Rasa Property Development Public Company Limited

Transcription

1 (Translation) Attachment 5 Opinion of the Independent Financial Advisor on Acquisition and Disposal of Assets and Connected Transactions of Rasa Property Development Public Company Limited Prepared by Advisory Plus Company Limited April 29, 2014

2 Table of Contents Page Executive Summary 6 1 Nature and details of the transactions Type and size of the transactions Value of consideration Shareholding structure of the Company before and after entire business transfer of 24 STB and SBF 1.4 Connected persons and nature of relationship Conditions for entering into the transactions Details of assets being acquired Industry situation relating to business operation of the acquired assets 63 2 Company profile Business overview Overview of industry relating to the Company s business 74 3 Reasonableness of the transactions Objective and necessity of the transactions Advantages and disadvantages of entering into the transactions Advantages and disadvantages of not entering into the transactions Advantages and disadvantages of entering into the transactions with a connected 88 party compared with a third party, necessity of entering into the transactions with a connected party, and reasons for not entering into the transactions with a third party 3.5 Potential risks from entering into the transactions Impacts on consolidated financial statements of the Company 94 4 Fairness of prices and conditions for the transactions Fairness of transaction prices Entire Business Transfer and New Shares Allocation Transaction 99 a. Valuation of the Company s assets 99 b. Valuation of SBF s assets 137 c. Valuation of STB s assets Land sale transaction Termination of the Management Agreement Transaction Appropriateness of conditions for the transactions Conclusion of the Independent Financial Advisor s opinion 179

3 AP. 045/2557 April 29, 2014 To Board of Directors and Shareholders Rasa Property Development Plc. Subject Opinion of the Independent Financial Advisor on acquisition and disposal of assets and entering into connected transactions The Board of Directors meeting of Rasa Property Development Plc. ( the Company ) No. 3/2014, held on April 11, 2014, passed the following significant resolutions: 1. Entire Business Transfer and New Shares Allocation Transaction The Company will implement a plan on business integration with (a) Santiburi Co., Ltd. ( STB ) by Khun Santi Bhirombhakdi ( Khun Santi ), and (b) S Bright Future Co., Ltd. ( SBF ) by Singha Property Management Co., Ltd. ( SPM ), by way of entire business transfer ( EBT ) ( Business Integration Plan ), details of which are as follows: The EBT of STB and SBF will consist of all assets and liabilities of both companies, including, but not limited to, their rights, duties, obligations, commitments and liabilities owned or incurred by STB and SBF as of the transfer date, including all shares owned by SBF in: (a) Singha Property Development Co., Ltd. ( SPD ) of 99.99% of paid-up registered capital; (b) Bhiromphat Co., Ltd. ( BRP ) of 99.99% of paid-up registered capital; and (c) Max Future Co., Ltd. ( MAX ) of 99.99% of paid-up registered capital ("EBT Transaction"). The Board of Directors resolved that the Company is required to allocate its 4,162,352,331 newly issued ordinary shares with a par value of Baht 1 per share to: (a) Khun Santi at Baht 1.87 per share, totaling Baht 2,300,000,000; and (b) SPM at Baht 1.87 per share, totaling Baht 5,483,598,859, as payment in kind for the transfer of entire business of STB and SBF to the Company (collectively referred to as the "EBT and New Shares Allocation Transaction"). However, the EBT and New Shares Allocation Transaction is contingent upon the following conditions precedent, as specified in the share subscription agreement signed by the Company with Khun Santi and SPM:

4 a) Obtaining approval from the Board of Directors meeting and shareholders meeting of the Company with respect to the capital increase, the allocation of the newly issued ordinary shares of the Company, the business transfer acceptance plan, the appointment of new directors to replace the resigning directors, etc.; and b) Obtaining approval from the Stock Exchange of Thailand ( SET ) with respect to the EBT Transaction, which is considered an acquisition of significant assets, Type 4, and obtaining approval from the SET with respect to the relisting application to approve the listing of ordinary shares of the Company as listed securities on the Exchange. It is initially expected by the Company that the EBT of STB and SBF to the Company will be completed by December 31, 2014 and the Company will allocate its newly issued shares to Khun Santi and SPM after its relisting application is duly approved. The entering into the EBT Transaction is considered as the purchase or acceptance of the transfer of the business from other companies by the Company under Section 107(2)(b) of the Public Limited Companies Act, B.E Therefore, the Company is required to hold a meeting of shareholders to consider and approve the acceptance of the transfer of business. In this respect, the resolution of the meeting of shareholders to approve the acceptance of the transfer of business requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding the vote of the shareholder having an interest in the matter. From calculation of the transaction size under the Notification of the Capital Market Supervisory Board No. Tor. Jor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and Notification of the SET Board of Governors Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposition of Assets B.E. 2547, the size of the EBT Transaction equals %, as calculated based on capital shares. Therefore, the transaction is considered an acquisition of assets, Type 4, or backdoor listing. The Company is accordingly required to disclose the information regarding the entering into such transaction to the SET, to appoint an independent financial advisor, and to apply for the approval from the SET by submitting a relisting application to list ordinary shares of the Company as listed securities on the SET in accordance with the Rules of the SET concerning listing of ordinary shares or preferred shares as listed securities. The Company is also obligated to convene a meeting of shareholders to approve the transaction, with a required affirmative vote of not less than three-fourths of the total number of vote of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. Moreover, as Khun Santi and SPM will be nominated as the management or persons having controlling power over the Company under the conditions for entering into the EBT Transaction as specified above, the entry into the EBT Transaction with Khun Santi and SPM is considered a connected transaction under the Connected Transaction Notifications. From calculation of the Page 2

5 transaction size under the Connected Transaction Notifications, the size of the transaction equals 1,079.07% of the Company's net asset value, which is higher than 3% of the Company's net asset value. Therefore, the Company is required to disclose the information regarding the transaction to the SET, to appoint an independent financial advisor, and to hold a meeting of shareholders to approve the transaction. The resolution of the meeting of shareholders to approve the entering into the EBT Transaction under the Business Integration Plan requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. 2. Land Sale Transaction The Company will sell two parcels of land, consisting of (a) vacant land of rai in Don Mueang area at Baht 198,000,000 and (b) vacant land of rai in Lam Luk Ka area at Baht 175,000,000, to Khun Rapi Pinitchob ( Khun Rapi ), who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi ( Land Sale Transaction ) at a total value of Baht 373,000,000. Entering into such transaction is considered a connected transaction under the Connected Transaction Notifications. From calculation of the transaction size under the Connected Transaction Notifications, the size of the transaction equals 52.48% of the Company's net asset value, which is higher than 3% of the Company's net asset value. Therefore, the Company is required to disclose the information regarding this transaction to the SET, to appoint an independent financial advisor, and to hold a meeting of shareholders to approve the transaction. The resolution of the meeting of shareholders to approve the Land Sale Transaction requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. The size of such Land Sale Transaction, when calculated based on value of the consideration paid, equals 30.85%. Therefore, the transaction is considered a disposal of assets, Type 2. The Company is accordingly required to disclose the information regarding the entering into such transaction to the SET and to submit the information memorandum on the transaction to the shareholders of the Company within 21 days from the date of disclosure to the SET. Moreover, the Board of Directors meeting passed a resolution approving execution of the land sale and purchase agreement with conditions precedent between the Company and Khun Rapi, and other agreements relating to the entry into such transaction. 3. Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) The Company entered into the Management Agreement with Siam Prime Estate Co., Ltd. ( Siam Prime ) dated November 26, 2007, which resulted in 70% of the ownership of land leased for Page 3

6 commercial purpose in The Light House Project belonging to the Company and 30% belonging to Siam Prime. The land leased for commercial purpose in this project covers a total area of 5, square meters. The Company has an intention to terminate the said Management Agreement in order to acquire 30% ownership of the land leased for commercial purpose in such project ( Termination of the Management Agreement Transaction ). In this respect, the Company will pay Baht 51 million to Siam Prime as a consideration for such agreement termination. The entering into such transaction is considered a connected transaction as Siam Prime s major shareholders (Khun Kanukros Pongsatad and Khun Thanapat Suwansarang with combined shareholding of 44%) are close relatives (daughter and her spouse) of the executive of the Company (Assoc. Prof. Manob Pongsatad). From the transaction size calculation, the size of the transaction equals 7.07% of the Company's net asset value, which is higher than 3% of the Company's net asset value. Therefore, the Company is required to disclose the information regarding the transaction to the SET, to appoint an independent financial advisor, and to hold a meeting of shareholders to approve the transaction. The resolution of the meeting of shareholders to approve the Termination of the Management Agreement Transaction requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. The size of such Termination of the Management Agreement Transaction, when calculated based on value of the consideration paid, equals 4.16%. Therefore, the transaction is considered an acquisition of assets, with transaction size lower than 15% of total assets of the Company. However, Clause 21 of the SET s Acquisition or Disposition Notification states that "for the purpose of comparing the volume of transactions, the SET may combine separate acquisitions occurring during the 12 months period prior to the date on which a listed company or any of its subsidiaries acquires assets as the same acquisition." In this case, if combining the transaction in Item 1 and the transaction in Item 3 above, the total size of the transactions equals %. Therefore, it is considered an acquisition of assets, Type 4, or backdoor listing. The Company is accordingly required to disclose the information regarding the entering into such transaction to the SET, to appoint an independent financial advisor, and to apply for the approval from the SET by submitting a relisting application to list ordinary shares of the Company as listed securities on the SET in accordance with the Rules of the Exchange concerning listing of ordinary shares or preferred shares as listed securities. A meeting of shareholders shall also be held to approve the transaction with a required affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. The notice of the shareholders meeting is required to be accompanied by opinion from an independent financial advisor regarding (1) reasonableness and benefits of the transaction to the listed company, (2) fairness of price and conditions for the transaction, and (3) recommendation as to whether the shareholders should vote for or against the transaction together with reasons thereof. Page 4

7 In this respect, the Company has appointed Advisory Plus Co., Ltd. as the independent financial advisor ( IFA ) to render opinion to the Company s shareholders. In providing opinion herein, IFA has considered and analyzed information and documents obtained from the Company, STB and SBF, including publicly available information such as resolutions of the Board of Directors meeting No. 3/2014 held on April 11, 2014, the Information Memorandum relating to the transaction as notified to the SET, the Company s audited consolidated financial statements for the years ended December 31, , STB s audited financial statements and SBF s audited consolidated financial statements for the years ended December 31, , financial projection and relevant assumptions, property appraisal reports, annual registration statement (Form 56-1), information disclosed on the SET s website, and information obtained from interviews with the management of the Company, STB and SBF, as well as assessment of the relevant economic situations as a basis for the analysis and rendering of opinion. The opinion expressed herein is based on the assumption that all information and documents available from the Company, STB and SBF and the information derived from the interviews with the management of the Company, STB and SBF are true and correct. IFA has considered such information in a thorough and reasonable manner in accordance with professional best practices. IFA s rendering of opinion is, moreover, based on the economic environment and the information prevailing at the time of conducting this study only. As such, if there is any significant change in these factors, it will likely have an impact on IFA s opinion. Therefore, IFA may not affirm as to whether there will be any potential material impact on the Company in the future. IFA s opinion on the acquisition and disposal of assets and the connected transactions of the Company can be summed up as follows: Page 5

8 Executive Summary The Board of Directors meeting of Rasa Property Development Plc. ( the Company ) No. 3/2014, held on April 11, 2014, resolved to propose the following transactions to the shareholders meeting for consideration and approval: 1. Entire Business Transfer and New Shares Allocation Transaction ( Transaction 1 ) The Company will approve a plan on business integration with Santiburi Co., Ltd. ( STB ) by Khun Santi Bhirombhakdi ( Khun Santi ) and S Bright Future Co., Ltd. ( SBF ) by Singha Property Management Co., Ltd. ( SPM ), by way of entire business transfer ( EBT ), and has resolved to allocate its 4,162,352,331 newly issued ordinary shares with a par value of Baht 1 per share to (a) Khun Santi in the amount of 1,229,946,524 shares at Baht 1.87 per share totaling Baht 2,300,000,000 and (b) SPM in the amount of 2,932,405,807 shares at Baht 1.87 per share totaling Baht 5,483,598,859, as payment in kind for the transfer of entire business of STB and SBF to the Company. The entering into the EBT Transaction is considered as the purchase or acceptance of the transfer of the business from other companies by the Company under Section 107(2)(b) of the Public Limited Companies Act, B.E It is also deemed as an acquisition of assets of listed companies under the Notification of the Capital Market Supervisory Board No. Tor. Jor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and Notification of the SET Board of Governors Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposition of Assets B.E ( Acquisition or Disposition Notifications ). The size of the transaction equals %, as calculated based on capital shares. Therefore, the transaction is considered an acquisition of assets Type 4, or backdoor listing. Moreover, after implementation of the Business Integration Plan, Khun Santi and SPM will nominate persons to serve as the management or persons having controlling power over the Company under the conditions for entering into the EBT Transaction as specified above. Thus, the entry into the EBT Transaction with Khun Santi and SPM is considered a connected transaction under the Notification of the Capital Market Supervisory Board No. Tor. Jor. 21/2551 Re: Rules on Connected Transactions and Notification of the SET Board of Governors Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Connected Transactions B.E ( Connected Transaction Notifications ). From calculation of the transaction size, the size of the transaction equals 1,079.07% of the Company's net asset value, which is higher than 3% of the Company's net asset value. 2. Land Sale Transaction ( Transaction 2 ) The Company will sell its land in Don Mueang and Lam Luk Ka areas to Khun Rapi Pinitchob ( Khun Rapi ), who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi at a total value of Baht 373,000,000. Entering into such transaction is considered a connected transaction under the Connected Transaction Notifications. From calculation of the transaction size, the size of the transaction equals 52.48% of the Company's net asset value, which is higher than 3% of the Company's net asset value. The size of such Land Sale Transaction, when calculated based on value of the consideration paid, equals 30.85%. Page 6

9 Therefore, the transaction is considered a disposal of assets, Type 2, under the Acquisition or Disposition Notifications. The Company is accordingly required to disclose the information regarding the entering into such transaction to the SET and to submit the information memorandum on the transaction to the shareholders of the Company within 21 days from the date of disclosure to the SET. 3. Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) ( Transaction 3 ) The Company will terminate the Management Agreement made with Siam Prime Estate Co., Ltd. ( Siam Prime ) dated November 26, 2007 ( Termination of the Management Agreement Transaction ). In this respect, the Company will have to pay Baht 51,000,000 to Siam Prime as a consideration for such agreement termination. The entering into such transaction is considered a connected transaction under the Connected Transaction Notifications as Siam Prime s major shareholders (Khun Kanukros Pongsatad and Khun Thanapat Suwansarang with combined shareholding of 44%) are close relatives (daughter and her spouse) of the executive of the Company (Assoc. Prof. Manob Pongsatad). From the transaction size calculation, the size of the transaction equals 7.07% of the Company's net asset value, which is higher than 3% of the Company's net asset value. The size of such Termination of the Management Agreement Transaction, when calculated based on value of the consideration paid, equals 4.16%. Therefore, the transaction is considered an acquisition of assets with transaction size lower than 15% of total assets of the Company. If combining Transaction 1 and Transaction 3 above, the total size of the transactions equals %. Therefore, it is considered an acquisition of assets Type 4, or backdoor listing, under the Acquisition or Disposition Notifications. The Company is accordingly required to disclose the information regarding the entering into such transactions to the SET, to appoint an independent financial advisor, and to apply for the approval from the SET by submitting a relisting application to list ordinary shares of the Company as listed securities on the SET in accordance with the Rules of the Exchange concerning listing of ordinary shares or preferred shares as listed securities. A meeting of shareholders shall also be held to approve the transactions. Since the three transactions are considered an assets acquisition and disposal transaction and connected transaction, the resolution of the shareholders meeting to approve the entering into these transactions requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. The Company will hold the extraordinary general meeting of shareholders on June 9, 2014 to consider and approve such transactions. Page 7

10 After completion of all transactions, Khun Santi will be allocated the newly issued ordinary shares and become a major shareholder of the Company. To avoid a conflict of interest, Khun Santi and SPD including persons with control power in Boon Rawd Brewery Co., Ltd., will enter into an agreement with the Company after the extraordinary general meeting of shareholders, scheduled for June 9, 2014, approves the EBT and New Shares Allocation Transaction. The said agreement will include key conditions as follows: 1) As long as Khun Santi, his spouse, his minor, his person according to section 258, and his attorney-in-fact ( related persons ) who is the major shareholder and/or director of the company giving the right, and the company giving the right (person giving right consisted of Khun Santi, related persons and company as prescribed in a. and c. (Please see details on page 29-32)), still are the major shareholder or controlling person of the Company (according to the definition of SEC). Khun Santi and related persons whether by themselves or joint venture with other entity will not conduct the hotel or real estate business which may compete with the company; however, except for the Khun Santi or related person s assets which do not have opportunity to develop for the significant return in the future ( significant is defined as assets or project which have value equal or more than 3 percent of the Company s net tangible assets) or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed project; and 2) Khun Santi and his related persons will enter into an agreement with the Company after the approval from extraordinary general meeting of the shareholder to enter into the transaction, specifying therein that for the 3 years period after the entire business transfer and as long as Khun Santi and related person still are the major shareholder or controlling person of the Company, Khun Santi and related person will not transfer, sell their ordinary shares, land or building under the company possession as prescribed in a. and c. (Please see the detail on page no ) and agree to grant an exclusive option to the Company and/or subsidiaries of the Company tor buy such ordinary shares, land or building at the price that shalll not exceed the fair value appraised by two independent appraisals(from the approved list of the SEC)appointed by Company and Khun Santi or related persons. After the 3 years period from the entire business transfer and as long as Khun Santi and related person still be the major shareholder of the company or person who can control Company, if Khun Santi have an intention to sell ordinary shares, land or building under his possession to other persons, Khun Santi agree to grant the right of first refusal to Company or subsidiary of Company with the same price offered to the other persons. In case that Company and /or subsidiary of Company reject to exercise such right, Khun Santi will have right to sell to other persons at the price not lower than the price offer to the Company; however, except for the assets that has insignificant value or residual from completed project. In the case where the Company agrees to exercise such right, the Company will comply with the laws and regulations in relation to the connected transaction. In order to prevent conflict of interest with Boon Rawd Group and affiliates, including authorized directors of SPM, thus, as long as Boonrawd group, SPM, Mr.Chayanin Thephakham, Mr. Jutinunt BhiromBhakdi and Mr.Santi BhiromBhakdi (authorized director of SPM) including their spouse, minor, person according to section 258, and attorney-in-fact ( related persons ) (all of them defined as promisors ), who is major shareholder and/or director of promisors, still be the major shareholder or governor of Boonrawd group, SPM or authorized director of SPM will not conduct whether by themselves or join venture with other entity the hotel or real estate business which may compete with the company; however, except for the assets which Page 8

11 not have opportunity to develop for the significant return in the future or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed project. In addition, if there are land or real estate that may consider competing with the Company and it subsidiariy, Boonrod group, SPM, authorized directors of SPM including their related persons shall consider to sell such assets at the transaction price will not exceed the fair value appraised by two independent appraisals(from the approved list of the SEC) appointed by the Company and Khun Santi or Boonrawd Group, SPM, Mr.Chayanin, and Mr. Jutinunt including their spouse, minor, person according to section 258 and their attorney-in-fact(as the case may be); however, except for the promisors assets which not have opportunity to develop for the significant return in the future or assets which is not related to hotel or real estate business currently operate but is not significant or residual assets from completed project. In the case where the Company agrees to exercise such right, the Company will comply with the laws and regulations in relation to the connected transaction. After such process is completed and the conditions precedent for the share subscription and the tender offer are fulfilled, Khun Santi and SPM will become major shareholders of the Company owning 26.10% and 62.23% of the Company s paid-up registered capital respectively. Each of them will therefore be obligated to make a mandatory tender offer ( MTO") to purchase all shares of the Company. The MTO price will be Baht 1.87 per share. The MTO is expected to be made when Khun Santi and SPM are duly and completely allocated the new ordinary shares of the Company and the Company completely registers the paid-up capital in respect of the shares allocated to Khun Santi and SPM. The MTO by Khun Santi and SPM is not considered as Acting in Concert. The IFA is of the opinion that the entering into Transaction 1, the EBT Transaction, is reasonable. The Company s existing business, focusing mainly on residential property development, is currently faced with tougher competition and the Company therefore plans to diversify into hotel business and property renting business and has a policy to invest in promising projects with a reasonable rate of return and acceptable risk exposure. This will be compatible with the new management team s considerable experience and expertise in real estate business and will allow the Company to engage in a more diverse line of business while reducing risk involved with its existing business. As for the entering into Transaction 2, the sale of two plots of vacant land in Lam Luk Ka and Don Mueang areas, IFA also considers it a reasonable transaction since the new shareholders have no intention to use the two plots of vacant land as their locations do not match their target groups. Besides, the vacant land in Don Mueang is situated in the landing/take-off direction of Don Mueang Airport, which could be a constraint on future development. As regards Transaction 3, the Termination of the Management Agreement Transaction in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land, IFA deems this transaction reasonable because it will enable the Company to be the sole owner of the leased land for commercial purpose in The Light House Project. This will be in line with the new shareholders desire to have controlling power and full ownership of the land leased for commercial purpose in The Light House Project in order to increase flexibility and Page 9

12 efficiency in the operation and also respond to the new shareholders policy to expand the property rental business. The advantages of entering into Transaction 1, the EBT Transaction, are that it will enable the Company to immediately recognize income and profit from the hotel business. The acquired property is Santiburi Beach Resorts, Golf & Spa, which is a five-star hotel located on Samui Island and has been in operation for more than 20 years. Its average occupancy rate in stood at 72.8%, 82.1% and 79.1% respectively. The hotel has had a strong financial status and has been operating profitably. By entering into this transaction, the Company itself will have a larger scale of business in terms of both assets and registered capital and will acquire good assets in prime locations. After completion of the Business Integration Plan implementation, the Company will become the owner of not only Santiburi Beach Resorts, Golf & Spa, but also three pieces of vacant land by way of shareholding through three subsidiaries of SBF. All of the three plots of land are in strategic locations appropriate for further development of property projects that will generate reasonable benefit and return for the Company and its shareholders in the long term. However, there are some disadvantages of entering into Transaction 1 such that the Company will have to issue a large amount of new ordinary shares as a consideration for the EBT Transaction, which will result in a tremendous control dilution effect on the existing shareholders, by plunging from 88.33% to 11.67% of paid-up registered capital (please see more details in Item Disadvantages of entering into the transactions, page 82). It could also lead to an increase in the Company s debt burden if in the future the Company has to invest in development of the three plots of vacant land of SBF s subsidiaries, which will involve a huge investment, in order to conform with the Company s objective of focusing on hotel and real estate business including property rental business. The Company s plans to develop the three plots of land of SBF s subsidiaries into property projects in the future include 1) land on New Phetchaburi Road to be developed into an office building with commercial area, covering a total space of 144,250 square meters with an estimated project value of Baht 6,000 million; 2) land in the middle part of Asok Montri Road to be developed into a serviced apartment and office building; and 3) land on Pradit Manutham Road to be developed into a high-end housing estate with an estimated project value of Baht 3,200 million (please see more details of future projects on page 80). Investments in these three projects will be capital-intensive and time-consuming. It could take 2-3 years before the Company will be able to recognize income from these projects. As such, at the early stage of project implementation, the Company will likely suffer from loss and be unable to pay dividend to its shareholders. If the Company has to embark on these projects in the future, it will borrow loans from financial institutions to finance such project investments. After a successful implementation of the Business Integration Plan through entire business transfer from STB and SBF, the Company s debt to equity ratio will drop from 0.67 to 0.13 time and, hence, it will have the ability to incur new debts to fund large-scale investments. However, a success in property development typically hinges on factors such as economic situation, real estate market condition and consumers purchasing power. If these factors are unfavorable, they could have an adverse impact on the Company s future operation. The advantages of entering into Transaction 2 are that it will enable the Company to receive funds from the land sale and to further use such funds for repaying debts and/or investing in future projects and/or Page 10

13 meeting the Company s working capital needs. Meanwhile, the disadvantages of the entry into Transaction 2 are a decrease in vacant land available for property development and a loss from such land sale. The advantage of entering into Transaction 3 is that it will result in the Company having control power and 100% ownership of the commercial area which will enable the Company to have more flexibility and efficiency in determining or changing a policy or plan on management of such commercial area. If the operation of the said area is profitable, the Company will be able to recognize 100% of such profit. Besides, the entry into Transaction 3 will respond to the new shareholders policy to expand the property rental business. On the negative side, the entering into this transaction will result in the Company having to pay Baht 51 million as a consideration for the Management Agreement termination. If the leased land for commercial purpose is operated at a loss, the Company may have to recognize 100% of such loss. As regards fairness of prices of the three transactions, IFA is of the opinion that all such transactions are fair and appropriate. IFA deems that Transaction 1, the EBT Transaction under which the Company will issue and allocate its new ordinary shares as payment in kind for the transfer of entire business of STB and SBF to the Company, is appropriate and fair. The offering price of 4,162,325,331 new shares of the Company at Baht 1.87 per share to Khun Santi and SPM is reasonable since it is higher than a fair value of the shares appraised by the IFA by the discounted cash flow approach at Baht 1.80 per share. Transaction 2, the sale of land in Lam Luk Ka area at Baht 175 million and the land in Don Mueang area at Baht 198 million, or at a total selling price of Baht 373 million, to Khun Rapi, is deemed appropriate. This is because the selling price of the land in Lam Luk Ka area is higher than the appraisal price of such land as appraised by American Appraisal (Thailand) Ltd. (Independent Valuer) at Baht 169 million, and also higher than the book value of Baht million by Baht 1.15 million. For the land in Don Mueang area, the IFA has appraised it in two scenarios. In case 1, where interest expenses are not incorporated into land cost, the selling price is higher than the appraisal price as appraised by the Independent Valuer at Baht 189 million, and also higher than the book value of Baht million by Baht 0.75 million. In case 2, where interest expenses are incorporated into cost of both plots of land, the selling price is lower than the book value by Baht 5.50 million. Therefore, the sale of land in Don Mueang area in Case 1 combined with the sale of land in Lam Luk Ka area will bring in a profit of Baht 1.90 million for the Company, whereas the sale of land in Don Mueang area in Case 2 aggregated with the sale of land in Lam Luk Ka area will incur a loss of Baht 4.40 million. Nonetheless, the land in Don Mueang area has some weaknesses in that it is in the area which once was heavily flooded and also is in the landing/take-off direction of Don Mueang Airport. Therefore, IFA deems that to give a discount on such land at Baht 5.50 million or 2.73% off the book value is acceptable and appropriate. The said selling price is accordingly considered reasonable. Transaction 3, the Termination of the Management Agreement Transaction under which the Company has to pay Baht 51 million as a consideration for such agreement termination to Siam Prime Estate Co., Ltd., is considered appropriate, although such payment of Baht 51 million is higher than a fair value appraised by the IFA at Baht million by Baht 9.7 million. The commercial area in The Light House Project is situated in Sathon-Charoen Nakhon area which is a prime location of Charoen Nakhon community. Page 11

14 It has a strong growth potential, being widely recognized among local people. The area has been fully rented out, hence no risk from acquisition of new rentees. As some of the rented space currently have a low rental rate, the Company will have a chance to increase such rental fees and, thus, to generate higher income therefrom in the future. In IFA s opinion, the said value of consideration of Baht 51 million, which is higher than the appraised value by the IFA by Baht 9.70 million, is reasonable when compared with the prime location and future growth potential of such project. The said value of consideration for the agreement termination is within the appraisal price range between the appraised price by the IFA and the appraised value of Baht million by the Independent Valuer. Moreover, the overall benefit to be obtained by the Company from all of the three transactions is still higher than the appraised value by Baht million. IFA accordingly views that the payment of Baht 51 million as a consideration for the agreement termination is appropriate. IFA therefore recommends that the shareholders should approve the acquisition and disposal of assets and the entering into the connected transactions. However, the decision whether to approve the proposed transactions depends primarily on the individual shareholders judgment. Page 12

15 1. Nature and details of the transactions 1.1 Type and size of the transactions a. EBT and New Shares Allocation Transaction The Company will implement a plan on business integration with (a) Santiburi Co., Ltd. ( STB ) by Khun Santi Bhirombhakdi ( Khun Santi ), and (b) S Bright Future Co., Ltd. ( SBF ) by Singha Property Management Co., Ltd. ( SPM ), by way of entire business transfer ( EBT ) ( Business Integration Plan ), details of which are as follows: The EBT of STB and SBF will consist of all assets and liabilities of both companies, including, but not limited to, their rights, duties, obligations, commitments and liabilities owned or incurred by STB and SBF as of the transfer date, including all shares owned by SBF in: (a) Singha Property Development Co., Ltd. ( SPD ) of 99.99% of paid-up registered capital; (b) Bhirompat Co., Ltd. ( BRP ) of 99.99% of paid-up registered capital; and (c) Max Future Co., Ltd. ( MAX ) of 99.99% of paid-up registered capital ("EBT Transaction"). The Board of Directors resolved that the Company is required to allocate its 4,162,352,331 newly issued ordinary shares with a par value of Baht 1 per share to: (a) Khun Santi at Baht 1.87 per share, totaling Baht 2,300,000,000; and (b) SPM at Baht 1.87 per share, totaling Baht 5,483,598,859, as payment in kind for the transfer of entire business of STB and SBF to the Company (collectively referred to as the "EBT and New Shares Allocation Transaction"). On the business transfer acceptance date, the Company will accept the transfer of the entire business of STB and SBF, including all assets and liabilities with details as follows: 1) Assets and liabilities to be transferred from STB (please see more details in the statements of financial position on page 36) Assets of STB 1. Santiburi Beach Resorts, Golf & Spa 2. Loans to Santiburi Samui Country Club Co., Ltd. 3. Any assets that STB has on the business transfer acceptance date Liabilities of STB Any liabilities that STB has as of the business transfer acceptance date. 2) Assets and liabilities to be transferred from SBF (please see more details in the statements of financial position on page 50) Assets of SBF 1. Ordinary shares in Singha Property Development Co., Ltd. ( SPD ) in the amount of 25,619,992 shares with a par value of Baht 100 per share, representing 99.99% of paidup registered capital of SPD 2. Ordinary shares in Bhiromphat Co., Ltd ( BRP ) in the amount of 72,993 shares with a par value of Baht 100 per share, representing 99.99% of paid-up registered capital of BRP Page 13า

16 3. Ordinary shares in Max Future Co., Ltd. ( MAX ) in the amount of 14,999,997 shares with a par value of Baht 100 per share, representing 99.99% of paid-up registered capital of MAX Liabilities of SBF Any liabilities that SBF has as of the business transfer acceptance date. Calculation of transaction size - acquisition of assets The calculation of transaction size under the Acquisition or Disposition Notifications according to the consolidated financial statements of the Company, STB and SBF as at December 31, 2013 can be shown as follows: Unit: Baht 000 s The Company 1/ STB 2/ SBF 2/ Total assets 1,227, , ,135, Less Intangible assets (498.71) (85.24) 0.00 Deferred tax (13,812.01) (3,983.38) 0.00 Total liabilities (491,376.68) (134,900.27) (526.21) Non-controlling interests Net tangible assets (NTA) 721, , ,134, Net profit (loss) attributable to owners of the 23, parent (4 most recent quarters) Net profit (loss) 36, (436.81) Note: 1/ The consolidated financial statements as at December 31, 2013 were audited by Mr. Teerasak Chuasrisakul, CPA Registration No. 6624, of Grant Thornton Ltd., an SEC-approved auditor. 2/ The financial statements as at December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared for the sole purpose of supporting the pro forma financial information of Rasa Property Development Plc. submitted to the SET. The transaction size calculated under the Acquisition or Disposition Notifications according to the consolidated financial statements of the Company, STB and SBF as at December 31, 2013 by four calculation methods is as follows: STB SBF Total Percentage of acquisition (%) Maximum acquisition price (Baht 000 s) 2,300, ,483, ,783, NTA basis (%) Net profit basis (%) Value of consideration paid basis (%) Share value basis (%) The calculation of transaction size under the Connected Transaction Notifications according to the consolidated financial statements of the Company, STB and SBF as at December 31, 2013 is as follows: Page 14า

17 Unit: Baht 000 s STB SBF Total Transaction value not higher than 3% of NTA of 21, the Company Maximum transaction value 2,300, ,483, ,783, Connected transaction size as % of NTA of the Company , The entering into the EBT Transaction is considered as the purchase or acceptance of the transfer of the business from other companies by the Company under Section 107(2)(b) of the Public Limited Companies Act, B.E Therefore, the Company is required to hold a meeting of shareholders to consider and approve the acceptance of the transfer of business. In this respect, the resolution of the meeting of shareholders to approve the acceptance of the transfer of business requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding the vote of the shareholder having an interest in the matter. From calculation of the transaction size under the Notification of the Capital Market Supervisory Board No. Tor. Jor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and Notification of the SET Board of Governors Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposition of Assets B.E. 2547, the size of the EBT Transaction equals %, as calculated based on capital shares. Therefore, the transaction is considered an acquisition of assets, Type 4, or backdoor listing. The Company is accordingly required to disclose the information regarding the entering into such transaction to the SET, to appoint an independent financial advisor, and to apply for the approval from the SET by submitting a relisting application to list ordinary shares of the Company as listed securities on the SET in accordance with the Rules of the SET concerning listing of ordinary shares or preferred shares as listed securities. The Company is also obligated to convene a meeting of shareholders to approve the transaction, with a required affirmative vote of not less than three-fourths of the total number of vote of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. Moreover, as Khun Santi and SPM are nominated as the management or persons having controlling power over the Company under the conditions for entering into the EBT Transaction as specified above, the entry into the EBT Transaction with Khun Santi and SPM is considered a connected transaction under the Connected Transaction Notifications. From calculation of the transaction size under the Connected Transaction Notifications, the size of the transaction equals 1,079.07% of the Company's net asset value, which is higher than 3% of the Company's net asset value. Therefore, the Company is required to disclose the information regarding the transaction to the SET, to appoint an independent financial advisor, and to hold a meeting of shareholders to approve the transaction. The resolution of the meeting of shareholders to approve the entering into the EBT Transaction under the Business Integration Plan requires an affirmative vote of not Page 15า

18 less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. b. Land Sale Transaction The Company will sell its two parcels of land to Khun Rapi Pinitchob ( Khun Rapi ), who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi ( Land Sale Transaction ) at a total value of Baht 373,000,000. Details of the vacant land to be disposed of are as follows: 1) Vacant land in Don Mueang area The Company intends to sell a plot of vacant land under title deed no , parcel no. 3601, dealing file no , with an area of rai located on Soi Phahon Yothin 73, Phahon Yothin Road, Sanam Bin, Don Mueang, Bangkok, adjacent to Rasa Maxx Ville Project site (Phase 1). The Company will sell such land to Khun Rapi, who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi at a total value of Baht 198,000,000. Picture of the location of vacant land in Don Mueang area Source: Appraisal report of American Appraisal (Thailand) Ltd. Page 16า

19 2) Vacant land in Lam Luk Ka area The Company intends to sell two plots of land in Lam Luk Ka, Pathum Thani, with an area of rai and rai respectively, totaling rai under 13 title deeds, as follows: No. Title deed Area Title deed Dealing file Parcel no. no. no. Rai Ngan Sq. wah Land in Lam Luk Ka, Plot No Land in Lam Luk Ka, Plot No The Company will sell such land, covering a total area of rai under 13 title deeds located in Lam Luk Ka, Pathum Thani, to Khun Rapi, who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi at a total value of Baht 175,000,000. Page 17า

20 Plot No. 1 of rai Picture of the location of vacant land in Lam Luk Ka area Source: Appraisal report of American Appraisal (Thailand) Ltd. Plot No. 2 of rai Source: Appraisal report of American Appraisal (Thailand) Ltd. Page 18า

21 Calculation of transaction size - disposal of assets The transaction size calculated under the Acquisition or Disposition Notifications according to the consolidated financial statements of the Company as at December 31, 2013 by four calculation methods is as follows: Vacant land in Vacant land in Don Mueang Lam Luk Ka Total Percentage of disposal (%) Maximum acquisition price (Baht 000 s) 203, , , NTA basis (%) 1/ n/a n/a n/a Net profit basis (%) 2/ n/a n/a n/a Value of consideration paid basis (%) Share value basis (%) 3/ n/a n/a n/a Note: 1/ Since the asset is vacant land and has no NTA value, the NTA method is not applicable. 2/ Since the asset is vacant land and does not earn any income, the net profit method is not applicable. 3/ There is no issuance of shares. The calculation of transaction size under the Connected Transaction Notifications according to the consolidated financial statements of the Company as at December 31, 2013 is as follows: Unit: Baht 000 s Vacant land in Don Mueang Vacant land in Lam Luk Ka Total Transaction value not higher than 3% of NTA of 21, the Company Maximum transaction value 203, , , Connected transaction size as % of NTA of the Company Entering into such transaction is considered a connected transaction under the Connected Transaction Notifications. From calculation of the transaction size, the size of the transaction equals 52.48% of the Company's net asset value, which is higher than 3% of the Company's net asset value. Therefore, the Company is required to disclose the information regarding this transaction to the SET, to appoint an independent financial advisor, and to hold a meeting of shareholders to approve the transaction. The resolution of the meeting of shareholders to approve the Land Sale Transaction requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. The size of such Land Sale Transaction, when calculated based on value of the consideration paid, equals 30.85%. Therefore, the transaction is considered a disposal of assets, Type 2. The Company is accordingly required to disclose the information regarding the entering Page 19า

22 into such transaction to the SET and to submit the information memorandum on the transaction to the shareholders of the Company within 21 days from the date of disclosure to the SET. c. Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) The Company entered into the Management Agreement with Siam Prime on November 26, 2007, which resulted in 70% of the ownership of land leased for commercial purpose in The Light House Project belonging to the Company and 30% belonging to Siam Prime. The land leased for commercial purpose in this project covers a total area of 5, square meters. The Company has an intention to terminate the said Management Agreement in order to acquire 100% ownership of the leased land and, hence, to increase flexibility in management of such commercial area. In this respect, the Company will pay Baht 51,000,000 to Siam Prime as a consideration for such agreement termination (please see a summary of the Management Agreement on page 61). Calculation of transaction size - termination of the Management Agreement The termination of the Management Agreement will enable the Company to acquire the rest 30% investment in this condominium and commercial area development project from Siam Prime. The calculation of transaction size under the Acquisition Notifications according to the consolidated financial statements of the Company as at December 31, 2013, based on value of the consideration paid, is as follows: 30% investment in the project Percentage of acquisition (%) 30 Maximum acquisition value (Baht 000 s) 51,000 Value of consideration paid basis (%) 4.16 The calculation of transaction size under the Connected Transaction Notifications according to the consolidated financial statements of the Company as at December 31, 2013 is as follows: Unit: Baht 000 s 30% investment in the project Transaction value not higher than 3% of NTA of 21, the Company Maximum transaction value 51, Connected transaction size as % of NTA of the 7.07 Company The entering into such transaction is considered a connected transaction as Siam Prime s major shareholders (Khun Kanukros Pongsatad and Khun Thanapat Suwansarang with combined shareholding of 44%) are close relatives (daughter and her spouse) of the executive of the Company (Assoc. Prof. Manob Pongsatad). From the transaction size calculation, the size of the transaction equals 7.07% of the Company's net asset value, which is higher than 3% of the Page 20า

23 Company's net asset value. Therefore, the Company is required to disclose the information regarding the transaction to the SET, to appoint an independent financial advisor, and to hold a meeting of shareholders to approve the transaction. The resolution of the meeting of shareholders to approve the Termination of the Management Agreement Transaction requires an affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. The size of such Termination of the Management Agreement Transaction, when calculated based on value of the consideration paid, equals 4.16%. Therefore, the transaction is considered an acquisition of assets with transaction size lower than 15% of total assets of the Company. However, Clause 21 of the SET s Acquisition or Disposition Notification states that "for the purpose of comparing the volume of transactions, the SET may combine separate acquisitions occurring during the 12 months period prior to the date on which a listed company or any of its subsidiaries acquires assets as the same acquisition." In this case, if combining the transaction in a. and the transaction in c. above, the total size of the transactions equals %. Therefore, it is considered an acquisition of assets, Type 4, or backdoor listing. The Company is accordingly required to disclose the information regarding the entering into such transaction to the SET, to appoint an independent financial advisor, and to apply for the approval from the SET by submitting a relisting application to list ordinary shares of the Company as listed securities on the SET in accordance with the Rules of the Exchange concerning listing of ordinary shares or preferred shares as listed securities. A meeting of shareholders shall also be held to approve the transaction with a required affirmative vote of not less than three-fourths of the total number of votes of the shareholders attending and eligible to vote at the meeting, excluding shareholders with interest in the matter. In addition, after such process is completed and the conditions precedent for the share subscription and the tender offer are fulfilled, Khun Santi and SPM will become major shareholders of the Company owning 26.10% and 62.23% of the Company s paid-up registered capital respectively. Each of them will therefore be obligated to make a mandatory tender offer ( MTO") to purchase all shares of the Company in accordance with the Capital Market Supervisory Board s Notification No. Tor. Jor. 12/2554 Re: Rules, Conditions and Procedures for the Acquisition of Securities for Business Takeovers. The MTO price will be Baht 1.87 per share. The MTO is expected to be made when Khun Santi and SPM are duly and completely allocated the new ordinary shares of the Company and the Company completely registers the paid-up capital in respect of the shares allocated to Khun Santi and SPM. The MTO by Khun Santi and SPM is not considered as Acting in Concert. Page 21า

24 1.2 Value of acquired assets and disposed assets and value of consideration Value of acquired assets and value of consideration for the EBT and New Shares Allocation Transaction The Company will accept the entire business transfer (EBT) of STB and SBF, consisting of all assets and liabilities of both companies, including, but not limited to, their rights, duties, obligations, commitments and liabilities owned or incurred by STB and SBF as of the transfer date, including all shares owned by SBF in: (a) Singha Property Development Co., Ltd. ( SPD ) of 99.99% of paid-up registered capital; (b) Bhiromphat Co., Ltd. ( BRP ) of 99.99% of paid-up registered capital; and (c) Max Future Co., Ltd. ( MAX ) of 99.99% of paid-up registered capital. In this respect, the Company will allocate its 4,162,352,331 newly issued ordinary shares with a par value of Baht 1 per share to: (a) Khun Santi at Baht 1.87 per share, totaling Baht 2,300,000,000; and (b) SPM at Baht 1.87 per share, totaling Baht 5,483,598,859, as payment in kind for the transfer of entire business of STB and SBF to the Company. Value of the acquisition of assets and value of the consideration for such transaction are as follows: Value of consideration paid in Method used for Acquired assets Net asset value kind through share swap determination of value of (Baht million) No. of shares value consideration (million shares) (Baht million) 1 All shares in STB 2, Comparison of fair value of 1, , the Company vs STB 2 All shares in SBF 5, Comparison of fair value of 2, , the Company vs SBF Total 7, , , Value of disposed assets and value of consideration for the Land Sale Transaction The Company intends to sell its vacant land in Don Mueang and Lam Luk Ka areas to Khun Rapi, who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi at a total value of Baht 373,000,000. Value of the disposed assets and value of the consideration for such transaction are as follows: Disposed assets Net asset value (Baht million) Method used for determination of value of consideration Value of consideration paid in cash (Baht million) Land in Don Mueang Market approach by Independent Valuer 2 Land in Lam Luk Ka Market approach by Independent Valuer Total Page 22า

25 1.2.3 Value of acquired assets and value of consideration for the Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) The Company intends to terminate the Management Agreement for the commercial area in The Light House Project in respect of the 30% ownership held by Siam Prime, whereby the Company will have to pay Baht 51,000,000 to Siam Prime as a consideration for the termination of such agreement. Value of the acquired assets and value of the consideration for such transaction are as follows: Acquired assets 1 30% investment in a condominium and commercial area development project Net asset value (Baht million) Method used for determination of value of consideration Income approach by Independent Valuer Value of consideration paid in cash (Baht million) Page 23า

26 1.3 Shareholding structure of the Company before and after the EBT Transaction of STB and SBF Shareholding structure of the Company before entering into the transaction Shareholding structure of the Company after entering into the transaction Company structure before registration for dissolution of STB and SBF Company structure after registration for dissolution of STB and SBF Note: 1. The Company will be renamed, Singha Estate Public Company Limited. Page 24า

27 2. After acceptance of the transfer of entire business of STB and SBF, including all of their assets and liabilities, the Company will register the dissolution of STB and SBF. The Company s shareholder structure Shareholder structure of the Company before and after entering into the transaction is as follows: Shareholders Before the transaction 2/ After the transaction No. of Proportion No. of Proportion shares (%) shares (%) 1 Pinitchob Group 1/ 250,717, ,717, Miss Atcharaphorn Siriphraiwan 121,000, ,000, Thai NVDR Co., Ltd. 10,866, ,866, Mr. Pises Lertwilai 6,077, ,077, Mr. Panja Senadisai 5,500, ,500, Mrs. Pachara Khlamchuen 5,206, ,206, Mrs. Wirongrong Ratanawijai 4,321, ,321, Mr. Apinan Horsaengchai 4,247, ,247, Mr. Wallop Rungkitworasatien 4,050, ,050, Mr. Somsak Arthonsombat 4,000, ,000, General investors 134,011, ,011, Singha Property Management Co., Ltd. 2,932,405, Mr. Santi Bhirombhakdi 1,229,946, Total 549,998, ,712,350, Note: 1/ Pinitchob Group consists of Mr. Khemchai Rasanont who is Mr. Rapi Pinitchob s father and holds 129,920,437 shares, Mr. Rapi Pinitchob holding 101,344,375 shares, and Rasa Tower Co., Ltd. holding 19,452,500 shares, making up a total of 250,717,312 shares or 45.58% of paid-up registered capital. Rasa Tower Co., Ltd. is deemed as a related person under Section 258 (3) of the Securities and Exchange Act of Mr. Rapi Pinitchob because Mr. Rapi Pinitchob holds 36.63% of shares in this entity. 2/ Shareholder information as at April 3, 2014, the register book closing date. 1.4 Connected persons and nature of relationship a) EBT and New Shares Allocation Transaction 1) EBT Transaction Parties involved Buyer : the Company Seller : (a) Khun Santi (b) SPM Page 25า

28 2) New Shares Allocation Transaction Parties involved Allocated parties : (a) Khun Santi (b) SPM Seller : the Company Relationship between the involved parties and extent of interest of the connected persons: After completion of the EBT Transaction, representatives of Khun Santi and SPM will be nominated as directors or management or persons with control power of the Company. Therefore, in entering into such transaction with the Company, they are considered connected persons. b) Land Sale Transaction Parties involved Buyer : Khun Rapi Pinitchob ( Khun Rapi ) or any individual or juristic persons designated by Khun Rapi Seller : the Company Relationship between the involved parties and extent of interest of the connected persons: Since Khun Rapi, who is a major shareholder and management of the Company, or any individual or juristic persons designated by Khun Rapi will enter into this transaction with the Company, they are considered as connected persons. Pinitchob Group consists of Mr. Khemchai Rasanont who is Mr. Rapi Pinitchob s father and holds 129,920,437 shares, Mr. Rapi Pinitchob holding 101,344,375 shares, and Rasa Tower Co., Ltd. holding 19,452,500 shares in the Company, making up a total of 250,717,312 shares or 45.58% of paid-up registered capital. At the same time, Mr. Rapi holds 36.63% of paid-up registered capital of Rasa Tower Co., Ltd., which is therefore deemed as a related person under Section 258 of the Securities and Exchange Act. As a result, at the extraordinary general meeting of shareholders to be held on June 9, 2014, Pinitchob Group will not be entitled to cast vote on Agenda Item No to consider and approve the entering into the Land Sale Transaction. c) Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) Parties involved Terminating party : the Company Terminated party : Siam Prime Estate Co., Ltd. ( Siam Prime ) Relationship between the involved parties and extent of interest of the connected persons: Page 26า

29 Siam Prime s major shareholders and directors (Khun Kanukros Pongsatad and Khun Thanapat Suwansarang (with combined shareholding of 44% of Siam Prime s paid-up registered capital)) are close relatives (daughter and her spouse) of Assoc. Prof. Manob Pongsatad who is the Company s director. Therefore, in entering into such transaction with the Company, they are considered connected persons. Since Assoc. Prof. Manob Pongsatad holds 687,500 shares or 0.13% of paid-up registered capital of the Company, at the extraordinary general meeting of shareholders to be held on June 9, 2014, he will not be entitled to cast vote on Agenda Item No to approve the entering into the Termination of the Management Agreement Transaction. 1.5 Conditions for entering into the transactions EBT and New Shares Allocation Transaction The conditions for entering into the EBT Transaction and New Shares Allocation Transaction shall be in accordance with the conditions as specified in the agreement to subscribe for the newly issued ordinary shares with conditions precedent and the business transfer agreement executed by the Company with Khun Santi and SPM. The significant conditions precedent are summarized as follows: a) Obtaining approval from the Board of Directors meeting and shareholders meeting with respect to the capital increase, the allocation of the newly issued ordinary shares, the business transfer acceptance plan, the appointment of new directors to replace the resigning directors, etc.; and b) Obtaining approval from the SET with respect to the EBT Transaction, which is considered an acquisition of significant assets, Type 4, and obtaining approval from the SET with respect to the relisting application to approve the listing of ordinary shares of the Company as listed securities on the Exchange Land Sale Transaction The conditions precedent for entering into the Land Sale Transaction shall be in accordance with the conditions as specified in the land sale agreement, as follows: a) Obtaining approval from the Board of Directors meeting and shareholders meeting with respect to the business transfer acceptance plan; b) Obtaining approval from the SET with respect to the EBT Transaction, which is considered an acquisition of significant assets, Type 4, and obtaining approval from the SET with respect to the relisting application to approve the listing of ordinary shares of the Company as listed securities on the Exchange. Page 27า

30 1.5.3 Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) The conditions precedent for entering into the Termination of the Management Agreement Transaction shall be in accordance with the conditions specified in the Management Agreement, which is of an indefinite term. The termination of the Management Agreement shall be mutually agreed in writing by the two parties Conflict of interest prevention measure For the EBT and New Shares Allocation Transaction, after the allocation of the newly issued ordinary shares, SPM, whose major shareholder is Boon Rawd Brewery Co., Ltd. ( Boon Rawd Group ), and Khun Santi will become major shareholders of the Company. To avoid conflict of interest, after the extraordinary general meeting of shareholders on June 9, 2014, the Company will enter into an agreement with Khun Santi, SPM and Boon Rawd Group. Details of the said agreement will be as follows: Entities or assets of Khun Santi that are prone to create a conflict of interest: 1. As long as Khun Santi, his spouse, his minor, his person according to section 258, and his attorney in-fact( related persons ) who is the major shareholder and/or director of the company giving the right (person giving right consisted of Khun Santi related persons and company as prescribed in a. and c.), still are the major shareholder of the Company (according to the definition of SEC). Khun Santi and related persons whether by themselves or joint venture with other entity will not conduct the hotel or real estate business which may compete with the company; however, except for the Khun Santi or related person s assets which not have opportunity to develop for the significant return in the future ( significant is defined as assets or project which have value equal or more than 3 percent of Company net tangible assets) or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed project; and 2. Khun Santi and his related perons will enter into an agreement with the Company after the approval from general meeting of the shareholder to enter into the transaction, specifying therein that for the 3 years period after the entire business transfer and as long as Khun Santi and related person still are the major shareholder of the company or controlling person of the Company, Khun Santi and related person will not transfer, sell their ordinary shares, land or building under the company possession as prescribed in a. and c. to other perons and agree to grant an exclusive option to the Company and/or subsidiary of the Company to buy such ordinary shares, land or building at the price that shalll not exceed the fair value appraised by two independent appraisals(from the approved list of the SEC) appointed by Company and Khun Santi or related persons. After the 3 years period from the entire business transfer and as long as Khun Santi and related person still are the major Page 28า

31 shareholder or controlling person of the company, if Khun Santi have an intention to sell ordinary share, land or building under his possession to other person, Khun Santi agree to grant the right of first refusal to Company or subsidiary of Company with the same price offered to other person. In case that Company and /or subsidiary of Company reject to exercise such right, Khun Santi will have right to sell to other peson at the price not lower than the price offer to Company; however, except for the assets that has insignificant value or residual from completed project. After completion of the transaction, there will be certain companies as prescribed below and certain assets held by Khun Santi or his related persons which may create a conflict of interest with the Company. Therefore, the Company will proceed to enter into an agreement with persons who have conflict of interest with the Company. Khun Santi or related persons agrees to grant an option and right of first refusal to the Company to buy their assets in relation to hotels or real estate development projects which relate to the Company in terms of the location or management or joint venture and all real estate development projects of Khun Santi or his related persons. Measurent of Prevention of Conflict of Interest are illustrated 3 categories as follows: a. List of companies/assets which the Company have call option to purchase within the first 3 year after the signing date of the agreement and, after 3 years, the Right of First Refusal are as the following details: Company Type of business Project/Real estate development project Hotel, food and beverages business 1 Bo Phut Property and Resort Co., Ltd. ( Bo Phut ) 2 Santiburi Development and Resort Co., Ltd. Manage Golf Club and Golf Car Bo Phut Resort & Spa, located at 12/12 Moo 1, Bo Phut Sub-district, Ko Samun District, Surat Thani Province, At the present, company hold the vacant land in the number of 2 Rai at Khonkean and 91 Rai at Prachuabkirikhan. Company also study for the feasibility of the commercial project and if there is an opportunity to develop, company will give right to Company as aforementioned. Page 29า

32 Company Type of business Project/Real estate development project 3 Santiburi Samui Country Club Co., Ltd. Golf Club Company own the right on golf club at Samui and has vacant land closed to golf club. Company also study for the feasibility of the commercial project and if there is an opportunity to develop, company will give right to Company as aforementioned. The Company has not acquired Bo Phut under this transaction because this will involve some preparatory steps such as negotiations with other shareholders (66% of Bo Phut is owned by Khun Santi and the rest 34% by other shareholders) and negotiations about the land lease agreement for the hotel operation. Nonetheless, Bo Phut Resort & Spa is located on Bo Phut Beach which is a distance from Santiburi Beach Resorts, Golf & Spa, that is located on Mae Nam Beach. After all, the two hotels focus on different target groups: Bo Phut as a four-star hotel and Santiburi Beach Resorts, Golf & Spa, as a five-star hotel. As for the reason not acquisition golf club after this transaction, Santiburi Hotel is not located next to Santiburi Golf Club and required car transportation to travel between these two places. For the marketing campaign of Santiburi Hotel which coordinate with Santiburi Golf Club is only facility provide to customer and dosen t mean that Santiburi Hotel has to depend on Golf Club. b. List of companies/assets of Khun Santi that the Company does not intend to buy for the development of projects as such assets do not have material value, or are projects that are under operation but the remaining project life is limited, or are assets remaining from the completed projects, classified by owner company, is shown below: Company Type of business Project/Real estate development project 1 Max Future Engineering Co., Ltd. Construction Operating no projects and planning to liquidate business 2 Living Matters Co., Ltd. Sale and lease of real estates Project already sold; having no further plan on project development; Khun Santi planning to sell his shares Page 30า

33 c. Khun Santi has other related businesses which currently are not operational. The companies related to Khun Santi will arrange for execution of an agreement with those related persons and/or entities, stipulating that if they plan to develop such property in the future, they will grant an option and right of first refusal to the Company. Details of such companies are as follows: Company Type of business Project/Real estate development project 1 International Sport & Resort Co., Ltd. Sport services (in relation to golf courses) and movable and immovable properties It owns vacant land in Chiang Rai. 2 Santiburi Private Community Co., Ltd.* Property sale business It owns vacant land in Chiang Rai but does not have any plan to develop such land in the near future. 3 Akin Land Co., Ltd. Plan to operate nursing Khun Santi has planned to sell home shares. Note: * For the right to use Santiburi trademark which owned by Santiburi Private Community Co., Ltd., Santiburi Private Community Co., Ltd. will grant the right for Santiburi Beach Resort Golf and Spa to use this trademark with free of charge in the future. However, for the non-related business to hotel business such as golf club, Santiburi Private Community Co., Ltd. still be the owner of this trademark. In addition, as long as Khun Santi is the major shareholder of the Company, Santiburi Private Community Co., Ltd. will grant right to use Santiburi trademark to Company for the new hotel with the charge that will negotiate in the future if Company has an intention to use these trademark and Company will proceed according to Connected Transaction Notifications. As a measure to prevent confusion of Santiburi trademark used by Santiburi Beach Resort Golf and Spa and Santiburi Golf Club, Management has planned to change the hotel name to Santiburi Beach Resort and Spa and put the name hotel and golf club in the trademark. Entities/Assets of Boon Rawd Group and affiliates, including authorized directors of SPM, that are prone to create a conflict of interest As long as Boonrawd group, SPM, Mr.Chayanin Thephakham, Mr. Jutinunt BhiromBhakdi, and Mr.Santi BhiromBhakdi (authorized director of SPM) including their spouse, minor, person according to section 258, and their attorney-in-fact ( related persons ) (all of them defined as promisors ), who is major shareholder and/or director of promisors, still are the major shareholder or controlling person of the Company andboonrawd group, SPM or authorized director of SPM whether by themselves or joint venture with other entity will not conduct the hotel or real estate business which may compete with the company; however, except for the assets which not have opportunity to develop for the significant return in the future or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed Page 31า

34 project. If there are land or real estate competing with the Company, promisors will consider to sell such assets at the price that will not exceed the fair value appraised by two independent appraisals(from the approved list of the SEC) appointed by the Company and Khun Santi or Boonrawd Group, SPM, Mr.Chayanin, and Mr. Jutinunt including their spouse, minor, person according to section 258, and their attorney-in-fact; however, except for the promisors assets which do not have opportunity to develop for the significant return in the future or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed project. In the case where the Company agrees to exercise such right, the Company will comply with the laws and regulations in relation to the entry into a connected transaction. Company Type of business Project/Real estate development project Park Industry Co., Ltd. Real estate, houses and condominiums, and all kinds of real estate development, as well as purchase and sale of land It owns vacant land in Ang Thong province but does not have any development plan. The reason promisors don t give call option and right of first refusal is that Park Industry Co., Ltd. has not planned to develop further projects and the location of land doesn t compete with the Company. After completion of the transaction, the Company will earn income mainly from hotel and real estate development business and will focus on the hotel and real estate business which is in line with the experience of its new management team. In the case where the Company exercises such right, the Company will comply with the laws and regulations in relation to the connected transaction. 1.6 Details of assets being acquired or disposed of EBT and New Shares Allocation Transaction (a) Santiburi Co., Ltd. ( STB ) Background and business description Santiburi Co., Ltd. ( STB ) was incorporated on December 20, 1989 to operate hotel, accommodation and food sale business. It is headquartered at No. 245/7 Soi Sukhumvit 31, Sukhumvit Road (Sawatdi), Khlong Tan Nua, Watthana, Bangkok. Page 32า

35 Its branch office is located at No. 12/12 Moo 1, Mae Nam Sub-district, Ko Samui District, Surat Thani Province Company Registration No Capital structure and shareholders (as at April 30, 2013) Issued and paid-up capital: Registered capital of Baht 100 million, divided into 1,000,000 ordinary shares with a par value of Baht 100 per share Shareholders of STB are as follows: Name No. of shares % 1 Mr. Santi Bhirombhakdi 999, Mr. Thaklaew Kanitthanon Mr. Piti Bhirombhakdi Mr. Rangsarit Laksitanont Mr. Warut Yantasri Mr. Sorapong Limsuval Total 1,000, Board of Directors STB Board of Directors as at February 25, 2014 is as follows: No. Name Position 1 Mr. Santi Bhirombhakdi Director 2 Mr. Supoj Chaladol Director 3 Mr. Sorapong Limsuval Director 4 Mr. Rangsarit Laksitanont Director 5 Mr. Phurit Bhirombhakdi Director 6 Mr. Piti Bhirombhakdi Director Asset information Property location Type of property Ownership STB has engaged in hotel, accommodation and food sale business. In 1990, it started the hotel business in the name Santiburi Beach Resorts, Golf & Spa, offering a total of 71 rooms located at No. 12/12 Moo 1 Sai Rop Ko Road, Mae Nam Sub-district, Ko Samui District, Surat Thani Province. Its assets are composed of land and building which is a fivestar hotel. Details are as follows: 12/12 Moo 1, Mae Nam Sub-district, Ko Samui District, Surat Thani Land and construction Santiburi Co., Ltd. Page 33า

36 Title deed (title deed no./parcel no./dealing file no.) Area Construction 1363/374/316, 4937/442/1170, 4514/221/769, 4980/361/1209, 4520/227/775, 12134/278/1661, 4776/441/1024, 12135/285/1679, 4884/220/1119, 12138/878/1754, and 4936/438/ rai ( rai) Two buildings with a total of 71 rooms, comprising 12 standard rooms and 59 villa-type rooms Mortgaged as collateral with Bangkok Bank Plc. Registered encumbrance Book value Baht 457,439,585 Official land appraisal price Baht 63,284,200 Independent Valuer American Appraisal (Thailand) Ltd. Appraisal date February 1, 2014 Appraisal price of land and Baht 2,608,000,000 building by Independent Valuer Agreed transaction price Baht 2,300,000,000 Note: * After the transfer of all assets and liabilities from STB, the Company will also assume the obligations with respect to the mortgage of land and construction as collateral to Bangkok Bank Plc. Picture of the location of Santiburi Beach Resorts, Golf & Spa Source: Appraisal report of American Appraisal (Thailand) Ltd. Details of the two hotel buildings with a total of 71 rooms, divided into 12 standard rooms and 59 villa-type rooms, classified by room type, are as follows: Room type Room rate (Baht/night) No. of rooms Area per room (sq.m.) 1 Duplex Suite (1 bedroom) 9,250 13, Duplex Suite (2 bedrooms) 18,750 24, River Villa 10,330 17, Orchid Garden Villa 13,270 18, Page 34า

37 Room type Room rate (Baht/night) No. of rooms Area per room (sq.m.) 5 Dalha Villa 13,880 18, Garden Villa with Plunge Pool 14,960 19, Beachfront Villa 20,000 24, Beachfront Villa with Plunge Pool 24,380 28, Pool Villa 23,130 28, Presidential Retreat 56,250 61, Total In , Santiburi Beach Resorts, Golf & Spa, recorded an average occupancy rate of 72.8%, 82.1% and 79.1% of total number of rooms respectively. In addition, STB plans to increase the hotel rooms from 71 rooms to 102 rooms and to renovate some of the existing rooms, expected to be completed by The room renovation and expansion and the funding by means of borrowing from financial institutions will be undertaken by STB. However, after the merger, the Company will accept the transfer of all assets and liabilities of STB. Operating results and financial position of STB Statements of income / / / Baht 000 s % Baht 000 s % Baht 000 s % Revenue from sale and service 237, , , Cost of sale and service (105,128.66) (37.57) (95,578.58) (31.70) (96,361.24) (35.28) Gross income 131, , , Dividend income 24, , Income from flood loss compensation 4, , Interest income , Other income 13, , , Profit before expenses 174, , , Selling expenses (44,421.47) (15.88) (45,631.24) (15.14) (46,480.45) (17.02) Administrative expenses (92,201.37) (32.95) (89,259.67) (29.61) (84,635.87) (30.99) Total expenses (136,622.84) (48.83) (134,890.91) (44.75) (131,116.32) (48.01) Profit before finance cost and income tax 38, , , Finance cost (422.08) (0.15) (202.34) (0.07) (604.40) (0.22) Profit before income tax 37, , , Income tax (7,742.59) (2.77) (16,069.89) (5.33) (8,992.01) (3.29) Net profit 29, , , Basic earnings per share Page 35า

38 Note: 1/ The financial statements as at December 31, were audited by Mr. Saravut Jetsadakum, CPA Registration No. 5348, of Jetsada CPA Ltd. Part., and were prepared in accordance with the financial reporting standard for non-public interest business. 2/ The financial statements as at December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared for the sole purpose of supporting the pro forma financial information of Rasa Property Development Plc. submitted to the SET. Statements of financial position / / / Baht 000 s % Baht 000 s % Baht 000 s % Assets Current assets Cash and cash equivalents 5, , , Trade and other accounts receivable-net 14, , , Receivable from insurance companies 1, Inventories 6, , , Prepaid expenses 2, , Tax deducted at source 1, , Other current assets , Total current assets 32, , , Non-current assets Restricted deposits with financial - - 1, , institutions Long-term investments in related 100, , companies Long-term investments in other 20, , companies Long-term loans to related companies 290, , , Property, plant and equipment 369, , , Intangible assets Deferred tax assets , Other non-current assets Total non-current assets 780, , , Total assets 812, , , Page 36า

39 2011 1/ / / Baht 000 s % Baht 000 s % Baht 000 s % Liabilities and shareholders equity Liabilities Current liabilities Overdrafts from financial institutions 11, Trade and other accounts payable 28, , , Current portion of long-term loans from , financial institutions-net Current portion of hire purchase payable 1, , Advance received from room payment 4, , Accrued income tax 4, , , Retentions payable Other current liabilities 7, , , Total current liabilities 57, , , Non-current liabilities Long-term loans from related parties 52, , Long-term loans from financial institutions , Hire purchase payable 2, Employee benefit obligations , Total non-current liabilities 54, , , Total liabilities 112, , , Shareholders equity Issued and paid-up capital 100, , , Retained earnings Appropriated (legal reserve) , Unappropriated 600, , , Total shareholders equity 700, , , Total liabilities and shareholders equity 812, , , Note: 1/ The financial statements as at December 31, were audited by Mr. Saravut Jetsadakum, CPA Registration No. 5348, of Jetsada CPA Ltd. Part., and were prepared in accordance with the financial reporting standard for non-public interest business. 2/ The financial statements as at December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Page 37า

40 Cash flow Unit: Baht 000 s Cash flow provided from (used in) operating activities 42, , , Cash flow provided from (used in) investing activities (50,418.04) (36,077.78) (211.56) Cash flow provided from (used in) financing activities 8, (28,531.36) (79,105.76) Net increase (decrease) in cash and cash equivalents 1, , (12,134.45) Cash and cash equivalents at beginning of year 4, , , Cash and cash equivalents at end of year 5, , , Key financial ratios Financial ratios Liquidity ratios Current ratio time Quick ratio time Cash ratio time Receivable turnover ratio time Average collection period day Inventory turnover ratio time Average selling period day Payable turnover ratio time Repayment period day Cash cycle day (35) (58) (16) Profitability ratios Gross profit margin % Operating profit margin % (1.97) Other profit margin % Cash to earnings ratio % (916.79) Net profit margin % Return on equity % Efficiency ratios Return on assets % Return on fixed assets % Asset turnover time Financial policy ratios Debt to equity ratio time Interest coverage ratio time Commitment coverage ratio time Payout ratio % Page 38า

41 Analysis of operating results and financial position Operating results in Revenue from sale and service STB recorded revenue from sale and service of Baht million, Baht million and Baht million in respectively, up by Baht million or 15.81% y-o-y in 2012 and down by Baht million or 5.04% y-o-y in In 2012, STB could grow revenue because Thailand was not plagued by political conflict, leading European visitors to be more confident in visiting the country. At the same time, the hotel revised up its room rates. In 2013, the revenue dropped due to a temporary close of 14 hotel rooms during September- December 2013 for refurbishment, as well as closing of guestrooms nearby the office building construction area. Other income and interest income In , other income and interest income totaled Baht million, Baht million and Baht million respectively. The major item was interest income, amounting to Baht million, Baht million and Baht million in respectively. Due to reclassification of accounting items in 2013, interest income was separated from other income, thus leading other income in 2013 to decrease remarkably. Cost of sale and service STB recorded cost of sale and service of Baht million, Baht million and Baht million in respectively, decreasing by Baht 9.55 million or 9.08% y-o-y in 2012 and increasing by Baht 0.78 million or 0.82% y-o-y in In 2012, the decline in cost of sale and service resulted partly from termination of the landscaping service agreement and partly from a stricter control over product and raw material procurement, inventory control and cost control on all sections. In 2013, cost of sale and service went up slightly from 2012 despite the minimum wage hike to Baht 300 per day or Baht 9,000 per month, stemming from a temporary close of some hotel rooms for renovation and suspended service of guestrooms nearby the office building construction area. However, cost of sale and service as percentage of revenue edged up from 31.70% in 2012 to 35.28% in 2013 as a consequence of the minimum wage increase. During the period of such guestroom renovation and suspended service, STB continued to procure raw materials and products in the quantity close to that procured in the normal course of full operation so as to maintain its service standards. Moreover, it has since January 2013 increased the minimum wage rate to Baht 9,000 per month in line with the government policy, thereby leading to an increase in its expenses. Page 39า

42 Selling and administrative expenses In , STB recorded selling and administrative expenses of Baht million, Baht million and Baht million respectively, decreasing y-o-y by Baht 1.73 million or 1.27% in 2012 and Baht 3.77 million or 2.80% in 2013 due to a stricter control over product and raw material procurement, inventory control and cost control on all sections. Net profit STB posted a net profit in of Baht million, Baht million and Baht million respectively, surging by Baht million or 83.06% in 2012 and plunging by Baht million or 34.16% in 2013 relative to the foregoing year. Financial position as at December 31, Total assets STB had total assets of Baht million, Baht million and Baht million in respectively, growing y-o-y by Baht million or 3.88% in 2012 and then declining by Baht million or 3.42% in In 2012, the asset growth was attributed primarily to an increase in cash and cash equivalents of Baht million and in long-term loans to related companies of Baht 9.91 million since STB could increase cash flow provided from operating activities. In 2013, the decline in total assets resulted from a decrease in long-term investments in related companies of Baht 100 million, long-term investments in other companies of Baht million, and longterm loans to related companies of Baht million due to sale of investments by STB in order to repay loans from directors. The decrease in long-term loans to related companies in 2013 stemmed from reclassification of accounting items, with accrued interest receivable from loans in 2012 being totally included in trade and other receivables-net. As a result, trade and other receivables-net mounted from Baht million and Baht million in 2011 and 2012 respectively to Baht million in Nonetheless, its net fixed assets grew by Baht million, mainly coming from construction work in progress in respect of the renovation of 14 temporarily-closed rooms and the construction of office building, which commenced in late 2013 and is expected to be completed by Besides, trade and other receivables-net rose by Baht million due to reclassification of accounting items with accrued interest receivable from loans of Baht million being incorporated into the said trade and other receivables-net. At the same time, trade accounts receivable-net in 2013 were Baht million, close to the preceding year. Total liabilities STB had total liabilities of Baht million, Baht million and Baht million in respectively, down y-o-y by Baht million or 20.65% in 2012 and then up by Baht million or 51.32% in Page 40า

43 In 2012, the drop in total liabilities stemmed from a decrease in overdrafts from financial institutions of Baht million and long-term loans from related parties of Baht million. This was because STB could bring in sufficient working capital and, hence, needed not to use such overdraft loans and had partially repaid the long-term loans. In 2013, the increase in total liabilities resulted partly from new borrowing from financial institutions of Baht million (comprising current portion of long-term loans from financial institutions-net of Baht million and long-term loans from financial institutions-net of Baht million) to finance costs of room renovation and office building construction. Such loan was out of the total available credit line of Baht 200 million, with principal and interest payment period of 10 years, payable on a monthly basis as determined by the financial institutions. The amount payable for principal and interest during May-November of each year is set to be lower than all other monthly installments to be consistent with the drop in revenues during such period which is the low season months. The increase in total liabilities also resulted from employee benefit obligations of Baht million. At the same time, long-term loans from related parties decreased by Baht million due to partial loan repayment. Shareholders equity STB s shareholders equity amounted to Baht million, Baht million and Baht million in respectively, rising by Baht million or 7.81% in 2012 and falling by Baht million or 9.88% in Shareholders equity increased in line with the yearly results. In 2013, however, STB paid Baht million in dividend to its shareholders out of the profit for 1999 and 2000, leading to a drop in the equity in such year. Liquidity As at the end of fiscal year , STB had cash flow of Baht 5.77 million, Baht million and Baht million respectively. Cash provided from and used in each activity in 2013 was as follows: o Operating activities: Net cash was provided in the amount of Baht million, down by Baht million from 2012 due to an increase in trade and other receivables of Baht 9.81 million, a decrease in depreciation and amortization of Baht 9.87 million, and an increase in income tax payment of Baht 3.74 million. o Investing activities: Net cash was used in the amount of Baht 0.21 million, which dropped from 2012 by Baht million because in 2013 STB received proceeds from sales of investments in other companies of Baht million whereas payment for purchase of fixed assets increased by Baht million. o Financing activities: Net cash was used in the amount of Baht million, increasing from 2012 by Baht million due to an increase in repayment of long-term loans from directors of Baht million and dividend payment of Baht million, with an increase in long-term loans from financial institutions of STB of Baht million. Page 41า

44 By aggregating the net decrease in cash and cash equivalents of Baht million with the beginning balance of cash of Baht million, STB had cash balance available as at the end of fiscal 2013 in the amount of Baht million. (b) S Bright Future Co., Ltd. ( SBF ) Background and business description S Bright Future Co., Ltd. ( SBF ) was incorporated on December 12, 2013 to mainly invest in property-related business and real estate development business. It is headquartered at No. 999 Samsen Road, Thanon Nakhon Chaisi, Dusit, Bangkok. Company Registration No Capital structure and shareholders (as at December 12, 2013) Issued and paid-up capital: Registered capital of Baht 4,135,000,000, divided into 41,350,000 ordinary shares with a par value of Baht 100 per share Shareholders of SBF are as follows: Name No. of shares (shares) % 1 Singha Property Management Co., Ltd. 41,349, Mr. Santi Bhirombhakdi Mr. Jutinant Bhirombhakdi Mr. Chayanin Thephakham Total 41,350, Singha Property Management Co., Ltd. ( SPM ) s major shareholder is Boon Rawd Brewery Co., Ltd., which is 82.20% owned by Bhirombhakdi family. The remainder of 17.80% of total shares of Boon Rawd Brewery Co., Ltd. belong to third parties that are unrelated to these two families. Board of Directors SBF Board of Directors as at January 14, 2014 is as follows: Name Position 1 Mr. Santi Bhirombhakdi Director 2 Mr. Jutinant Bhirombhakdi Director 3 Mr. Chayanin Thephakham Director Page 42า

45 Operating results and financial position of SBF in 2013 Statements of income 2013 Baht 000 s % Revenues Interest income Total revenues Expenses Administrative expenses (436.81) (4,368,100.00) Total expenses (436.81) (4,368,100.00) Profit (Loss) before income tax expenses (436.80) (4,368,000.00) Income tax expenses - - Net profit (loss) for the period (436.80) (4,368,000.00) Basic earnings (loss) per share (Baht) (0.01) Note: The financial statements for the period from December 12, 2013 to December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Statements of financial position 2013 Baht 000 s % Assets Current assets Cash and cash equivalents Total current assets Non-current assets Investments in subsidiaries 4,134, Total non-current assets 4,134, Total assets 4,135, Liabilities and shareholders equity Liabilities Current liabilities Trade and other payables Trade accounts payable to related companies Total current liabilities Total liabilities Page 43า

46 o 2013 Baht 000 s % Shareholders equity Registered and paid-up capital 41,350,000 ordinary shares of Baht 100 each 4,135, Unappropriated retained earnings (436.80) (0.01) Total shareholders equity 4,134, Total liabilities and shareholders equity 4,135, Note: The financial statements for the period from December 12, 2013 to December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Analysis of operating results and financial position SBF has engaged in investment in property-related business and real estate development business and also in shareholding in other entities. Its core assets are thus composed of investments in three subsidiaries. As at December 31, 2013, SBF s total investments made in ordinary shares of these three entities amounted to Baht 4,135 million with details as follows: Company Investments (Baht million) Shareholding (%) 1 Singha Property Development Co., Ltd. 2, Max Future Co., Ltd. 1, Bhiromphat Co., Ltd Total 4,135 SBF has just been founded on December 12, 2013 and has not yet earned any revenues, nor shown any operating performance. Meanwhile, its three subsidiaries hold vacant land that is still under preparatory stage for further development and, thus, have not yet reported any income and profit from operation. Here are details of SBF s subsidiaries: Singha Property Development Co., Ltd. ( SPD ) Background and business description Singha Property Development Co., Ltd. ( SPD ) was incorporated on April 22, 2011 to mainly engage in property rental and real estate development business. At the same time, this group of shareholders established Max Future Co., Ltd. ( MAX ) on April 22, 2011 to operate property rental and real estate development business. Page 44า

47 Later, the Japanese Embassy announced an invitation to bidding for its land and construction. SPD and MAX joined in proposing a 70:30 bid for a plot of land with construction located at the corner of Asok Montri-New Phetchaburi intersection, which was the location of the Japanese Embassy. SPD and MAX were selected to win such bid. Then on March 5, 2012 and June 8, 2012, a meeting of shareholders of both SPD and MAX resolved to approve their merger in order that the property purchased from the Japanese Embassy would be under ownership of one single entity, and jointly resolved to set up a new entity in the same name of Singha Property Development Co., Ltd. On June 12, 2012 SPD and MAX registered a dissolution of both companies and concurrently registered the establishment of the new company to accept a transfer of right to all assets and liabilities of SPD and MAX. It is headquartered at No. 999 Samsen Road, Thanon Nakhon Chaisi, Dusit, Bangkok. Company Registration No o Capital structure and shareholders (as at January 10, 2014) Issued and paid-up capital: Registered capital of Baht 2,562,000,000, divided into 25,620,000 ordinary shares with a par value of Baht 100 per share Shareholders of SPD are as follows: Name No. of shares (shares) % 1 S Bright Future Co., Ltd. 25,619, Mr. Santi Bhirombhakdi Mr. Phurit Bhirombhakdi Mr. Chayanin Thephakham Mr. Chaowalit La-ongkhwan Total 25,620, o Board of Directors SPD Board of Directors as at January 14, 2014 are as follows: Name Position 1 Mr. Santi Bhirombhakdi Director 2 Mr. Phurit Bhirombhakdi Director 3 Mr. Chayanin Thephakham Director o Operating results and financial position of SPD in To ensure continuity of the financial statements before and after the merger, the IFA has compared the financial statements of Singha Property Development Co., Ltd. before and after the merger and establishment of a new company in the original name, as shown below: Page 45า

48 Statements of income / Jan 1 - Jun 12, /,2/ Jun 12 - Dec 31, /,3/ / Baht 000 s % Baht 000 s % Baht 000 s % Baht 000 s % Revenues Interest income Other income Total revenues Expenses Administrative expenses (4,506.85) (28,542.43) (595.86) 2.38 (387.24) (243.36) (8,899.11) (23,851.81) Total expenses (4,506.85) (28,542.43) (595.86) 2.38 (387.24) (243.36) (8,899.11) (23,851.81) Loss before finance cost (4,491.06) (28,442.43) (595.86) 2.38 (228.12) (143.36) (8,861.80) (23,751.81) Finance cost (26,925.38) (170,521.72) (24,408.44) (24.41) Net loss (31,416.44) (198,964.15) (25,004.30) (22.03) (228.12) (143.36) (8,861.80) (23,751.81) Basic loss per share (Baht) (314.16) (250.04) (1.14) (7.14) Note: 1/ The financial statements for the years ended December 31, were audited by Dr. Supamit Techamontrikul, CPA Registration No. 3356, of Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd., an SEC-approved auditor. 2/ Financial statements of SPD before the merger. 3/ Financial statements of the newly established SPD after the merger and the transfer of all assets and liabilities of SPD and MAX. 4/ The financial statements as of December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Statements of financial position / Jan 1 - Jun 12, /,2/ Jun 12 - Dec 31, /,3/ / Baht 000 s % Baht 000 s % Baht 000 s % Baht 000 s % Assets Current assets Cash and cash equivalents 6, , , Trade and other receivables , Other current assets Total current assets 6, , , Non-current assets Investment property 1,429, ,453, ,547, Construction work in progress 9, Other non-current assets Property, plant and equipment Total non-current assets 1,438, ,453, ,547, Total assets 1,445, ,459, ,552, Page 46า

49 2011 1/ Jan 1 - Jun 12, /,2/ Jun 12 - Dec 31, /,3/ / Baht 000 s % Baht 000 s % Baht 000 s % Baht 000 s % Liabilities and shareholders equity Current liabilities Trade and other payables , , Short-term loans from related 1,470, ,405, companies Other current liabilities 4, Total current liabilities 1,474, ,460, , Total liabilities 1,474, ,460, , Shareholders equity Registered capital 10, , ,562, Paid-up capital 2, , ,562, Retained earnings (losses) Appropriated (legal reserve) Unappropriated (31,416.44) (2.17) - - (5,549.01) (0.23) (14,410.80) (0.56) Total shareholders equity (28,916.44) (2.00) - - (549.01) (0.03) 2,547, Total liabilities and shareholders equity 1,445, ,459, ,552, Note: 1/ The financial statements for the years ended December 31, were audited by Dr. Supamit Techamontrikul, CPA Registration No. 3356, of Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd., an SEC-approved auditor. 2/ Financial statements of SPD before the merger. 3/ Financial statements of the newly established SPD after the merger and the transfer of all assets and liabilities of SPD and MAX. 4/ The financial statements for the year ended December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Key financial ratios Financial ratios 2011 Jan 1 - Jun 12, 2012 Jun 12 - Dec 31, 2012 Liquidity ratios Current ratio time n/a Quick ratio time n/a Cash ratio time ( ) n/a ( ) (12.29) Profitability ratios Operating profit margin % (28,442.43) n/a (143.36) (23,751.81) Other profit margin % (28,442.43) n/a (143.36) (23,751.81) Cash to earnings ratio % Net profit margin % (198,964.15) n/a (143.36) (23,751.81) Return on equity % n/a 0.39 (0.17) 2013 Page 47า

50 Financial ratios 2011 Jan 1 - Jun 12, 2012 Jun 12 - Dec 31, 2012 Efficiency ratios Return on assets % (2.17) n/a (0.01) (0.35) Asset turnover time Financial policy ratios Debt to equity ratio time (51.00) n/a (4,480.83) Interest coverage ratio time n/a n/a Commitment coverage ratio time (0.00) (0.04) (0.01) (0.02) 2013 Analysis of operating results and financial position From its inception in 2011 until the merger with MAX in 2012, SPD has not yet recorded any income and operational performance since its vacant land is still under commercial viability study for future development. Its major asset is vacant land held for development, details of which are as follows: Asset location The corner of Asok Montri - Phetchaburi Intersection, Bang Kapi, Huai Khwang, Bangkok Type of asset Vacant land Title deeds (title deed no./parcel 4762/173/2558, 4763/310/2259 and 4852/311/2300 no./dealing file no.) Area 11 rai 1 ngan 24 square wah (4,524 square wah) Ownership Singha Property Development Co., Ltd. Registered encumbrance None Book value Baht 2,547,394,187 Official land appraisal price Baht 1,067,994,500 Independent Valuer American Appraisal (Thailand) Ltd. Appraisal date February 1, 2014 Land appraisal price by Baht 3,257,000,000 Independent Valuer Picture of the location of SPD s property Source: Appraisal report of American Appraisal (Thailand) Ltd. Page 48า

51 o Bhiromphat Co., Ltd. ( BRP ) Background and business description Bhiromphat Co., Ltd. ( BRP ) was incorporated on December 13, 2001 to engage in leasing of building and car park. It is headquartered at No. 179 Soi Asok, Sukhumvit 21 Road, Khlong Toei Nua, Watthana, Bangkok. Company Registration No o Capital structure and shareholder (as at January 10, 2014) o Issued and paid-up capital: Registered capital of Baht 73,000,000, divided into 73,000 ordinary shares with a par value of Baht 1,000 per share. BRP shareholders are as follows: Name No. of shares (shares) % 1 Mr. Vudha Bhirombhakdi Mr. Santi Bhirombhakdi Mr. Jutinant Bhirombhakdi Mr. Rojrit Thephakham Mr. Phalit Bhirombhakdi Mr. Sudhabodi Sattabut Mr. Phurit Bhirombhakdi S Bright Future Co., Ltd. 72, Total 73, Board of Directors BRP Board of Directors as at January 14, 2014 is as follows: Name Position 1 Mr. Vudha Bhirombhakdi Director 2 Mr. Santi Bhirombhakdi Director 3 Mr. Jutinant Bhirombhakdi Director 4 Mr. Rojrit Thephakham Director 5 Mr. Phalit Bhirombhakdi Director 6 Mr. Sudhabodi Sattabut Director 7 Mr. Phurit Bhirombhakdi Director Page 49า

52 o Operating results and financial position of BRP in Statements of income / / / Baht 000 s % Baht 000 s % Baht 000 s % Revenues Income from building rental 1, , Other income Total revenues 1, , Expenses Cost of building rental (854.59) (101.05) Administrative expenses (107.04) (7.43) (20.10) (1.60) (463.71) (54.83) Total expenses (107.04) (7.43) (20.10) (1.60) (1,318.30) (155.89) Profit (Loss) before finance cost and income tax expenses 1, , (472.62) (55.89) Finance cost (322.63) (38.15) Profit (Loss) before income tax expenses 1, , (795.25) (94.04) Income tax (421.49) (29.27) (285.18) (22.63) - - Net profit (795.25) (94.04) Basic earnings per share (Baht) (10.89) Note: 1/ The financial statements for the years ended December 31, were audited by Miss Nualrat Kupatanon, CPA Registration No. 4739, of United Charter Accountant Co., Ltd. 2/ The financial statements for the year ended December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Statements of financial position / / / Baht 000 s % Baht 000 s % Baht 000 s % Assets Current assets Cash and cash equivalents 5, , , Trade and other receivables Other current assets Total current assets 5, , , Non-current assets Investment property-net 60, , , Equipment-net Total non-current assets 60, , , Total assets 65, , , Page 50า

53 2011 1/ / / Baht 000 s % Baht 000 s % Baht 000 s % Liabilities and shareholders equity Liabilities Current liabilities Trade and other payables , , Retentions payable Short-term loans from related companies 16, Other current liabilities Total current liabilities , , Total liabilities , , Shareholders equity Issued and paid-up capital 73, , , Retained earnings (losses) Appropriated (legal reserve) Unappropriated (7,794.57) (11.92) (6,839.84) (9.82) (7,635.09) (9.12) Total shareholders equity 65, , , Total liabilities and shareholders equity 65, , , Note: 1/ The financial statements for the years ended December 31, were audited by Miss Nualrat Kupatanon, CPA Registration No. 4739, of United Charter Accountant Co., Ltd. 2/ The financial statements for the year ended December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Cash flow Unit: Baht 000 s Cash flow provided from (used in) operating activities , (328.20) Cash flow provided from (used in) investing activities - (3,386.32) (19,890.88) Cash flow provided from (used in) financing activities , Net increase (decrease) in cash and cash equivalents (4,219.08) Cash and cash equivalents at beginning of year 4, , , Cash and cash equivalents at end of year 5, , , Page 51า

54 Key financial ratios Financial ratios Liquidity ratios Current ratio time Quick ratio time Cash ratio time (0.02) Profitability ratios Gross profit margin % (1.74) Operating profit margin % (56.26) Cash to earnings ratio % Net profit margin % (94.67) Return on equity % (0.30) Efficiency ratios Return on assets % (0.95) Return on fixed assets % (1.11) Asset turnover time Financial policy ratios Debt to equity ratio time Interest coverage ratio time n/a n/a (1.02) Commitment coverage ratio time n/a n/a (0.02) Analysis of operating results and financial position Operating results in Income from building rental in was Baht 1.44 million, Baht 1.26 million and Baht 0.85 million respectively, dropping y-o-y by Baht 0.18 million or 12.50% in 2012 and Baht 0.41 million or 32.88% in The decrease in rental income in stemmed from a temporary close of the building for renovation between September 2012 and August The building was reopened for rent in September 2013 with number of rentees increasing from one to three. No cost of building rental was incurred in as there was no building renovation and construction in such years. Hence, BRP recorded no cost of building rental with respect to depreciation and no cost of building rental with respect to public utilities, which were water supply expenses, because there was only one rentee and the rentee paid for water supply expenses by itself. For 2013, cost of building rental was Baht 0.85 million, increasing by such amount from the previous year. This was because in 2013 BRP constructed, renovated and decorated the building and accordingly incurred cost of building rental with respect to depreciation of the rented property. After the renovation, number of rentees rose from one to three. BRP therefore paid the water supply expenses and collected the expenses afterwards from the rentees. As a result, cost of building rental was inclusive of utilities expenses. Page 52า

55 Administrative expenses in totaled Baht 0.11 million, Baht 0.02 million and Baht 0.46 million respectively. In 2012, such expenses decreased by Baht 0.09 million or 81.22% as miscellaneous expenses went down and the withholding income tax assets were not deleted from the account. For 2013, administrative expenses soared by Baht 0.44 million or 2,207.01% due to depreciation cost for general tools of Baht 0.09 million, property appraisal fee of Baht 0.09 million, and an increase in auditing fee of Baht 0.25 million. Finance cost was Baht 0.32 million in 2013, increasing by such amount from the preceding year due to borrowing raised to cover cost of building construction and renovation. Financial position as at December 31, Total assets as of December 31, were Baht million, Baht million and Baht million respectively, growing y-o-y by Baht 4.27 million or 6.52% in 2012 and Baht million or 20.11% in The major item, investment property-net, amounted to Baht 60 million in 2011 and then increased by Baht 3.39 million to Baht million in 2012 and by Baht million to Baht million in 2013, mainly resulting from building construction, renovation and decoration. Investment property-net consisted of a plot of land of rai on Asok Montri Road, buildings and improvement, furniture and fixture. Total liabilities as at December 31, were Baht 0.19 million, Baht 3.50 million and Baht million respectively, a y-o-y surge of Baht 3.31 million or 1,766.04% in 2012 and Baht million or % in Such increase in total liabilities in 2012 resulted mainly from an increase in trade and other payables of Baht 3.39 million and, in 2013, was largely caused by short-term loans from Singha Corporation Co., Ltd., which is a related company, of Baht 16 million to finance building construction and modification. As at December 31, , shareholders equity stood at Baht million, Baht million and Baht million respectively, up by Baht 0.95 million in 2012 and down by Baht 0.80 million in 2013 which was in line with working results in each year. Liquidity As at the end of fiscal year , BRP had cash flow of Baht 5.39 million, Baht 6.09 million and Baht 1.87 million respectively. Cash provided from and used in each activity in 2013 was as follows: o Operating activities: BRP had net cash used of Baht 0.33 million, increasing by Baht 1.03 million, mainly due to an increase in trade and other receivables of Baht 0.49 million and an increase in financial costs of Baht 0.32 million, with loss incurred from 2013 operation of Baht 0.79 million. o Investing activities: BRP had net cash used of Baht million, up by Baht million from 2012 largely stemming from investments in building construction and renovation and furniture & fixture totaling Baht million. Page 53า

56 o Financing activities: BRP had net cash provided of Baht million, increasing by this amount from 2012 due to borrowing from a related company of Baht million to meet costs of construction and renovation. By aggregating the net decrease in cash and cash equivalents of Baht 4.22 million with the beginning balance of cash of Baht 6.09 million, BRP had cash balance available as at the end of fiscal 2013 in the amount of Baht 1.87 million. Details of BRP s investment property are as follows: Location Asok Montri Road, Khlong Tan, Phra Khanong, Bangkok Type of property Land with construction Title deeds (title deeds no./parcel 7656/815/1408, 7657/817/1409 and 7806/816/1480 no./dealing file no.) Area 2 rai 48 square wah Ownership Bhiromphat Co. Ltd. Registered encumbrance None Book value Baht 80,071,356 Official land appraisal price Baht 258,400,000 Independent Valuer American Appraisal (Thailand) Ltd. Appraisal date February 1, 2014 Appraisal price by Independent Baht 721,000,000 Valuer Picture of the location of BRP s property Source: Appraisal report of American Appraisal (Thailand) Ltd. Max Future Co., Ltd. ( MAX ) o Background and business description Max Future Co., Ltd. ( MAX ) was incorporated on August 6, 2013 to engage in propertyrelated business and real estate development business. Its office is located at No. 999 Samsen Road, Thanon Nakhon Chaisi, Dusit, Bangkok. Page 54า

57 Company Registration No o Capital structure and shareholders (as at December 24, 2013) o Issued and paid-up capital: Registered capital of Baht 1,500,000,000, divided into 15,000,000 ordinary shares with a par value of Baht 100 per share. MAX shareholders are as follows: Name No. of shares (shares) % 1 S Bright Future Co., Ltd. 14,999, Mr. Santi Bhirombhakdi Mr. Chayanin Thephakham Mr. Pitsanu Boonprasit Total 15,000, Board of Directors MAX Board of Directors as at January 14, 2014 is as follows: Name Position 1 Mr. Santi Bhirombhakdi Director 2 Mr. Chayanin Thephakham Director o Operating results and financial position of MAX in 2013 Statements of income 2013 Baht 000 s % Revenues Interest income Total revenues Expenses Administrative expenses (457.19) (64.16) Total expenses (457.19) (64.16) Profit before income tax expenses Income tax expenses (51.40) (7.21) Net profit for the year Basic earnings per share (Baht) 0.01 Note: The financial statements for the year ended December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SECapproved auditor. Such financial statements were prepared in accordance with the financial reporting standard for public interest business. Page 55า

58 Statements of financial position 2013 Baht 000 s % Assets Current assets Cash and cash equivalents 402, Total current assets 402, Non-current assets Land held for development 1,097, Total non-current assets 1,097, Total assets 1,500, Liabilities and shareholders equity Liabilities Current liabilities Trade and other payables Income tax payable Total current liabilities Total liabilities Shareholders equity Registered and paid-up capital 15,000,000 ordinary shares each of Baht 100 1,500, Unappropriated retained earnings Total shareholders equity 1,500, Total liabilities and shareholders equity 1,500, Note: The financial statements for the year ended December 31, 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SECapproved auditor. Such financial statements were prepared for the sole purpose of supporting the pro forma financial information of Rasa Property Development Plc. submitted to the SET. Analysis of operating results and financial position MAX has engaged in property-related business and real estate development business. Established on August 6, 2013, MAX had not yet generated any revenue from such business in fiscal year 2013 because its acquired land still awaits further development. Its assets mainly consisted of cash and cash equivalents of Baht million and land held for development of Baht 1, million. Such land is deemed an investment property with details as follows: Page 56า

59 Location Pradit Manutham Road, Khlong Kum, Bung Kum (Bang Kapi), Bangkok Type of property Vacant land Title deeds (title deeds no./parcel no./dealing file no.) 113/3123/28204, 5820/18/52678, 114/3124/28205, 8058/416/543, 115/3125/28206, 12187/418/683, 116/3126/28207, 12188/419/684, 1011/50007/5042, 14900/19/64811, 1732/5001/50213, 15352/445/65226, 4286/404/329, 15630/446/65453, 5617/15/51881, 15631/447/65454, 5798/17/52664 and 59347/417/7960 Ownership Max Future Co., Ltd. Area rai Registered encumbrance None Book value Baht 1,097,581,054 Official land appraisal price Baht 130,657,800 Independent Valuer American Appraisal (Thailand) Ltd. Appraisal date February 1, 2014 Appraisal price by Independent Baht 1,221,000,000 Valuer Picture of the location of MAX s property Source: Appraisal report of American Appraisal (Thailand) Ltd. Page 57า

60 1.6.2 Land Sale Transaction The Company will sell its land in Don Mueang and Lam Luk Ka areas to Khun Rapi Pinitchob, who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi. Details of such land are as follows: (a) Vacant land in Don Mueang area Baht 189,000,000 Location Soi Phahon Yothin 73 (Soi Nguan Wienrawi), Phahon Yothin Road (Highway No. 1), Sanam Bin, Don Mueang, Bangkok Type of property Vacant land Title deeds (title deeds no./parcel 21878/ 3601/ no./dealing file no.) Area rai ( rai or 13,481.4 square wah) Ownership Rasa Property Development Plc. Registered encumbrance Mortgaged as collateral with Kiatnakin Bank Plc. Book value Baht 203,547, Official land appraisal price 1/ Baht 303,331, Independent Valuer American Appraisal (Thailand) Ltd. Appraisal date February 1, 2014 Appraisal price by Independent Valuer 2/ Agreed transaction price Baht 198,000,000 Selling price lower than book Baht 5,547, value Land selling expenses Baht 8,038, Comprising transfer fee of Baht 3,033, and specific business tax of Baht 5,004, Net amount receivable Baht 189,961, Note: 1/ Official appraisal price, determined by the Treasury Department, could not reflect the true market value of a property. It has been used as a minimum benchmark and applied in land appraisal for collection of tax on property sale, stamp duty and fee for registration of right and juristic act. 2/ The Independent Valuer appraised the land at a price lower than the official appraisal price because the land is situated in the landing/take-off direction of Don Mueang Airport and, hence, is not suitable for development into a housing project. Page 58า

61 Picture of the location of vacant land in Don Mueang area Source: Appraisal report of American Appraisal (Thailand) Ltd. (b) Vacant land in Lam Luk Ka area Location 1) Plot No. 1: Kanchanaphisek frontage road (Highway No. 9) and Khlong 6 west section road, Kham Phroi Sub-district, Lam Luk Ka District, Pathum Thani Province 2) Plot No. 2: Khlong 6 west section road, Bung Kham Phroi Subdistrict, Lam Luk Ka District, Pathum Thani Province Type of property Vacant land Page 59า

62 Title deeds (title deeds no./parcel no./dealing file no.) 1) Plot No. 1: 93597/168/4247, /406/14976, /407/14977, /408/14978, /409/14978, /410/14980, /411/14981, /412/14982 and /438/ ) Plot No. 2: 531/60/17, 47016/59/631, /413/16009 and /415/16011 Area 1) Plot No. 1: rai ( rai or 21,830.0 square wah) 2) Plot No. 2: rai (89.2 rai or square wah) Totaling rai Ownership Rasa Property Development Plc. Registered encumbrance 1) Plot No. 1: In process of release of mortgage as collateral with Krung Thai Bank Plc. 2) Plot No. 2: Unencumbered Book value Combined value of Plot No. 1 and No. 2: Baht 173,850,000 Official land appraisal price 1) Plot No. 1: Baht 37,665,300 2) Plot No. 2: Baht 58,872,000 Totaling Baht 96,537,300 Independent Valuer American Appraisal (Thailand) Ltd. Appraisal date February 1, 2014 Appraisal price by Independent Valuer 1) Plot No. 1: Baht 70,900,000 2) Plot No. 2: Baht 98,100,000 Totaling Baht 169,000,000 Agreed transaction price Combined value of Plot No. 1 and No. 2: Baht 175,000,000 Selling price higher than book Baht 1,750, value Land selling expenses Baht 3,836,415 Comprising transfer fee of Baht 948, and specific business tax of Baht 2,887, Net amount receivable Baht 171,163, Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) On November 26, 2007, the Company and Siam Prime Estate Co., Ltd. ( Siam Prime ) entered into the Management Agreement on The Light House Project, under which it is mutually agreed that the two parties shall join in constructing a residential condominium project in Charoen Nakhon area offering 297 units, together with area leased for commercial purpose on four floors with a total area of 5, square meters, in a proportion of 70% and 30% respectively. Investment structure under the Management Agreement is as follows: Page 60า

63 No. Name Baht Proportion (%) 1 Rasa Property Development Plc. 107,824, Siam Prime Estate Co., Ltd. 46,210, Total 154,035, The Light House Project was completely constructed and all units were sold out, thus enabling the Company and Siam Prime to fully repay debts and return all investment funds, as well as sharing of benefits according to investment structure under the Management Agreement. However, there remains the land leased for commercial purpose. The Company intends to terminate the Management Agreement with Siam Prime in order to become sole owner of the said leased land in The Light House Project, which will increase flexibility in management of such leased area. The Company has accordingly proposed to terminate the Management Agreement with Siam Prime and will pay Baht 51 million as a consideration for the agreement termination, as negotiated with Siam Prime. Summary of the Management Agreement between the Company and Siam Prime Estate Co., Ltd. This Agreement was made on November 26, Parties Rasa Property Development Plc. ( Party No. 1 ) Siam Prime Estate Co., Ltd. ( Party No. 2 ) 2. Project Residential condominium and commercial area or plaza developed by the Parties on the project area 3. Joint venture 3.1 The Parties agree to cooperate in the form of investment management in project development and mutually agree to the rights, duties and responsibilities of each party as specified herein. 3.2 The Parties agree and are obligated to treat the other party with honesty and candor for their mutual benefit. 4. Investment structure 4.1 Party No. 1 70% of investment Party No. 2 30% of investment In the initial period of the project, each party shall inject funds as follows: Party No. 1 Baht 107,824,500 Party No. 2 Baht 46,210, If additional funds are required, the project monitoring committee may consider having both parties procure and transfer the required amount of funds into their joint bank account on a pro rata basis. In the event that the additional fund injection causes a change in their investment structure, they shall recalculate the investment percentage based on the actual amount of funds injected by each party, and such revised investment structure shall be used as a basis for profit sharing between them. Page 61า

64 5. Profit/Loss sharing 6. Termination of agreement 5.1 Unless otherwise specified, revenues from sales and/or renting of residential condominium and/or commercial area or plaza or any other income relating to the project contemplated herein. 5.2 The Parties shall share profit/loss according to the investment structure by the average method based on the investment percentage and the period of actual investment by both parties. 5.3 The profit/loss sharing shall be divided into two phases as follows: Phase 1 When the ownership transfer and/or renting of condominium and/or commercial area or plaza altogether reach 80% of total project area Phase 2 When the ownership transfer and/or renting of condominium and/or commercial area or plaza are fully accomplished After the profit appropriation as in 5.3, if some of the condominium and/or commercial area or plaza is allocated for renting, the Parties shall share profit from such renting according to the investment structure at any time as they deem fit. 6.1 In the event that any of the Parties breaches any of the provisions herein, the other party may send a letter requesting the defaulting party to make a remedy within an appropriate period of time. If the defaulting party fails to act accordingly by the specified period of time, the other party shall have the right to terminate the agreement forthwith. If the terminating party does not wish to continue the business, it may sell and/or rent out the said area of the project and/or the condominium and/or commercial area or plaza, and use the proceeds received thereof for repaying the debts incurred from the said project operation to all creditors. 6.2 Aside from the case in 6.1, the terminating party may otherwise decide not to sell and/or rent out the said area of the project and/or the condominium and/or commercial area or plaza, and may decide to continue the project operation. In the event that the terminating party decides to continue the project operation after the agreement termination, when the said area of the project and/or the condominium and/or commercial area or plaza have been completely sold or rented out, the revenues, remaining from deduction of expenses and monies invested by the terminating party, shall be returned to the defaulting party in proportion to its investment percentage and the remainder thereof shall then be shared between them, whereby the defaulting party shall be entitled to receive the profit generated before the agreement termination only. Page 62า

65 6.3 In any case whatsoever, the termination of this agreement shall not prejudice rights of the terminating party to claim damages. The terminating party may deduct any claims arising from such default from the monies to be paid to the Parties as in 6.1 or 6.2, whichever is the case. 7. Agreement term 7.1 This agreement shall take effect as from the date of signing the agreement until the Parties have completely sold the condominium and commercial area or plaza and have duly shared profit and/or loss and/or have terminated the agreement. 7.2 Unless otherwise agreed, in the case where the condominium and/or commercial area or plaza are rented out, this agreement shall continue to take effect only for the rented part of the condominium and/or commercial area or plaza until the entity which the Parties have jointly managed has completely sold out the condominium and/or commercial area or plaza and have duly shared profit and/or loss. 1.7 Industry situation relating to business operation of the acquired assets Overview of hotel business Thailand possesses a wide variety of tourist attractions including natural attractions, food and culture in various parts of the country, coupled with an array of tourism promotion events such as Songkran Festival, International Horticulture Exposition, etc. Winning the world-class Best Tourist Country award and Best Country Brand for Value for Money award helps make Thailand become well recognized internationally and draw an increasing number of tourists to the country. Growth in tourism industry augurs well for hotel business as these two sectors are directly related. Hotel business also hinges on factors such as economic condition, currency exchange, physical environment and climate, season, etc. Hotel business growth is driven not only by international tourists, but also by local visitors. Thailand s tourism situation in reported by Department of Tourism can be concluded as follows: Countrywide Samui Island Number of visitors Thai (million persons) International (million persons) Total Growth rate (%) Revenues earned from visitors Thai (Baht million) 402, , ,865 1,075 1,381 2,086 International (Baht million) 501, , ,928 8,154 10,138 15,594 Total 904,376 1,109,349 1,349,793 9,228 11,518 17,680 Page 63า

66 Countrywide Samui Island Growth rate (%) Accommodations Number of rooms (000 s rooms) Occupancy rate (%) Number of check-in guests Thai (million persons) International (million persons) Total Growth rate (%) Source: Department of Tourism, Ministry of Tourism and Sports Based on the report on Thailand s tourism situation in by Department of Tourism, Ministry of Tourism and Sports, the aggregate number of Thai and foreign visitors in Thailand grew from million persons in 2010 to million persons in 2012, representing an average y-oy growth rate of 12.80%. As well, revenues earned from visitors increased from Baht 904,376 million in 2010 to Baht 1,349,793 million in 2012, representing an average y-o-y increase rate of 22.17%. As a consequence, number of accommodations rose from 454,686 rooms in 2010 to 530,623 rooms in 2012, representing an average y-o-y growth rate of 22.92%. As regards the tourism market on Samui Island, Surat Thani Province, where Santiburi Hotel is located, the said Department of Tourism s report showed that the aggregate number of Thai and foreign visitors to Samui Island soared from 0.79 million persons in 2010 to 1.25 million persons in 2012, representing an average y-o-y growth rate of 27.88%. At the same time, revenues earned from visitors surged from Baht 9,228 million in 2010 to Baht 17,680 million in 2012, an average y-o-y increase rate of 39.15%. Correspondingly, number of accommodations rose from 15,012 rooms in 2010 to 19,857 rooms in 2012, representing an average y-o-y growth rate of 19.44%. As evident from the above report, Thai tourism industry has witnessed a recovery as propelled by growth in both number of visitors and revenues from tourism. Another contributing factor is the National Tourism Development Plan outlined by National Tourism Policy Commission with aims to revivify and stimulate Thai tourism sector for growth and sustainability and to boost and enhance potential in tourism revenue generation with a view to ensuring Thai tourism s readiness in terms of quality and competitiveness and strengthening income generation and distribution in parallel with sustainable development. Moreover, World Tourism Organization (UNWTO) forecasts that by 2020 number of international tourists will reach 1,600 million persons and East Asia, Pacific and Southeast Asia regions will likely become top tourist destinations with ongoing growth in number of visitors. It is therefore possible that Thai tourism will pick up, which will further bode well for hotel industry. Page 64า

67 2. Company profile 2.1 Business overview Background Rasa Property Development Plc. ( the Company ) was incorporated on August 14, 1995 in the name, Panich Phum Phatthana Co., Ltd., with a registered capital of Baht 10 million. It was listed on the Stock Exchange of Thailand on April 30, Its main objective is to operate real estate development business in the types of housing estate and residential condominium. The Company currently has a registered capital of Baht 549,999,986 and a paid-up capital of Baht 549,998,401. It is headquartered at No. 555 Rasa Tower Floor 28, Phahon Yothin Road, Chatuchak, Bangkok Description of business The Company is a developer and owner of housing estate and residential condominium projects of premium quality, emphasizing functionality and uniqueness of each project. All projects are of a limited edition with innovative style and concept, which is the key selling point of the individual properties. The Company s existing housing estate and residential condominium projects are as follows: Intro Condominium (Pradiphat) This is a condominium project located on Pradiphat Road, with a unique architectural design and complete with facilities and amenities for urban living. All units feature an optimum design with a relaxing and refreshing ambience created by a large green area at the front of the project site. It is located in a prime downtown area in close proximity to shopping malls, schools, hospitals and office buildings, as well as expressways, BTS/MRT stations, and interchange points to other electric train lines. The project, covering a land area of 3 rai 1 ngan 33 square wah, offers a 37-storied condominium with approximately 450 units sold at a price ranging from Baht 2.5 million to Baht 13.3 million, having a total project value of Baht 1,450 million. Page 65า

68 RASA Maxx Vile (Phahon Yothin 73) This is a modern tropical two-storied townhome project suitable for new generation s modern and perfect lifestyle, emphasizing functionality, perfect combination, fine quality materials, easy use and pleasant atmosphere amid a variety of plants together with a multi-purpose area. Sited on a land area of rai, the project offers 217 units of square wah townhome sold at a price of Baht 2.0 million million (approx.) with a total project value of about Baht 520 million. Sales were launched in Q4/2012. Construction is expected to be fully completed in Q4/2014. As of March 2014, 93 units have been sold and already transferred Revenue structure of THE COMPANY and its subsidiaries The Company s revenue structure for is as follows: Revenue structure Baht million % Baht million % Baht million % 1) Revenues from sales of properties 1.1) Land and houses ) Condominium units 1, Total revenues from sales of properties 1, ) Other income Total revenues 1, Revenue increase (decrease) rate (605.39) (48.98) (146.72) (23.27) Shareholders As of April 3, 2014, the Company s top 10 shareholders are as follows: No. Name No. of shares % 1 Pinitchob Group 1/ 250,717, Miss Atcharaphorn Siriphraiwan 121,000, Thai NVDR Co., Ltd. 10,866, Mr. Pises Lertwilai 6,077, Mr. Panja Senadisai 5,500, Page 66า

69 No. Name No. of shares % 6 Mrs. Pachara Khlamchuen 5,206, Mrs. Wirongrong Ratanawijai 4,321, Mr. Apinan Horsaengchai 4,247, Mr. Wallop Rungkitworasatien 4,050, Mr. Somsak Arthonsombat 4,000, Source: Note: 1/ Pinitchob Group consists of Mr. Khemchai Rasanont who is Mr. Rapi Pinitchob s father and holds 129,920,437 shares, Mr. Rapi Pinitchob holding 101,344,375 shares, and Rasa Tower Co., Ltd. holding 19,452,500 shares, making up a total of 250,717,312 shares or 45.58% of paid-up registered capital. Rasa Tower Co., Ltd. is deemed as a related person under Section 258 (3) of the Securities and Exchange Act of Mr. Rapi Pinitchob because Mr. Rapi Pinitchob holds 36.63% of shares in this entity Board of Directors The Company s Board of Directors is composed of nine members as follows: No. Name Position 1 Assoc. Prof. Manob Pongsatad Chairman of the Board 2 Mr. Loetchai Lilayonkun Audit Committee Chairman/Independent Director/ Nomination Committee Member 3 Mr. Panja Senadisai Nomination Committee Chairman/Audit Committee Member/Independent Director 4 Mrs. Sudjit Tiwaree Audit Committee Member/Independent Director 5 Miss Atcharaphorn Siriphraiwan Director/Chairman of the Executive Board 6 Mr. Rapi Pinitchob Director/Managing Director 7 Miss Sumida Phankrawi Independent Director/Nomination Committee Member 8 Mr. Kowit Waiwatthana Director/Executive Board Member 9 Mr. Phisit Phatsathapong Independent Director Source: Operating results and financial position in Statements of comprehensive income Particulars Baht 000 s % Baht 000 s % Baht 000 s % Revenues from sales Revenues from sale of land and houses 146, , , Revenues from sale of condominium 1,086, , , units Other income 2, , , Total revenues 1,235, , , Page 67า

70 Particulars Baht 000 s % Baht 000 s % Baht 000 s % Costs of sales Costs of land and houses sold (119,039.50) (9.63) (46,799.18) (7.42) (129,164.83) (26.70) Costs of condominium units sold (738,042.81) (59.71) (385,934.19) (61.20) (204,638.64) (42.29) Total costs of sales (857,082.31) (69.34) (432,733.36) (68.62) (333,803.47) (68.99) Gross income 378, , , Selling expenses (37,385.13) (3.02) (31,297.62) (4.96) (22,215.61) (4.59) Administrative expenses (69,090.62) (5.59) (62,348.18) (9.89) (58,238.17) (12.04) Specific business tax (40,976.94) (3.32) (20,807.48) (3.30) (16,197.45) (3.35) Financial costs (34,830.00) (2.82) (26,258.04) (4.16) (20,656.74) (4.27) Profit before income tax 196, , , Tax expenses (21,697.83) (1.76) (14,027.05) (2.22) (9,609.81) (1.99) Profit for the year 174, , , Other comprehensive income Actuarial gain net of tax (1,284.62) (0.10) Total comprehensive income for the 173, , , year Basic earnings per share Profit (Baht/share) Note : The financial statements for were audited by Mrs. Sumalee Chokdeeanan, CPA Registration No. 3322, of Grant Thornton Ltd., an SEC-approved auditor. The financial statements for 2013 were audited by Mr. Teerasak Chuasrisakul, CPA Registration No. 6624, of Grant Thornton Ltd., an SEC-approved auditor. Statements of financial position Particulars Baht 000 s % Baht 000 s % Baht 000 s % Assets Current assets Cash and cash equivalents 8, , , Short-term loans 1, Costs of property development projects - net 693, , , Costs of condominium development under joint venture project - net 131, , Prepaid construction costs 3, , , Deposit for land purchase 5, , Other current assets 14, , , Total current assets 857, , , Page 68า

71 Particulars Baht 000 s % Baht 000 s % Baht 000 s % Non-current assets Restricted deposits with banks 1, , Land held for development 561, , , Investment in condominium development under joint venture project Investment property - net 107, , , Building and equipment - net 2, , , Computer program Deferred tax assets 13, , , Other non-current assets Total non-current assets 686, , , Total assets 1,543, ,227, ,227, Liabilities and shareholders equity Current liabilities Bank overdrafts 1, , Trade accounts payable 67, , , Land payable 9, Current portion of long-term loans 114, , , Current portion of liabilities under finance lease agreements Short-term loans 32, Advances received from customers Unearned installments income 42, , , Accrued income tax 9, , , Accrued expenses 16, , , Retentions payable 47, , , The projects common utilities expenses awaiting settlement 10, , Other current liabilities 1, , , Total current liabilities 353, , , Non-current liabilities Long-term loans - net 499, , , Employee benefit obligations 6, , , Total non-current liabilities 505, , , Total liabilities 858, , , Page 69า

72 Particulars Baht 000 s % Baht 000 s % Baht 000 s % Shareholders equity Share capital common shares, Baht 1 par value Authorized - 549,999,986 shares (2012: 500,000,000 shares) 400, , , Issued and fully paid-up 549,998,401 shares (2012: 499,999,986 shares) 400, , , Premium on share capital 23, , , Retained earnings Appropriated for legal reserve 18, , , Unappropriated 242, , , Total shareholders equity 684, , , Total liabilities and shareholders equity 1,543, ,227, ,227, Note: The financial statements for were audited by Mrs. Sumalee Chokdeeanan, CPA Registration No. 3322, of Grant Thornton Ltd., an SEC-approved auditor. The financial statements for 2013 were audited by Mr. Teerasak Chuasrisakul, CPA Registration No. 6624, of Grant Thornton Ltd., an SEC-approved auditor. Cash flow Unit: Baht 000 s Net cash provided from (used in) operating activities 98, ,764 11,659 Net cash provided from (used in) investing activities (10,809) (3,166) (4,324) Net cash provided from (used in) financing activities (108,256) (240,597) (28,870) Net increase (decrease) in cash and cash equivalents (20,512) 27,001 (21,535) Cash and cash equivalents at beginning of year 29,015 8,503 35,504 Cash and cash equivalents at end of year 8,503 35,504 13,970 Key financial ratios Financial ratios Fiscal year ended December Liquidity ratios Current ratio time Quick ratio time Cash ratio time Receivable turnover ratio time Average collection period day Page 70า

73 Financial ratios Fiscal year ended December Inventory turnover ratio time Average selling period day Payable turnover ratio time Repayment period day Cash cycle day Profitability ratios Gross profit margin % Operating profit margin % Other profit margin % Cash to earnings ratio % Profit margin before tax and interest expenses % Net profit margin % Return on equity % Efficiency ratios Return on assets % Return on fixed assets % Asset turnover time Financial policy ratios Debt to equity ratio time EBIT/Total interest time Commitment coverage ratio time Payout ratio % Analysis of operating results and financial position Operating results in fiscal Revenues The Company recorded revenues from sales in of Baht 1, million, Baht million and Baht million respectively, a y-o-y drop of Baht million or 48.98% in 2012 and Baht million or 23.47% in The revenues contraction in 2012 resulted from a change in accounting method for income recognition in 2011 and a transfer of a large number of The Light House and INTRO Condominium units to customers. This was because, in 2011, the projects had just been finished and, hence, transfers were made to a great number of customers who bought the property since the start of project, while in 2012, transfers were gradually made based on sales. For 2013, the revenues declined because transfers of INTRO Condominium units were in a smaller amount than in 2012 and The Light House project was closed in Q3/2013. Page 71า

74 Costs of sales Costs of sales consisted of costs of land and houses sold and costs of condominium units sold. In , costs of land and houses sold were Baht million, Baht million and Baht million respectively, plunging y-o-y by Baht million or 60.69% in 2012 and soaring by Baht million or % in Costs of condominium units sold in were Baht million, Baht million and Baht million respectively, dropping y-o-y by Baht million or 47.71% in 2012 and Baht million or 46.97% in 2013 which was in tandem with sales. Costs of sales made up 69.50%, 69.06% and 69.75% of revenues from sales in respectively. Expenses Selling and administrative expenses in totaled Baht million, Baht million and Baht million respectively, declining y-o-y by Baht million or 22.38% in 2012 and Baht 17.8 million or 15.55% in 2013 in line with the sales contraction. Net profit The Company posted a net profit in of Baht million, Baht million and Baht million respectively, plummeting by Baht million or 75.35% in 2012 and Baht million or 46.34% in 2013 due to a drop in income recognition. Financial position as at December 31, Total assets From its financial position as at December 31, , the Company had total assets of Baht 1, million, Baht 1, million and Baht 1, million respectively, decreasing y-o-y by Baht million or 20.47% in 2012 and Baht 0.72 million or 0.06% in The decline in total assets in 2012 stemmed from completion of sales and closing of The Parklane Project and also from gradual transfers of The Light House and INTRO Condominium units. Meanwhile, new investments in 2012 were made in horizontal property which did not require a huge amount of funds. Fallouts from the late-2011 flood crisis prompted the Company to become more stringent in launching any new investments. However, part of the assets is land held for development which the Company will develop in 2013 and will thereby help to strengthen its income stability in the future. Total liabilities As at December 31, , the Company had total liabilities of Baht million, Baht million and Baht million respectively, decreasing y-o-y by Baht million or 40.60% in 2012 and Baht million or 3.84% in The decrease in total liabilities in 2012 and 2013 was primarily due to the use of funds received from transfers of ownership to customers for loan repayment to financial institutions and also for development of the two projects, whereas the amount of loan repayment was more than the amount of loans disbursed for new project development. Page 72า

75 The drop in current liabilities in 2012 stemmed from a decrease in short-term loans, current portion of long-term loans, and unearned installments income as transfers of condominium units were made during the year and revenues therefrom were already recognized. In 2013, current liabilities went up on account of an increase in current portion of long-term loans. Shareholders equity As at December 31, , shareholders equity totaled Baht million, Baht million and Baht million respectively, growing y-o-y by Baht million or 4.79% in 2012 and Baht million or 2.52% in Such equity growth was contributed by a capital increase by the Company in 2012 and 2013 with payment of stock dividends to its shareholders. From analysis of capital structure, the Company s debt to equity stood at 1.25, 0.71 and 0.97 time respectively. In 2012, the Company made dividend payment totaling Baht 111,111,113, divided into stock dividends of Baht 99,999,986 through issuance of 99,999,986 new ordinary shares at a price of Baht 1 per share and cash dividend of Baht 11,111,127 to cover withholding tax payable. In 2013, the Company made dividend payment totaling Baht 55,553,887, divided into stock dividends of Baht 49,998,415 through issuance of 49,998,415 new ordinary shares at a price of Baht 1 per share and cash dividend of not more than Baht 5,555,472 to cover withholding tax payable. Liquidity As at the end of fiscal , Company had cash balance of Baht 8.50 million, Baht million and Baht million respectively. Cash provided from and used in business activities in 2013 can be concluded as follows: o Operating activities: The Company had net cash provided from operating activities of Baht million, plunging from 2012 by Baht million due to an increase in costs of property development projects. o Investing activities: The Company had net cash used in investing activities of Baht 4.32 million, dropping from 2012 by Baht 1.15 million due to an increase in payment for purchase of equipment and computer programs. o Financing activities: The Company had net cash used in financing activities of Baht million, plunging from 2012 by Baht million due to an increase in long-term loans of Baht million. By aggregating the net decrease in cash and cash equivalents of Baht million with beginning cash balance of Baht million, the Company had cash balance at the end of fiscal 2013 of Baht million. Page 73า

76 2.2 Overview of industry relating to the Company s business Over the past few years, property market was hit from time to time by economic crises at home and overseas, including, among others, the EU s financial turbulence in 2011 and Thailand s devastating floods that broke out towards the end of that year. In 2012, despite impacts from financial turmoil in Cyprus and Italy, the eurozone members, Thai property market could return to normalcy, helped by massive capital influx from western countries into Asia. In 2013, the ongoing western fund inflow into Asian region coupled with domestic capital flow from the government-promoted mega project investments led the property sector to recover. However, the internal political impasse that took place in the latter half of 2013 caused a decrease in consumers spending, particularly huge spending, thus leading property market expansion to stall. The unification of 10 Southeast Asian countries into ASEAN Economic Community (AEC) in 2015 will result in ASEAN production market becoming a single market and production base. As such, the cheaper property prices in Thailand, compared with Singapore and Malaysia, could help attract more capital flow from western countries into Thailand. For 2014, the internal political unrest that prevails from late 2013 still poses an adverse impact and seems unlikely to be resolved in the near term, hence signaling a continued slowdown in the overall economy and the property market. Newly registered residences in Bangkok and its vicinities According to the 2013 Report on Newly Registered Residences in Bangkok and Its Vicinities, February 2014 Issue, prepared by the Government Housing Bank s Real Estate Information Center, total number of completely built, newly registered residential properties of all types in 2013 in Bangkok and five surrounding provinces (Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon and Nakhon Pathom) reached 130,100 units approximately, up by around 4% from Such properties can be categorized by type and location zone as follows: Location zone Single Commercial Duplex * Townhouse * house * building * Condominium Bangkok 13,700 1,000 8,700 4,900 49,600 77,900 64,300 5 nearby provinces 17,400 1,700 8,400 4,800 19,900 52,200 60,700 Total 31,100 2,700 17,100 9,700 69, , ,000 % Source: Real Estate Information Center, Government Housing Bank Note: Five nearby provinces of Bangkok include Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon and Nakhon Pathom. * Horizontal residential property In 2013, number of completely built, newly registered residential properties in Bangkok grew 21% y-o-y to 77,900 units, whereas those in the five surrounding provinces decreased 14% to 52,200 units. Of the total number of such properties, about 69,500 units were condominium units and 60,600 units were Page 74า

77 horizontal residential properties. Apparently, the number of condominium units was more than the number of horizontal residences, partly due to effects from the 2011 massive flooding. The two existing projects of the Company, one being horizontal and the other being vertical, are both located in prime areas, as evident from a lot of newly built residential properties also situated in such areas. Besides, convenient transportation is another contributing factor of both projects, stemming from the opening of Chalongrat Expressway, the expropriation of land for construction of Ram Inthra Outer Ring Road Expressway in the areas of Bang Khen, Sai Mai and Khlong Sam Wa, the Pink Line electric train project (Pak Kret Lak Si Min Buri Suwinthawong), and the Phahon Yothin Rattanakosin Somphot road construction project. Residential property projects of the Company and other developers in nearby areas are as follows: Area the Company Other developers Phahon Yothin * RASA Maxx Vile Home In Town, RK Park Watcharapol, Lio, and Pruksa Ville Sathon Charoen Nakhon The Light House Phahon Yothin Pradiphat Intro Condominium Source: Note: the Company * Horizontal residential property Outlook of future residential property development The River, Urbano, The Room, and Rhythm Sathon Cross Point, Tree Interchange, Issara Lat Phrao, Equinox, and Rhythm Saphan Khwai Vertical residential property, or condominium, projects still have room for expansion in areas close to the forthcoming electric train line extensions due to clarity in their routes and construction plans, including the Blue Line, Purple Line and Green Line. Property development can also expand to the suburbs of Bangkok and its vicinities where electric train systems will pass through in the future. Horizontal housing will likely increase in Bangkok s suburbs and surrounding provinces because this type of property project requires plenty of space whereas a large plot of vacant land is very scarce in the inner Bangkok areas or, if so, is very expensive. In the provincial areas, housing property is expected to witness ongoing growth, especially in the cities along the high-speed train system routes as well as the border provinces. The 2011 flood crisis has spurred demand for high-rise residential property such as condominium, while demand for horizontal housing has declined, particularly in the flood-stricken areas. Control measure on property loan provision On November 25, 2010, the Bank of Thailand released rules on credit-risk asset calculation for commercial banks (No. 3) by determining a loan to value (LTV) ratio for housing credits with property price less than Baht 10 million. Under the revised rules, commercial banks housing loans for high-rise properties such as condominiums are limited to 90% of a property s agreed sale and purchase price, applicable to sale and purchase agreements as from January 1, 2011 onwards. For low-rise housing such as detached house, duplex and townhouse, the LTV ratio is capped at 95% of a property s agreed sale and purchase price, applicable to sale and purchase agreements as from January 1, 2012 onwards. However, on Page 75า

78 November 25, 2011, the BOT announced a delay of the implementation of the LTV ratio rules for low-rise housing loans until January 1, 2013 due to severe impacts of the late-2011 flood crisis on property sector. Such postponement aims to help relieve financial burden on banks, property developers and the public. Page 76า

79 3. Reasonableness of the transactions 3.1 Objective and necessity of the transactions The Company intends to implement a business integration plan by accepting the entire business transfer (EBT) of STB and SBF, consisting of all assets and liabilities of both companies, including, but not limited to, their rights, duties, obligations, commitments and liabilities owned or incurred by STB and/or SBF as of the transfer date, including all shares owned by SBF in: (a) SPD of 99.99% of paid-up registered capital; (b) BRP of 99.99% of paid-up registered capital; and (c) MAX of 99.99% of paid-up registered capital. In this respect, the Company will allocate its 4,162,352,331 newly issued ordinary shares with a par value of Baht 1 per share on a private placement basis to: (a) Khun Santi Bhirombhakdi in the amount of 1,229,946,524 shares at Baht 1.87 per share, totaling Baht 2,300,000,000; and (b) Singha Property Management Co., Ltd. ( SPM ) in the amount of 2,932,405,807 shares at Baht 1.87 per share, totaling Baht 5,483,598,859, as payment in kind for the transfer of entire business of STB and SBF to the Company. After completion of the EBT Transaction, the Company will continue the core business of real estate development as usual and will expand into a more diverse property-related business. In the future, the newcoming major shareholder group will assist in developing more new property projects to complement the Company s existing business as well as embarking on other property-related businesses such as hotel, office building for rent, serviced apartment, high-end housing estate, and so on. In this respect, STB already is operator of a five-star hotel on Samui Island in Surat Thani Province, whereas SBF owns vacant land in prime areas in Bangkok that is developable into a large-scale office building, residential condominium, housing estate, etc. The new shareholder group has had a solid capital base and financial standing and a strong reputation, thus being capable of developing new property projects. They also have a team of professional management and staff members with extensive experience and skill in real estate and hotel project development. Under the terms and conditions for business integration, the Company must sell its two plots of vacant land to Khun Rapi Pinitchob ( Khun Rapi ), who is a major shareholder and management of the Company, or any individual or juristic person designated by Khun Rapi, and must terminate the Management Agreement for land leased for commercial purpose in The Light House Project signed with Siam Prime Estate Co., Ltd. ( Siam Prime ) in order to increase flexibility and efficiency in the management of such commercial area. In addition, the new shareholder group plans to change the Company s board composition by nominating their representatives to serve on the Board of Directors of the Company according to their shareholding percentage. They will also change the Company s management and corporate structure to fit with future business expansion so as to enhance flexibility and competitiveness in business operation. Therefore, by implementing the business integration plan through entire business transfer of STB and SBF, the Company will generate income primarily from the operation of hotel business and real estate development business. It will focus on the hotel business, real estate business and property Page 77า

80 rental business which will be compatible with the new management s experience. This will allow the Company to diversify into a more diverse type of property business and, hence, to reduce risk from its existing sole reliance on residential property business. The Company will then be able to earn greater revenues and increase its profitability in the future, thus benefiting the Company and the shareholders in the long term. 3.2 Advantages and disadvantages of entering into the transactions Advantages and disadvantages of entering into the merger transaction with STB and SBF Advantages of entering into the transaction 1. Growth in revenues and net profit The Company has been a developer of housing estate and residential condominium projects. In the past 2-3 years, it has operated two condominium projects. One of them is The Light House Project which is a residential condominium on Charoen Nakhon Road offering a total of 297 units with a project value of Baht 1,500 million, already sold out. The other one is Intro Condominium Project on Pradiphat Road, featuring a 37- storied residential condominium of 450 units with a project value of Baht 1,450 million, already sold with only 40 remaining units. The Company also operates a townhome project, RASA Maxx Ville, on Phahon Yothin 73 Road, featuring 217 units of two-storied, square wah townhome with a project value of Baht 520 million, of which 93 units were sold and transferred already with 124 remaining units (66 of the remaining units were sold and awaiting transfer with only 58 units left unsold). Currently, the Company has not developed any other property. From its existing business operation, the Company s revenue earning has been inconsistent, depending on property sales and development in each period. In , the Company recorded total revenues from property sales of Baht million, Baht 1, million, Baht million and Baht million respectively with a net profit of Baht 1.12 million, Baht million, Baht million and Baht million respectively. After accepting the transfer of the entire business of STB and SBF, the Company s total revenues and profit will increase since the revenues and performance of STB will immediately belong to the Company. STB operates a hotel business in the name, Santiburi Beach Resorts, Golf & Spa, which is a five-star hotel with 71 rooms (currently being in the process of expansion to 102 rooms). Located on Mae Nam Beach, Samui Island, Surat Thani Province, the hotel has been in operation for more than 20 years. It is a well-known hotel for tourists with quality service standards, ranking among the top accommodations of Samui Island. STB has operated the hotel with business stability and profitable performance. It recorded revenues from operation of Baht million, Baht million, Baht million and Baht million in respectively and a Page 78า

81 net profit of Baht million, Baht million, Baht million and Baht million. Its average occupancy rate in stood at 72.8%, 82.1% and 79.1% respectively. Subsequent to the entire business transfer of STB, the Company will be able to consolidate revenues and profit earned from STB s hotel business into its performance immediately. This will be another source of income and profit for the Company and help to reduce risk from its real estate business and provide an opportunity of consistent income and profit generation in the long run. By entering into this transaction, the Company will have a larger business scale and a more diverse revenue structure, thus helping to stabilize its income and profit that currently rely on the property business only and creating benefit to the Company and its shareholders in the long term. Given that the partial renovation and new room construction are delayed, it may cause the Company to lose revenues from hotel operation. Nonetheless, STB itself has had experience in its hotel renovation and could control and keep the renovation process on track. As specified in the construction service contract, any construction delay by the contractor itself will result in the contractor being fined according to the delayed work. The Company must, however, manage to control and ensure the construction is completed as scheduled since the hotel has already given a prior notice to tourists of the temporary close of the hotel for renovation during September-December 2014 and the reopening to service in January Thus, the hotel has to control and make sure the renovation is accomplished on schedule. As for SBF, its core assets are investments in three subsidiaries. Subsequent to the merger, the three subsidiaries of SBF will become the Company s subsidiaries. They own three plots of vacant land that are located in prime areas potentially developable for commercial purpose. The new shareholder group of the Company is currently in the process of studying commercial viability of these three projects. If the Company can develop such projects, its total revenues will further increase in the future. 2. Expansion of business scale By entering into this transaction, the Company will have a larger scale of business in terms of both assets and registered capital. As of December 31, 2013, it had total assets of Baht 1, million and a paid-up registered capital of Baht million. After acceptance of the entire business transfer from STB and SBF, its total assets will grow to Baht 6, million and its paid-up registered capital will rise to Baht 4, million, with an increase in both liabilities and shareholders equity, thereby resulting in a six-fold larger business size. Page 79า

82 Moreover, the Company will be able to immediately recognize income from the hotel business of STB and, hence, could record higher revenues from operation. After the entire business transfer from SBF, the Company will acquire all assets of SBF, consisting of investments in three subsidiaries. The core assets of the three subsidiaries include three plots of vacant land held for development: (1) land on New Phetchaburi Road with an area of rai; (2) land on Asok Road of rai; and (3) land on Pradit Manutham Road of rai. The management of SBF has devised plans on property development on such land and is currently conducting a commercial feasibility study on each project. Since all plots of land are in high potential areas, if the Company can develop and invest in property projects on such land in the future, it will then be able to expand business and have a larger business scale, which will benefit the Company and its shareholders in the long term. 3. Acquisition of good assets in prime locations After acceptance of the entire business transfer from STB and SBF, the Company will become the owner of Santiburi Beach Resorts, Golf & Spa, on Samui Island, Surat Thani Province, which has been in operation for a long period of time with profitable performance, thus enabling the Company to instantly recognize income and profit from this business. but also three pieces of vacant land by way of shareholding through three subsidiaries of SBF. All of the three plots of land are in strategic locations appropriate for further development of property projects that will generate reasonable benefit and return for the Company and its shareholders in the long term. At the same time, the Company will own 99.99% of paid-up registered capital of the three subsidiaries of SBF, namely SPD, BRP and MAX, which possess three plots of vacant land in prime locations with high growth potential in Bangkok s business areas. The land, covering a large area, is developable into property projects that will generate favorable return for the Company. The new shareholder group of the Company has plans on property development projects for all three subsidiaries and has prepared personnel and management team with skill and experience in hotel and property development, together with funding sources available for financing all future projects of the Company. As such, if the Company can proceed with property project development on the three plots of land, the Company and its shareholders will gain benefit in the future. The future projects under the Company s plans on development of the three plots of land subsequent to the entire business transfer can be concluded as follows: 1) SPD s land of rai on New Phetchaburi Road This plot of land was the former location of the Japanese Embassy located at the corner of Asok Montri-New Phetchaburi intersection, about 20 meters from MRT s Phetchaburi Station and around 200 meters from Airport Link electric train station. It is in a high potential area, close to Asok business zone where there are a large number of office Page 80า

83 buildings and connected to Sukhumvit Road. The new shareholder group of the Company plans to develop office buildings with commercial zone on such land, with an estimated project value of Baht 6,000 million. The project will feature two office buildings, conference rooms, a small 21-room hotel, and commercial area for selling merchandise to employees in the buildings and the general public. It is estimated that the project will cover a total space of approximately 144,250 square meters and will begin construction in Q3/2015 and be completed by Q2/2018. A study on its commercial viability is still underway. 2) BRP s land of rai on Asok Montri Road This plot of land, once the location of Singha Beer House, has a high development potential as it is in the middle part of Asok Montri Road. The new shareholder group of the Company plans to develop such land into a serviced apartment and office building. Construction is scheduled to start in Q2/2015 and be finished in Q3/2017. A study on its commercial viability is still underway. 3) MAX s land of rai on Pradit Manutham Road This plot of land is in a residential area on Ekkamai-Ram Inthra Expressway along road. The new shareholder group of the Company plans to develop such land into a highend housing estate project offering 28 housing units each with an area of around 235 square meters. The total project value is estimated at Baht 3,200 million. The target groups will be high-income earners. Construction will commence in Q4/2015 and is expected to be completed by Q3/2019. A study on commercial viability is underway. After completion of the EBT of STB and SBF, the Land Sale Transaction, and the Termination of the Management Agreement Transaction, the Company will own the following properties: Details of properties Before transactions After transactions Project Light House 1/ Rasa Maxx Ville Intro Vacant land Area Ram Inthra Road rai Watcharaphon Road rai Lam Luk Ka rai Soi Phahon Yothin rai Corner of Asok Montri Road rai Asok Montri Road rai Pradit Manutham Road rai Page 81า

84 Details of properties Hotel Santiburi Hotel Before transactions After transactions Note: 1/ The Company owns rights to the project in the amount of 70% before entering into the transaction and 100% after the transaction Disadvantages of entering into the transaction 1. Control dilution effect on existing shareholders In the entry into this transaction, the Company will have to increase its registered capital from Baht 549,998,401 to Baht 4,712,350,732 through an issuance of 4,162,352,331 new ordinary shares with a par value of Baht 1 per share for allocation at a price of Baht 1.87 per share to Khun Santi Bhirombhakdi, who is STB s existing shareholder, in the amount of 1,229,946,524 shares totaling Baht 2,300,000,000 as payment in kind for the transfer of entire business of STB to the Company, and also for allocation to SPM, which is SBF s existing shareholder, in the amount of 2,932,405,807 shares totaling Baht 5,483,598,859 as payment in kind for the transfer of entire business of SBF to the Company. Such capital increase will result in a control dilution effect on the existing shareholders of the Company as follows: Before capital increase After capital increase % increase/ No. of shares % No. of shares % decrease (shares) (shares) 1. Existing shareholders of the 549,998, ,998, Company 2. SPM - - 2,932,405, Khun Santi Bhirombhakdi - - 1,229,946, Total 549,998, ,712,350, The said capital increase and allocation of newly issued shares on a private placement basis to Khun Santi and SPM will cause shareholding percentage of the Company s existing shareholders to be diluted by 88.33% to 11.67% of total registered and paid-up capital, whereas the new shareholder group, comprising SPM and Khun Santi, will hold 62.23% and 26.10% of shares in the Company respectively. Moreover, the increased number of shares will cause a dilution effect on value per share of the Company, including book value per share, earnings per share, and share price etc. The new shares issuance and allocation will have a dilution effect on market price of the Company s shares, leading the market price to drop by 8.70% (calculated by comparison of the average market price for one day, i.e. April 10, 2014 which is the day before the board meeting date, which is equal to Baht 2.07, with the market price after the Page 82า

85 share allocation, which is derived from a sum of the average market price before the share allocation date multiplied by total number of existing shares of the Company and the offering price multiplied by number of shares allocated to the new shareholder group, then divided by a sum of total number of existing shares of the Company and total number of new shares allocated to the new shareholders, resulting in market price after share allocation of Baht 1.89 per share). 2. Loss incurred in the initial period of investment After entering into the transaction, the Company plans to develop new properties on the existing vacant land of the three subsidiaries of SBF, including an office building project of SPD, a serviced apartment and office building project of BRP, and a housing estate project of MAX. It is typical of the property development business that during property construction and sale period, there will be no income recognition until transfers are made to buyers. Construction generally takes around 2-3 years to complete. As such, the Company may suffer from loss during project construction period. If loss from the project is higher than overall profit, it could cause the Company to be unable to pay dividend to its shareholders during the said period. 3. Risk associated with business operation and property development After acceptance of entire business of STB and SBF, the Company will additionally acquire a hotel business and an office building for rent business. The hotel business operated by STB will be transferred to the Company, following which the Company will be able to immediately recognize income and profit from the hotel operation. If the hotel business performance does not turn out as expected in the future, it could affect the Company s consolidated performance. However, STB s hotel has been in operation for a long period of time with strong reputation and financial position and has made consistent profit from the operation. Accordingly, after the entire business transfer, the hotel will likely continue to operate profitably as in the past years. Given that the partial renovation and new room construction are delayed, it may cause the Company to lose revenues from hotel operation. Nonetheless, STB itself has had experience in its hotel renovation and could control and keep the renovation process on track. As specified in the construction service contract, any construction delay by the contractor itself will result in the contractor being fined according to the delayed work. The Company must, however, manage to control and ensure the construction is completed as scheduled since the hotel has already given a prior notice to tourists of the temporary close of the hotel for renovation during September-December 2014 and the reopening to service in January Thus, the hotel has to control and make sure the renovation is accomplished on schedule. Page 83า

86 As for other properties of the three subsidiaries of SBF, to develop new projects thereon will necessitate additional borrowing to fund the project investments. A success in property development hinges on factors such as economic situation, real estate market condition and the public s consumption. If these factors are unfavorable, they could have an adverse impact on project development by the Company, as well as its funding, liquidity, sales and profit. 4. Increase in loans After acceptance of the entire business transfer from STB and SBF, the Company will have to raise additional loans since STB plans to renovate Santiburi Beach Resorts, Golf & Spa, during September-December 2014 and to construct 31 additional rooms (total number of rooms is 71 before renovation and will increase to 102 rooms thereafter). Funding for such renovation and construction will come from borrowing from a financial institution. Although, after the merger, the Company will have to accept a transfer of such loan of STB, it will not affect the Company s financial position, as evident from the Company s debt to equity ratio which stands at 0.67 time before the merger and at 0.13 time after the merger (based on the consolidated financial statements and the pro forma consolidated financial statements on page 95). Nonetheless, the Company has a future plan to develop large-scale projects on the three plots of land after the entire business transfer from SBF, including an office building and commercial area project, a serviced apartment and office building project, and a high-end housing estate project, all of which require a huge amount of investment. To invest in these projects will therefore necessitate additional borrowing from financial institutions, which will increase the Company s debt and interest expenses Advantages and disadvantages of entering into the Land Sale Transaction Advantages of entering into the transaction 1. Proceeds obtainable from land sale After entering into this transaction, the Company will have to sell two parcels of vacant land: (1) vacant land of rai in Don Mueang area on Soi Phahon Yothin 73 and (2) two pieces of vacant land of rai and rai in Lam Luk Ka area, to Khun Rapi, who is the major shareholder and management of the Company. Such land sale is in compliance with the terms and conditions agreed upon between the Company and the new shareholder group which has no intention to use these plots of vacant land as their locations do not match the target groups of the new shareholders. Besides, the Don Mueang plot of land is situated in the airplane take-off/landing direction of Don Mueang Airport and, thus, is not appropriate for housing property development. For this reason, the Page 84า

87 new shareholders of the Company do not wish to keep such land which will become a burden on the Company in the future. From the land sale, the Company will receive total proceeds of Baht 373,000,000 and can use it for debt repayment and/or for financing its future project investment and/or for meeting its working capital needs. In entering into this transaction, the Company will incur a loss of Baht 4.40 million. After deduction of land sale tax of Baht million, it will receive a net amount of Baht million Disadvantages of entering into the transaction 1. A decrease in vacant land available for development Before entering into this transaction, the Company has four plots of vacant land held for future development: (1) land on Ram Inthra Road of rai; (2) land on Watcharaphon Road of rai; (3) land in Don Mueang area on Soi Phahon Yothin 73 of rai; and (4) two pieces of land in Lam Luk Ka area of rai and rai. After the entry into this transaction, the Company will sell the land no. (3) and (4) to Khun Rapi, who is its shareholder and management, to comply with the terms and conditions set forth in the Business Integration Plan. Therefore, it will have a fewer plots of land available for property development, i.e. land plots no. (1) and (2) above. 2. Loss from the land sale As for the two plots of land to be sold by the Company, the land in Don Mueang area has a book value of Baht million and the land in Lam Luk Ka area of Baht million, making Baht million in total. These two plots of land will be sold at a price of Baht million and Baht million respectively, totaling Baht million. Thus, the Company will incur a loss of Baht 4.40 million from such land sale Advantages and disadvantages of entering into the Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) Advantages of entering into the transaction 1. Increase of efficiency in management of plaza areas of The Light House condominium project On November 26, 2007, the Company entered into the Management Agreement with Siam Prime Estate Co., Ltd. ( Siam Prime ), which resulted in ownership of land leased for commercial purpose in The Light House Project and profit/loss sharing between the Company and Siam Prime in a proportion of 70% and 30% of total investment Page 85า

88 respectively. The land leased for commercial purpose in this project covers a total area of approximately 5, square meters. After termination of the said Management Agreement, the Company will acquire 100% ownership of the said land leased for commercial purpose, which will allow it to have total control power over the operation in such area and to determine or redefine the future management plan or policy independently with more flexibility in management, as well as to recognize 100% of profit from such project operation, thereby increasing efficiency in business operation in the said area Disadvantages of entering into the transaction 1. Increase in expenses In the termination of the Management Agreement on the plaza areas of The Light House Project with Siam Prime, although it will comply with the conditions between the Company and the new shareholders, the Company will have to pay Baht 51 million in cash to Siam Prime as a consideration for such agreement termination. After the said agreement termination, the Company will become sole owner of The Light House Project. As such, if in the future the project operates at a loss, the Company will have to recognize the full amount of such loss. 3.3 Advantages and disadvantages of not entering into the transactions Advantages and disadvantages of not entering into the merger transaction with STB and SBF Advantages of not entering into the transaction 1. No control dilution effect on existing shareholders If the Company does not enter into this transaction, it will not have to increase the registered capital and allocate the newly issued shares to the new shareholders. Accordingly, there will not be any control dilution effect on the existing shareholders of the Company due to such capital increase and allocation of the new shares on a private placement basis to Khun Santi and SPM. 2. No risk exposure from investment in large-scale property projects If the Company does not enter into this transaction, it will not be exposed to risk from investment in large-sized real estate development. It is typical of property business that loss will be incurred in the initial period of operation. If loss from the property projects is higher than profit earned from other businesses of the Company, it could cause the Company to incur loss from its overall performance, which will lessen its ability to pay dividend to its shareholders. Page 86า

89 3. No borrowing requirement for large-scale projects in the future If the Company does not enter into this transaction, it will not have to raise a huge amount of new loans and funding for large-scale property development in the future to be undertaken by the subsidiaries transferred from SBF, which will then lead the Company to bear higher debt burden and interest expenses Disadvantages of not entering into the transaction 1. Loss of opportunity for long-term consistent growth in revenues and profit If the Company does not enter into this transaction, it will not be able to recognize revenues and profit from the operation of Santiburi Beach Resorts, Golf & Spa, as its own income, nor to invest in property development on the three plots of land of SBF s subsidiaries. As such, the Company will not be able to expand into a more diverse type of property business and mitigate risk from sole reliance on its existing core business of housing estate and residential condominium development, hence a loss of opportunity for consistent growth in overall revenues and profit in the long run. 2. Loss of opportunity for ownership of potential assets in prime locations If the Company does not enter into this transaction, it will lose an opportunity to own a promising hotel business. Santiburi Beach Resorts, Golf & Spa, is widely recognized among tourists and has had a high occupancy rate. It has been in operation for more than 20 years and has made consistent profit from the operation. Moreover, the Company will lose an opportunity to acquire three plots of land belonging to SBF s subsidiaries, which are of high potential in prime areas and can be developed into property projects and other continuing projects Advantages and disadvantages of not entering into the Land Sale Transaction Advantages of not entering into the transaction 1. Availability of vacant land for property development If the Company does not enter into this transaction, it will have the same amount of land available for property project development since it will not have to sell two plots of land to Khun Rapi, who is its shareholder and management. 2. No recognition of loss from the land sale If the Company does not enter into this transaction, it will not have to suffer from loss from the land sale in the amount of Baht 4.40 million. Page 87า

90 Disadvantages of not entering into the transaction 1. Non-receipt of proceeds from the land sale If the Company does not enter into this transaction, it will not receive proceeds from the land sale of Baht million and, hence, will not have funds available for debt repayment and/or use a working capital in future investment and/or use as working capital in business operation of the Company Advantages and disadvantages of not entering into the Termination of the Management Agreement Transaction (in order to acquire 30% ownership of land leased for commercial purpose in The Light House Project which will lead the Company to become sole owner of the leased land) Advantages of not entering into the transaction 1. No expenses arising from the agreement termination If the Company does not terminate the Management Agreement, it will not have to pay Baht 51 million to Siam Prime as a consideration for the said agreement termination Disadvantages of not entering into the transaction 1. Loss of opportunity to become sole owner of the leased land If the Company does not terminate the Management Agreement with Siam Prime, it will not be able to become sole owner of the leased land and will have no flexibility in management or determination of policy on such area management. 3.4 Advantages and disadvantages of entering into the transactions with a connected party compared with a third party, necessity of entering into the transactions with a connected party, and reasons for not entering into the transactions with a third party The entry into the transaction under the Business Integration Plan by the Company with STB and SBF will bring about many benefits to the Company. It will enable the Company to diversify into a wider variety of property business and to promptly carry on a well-established hotel business, thereby helping to spread the downside risk. In addition, the Company will be prepared and have stronger competitiveness for business expansion in the future. In entering into the transaction, STB and SBF are not deemed a connected party of the Company. However, after completion of the entire business transfer of STB and SBF to the Company, the shareholders and/or management of STB and SBF shall have the right to nominate persons to serve as directors on a pro rata basis and/or as management of the Company. Therefore, the said transaction is considered as a connected transaction. Page 88า

91 Before entering into the transaction under the Business Integration Plan, the Company has not received any similar merger proposal or conditions from any other third party. Thus, it is not possible to compare this transaction with a transaction made with an outsider. Taking into account the advantages and disadvantages of the transaction, there will be more benefits than negative impacts to the Company. After all, the proposed transaction offers the best terms and conditions received by the Company for the time being. The Land Sale Transaction, under which the Company will sell two plots of land to Khun Rapi who is the major shareholder and management of the Company, and the Termination of the Management Agreement Transaction with Siam Prime whose major shareholders are close relatives of the Company s management are considered as connected transactions under the Connected Transaction Notifications. These two transactions are part of the terms and conditions agreed upon between the Company and the new shareholder group. The new shareholders do not wish to hold such two plots of land and have accordingly offered to sell the land to the existing shareholder of the Company. At the same time, since the Management Agreement on the plaza areas has been operated by a related person of the Company s management, the new shareholders require that the said agreement be terminated so that the Company will acquire 100% ownership of the leased land and have power to control the operation of such areas independently and with more flexibility. Entering into these transactions is part of the terms and conditions to be complied with. Therefore, it is not possible to compare with transactions made with a third party. 3.5 Potential risks from entering into the transactions Risk of failure to obtain approval for relisting on the SET The implementation of the Business Integration Plan of the Company by acceptance of entire business transfer from STB and SBF has a transaction size equal to % and is accordingly considered an acquisition of assets Type 4, or backdoor listing. Therefore, the Company has duty to file a relisting application to the SET to approve the listing of ordinary shares of the Company as listed securities on the Exchange. In this respect, it has appointed Maybank Kim Eng Securities (Thailand) Plc. as financial advisor on such relisting application filing. Presently, the filing process is still underway. The relisting application is subject to approval from the SET. Taking into account qualifications of the Company after the business transfer under the SET regulation Re: Acceptance of ordinary shares or preferred shares as listed securities B.E ( Relisting Guideline ), it is found that the Company meets all qualifications pertaining to ordinary shares, paid-up capital, operating performance, management, financial status and liquidity, internal governance and control, financial statements and auditors, and provident fund. It will fail to meet only the free float requirement, stipulating that it must have minority shareholdings of not less than Page 89า

92 15% of paid-up registered capital, whereas after the entire business transfer its free float proportion will drop to 11.67%. Nonetheless, according to such regulation of the SET, a company failing to meet the free float requirement is able to remedy its situation within two years (see more information in Item Risk involved with qualifications for maintaining a listed company status) Risk involved with qualifications for maintaining a listed company status After entering into the transactions, the Company will have to increase its registered capital and allocate its newly issued shares on a private placement basis to Khun Santi and SPM, which are shareholders of STB and SBF, as payment in kind for the transfer of entire business to the Company. This will result in a drop in the Company s free float proportion to 11.67% of its paid-up registered capital, which is below the minimum requirement of 15%. Besides, after such shares allocation to Khun Santi and SPM, both of them will be obligated to make a mandatory tender offer to purchase all shares of the Company from minority shareholders, which may cause a further drop in the free float ratio and could lead the Company to fail to meet the free float requirement. As such, the Company will still have to rectify the free float shortfall in order to qualify for maintaining its listed company status by making additional distribution of minority shareholdings to reach the 15% free float threshold. The new major shareholder group, i.e. SPM and Khun Santi, expect to be able to meet the free float requirement within two years from the date the Company allocates its new shares to SPM and Khun Santi. However, given that the Company fails to satisfy such requirement within two years, it will be subject to an additional fee charged by the SET according to the amount or proportion of the free float shortfall and the number of years that the shortfall exists until such requirement is met. The said extra fee is in a range of 1% 3.5%. After EBT and new shares allocation transaction, SPM and Khun Santi will hold 63.23% and 26.10% of the Company s total paid-up and issued shares respectivedly. As a result, SPM and Khun Santi are obligated to make a mandatory tender offer ( MTO ); therefore, it is possible that the proportion of the free float shortfall will increase and the extra fee is equal or more than 2% Risk associated with room renovation and expansion of Santiburi Beach Resorts, Golf & Spa Santiburi Beach Resorts, Golf & Spa, belonging to STB, plans to renovate some of its existing guestrooms and also increase the hotel rooms from 71 to 102 rooms in line with STB s 2014 yearly business plan. Sale agents and tourists have been notified in advance of its plan to temporarily close the hotel for partial room renovation and new room construction between September and December 2014, which are the low season months. Under the said renovation plan, the hotel is expected to be reopened to service in January Page 90า

93 In order to implement the said partial room renovation and additional room construction plan, the hotel must first seek permission from concerned authorities. It also has to engage an architectural firm to undertake room designing, interior designing, and landscape architectural designing; an outside company to conduct an environmental impact assessment (EIA); and a contractor to construct the hotel rooms according to the agreed plan. Presently, STB has already hired an architectural company to provide services on room and interior designing and a specialist company to conduct a study on environmental impact, which is still underway. It is initially expected that an application for EIA approval can be filed in June 2014 and that such approval will be granted because STB s hotel has, throughout the past operation of more than 20 years, never created any environment and water pollution problems. After obtaining the EIA approval and construction permission, the renovation and construction plan will start to be implemented. Construction is scheduled to begin in September If the renovation and construction plan implementation is behind the schedule, the Company will lose revenues from the hotel business operation. Nonetheless, STB has had experience in its hotel renovation and could control and keep the renovation process on track. As specified in the construction service contract, any construction delay by the contractor itself will result in the contractor being fined according to the delayed work. The Company must, however, manage to control and ensure the construction is completed as scheduled since the hotel has already given a prior notice to tourists of the temporary close of the hotel for renovation during September- December 2014 and the reopening to service in January Thus, the hotel has to control and make sure the renovation is accomplished on schedule Risk incidental to a conflict of interest (Qualification for maintaining a listed company status) After completion of all procedures for the above transactions according to the agreed terms and conditions, Khun Santi and SPM will be allocated newly issued ordinary shares of the Company and become the Company s major shareholders. As a consequence, Khun Santi and SPM whose major shareholder is Boon Rawd Brewery Co., Ltd. ( Boon Rawd Group ) will have a conflict of interest with the Company. As a measure to prevent conflict of interest, after the extraordinary general meeting of shareholders, scheduled for June 9, 2014, the Company will enter into an agreement with Khun Santi, SPM, Boon Rawd Group and affiliates, including authorized directors of SPM. Details of the said agreement are as follows: Measures to prevent conflict of interest with Khun Santi and related persons: 1. As long as Khun Santi, his spouse, his minor, his person according to section 258, and his donee of power of attorney ( related persons ) who is the major shareholder and/or director and/or governor of the company giving the right (person giving right consisted of Khun Santi related persons and company as prescribed in a. and c. (Please see the detail on page no )), still are the major shareholder of the Company (according to the definition of Page 91า

94 SEC). Khun Santi and related persons whether by themselves or joint venture with other entity will not conduct the hotel or real estate business which may compete with the company; however, except for the Khun Santi or related person s assets which not have opportunity to develop for the significant return in the future ( significant is defined as assets or project which have value equal or more than 3 percent of Company net tangible assets) or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed project; and 2. Khun Santi and his related perons will enter into an agreement with the Company after the approval from general meeting of the shareholder approves the entry into the transaction, specifying therein that for the 3 years period after the entire business transfer and as long as Khun Santi and related person still are the major shareholder of the company or controlling periosn of Company, Khun Santi and related person will not transfer, sell their ordinary share, land or building under the company possession as prescribed in a. and c. (Please see the detail on page no ) to other persons and agree to grant an exclusive option to the Company to buy such ordinary shares, land or building atthe price that shall not exceed the fair value appraised by two independent appraisals(from the approved list of the SEC) appointed by Company and Khun Santi or related persons. After the 3 years period from the entire business transfer and as long as Khun Santi and related person still are the major shareholder of the company or controlling person of the Company, if Khun Santi have an intention to sell ordinary share, land or building under his possession to other person, Khun Santi agree to grant the right of first refusal to Company or subsidiary of Company with the same price offered to other person. In case that Company and /or subsidiary of Company reject to exercise the right, Khun Santi will have right to sell to other person at the price not lower than the price offer to Company; however, except for the assets that has insignificant value or residual from completed project. After completion of the transaction, there will be certain companies as prescribed in a. and c. (Please see the detail on page no ) and certain assets held by Khun Santi or related persons which may create a conflict of interest with the Company. Therefore, the Company will proceed to enter into an agreement with persons and/or the said related companies. Khun Santi or related persons agrees to grant an option and right of first refusal to the Company for buy their assets in relation to hotels or real estate development projects which relate to the Company in terms of the location or management or joint venture and all real estate development projects of Khun Santi or related persons. Measurement of Prevention of Conflict of Interest with Boon Rawd Group and affiliates, including authorized directors of SPM: As long as Boonrawd group, SPM, Mr.Chayanin Thephakham, Mr. Jutinunt BhiromBhakdi, and Mr.Santi BhiromBhakdi (authorized director of SPM) including their spouse, minor, person according to section 258, and their attorney-in-fact ( related persons ) (all of them defined as Page 92า

95 promisors ), who is major shareholder and director of promisors, still are the major shareholder or controlling person of the Company, Boonrawd group or SPM or authorized director of SPM will not conduct whether by themselves or joint venture with other entity the hotel or real estate business which may compete with the company; however, except for the assets which not have opportunity to develop for the significant return in the future or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed project. If there are land or real estate competing with the Company, promisors will consider to sell these to Company at the price that will not exceed the fair value appraised by two independent appraisals(from approved list of the SEC)t appointed by the Company and Khun Santi or Boonrawd Group, SPM, Mr.Chayanin, and Mr. Jutinunt including their spouse, minor, person according to section 258, and attorney-in-fact; however, except for the promisors assets which not have opportunity to develop for the significant return in the future or assets which is not related to hotel or real estate business currently operate and is not significant or residual assets from completed project. In the case where the Company agrees to exercise such right, the Company will comply with the laws and regulations in relation to the entry into a connected transaction. After the transaction, the Company will earn income mainly from hotel and real estate development business and will focus on the hotel and real estate business which is in line with the experience of its new management team. According to IFA opinion, the above measures are well served to prevent conflict of interest between the Company and Khun Santi including related persons and SPM Boon Rawd Group and affiliates including authorized directors of SPM Risk from use of Santiburi trademark STB s Santiburi Beach Resorts, Golf & Spa, has been operated under Santiburi trademark, which belongs to Santiburi Private Community Co., Ltd., ( Santiburi Private ) of which Khun Santi is a major shareholder. Santiburi Private has granted right to Santiburi Beach Resorts, Golf & Spa, to use the trademark free of charge. After the merger, as long as Khun Santi still is a major shareholder or controlling perions in the Company, Khun Santi will grant option to the Company to use "Santiburi" trademark without any charges. However, if in the future the Company intends to continue to use the trademark for new hotel, Khun Santi may charge a trademark fee from the Company which will negotiate in the future. In the case that the Company has an intention to use Santiburi trademark for its new hotel or for other business, the Company will proceed according to Connected Transaction Notifications. As a defensive measure to prevent confusion of Santiburi trademark used by Santiburi Beach Resort Golf and Spa and Santiburi Golf Club, the Company has planned to change the hotel name to Santiburi Beach Resort and Spa and put the name hotel in the trademark. Page 93า

96 Risk from future project investment by SBF s subsidiaries After the merger, the three subsidiaries of SBF will be transferred and become the Company s subsidiaries. All of them plan to launch property projects in the future, including (1) SPD s office building with commercial area project valued at approximately Baht 6,000 million, scheduled for start of construction in Q3/2015 and for completion in Q2/2018; (2) BRP s serviced apartment and office building project, expected to begin construction in Q2/2015 and be completed in Q3/2017; and (3) MAX s high-end housing estate with a total project value of Baht 3,200 million, planned to commence construction in Q4/2015 and be finished in Q3/2020. Currently, a study on commercial viability of these three projects is still underway. If the Company has to proceed with development of the three projects, the Company and its subsidiaries will have to borrow loans from financial institutions to finance such property development. This will result in an increase in loans of the Company and its subsidiaries and likely cause the Company s debt to equity ratio to edge up. A success in property development hinges on factors such as economic situation, real estate market condition and the public s consumption. If these factors are unfavorable, they could have an adverse impact on project development by the Company, as well as its funding, liquidity, sales and profit. 3.6 Impacts on consolidated financial statements of the Company To provide information for consideration of the Company s performance and financial position in entering into the entire business transfer transaction from STB and SBF, the Company has prepared pro forma consolidated financial statements by consolidating the relevant financial information of the Company with those of SBF, which has three subsidiaries, namely SPD, BRP and MAX, and STB, in order to see the accounting impacts on the consolidated financial statements of the Company. Assumptions for preparing the pro forma consolidated financial statements are as follows: 1. The pro forma consolidated financial statements have been prepared for the purpose of providing relevant consolidated financial information of the Company with SBF (which has three subsidiaries, namely SPD, BRP and MAX) and STB by assuming that the merger of the Company with STB and SBF had taken place since January 1, The pro forma consolidated financial statements have been prepared by assuming that the following transactions had taken place since January 1, 2011: (a) the Company having a paidup registered capital of 4,712,350,732 shares, with SPM and Khun Santi altogether holding 4,162,352,331 shares or 88.33% of total registered capital of the Company; (b) SBF having a paid-up registered capital of 42,350,000 shares each of Baht 100; and (c) SPD and MAX being merged into a newly established company in the name of SPD with a transfer of all assets, liabilities and shareholders equity to SPD at the net book value. 3. The Company s assets and liabilities were stated at book value, except costs of investment property development projects which were stated at fair value as at December 31, Page 94า

97 4. The Company recorded net assets and liabilities from the business transfer acceptance at fair value and also recorded goodwill. 5. Purchase of interest in joint venture projects was adjusted upwards from 70% to 100%. Therefore, the IFA has compared the consolidated financial statements before the entry into such transaction with the pro forma consolidated financial statements after the transaction for the period ended December 31, 2013 for the shareholders information, details of which are as follows: Statements of financial position Particulars 1/ Consolidated financial statements before the transaction 2/ Pro forma consolidated financial statements after the transaction Baht 000 s % Baht 000 s % Assets Current assets Cash and cash equivalents 13, , Trade and other receivables , Costs of property development projects - net 913, ,176, Inventories - - 5, Other current assets 7, , Total current assets 934, ,749, Non-current assets Restricted deposits with financial institutions - - 1, Long-term loans to related companies 219, Prepaid construction costs 1, , Land held for development 173, ,272, Building and equipment - net 7, , Investment property - net 94, ,808, Goodwill , Intangible assets Computer program Deferred tax assets 13, , Other non-current assets Total non-current assets 292, ,826, Total assets 1,227, ,576, Page 95า

98 Particulars 1/ Consolidated financial statements before the transaction 2/ Pro forma consolidated financial statements after the transaction Baht 000 s % Baht 000 s % Liabilities and shareholders equity Current liabilities Trade accounts payable 35, , Other payables to related companies Current portion of long-term loans from financial 61, , institutions Short-term loans from related companies , Unearned installments income 11, , Retentions payable 27, , Accrued income tax 5, , Accrued expenses 7, , The projects common utilities expenses awaiting 1, settlement Other current liabilities 1, , Total current liabilities 151, , Non-current liabilities Long-term loans from directors Long-term loans from financial institutions - net 333, , Post-employment/retirement employee benefit 6, , obligations Deferred tax liabilities , Total non-current liabilities 339, , Total liabilities 491, , Shareholders equity Registered capital 549, ,712, Issued and paid-up share capital 549, ,712, Premium on share capital 23, , Retained earnings Appropriated for legal reserve 31, , Unappropriated 130, , Total shareholders equity 735, ,818, Total liabilities and shareholders equity 1,227, ,576, Note: 1/ The consolidated financial statements for 2013 were audited by Mr. Teerasak Chuasrisakul, CPA Registration No. 6624, of Grant Thornton Ltd., an SEC-approved auditor. 2/ The pro forma consolidated financial statements for 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Page 96า

99 Statements of income Particulars 1/ Consolidated financial statements before the transaction 2/ Pro forma consolidated financial statements after the transaction Baht 000 s % Baht 000 s % Revenues from sales Revenues from sale of land and houses 172, , Revenues from sale of condominium units 306, , Revenues from rendering of services - 260, Revenues from building rentals Total revenues 478, , Costs of sales Costs of sale of land and houses (129,164.83) (26.99) (129,164.83) (17.17) Costs of sale of condominium units (204,638.64) (42.76) (212,507.74) (28.25) Costs of rendering of services (96,361.23) (12.81) Costs of building rentals (854.59) (0.11) Total costs of sales (333,803.47) (69.75) (438,888.39) (58.34) Gross income 144, , Other income 5, , Selling expenses (22,215.61) (4.64) (69,198.61) (9.20) Administrative expenses (58,238.17) (12.17) (159,132.45) (21.15) Specific business tax (16,197.45) (3.38) (16,600.69) (2.21) Financial costs (20,656.74) (4.32) (21,583.76) (2.87) Profit before income tax 32, , Tax expenses (9,609.81) (2.01) (18,630.64) (2.48) Profit for the year 23, , Other comprehensive income Actuarial gain - net of tax Total comprehensive income for the year 23, , Note: 1/ The consolidated financial statements for 2013 were audited by Mr. Teerasak Chuasrisakul, CPA Registration No. 6624, of Grant Thornton Ltd., an SEC-approved auditor. 2/ The pro forma consolidated financial statements for 2013 were audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor. Based on the above financial information, it has been found that after the entire business transfer of STB and SBF, the Company s financial position and operating performance will significantly change as follows: Page 97า

100 Total assets Total assets surge from Baht 1, million to Baht 6, million, resulting from land held for development and investment property which includes three plots of land of SBF s subsidiaries and hotel assets of STB. Total liabilities Total liabilities increase from Baht million to Baht million, arising from trade accounts payable, long-term loans from financial institutions and deferred tax liabilities. Shareholders equity Shareholders equity mounts from Baht million to Baht 5, million, primarily stemming from an issuance of 4,162,352,331 new shares with a par value of Baht 1 per share for allocation at a price of Baht 1.87 per share as payment in kind for the transfer of entire business of STB and SBF. Total revenues Total revenues grow from Baht million to Baht million, resulting from revenues from services of Santiburi hotel which help to drive the Company s profit up from Baht million to Baht million. Page 98า

101 4. Fairness of prices and conditions for the transactions 4.1 Fairness of transaction prices 1. EBT and New Shares Allocation Transaction The Company will implement a plan on business integration with STB and SBF by way of entire business transfer, and has thus resolved to increase its registered capital and allocate 4, million newly issued ordinary shares with a par value of Baht 1 per share on a private placement basis to SPM and Khun Santi at a price of Baht 1.87 per share as payment in kind for the transfer of entire business of STB and SBF to the Company. Therefore, the IFA has measured an appropriate value of the Company shares and value of SBF and STB by various approaches as a basis for determining fairness of the transaction price, details of which are as follows: a) Valuation of Rasa Property Development Plc. IFA has valued the Company s shares by the following approaches as a basis for rendering opinion on fairness of the transaction price: (1) Market price approach (2) Book value approach (3) Adjusted book value approach (4) Price-to-book value ratio approach (5) Price-to-earnings ratio approach (6) EV/EBITDA ratio approach (7) Discounted cash flow approach Details of share valuation (1) Market price approach By this approach, the shares are valued based on the weighted average market price of the Company s shares traded on the Exchange in the past 1 month, 3 months, 6 months, 9 months and 12 months up to the cut-off date of April 10, 2014 (one business day before the date on which the Company s Board of Directors resolved to approve the EBT and New Shares Allocation Transaction). Details of the said share valuation are as follows: Period Market price (Baht/share) Weighted Highest Lowest average Avg. daily trading volume (shares) Avg. daily trading volume as % of total number of paid-up shares of the Company Average of past 1 month ,639, % Average of past 3 months ,010, % Average of past 6 months ,786, % Average of past 9 months ,745, % Average of past 12 months ,410, % Source: Page 99า

102 By the market price approach (weighted average), the Company s shares are valued in a range of Baht per share. It is evident that the average trading volume of the Company s shares during each time period of the share valuation (past 1-12 months) was in a range of 2.01 million 4.79 million shares per day or 0.37% 0.87% of the total number of paid-up shares of the Company, which represents a small turnover ratio. Market price is a price mechanism driven by demand and supply from investors for the Company s shares, which could reflect the share value during such given period as well as reflect the fundamental factors and general investors demand with respect to the Company s future potential and growth to a certain degree. However, considering such rather thin trading volume, the historical market price of the Company s shares may not fairly reflect the true value or price of the shares. (2) Book value approach By this approach, the share value is appraised from the net book value of assets (total assets less total liabilities) or equal to shareholders equity, divided by total number of shares to derive a book value. The share valuation, based on the Company s audited financial statements as of December 31, 2013, can be concluded as follows: Items Baht million Paid-up registered capital as at Dec 31, Ordinary shares Premium on share capital Retained earnings (losses) Appropriated (legal reserve) Unappropriated Shareholders equity Number of ordinary shares as at Dec 31, 2013 (million shares) Par value (Baht/share) 1.00 Book value (Baht/share) 1.34 The book value approach reflects the Company s financial position as at December 31, 2013 only, but could not reflect the present market value of assets and the Company s profitability in the future. By this approach, the Company s shares are valued at Baht 1.34 per share. Page 100า

103 (3) Adjusted book value approach By this approach, the shares are valued from total assets less total liabilities of the Company as of December 31, 2013, adjusted by commitments and contingent liabilities including a surplus/discount on market price of fixed assets as appraised by an independent valuer, then divided by total number of shares of the Company. Valuation of properties The Company appointed American Appraisal (Thailand) Ltd. as an independent valuer to appraise eight items of its land and construction, consisting of: Assets developed for business operation, three items: Location and assets appraised 1. Residential condominium, 23 units, 40 condominium ownerships, covering a total area of 1, sq.m., Fl , Intro Condominium, located on Pradiphat Road, Samsen Nai, Phayathai, Bangkok Date of appraisal December 31, Commercial condominium, 2 units, covering a total area of 5, sq.m., Room No. 8/299 and 8/300, The Light House Condominium, located on Charoen Nakhon Road, Khlong Ton Sai, Khlong San, Bangkok 3. Townhouse, 139 units of Rasa Maxx Ville Project, covering a total area of rai, located on Soi Phahon Yothin 73, Phahon Yothin Road, Si Kan, Don Mueang, Bangkok Assets not yet developed, five items: Location and assets appraised 1. Vacant land of rai, located on Watcharaphon Road, Khlong Thanon, Sai Mai, Bangkok 2. Vacant land of rai, located on Kanchanaphisek frontage road and Khlong 6 west section road, Bung Kham Phroi Sub-district, Lam Luk Ka District, Pathum Thani Province 3. Vacant land of rai, located on Khlong 6 west section road, Bung Kham Phroi Sub-district, Lam Luk Ka District, Pathum Thani Province 4. Vacant land of rai, located on Ram Inthra Road, Anusaowari, Bang Khen, Bangkok February 1, 2014 February 1, 2014 Date of appraisal February 1, 2014 February 1, 2014 February 1, 2014 February 1, 2014 Page 101า

104 Location and assets appraised 5. Vacant land of rai, located on Soi Phahon Yothin 73, Phahon Yothin Road, Sanam Bin, Don Mueang, Bangkok Date of appraisal February 1, Appraisal of Intro Condominium Project Type of assets Residential condominium, 23 units, 40 condominium ownerships, covering a total area of 1, sq.m. Location Fl , Intro Condominium, Pradiphat Road, Samsen Nai, Phayathai, Bangkok Ownership Rasa Property Development Plc. Appraisal date December 31, 2013 Picture of the location of Intro Condominium Project Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise its condominium units in Intro Condominium Project. According to the appraisal conducted as at December 31, 2013, AAT applied the market value comparable approach to appraise the property based on factors such as location, number of floors, space per unit, selling price, etc., and then graded by the weight quality score method. Details of the comparable market data are tabulated below: Page 102า

105 Table: Details of appraised condominium and comparable condominiums Description Appraised Data 1 Data 2 Data 3 property Property type Condominium Condominium Condominium Condominium Project name Intro Condominium Intro Condominium ONYX Condominium Sense Condominium Location Pradiphat Road Pradiphat Road Fl 26, Phahon Yothin Inthamara Soi 4 Road Road Area (sq.m.) Physical condition of Good Good Good Good building Physical condition of room Good Good Good Good Floor no Road width 12 m. 12 m. 24 m. 8 m. Facilities 5 passenger lifts, 1 service lift, 200-car parking, telephone, 5 passenger lifts, 1 service lift, 200-car parking, telephone, 4 passenger lifts, swimming pool, sauna, gym and laundry 3 passenger lifts, swimming pool, sauna and gym swimming pool and basketball court swimming pool and basketball court Appraisal date December 31, 2013 January 2014 January 2014 January 2014 Selling price (Baht/sq.m.) 85, ,000 90,000 Adjusted factors Sale term Offered for sale -5% Offered for sale -5% Offered for sale -5% Market condition (selling January % January % January % date) Total -5% -5% -5% Adjusted value (Baht/sq.m.) 80, ,000 85,500 Location Comparable 0% Superior -35% Superior -20% Property space Comparable 0% Comparable 0% Comparable 0% Physical condition of Comparable 0% Comparable 0% Comparable 0% building Physical condition of room Comparable 0% Comparable 0% Comparable 0% Location (floor) Superior -2% Comparable 0% Comparable 0% Facilities Comparable 0% Comparable 0% Comparable 0% Total physical adjustment -2% -35% -20% Final price adjustment 79,135 74,100 72,675 Weighting 100% 40% 25% 35% Fair value 75,292 31,331 18,525 25,436 Net value (Baht/sq.m.) 75,000 Extra value per floor 500 (Baht/sq.m.) Extra value for corner unit 300 (Baht/sq.m.) Operating fee 10% Total appraisal price Baht 121,000,000 Page 103า

106 AAT appraised Intro Condominium at Baht 75,000 per square meter. Adjusted by certain positive factors with an extra value of Baht 500/square meter/floor and an additional Baht 300/square meter for corner units, deducted by an operating fee at 10% of total revenues, the total appraisal price became Baht 121,000,000. Opinion of the IFA AAT appraised Intro Condominium units by the market value comparable approach through comparison with nearby condominiums which had an offering price at about the same period, taking into account factors such as location, area, building condition, room condition, position (floor), road width and facilities, including regulatory rules, notifications or laws restricting the use of properties. AAT made a market survey on three sets of data with offering prices ranging from Baht 85,000 to Baht 120,000 per square meter. Such offering prices were adjusted in order to reflect the present selling price or the expected price to be in a range of Baht 80, ,000 per square meter. The derived property value was analyzed by the Weighted Quality Score (WQS) method for quality scoring based on quality factors that could affect value, including location, area, building condition, room condition, position (floor), and facilities. After physical value adjustment based on the asset quality, the sale and purchase price was in a range of Baht 72,675 79,135 per square meter. From calculation based on relationship between the quality score and the sale and purchase price, the appraised market value of the condominium was equal to Baht 75,000 per square meter, with an extra increase of Baht 500 per square meter per floor for upper rooms and Baht 300 per square meter for corner room, together with an operating expense of 10% of total revenues. AAT then appraised the said condominium at a total value of Baht 121,000,000. In IFA s opinion, the selling price used in the appraisal by AAT is different from the actual selling price set by the Company. Moreover, the said price was appraised in form of the project value that has not yet included income tax payable on profit from operation. Therefore, IFA views that the appraised price by AAT does not fairly reflect the true value of the Company s shareholders equity. 2. Appraisal of Rasa Maxx Ville Project Type of assets Land and two-storied townhouse, 139 units (under construction) Location Soi Phahon Yothin 73 (Soi Nguan Wienrawi), Phahon Yothin Road (Highway No. 1), Sanam Bin, Don Mueang, Bangkok, 1.0 km from Don Mueang Airport and 2.0 km from Royal Thai Air Force Academy Ownership Rasa Property Development Plc. Appraisal date February 1, 2014 Page 104า

107 Picture of the location of Rasa Maxx Ville Project Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise the land and 139 units of two-storied townhouse in Rasa Maxx Ville Project. According to the appraisal conducted as of February 1, 2014, AAT employed the income approach to appraise the property based on the following assumptions: Page 105า

108 Table: Assumptions for Rasa Maxx Ville Project Particulars Amount 1 Number of units for sale 139 units 2 Average price per unit Baht 2,600,000 3 Total value Baht 361,802, Sales target date Q1/ units Baht 72,360,520 Q2/ units Baht 72,360,520 Q3/ units Baht 72,360,520 Q4/ units Baht 72,360,520 Q1/ units Baht 72,360,520 5 Remaining construction cost Baht 28,530,000 6 Selling expenses 4% of revenues 7 Administrative expenses 3% of revenues 8 Specific business tax 3.3% of revenues 9 Transfer fee 1% of revenues 10 Long-term growth rate 3% 11 Discount rate 18% 12 Present value of cash flow Baht 266,000, Appraisal date February 1, 2014 AAT appraised the land and 139 units of two-storied townhouse in Rasa Maxx Ville Project at a total of Baht 266,000,000. Opinion of the IFA AAT appraised the remaining 139 units of townhouse in Rasa Maxx Ville Project by the income approach. Based on the assumptions for financial projection preparation, AAT appraised such property at Baht 266,000,000. However, IFA is of the opinion that the selling price adopted by AAT in the financial projection was derived from market prices of nearby properties and the appraised price is thus different from the actual selling price set by the Company. Moreover, the said price was appraised in form of the project value that has not yet included corporate income tax payable on profit from operation. Therefore, IFA views that the appraised price by AAT does not fairly reflect the true value of the Company s shareholders equity. Page 106า

109 3. Appraisal of Light House Plaza Project Type of assets Commercial condominium, 2 units, covering a total area of 5, square meters Location Condominium suit no. 8/299 covering four floors of leased area with parking space and air-conditioner space, totaling 5, sq.m., and no. 8/300 covering three floors of leased area with parking space, totaling sq.m., at The Light House Condominium Project, on Charoen Nakhon Road, Khlong Ton Sai, Khlong San, Bangkok Ownership Rasa Property Development Plc. Appraisal date February 1, 2014 Picture of the location of Light House Plaza Project Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise the commercial areas for rent of 3, square meters in Light House Plaza Project. According to the appraisal conducted as of February 1, 2014, AAT employed the income approach to appraise the property based on the following assumptions: Table: Assumptions for Light House Plaza Project Particulars Amount 1 Rentable area 3, square meters 2 Rental fees Floor 1 at an average of Baht 800 per square meter Floor 2 at an average of Baht 680 per square meter Floor 3 at an average of Baht 612 per square meter Floor 4 at an average of Baht 551 per square meter Page 107า

110 Particulars 3 Occupancy rate 90% 4 Utilities fee 10% of total revenues 5 Security guard fee 2% of total revenues 6 Cleaning fee 1% of total revenues 7 Maintenance fee 2% of total revenues 8 Building tax 0.5% of total revenues 9 Insurance 0.5% of total revenues 10 Others 1.0% of total revenues 11 Salary 10% of total revenues 12 Marketing expenses 3.5% of total revenues 13 Long-term growth rate 3% 14 Discount rate 13% 15 Present value of cash flow Baht 181,000, Appraisal date February 1, 2014 Amount AAT appraised the commercial areas of 3, square meters in Light House Plaza Project at a total of Baht 181,000,000. Opinion of the IFA AAT appraised the commercial areas in The Light House Project by the income approach. Based on the assumptions for financial projection preparation, AAT appraised such property at Baht 181,000,000. However, IFA is of the opinion that the rental rate adopted by AAT in the financial projection was derived from market price which is different from the actual rental rate currently collected from the rentees. Since the rental agreements still take effect, the rental fees cannot be immediately revised up to the market rate. Moreover, the said price has not yet included corporate income tax payable on profit earned. Therefore, IFA views that the appraised price by AAT does not fairly reflect the true value of the Company s shareholders equity. 4. Appraisal of vacant land on Ram Inthra Road Type of assets Vacant land of rai or 5,472.1 square wah Location Ram Inthra Road, Anusaowari, Bang Khen, Bangkok Physical condition Multi-angle shape, Ram Inthra Road to the south and a private property to the north Ownership Rasa Property Development Plc. Land title deed (title deed no./ parcel no./dealing file no.) /351/648, /387/4874, /388/4875 and /389/5123 Registered encumbrance Mortgaged as collateral with Krung Thai Bank Plc. Page 108า

111 Picture of the location of vacant land on Ram Inthra Road Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise the vacant land on Ram Inthra Road. According to the appraisal conducted as of February 1, 2014, AAT used the market value comparable approach for appraising the property based on factors such as location, land area, land level, shape, front area, road width, facilities, etc., and then graded by the weight quality score method. Details of the comparable market data are as follows: Table: Details of appraised land and other comparable properties Description Appraised property Data 1 Data 2 Data 3 Type of property Vacant land Vacant land Vacant land Vacant land Location Ram Inthra Road Ram Inthra Road between Km 3 and Km 4 Ram Inthra Road between Km 3 and Km 4 Ram Inthra Road between Km 3 and Km 4 Area (sq. wah) 5,472 2,018 2,800 5,414 Land level Same level as front road Same level as front road Same level as front road Same level as front road Shape/Front area Multi-angle/adjacent to Ram Inthra Road for 58 m. long Almost rectangular/ adjacent to Ram Inthra Road for 30 m. long Almost rectangular/ adjacent to Ram Inthra Road for 37 m. long Almost rectangular/ adjacent to Ram Inthra Road for 80 m. long Road width 24 m. concrete road 24 m. concrete road 24 m. concrete road 24 m. concrete road Facilities Electricity, water Electricity, water supply Electricity, water supply Electricity, water supply supply and telephone and telephone and telephone and telephone Appraisal date February 1, 2014 February 2014 February 2014 February 2014 Selling price (Baht/sq.wah) 95,000 90,000 95,000 Adjusted factors Sale term Selling price -5% Selling price -5% Selling price -5% Page 109า

112 Description Appraised property Data 1 Data 2 Data 3 Market condition (selling date) January January January Total -5% -5% -5% Adjusted value (Baht/sq.wah) 90,250 85,500 90,250 Location Inferior 15% Inferior 10% Inferior 10% Land area Inferior 5% Inferior 5% Comparable 0% Land level Comparable 0% Comparable 0% Comparable 0% Shape/Front area Superior -5% Superior -5% Superior -5% Road width Comparable 0% Comparable 0% Comparable 0% Facilities Comparable 0% Comparable 0% Comparable 0% Total physical adjustment 15% 10% 5% Final price adjustment (Baht/sq.wah) 99,275 94,050 94,763 Proportion 100% 20% 30% 50% Fair value (Baht/sq.wah) 95,451 19,855 28,215 47,381 Net value (Baht/sq.wah) 95,000 AAT appraised the vacant land on Ram Inthra Road at Baht 95,000 per square wah or a total of Baht 520,000,000. Opinion of the IFA AAT appraised the vacant land on Ram Inthra Road by the market value comparable approach through comparison with nearby plots of vacant land which had an offering price at about the same period, taking into account factors such as physical condition, location, area, land level, shape, front area, road width and facilities, including regulatory rules, notifications or laws restricting the use of properties. AAT made a market survey on three sets of data with offering prices ranging from Baht 90,000 to Baht 95,000 per square wah. Such offering prices were adjusted in order to reflect the present selling price or the expected price to be in a range of Baht 85,500-90,250 per square wah. The derived property value was analyzed by the Weighted Quality Score (WQS) method for quality scoring based on quality factors that could affect value, including location, area, land level, size, shape, road width and facilities. After physical value adjustment based on the asset quality, the sale and purchase price was in a range of Baht 94,050 99,275 per square wah. From calculation based on relationship between the quality score and the sale and purchase price, the appraised market value of the said land was equal to Baht 95,000 per square wah, or a total value of Baht 520,000,000. In IFA s opinion, this is an appropriate method since it was a comparison with the properties of a similar nature and/or in nearby areas which have been sold/purchased or had an offering price. Moreover, it was compared and adjusted by quality score of the appraised property and the comparable properties based on factors such as location, physical condition of the area, shape of land, zoning, facilities, transportation, etc. Therefore, the appraised price is closest to the property s current price and could reflect the property value under its present condition. Page 110า

113 5. Appraisal of vacant land on Watcharaphon Road Type of assets Vacant land of rai or square wah Location Watcharaphon Road, Khlong Thanon, Sai Mai, Bangkok Physical condition Multi-angle, Rasa Parklane Watcharaphon Project to the northwest and the northeast; Laddarom Watcharaphon- Rattanakosin to the southeast; Watcharaphon Road to the southwest Ownership Rasa Property Development Plc. Land title deed (title deed no./ / 2938 / parcel no./dealing file no.) Registered encumbrance Unencumbered Appraisal date February 1, 2014 Picture of the location of vacant land on Watcharaphon Road Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise the vacant land on Watcharaphon Road. According to the appraisal conducted as of February 1, 2014, AAT employed the market value comparable approach to appraise the property based on factors such as location, land area, land level, shape, front area, road width, facilities, etc., and then graded by the weight quality score method. Details of the comparable market data are as follows: Page 111า

114 Table: Details of appraised land and other comparable properties Description Appraised property Data 1 Data 2 Data 3 Type of property Vacant land Vacant land Vacant land Vacant land Location Watcharaphon Road Corner of Poemsin Road and Soi Poemsin 32 Corner of Poemsin Road and Soi Poemsin 41 New Rattanakosin Somphot Road Area (sq. wah) Land level Same level as front road Same level as front road About 0.5 m. lower than front road level Same level as front road Shape/Front area Multi-angle/adjacent to Watcharaphon Road for 56 m. long Rectangle/adjacent to Poemsin Road for 45 meters long and Soi Poemsin 32 for 35 m. long Rectangle/adjacent to Poemsin Road for 45 meters long and Soi Poemsin 41 for 70 m. long Rectangle/adjacent to New Rattanakosin Somphot Road for 55 m. long Road width 12 m. concrete road 12 m. concrete road 12 m. concrete road 12 m. concrete road Facilities Electricity, water Electricity, water supply Electricity, water supply Electricity, water supply supply and telephone and telephone and telephone and telephone Zoning Low-density residential zone Low-density residential zone Low-density residential zone Medium-density residential zone Appraisal date February 1, 2014 January 2014 January 2014 January 2014 Selling price (Baht/sq.wah) 70,000 45,000 45,000 Adjusted factors Sale term Selling price -10% Selling price -5% Selling price -5% Market condition (selling date) January January January Total -10% -5% -5% Adjusted value (Baht/sq.wah) 63,000 42,750 42,750 Location Comparable 0% Inferior 30% Inferior 35% Land area Superior -5% Comparable 0% Inferior 5% Land level Comparable 0% Inferior 1% Comparable 0% Shape/Front area Comparable 0% Inferior 10% Comparable 0% Facilities Comparable 0% Comparable 0% Comparable 0% Road width Comparable 0% Comparable 0% Comparable 0% Zoning Comparable 0% Comparable 0% Comparable 0% Total physical adjustment -5% 41% 40% Final price adjustment (Baht/sq.wah) 59,850 60,278 59,850 Proportion 100% 80% 10% 10% Fair value (Baht/sq.wah) 59,893 47,880 6,028 5,985 Net value (Baht/sq.wah) 60,000 AAT appraised the vacant land on Watcharaphon Road at Baht 60,000 per square wah or a total of Baht 36,600,000. Page 112า

115 Opinion of the IFA AAT appraised the vacant land on Watcharaphon Road by the market value comparable approach through comparison with nearby plots of vacant land which had an offering price at about the same period, taking into account factors such as physical condition, location, area, land level, shape, front area, road width, facilities and zoning, including regulatory rules, notifications or laws restricting the use of properties. AAT made a market survey on three sets of data with offering prices ranging from Baht 45,000 to Baht 70,000 per square wah. Such offering prices were adjusted in order to reflect the present selling price or the expected price to be in a range of Baht 42,750-63,000 per square wah. The derived property value was analyzed by the Weighted Quality Score (WQS) method for quality scoring based on quality factors that could affect value, including location, area, land level, size, shape, road width, facilities and zoning. After physical value adjustment based on the asset quality, the sale and purchase price was in a range of Baht 59,850 60,278 per square wah. From calculation based on relationship between the quality score and the sale and purchase price, the appraised market value of the said land was equal to Baht 60,000 per square wah, or a total value of Baht 36,600,000. In IFA s opinion, this is an appropriate method since it was a comparison with the properties of a similar nature and/or in nearby areas which have been sold/purchased or had an offering price. Moreover, it was compared and adjusted by quality score of the appraised property and the comparable properties based on factors such as location, physical condition of the area, shape of land, zoning, facilities, transportation, etc. Therefore, the appraised price is closest to the property s current price and could reflect the property value under its present condition. 6. Appraisal of two plots of vacant land on Lam Luk Ka Road Type of assets Vacant land: Plot No rai or 21,830.0 square wah Plot No rai or square wah Total rai Location Plot No. 1 Kanchanaphisek frontage road (Highway No. 9) and Khlong 6 west section road, Kham Phroi Sub-district, Lam Luk Ka District, Pathum Thani Province Plot No. 2 Khlong 6 west section road, Bung Kham Phroi Sub-district, Lam Luk Ka District, Pathum Thani Province Page 113า

116 Physical condition Plot No. 1 Multi-angle shape; other private property to the north and the south, Khlong 6 west section road to the east, Kanchanaphisek frontage road (Highway No. 9) to the west Plot No. 2 Multi-angle shape; other private property to the north, the south and the west, Khlong 6 west section road to the east Ownership Rasa Property Development Plc. Land title deed (title deed no./ parcel no./dealing file no.) Plot No /168/4247, /406/14976, /407/14977, /408/14978, /409/14978, /410/14980, /411/14981, /412/14982, and /438/14983 Plot No /60/17, 47016/59/631, /413/16009, and /415/16011 Registered encumbrance Plot No. 1 Mortgaged as collateral with Krung Thai Bank Plc. Plot No. 2 Unencumbered Appraisal date February 1, 2014 Picture of the location of two plots of vacant land on Lam Luk Ka Road Plot No. 1 of rai Source: Appraisal report of American Appraisal (Thailand) Ltd. Page 114า

117 Plot No. 2 of rai Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise the vacant land on Lam Luk Ka Road. According to the appraisal conducted as of February 1, 2014, AAT employed the market value comparable approach to appraise the property based on factors such as location, land area, land level, shape, front area, road width, facilities, etc., and then graded by the weight quality score method. Details of the comparable market data are as follows: 1) Land Plot No. 1 of rai Table: Details of appraised land and other comparable properties Description Appraised property Data 1 Data 2 Data 3 Type of property Vacant land Vacant land Vacant land Vacant land Location Kanchanaphisek frontage road and Khlong 6 west section road, about 4.4 km from Lam Luk Ka Road Kanchanaphisek frontage road, about 6.4 km from Lam Luk Ka Road Kanchanaphisek frontage road about 2.8 km from Lam Luk Ka Road Khlong 6 west section road, about 1.5 km from Kanchanaphisek Road Area (rai) Land level About 1 m lower than front road level About 1 m lower than front road level About 1 m lower than front road level About 1 m lower than front road level Shape/Front area Multi-angle/adjacent Multi-angle/adjacent to Almost rectangular/ Almost rectangular/ to Kanchanaphisek Kanchanaphisek adjacent to adjacent to Khlong 6 frontage road for 25 frontage road for 40 m Kanchanaphisek west section road for 70 m long and Khlong long frontage road for 120 m m long 6 west section road long for 80 m long Page 115า

118 Description Appraised property Data 1 Data 2 Data 3 Access road 7 m asphalt road 7 m asphalt road 7 m asphalt road 7 m asphalt road Facilities Electricity, water Electricity, water supply Electricity, water supply Electricity, water supply supply and telephone and telephone and telephone and telephone Zoning Farming and residential zone Farming and residential zone Farming and residential zone Farming and residential zone Appraisal date February 1, 2014 February 2014 February 2014 February 2014 Selling price (Baht/rai) 1,300,000-1,600,000 Actual sale and purchase price (Baht/rai) - 3,300,000 - Adjusted factor Sale term Offered for sale -10% Offered for sale 0% Offered for sale -10% Market condition (selling date) January % January % January % Total -10% 0% -10% Adjusted value (Baht/rai) 1,170,000 3,300,000 1,440,000 Location Comparable 0% Comparable 0% Inferior 30% Land area Inferior 35% Superior -15% Comparable 0% Land level Comparable 0% Comparable 0% Comparable 0% Shape/Front area Superior -20% Superior -45% Superior -40% Access road Comparable 0% Comparable 0% Comparable 0% Facilities Comparable 0% Comparable 0% Comparable 0% Zoning Comparable 0% Comparable 0% Comparable 0% Total physical adjustment 15% -60% -10% Final price adjustment (Baht/rai) 1,345,500 1,320,000 1,296,000 Proportion 100% 35% 35% 30% Fair value (Baht/rai) 1,321, , , ,800 Net value (Baht/rai) 1,300,000 AAT appraised the vacant land on Lam Luk Ka Road ( rai) at Baht 1,300,000 per rai or a total of Baht 70,900,000. 2) Land Plot No. 2 of rai Table: Details of appraised land and other comparable properties Description Appraised property Data 1 Data 2 Data 3 Type of property Vacant land Vacant land Vacant land Vacant land Location Khlong 6 west section road, about 2 km from Kanchanaphisek frontage road Kanchanaphisek frontage road, about 6.4 km from Lam Luk Ka Road Public road, about 1.6 km from Kanchanaphisek frontage road Public road, about 1.5 km from Kanchanaphisek frontage road Area (rai) Land level About 1 m lower About 1 m lower than About 1 m lower than than front road level front road level front road level About 1 m lower than front road level Page 116า

119 Description Appraised property Data 1 Data 2 Data 3 Shape/Front area Multi-angle/adjacent to public road for 75 m long Multi-angle/adjacent to Kanchanaphisek frontage road for 40 m Almost rectangular/ adjacent to public road for 80 m long Almost rectangular/ adjacent to public road for 70 m long long Access road 7 m concrete road 7 m asphalt road 7 m concrete road 7 m concrete road Facilities Electricity, water Electricity, water supply Electricity, water supply Electricity, water supply supply and telephone and telephone and telephone and telephone Zoning Farming and residential zone Farming and residential zone Farming and residential zone Farming and residential zone Appraisal date February 1, 2014 February 2014 February 2014 February 2014 Selling price (Baht/rai) 1,300,000 1,700,000 1,600,000 Adjusted factor Sale term Offered for sale -10% Offered for sale -10% Offered for sale -10% Market condition (selling date) January % January % January % Total -10% -10% -10% Adjusted value (Baht/rai) 1,170,000 1,530,000 1,440,000 Location Superior -30% Comparable 0% Comparable 0% Land area Inferior 20% Superior -15% Superior -15% Land level Comparable 0% Comparable 0% Comparable 0% Shape/Front area Inferior 10% Superior -10% Superior -10% Access road Comparable 0% Comparable 0% Comparable 0% Facilities Comparable 0% Comparable 0% Comparable 0% Zoning Comparable 0% Comparable 0% Comparable 0% Total physical adjustment 0% -25% -25% Final price adjustment (Baht/rai) 1,170,000 1,147,500 1,080,000 Proportion 100% 15% 40% 45% Fair value (Baht/rai) 1,120, , , ,000 Net value (Baht/rai) 1,100,000 AAT appraised the vacant land on Lam Luk Ka Road ( rai) at Baht 1,100,000 per rai or a total of Baht 98,100,000. The total appraisal price for the two plots of vacant land on Lam Luk Ka Road is equal to Baht 169,000,000. Opinion of the IFA AAT appraised the vacant land on Lam Luk Ka Road, Plot No. 1, by the market value comparable approach through comparison with nearby plots of vacant land which had an offering price at about the same period, taking into account factors such as physical condition, location, area, land level, shape, front area, road width, facilities and zoning, including regulatory rules, notifications or laws restricting the use of properties. AAT made a market survey on three sets of data with offering prices ranging from Baht 1,300,000 to Baht 3,300,000 per rai. Such offering prices were Page 117า

120 adjusted in order to reflect the present selling price or the expected price to be in a range of Baht 1,170,000-3,300,000 per rai. The derived property value was analyzed by the Weighted Quality Score (WQS) method for quality scoring based on quality factors that could affect value, including location, area, land level, size, shape, road width, acess road, facilities and zoning. After physical value adjustment based on the asset quality, the sale and purchase price was in a range of Baht 1,296,000 1,345,000 per rai. From calculation based on relationship between the quality score and the sale and purchase price, the appraised market value of the said land was equal to Baht 1,300,000 per rai, or a total value of Baht 70,900,000. AAT appraised the vacant land on Lam Luk Ka Road, Plot No. 2, by the market value comparable approach through comparison with nearby plots of vacant land which had an offering price at about the same period, taking into account factors such as physical condition, location, area, land level, shape, front area, road width, acess road, facilities and zoning, including regulatory rules, notifications or laws restricting the use of properties. AAT made a market survey on three sets of data with offering prices ranging from Baht 1,300,000 to Baht 1,700,000 per rai. Such offering prices were adjusted in order to reflect the present selling price or the expected price to be in a range of Baht 1,170,000-1,530,000 per rai. The derived property value was analyzed by the Weighted Quality Score (WQS) method for quality scoring based on quality factors that could affect value, including location, area, land level, size, shape, road width, acess road, facilities and zoning. After physical value adjustment based on the asset quality, the sale and purchase price was in a range of Baht 1,080,000 1,170,000 per rai. From calculation based on relationship between the quality score and the sale and purchase price, the appraised market value of the said land was equal to Baht 1,100,000 per rai, or a total value of Baht 98,100,000. In IFA s opinion, this is an appropriate method since it was a comparison with the properties of a similar nature and/or in nearby areas which have been sold/purchased or had an offering price. Moreover, it was compared and adjusted by quality score of the appraised property and the comparable properties based on factors such as location, physical condition of the area, shape of land, zoning, facilities, transportation, etc. Therefore, the appraised price is closest to the property s current price and could reflect the property value under its present condition. 7. Appraisal of vacant land in Don Mueang area Type of assets Vacant land of rai or 13,481.4 square wah Location Soi Phahon Yothin 73 (Soi Nguan Wienrawi), Phahon Yothin Road (Highway No. 1), Sanam Bin, Don Mueang, Bangkok Physical condition Almost rectangular Ownership Rasa Property Development Plc. Land title deed (title deed no./ / 3601 / parcel no./dealing file no.) Registered encumbrance Mortgaged as collateral with Kiatnakin Bank Plc. Appraisal date February 1, 2014 Page 118า

121 Picture of the location of vacant land in Don Mueang area Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise the vacant land on Phahon Yothin Road. According to the appraisal conducted as of February 1, 2014, AAT employed the market value comparable approach to appraise the property based on factors such as location, land area, land level, shape, front area, road width, facilities, etc., and then graded by the weight quality score method. Details of the comparable market data are as follows: Page 119า

122 Table: Details of appraised land and other comparable properties Description Appraised property Data 1 Data 2 Data 3 Type of property Vacant land Vacant land Vacant land Vacant land Location Soi Phahon Yothin 73, about 620 m from Phahon Yothin Road Soi Phahon Yothin 54/4 Yaek 1, about 680 m from Phahon Yothin Road Corner of Soi Phahon Yothin 58 and Soi Phahon Yothin 58 Yaek 41, about 700 m from Phahon Yothin Road Soi Khum Khrong 3 off Soi Phahon Yothin 64, about 1 km from Phahon Yothin Road Area (sq.wah) 13, ,138 2, Land level Same level as front road Same level as front road Same level as front road About 1 m lower than front road level Shape/Front area Almost rectangular/ adjacent to Soi Phahon Yothin 73 Rectangle/adjacent to Soi Phahon Yothin 54/4 Yaek 1 for 75 m long Rectangle/adjacent to Soi Phahon Yothin 58 for 75 m long Rectangle/adjacent to Soi Khum Khrong 3 for 35 m long for 140 m long Facilities Electricity, water Electricity, water supply Electricity, water supply Electricity, water supply supply and telephone and telephone and telephone and telephone Zoning Low-density residential zone Low-density residential zone Low-density residential zone Medium-density residential zone Appraisal date February 1, 2014 January 2014 January 2014 January 2014 Selling price (Baht/sq.wah) 30,000 35,000 23,000 Adjusted factor Sale term Offered for sale -10% Offered for sale -10% Offered for sale -10% Market condition (selling date) January January January Total -10% -10% -10% Adjusted value (Baht/sq.wah) 27,000 31,500 20,700 Location Superior -20% Superior -25% Superior -15% Land area Superior -30% Superior -30% Superior -30% Land level Comparable 0% Comparable 0% Inferior 10% Shape/Front area Comparable 0% Comparable 0% Comparable 0% Facilities Comparable 0% Comparable 0% Comparable 0% Zoning Comparable 0% Comparable 0% Comparable 0% Total physical adjustment -50% -55% -35% Final price adjustment (Baht/sq.wah) 14,175 13,455 Proportion 100% 35% 35% 30% Fair value (Baht/sq.wah) 13,723 4,725 4,961 4,037 Net value (Baht/sq.wah) 14,000 AAT appraised the vacant land on Phahon Yothin Road at Baht 14,000 per square wah or a total of Baht 189,000,000. Page 120า

123 Opinion of the IFA AAT appraised the vacant land in Don Mueang area by the market value comparable approach through comparison with nearby plots of vacant land which had an offering price at about the same period, taking into account factors such as physical condition, location, area, land level, shape, front area, road width, facilities and zoning, including regulatory rules, notifications or laws restricting the use of properties. AAT made a market survey on three sets of data with offering prices ranging from Baht 23,000 to Baht 35,000 per square wah. Such offering prices were adjusted in order to reflect the present selling price or the expected price to be in a range of Baht 20,700-31,500 per square wah. The derived property value was analyzed by the Weighted Quality Score (WQS) method for quality scoring based on quality factors that could affect value, including location, area, land level, size, shape, access road, facilities and zoning. After physical value adjustment based on the asset quality, the sale and purchase price was in a range of Baht 13,455 14,175 per square wah. From calculation based on relationship between the quality score and the sale and purchase price, the appraised market value of the said land was equal to Baht 14,000 per square wah, or a total value of Baht 189,000,000. In IFA s opinion, this is an appropriate method since it was a comparison with the properties of a similar nature and/or in nearby areas which have been sold/purchased or had an offering price. Moreover, it was compared and adjusted by quality score of the appraised property and the comparable properties based on factors such as location, physical condition of the location, area, shape of land, zoning, facilities, transportation, etc. Therefore, the appraised price is closest to the property s current price and could reflect the property value under its present condition. The IFA has then calculated the adjustment to the book value arising from the appraisal of assets as described above. The outcome is as follows: Appraisal price of properties compared with their book value as at December 31, 2013: (Unit: Baht million) Book value Appraisal value Surplus (Discount) on book value 1. Intro Condominium 23 units Light House Plaza 5, sq.m.* Rasa Maxx Ville 139 units of townhome Vacant land in Watcharaphon area of rai Vacant land on Kanchanaphisek frontage road 5.1 Area of rai Area of rai Total (4.85) 6. Vacant land on Ram Inthra Road of rai Vacant land on Soi Phahon Yothin 73 of rai (14.55) Total 1, , Page 121า

124 Note: * The Company owns 70% of total appraisal value of Baht 181 million in accordance with the joint venture agreement with Siam Prime Estate Co., Ltd., dated November 26, The IFA therefore adopts the appraisal price in proportion to the Company s ownership. Items Baht million Total assets book value as at December 31, , (Less) Total liabilities book value as at December 31, 2013 (491.38) Add: Surplus on asset appraisal Add: Cash from sale of five townhouse units in Rasa Maxx Ville Project* Net asset value after adjustment Total number of issued and paid-up shares (million shares) Adjusted book value of shares (Baht/share) 1.81 Note: * As at February 1, 2014, the appraisal date of Rasa Maxx Ville Project by AAT, the number of townhome units was only 139, which was five units lower than the outstanding number of 144 units as of December 31, 2013 due to the sale and transfer of those units to buyers. In order that the data in the property appraisal report is equal to the book value as at December 31, 2013 for comparison purpose, the IFA has made adjustment by adding back revenue from sale of the five townhome units of Baht million to the appraisal value. By the adjusted book value approach, the Company s shares are valued at Baht 1.81 per share. The adjusted book value approach could reflect the net asset value better than the book value approach since the appraised book value derived from Item 1 is adjusted by value of land, buildings and equipment, and leasehold right to reflect the market price or fair price and then divided by number of shares. Nonetheless, in the appraisal of the leased area of 3, square meters in The Light House Project, AAT, which is the Independent Valuer, appraised revenues from the project by using the market-based rental rates. The IFA is of the opinion that since the rental agreements between the rentees and the project owner still take effect, the rental fees cannot be immediately revised up to the market rate. Moreover, the appraisal of 23 units of Intro Condominium and 139 townhouse units of Rasa Maxx Ville by AAT did not include corporate income tax paid on profit from each project. Therefore, IFA views that the share valuation by this approach cannot genuinely reflect value of shareholders equity of the Company. (4) Price-to-book value ratio approach Under this approach, the shares are appraised from the Company s book value as of December 31, 2013 derived from Item (2), equal to Baht 1.34 per share, multiplied by the average price to book value (P/BV) ratio of peer companies, which are the entities listed in the Stock Exchange of Thailand ( SET ) s Property Development Sector and engaging in housing and condominium development for sale, with total asset size close to the Company s, i.e. not exceeding Page 122า

125 Baht 5,000 million. There are nine peer companies selected for this study ( Peer Group ), as follows: Company name Symbol Type of business Assets (Baht million) 1. Baan Rock Garden BROCK Development of housing estate for sale in 1, Plc. Bangkok, Phuket and Samut Prakan 2. Charn Issara CI Property development for sale, lease of office 4, Development Plc. buildings and shopping centers, hotel business, and property after sales services 3. Everland Plc. EVER Development of land and houses for sale, 3, condominium for sale, and project management services 4. KC Property Plc. KC Detached house and townhouse development 2, and house construction service for middle-end market in the northeast of Bangkok 5. N.C. Housing Plc. NCH Development of real estate for commercial 4, purpose, comprising land with completely built houses and condominiums, civil work, services and renting in housing estate clubhouse, etc. 6. Keppel Thai KTP Property development for sale and office 1, Properties Plc. buildings for rent 7. Preecha Group Plc. PRECHA Development of vertical and horizontal housing properties 8. Sammakorn Plc. SAMCO Housing estate development and after sales 3, services 9. Wattana Capital Plc. WAT Development of vertical and horizontal properties for sale 1, The average P/BV ratio of the Peer Group in the past 1 month, 3 months, 6 months, 9 months and 12 months up to the cut-off date of April 10, 2014 can be concluded as follows: Stock symbol Average historical P/BV ratio 1 M 3 M 6 M 9 M 12 M BROCK CI EVER KC NCH KTP Page 123า

126 Stock symbol Average historical P/BV ratio 1 M 3 M 6 M 9 M 12 M PRECHA SAMCO WAT Average (time) Source: www. setsmart.com Here is the calculation formula for share valuation: the Company s share value = Avg. P/BV ratio of Peer Group Book value of the Company as of December 31, 2013 Conclusion of the Company s share valuation by P/BV ratio approach: Past period P/BV of Peer Group Book value Share value (time) as of Dec 31, 13 (Baht/share) 1 M M M M M The price to book value ratio approach reflects the Company s performance and financial position at a certain period of time through comparison with the average ratio of the Peer Group, but does not reflect the present market value of its assets, nor its future profitability. By this approach, the Company s shares are valued in a range of Baht per share. (5) Price-to-earnings ratio approach By this approach, the shares are appraised from the Company s earnings per share in 2013, which is Baht per share (net profit in 2013 of Baht million divided by million shares), multiplied by the average P/E ratio of the Peer Group in the past 1 month, 3 months, 6 months, 9 months and 12 months. IFA adopts information of the nine peer companies listed in the SET s Property Development Sector and engaging in housing and condominium development for sale, with total asset size close to the Company s, i.e. not exceeding Baht 5,000 million, as described in Item (4) Price-to-book value ratio approach, for comparison in share valuation by this approach. Page 124า

127 The average P/E ratio of the Peer Group in the past 1 month, 3 months, 6 months, 9 months and 12 months up to the cut-off date of April 10, 2014 can be concluded as follows: Stock symbol Average historical P/E ratio 1 M 3 M 6 M 9 M 12 M BROCK 2/ N/A CI EVER 1/ N/A N/A N/A N/A N/A KC 2/ NCH KTP 1/ N/A N/A N/A N/A N/A PRECHA 2/ SAMCO WAT 1/ N/A N/A N/A N/A N/A Average (time) Source: www. setsmart.com Note: 1/ N/A refers to companies operating at a loss or whose shares were not traded during such given period. 2/ BROCK, KC and PRECHA, which are deemed as outliers, and companies expressed as N/A were not incorporated into the calculation of average P/E of the Peer Group. Here is the calculation formula for share valuation: the Company s share value = P/E ratio of Peer Group EPS of the Company in past 12 months Conclusion of the Company s share valuation by P/E ratio approach: Past period P/E of Peer Group EPS of the Company Share value (time) as of Dec 31, 13 (Baht/share) 1 M M M M M This price to earnings ratio approach focuses on the Company s profitability in the past 12 months through comparison with the average ratio of the Peer Group, but takes no account of its long-term potential and profitability in the future. Besides, the comparison is made with the peer companies that are listed on a stock market and have a different financial structure from each other, resulting in variations on their performance and profitability. Therefore, this approach cannot fairly reflect the true value or price of the Company s shares. By this approach, the Company s shares are valued in a range of Baht per share. Page 125า

128 (6) EV/EBITDA ratio approach By this approach, the shares are appraised from the average EV/EBITDA of the Peer Group, multiplied by EBITDA of the Company less interest-bearing debts and minority interests and added by cash of the Company. The Company s EBITDA in 2013, as shown on its audited financial statements for 2013, amounted to Baht million. As at December 31, 2013, the Company had cash and cash equivalents of Baht million and loans of Baht million. Based on these data, the Company s shares are appraised as follows: EV of the Company = Average EV/EBITDA of Peer Group EBITDA Where: EV = Market cap + Minority interests + Interest-bearing debts Cash Market cap the Company s share value = Share price Total paid-up shares of the Company = {(Average EV/EBITDA of Peer Group EBITDA) Minority interests Interest-bearing debts + Cash (incl. short-term investments)} / Total paid-up shares IFA adopts information of the nine peer companies listed in the SET s Property Development Sector and engaging in housing and condominium development for sale, with total asset size close to the Company s, i.e. not exceeding Baht 5,000 million, as described in Item (4) Price-to-book value ratio approach, for comparison in share valuation by this approach. The average EV/EBITDA ratio of the Peer Group in the past 1 month, 3 months, 6 months, 9 months and 12 months up to the cut-off date of April 10, 2014 can be concluded as follows: Stock symbol Average historical EV/EBITDA ratio 1 M 3 M 6 M 9 M 12 M BROCK CI N/A N/A N/A N/A N/A EVER 1/ KC NCH 2/ KTP PRECHA SAMCO WAT N/A N/A N/A N/A N/A Average Source: and calculation by IFA Page 126า

129 Past period Note: 1/ N/A refers to companies having negative EBITDA or whose shares were not traded during such given period. 2/ NCH and EVER, which are deemed as outliers, and companies expressed as N/A were not incorporated into the calculation of average EV/EBITDA of the Peer Group. Conclusion of the Company s share valuation by EV/EBITDA ratio approach EV/EBITDA of Peer Group (time) EBITDA of the Company as of Dec 31, 13 (Baht million) EV/EBITDA of Peer Group x EBITDA of the Company the Company s cash (Baht million) the Company s liabilities (Baht million) Total transaction value (Baht million) Share value (Baht/share) =1 x = = 5/no. of shares 1 M , , M , , M , , M , , M , , The EV/EBITDA ratio approach focuses on the Company s profitability in the past 12 months, but takes no account of its potential and profitability in the future. Therefore, this approach cannot fairly reflect the true value of the Company. By this approach, the Company s shares are valued in a range of Baht per share. (7) Discounted cash flow approach Share valuation by this approach is based on the Company s future performance. The shares are appraised by an estimation of net present value of free cash flow expected from future operation according to a financial projection of the Company. The projection is under the assumption that the Company continues as a going concern without any material change taking place, and also based on the economic environment and present circumstances where the business operation is under oversight of the current management team, taking no account of business plan or any change that might be determined by the Company in the future. The financial projection and assumptions are prepared by the IFA with an estimation of cash flow made based on the management s forecast on future performance from the following three projects that have already been in operation: 1. Intro Condominium is a 37-storied condominium of 450 units, located on Pradiphat Road, Samsen Nai, Phayathai, Bangkok. Construction was completed and sales and transfers have been partly fulfilled. As at December 31, 2013, there were only 23 remaining units for sales. Page 127า

130 2. Rasa Maxx Ville is a two-storied townhome project of 217 units, located on Soi Phahon Yothin 73, Sanam Bin, Don Mueang, Bangkok. Construction was completed and sales and transfers have been partly fulfilled. As at December 31, 2013, there were 144 remaining units for sales. 3. Light House Plaza is a commercial condominium of 5, square meters, with leasable space of 3, square meters, located in The Light House Project, Charoen Nakhon Road, Khlong Ton Sai, Khlong San, Bangkok. The project offers plaza areas for retail shop leasing. 1. Intro Condominium Project Condominium units in this project have been mostly sold and transferred to buyers. As of December 31, 2013, there were only 23 remaining units with total area of 1, square meters. The selling price of each unit is as follows: Room no. Area Expected selling Expected total price Remark (sq.m.) price (Baht/sq.m.) (Baht) 28A1A ,360 2,830,522 28A1B ,360 2,880,259 28A1C ,360 2,851,622 28A1D ,360 2,851,622 28B ,000 3,648,000 29A1B ,840 2,898,605 29A1C ,840 2,869,786 30A1B ,320 2,916,950 31A1B ,320 2,916,950 31A1G ,320 2,916,950 31C ,340 6,381,812 31C ,340 6,228,950 31D ,340 9,311,102 32C ,340 6,381,812 32C ,320 5,775,898 32D ,340 9,311,102 33A1B ,320 2,916,950 33C ,477 6,300,000 Transferred Feb C ,340 6,228,950 33D ,706 9,500,000 Transferred Feb C ,674 5,500,000 Transferred Mar D ,340 9,311,102 35D ,706 9,500,000 Transferred Jan 2014 Total 1, ,228,944 Page 128า

131 The Company s management expects that the remaining Intro Condominium units will be sold and transferred completely by September Selling and transfer expenses are estimated at 6% of sales value. The total project cost is Baht 90,572, IFA has appraised Intro Condominium by estimation of cash flow receivable from the project operation, as follows: Items Amount (Baht) Total sales 122,228, (Less) Costs of sales (90,572,411.96) Operating costs (7,333,736.00) Profit 24,322, (Less) Corporate income tax (4,864,559.21) Net profit 19,458, Add Net working capital change 90,572, Project value 110,030, From the above cash flow estimation, Intro Condominium Project is valued at Baht 110,030, Rasa Maxx Ville Townhome Project This project features 217 units of two-storied townhome, having been gradually built and transferred to retail buyers. As at December 31, 2013, there were 73 units sold and transferred and 144 remaining units. Here are the key assumptions used for estimating the project value: Revenues The Company s management expects to complete sales of the rest 144 units and close the project by Q1/2015, based on the following quarterly sales projection: Particulars Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Total No. of townhome (units) Value (Baht) 47,375,000 71,855, ,708,000 61,049,000 50,400, ,387,000 In March 2014, the Company could sell and transfer another 20 units, while an additional 66 units were reserved and expected to be transferred in Q2 and Q3 of Thus, there are 58 units remaining. Production costs and operating expenses Production costs, consisting of costs of land and construction, are assumed to be 67.45% of sales, based on the Company s projection. Marketing expenses Marketing expenses are estimated, based on the Company s projection, at Baht 1,370,650 per quarter. Page 129า

132 Operating expenses Operating expenses are set to be Baht 400,000 per month, according to the Company s projection. Expenses on contact with the authorities This item is estimated at Baht 5,000 per unit, based on the Company s projection. Specific business tax and transfer fee This item is set to be 4.3% of sales. Projection of expenses for Q1/2014-Q1/2015 (Unit: Baht) Particulars Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Costs of sales 31,953,938 48,465,440 83,439,742 41,176,907 33,994,269 Marketing expenses 1,370,650 1,370,650 1,370,650 1,370,650 1,370,650 Operating expenses 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 Expenses on official contact 100, , , , ,000 Specific business tax and 2,037,125 3,089,765 5,319,444 2,625,107 2,167,200 transfer fee Total expenses 36,661,713 54,275,855 91,579,836 46,497,664 38,837,119 Based on the above assumptions for financial projection, IFA has estimated cash flow from the project operation to identify value of the project by an estimation of net present value of free cash flow from the projection, using the weighted average cost of capital (WACC), equal to 10.33%, as a discount rate. WACC is calculated with the following formula: WACC = Ke(E/V) + Kd (1-t)(D/V) Ke = Cost of equity or shareholders required rate of return, equal to 12.84% Kd = Cost of debt or average loan interest rate of the Company, equal to 7.03% t = Corporate income tax of 20% E = Total shareholders equity as of December 31, 2013 of Baht million D = Interest-bearing debt as at December 31, 2013 of Baht million V = D + E equal to Baht 1, million E/V = 65.10% D/V = 34.90% Calculation of Ke: Ke = Rf + β(rm Rf) Page 130า

133 Where: Risk free rate (Rf) Beta (β) Rm Risk free rate of return on investment as of April 10, 2014, equal to 4.25% per year, based on bid yield on government bond with maturity of 25 years, which is a period that could reflect investment condition in different time periods better than shorter-term data (source: A variance between market return and closing market price of the Company s shares, which the IFA has derived from the Company s average beta over the past three years as of April 10, 2014, equal to Average rate of return on the SET over the past 25 years (SET data from 1989 to 2013), equivalent to 13.79% per year From the above assumptions, IFA could arrive at the project value of Baht million, as shown in the table below: (Unit: Baht) Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 EBIT 10,713,287 17,579,145 32,128,164 14,551,336 11,562,881 Less Income tax 2,142,657 3,515,829 6,425,633 2,910,267 2,312,576 Net working capital change 10,185,938 40,425,440 80,163,742 40,012,907 32,830,269 Cash flow to firm 18,756,568 54,488, ,866,273 51,653,976 42,080,574 Discounting period (years) Discount factor PV of cash flow 18,193,871 51,764,318 98,455,634 46,488,578 37,030,905 Project value 251,933, Light House Plaza Project This project offers a plaza space for rent in Light House Condominium covering a total area of 5, square meters with a leasable area of 3, square meters. The Company entered into the Management Agreement with Siam Prime Estate Co., Ltd. on November 26, 2007 on a 70:30 basis, which resulted in 70% of the ownership of land leased for commercial purpose belonging to the Company. On January 14, 2011, the Company executed a sub-lease agreement on Light House Plaza Project with Real Assets Co., Ltd. for a three-year term, which expired already. The Company intends to terminate the sub-lease agreement with Real Assets Co., Ltd. and to manage the area by itself. All 26 units of the said leased area have been fully occupied. Rental rates vary by location of the rented units. (1) Revenues from services IFA has projected services income from the said leased plaza area by basing on the original rental agreements made with the rentees. It is specified in such rental agreements that rental and services fees can be increased by not exceeding 10% in a three-year period. Presently, Page 131า

134 the average rental fee is equal to Baht per square meter, with the average common service fee of Baht per square meter and cooling service fee of Baht 150 per square meter, all being subject to a 10% increase every three years. Income from public utilities and parking services is estimated from fees in the 2013 base year, with a 3% yearly increase. Revenues projection for (Unit: Baht) Rental fees 7,009,744 7,009,744 7,009,744 7,710,718 7,710,718 Common service fees 7,009,744 7,009,744 7,009,744 7,710,718 7,710,718 Cooling service fees 4,357,332 4,357,332 4,357,332 4,793,065 4,793,065 Public utilities fees 2,799,711 2,883,703 2,970,214 3,059,320 3,151,100 Parking fees 523, , , , ,396 Total revenues 21,700,202 21,799,903 21,902,596 23,846,051 23,954,998 Revenues projection for (Unit: Baht) Rental fees 7,710,718 8,481,790 8,481,790 8,481,790 9,329,969 Common service fees 7,710,718 8,481,790 8,481,790 8,481,790 9,329,969 Cooling service fees 4,793,065 5,272,372 5,272,372 5,272,372 5,799,609 Public utilities fees 3,245,633 3,343,002 3,443,292 3,546,590 3,652,988 Parking fees 607, , , , ,271 Total revenues 24,067,213 26,204,244 26,323,293 26,445,913 28,795,807 (2) Expenses and services Fee and services expenses consist of public utilities fees, personnel expenses, repair and maintenance costs, and other expenses. Since the areas have been fully rented out, there will unlikely be any incremental expenses that will have a material impact on this projection. Thus, IFA adopts the expenses in 2013 as the base year for the projection and assume these expenses will increase 3% per year. (3) Common utilities expenses Common utilities expenses currently payable to the condominium juristic entity are Baht 169,414 per month and are expected to increase 3% every three years. (4) Building tax Building tax is set to be equal to 12.50% of 50% of space rental fee income throughout the projection period. Page 132า

135 (5) Depreciation cost 4. Terminal value Depreciation cost is assumed to be equal to the depreciation cost in 2013 of Baht 11,462,431 per year throughout the projection period. Terminal growth is projected at 1% per year. Expenses projection for (Unit: Baht) Public utilities fees 5,391,635 5,553,384 5,719,986 5,891,585 6,068,333 6,250,383 Common utilities fees 1,524,726 2,032,968 2,032,968 2,032,968 2,093,957 2,093,957 Personnel expenses 775, , , , , ,562 Repair & maintenance 360, , , , , ,417 costs Building tax 438, , , , , ,920 Other expenses 733, , , , , ,915 Total expenses 9,224,514 9,950,606 10,174,992 10,406,110 10,748,961 10,994,153 Expenses projection for (Unit: Baht) Public utilities fees 6,437,894 6,631,031 6,829,962 7,034,861 7,245,907 Common utilities fees 2,093,957 2,156,776 2,156,776 2,156,776 2,221,479 Personnel expenses 926, , ,976 1,012,465 1,042,839 Repair & maintenance 430, , , , ,059 costs Building tax 481, , , , ,123 Other expenses 875, , , , ,284 Total expenses 11,246,701 11,617,837 11,885,765 12,161,732 12,563,691 Based on the above assumptions for financial projection, IFA has estimated cash flow from the project operation to identify value of the project by an estimation of net present value of free cash flow from the projection, using the weighted average cost of capital (WACC), equal to 10.33%, as a discount rate. The total project value is estimated at Baht million. After deduction by 30% belonging to Siam Prime according to the Management Agreement, the project value for the 70% ownership of the Company equals Baht million. Details of such estimation are as follows: (Unit: Baht) EBIT 287, ,480 34,055 1,634,660 1,498,413 Less Income tax 57,433 32,496 6, , ,683 Add Depreciation 11,462,431 11,462,431 11,462,431 11,462,431 11,462,431 Cash flow to firm 11,692,163 11,592,415 11,489,675 12,770,159 12,661,162 Page 133า

136 Terminal growth of 1% Discounting period (year) Discount factor PV of cash flow 10,639,868 9,505,780 8,502,360 8,556,006 7,723,309 Terminal value (Unit: Baht) EBIT 1,358,080 3,123,976 2,975,096 2,821,750 4,769,685 Less Income tax 271, , , , ,937 Add Depreciation 11,462,431 11,462,431 11,462,431 11,462,431 11,462,431 Cash flow to firm 12,548,895 13,961,612 13,842,508 13,719,831 15,278,179 Terminal growth of 1% 165,556,280 Discounting period (year) Discount factor PV of cash flow 6,901,892 6,980,806 6,367,554 5,625,131 5,652,926 Terminal value 61,191,372 Project value 137,647,003 The Company s business value, estimated by the discounted cash flow approach from its three existing projects and aggregated with the surplus on book value of land as reappraised by AAT, is as follows: Value (Baht million) Value of projects under operation as appraised by IFA Intro Condominium Rasa Maxx Ville Light House Plaza 1/ Add Cash 2/ Add Land held for development 3/ Land in Watcharaphon area of rai Land on Khlong 6 road of rai Land on Khlong 6 road of rai Land in Ram Inthra area of rai Land in Don Mueang area of rai (Less) Interest-bearing loans 1/ (394.34) Total value Total number of paid-up shares (million shares) the Company s share value (Baht/share) 1.80 Note: 1/ The Company owns 70% of the property value. The IFA has appraised the property at Baht 137,647,003 in total, of which 70% that belongs to the Company is equal to Baht million. 2/ Based on the Company s consolidated financial statements as at December 31, Page 134า

137 3/ Based on the property appraisal report by American Appraisal (Thailand) Co., Ltd. ( AAT ). Table: Comparison of THE COMPANY share valuation Appraised share value Share swap price Higher (Lower) (Baht/share) (Baht/share) (Baht/share) 1. Market price approach (0.15) 2. Book value approach Adjusted book value approach Price-to-book value ratio approach Price-to-earnings ratio approach EV/EBITDA ratio approach (0.79)-(0.73) 7. Discounted cash flow approach (DCF) Conclusion of the IFA s opinion on valuation of the Company s shares for share swap The above valuation approaches have different strengths and weaknesses in identifying a fair value of the shares, as described below: 1) Market price approach: The trading volume of the Company s shares in each period under this study was indicative of a somewhat low turnover ratio. Market price is a price mechanism driven by demand and supply from investors for the Company s shares, which could reflect the share value during such given period as well as reflect the fundamental factors and general investors demand with respect to the Company s future potential and growth to a certain degree. However, considering such rather thin trading volume, the historical market price of the Company s shares may not fairly reflect the true value or price of the shares. 2) Book value approach: This approach reflects the Company s financial position at a certain point in time and could also reflect its assets book value, but takes no account of the Company s profitability and business performance in the future. 3) Adjusted book value approach: This approach could reflect the net asset value better than the book value approach since the appraised book value derived from Item 1 is adjusted by value of land, buildings and equipment, and leasehold right to reflect the market price or fair price and then divided by number of shares. Nonetheless, in the appraisal of the leased area of 3, square meters in The Light House Project, AAT, which is the Independent Valuer, appraised revenues from the project by using the market-based rental rates. The IFA is of the opinion that since the rental agreements between the rentees and the project owner still take effect, the rental fees cannot be immediately revised up to the market rate. Moreover, the appraisal of 23 units of Intro Condominium and 139 townhouse units of Rasa Maxx Ville by AAT did not include corporate income tax paid on profit from each project. Therefore, IFA views that the share valuation by this approach cannot genuinely reflect value of shareholders equity of the Company. Page 135า

138 4) Price-to-book value ratio approach: This approach reflects the Company s financial position at a certain period of time through comparison with the average ratio of the Peer Group, but does not focus on the Company s future profitability and performance. 5) Price-to-earnings ratio approach: This approach reflects the Company s profitability through comparison with the average ratio of the Peer Group, but by basing on its historical profit only and taking no account of its profitability and performance in the future. 6) EV/EBITDA ratio approach: This approach focuses on the Company s profitability in the past 12 months, but does not reflect its long-term future potential and profitability. 7) Discounted cash flow approach: This approach reflects the Company s profitability and growth prospect based on the net present value of free cash flow expected from its future operation. Therefore, this approach can more accurately reflect the share value than all other approaches. In IFA s opinion, the discounted cash flow approach is the most suitable method for measuring a fair value of the Company s shares. By this approach, the Company s shares are valued at Baht 1.80 per share. When comparing the appraised fair value of the Company s shares with the offering price of its newly issued shares to be allocated to SPM and Khun Santi at Baht 1.87 per share, the said offering price is higher than the appraised value by the IFA of Baht 1.80 per share by Baht 0.07 per share or 3.89%. Therefore, IFA is of the opinion that the offering price of the Company s newly issued shares for allocation to SPM and Khun Santi at Baht 1.87 per share is a reasonable price. Page 136า

139 b) Valuation of S Bright Future Co., Ltd. (SBF) IFA has measured a fair value of SBF shares by the following approaches as a basis for rendering opinion on appropriateness of the transaction price. (1) Market price approach (2) Book value approach (3) Adjusted book value approach (4) Price-to-book value ratio approach (5) Price-to-earnings ratio approach (6) EV/EBITDA ratio approach (7) Discounted cash flow approach Details of share valuation (1) Market price approach Since SBF ordinary shares are not listed on the Exchange, no market price is available for comparison in this study. Thus, it is not possible to appraise SBF shares by this approach. (2) Book value approach By this approach, the share value is appraised from the net book value of assets (total assets less total liabilities) or equal to shareholders equity of SBF, divided by total number of shares to derive a book value of shares. The data, based on SBF s audited financial statements as of December 31, 2013 (audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., an SEC-approved auditor), can be concluded as follows: Items Baht million Paid-up registered capital as at Dec 31, Ordinary shares 4, Retained earnings (losses) (0.44) Shareholders equity 4, Number of ordinary shares as at Dec 31, ,350,000 Par value (Baht/share) Book value (Baht/share) The book value approach reflects SBF s financial position at a certain period of time, and also its assets book value, but takes no account of its profitability and business performance in the future. By this approach, SBF shares are valued at Baht per share. Page 137า

140 (3) Adjusted book value approach By this approach, the shares are valued from total assets less total liabilities of SBF as of December 31, 2013, adjusted by commitments and contingent liabilities including a surplus/discount on market price of fixed assets as appraised by an independent valuer, then divided by total number of shares of SBF. SBF s main business is to invest in property development entities. Its current core assets are investments in three subsidiaries: SPD, BRP and MAX. The IFA has thus appraised a business value of these three subsidiaries as a basis for further valuation of SBF, details of which are as follows: 1. Singha Property Development Co., Ltd. (SPD) SBF holds 99.99% of shares in SPD. Presently, SPD owns a major property which is a plot of vacant land of 11 rai 1 ngan 24 square wah, located at the corner of New Phetchaburi Asok Montri Intersection, Bang Kapi, Huai Khwang, Bangkok. No property project has yet been developed on such land. The IFA has accordingly applied the adjusted book value approach to appraise SPD s value. American Appraisal (Thailand) Ltd. ( AAT ), hired by the Company as an independent valuer, appraised the property of SPD at Baht 3,257 million. When compared with the book value of Baht 2, million, there is a surplus on the book value of Baht million. Therefore, IFA has adjusted SPD share value by such appraisal price by AAT. Valuation of land located at the corner of New Phetchaburi Asok Montri Intersection Type of property Vacant land of rai or 4,524 square wah Location The corner of New Phetchaburi Asok Montri Intersection, Bang Kapi, Huai Khwang, Bangkok Physical condition Multi-angle shape; New Phetchaburi Road to the north, Saen Saep canal to the south, Asok Montri Road to the west Ownership Singha Property Development Co., Ltd. Land title deed (title deed no./ 4762/173/2558, 4763/310/2259, 4852/311/2300 parcel no./dealing file no.) Registered encumbrance None Appraisal date February 1, 2014 Picture of the location of vacant land at the corner of Asok Montri Road Source: Appraisal report of American Appraisal (Thailand) Ltd. Page 138า

141 The Company hired American Appraisal (Thailand) Co., Ltd. ( AAT ) to appraise the vacant land at the corner of New Phetchaburi Asok Montri Intersection. According to the appraisal conducted as of February 1, 2014, AAT employed the market value comparable approach to appraise the property based on factors such as location, land area, land level, shape, front area, road width, facilities, etc., and then graded by the weight quality score method. Details of the comparable market data are as follows: Table: Details of appraised land and other comparable properties Description Appraised property Data 1 Data 2 Data 3 Type of property Land Vacant land Vacant land Vacant land Location The corner of New Phetchaburi Asok Montri Intersection New Phetchaburi Road, about 500 m from Phayathai Road New Phetchaburi Road, about 700 m from Asok Montri Road New Phetchaburi Road, about 200 m from Sukhumvit 55 Road (Thong Lor) Area (sq. wah) 4,524 1,449 2, ,220 Land level Same level as front road Same level as front road Same level as front road Same level as front road Shape/Front area Multi-angle/100 m Multi-angle/48 m Multi-angle/100 m Multi-angle/44 m and 180 m Road width 18 m/24 m 24 m 24 m 24 m Facilities Electricity, water Electricity, water supply Electricity, water supply Electricity, water supply supply and telephone and telephone and telephone and telephone Zoning Commercial Commercial Commercial Commercial Current/Future use Vacant Vacant land/residential Vacant land/residential Vacant land/residential land/residential Appraisal date February 1, 2014 January 2014 January 2014 January 2014 Selling price (Baht/sq.wah) 960, , ,000 Adjusted factors Sale term Offered for sale -10% Offered for sale -10% Offered for sale -10% Market condition (selling date) January January January Total -10% -10% -10% Adjusted value (Baht/sq.wah) 864, , ,000 Location Superior -15% Inferior 35% Inferior 15% Land area Superior -15% Superior -5% Superior -15% Land level Comparable 0% Comparable 0% Comparable 0% Shape/Front area Inferior 15% Inferior 15% Inferior 15% Facilities Comparable 0% Comparable 0% Comparable 0% Zoning Comparable 0% Inferior 10% Inferior 10% Current/Future use Comparable 0% Comparable 0% Comparable 0% Total physical adjustment -15% 55% 25% Page 139า

142 Description Appraised property Data 1 Data 2 Data 3 Final price adjustment (Baht/sq.wah) 734, , ,250 Proportion 100% 30% 40% 30% Fair value (Baht/sq.wah) 718, , , ,375 Net value (Baht/sq.wah) 720,000 AAT appraised the vacant land at the corner of New Phetchaburi Asok Montri Intersection at Baht 720,000 per square wah or a total of Baht 3,257,000,000. Opinion of the IFA AAT appraised the vacant land at the corner of New Phetchaburi Asok Montri Intersection by the market value comparable approach through comparison with nearby plots of vacant land which had an offering price at about the same period, taking into account factors such as physical condition, location, area, land level, shape, front area, road width, facilities, zoning and current/future use, including regulatory rules, notifications or laws restricting the use of properties. AAT made a market survey on three sets of data with offering prices ranging from Baht 500,000 to Baht 960,000 per square wah. Such offering prices were adjusted in order to reflect the present selling price or the expected price to be in a range of Baht 450, ,000 per square wah. The derived property value was analyzed by the Weighted Quality Score (WQS) method for quality scoring based on quality factors that could affect value, including location, area, land level, size, shape, facilities, zoning and current/future use. After physical value adjustment based on the asset quality, the sale and purchase price was in a range of Baht 697, ,400 per square wah. From calculation based on relationship between the quality score and the sale and purchase price, the appraised market value of the said land was equal to Baht 720,000 per square wah, or a total value of Baht 3,257,000,000. In IFA s opinion, the land valuation by the market value comparable approach is an appropriate method since it was a comparison with the properties of a similar nature and/or in nearby areas which have been sold/purchased or had an offering price. Moreover, it was compared and adjusted by quality score of the appraised property and the comparable properties based on factors such as location, physical condition of the area, shape of land, zoning, facilities, current/future use, etc. Therefore, the appraised price is closest to the property s current price and could reflect the property value under its present condition. Based on SPD s financial statements as of December 31, 2013, audited by Miss Amornrat Permwattanasuk, CPA Registration No. 4599, of PricewaterhouseCoopers ABAS Ltd., adjustment is made to the book value as follows: Page 140า

143 Items Baht million Total assets 2, (Less) Total liabilities (4.68) Add Revaluation surplus on book value of land Net asset value after adjustment 3, Total number of issued and paid-up shares (million shares) Share value by adjusted book value approach (Baht/share) SPD share value, appraised by the adjusted book value approach above, is equal to Baht 3, million in total or Baht per share. 2. Bhiromphat Co., Ltd. (BRP) SBF holds 99.99% of shares in BRP. Presently, BRP owns a plot of land with construction, covering a total area of 2 rai 48 square wah located on Asok Montri Road (Soi Sukhumvit 21), Khlong Toei Nua, Watthana, Bangkok. BRP has leased the original building thereon to a private lessee to open a restaurant. It has an intention to develop and construct a new property on such land, but has not yet taken any action. The IFA has therefore applied the adjusted book value approach to appraise BRP s value. American Appraisal (Thailand) Ltd. ( AAT ), hired by the Company as an independent valuer, appraised the property of BRP at Baht 721 million. When compared with the value shown on its financial statements of Baht million, there is a surplus on the book value of Baht million. Therefore, IFA has adjusted BRP s value by such appraisal price by AAT. Valuation of vacant land on Asok Montri Road Type of property Vacant land of rai or 848 square wah Location Asok Montri Road, Khlong Tan, Phra Khanong, Bangkok Physical condition Rectangular shape; Asok Montri Road to the east Ownership Bhiromphat Co., Ltd. Land title deed (title deed no./ 7656/815/1408, 7657/817/1409, 7806/816/1480 parcel no./dealing file no.) Registered encumbrance None Appraisal date February 1, 2014 Page 141า

144 Picture of the location of vacant land on Asok Montri Road Source: Appraisal report of American Appraisal (Thailand) Ltd. The Company hired American Appraisal (Thailand) Ltd. ( AAT ) to appraise the vacant land on Asok Montri Road. According to the appraisal conducted as of February 1, 2014, AAT employed the market value comparable approach to appraise the property based on factors such as location, land area, land level, shape, front area, road width, facilities, etc., and then graded by the weight quality score method. Details of the comparable market data are as follows: Table: Details of appraised land and other comparable properties Description Appraised property Data 1 Data 2 Data 3 Type of property Land Vacant land Vacant land Vacant land Location Asok Montri Road New Phetchaburi Road, about 500 m from Phayathai Road New Phetchaburi Road, about 200 m from Sukhumvit 55 Road (Thong Lor) Sukhumvit 55 Road (Thong Lor), about 500 m from New Phetchaburi Road Area (sq. wah) 848 1,449 1, Land level Same level as front road Same level as front road Same level as front road Same level as front road Shape/Front area Rectangular shape/ 40 m adjacent to Asok Montri Road Rectangular shape/48 m adjacent to New Phetchaburi Road Rectangular shape/68 m adjacent to New Phetchaburi Road Rectangular shape/51 m adjacent to Sukhumvit 55 Road (Thong Lor) Road width 12 m 24 m 18 m 12 m Facilities Electricity, water Electricity, water supply Electricity, water Electricity, water supply supply and telephone and telephone supply and telephone and telephone Zoning Commercial Commercial Commercial Commercial Current/Future use Commercial/ Residential Vacant land/residential Vacant land/residential Vacant land/residential Appraisal date February 1, 2014 January 2014 January 2014 January 2014 Selling price (Baht/sq.wah) 960, ,000 1,100,000 Sold (Baht/sq.wah) Adjusted factors Page 142า