-Information Memorandum- The Platinum Group Public Company Limited ( PLAT )

Transcription

1 -Information Memorandum- The Platinum Group Public Company Limited ( PLAT ) Registered Address: The registered address of the Platinum Group Public Company Limited (the Company ) is no.222/1398, floor 11, the Platinum Fashion Mall Building, Petchaburi Road, Petchaburi Road Sub-District, Ratchatewi District, Bangkok Tel.No. (02) Fax.No. (02) Website Factory Location None Listing Date As at 24 March 2015 (Trading commencement on 24 March 2015) Type of Listed Securities Total ordinary shares amounting 2,800,000,000, with a par value of Baht 1 each. The Company s registered and paid-up capital is Baht 2,800 million. (Listed shares consist of 2,100,000,000 pre-ipo shares and 700,000,000 shares offered to public investors.) The Company s Capital As at 24 March 2015 (Trading commencement on 24 March 2015) Registered Capital 2,800,000,000 Baht of ordinary shares (2,800,000,000 shares, with a par value of Baht 1 each) Paid-up Capital 2,800,000,000 Baht of ordinary shares (2,800,000,000 shares, with a par value of Baht 1 each) The Secondary Market The Stock Exchange of Thailand ( SET ) Offering Price 7.40 baht per share Offering Period 12, 13 and 16 March 2015 Purpose (s) of Fund Raising Net proceeds amounting approximately Baht 5,084 million from this IPO offering will be used to finance business expansion of the Company and its subsidiaries for the period from 2015 to Green Shoe Option None Type of Business and Nature of Operation 1. Nature of Products and Services As of 1 January 2015, the Company s main businesses comprise the business of property development for leasing and renting and the hotel business. Details of each business are as follows: 1

2 Property Development for Leasing and Renting As at 1 January 2015, the Company has two projects that have been in operation, including: 1. The Platinum Fashion Mall which the Company has owned areas in Floors 3-6, Floor 11 and some parts of parking areas; and 2. The Wharf Samui which the Company entered into a 10-year agreement (from 1 January 2015 to 31 December 2024) to lease it from a related firm. Details of each project are as follows: The Platinum Fashion Mall The Platinum Fashion Mall is a large-scale wholesale and retail mall for clothes and fashion products. Located in the center of Pratunam area, the Platinum Fashion Mall was developed to be a one-stop wholesale shopping center, comprising more than 2,000 wholesalers of clothes and fashion products. Total investment for the project is approximately Baht 5,000 million. Investments for the initial and the expansion phases of the project were Baht 2,600 and Baht 2,400 million consecutively. The Platinum Fashion Mall started its operation in November The Platinum Fashion Mall is fully equipped with necessary supporting facilities. Illustration of the Existing Location of the Platinum Fashion Mall 2

3 (1) Project Location The Platinum Fashion Mall is located at Pratunam Intersection, No.222 Petchaburi Road, Petchaburi Road Sub-District, Ratchathewi District, Bangkok. (2) Buildings and Utilities Systems The Platinum Fashion Mall consists of two integrated buildings. Details of each building are as follows: Building 1 (Zone 1 and Zone 2) or the Platinum Fashion Mall Phase 1: This is a 24-storey building, with 1 underground floor. The Platinum Fashion Mall Phase 1 is located on land with approximate area of 7 rais and 22 sq.wah. (under land title deed no.1034, 1408 and 15866). Its approximate gross area is 110,000 sq.m. (including plaza and residential areas). Located in underground floor to Floor 6 are plaza and food center areas. Located in Floor 7 to Floor 10 are parking areas. Located in Floor 11 are the Company s main office and merchandise storage areas. Floor 12 to Floor 24 are residential areas (condominium). Building 2 (Zone 3) or the Platinum Fashion Mall Phase 2: This is a 25-storey building, with four underground floors. The Platinum Fashion Mall Phase 2 is located on land with approximate area of 2 rais, 2 ngans and sq.wah (under land title deed no.1041 and 15867). Its approximate gross floor area is 39,570 sq.m. Four underground floors are used as parking areas. Floor 1 to Floor 5 are used as shopping plaza and Floor 6 to Floor 25 belong to Novotel Bangkok Platinum Pratunam Hotel. Utilities systems for the Platinum Fashion Mall comprise 21 elevators, 24 escalators, electricity system, sanitary system, air conditioning system, air ventilation system and fire protection system. (3) Form of Management Management of the Platinum Fashion Mall Phase 1 is in the form of juristic person as some parts of the building (Floor 12 to Floor 24) are residential areas (condominium). The Company appointed Platinum Plaza Company Limited, a 100% subsidiary, to manage the Platinum Fashion Mall Phase 2. (4) Nature of Operation In managing the Platinum Fashion Mall, the Company has procured tenants of areas in the plaza, most of which are wholesalers of clothes and fashion products. Wholesalers of similar products will be placed in the same floor to facilitate shoppers of clothes and fashion products. At present, there are many kinds of tenants comprising short-term renters of areas (with rent terms of 1 and 3 years) and long-term lessees of areas (with lease terms of 5 and 10 years). 3

4 (5) Details of the Platinum Fashion Mall Details Approximate Area (sq.m.) The Platinum Fashion Mall Phase 1 (Details as showed below consist only those concerning shopping plaza areas in which the Company has an ownership/leasehold right.) 1 Shopping center area 18,661 (accounting for 63.37% of total floor area in which the Company has an ownership/leasehold right) Area under short-term rent (1) 10,940 (accounting for 37.15% of total floor area in which the Company has an ownership/leasehold right) Area under long-term lease (2) 4,811 (accounting for 16.34% of total floor area in which the Company has an ownership/leasehold right) Food center area 2,910 (accounting for 9.88% of total floor area in which the Company has an ownership/leasehold right) 2 Office area 1,359 (accounting for 4.61% of total floor area in which the Company has an ownership/leasehold right) 3 General service area 1,924 (accounting for 6.53% of total floor area in which the Company has an ownership/leasehold right) 4 Parking areas (for 590 cars. Note that this is the parking areas belonging to the Company only, excluding parking 7,505 (accounting for 25.48% of total floor area in which the 4

5 Details areas that belongs to shopping plaza in which the Company does not have ownership/leasehold right and to residential areas (condominium)) Approximate Area (sq.m.) Company has an ownership/leasehold right) Total floor area for the Platinum Fashion Mall Phase 1 29,449 (6) The Platinum Fashion Mall Phase 2 1 Shopping center area 5,040 (accounting for 12.74% of Area under short-term rent (3) Area under long-term lease (2) total floor area) 1,365 (accounting for 3.45% of total floor area) 3,675 (accounting for 9.29% of total floor area) 2 Common area (4) 5,578 (accounting for 14.10% of total floor area) 3 Area for utilities and supporting systems (5) 1,742 (accounting for 4.40% of total floor area) 4 Parking area (for 269 cars) 7,737 (accounting for 19.55% of total floor area) 5 Area for Novotel Bangkok Platinum Pratunam Hotel 19,473 (accounting for 49.21% of Total floor area for the Platinum Fashion Mall Phase 2 39,570 Note: total floor area) (1) Area under short-term rent is that with rental period of no more than 3 years. The Company holds an ownership in total area of 10,124 sq.m. and a leasehold right in total area of 816 sq.m. (2) Area under long-term lease is that with lease period of more than 3 years. The Company already received advanced leasehold payments for this area. (3) Area under short-term rent is that with rental period of no more than 3 years (4) Common area is the area that renters/lessees and shoppers/visitors could utilize. (5) Area for utilities and supporting systems is that for installing elevators, escalators, electricity system and air-conditioning system. (6) Total floor area for the Platinum Fashion Mall Phase 1 as showed in the table above includes only the areas in which the Company holds an ownership/leasehold right. The Platinum Fashion Mall Phase 1 is managed by the Platinum Fashion Mall Juristic Person. From total floor area of the Platinum Fashion Mall Phase 1 of 29,449 sq.m. in which the Company could utilize, the Company holds an ownership in total areas of 26,523 sq.m. and leases area of 2,276,460 and 190 sq.m. 5

6 from the Platinum Fashion Mall Juristic Person, the Treasury Department and individual persons consecutively. (6) Historical Occupancy Rate of the Platinum Fashion Mall (including Phase 1 and Phase 2) As of 31 December 2011 As of 31 December 2012 As of 31 December 2013 As of 31 December 2014 Occupancy Rate 99% 99% 99% 99% Note: Historical occupancy rate as showed above is those concerning area under short-term rent only. (7) Details of tenants in the Platinum Fashion Mall including Phase 1 and Phase 2 (As of 31 December 2014) Type of Business Proportion of occupied area to total area under shortterm rent and long-term lease (%) Clothes, fashion products and decorations 49% Leather products, bags and shoes 12% Food center 10% Bank and financial institutions 5% Restaurants 4% Souvenirs 3% Smartphone and devices 1% Merchandise storage area 16% Total 100% Note: Ratio of areas under short-term rent to areas under 5 year lease to areas under 10-year lease for the Platinum Fashion Mall (including Phase 1 and Phase 2) is 58.7%:0.8%:40%. (8) Lease profile of the Platinum Fashion Mall (including Phase 1 and Phase 2) as of 31 December 2014 Lease/Rent Period No more than 3 years (most rent contracts under this category will expire during 2015 and 2016.) Approximate Areas (sq.m.) Proportion of Occupied Areas to Total Areas under Short-Term Rent/Long-Term Lease 12, % 6

7 5 years % 10 years (most lease contracts under 8, % this category will expire during 2020 and 2021.) Vacant areas (in the process of % procuring new tenants) Total 20, % Year (9) Lease expiry profile of the Platinum Fashion Mall (including Phase 1 and Phase 2) as of 31 December 2014 Approximate areas of which lease/rental agreements expire Proportion of areas of which lease/rental agreements expire to total areas under shortterm rent and long-term lease , % , % % % , % , % % % Vacant areas % Total 20, % The Wharf Samui The meeting of the Company s board of directors no.3/2014 held on 17 June 2014 reached a resolution approving the Company to enter into an agreement to lease the Wharf Samui with a related company called The Wharf Samui Plaza Company Limited. The aim in doing so is to support the Company s business expansion policy. Details of the Wharf Samui are as follows: Project details The Wharf Samui is a community mall project located in Koh Samui, Suratthani Province. The project was designed to be the mix between eastern and western cultures with their own unique features. The project will provide variety of products 7

8 Project location and land size and services which can well satisfy different needs of domestic and international tourists. The Wharf Samui is located in Bo Phut, Koh Samui, Suratthani Province. The project is located on land plots with approximate area of 12 rais. Gross and leased areas of the project Total development cost Utilities system Commercial operation commencement Renters of areas in the project Target visitors The leased properties include 9 plots of land with approximate area of 12 rais located at Bo Phut Sub- District, Koh Samui District, Suratthani Province, a onestorey building No.62/1-62/8 located at Moo 1, Bo Phut Sub-District, Koh Samui District, Suratthani Province, a two-storey building No.62 and 62/9-62/12 located at Moo 1, Bo Phut Sub-District, Koh Samui District, Suratthani Province and a four-storey building. Total gross and net leasable areas of the project are 7,089 and 5,493 sq.m. consecutively. There are parking spaces for more than 500 cars and motorcycles. Approximately Baht 200 million The Wharf Samui comprises utilities systems including electrical, CCTV, water treatment, central electrical, sound systems and etc as well as surrounding roads and parking areas. The Wharf Samui Project officially started its operation on 1 January The Company entered into an agreement with The Wharf Samui Plaza Co., Ltd. to lease such project for a period of 10 years (from 1 January 2015 to 31 December 2024) on 29 October Renters of areas in the Wharf Samui include restaurants, minishops (such as clothes and swimming suits outlets), bags, shoes and decoration outlets, souvenir shops, financial service providers (i.e. money exchange and ATM), massage and spa palors, travel agents and etc. Domestic and international tourists who visit Koh Samui 8

9 Project manager The Platinum Group Public Company Limited Details about utilization of areas in the Wharf Samui (as of 1 January 2015) Usage of Area Area Size (sq.m.) 1. Commercial area 5,493 (accounting for 35% of total floor area of the project) -Area under short-term rent 5,211 (accounting for 33.20% of total floor area of the project) -Area under long-term lease - -Food center area (seat) 282 (accounting for 1.80% of total floor area of the project) 2. Office area 100 (accounting for 0.64% of total floor area of the project) 3. Common area 1,716 (accounting for 10.93% of total floor area of the project) 4. Areas for utilities and supporting systems 5. Parking area (for approximately 500 cars) Total floor area 150 (accounting for 0.96% of total floor area of the project) 8,234 (accounting for 52.50% of total floor area of the project) 15,693 sq.m. Note: As of 1 January 2015 which is the date the Wharf Samui started commercial operation, total occupied area was approximately 4,400 sq.m. This represented an occupancy rate of approximately 80% of total commercial areas of the Wharf Samui (5,493 sq.m.). All occupied area has been rented for a period of no more than 3 years. Most rent contracts will expire during 2016 and 2017.The Company may adjust some areas of the project (i.e. parking areas) so that they can be used as commercial area, subject to prior approval from The Wharf Samui Plaza Co., Ltd. 9

10 Details of tenants in the Wharf Samui (as of 1 January 2015) Type of Business Proportion of occupied area to total commercial area Fashion products and souvenirs 30% Restaurants 40% Services and others 5% Food center area 5% Vacant area 20% Total 100% Hotel Business As at 1 January 2015, the Company s hotel that is already in operation is Novotel Bangkok Platinum Pratunam Hotel. Details of the hotel are as follows: 1) Investment policy for the hotel business The Company s investment policy for the hotel business is to invest and own the hotel. However, the hotel that the Company owns will be operated by an internationally recognized hotel chain. The Company will appoint an internationally recognized hotel chain to manage the hotel it develops and owns, and it will pay management fee to such international hotel chain. At present, the Company enters into a hotel management agreement with the ACCOR Group, a well-recognized international hotel chain, whereby the ACCOR Group will manage Novotel Bangkok Platinum Pratunam Hotel for a period of 10 years starting from November ) Details about Novotel Bangkok Platinum Pratunam Hotel Hotel manager The ACCOR Group which is one of the most internationally recognized hotel chains Hotel address No.220 Petchaburi Road Sub-District, Ratchathewi District, Bangkok Land tile deed no. The hotel is located on plots of land under title deed no and 15867, with total area of 2 rais and sq.wah. 10

11 Year of operation commencement Hotel location Total floor area Type of hotel Number of rooms Facilities The hotel commenced its operation in November The hotel is located on Floor 6 to Floor 25 of the Platinum Fashion Mall Phase 2. 19,473 sq.m. A 4-star hotel 283 rooms Restaurant Lobby lounge Swimming pool Spa and fitness center Catering room and conference room Parking area 3) Management of Novotel Bangkok Platinum Pratunam Hotel The ACCOR Group has been appointed as the hotel manager of Novotel Bangkok Platinum Pratunam Hotel. The ACCOR Group is responsible for formulating and implementing hotel management policy and plan and controlling operating costs and expenses to be in line with annual business plan and operating budget which are approved by both the Company and the hotel operator. The ACCOR group shall prepare for consideration and approval by the Company the hotel s business plan and operating budget on an annual basis. As a compensation for rendering hotel management services, the ACCOR Group will be paid in the form management fee which comprises base fee and incentive fee. Payment of management fee shall be made in accordance with terms and conditions as stipulated in the hotel management agreement entered into between the Company and the ACCOR Group. 4) Historical performance of Novotel Bangkok Platinum Pratunam Hotel As at 31 December 2011 As at 31 December 2012 As at 31 December 2013 As at 31 December 2014 Occupancy rate 22% (1) 81% 88% 70% Average room rate (Baht/room/night) 1,815 2,083 2,500 2,498 Note: (1) The hotel started its operation in November

12 2) Revenue structure Revenue structure for the Company and its subsidiaries as showed in the financial statements for special purpose for the Year ended 31 December 2013 and in the audited financial statements for the Year ended 31 December 2014 is as follows: A. Revenue structure classified by project Year 2011 (Non-audited and non-reviewed) Millions % of Baht Year 2012 (Non-audited and non-reviewed) Millions % of Baht Year 2013 (Adjusted) Year 2014 Millions Millions of % % of Baht Baht 1 The Platinum Fashion Mall (1) % % % 1, % Novotel Bangkok Platinum 2 Pratunam Hotel (2) % % % % 3 Other revenues (3) % % % % Total revenue % 1, % 1, % 1, % Note: (1) Revenue from the Platinum Fashion Mall includes rental & service and food & beverage revenues. (2) Revenue from Novotel Bangkok Platinum Pratunam Hotel is revenue from hotel business. (3) Other revenues include interest revenue, advertising billboard revenue, realized gains/losses from investment in securities, unrealized gains/losses from investment in securities as well as gains/losses from asset disposal. B. Revenue structure classified by type of business Year 2011 (Non-audited and non-reviewed) Millions % of Baht Year 2012 (Non-audited and non-reviewed) Millions % of Baht 12 Year 2013 (Adjusted) Millions of Baht % Year 2014 Millions of Baht 1 Rental and service revenues (1) % % % % 2 Revenues from food and beverage (2) % % % % 3 Revenues from hotel business (3) % % % % 4 Other revenues (4) % % % % Total revenue % 1, % 1, % 1, % Note: (1) Rental and service revenues include rental revenue, profit sharing, utilities revenue, common service revenue, insurance revenue and car parking revenue. (2) Revenues from food and beverage are from sale of food and beverage in the Company s food center and its own restaurants. This kind of revenue is in the form of revenue sharing whereby the Company would recognize %

13 all revenues from sale of food and beverage on its statement of comprehensive income and distribution of revenue to operators of food outlets and restaurants will be recognized as cost related to food and beverage business. (3) Revenues from hotel business include hotel room revenue, revenue from sale of food and beverage in hotel and other services revenue related to hotel. (4) Other revenues include interest revenue, advertising billboard revenue, realized gains/losses from investment in securities, unrealized gains/losses from investment in securities as well as gains/losses from asset disposal. 3) Target group of clients Target clients of the Platinum Fashion Mall are tenants who operate the business of wholesaling and retailing clothes, fashion products, leather products, bags, shoes and decorations. Most of whom already have wholesale distributing outlets in Pratunam, Bobe Market and Chatuchak Market, but wish to expand their distribution channels or enhance their product lines. Another target tenant group is the garment manufacturers who wish to reach retailers of clothes and fashion products more effectively. For shoppers/visitors in the project, the Platinum Fashion Mall has targeted retailers of clothes and fashion products who purchase in a substantial amount in each time for further distributing to end users. Apart from retailers, a lot of end users have also visited the Platinum Fashion Mall each day thanks to variety of fashion products with reasonable prices they can select. A lot of foreign tourists also visit and shop in the Platinum Fashion Mall each day. Target clients of Novotel Bangkok Platinum Pratunam Hotel include domestic and foreign tourists and users of other hotel services such as restaurant, conference room, catering room, fitness and spa. 4) Distribution Channels Distribution Channel for the business of developing and leasing/renting of areas in the Platinum Fashion Mall The Platinum Fashion Mall has long been regarded as a One-Stop Wholesale Shopping Mall thanks to variety of clothes and fashion products that shoppers could select. In selecting tenants of areas in the project who mostly are wholesalers and retailers of clothes and fashion products, the Company follows the steps as follows: Step 1: Collect names of potential tenants The Company s marketing team will conduct a market survey to collect as much as possible names and details of distributors of clothes and fashion products who are potential tenants. 13

14 Step 2: Classification of businesses and products Names and details of distributors of clothes and fashion products collected in Step 1 will be classified in accordance with types of products they offer. They may be classified into clothes, fashion products, leather goods, shoes outlets, food outlets, restaurants and etc. Step 3: Outlet scoring When potential tenants are classified in accordance with types of products or services offered, they will be evaluated and scored based on certain criteria such as product & service quality, number of stores, form of management of stores and outlets, product and service price level and etc. After that they will be ranked from highest to lowest. Step 4: Outlet and store selection The number of stores and outlets to be placed in each floor and zone will be in accordance with zoning arrangement plan and result of market survey. For highly demanded products and services, the number of stores and outlets will be high and vice versa. Whether or not a particular store our outlet will be chosen depends upon result of outlet scoring in Step 3 and required number of outlets for each kind of product and service. Step 5: Contacting potential tenants In this step, the Company will contact potential tenants and ask whether they are interested to lease/rent areas in the Platinum Fashion Mall. To persuade such potential tenants to lease/rent areas in the plaza, the Company will introduce and provide details about the project and show example of potential leased areas so that they can use such preliminary data to make decisions. In case a potential tenant does not wish to lease/rent areas, the Company will contact another potential tenant from the list. In attracting shoppers or visitors which are normally retailers of clothes and fashion products to the Platinum Fashion Mall, the Company will send its teams to meet and provide them with basic information about the project. After clients get more accustomed to the project, the Company will focus on providing further information about the project via its web site, and this will be a good channel potential clients can get access to information concerning the Company and the Platinum Fashion Mall on a regular basis. Distribution channels for the hotel business To reach target clients efficiently, the Company has relied on the following channels for its hotel business: 14

15 Sales agent Tour agent Its own sales staffs Internet-based hotel reservation system Tourism exhibition 5) Raw material procurement Given the nature of the Company s two main existing businesses which include the business of developing commercial property for leasing/renting and the hotel business, raw material procurement is normally referred to project development and construction procedures which are as follows: (1) Land Procurement Land procurement is the first step in developing and constructing a commercial property project. Normally, land plots which are appropriate for developing a large-scale commercial property project such as shopping plaza and hotel should be located in the area that is conveniently accessible, highly populated and possesses physical shape that matches project concept. Such land plots shall also be located in the area that is equipped with complete set of infrastructure, with limited usage constraints. In procuring land plots necessary for development and construction of a commercial property project, the Company will do so by: A. Acquisition of land ownership: The Company will do this when land acquisition price is reasonable. B. Acquisition of land leasehold right: The Company will do this when original land owner does not wish to sell land or the land price is so high that this will substantially affect expected project return. (2) Conduct project feasibility study When the Company could procure required land plots, it will then conduct project feasibility study in many areas to forecast expected project return and assess potential risk and uncertainty in relation to project development, construction and operation. In developing a commercial property project, the Company will conduct feasibility study in the area of: Marketing feasibility Technical and structural feasibility Financial feasibility 15

16 (3) Project design When the Company is quite sure that it can procure sufficient land plots with desired characteristics for project development and construction, it will commence architectural, structural and system designs. During the project design phase, the Company as the project owner will work closely with project designer (whose main duties including studying details about project design, conducting civil, electrical, mechanic, environmental and architectural designs, preparing technical requirements concerning the project, conducting additional project designs (if necessary) and modifying project design and construction if necessary) to ensure that project design, architecture, internal area design and arrangement and tenant selection match well with marketing concept of the project and dynamically changing property market condition. (4) Conduct environmental impact assessment Prior to commencing project construction, the Company will conduct a study to assess whether in developing and constructing a particular commercial property project, it needs to conduct an environmental impact assessment (EIA) study in accordance with applicable legal requirements. In developing a new project, the Company will strictly conform to all applicable rules and regulations. (5) Selection of construction contractor In developing a commercial property project, the Company has put emphasis on high quality and standards of construction to ensure timely completion of project development under the prespecified development budget. To achieve the aforementioned objectives, the Company will select a qualified construction contractor (whose main duties are to construct project and install equipment in accordance with project development schedule, monitor construction quality and schedule, institute safety and environmental protection measures and etc), taking into account their past records and experience in similar projects, financial strengths, construction process and procedures, construction technologies and availability of construction equipment. (6) Project construction management After selecting a construction contractor, the Company will consider and select a construction consulting firm, taking into account their past experience and records in similar projects, availability and credentials of working teams, working schedule, financial and technical proposals, scope of proposed services and etc. Construction consulting firm will foresee potential problems and threats to project development and construction and formulate solutions for such problems and threats. The Company and the construction consulting firm will continuously monitor project development progress to ensure timely project development completion. 16

17 6) Business Competition Competition in the Commercial Property Business in Pratunam and Ratchaprasong Area As of 1 January 2015, the Company s main source of revenue comes from the Platinum Fashion Mall which is the Company s core commercial property project. Despite its good location, the Platinum Fashion Mall has faced intense competition from department stores, shopping plazas and other commercial property projects located in the nearby area. Competition that the Platinum Fashion Mall has faced includes: 1. Competition to procure sufficient and appropriate land plots with good location 2. Competition to procure tenants. To draw interests from potential tenants, project owner and developer must be able to propose lease/rent terms which are relatively attractive compared to those proposed by other competitors and must continuously launch marketing and promotional campaigns to create project awareness. Despite intense competition from other nearby commercial property projects, the Platinum Fashion Mall can compete well with its competitors which include modern trade, shopping plaza, department store and other types of commercial property projects by capitalizing on: 1. Good project location 2. Well-designed and elegant buildings of the Platinum Fashion Mall 3. Easy access to the project via various transportation modes 4. Strong management team Competition in the hotel business in Pratunam and Ratchaprasong Area As of 1 January 2015, the Company s hotel already in operation is Novotel Bangkok Platinum Pratunam Hotel which is under management by the ACCOR Group. Despite its good location and being under management by the ACCOR Group, the hotel has faced stiff competition from other hotels and residential properties in the nearby area while number of tourists who have used hotel services over the last two years did not much increase due to strong competition from hotels located in other parts of Bangkok and unfavorable economic and political environment. Competition among hotels is in the form of service quality, pricing and provision of other hotel services. In competing with other hotels, Novotel Bangkok Platinum Pratunam Hotel will compete not only in terms of pricing but also in terms of service quality. The Company will control operating costs and expenses in relation to hotel business. Locating close to the Platinum Fashion Mall has also helped to create competitive advantage for the hotel business as such prominent feature of Novotel Bangkok Platinum Pratunam Hotel would help to attract a lot of international tourists to use its hotel services each year. The 17

18 Company can also formulate and implement advertising and promotional campaigns to support operation of those two projects simultaneously, allowing the Company to gain benefit in terms of economy of scale in its operation. Environmental Impact None Summary of Key Contracts Key Contracts that the Company Entered into 1) Area Lease Agreement for Commercial Purposes Name of Contract Key Parties Leased Areas Type of Business to be Operated in Leased Areas Tenor of the Area Lease Agreement and Its Renewal Lease Deposit Area Lease Agreement for Commercial Purposes ( Area Lease Agreement ) Lessor: The Platinum Group Public Company Limited (the Company ) Lessee: Business operators in the Platinum Fashion Mall Areas in the Platinum Fashion Mall of which sizes may vary from one contract to another Depending on the type of business which is operated by the lessee. Such will be clearly specified in the Area Lease Agreement the Company enters into with each lessee. The lessee agrees not to operate any business that differs from the one specified in the Area Lease Agreement unless obtaining a prior written consent from the Company as the lessor. Tenor of the Area Lease Agreement will be in accordance with the term specified in each agreement. If the lessee does not violate terms and conditions of the Area Lease Agreement and would like to renew the contract after its expiration, the lessee shall inform the Company in writing about its intention to do so prior to the contract expiration. The parties in the Area Lease Agreement shall discuss and agree about the tenor, lease rate & payment and other terms and provisions in the renewed Area Lease Agreement prior to the expiration of the existing contract. The amount of lease deposit will be specified in each Area Lease Agreement. Lease deposit is required under all lease agreements as collateral for payment of lease, utilities services, common fee charges, damages, fines, fees, insurance or any other debts that may be incurred as a result of breach of terms and provisions in the Area Lease Agreement by the lessee. In case the lessee fails to settle any debts or claims that are incurred in relation to terms and conditions in the Area Lease Agreement when they are due, the lessee allows the Company to deduct from lease deposit for the purpose of settling such debts and claims. In 18

19 Termination and Expiration of the Area Lease Agreement case the Company exercises its rights to terminate the Area Lease Agreement due to violation of terms and conditions in the contract by the lessee or the lessee terminates the Area Lease Agreement prior to its expiration, the lessee allows the Company to confiscate the said lease deposit immediately. Each of the followings will result in immediate termination and expiration of the Area Lease Agreement: 1. In case either party in the agreement violates one or more terms and conditions as stipulated in the contract or is under receivership, the non-defaulting party shall inform the defaulting one to cure such default within the specified period. If the defaulting party fails to cure such default within the specified period, the non-defaulting one reserves the right to terminate the Area Lease Agreement immediately without prior notice. 2. In case the Area Lease Agreement expires and it is not renewed, the agreement shall be terminated. 3. In case there is a fire or any other disaster which causes serious damages to leased areas such that they can no longer be used, the Area Lease Agreement will automatically expire. 4. In case state agencies or BMA expropriates land or leased areas or BMA does not allow the use of leased areas, the Area Lease Agreement will automatically expire. 2) Hotel Management Agreement for Novotel Bangkok Platinum Pratunam Hotel Contract Hotel Management Agreement for Novotel Bangkok Platinum Pratunam Hotel ( Hotel Management Agreement ) Parties in the Agreement The Employer: The Platinum Group Public Company Limited The Employee: AAPC (Thailand) Co., Ltd. Tenor of the Hotel Management Agreement Nomination of the Employee Operating Expenses of the Hotel The tenor of the Hotel Management Agreement is 10 years, starting from the first day the hotel commencing its operation in November 2011 until the 10 th anniversary year from the day the hotel commencing its operation, or any other day the Employer and the Employee will later agree upon. When the Hotel Management Agreement reach its 10-year term and it is renewed, the term of such extended contract will be 5 years. The Employer agrees to appoint the Employee to manage and operate Novotel Bangkok Platinum Pratunam Hotel ( Hotel ) throughout the tenor of the Hotel Management Agreement. The Employer acknowledges and allows the Employee to formulate and implement business, marketing and operating plans for the Hotel. In this regard, the Employer will not intervene in operation and management of the Hotel by the Employee. The Employer shall bear all costs and expenses in relation to management and operation of the Hotel. 19

20 Formulation of Business Plan Use of ACCOR Brand and Novotel Brand Compensation for the Employee The Employee shall prepare and submit for consideration by the Employer draft of annual business plan at least 45 days prior to the beginning of each fiscal year. The Employer and the Employee shall consider and approve the said annual business plan prior to its actual implementation. When the annual business plan is implemented, the Employee shall continuously monitor its implementation and control operating costs and expenses to be in line with the implemented annual business plan and budget. The Hotel is allowed to include ACCOR Brand or Novotel Brand as a part of the Hotel s name, provided that operation and management of the Hotel are in accordance with terms, conditions and standards of hotel management as prescribed by the ACCOR Group. Annual compensation to be made by the Employer to the Employee consists of: 1) Base fee 2) Incentive fee Payment of base fee and incentive fee shall be made in accordance with terms and conditions of the Hotel Management Agreement. 3) Joint Venture Agreement to Invest in the Bangkok Skyline Project Contract Date of Agreement 4 November 2013 Joint Venture Agreement to Invest in the Bangkok Skyline Project ( Bangkok Skyline Joint Venture Agreement ) Parties in the Agreement The parties in the Bangkok Skyline Joint Venture Agreement consist of: 1. The Kesorn Group 2. The Platinum Group (which consists of The Platinum Group Public Company Limited, The Platinum Market Company Limited and the Platinum Fashion Mall Juristic Person) (1. and 2. are collectively called owners of buildings in the Bangkok Skyline Project ) 3. Bangkok Skyline Company Limited ( BS ) 4. Ratchaprasong Square Trade Association 20

21 Objectives of the Agreement Investment in and Construction of the Bangkok Skyline Project Period for Using the Bangkok Skyline Project Ownership in the Skywalk Management of the All parties in the agreement agree to design, develop, construct and manage the Bangkok Skyline Project, a skywalk which integrates Chidlom BTS Skytrain Station with some shopping center buildings located in Ratchaprasong Area including Amarin Plaza, Kesorn Plaza, a commercial property project to be developed and constructed in the future by the Kesorn Group, BIG C Super Center, Ratchadamri Branch, a future commercial property project to be developed and constructed by The Platinum Market Co., Ltd. (i.e. The Market by Platinum Project), Novotel Bangkok Platinum Pratunam Hotel and the Platinum Fashion Mall (collectively called buildings in the Bangkok Skyline Project ). Owners of buildings in the Bangkok Skyline Project will develop and construct the skywalk in the Bangkok Skyline Project in accordance with construction plan and design as approved by BS and BMA. Payment for development and construction costs and expenses in relation to the Bangkok Skyline Project shall be made as follows: 1) For development and construction of the Bangkok Skyline Project for the part which passes privately owned land, owners of such land plots shall bear all development and construction costs. 2) For development and construction of the Bangkok Skyline Project for the part which passes publicly owned land, the Platinum Group and the Kesorn Group shall share development and construction costs in accordance with development and construction cost sharing schedule as agreed by both parties and specified in the Bangkok Skyline Joint Venture Agreement 3) For future costs and expenses to be incurred in repairing, maintaining and removing the Bangkok Skyline Project, owners of buildings in the Bangkok Skyline Project shall share such costs and expenses in accordance with 1) and 2) above. Usage time of the Bangkok Skyline Project is equivalent to the concession period for the BTS Skytrain Project for which BTS was granted. The initial term of the BTS Skytrain concession period will end in December Parts of the Bangkok Skyline Project which are developed and constructed in the privately owned land shall be privately owned. Parts of the Bangkok Skyline Project which are developed and constructed in the public area shall be owned by BMA. All parts of the Bangkok Skyline Project shall be managed by BS. When development and construction of the Bangkok Skyline Project is completed, 21

22 Bangkok Skyline Project Termination and Expiration of the Contract BS, in cooperation with Ratchaprasong Square Trade Association, will manage the project throughout the term of the Bangkok Skyline Joint Venture Agreement. In managing the Bangkok Skyline Project, a committee consisting of 3 members from the Platinum Group and 3 members from the Kesorn Group will be formed. Contract Termination BS may terminate the agreement it entered into with any of the owners of buildings in the Bangkok Skyline Project by providing a prior written notice under the following circumstances: During the tenure of the Bangkok Skyline Joint Venture Agreement, if any of the owners of buildings in the Bangkok Skyline Project fails to settle repairing and maintenance expenses in relation to the skywalk or fulfill any debt obligations with BS, and despite a 15-day prior written warning from BS, such owner of buildings still fails to make such payment to or settle debt obligations with BS within the period as specified in the written warning, BS shall be allowed to terminate the Bangkok Skyline Joint Venture Agreement with that particular defaulting owner of buildings in the Bangkok Skyline Project. During the tenure of the Bangkok Skyline Joint Venture Agreement, if any of the owners of buildings in the Bangkok Skyline Project violates of fails to comply with terms and conditions in such contract, and despite a prior written warning from BS, such owner of buildings in the Bangkok Skyline Project still fails to cure such default with 30 days from the date it obtains a written warning from BS, BS shall be entitled to terminate the Bangkok Skyline Joint Venture Agreement with that particular owner of buildings in the Bangkok Skyline Project. Contract Expiration The following circumstances will lead to automatic expiration of the Bangkok Skyline Joint Venture Agreement: In case there is an order from competent authorities disapproving development and construction of the skywalk or there is any force majeure or event which makes development and construction of the Bangkok Skyline Project impractical; In case the concession agreement between BTS and BMA is terminated or expires due to whatsoever reasons; In case the skywalk is destroyed or damaged by natural disaster, chaos or any force majeure which is not in accordance with the fault of either party, and 22

23 such damage cannot be resurrected; In case there is an order from competent authorities to close the skywalk on a permanent basis or to remove the skywalk; and In case all parties in the agreement agree and give a mutual consent to terminate the contract. 4) Agreement to Lease Land and Buildings of the Wharf Samui Date of Agreement Parties in the Agreement Leased Properties Lease Period Purpose in Leasing the Properties Lease Payment and Method of Payment Lease 29 October 2014 The Lessor: The Wharf Samui Plaza Company Limited The Lessee: The Platinum Group Public Company Limited 9 plots of land with total approximate area of 12 rais located in Bor Phut Sub-District, Koh Samui District, Suratthani Province A one-storey building No.62/1-62/8 located at Moo 1, Bor Phut Sub-District, Koh Samui District, Suratthani Province, a two-storey building No.62 and 62/9-62/12 located at Moo 1, Bor Phut Sub- District, Koh Samui District, Suratthani Province and a four-storey building (All of which are collectively called Land along with Buildings.) The Lessor agrees to allow the Lessee to lease Land along with Buildings for a period of 10 years (see note 1 under this table) from 1 January 2015 to 31 December The Lessor agrees to allow the Lessee to lease Land along with Buildings for another 5 years upon the expiration of the initial lease period. In this regard, the Lessee shall inform the Lessor in writing its intention to renew the lease contract at least 1 year prior to the expiration of the initial lease contract unless the Lessee would not like to renew the lease agreement. The parties shall agree key terms and conditions of the extended lease agreement at least 6 months prior to the lease expiration. The Lessee has leased land along with buildings for the purpose of operating a commercial property project in the form of community mall consisting of restaurants, retail outlets and parking areas. The Lessee could also sub-lease Land along with Buildings to an outside party. In case the Lessee would like to change the purpose of leasing Land along with Buildings, it must obtain a prior written consent from the Lessor. The Lessee agrees to make an annual lease payment for the amount of Baht 34,000,000 to the Lessor. The first annual lease payment shall be made on the date of signing this agreement. Subsequent annual lease payments shall be made within 5 January of each year. The Lessee agrees to provide a lease deposit or a bank guarantee to the Lessor in accordance 23

24 Deposit Use of Land along with Buildings Sub-Lease of Land along with Buildings Repairing and Maintaining the Properties Expiration of the Agreement Grant of with the amount specified in the Agreement to Lease Land and Buildings of the Wharf Samui throughout the term of the agreement. Lease deposit is required as collateral for payment of lease, damages, fines, fees or any other debts that may be incurred as a result of breach of terms and provisions in the agreement by the Lessee. In case the Lessee fails to settle any debts or claims that are incurred in accordance with terms and conditions in the Agreement to Lease Land and Buildings of the Wharf Samui when they are due, the Lessee allows the Lessor to deduct from lease deposit amount for the purpose of settling such debts and claims. The Lessee agrees to utilize Land along with Buildings in accordance with the purpose, terms and conditions of the Agreement to Lease Land and Buildings of the Wharf Samui. The Lessor allows the Lessee to sub-lease Land along with Buildings to an outside party, provided that the sub-lease period shall not exceed the remaining terms of this agreement. Throughout the tenure of the Agreement to Lease Land and Buildings of the Wharf Samui, the Lessee agrees to repair and maintain buildings and equipment belonging to the Wharf Samui with its own expenses to ensure they are in good condition. When the agreement expires or is terminated under whatsoever cases, the Lessee shall deliver to the Lessor land, buildings and equipment belonging to the Wharf Samui which are in good condition with its own expenses. In case the Lessee violates any of the provisions in the Agreement to Lease Land and Buildings of the Wharf Samui, fails to make annual lease payment or pay for fire insurance or property tax or settle any debt obligations that are incurred in accordance with the terms and conditions under this agreement and the Lessee fails to cure such default within the period as stipulated in the agreement, the Agreement to Lease Land and Buildings of the Wharf Samui shall be automatically terminated when reaching the end of the specified period. In case there is any promulgation of rules and regulations by competent authorities or flood, fire, war, natural disaster or any catastrophe which ruin or cause serious damages to properties of the Wharf Samui such that they cannot be used for commercial purposes for 180 days or more, the Lessor and the Lessee agree to terminate the Agreement to Lease Land and Buildings of the Wharf Samui. In case any of the following circumstances occurs: 1. The Lessee is under receivership; 2. The Lessee goes into bankruptcy; 3. The Lessee disposes or transfers rights under this agreement to another party without a prior written consent from the Lessor. For the above mentioned, this agreement shall be automatically terminated. In case the Lessee would like to acquire Land along with Buildings in whole or in part from 24

25 Call Option and Right of First Refusal related to the Wharf Samui Note 1: the Lessor, the Lessee shall inform the Lessor in writing about their indicative purchase price along with other terms and conditions. The Lessor agrees to negotiate with the Lessee about this, and the transaction should be completed within 90 days. In case the Lessor would like to dispose Land along with Buildings any time during the lease period, the Lessor shall notify the Lessee about this in writing. Such written notification will specify their indicative sale price along with other terms and conditions which facilitate the Lessee to decide whether it should exercise its option to acquire Land along with Buildings. In case the Lessee does not exercise its option to acquire Land along with Buildings within 90 days from the date of notification by the Lessor, the Lessor may offer to sell Land along with Buildings to outside parties, provided that the offer price of such properties along with terms and conditions provided to outside parties shall not be better than those offered to the Lessee. In accordance with the Agreement to Lease Land and Buildings of the Wharf Samui dated 29 October 2014, key terms related to the tenure of the lease agreement are as follows: 1. The Lessor agrees to allow the Lessee to lease Land along with Buildings for a period of 3 years from 1 January 2015 to 31 December The Lessor undertakes to let the Lessee to renew the Agreement to Lease Land and Buildings of the Wharf Samui for another 3 times as follows: 2.1 The first renewal shall allow the 3-year lease period from 1 January 2018 to 31 December The second renewal shall allow the 3-year lease period from 1 January 2021 to 31 December The third renewal shall allow the 1-year lease period from 1 January 2024 to 31 December In renewing the Agreement to Lease Land and Buildings of the Wharf Samui, the Lessee shall notify the Lessor in writing about its intention to renew the agreement at least 6 months prior to each expiration unless the Lessee does not wish to extend it. Both parties agree that terms and conditions under the renewed Agreement to Lease Land and Buildings of the Wharf Samui will be the same as those under the original one. Apart from the Agreement to Lease Land and Buildings of the Wharf Samui dated 29 October 2014, The Wharf Samui Plaza Co., Ltd. as the Lessor and the Company as the Lessee also entered into an undertaking agreement dated 29 October 2014 whereby the Lessor undertakes to take certain actions to ensure that the Lessee has possessed the right to lease Land along with Buildings for the period of 10 years in accordance with terms and conditions as stipulated in the Agreement to Lease Land and Buildings of the Wharf Samui. 25

26 Thus, the real intention of the Agreement to Lease Land and Buildings of the Wharf Samui dated 29 October 2014 for the part regarding tenure of the agreement is to grant the Company the right to lease Land along with Buildings for the period of 10 years from 1 January 2015 to 31 December ) Non-Competition Agreement Contract Non-Competition Agreement Date of Agreement January 2015 Parties in the Mr.Surachai Chotjurangkool, Mr.Chatchawal Pongsuthimanus, Ms.Panjaporn Agreement Chotjurangkool and Mr.Piroon Limpiwiwatkool (all of whom are directors and/or controlling shareholders of the Company and are collectively called the Undertakers.) The Platinum Group Public Company Limited (the Company ) Terms and Conditions of the Agreement 1. Throughout the period the Undertakers are directors, executive directors, major shareholders and controlling persons of the Company (the Undertaking Period ), the Undertakers agree not to operate any businesses that have nature and characteristics similar to those of the Company as follows: A. The Undertakers shall not (a) operate any businesses of the same nature and competing with that of the Company and/or its subsidiaries (whether those in existence as of the date of this agreement or those to be later established during the Undertaking Period) (The Company and all of its subsidiaries are collectively called the Company.) or (b) be a partner in an ordinary partnership (including being a partner in a joint venture) or be a partner with unlimited liability in a limited partnership that undertakes the business of the same nature and competing with that of the Company whether on their own account or on account of a third person and whether directly or indirectly. B. The Undertakers shall monitor to make sure that their related persons not (a) operate any businesses of the same nature and competing with that of the Company or (b) be a partner in an ordinary partnership (including being a partner in a joint venture) or be a partner with unlimited liability in a limited 26

27 partnership that undertakes the business of the same nature and competing with that of the Company whether on their own account or on account of a third person and whether directly or indirectly. A subsidiary and a related person shall have the same meanings as those defined in the Notification of the Capital Market Supervisory Board no.kor.chor 17/2551 re: definitions used in notifications concerning issuance and offer for sale of securities (as amended). 2. This agreement shall become into force from the date of signing of this agreement by the Undertakers and be valid throughout the Undertaking Period. Key Agreement Bangkok Skyline Company Limited Entered into with Outside Party Agreement to Develop and Construct the Bangkok Skyline Project Contract Agreement to Develop and Construct the Bangkok Skyline Project Date of Agreement 1 August 2013 Parties in the Agreement Purpose of the Agreement Construction of the Skywalk Bangkok Mass Transit Public Company Limited ( BTS ) Bangkok Skyline Company Limited ( BS ) BTS and BS agree to develop and construct a skywalk that integrates BTS Skytrain Chidlom Station with some commercial property projects located in Ratchaprasong Area including Amarin Plaza, Kesorn Plaza, a commercial property to be developed in the future by the Kesorn Group, BIG C Super Center, Ratchadamri Branch, a future commercial property project to be developed by The Platinum Market Company Limited (i.e. The Market by Platinum Project), Novotel Bangkok Platinum Pratunam Hotel and the Platinum Fashion Mall (all of which are collectively called Buildings ). BS agrees to deliver a construction plan to BTS for consideration and approval. BS shall procure and deliver any documents in relation to asking for approval to develop and construct the Bangkok Skyline Project as requested by BTS as soon as it can. BS shall ask for approval in relation to modification of buildings or any 27

28 other approval as required by law for the purpose development and construction of the Bangkok Skyline Project from relevant government authorities. During development and construction of the Bangkok Skyline Project, BS agrees to arrange for sufficient and efficient safety measures and those aimed to reduce environmental impact. Usage Period for the Skywalk Remuneration in case of Extension of the Bangkok Skyline Project Installation of Commercial and Advertising Boards and Procurement of Commercial Benefits from the Bangkok Skyline Project BTS allows BS to use the Bangkok Skyline Project for the period equivalent to the concession period BTS granted by BMA to operate the BTS Skytrain Project. The initial concession period for the BTS Skytrain Project will end in December In case any outside parties who are owners of buildings or operators of shopping centers in Ratchprasong Area (excluding the Platinum Group and the Kesorn Group) would like to integrate their buildings or shopping centers to the Bangkok Skyline Project, doing so shall be approved by BTS. BTS then will proceed to ask for approval to do so from BMA and inform such outside party(s) to acknowledge and accept terms and conditions in relation to integrating its project(s) to the Bangkok Skyline Project. Such terms and conditions will be co-formulated by BTS and BS. In this regard, BS and BTS will ask such party to pay remuneration for linking its project (s) to the Bangkok Skyline Project. Such remuneration which will be determined based on the formula as specified in the agreement will be later reverted to the Platinum Group and the Kesorn Group. Throughout the term of the Agreement to Develop and Construct the Bangkok Skyline Project, BS agrees not to install or allow installation in any parts of the Bangkok Skyline Project commercial or advertising boards, posters, trademarks, trade names for commercial purposes. BS also agrees not to lease or rent any parts of the Bangkok Skyline Project to outside parties for commercial purposes. Termination and Expiration of the Agreement Termination of the Agreement BTS may terminate the Agreement to Develop and Construct the Bangkok Skyline Project by informing BS in advance in writing under the following circumstances: During the tenure of the agreement, if BS fails to pay for repairing and maintenance expenses in relation to the skywalk or settle any debt 28

29 obligations or claims with BTS, and despite a 15-day prior written warning from BTS, BS still fails to make such payment to or settle debt obligations or claims with BTS within the period as specified in the written warning, BTS shall be allowed to terminate the Agreement to Develop and Construct the Bangkok Skyline Project. During the tenure of the Agreement to Develop and Construct the Bangkok Skyline Project, if BS violates of fails to comply with terms and conditions under such agreement, and despite a prior written warning from BTS, BS still fails to cure such default with 30 days from the date it receives a written warning from BTS, BTS shall be entitled to terminate the agreement. Contract Expiration The following circumstances will lead to automatic expiration of the Agreement to Develop and Construct the Bangkok Skyline Project: In case there is an order from competent authorities disapproving development and construction of the skywalk or there is any force majeure or event which makes development and construction of the Bangkok Skyline Project impractical; In case the concession agreement between BTS and BMA is terminated or expires due to whatsoever reasons; In case the skywalk is destroyed or damaged by natural disaster, chaos or any force majeure which is not in accordance with the fault of either party, and such damage cannot be resurrected; In case there is an order from competent authorities to close the skywalk on a permanent basis or to remove the skywalk; and In case both parties in the agreement agree and give a mutual consent to terminate the contract. Land Lease Agreement for the Market by Platinum Project Contract Land Lease Agreement for Land in Ratchaprasong Area Date of Agreement 1 August 2012 Parties Bureau of the Crown Property (the Lessor ) and The Platinum Market Company Limited (the Lessee ) Leased Properties Land plot with total area of 20 rais and sq.wah located in Lumpini Sub-District, Pathumwan District, Bangkok 29

30 Term of the Agreement and Extension Purposes in Leasing the Properties Lease Payment The term of the agreement is 30 years from the end of the initial construction phase, or 4 years from the date the Lessor delivers all land plots to the Lessee. The Lessor delivered all land plots to the Lessee on 7 January The Lessor undertakes that if the Lessee wishes to extend the Land Lease Agreement for Land in Ratchaprasong Area, it can do so for another 30 years after the expiration of initial lease term. In extending the lease term, the Lessee shall inform the Lessor in writing its intention to extend such land lease agreement within Year 25 of the initial lease term. All terms and conditions under the extended or the new Land Lease Agreement for Land in Ratchaprasong Area (as the case may be) shall be agreed upon by both parties, and the extended or the new lease agreement shall be signed by both parties within Year 27 of the initial lease term. However, the Lessee s right to renew the Land Lease Agreement for Land in Ratchaprasong Area shall be voided in case the Lessee fails to make annual lease payment or conform to terms and conditions in the agreement, and despite a prior written notice from the Lessor, the Lessee still fails to cure such default within 30 days from the date it obtain a prior written warning from the Lessor. There is an exception to this in case the Lessee obtains a written consent from the Lessor. The purpose in entering into the Land Lease Agreement for Land in Ratchaprasong Area is to procure plots of land for developing a commercial property project. Ownership in buildings of the commercial property project shall belong to the Lessee during the development and the operation phases of the project. Upon expiration of the lease agreement or when the contract is terminated under whatsoever cases, ownership in buildings of the commercial property project shall be transferred to the Lessor. Terms of lease payment shall be in accordance with the agreement. Lease payment consists of: 1) Initial Lease Payment for the total amount of Baht 626 million. It consists of advanced lease payment for the amount of Baht 588 million and leasehold transfer fee for the amount of Baht 38 million 2) Annual lease payment from Year 1 to Year 30 to be made on a monthly basis. 30

31 Renewal of the Lease Agreement Construction of Buildings Damaged or Destroyed Properties In case the Lessee would like to extend the lease tenure for another 30 years after the expiration of the initial lease term, it must conform to the following procedures: 1) The Lessee shall inform the Lessor in writing its intention to extend the agreement within Year 25 of the initial lease term. 2) The parties under the lease agreement shall each appoint an independent asset appraiser which must be under the SEC list. Each independent asset appraiser shall appraise its leasehold right value. New leasehold value shall be determined based on the average of leasehold value as appraised by the independent asset appraiser appointed by the Lessee and that as appraised by the independent asset appraiser appointed by the Lessor. 3) The parties shall finalize terms and conditions and sign the new or extended agreement within Year 27 of the initial lease term. The Lessee undertakes to develop and construct the project by conforming to all applicable rules and regulations and in accordance with construction plan approved by competent authorities so that development and construction of the project could be completed in accordance with construction schedule. In case of development and construction delays, the Lessee could not ask for extension of development and construction period unless such delay is caused by a force majeure event or the Lessee is granted by the Lessor a written consent to do so. In case of a force majeure event, the Lessee shall inform the Lessor in writing immediately but no later than 7 days from the date of occurrence of such force majeure event. In this regard, the Lessor may allow extension of development and construction of the project for a period equivalent to the period of force majeure or longer. The parties in the agreement agree that ownership in buildings under this agreement shall belong to the Lessee from the commencement date of project construction. However, from the date the agreement expires or is terminated under whatsoever reasons, ownership in buildings shall be transferred to the Lessor. Throughout the term of the lease agreement, if properties or buildings in the project are damaged or destroyed in whole or in part under whatsoever reasons such that they can no longer be used in accordance with leasing purposes as specified in the agreement, the 31

32 Termination of the Agreement Lessee shall notify the Lessor within 30 days from the date such incident occurs whether it would like to resurrect the damaged properties or to terminate the agreement: 1) In case the Lessee informs the Lessor that it would like to resurrect the damaged properties, it shall proceed to do so within reasonable time so that they could be repaired and utilized for commercial purposes; 2) In case the Lessee does not inform the Lessor whether it would like to resurrect the damaged properties or buildings within 30 days from the date such incident occurs or informs the Lessor that it does not wish to do so, the Lessor may immediately terminate the lease agreement. The Land Lease Agreement for Land in Ratchaprasong Area shall be terminated when: 1) Any of the following circumstances occurs: The Lessee is under receivership; The Lessee disposes or transfers any rights under this agreement to any outside parties without a prior written consent from the Lessor, violates or fails to comply with provisions concerning use of leasehold right as a collateral or sub-lease of assets; The Lessee does not inform the Lessor whether it would like to extend the agreement within the prescribed period; In this regard, the Lessor may immediately terminate the agreement by informing the Lessee in writing. 2) The Lessee violates or fails to conform to one or more conditions or provisions in the lease agreement, and the Lessee fails to cure such violation or non-conformance within 30 days from the date it receives a prior written notice from the Lessor. In this regard, the lease agreement shall be immediately terminated at the end of the period as specified in the written notice. When the lease agreement is terminated under whatsoever reasons, the Lessee shall transfer ownership in buildings, equipment and properties to the Lessor. In case the Lessor gets any damages from such termination, the Lessee shall compensate the Lessor for such incurred damages. 32

33 Key Contract The Platinum Samui Co., Ltd. Enters Into Hotel Management Agreement for Holiday Inn Express Hotel and Holiday Inn Resort Hotel Contract Hotel Management Agreement for Holiday Inn Express Hotel and Holiday Inn Resort Hotel Date of Agreement 22 October 2014 Parties The Platinum Samui Co., Ltd. (the Employer ) Holiday Inns (Thailand) Limited (the Employee ) Term of the Agreement 15 years from the date each hotel starts its operation Scope of Services In case the Employer and/or the Employee does not inform the other party that it does not wish to renew the contract (must do so at least 6 months prior to the expiry of the agreement), this agreement shall be automatically extended twice, with the renewed term of 5 years each. Scope of services in accordance with Hotel Management Agreement for Holiday Inn Express Hotel and Holiday Inn Resort Hotel during preoperation and operation phases of each hotel include: Pre-Operation Scope of Services: During the pre-operation phase of each hotel, the Employee shall provide the following services to the Employer: 1. Provide technical services and assistance necessary in developing and constructing Hotel Inn Express Hotel and Holiday Inn Resort Hotel in accordance with standards as prescribed by the InterContinental Hotels Group (IHG); 2. Recruit and select general manager of each hotel who will be in charge of formulating and implementing hotel business plan; 3. Cooperate and provide assistance and support as necessary to the Employer in formulating and implementing key business and operating plans for Holiday Inn Express Hotel and Holiday Inn Resort Hotel including sales, marketing and promotional plans as well as annual budget plan for the first year of hotel operation, recruitment plan, IT plan and etc; 4. Cooperate and provide assistance and support as necessary to the Employer in obtaining relevant permission and licenses in relation to development, construction and operation of Holiday Inn Express Hotel and Holiday Inn Resort Hotel from relevant authorities; and 5. Recommend and assist the Employer as necessary in obtaining 33

34 Responsibilities of the Employee in Controlling and Managing Day-to-Day Operation of Hotel Business Formulation of Annual Hotel Business Plan insurance policies in relation to operation of Holiday Inn Express Hotel and Holiday Inn Resort Hotel. Scope of Services during Operation Phase After Holiday Inn Express Hotel and Holiday Inn Resort Hotel start their respective operations, the Employee will provide services to the Employer as follows: 1. Recruit, select and manage hotel staffs; 2. Purchase, repair and maintain hotel equipment; 3. Prepare and implement annual operating plan, business plan, advertising and promotional plans including other plans related to hotel operation; 4. Evaluate and select suppliers and purchase raw materials (such as fresh food and beverages) and consumables used in hotel business from the selected suppliers; 5. Monitor job performing by outside professionals such as lawyer, auditor, asset appraiser and etc that are employed for the purposes related to hotel operation; 6. Prepare and keep documents and evidence including financial and accounting data to be used in preparing financial statements of hotel business which must be audited/reviewed by an external auditor to be appointed by the Employer; and 7. Prepare financial statements and other financial reports required to assess performances of hotel business as well as the Employee. The Employer shall assign the Employee to control and manage day-today operation of Holiday Inn Express Hotel and Holiday Inn Resort Hotel without direct or indirect intervention, provided that operation and management of hotel business will be in accordance with terms and conditions as stipulated in the hotel management agreement, business plan and annual operating budget as approved by the Employer and the Employee and practices and standards of hotel management as prescribed by the InterContinental Hotels Group (IHG). Prior to the beginning of each fiscal year, the Employee shall prepare an annual business plan for Holiday Inn Express Hotel and Holiday Inn Resort Hotel which comprises pro-forma statement of income, pro-forma statement of cash flows, capital expenditures plan, recruitment plan, marketing plan as well as other details and information as additionally requested by the Employer. Such annual business plan shall be 34

35 Compensation to the Employee considered and approved by the Employer and the Employee prior to its actual implementation. The Employee shall provide the Employer a monthly progress report concerning operating performances of Holiday Inn Express Hotel and Holiday Inn Resort Hotel or other reports and data as reasonably requested by the Employer. Compensation for provision of technical services and others during preopening phase To be made in accordance with the rate and terms as stipulated in the agreement Management Fee Management fee to be made in relation to management of Holiday Inn Express Hotel and Holiday Inn Resort Hotel consists of: 1) Base Management Fee 2) Incentive Management Fee Payment of management fee shall be made in accordance with rates and terms as specified in Hotel Management Agreement for Holiday Inn Express Hotel and Holiday Inn Resort Hotel. Technical and Management Assistance: -None- Project Feasibility Study: -None- Future Projects Details of future projects to be developed by the Company and its affiliates are as follows: The Market by Platinum The Market by Platinum will be developed to be an air-conditioned fair market in Downtown Bangkok. The project will be located close to Ratchaprasong Junction, and it will comprise more than 3,000 outlets. The project will offer variety of products and services which can satisfy different needs of target clients. Total expected capital expenditure requirement for the project is Baht 7,500 million. 35

36 Construction of the Market by Platinum will commence in the Year 2015 and construction of the project will be completed in the Year The project will start its operation in the Year (1) Project location The Market by Platinum will be located close to Ratchaprasong Junction. This project will be located in a prime business area of Bangkok and will be easily accessible via various transportation modes. Illustrated below is the location of the Market by Platinum Project: Source: The Platinum Group Public Company Limited (2) Building characteristics and facilities The Market by Platinum will be a 13-storey building, with 1 underground floor. The project will be situated on land plots with approximate area of 20 rais. It will have approximate floor area of 226,500 sq.m., with total gross floor area of 64,760 sq.m. Details of the Market by Platinum is as follows: Underground floor Floor G to Floor 3 Floor 4 to Floor 5 Parking area Shopping plaza area Food center and restaurants 36