,456,774,142 6,960,773,362

Construction costs 21,018,135,721 18,832,022,136

Capitalised interest 4,493,432,497 4,351,344,294

Total 48,205,268,417 44,361,441,317

Less: Transferred to cost of sales (37,898,910,477) (33,821,534,282)

Transferred to settle debt

under rehabilitation plan (1,524,192,396) (1,524,192,396)

8,782,165,544 9,015,714,639

Less: Allowance for loss on

diminution in value of projects (73,454,194) (84,632,533)

Project development costs, net 8,708,711,350 8,931,082,106

(Unit:Baht) Separate financial statements 2009 2008 13,655,486,115 12,635,861,583 6,800,930,425 6,343,427,661 19,349,106,061 17,529,694,014 4,187,264,425 4,068,788,471 43,992,787,026 40,577,771,729 (35,247,874,548) (31,892,897,573) (1,524,192,396) (1,524,192,396) 7,220,720,082 7,160,681,760 (68,807,688) (75,536,021) 7,151,912,394 7,085,145,739

On 9 September 2009, the company inked a land sale contract with a university worth Bt900 million (with cancellation to the original plan signed on 9 April 2009). Under the contract, the company must build a road and set up a scholarship fund worth Bt20 million, as well as comply with other conditions. The company is liable to penalties if violating the contract. The company is now following the conditions and about to transfer the land to the university.

The company and subsidiaries mortgaged the land and buildings, of which book value as of 31 December 2009 stood at Bt6,435.1 million (Bt8,352.7 million in 2008), to back a loan and guarantee debentures.

In the current year, the company and subsidiaries booked land worth Bt480.4 million as the property development cost (Bt480.4 million on the non-consolidated basis).

In the current year, the company and subsidiaries booked borrowing cost worth Bt142.1 million as development cost (Bt118.5 million on the non-consolidated basis), (against Bt162.3 million in 2008 (Bt133.9 million on the non-consolidated basis)). The capitalization rate is 5-7.3% per annum (5.8-7.8% in 2008)

10. Restricted deposits

These represent fixed deposits pledged with the banks to secure credit facilities.

11. Investments in subsidiaries

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

Annual Report 2009

102

(Unit: Baht)

Separate financial statements

Company’s name Paid-up capital Cost

2009 2008 2009 2008

Million Million

Estate Perfect Company Limited 1,000 1,000 538,459,056 538,459,056

Perfect Satellite Services Company Limited 1 1 999,400 999,400

Bright Development Bangkok Company Limited 1 1 999,400 999,400

Centrepoint Shopping Mall Company Limited 1 1 599,500 599,500

Total 541,057,356 541,057,356

The ordinary shares of Bright Development Bangkok Company Limited have been pledged with a financial institution as collateral for debentures.

On 22 December 2009, the company signed a contract to buy all 6 million shares of a company from the company’s shareholder (seller), at the price of Bt484 million. The company paid Bt60 million as down payment and the rest will be paid as follows: a. Bt254 million in cash will be paid on the land transaction date. b. Promissory notes worth Bt170 million will be issued; Bt50 million to be redeemed within June 2010 and the remaining Bt120 million will be redeemed within March 2011.

On 27 January 2010, the company struck a deal to amend the contract as the company planned to raise the capital from Bt600 million (6 million common shares at Bt100 par value) to Bt1,000 million (10 million shares at Bt100 par value) with the issuance of shares to existing shareholders. Property Perfect agreed to buy 10 million shares at the price of Bt507 million. The transactions were to be completed within 26 February 2010.

12. Investment in associate

12.1 Details of associate:

((Unit: Baht)

Consolidated financial statements Company’s Nature of Country of Shareholding Carrying amounts based Share of income name business incorporation percentage on equity method from investment

in associate

during the year

2009 2008 2009 2008 2009 2008

(%) (%)

Krungthep LandProperty Real Estate Thailand 20.22 20.22 419,736,574 416,738,479 2,998,095 7,815,893

Public Company Limited development

Total 419,736,574 416,738,479 2,998,095 7,815,893 ((Unit: Baht)

Separate financial statements Company’s Nature of Country of Carrying amounts based Share of income name business incorporation on equity method from investment

in associate

during the year

2009 2008 2009 2008

% %

Krungthep LandProperty Real Estate Thailand 20.22 20.22 359,999,240 359,999,240

Public Company Limited development

Total 359,999,240 359,999,240

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103

12.2 Summarized financial information of associate

Financial information of the associated company is summarized below:

(Unit: Million Baht))

Total revenues Net income for

Company’s name Paid-up capital Total assets Total liabilities for the years ended the years ended

as at 31 December as at 31 December as at 31 December 31 December 31 December

2009

Krungthep Land Public 1,780

Company Limited

2008 1,780

2009 7,800

2008 6,496

2009 4,990

2008 3,847

2009 2,106

2008 1,974

2009 96

2008 123

The Company recorded share of income from investment in associate after adjusting the associate’s income, since there are differences in accounting policies in relation to the recognition of revenue from residential condominium units.

In accordance with a resolution of the Extraordinary General Meeting of Shareholders No. 1/2008 held on 14 January 2008, on 31 January 2008, Krungthep Land issued and offered 188,806 units of 5-year, name-registered, unsecured convertible debentures with a face value of USD 100 or a total value of USD 18,880,600, to the overseas company. In accordance with the conditions of the convertible debentures, Krungthep Land is to pay interest semi-annually at a rate of not exceeding 3% per annum or a dividend yield (whichever is higher) only in years in which Krungthep Land declares a dividend based on the conditions of the convertible debentures and mature on 31 January 2013. They are convertible upon the listing of Krungthep Land’s shares on the Stock Exchange of Thailand or MAI, or one year from the issue date (whichever is earlier), at a conversion price of Baht 13.85 per ordinary share, on a quarterly basis. If no interest payment is made until the maturity date, Krungthep Land is to redeem the outstanding convertible debentures at a price equal to 1.311651 times the baht equivalent of the face value, with such redemption subject to change dependent upon the interest payment made during the life of the debentures.

13. Other long-term investments (Unit: Baht) Consolidated and separate financial statements 2009 2008

Available-for-sale securities

Investments in property funds 53,613,050

Less: Allowance for change in value (4,750,330) 48,862,720

Trading securities

Domestic marketable equity securities 1,800,000

Less: Allowance for change in value (1,211,560) 588,440

Other investment

Domestic non-marketable equity security 4,275,000 4,275,000

Other long-term investments - net 53,726,160

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104

52,458,150 (5,396,570) 47,061,580 1,800,000 (1,441,138) 358,862 4,275,000 4,275,000 51,695,442

14. Land held for development

Land costs

Development costs

Construction costs

Capitalized interest

Total

Less: Transferred to cost of sales

Transferred to restructure debt

Transferred to settle debt under

rehabilitation plan

Less: Allowance for loss on impairment

Land held for development, net

\

Consolidated financial statements 2009 2008 5,147,311,175 3,403,987,764 118,096,031 98,123,248 17,449,523 17,472,528 487,540,431 487,540,431 5,770,397,160 4,007,123,971 (350,701,624) (350,701,624) (1,540,946,166) (1,540,946,166) (151,117,368) 3,727,632,002 (103,990,228) 3,623,641,774

(151,117,368) 1,964,358,813 (103,990,228) 1,860,368,585

During the current year, the Company and its subsidiary transferred land held for development to project development costs amounting to Baht 480.4 million (Separate financial statements: Baht 480.4 million).

Balance as at 31 December 2008

Increase during the year

Title of plots of land transferred during the year

Balance as at 31 December 2009

(151,117,368) (151,117,368) 2,817,853,327 1,689,291,772 (103,990,228) (103,990,228) 2,713,863,099 1,585,301,544

The company and subsidiaries mortgaged land, of which book value as of 31 December 2009 was Bt2,419.7 million(2008:Bt 680.8 million), with financial institutions as collaterals t loans and debentures.

15. Advances for purchases of land

(Unit:Baht) Separate financial statements 2009 2008 4,239,195,435 3,128,920,723 116,433,096 98,123,248 17,449,523 17,472,528 487,540,431 487,540,431 4,860,618,485 3,732,056,930 (350,701,624) (350,701,624) (1,540,946,166) (1,540,946,166)

Consolidated financial statements 2009 2008 476,159,648 151,462,635 112,053,552 414,089,013 (459,437,448) (89,392,000) 128,775,752 476,159,648

(Unit:Baht) Separate financial statements 2009 2008 388,904,213 22,000,000 63,798,552 376,296,213 (373,682,013) (9,392,000) 79,020,752 388,904,213

The remaining advances, amounting to approximately Baht 92.0 million (Separate financial statements: Baht 70.9 million), have been paid to agents in acquiring land and agreements to purchase and to sell land are still in the process of being signed with the landowners.

The remaining advance payment of Bt36.8 million (Bt8.1 million on the non-consolidated basis) was paid by the company and subsidiaries to brokers (Bt1.1 million paid out to a broker who is a company executive) who accumulated a number of land title deeds. The land purchase contract is about to be signed.

As of 31 December 2009, the company and subsidiaries, under signed contracts, agreed to buy land worth Bt452.4 million (Bt332.1 million on the non-consolidated basis).

Property Perfect Public Company Limited

105

Annual Report 2009

106

Unit: Baht)

Consolidated financial statements

Office Furniture and

buildings equipment for offices Motor Construction

Land and club house and club house vehicles in progress Others Total Cost 31 December 2008 61,106,629 264,554,272 166,309,241 34,497,129 56,437,092 39,177,053 622,081,416 Additions - - 13,571,443 5,799,998 16,522,659 388,903 36,283,003 Transfer to project development costs - - 3,066,746 - (24,965,522) - (21,898,776) Disposals (500,000) (10,049,130) (3,812,906) (510,000) - - (14,872,036) Transfer in (out) - 28,545,992 3,118,352 - (32,578,254) 913,910 - 31 December 2009 60,606,629 283,051,134 182,252,876 39,787,127 15,415,975 40,479,866 621,593,607 Accumulated depreciation 31 December 2008 - 64,530,643 97,954,755 27,269,253 - 31,740,340 221,494,991 Depreciation for the year - 29,294,517 25,236,581 5,764,866 - 2,874,898 63,170,862 Depreciation on disposals - (6,004,980) (2,395,028) (509,999) - - (8,910,007) 31 December 2009 - 87,820,180 120,796,308 32,524,120 - 34,615,238 275,755,846 Allowance for loss on impairment 31 December 2008 - - - - - - - Increase during the year 1,112,160 3,031,720 - - - - 4,143,880 31 December 2009 1,112,160 3,031,720 - - - - 4,143,880 Net book value 31 December 2008 61,106,629 200,023,629 68,354,486 7,227,876 56,437,092 7,436,713 400,586,425 31 December 2009 59,494,469 192,199,234 61,456,568 7,263,007 15,415,975 5,864,628 341,693,881 Depreciation for the years as included in administrative expenses 2008 64,631,476 2009 63,170,862

16. Property, plant and equipmentŕšŒ

Property Perfect Public Company Limited

107

Unit: Baht)

Separate financial statements

Office Furniture and

buildings equipment for offices Motor Construction

Land and club house and club house vehicles in progress Others Total Cost 31 December 2008 61,106,629 222,202,048 141,884,551 33,063,941 56,437,090 31,369,919 546,064,178 Additions - - 12,806,077 899,998 15,268,008 110,000 29,084,083 Transfer to project development costs - - 3,066,746 - (24,965,522) - (21,898,776) Disposals (500,000) (6,982,384) (7,002,380) (510,000) - - (14,994,764) Transfer in (out) - 28,545,991 3,118,352 - (32,578,253) 913,910 - 31 December 2009 60,606,629 243,765,655 153,873,346 33,453,939 14,161,323 32,393,829 538,254,721 Accumulated depreciation 31 December 2008 - 58,329,447 89,668,891 26,365,938 - 23,983,327 198,347,603 Depreciation for the year - 25,371,351 20,604,054 5,285,330 - 2,705,106 53,965,841 Depreciation on disposals - (6,004,980) (2,363,895) (509,998) - - (8,878,873) 31 December 2009 - 77,695,818 107,909,050 31,141,270 - 26,688,433 243,434,571 Allowance for loss on impairment 31 December 2008 - - - - - - - Increase during the year 1,112,160 3,031,720 - - - - 4,143,880 31 December 2009 1,112,160 3,031,720 - - - - 4,143,880 Net book value 31 December 2008 61,106,629 163,872,601 52,215,660 6,698,003 56,437,090 7,386,592 347,716,575 31 December 2009 59,949,469 163,038,117 45,964,296 2,312,669 14,161,323 5,705,396 290,676,270 Depreciation for the years as included in administrative expenses 2008 55,846,530 2009 53,965,841

As at 31 December 2009, certain plant and equipment items had been fully depreciated but were still in use. The original cost of those assets amounted to approximately Baht 105.4 million (2008: Baht 66.6 million) (Separate financial statements: Baht 94.3 million (2008: Baht 57.8 million)).

During the year 2008, the Company and its subsidiary changed the estimate useful lives of clubhouses from 20 years to 10 years in order to reflect their estimated useful lives. The changes have the effect of decreasing net income in the consolidated financial statements for the period ended 31 December 2008 by approximately Baht 14.8 million (Separate financial statements: Baht 13.1 million).

17. Leasehold rights

Leasehold rights - cost

Less: Accumulated amortization

Less: Allowance for loss on impairment

Transfer to leasehold rights awaiting sale,

net (Note: 18)

Leasehold rights - Net

Amortization for the years as included in

administrative expenses

Consolidated financial statements 2009 2008 346,767,125 345,317,693 (39,118,147) (35,907,052) 307,648,978 309,410,641 (189,843,897) (189,843,897) 117,805,081 119,566,744

(Unit:Baht) Separate financial statements 2009 2008 346,767,125 345,317,693 (39,118,147) (35,907,052) 307,648,978 309,410,641 (189,843,897) (189,843,897) 117,805,081 119,566,744

- 117,805,081

- 119,566,744

(64,923,228) 52,881,853

3,211,095

3,129,892

3,211,095

(60,717,672) 58,849,072 3,129,892

The outstanding covers the leasehold rights on a 11-rai land plot. The rights on 4 rai were subleased, for the remaining period specified in the main lease contract. The sub-leasee paid an upfront fee and will pay annual rents as specified in the contract. The company books sub-lease rents in advance, for the remaining period of the sub-lease contract.

18. Leasehold rights awaiting sale

On 25 December 2007, the Company entered into an agreement to transfer leasehold rights to a subsidiary, with a contract value of Baht 200 million, of which Baht 80 million was paid on the contract date. The remaining balances are to be paid by the subsidiary on the date the transfer of leasehold rights is registered.

On 27 June 2008, the company amended the lease right transfer contract, asking the subsidiary to pay the remaining fee on the lease registration date which must not be later than 30 September 2009. On 26 June 2009, the contract was further amended for the payment no later than 31 December 2009.

The Board on 22 January 2010 approved the cancellation of the lease transfer contract and returned the Bt80 million payment to the subsidiary’s directors. The Board then allowed the company to transfer the lease right to the subsidiary (after the company’s purchase of the subsidiary’s share as said in Note No.40 (a)) at the cost of Bt70 million.

19. Short-term loans from financial institutions

The loans’ interest rate is based on the minimum lending rate (MLR) and the minimum overdraft rate (MOR). The loans are guaranteed by the company, the directors and partial mortgage of land and construction buildings.

Most of loan contracts stated practices and some restrictions under normal course of business of the company and subsidiaries

Annual Report 2009

108

20. Promissory notes

The subsidiary issued promissory notes as payment for land and other expenses to land owners who gathered a number of land deeds. The promissory notes must be redeemed no later than 4 March 2010 and they carry no interest. The notes are avaled by a financial institution, backed by partial land of the subsidiary and Property Perfect.

21. Borrowing from others

Such borrowing carries the interest rate of 8% per annum, and come due when requested.

22. Bill of exchange

The Board on 14 August 2009 and 12 November 2009 meetings approved the issuance of no more than Bt2,000 million of bill of exchange, bearing the interest of 4.5-5.0% per year. The bill will come due within June and September 2010.

23. Debentures

Secured debentures of subsidiary companies

1/2009 secured debentures

2/2009 secured debentures , set 1

2/2009 secured debentures , set 2

Total

Less : debentures with maturity within 1 year

Debentures – Net of debentures with

maturity within 1 year

Consolidated financial statements 2009 2008 187,150 462,150 506,776 - 300,000 - 800,000 - 1,793,926 462,150 (187,150) (462,150) 1,606,776

-

(Unit:Thousand Baht) Separate financial statements 2009 2008 - - 506,776 - 300,000 - 800,000 - 1,606,776 - - - 1,606,776

-

The Company At annual general meetings on 21 June 2006 and 30 April 2008, shareholders approved the issuance of secured or unsecured bonds worth upto Bt3,200 million. Details of the bonds are as follows; - On 3 June 2009, the company issued 520,000 units of secured debentures, at Bt1,000 each or a total of Bt520 million.

The bonds, to mature on 3 June 2012, carry 6% per annum in coupon rate. The bonds are guaranteed by the mortgage of partial land and buildings in the company’s projects worth Bt260 million with a financial institution.

- On 14 August 2009, the company issued 300,000 secured bonds #1 at Bt1,000 each or a total of Bt300 million. The bonds, to mature on 14 February 2011, carry 4.85% per annum in coupon rate. The bonds are guaranteed by the mortgage of partial land and buildings in the company’s projects.

- On 14 August 2009, the company issued 800,000 secured bonds #2 at Bt1,000 each or a total of Bt800 million. The bonds, to mature on 14 August 2012, carry 6% per annum in coupon rate. The bonds are guaranteed by the mortgage of partial land and buildings in the company’s projects.

The subsidiary On 18 August 2008, Bright Development Bangkok Company Limited (“Bright”), a subsidiary, issued and offered 462,150 secured debentures with a par value of Baht 1,000 each, or a total value of Baht 462,150,000 to a financial institution, as previously approved by the Extraordinary General Meeting of shareholders held on 15 May 2007. The debentures mature on 28 November 2008, bear interest at a rate of THBFIX plus 5.55256% per annum and are secured by a guarantee provided by the Company, the mortgage of parts of the Company and Bright’s project land and construction and the pledge of ordinary shares of Bright held by the Company.

Property Perfect Public Company Limited

109

On 27 May 2009, Bright signed a deal with a financial institution to amend details of the debentures. It agreed to redeem the bonds in installments with all completed within February 2010. The THBFIX interest rate plus 8.55256% differential per annum was applied until November 2009 and 10.05256% differential during December 2009 and February 2010. Bright is on the course to redeem the debentures.

There are certain rules and limitations on debentures as the normal nature business of the company and subsidiaries.

24. Creditors per rehabilitation plan

During the current year, the Company made payments to creditors amounting to Baht 229 million. The Company is in the process of arranging for the creditors to receive settlement of the remaining amount of Baht 37 million.

25. Unsubordinated convertible debentures

In accordance with a resolution of the Extraordinary General Meeting of shareholders held on 19 September 2005, on 25 November 2005, the Company issued and offered 200,000 unsubordinated convertible debentures with a par value of USD 100 each, or a total value of USD 20 million, to an overseas company. The debentures have been convertible since 25 May 2008, mature in 25 November 2010, and bear interest at a rate of 3.50% per annum. The conversion price is Baht 6.25 per ordinary share, and the debentures are convertible in a ratio of 1 debenture per 658.4 ordinary shares. Those debentures which are not converted will be redeemed at USD 131.60 per unit, using a stipulated exchange rate of Baht 41.15 per USD. The Company recorded the provision for debentures which are not converted over the life of debentures and presented it as a separate item under the heading “provisions” in balance sheet as discussed in Note 27 to the financial statements.

Under the Company’s debenture agreement, there are normal covenants relating to various matters as required in the normal course of business.

The Extraordinary General Meeting of the Company’s shareholders No.1/2008, held on 20 June 2008, passed a resolution regarding unsubordinated convertible debentures, as follows: a) Approved the cancellation of the issue and offer of the USD 15 million unsubordinated convertible debentures as previously approved by the Extraordinary General Meeting of the Company’s shareholders No.1/2005 held on 19 September 2005 (The Company was approved to issue and offer USD 35 million unsubordinated convertible debentures which were issued by USD 20 million as discussed above). b) Approved the issue and offer of not more than USD 30 million of unsubordinated convertible debentures, or the equivalent of not more than Baht 1,000 million, as detailed below.

Term : Not over 5 years from the issue date

Unit price : USD 100,000

Interest rate : Not over 5% per annum

Conversion price : Not less than 110% of average closing price of the Company’s shares during the 7 - 15 consecutive working days before the offer date, and not less than Baht 6.50 per share

Allocation method : To overseas institutional investors or local institutional investors

However, the Company’s management is authorized to stipulate or amend details of the method and conditions of the issue and offer of the unsubordinated convertible debentures, such as offering price, conversion price, unit price, interest rate, exercise period, termination date of conversion and redemption price.

Currently, the Company’s management is considering the details of the issue and offer of these unsubordinated convertible debentures.

Annual Report 2009

110

Property Perfect Public Company Limited

111

160.9

-

A facility of Baht 1,280 million

5)

-

A facility of Baht 722 million

3)

A facility of Baht 1,501 million

17.3

A facility of Baht 1,186 million

2)

4)

113.1

A facility of Baht 464 million

Interest rate

93.6

Interest at a rate tied to the minimum loan rate (MLR)

421.3 Interest at a rate tied to the minimum loan rate (MLR)

228.9 Interest at a rate tied to the minimum loan rate (MLR)

230.8 Interest at a rate tied to the minimum loan rate (MLR)

232.8 Interest at a rate tied to the minimum loan rate (MLR)

(Million Baht)

Balance 2009 2008

1)

Repayment period Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 65 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within February 2010.

Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 65 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within April 2011.

Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 65 percent of the selling price, which is not to be less than the amount informed to the bank. The company already paid remaining balance in 2009.

Repaying each time of land with townhouse is redeemed from mortgage, at a rate of not less than 80 percent of the selling price. Any remaining balance is to be repaid within June 2013.

Repaying each time condominium unit is redeemed from mortgage, at a rate of not less than 65 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within July 2010 The company already paid remaining balance in 2009.

The Company Long-term loans consist of loans granted by four financial institutions under the following credit facilities.

26. Long-term loans

The mortgage of part of the Company’s project land and construction.

The mortgage of part of the Company’s project land and construction.

The guarantee of the Company’s director and the mortgage of part of the Company’s project land and construction.

The guarantee of other company and the Company’s director and the mortgage of part of the Company’s project land and construction and the shares in the Company held by a shareholder and shares of other company.

The guarantee of the Company’s director and the mortgage of part of the Company’s project land and construction

Security

Annual Report 2009

112

-

20.7

305.3

389.7

A facility of Baht 160 million

A facility of Baht 481 million

A facility of Baht 1,578 million

8)

9)

10)

-

A facility of Baht 430 million

A facility of Baht 550 million

Interest rate

Interest at a rate tied to the minimum loan rate (MLR)

555.7 Interest at a rate tied to the minimum loan rate (MLR)

334.1 Interest at a rate tied to the minimum loan rate (MLR)

160.0 Interest at a rate tied to the minimum loan rate (MLR)

91.4

137.5 Interest at a rate tied to the minimum loan rate (MLR)

(Million Baht)

Balance 2009 2008

7)

6)

Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 72 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within May 2011. The company already paid remaining balance in 2009.

Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 75 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within April 2010. The company already paid remaining balance in 2009.

Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 75 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within May 2011.

Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 65 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within May 2013.

Repaying each time of land and house with house is redeemed from mortgage, at a rate of not less than 80 percent of the selling price. Any remaining is to be repaid within June 2013.

Repayment period

The guarantee of the mortgage of part of the Company’s project land and construction.

The guarantee of the mortgage of part of the Company’s project land and construction.

The guarantee of Company’s director and the mortgage of part of the Company’s project land and construction.

The guarantee of the mortgage of part of the Company’s project land and construction.

The guarantee of the Company’s director and the mortgage of part of the Company’s project land and construction.

Security

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113

Total Less: Current portion Long-term loans - net of current portion

1,865.0 (148.7) 1,716.3

93.5

A facility of Baht 360 million

16)

235.0

A facility of Baht 820 million

14)

246.4

168.9

A facility of Baht 1,000 million

13)

A facility of Baht 358 million

78.7

A facility of Baht 317 million

12)

15)

35.5

A facility of Baht 201 million

Interest rate

Interest at a rate tied to the minimum loan rate (MLR)

Interest Rate 7.00 per year

Interest at a rate tied to the minimum loan rate (MLR)

Interest at a rate tied to the minimum loan rate (MLR)

Interest Rate 7.00 - 7.25 per year

Interest at a rate tied to the minimum loan rate (MLR)

2,564.9 (228.9) 2,336.0

-

-

-

-

-

78.8

(Million Baht)

Balance 2009 2008

11)

Repaying each time of land and house is redeemed from mortgage, at a rate of not less than 70 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within February 2010.

Repaying each time of land and house with house is redeemed from mortgage, at a rate of not less than 70 percent of the selling price. Any remaining is to be repaid within January 2012.

Repaying each time condominium unit is redeemed from mortgage, at a rate of not less than 70 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within June 2012.

Repaying each time of land and house with house is redeemed from mortgage, at a rate of not less than 70 percent of the selling price. Any remaining is to be repaid within December 2014.

Repaying each time of land and house with house is redeemed from mortgage, at a rate of not less than 70 percent of the selling price. Any remaining is to be repaid within April 2013.

Repaying each time of land with townhouse is redeemed from mortgage, at a rate of not less than 70 percent of the selling price. Any remaining balance is to be repaid within July 2012.

Repayment period

The guarantee of the mortgage of part of the Company’s project land and construction

The guarantee of the mortgage of part of the Company’s project land and construction.

The guarantee of the mortgage of part of the Company’s project land and construction.

The guarantee of the mortgage of part of the Company’s project land and construction.

The guarantee of the mortgage of part of the Company’s project land and construction.

The guarantee of the mortgage of part of the Company’s project land and construction.

Security

Annual Report 2009

114

220.0

16.5

A facility of Baht 15 million

A facility of Baht 720 million

A facility of Baht 19.7 million

Total Less: Current portion Long-term loans - net of current portion

3)

4)

5)

272.1 (45.5) 226.6

-

-

A facility of Baht 382 million

2)

35.6

A facility of Baht 328 million

Interest rate

Interest at a rate tied to the minimum loan rate (MLR)

Interest at a rate tied to the minimum loan rate (MLR)

Interest at a rate tied to the minimum loan rate (MLR)

389.5 (4.2) 385.3

-

-

4.2

116.7 Interest at a rate tied to the minimum loan rate (MLR)

268.2 Interest at a rate tied to the minimum loan rate (MLR)

(Million Baht)

Balance 2009 2008

1)

Repayment period Repaying each time of land and is redeemed from mortgage, at a rate of not less than 70 percent of the selling price, which is not to be less than the amount informed to the bank.

Any remaining balance is to be repaid within March 2010.

Repaying each time a plot of land is redeemed from mortgage, at a rate of not less than 60 percent of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within April 2010. The subsidiary company already paid remaining balance in 2009.

Repaying principal and interest is to be made in 21 installments of at least Baht 785,000 each. The subsidiary company already paid remaining balance in 2009.

Repaying each time of land and is redeemed from mortgage, at a rate of not less than 70 percent of the selling price, which is not to be less than the amount informed to the bank.

Any remaining balance is to be repaid within September 2013.

Repaying principal and interest is to be made at least Baht 900,000 each. Any remaining balance is to be repaid within September 2013.

Its subsidiary Long-term loans consist of loans granted by two financial institutions under the following credit facilities.

The guarantee of the Company and its subsidiary’s director and the mortgage of part of the Company’s project land and construction.

The guarantee of the Company and its subsidiary’s director and the mortgage of part of the Company’s project land and construction.

The guarantee of the Company and its subsidiary’s director and the mortgage of part of the Company’s project land and construction.

The guarantee of the Company and its subsidiary’s director and the mortgage of part of its subsidiary’s project land and construction.

The guarantee of the Company and its subsidiary’s director and the mortgage of part of its subsidiary’s project land and construction.

Security

The outstanding long-term loans are detailed as follow:

Consolidated

financial statements

2009 2008

Long-term loans 2,137.1 2,954.4

Less: Current portion (194.2) (233.1)

Long-term loans - net of current portion 1,942.9 2,721.3

(Unit: Million Baht) Separate financial statements 2009 2008 1,865.0 2,564.9 (148.7) (228.9) 1,716.3 2,336.0

The loan agreements contain normal covenants relating to various matters as required in the normal course of business.

As at 31 December 2009, the long-term credit facilities of the Company and its subsidiary which have not been drawn down amounted to Baht 3,917.8 million.

27. Provisions

These comprise the following:

Short-term provision

Provision for loss arising from minimum revenue guarantee

Provision for unconverted debentures

Long-term provisions

Provision for loss arising from minimum revenue guarantee

Provision for unconverted debentures

(Unit: Baht) Consolidated and separate financial statements 2009 2008 9,557,897 202,909,469 212,467,366

26,483,178 - 26,483,178

(Unit: Baht) Consolidated and separate financial statements 2009 2008 - - -

13,940,447 145,841,636 159,782,083

Accounting change in liabilities estimate for the year ending 31 December 2009 is as follows:

(Unit: Baht)

Consolidated and non-consolidated

statements Non-consolidated

Estimate Estimate

Short-term debts Long-term debt Outstanding as of 1 January 2009 26,483,178 159,782,083 Interim provision against losses from minimum revenue guarantee 9,422,551 - Changes in overdue expenses 78,456 - Change in provision against losses from minimum revenue guarantee, from long-term to short-term one 13,940,448 (13,940,448) Provision for debentures not yet converted, accordingly to their maturity - 57,067,834 Change in the provision for debentures not yet converted, from long-term to short-term one.

202,909,469 (202,909,469) Total 252,834,102 - Minus payment on minimum revenue guarantee (40,366,736) - Outstanding as of 31 December 2009 212,467,366 - Property Perfect Public Company Limited

115

On 28 February 2008, the company signed a contract to sell properties to Property Perfect Fund (the Fund) at the price of Bt510 million. Under the contract, the company agreed to guarantee the minimum revenue to the fund (rents and services before expenses) at Bt55 million per year for a 5-year period, which will end within 31 December 2012. The payment is due every 31 January and 31 July of each year. However, the minimum guarantee depends on the ratio of outstanding value of properties against original appraised value. In 2008, the company estimated the expenses incurring from the guarantee on the current cashflow value. In the year, the company was subjected to pay Bt73.8 million to the fund and in 2009, the expense was adjusted and additional provision against loss from the guarantee worth Bt9.4 million was booked. In the balance sheet, the provision was booked under item “Loss from minimum revenue guarantee”.

28. Share capital

The Extraordinary General Meeting of the Company’s shareholders No.1/2008 held on 20 June 2008 passed the following resolutions with respect to share capital: a) Approved the cancellation of 39,000,000 ordinary shares reserved for the exercise of warrants issued to directors and/or employees of the Company (ESOP). b) Approved the cancellation of 65,000,000 ordinary shares reserved for the conversion to ordinary shares of the convertible debentures as discussed in Note 25 a) to the financial statements. c) Approved the reduction of the registered share capital from Baht 6,213,565,176 (1,035,594,196 ordinary shares at a par value of Baht 6 each) to Baht 5,589,565,176 (931,594,196 ordinary shares at a par value of Baht 6 each) by canceling 104,000,000 ordinary authorized but unissued shares with a par value of Baht 6 each, a total of Baht 624 million, previously reserved to accommodate the exercise of warrants and the conversion to ordinary shares of convertible debentures as discussed in a) and b). The Company registered the reduction of its registered share capital with the Ministry of Commerce on 1 July 2008. d) Approved the increase of the Company’s registered and issued capital by Baht 5,589,565,176 (931,594,196 ordinary shares at a par value of Baht 6 each) to Baht 6,552,000,000 (1,092,000,000 ordinary shares at a par value of Baht 6 each), to be reserved for the conversion to ordinary shares of convertible debentures, as discussed in Note 25 b) to the financial statements. The Company registered the increase of its capital with the Ministry of Commerce on 2 July 2008.

As at 31 December 2008, the Company’s issued and fully paid share capital has increased to Baht 4,726,329,720 (787,721,620 ordinary shares of Baht 6 each), with Baht 1,382,556 (230,426 ordinary shares of Baht 6 each) of this being the result of the exercise of warrants in December 2007 and June 2008. The Company registered the corresponding increase in its capital with the Ministry of Commerce on 8 January 2008 and 8 July 2008.

On 11 January 2010, the company registered the capital-increase shares with the Commerce Ministry following the exercise of warrants worth Bt15,000 (2,500 common shares at Bt6 par value), as said in Note No.29 in the financial statement

29. Warrants

Outstanding as at 31 December 2008

Exercised during the year

Outstanding as at 31 December 2009

Units 8,872,576 (2,500) 8,870,076

The warrants are to be exercisable in a ratio of 1 warrant to 1 new ordinary share at an exercise price of Baht 0.01 per share and have an exercise period of 10 years from the issue date, 7 November 2002, with stipulated exercise dates of the end of the second and the fourth quarter of each year.

The Extraordinary General Meeting of the Company’s shareholders No.1/2008 held on 20 June 2008 passed to approve the cancellation of 39,000,000 ordinary shares reserved for the exercise of warrants issued to directors and/or employees of the Company (ESOP).

Annual Report 2009

116

In December 2007 and June 2008, the Company received advance subscription of Baht 0.01 per share to 230,426 of the additional ordinary shares arising from the exercise of the warrants, a total of Baht 2,304. The Company registered the resulting increase of Baht 1,382,556 in its capital with the Ministry of Commerce on 8 January 2008 and 8 July 2008, resulting in share discount totaling Baht 44,093,444.

In December 2009, the company received advance payment for the exercise of warrants for 2,500 shares at Bt0.01 per share, or a total of Bt25. The company registered the Bt15,000 capital increase from the exercise with the Commerce Ministry on 11 January 2010.

30. Statutory reserve

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.

31. Expenses by nature

Significant expenses by nature are as follows: (Unit: Baht)

Consolidated Separate

financial statements financial statements

2009 2008 2009 2008

Salary and wages and other employee benefits 354,952,860 384,577,851 298,613,287 324,110,611

Depreciation and amortization 63,017,000 67,761,368 57,176,936 58,976,422

Rental expenses 24,659,535 23,840,531 19,900,653 19,358,596

Specific business tax and transfer fees 6,852,456 74,097,269 5,711,150 68,805,738

Marketing expenses 234,882,562 294,714,725 206,634,296 268,781,269

Project management expense 137,735,628 156,424,239 120,801,582 138,825,256

Loss arising from minimum revenue guarantee 9,422,551 73,800,000 9,422,551 73,800,000

Real estate development during the year 5,465,012,086 4,827,401,202 4,425,100,899 3,840,439,231

Changes in real estate projects (1,540,902,433) 180,233,686 (1,195,328,210) 734,867,361

Finance cost 428,679,312 434,326,714 349,198,521 364,961,272

32. Earnings per share

Basic earnings per share is calculated by dividing net income for the year by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by dividing net income for the year 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:

Property Perfect Public Company Limited

117

(Unit: Baht)

Consolidated financial statements

Weighted average Earnings

Net income number of ordinary shares per share

2009 2008 2009 2008 2009 2008

Basic earnings per share

Net income attributable to equity holders of the parent 403,627,020 804,546,744 787,721,634 787,703,620 0.512 1.021

Effect of dilutive potential ordinary shares

Warrants 8,870,076 units

(2008: 8,872,576 units) - - 8,846,962 8,867,662

Unsubordinated convertible debentures - 84,133,336 - 131,680,000

Diluted earnings per share

Net income of ordinary shareholders

assuming the conversion of dilutive

potential ordinary shares 403,627,020 888,680,080 796,568,596 928,251,282 0.507 0.957

(Unit: Baht)

Separate financial statements

Weighted average Earnings

Net income number of ordinary shares per share

2009 2008 2009 2008 2009 2008

Basic earnings per share

Net income attributable to equity holders of the parent 386,325,918 798,268,725 787,721,634 787,703,620 0.490 1.013

Effect of dilutive potential ordinary shares

Warrants: 8, 870,076 units (2008: 8,872,576 units) - - 8,846,962 8,867,662

Unsubordinated convertible debentures - 84,133,336 - 131,680,000

Diluted earnings per share

Net income of ordinary shareholders

assuming the conversion of dilutive

potential ordinary shares 386,325,918 882,402,061 796,568,596 928,251,282 0.485 0.951

Since the conversion to ordinary shares of the unsubordinated convertible debentures would increase earnings per share in the consolidated and separate financial statements for the year ended 31 December 2008. Therefore, the Company has not assumed conversion of unsubordinated convertible debentures in calculation of diluted earnings per share in the consolidated and separate financial statements for the year ended 31 December 2008.

33. Financial information by segment

The Company’s and its subsidiaries’ operations involve principally a single industry segment, property development, and are carried on in the single geographic area of Thailand. As a result, all of the revenues, operating income and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.

34. Provident fund

The Company, its subsidiary and their employees have jointly established provident funds in accordance with the Provident Fund Act B.E. 2530. The Company, its subsidiary and their employees contributed to the fund monthly at the rate of 3 - 10 percent of basic salary. The fund, which is managed by Kasikorn Asset Management will be paid to employees upon termination in

Annual Report 2009

118

accordance with the fund rules. During the current year, the Company and its subsidiary contributed Baht 16.5 million (2008: Baht 15.5 million) (Separate financial statements: Baht 13.8 million (2008: Baht 13.1 million)) to the fund.

35. Dividends

Final dividend for 2008

Final dividend for 2009

Approved by Annual General Meeting of the shareholders on 30 April 2008 Annual General Meeting of the shareholders on 30 April 2009

Total dividends Baht 189.0 million Baht 283.5 million

Dividend per share Baht 0.24 Baht0.36

36. Commitments and contingent liabilities

36.1 Capital commitments a) The Company and its subsidiary had outstanding commitments of approximately Baht 2,047.2 million in respect of construction contracts of land and house projects and residential condominium units of which the Company and its subsidiary had already entered into contracts with subcontractors. b) The Company and its subsidiary had outstanding capital commitments of approximately Baht 360.4 million in respect of purchases of land. c) The subsidiary had the outstanding capital commitments of approximately Baht 16.8 million in respect of land lease for real estate development. d) The subsidiary had outstanding commitments of approximately Baht 14.0 million in respect of a design contract for a shopping center and office project. e) The Company had outstanding commitment in respect of a contract to construct no fewer than 1,000 residential units using a prefabrication system, and if the Company assigns the contractor to build fewer than 1,000 units, it must pay compensation of an amount stipulated in contract.

36.2 Operating lease commitments

The Company and its subsidiary have entered into several lease agreements in respect of the lease of land, vehicles, advertising board, office space and various services. The terms of the agreements are generally between 1 and 5 years.

Operating lease agreements are non-cancellable.

As at 31 December 2009, future minimum lease payments required under these non-cancellable operating lease contracts were as follows.

Payable within: Million Baht

Less than 1 year 52.6

2 to 5 years 24.0

During the year 2009, the Company and its subsidiaries recognized rental expenses of Baht 24.7 million (Separate financial statements: Baht 19.9 million).

36.3 Long-term service commitments

The Company has entered into clubhouse management agreements with its subsidiary. Under the conditions of these agreements, the Company is to pay monthly service fees as stipulated in the agreements. The fees for the year 2009 amounted to approximately Baht 11.4 million.

36.4 Guarantees a) The Company has guaranteed debentures and bank credit facilities of its subsidiaries amounting to Baht 2,594.4 million. b) As of 31 December 2009, the company and subsidiaries’ letter of guarantee issued to the company and subsidiaries by financial institutions was valued at Bt861.5 million. The guarantee concerns some obligations, in line with the Group’s normal business operations. The guarantees cover the guarantee for infrastructure, Bt601.5 million, and for debentures, Bt260 million.

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119

c)

37. Litigation

As at 31 December 2009, there was an outstanding letter of guarantee issued by a bank on behalf of the Company to guarantee minimum revenue of the Fund of Baht 55 million per year for a period of 5 years, ending on 31 December 2012.

As of 31 December 2010, the Group faced the following lawsuits. a) A subsidiary faced a lawsuit from a contractor over overdue construction cost worth Bt7.5 million. The subsidiary however filed a counter lawsuit, asking for compensation of Bt8.4 million as the subsidiary’s payment to the contractor was way beyond the value of the completed construction works. The case was dismissed but the contractor proceeded to the Appeals Court which is now considering the case. The subsidiary however believed that the lawsuit would not cause a significant impact. b) A subsidiary faced a lawsuit from a client, pressing for Bt7.7 million compensation for rights violation. The case was dismissed but it went on the Appeals Court and is now under the court’s consideration. The subsidiary however believed that the lawsuit would not cause a significant impact.

38. Financial instruments

38.1 Financial risk management

The Company’s and its subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 32 “Financial Instruments: Disclosure and Presentations”, principally consist of the following.

Financial assets Financial liabilities - Cash and cash equivalents - Trade accounts payable - Trade accounts receivable, net - Promissory note holders - Account receivable - land - Bill of exchange holders - Advances to contractors, net - Creditors per rehabilitation plan - Loans to related companies, net - Amounts due to related companies - Other long-term investments, net - Advance from director - Advances for purchases of land - Deposits and cash received in advance - Deposit for share purchase - Unsubordinated convertible debentures

- Debentures

- Long-term loans

- Deposits and cash received in advance for sublease agreement

The financial risks associated with these financial instruments and how they are managed is described below.

Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, account receivable - land, advances and loans. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk involved the real estate business since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivable, account receivable - land, advances and loans and as stated in the balance sheet.

Interest rate risk The Company and its subsidiaries are exposed to interest rate risk relating primarily to their cash at banks, loans, bank overdrafts and short-term loans from financial institutions, loans from other company/individual, creditors per rehabilitation plan, debentures, unsubordinated convertible debentures and long-term loans. However, since most of the Company’s and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.

Significant financial assets and liabilities as at 31 December 2008 classified by type of interest rates are summarized in the table below on the maturity date or, the repricing date if this occurs before the maturity date.

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(Unit: Million Baht)

Consolidated Financial Statement

Fixed interest rates Floating Non-

Within 1-5 year Over interest interest Interest Rate

1 year 5 years rate bearing Total (% p.a) Financial assets Cash and cash equivalents - - - 739.3 1.3 740.6 0.125 - 2.00 Trade accounts receivable, net - - - - 30.1 30.1 - Account receivable - land - - - - 31.0 31.0 - Advances to contractors, net - - - - 86.2 86.2 - Other long-term investments, net - - - - 53.7 53.7 - Advances for purchases of land - - - - 128.8 128.8 - Deposit for share purchase - - - - 60.0 60.0 -

- - - 739.3 391.1 1,130.4 Financial liabilities Trade accounts payable - - - - 485.1 485.1 - Promissory note holders - - - - 355.0 355.0 - Bill of exchange holders 1,266.0 - - - - 1,266.0 4.00 - 5.00 Creditors per rehabilitation plan - - - - 37.0 37.0 - Advance from director - - - - 80.0 80.00 - Deposits and cash received in advance - - - - 107.5 107.5 - Unsubordinated convertible debentures 812.6 - - - - 812.6 9.56 Debentures - 1,606.8 - 187.2 - 1,794.0 4.85 - 10.31 Long-term loans - - - 2,137.1 - 2,137.1 MLR Deposits and cash received in advance for sublease agreement - - - - 54.8 54.8

2,078.6 1,606.8 - 2,324.3 1,119.4 7,129.1

(Unit: Million Baht)

Separate Financial Statement

Fixed interest rates Floating Non-

Within 1-5 year Over interest interest Interest Rate

1 year 5 years rate bearing Total (% p.a) Financial assets

Cash and cash equivalents - - - 667.2 1.3 668.5 0.125 - 2.00 Trade accounts receivable, net - - - - 26.1 26.1 - Account receivable - land - - - - 31.0 31.0 - Advances to contractors, net - - - - 86.2 86.2 - Loans to related companies, net - - - 755.1 - 755.1 8.49 - 9.37 Other long-term investments, net - - - - 53.7 53.7 - Advances for purchases of land - - - - 79.0 79.0 - Deposit for share purchase - - - - 60.0 60.0 -

- - - 1,422.3 337.3 1,759.6 Financial liabilities Trade accounts payable - - - - 408.0 408.0 - Bill of exchange holders 1,266.0 - - - - 1,266.0 4.00 - 5.00 Creditors per rehabilitation plan - - - - 37.0 37.0 - Amounts due to related companies - - - - 81.2 81.2 - Deposits and cash received in advance - - - - 88.9 88.9 - Unsubordinated convertible debentures 812.6 - - - - 812.6 9.56 Debentures - 1,606.8 - - - 1,606.8 4.85 - 6.00 Long-term loans - - - 1,865.0 - 1,865.0 MLR Deposits and cash received in advance for sublease agreement - - - - 54.8 54.8

2,078.6 1,606.8 - 1,865.0 669.9 6,220.3 Property Perfect Public Company Limited

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38.2 Fair value of financial instruments

Since the majority of the Company’s and its subsidiaries’ financial assets and liabilities are short-term or have interest rates close to the market rates. The fair values of these financial assets and liabilities are not expected to differ materially from the amounts presented in the balance sheets.

A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using and appropriate valuation technique, depending on the nature of the instrument.

39. Capital management

The primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern.

According to the balance sheet as at 31 December 209, the Group’s debt-to-equity ratio was 1.1:1 (2008: 0.8:1) and the Company’s was 0.8:1 (2007: 1.1:1).

40. Subsequent events after the financial statement issuance

The Board’s resolutions on 22 January 2010 and 26 February 2010 are as follows; a) Allow the company to buy up all shares in Centrepoint Shopping Mall Co.,Ltd, owned by a company, at the cost of Bt400,000 (4,000 shares at Bt100 par value). After the investment, the company’s shareholding increased from 59.99% to 99.99%. b) Approve the capital increase in Centrepoint Shopping Mall from Bt1 million (10,000 shares at Bt100 par value) to Bt500 million (5 million shares at Bt100 par value). c) Approve the capital increase in Estate Perfect Co.,Ltd from Bt1,000 million (100 million shares at Bt10 par value) to Bt1,200 million (120 million shares at Bt10 par value), so that Estate Perfect can use the proceeds in repaying debts to the company. d) Approve the dividend payment for 2009 at Bt0.25 per share or a total of Bt196.9 million. e) Allow the company to raise no more than Bt4,000 million from debentures with maturity no more than 5 years.

41. Approval of financial statements

These financial statements were authorized for issue by the Company’s Board of Directors on 26 February 2010.

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The Board of Directors’ responsibilities for financial reports

Property Perfect Public Company Limited’s and subsidiaries’ financial statements are prepared in compliance with accounting standard stipulated in the Accounting Professions Act B.E.2547, presented in accordance with the requirements in the Business Development Department’s announcement on 14 September 2001 regarding in the Accounting ACT.B.E.2543 , and adjusts accounting practices to be in line with the Federation of Accounting Professions Notification 9/2007, 38/2007 and 62/2007 concerning the accounting standard.

The Board of Directors has appointed the Audit Committee comprising non-executive directors to take responsible for financial reports to follow the account standard and related regulators, disclose adequate and on-time information, and have internal control system to supervise internal control activities and the Audit Committee’s Opinions in the Audit Committee’s reports shown in the annual report

The Board of Directors takes responsible for Property Perfect’s and its subsidiaries’ financial reports prepared to ensure that financial position, revenue, expense and cash flow are presented accurately and reasonably. The Board of Directors prepares accurate and complete accounting records to maintain assets, and internal control system to prevent fraudulent irregularities activities. The Board of Directors has selected the appropriated and constantly practical accounting policy in preparing the financial reports to reflect the company’s actual performance in compliance with the Generally Accepted Accounting principles and adequate information disclosure in notes to financial statements. Auditor expresses opinions on Property Perfect’s and subsidiaries’ financial statements in auditors’ report.

Tawatchai Nakata Chainid NgOw-sirimanee

Chairman Chief Executive office

Property Perfect Public Company Limited

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Audit Committee Report 2009 Dear Valued shareholders

Property Perfect Public Company Limited’s Audit Committee comprises three independent directors – Mr.Virayuk Puntupetch as Chairman, and Mr. Somsak Toraksa and Dr. Thamnoon Ananthothai as directors.

In 2009, the Audit Committee performed duty in accordance with scope of responsibility assigned by the company’s Board of Directors. It held 8 meetings to consider financial information, operating results, risk management, and operation problems and obstacles.

Executives were occasionally invited to participate the audit committee’s meeting to clarify information and report improvement of internal control as suggested. The Audit Committee organized a joint meeting with auditor to acknowledge auditor’s opinion on the company’s annual financial statements and discussed with legal consultants to acknowledge practices under related laws. The Audit Committee’s activities can be summarized as follows:

1. To review quarterly and yearly financial statements, and yearly consolidated financial statements for the year 2009

Audit Committee jointly reviewed the financial statements with executives and auditor to ensure that the financial statements were prepared appropriately, and compliance with the Generally Accepted Accounting Principles and other related regulations.

The committee also has duty to assure accounting system’s accuracy and reliability and sufficient and on-time information disclosure in financial statements to benefit investors and financial statements users in making investment decision.

2. To review connected transactions

Audit Committee reviewed connected transactions between the company and subsidiaries and associates to assure that the company operated in normal course of business and provided necessary financial assistance to subsidiaries for project development and expansion as planned.

3. To review risk management

The Audit Committee made remarks on the composition of the Risk Management Committee, to ensure its independence and operations accordingly to the shareholders’ suggestions. The Audit Committee also reviewed the company’s rules and code of conduct, so that they are reasonable and compatible with the risk management pattern drawn up by the Risk Management Committee.

4. To review good corporate governance

The Audit Committee reviewed the company’s good corporate governance practices. Overall, the practices are in the satisfactory level. However, the company should further ensure clearer codes on some issues, like the Board of Directors’ responsibility. The Audit Committee also ensured transparent information disclosure, in line with the Securities and Exchange Act and relevant laws.

It also recommended the company to establish the Corporate Governance Committee to support the Board of Directors.

5. To review evaluation of internal control system

Audit Committee reviews as to whether the company’s internal control system is appropriate, achieves its objectives in using resources efficiently and effectively, and has a preventive system to reduce mistakes, damages and deplete the company’s resources as well as whether the financial statements is reliable.

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6.

To supervise internal audit activities Audit Committee has duty to approve the annual audit plan if the internal audit office, acknowledge the 2009 internal control system evaluation’s results as approved plan, supervise internal audit tasks proceeded efficiently and effectively under the acceptable risk level and appropriately with the changed environment, set audit mission to focus on preventing risk that might happen, and let the company follow suggestions in important matters stated in the system evaluation report. The Audit Committee also formulated the evaluation on the internal audit office’s operations, for further improvement. It also suggested the appointment of an outside advisor to support the company’s engineering and construction audit.

7. To review the company’s monitoring and operating performance evaluation system

Audit Committee reviews the company’s performance to ensure that the company follows the targets and adjusts operation to be accordance with the changed situation. The committee supports the company to determine clearer performance evaluation and indicators, and constantly follow the internal control system activities, and enhance the internal control become a part of normal practice of management ..

8. To conduct audit committee’s self assessment

Audit Committee carried out self assessment to evaluate the entire committee in many aspects including authority, internal control, and financial statements arrangement to use the result in improving its operation and to report to the company’s Board of Directors.

9. To present academic information concerning property development business from locally and internationally.

Audit Committee also suggests the company about financial, accounting, legal, and engineering to enable the company to accomplish its business goal.

10. To select auditor

Audit Committee selects auditor based on their independence and appropriateness of remuneration to seek approval from the company’s Board of Director and shareholders. Both the Board of Directors and shareholders appointed Ernst & Young Co., Ltd. as the auditor for 2009.

Audit Committee constantly reports resolutions of all meetings to the Board of Directors, independently practices assigned tasks on behalf of the Audit Committee with knowledge and competence, and gives suggestions straightly and appropriately for interests of the company, shareholders and other stakeholders.

(Mr. Virayuk Puntupetch)

Chairman of the Audit Committee

26 February 2010

Property Perfect Public Company Limited

125

Auditor Fee Accuracy Sanctification Form

Audit Fee

Item Payer Auditor Fee 1 Property Perfect Plc. Miss. Siraporn Ouaanunkun 1,650,000 2 Estate Perfect Co.,Ltd. Miss. Siraporn Ouaanunkun 500,000 3 Perfect Satellite Services Co.,Ltd Miss. Siraporn Ouaanunkun 100,000 4 Bright Development Bangkok Co.,Ltd. Miss. Siraporn Ouaanunkun 220,000 4 Center Point Shopping Mall Co.,Ltd. Miss. Siraporn Ouaanunkun 100,000

Total fee

2,570,000

The above information is

Accurate. I certify there is no other service I know of that the company and subsidiaries awarded to me, my auditing firm, and individuals or companies connected to me.

Inaccurate.

Note: .........................................................................................................................................................................................................

...................................................................................................................................................................................................................

...................................................................................................................................................................................................................

To improve the above information (if any), I affirm the accuracy of all information in this form that shows the audit fee and other service fee that the company and subsidiaries pay to me, my auditing firm, and individuals or companies connected to me.

(Miss. Siraporn Ouaanunkun)

Ernst & Young Co.,Ltd

Auditor of Property Perfect Public Company Limited

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