Pf 07 by Brother Roger

Property Perfect Public Company Limited

Contents Message from the Board of Directors Company Information Financial Information Nature of Business Revenue Structure Financial Developments Management Organization Chart Project Map Marketing and Competition Property Development Business Trend in 2008 Other Information Management and Authorized Person of the Company Details of directors, executive directors Remuneration Corporate governance Reference Connected Transactions with Related Persons Risk Factors Explanation and Analysis of Financial and Operating Results Report of Independent Auditor Balance Sheets Note to Consolidated Financial Statements The Board of Directorsâ&#x20AC;&#x2122; responsibilities for financial reports Audit Committee Report 2007 Auditor Fee Accuracy Sanctification Form

2 4 6 7 9 11 17 24 26 29 30 36 40 47 50 52 54 60 61 65 68 80 81 89 125 126 128

Annual Report 2007

Message from the Board of Directors Spike in oil price to almost US$100 per barrel in late 2007 and the subprime mortgage debacle, which inevitably jerk the US and the global economy particularly in financial and banking sector as well as the free capital mobility, hurt the Thai economy as seen by the fact that the country’s economic growth in 2007 rose less than 5%. The absence of new investment from both public and private sectors in 2007 as they waited for the general election held in late 2007 also dampened the situation. The company has adjusted its business policy to be in line with the economic slowdown by reducing the number of new low-rise residential projects launched in 2007 from five to two. The two projects are Perfect Masterpiece Rattanathibet and Maneerin Park Rangsit phase 2. For the existing projects, the company accelerated building to transfer homes to customers and recognize revenue more rapidly. These projects contain Metro Park Sathorn; a condominium project, and The Villa Rattanathibet; a townhouse project. With the strategy to hasten construction, the company’s sales revenue generated from land and houses sales in 2007 jumped at annual rate of 40% from Bt4,477 million in 2006 to Bt6,266 million and its net profit chalked up sharply from Bt12 million in 2006 to Bt412 million in 2007.The company announced to pay an annual dividend of Bt0.24 per share for the 2007’s financial performance. In 2007, the company received EIA Monitoring Awards for the third year in a row, highlighting the company’s policy to offer quality of live to residents. The company in 2007 unveiled the 7 Lakes Story campaign to build up target customers’ awareness about the company’s project features, which is more excellent than rivals. The company would focus on brand building to let customers be aware that all homes in Property Perfect projects are quality homes amid good environment. The company opened lakefront clubhouses in two projects - Perfect Place Sukhumvit 77 and Perfect Place Rama VRachapruek - raising the number of large-scaled lakefront clubhouses to six. The company has planned to increase the number of lakes and open more lakefront clubhouses in its projects in the coming years.

Property Perfect Public Company Limited

For the company’s overall financial position in 2007, its debt to equity ratio fell to 1.12 times after its Bt800 million unsecured debentures were redeemed and the last batch of another unsecured debentures worth 450 million was paid out early 2007. The company is not saddled with debts incurred from unsecured debenture issuance, accordingly. Most of the company’s liabilities are long-term loans from financial institutions to develop projects. The company marked a milestone in raising additional fund through new financial instrument after it successfully established and launched Property Perfect Fund in February 2008. For 2008, single-detached house business looks improve due to lower supply after many developers have shifted to focus on condominium projects. Also, largesized property developers raised their price tag by 5% following the increase in building costs. These factors would come as a boon to the company, which continues keeping its focus on single-detached houses as seen from its new housing model and function development such as Green Room concept available for sales from early 2008. To widen its revenue channel, the company plans to launch a condominium project near an electric rail route in 2008. Under the new government’s tenure, business operators and consumers are more optimistic. The real estate stimulus package announced by the government would directly and indirectly bode well for the company’s operation, raise the number of real estate transactions, and accelerate real estate business recovery. The real estate tax slash includes a reduction of specific business tax for real estate from 3% to 0.1% for one year after it takes into effect and a cut of transfer and mortgage registration fees to 0.01%. The company’s Board of Directors is satisfied with the higher revenue and net profit in 2007, and realizes that the achievement can not happen without the cooperation from staff, shareholders, banks and business partners. The Board of Directors hopes for their further trust and continued support. We would like to take this opportunity to extend gratitude to them. Tawatchai Nakata Chainid Ngow-sirimanee Chairman Chief Executive Officer

Annual Report 2007

Company Information Name : Head Office : Type of Business : No.of Paid-up Share : Par Value : Paid-up Capital :

Property Perfect Public Company Limited 17th Flr. Vorasombat Bldg. 100/1 Rama IX Road, Huaykwang Bangkok 10310 Tel. 0 2245 6640-7 Fax. 0 2247 3328 Real Estate Development 787,685,020 Share Baht 6 Baht 4,726,110,120

Property Perfect Public Company Limited

Investment in Other Companies

Name and Address

Registered Capital (MB)

Paid-up Capital (MB)

Percentage Type of Business of Investment

Krungthep Land Plc. 2,230.00 1,780.00 20.22% Real Estate 21th Flr. Vorasombat Bldg., Development 100/1 Rama IX Road, Huaykwang Bangkok Tel. 0 2645-0960-3 Fax. 0 2645-0380 Estate Perfect Co., Ltd. 1,000.00 1,000.00 100.00% Real Estate 17th Flr. Vorasombat Bldg. 100/1 Rama IX Road, Development Huaykwang Bangkok Tel. 0 2245-6640-7 Fax. 0 2645-1976 Real Service Co., Ltd. 40.00 40.00 19.00% Home Service 100/9 Soi Ta-it, Rattanathibet Road, Nonthaburi Tel. 0 2594-4001-5 Fax. 0 2594-4021 Perfect Satellite Services Co., Ltd. 1.00 1.00 99.94% Manage Fitness 19th Flr. Vongvanich B Bldg. and Clubhouse 100/52 Rama IX Road, Huaykwang Bangkok Tel. 0 2645-1406-8 Fax. 0 2645-1409 Bright Development Bangkok Co., Ltd. 1.00 1.00 99.94% Real Estate 17th Flr. Vorasombat Bldg. Development 100/1 Rama IX Road, Huaykwang Bangkok Tel. 0 2245-6640-7 Fax. 0 2645-1976 Centrepoint Shopping Mall Co., Ltd. 1.00 1.00 60.00% Real Estate 20th Flr. Forum Tower Development 184/117 Ratchadapisek Road, Huaykwang Bangkok

Annual Report 2007

Financial Information Unit : Million Baht Consolidated The Company Only 2007 2007 2006 2005 Financial Position Total Assets 12,911 11,951 12,127 13,414 Project Development Cost and Land for Development 10,972 9,405 9,574 9,832 Total Liabilities 6,824 6,233 6,777 7,476 Shareholdersâ&#x20AC;&#x2122; Equity 6,087 5,718 5,349 5,937 Operation Results Sales 6,266 5,713 3,815 4,149 Total Revenue 6,333 5,778 3,877 5,185 Gross Margin 29.85% 29.57% 30.55% 34.09% Net Income 412 369 (10) 1093 Financial Ratio Return on Total Revenue 6.50% 6.38% (0.26%) 21.07% Return on Equity 7.00% 6.66% (0.18%) 19.74% Return on Total Assets 3.16% 3.06% (0.08%) 8.68% Current Ratio 3.02 2.54 3.10 3.50 Quick Ratio 0.24 0.24 0.14 0.26 Per Share Data Unit : Baht Net Income per share 0.52 0.47 -0.01 1.40 Dividend 0.24 0.24 - 0.35 Book Value 7.73 7.26 6.84 7.59

Property Perfect Public Company Limited

Nature of Business The company and subsidiaries mainly develop residential units for sale, offering single houses, Duplex house, townhouses and condominium units in Bangkok and neighboring provinces. The company and subsidiaries have subcontracted the construction works to contractors, and closely supervised the construction by a team of engineers and architects who also control raw material quality to ensure the construction process in line with standards in offering the best quality. The company’s housing design team always keeps eyes on innovative development to improve designs to fit with project’s concept and differentiate to let consumers feel the continuously perfect change in each project from over 100 standard designs. The company’s housing design development concentrates in beauty, which are harmonized with each project’s atmosphere, benefits from various types of usable space to fit with family size and budget, and satisfies customer needs in consideration of worthwhile investment with appropriate prices. The company and subsidiaries have determined to develop products to meet demand and competition environment. The company has paid attention to determinants of consumers’ purchasing decision as follows : • Location - The company’s projects are located in potential areas near electric rail routes or new main roads. The company has also expanded projects into new locations to widen market coverage by geography, demand, and customers’ purchasing power. • Quality - The company has focused on screening contractors and it has product quality inspection system during construction, and after construction before transfer or sales to customers. • Design - The company has concentrated on beautiful designs and functions to serve demand and lifestyle of target customers. The company’s housing design line-up contains homes nestled in garden and inside-house garden, urban homes, and energy-efficient homes. In 2007, the three designs won Thailand Energy Award from the Department of Alternative Energy Development and Efficiency.

Annual Report 2007

The companyâ&#x20AC;&#x2122;s and subsidiariesâ&#x20AC;&#x2122; three housing options available for sales are as follows : 1) Pre-built home - The company completes building houses before sales. Customers then can transfer and move into the houses within one month. 2) Semi-pre-built home - The company analyzes customer demand to choose housing designs that meet their needs ahead of construction. This housing type is appropriate for customers who need longer time for down payment or ready-to-move in houses in coming months. 3) Built-to-order home - The company in 2007 designed Perfect Customization program, a new innovative software for residential search, to widen alternatives for customers in terms of housing designs, number of rooms, housing styles (Euro Metro Nature), colors, wallpaper designs and etc. In 2008, the company plans to launch five single-detached house projects with total value of Bt9,130 million and a condominium project value Bt4 billion. The company has continued to develop lowrise projects, and new functions and designs to satisfy customer demand. The company has introduced an innovative Green Room concept in the project put on sales early 2008 for perfect harmony.

Property Perfect Public Company Limited

Revenue Structure Revenue Structure: By Product Type Land and Houses Revenue Structure by Product Type

Project

Product Type

2007 MB

2006 MB %

2005 MB %

Brand Masterpiece Maneeya Masterpiece Maneeya Masterpiece Exclusive Zone Perfect Masterpiece Ekamai-RamIndra Perfect Masterpiece Rattanathibet- Rachapruek

SDH SDH SDH

76 2.00% 101 2.00% 845 18.00%

333 7.00% 33 1.00% 833 19.00%

SDH

147 3.00%

Perfect Place Rattanathibet SDH/Land Perfect Place Rattanathibet- Rachapruek SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (Phase 1-3) SDH/Land Perfect Place Ramkhamhaeng-Suvarnabhumi (The Lakeside Home) SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (Colonial Zone) SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (Garden Zone) SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (The Private Zone) SDH Perfect Place RamaV - Rachapruek SDH Perfect Place Sukhumvit 77-Suvarnabhumi** SDH

22 - 292 6.00%

162 214

4.00% 5.00%

Maneerin Lake & Park Tiwanon-Outer Ring Maneerin Exclusive Rangsit Maneerin Lake & Lagoon Maneerin Park Rangsit Maneerin Park Rattanathibet Maneerin Park 2 Rangsit

375 8.00% - - 547 11.00% -

Brand Perfect Place 496 10.00% 46 1.00%

0.00%

1.00%

105

2.00%

119

3.00%

189

4.00%

26 1.00%

110

2.00%

515 10.00%

223 5.00% 461 10.00% 553 12.00%

328 7.00% 419 9.00% 662 15.00%

148 3.00% 362 7.00% 781 16.00%

377 - - 93 51 135

323 4 5 203 104 -

337 - - 435 407 -

Brand Maneerin SDH/Land SDH SDH/ Land SDH SDH SDH

8.00% - - 2.00% 1.00% 3.00%

7.00% 0.00% 0.00% 5.00% 2.00% -

7.00% - - 9.00% 8.00% -

Brand Perfect Park Perfect Park Rattanathibet- Rachapruek SDH Perfect Park Ramkhamhaeng-Suvarnabhumi SDH Perfect Park Rama V- Bangyai SDH

158 3.00% 341 8.00% 69 1.00% 243 5.00% 272 6.00% 98 2.00% 462 10.00%

Other Nantana Garden Rangsit

0.00%

Brand The Villa

The Villa Rattanathibet- Rachapruek TH 424 9.00% - - - - Total Revenue from the Sale of land and houses 4,697 100.00% 4,477 100.00% 4,931 100.00% R emark : SDH = Single Detached House, TH = Townhouse, Land = Land ** Developed by 100%-owned subsidiary Estate Perfect Co., Ltd .

Annual Report 2007

As shown in the balance sheet, Property Perfect chalked up Bt 4,144 million in sales revenue in2007 and Bt3.815 million in 2006 Bt4,150million in 2005. In the same period, subsidiariesâ&#x20AC;&#x2122; revenue is Bt553 million , Bt662million and Bt 781 million, respectively. Sales of Condominium Units Revenue Structure by Product Type Project Product 2007 Type MB %

2006 MB %

2005 MB %

Metro Park

Metro Park Sathorn CONDO 1,470 100.00% - - - - Total Revenue from the Sale off Condominium Units 1,470 100.00% - - - - Revenue from the sale of condominium units shown in the companyâ&#x20AC;&#x2122;s consolidated financial statement is the total revenue generated from projects developed by Property Perfect in the amount of Bt1,470 million.

Property Perfect Public Company Limited

Financial Developments Like other developers, the company plunged into business problems after the 1997 financial crisis. On 19 February 2001, the Central Bankruptcy Court ordered us to fall through business rehabilitation. On 2 October 2001, the court approved the rehabilitation plan, with Asian International Planners Co Ltd as the planner and plan administrator. The company had followed through the plan and fully restructured the loans. The company consequently exited the plan on the court order on 12 April 2004, and the management power has been returned to the old management team since then. The Important Development 2004 : At the 1/2004 extraordinary shareholders’ meeting on 24 May 2004, resolutions were as follows • The company reduced the registered capital from Bt12,000 million to Bt7,200 million, by slashing the par value from Bt10 apiece to Bt6. The paid-up capital consequently dropped from Bt7,793.94 million to Bt4,676.36 million, constituted 779.39 million common shares with par value of Bt6 apiece. The Bt3,117.58 million reduction in the paid-up capital was used to write down its accumulated losses totaling Bt3,812.62 million as of December 31, 2006, leaving Bt695.04 million in retained losses. • The company issued secured debentures worth no more than Bt2,000 million for sale to public and/or institutional investors. The company sold secured debentures: 1/2004 Set 1 worth Bt450 million, 1/2004 Set 2 worth Bt750 million, and 2/2004 Set 1 worth Bt350 million. The proceeds of Bt1,550 million were used to refinance short-term loans and buy new land for business expansion. 2005 : At the 2/2005 board of directors meeting on 2 March 2005, resolutions were as follows : • The company increased the investment in Estate Perfect Co Ltd, buying 5 million newlyissued shares, with Bt10 par value, for a total amount of Bt50 million. The proceeds were used to speed up the construction of a project on Sukhumvit 77, ahead of the opening of the Suvarnabhumi International Airport. The company subscribed to all shares to maintain the major shareholder status.

Annual Report 2007

: At the general shareholders’ meeting on 7 April 2005, resolutions were as follows : • The company canceled warrants leftover from an allocation to unsecured creditors in accordance with the business rehabilitation plan. It offered 53 million free warrants to all unsecured creditors. Each warrant is eligible to convert into a common share at the exercise price of Bt0.01 per share. During the allotment, official receivership revoked the claim of some creditors and the company then offered 50.93 million warrants to unsecured creditors as approved by official receivership. As a result, the meeting resolved the cancellation of the unallocated 2.07 million warrants. • Reduction of capital from Bt7,200 million to Bt4,779.57 million. The capital was reduced due to the cancellation of 403.41 million unallocated shares. The shares, totaling Bt2,420.43 million with par value of Bt6 apiece were originally reserved for the exercise of unallocated warrants and for the conversion of unsecured debts • The company offered 39 million free warrants to directors and/or employees under the Employee Stock Option Program (ESOP). Each warrant can be exercised for a common share at the price of Bt6 each. The board of directors would decide on the issuance’s details to comply with related regulations and rules and authorized directors could amend the warrant’s details and conditions. • The company raised its registered capital from Bt4,779.57 million to Bt5,013.37 million by floating 39 million newly issued shares with a par value of Bt6 for the exercise of warrants issued to directors and/or employees under Employee Stock Option Program (ESOP). ; At the 1/2005 extraordinary shareholders’ meeting on 19 September 2005, resolutions were as follows : • The company allotted convertible debentures worth no more than US$35 million or Bt1,480 million in equivalent to Thai baht. Type : Unsecured convertible debentures with right to exercise for the company’s common shares Principal amount : No more than US$35 million or Bt1,480 million in equivalent to Thai Baht Face value : US$100 Coupon rate : Not exceeding 4% per annum, depending on market condition. The rate would be fixed ahead of the issuance. Exercise price : Not greater than 120% of the stock’s closing price averaged during 7-15 straight days before the offering

Property Perfect Public Company Limited

Exercise date

: Convertible debenture holders are entitled to exercise right according to conditions to be set later Maturity : Not longer than 5 years Offered to : Foreign or local institutional investors The board of directors or the executive board has been authorized to set and revise conditions, pricing, face value, coupon rate and other details of the convertible debentures, and undertake necessary process for the issue of the convertible debentures. • The company increased its registered capital from Bt5,013.57 million to Bt6,213.57 million by allocating 200 million capital increased shares with a par value of Bt6 for the convertible debenture exercise into common shares. Company prospectus article 4 concerning the registered capital increase was revised following the share issue. • The company on 25 November 2005 followed a resolution of the 1/2005 extraordinary shareholders’ meeting on 19 September 2005 by selling the US$20-million convertible debentures to Pyrite International Finance Limited (“Pyrite”) at the exercise price of Bt6.25 apiece. The company is liable to interest payment rate and redemption of the unexercised convertible debentures at the same foreign exchange rate as the issuance date at Bt41.15 per US dollar to prevent risk from foreign exchange (see detail in financial structure). The company still has US$15 million of unallocated convertible debentures. : At the 7/2005 board of directors meeting on 1 December 2005, resolutions were as follows : • Mr. Ka Kay Yip was appointed the director to replace Mr.Tamra Ngow-sirimanee who passed away. He represents Pyrite International Finance as prescribed in the bondholder’s condition . 2006 : At the general shareholders’ meeting on 28 April 2006, resolution were as follows : • The meeting approved a decrease in share discount to comply with the opinions and accounting practices of the Federation of Accounting Professions and the Securities and Exchange Commission. • The 1/2004 extraordinary shareholders’ meeting on 24 May 2004 had a resolution to reduce the par value from Bt10 to Bt6 each and use the reduced paid-up capital to write off the company’s accumulated losses without off-setting the share discount. Under the current practice set by the Federation of Accounting Professions, it stipulates that a company must bring the reduced paid-up capital to set off the share discount before the retained losses, however. Therefore, the company then restated its financial statement

Annual Report 2007

ended 31 December 2005 to be compliance with the opinions and the practices of the Federation of Accounting Professions and the Securities and Exchange Commission by taking the reduction of capital in the sum of Bt3,121,441,776 to set off the share discount in the amount of Bt346,583,259.81. Later, the company transferred the remaining balance to write off the accumulated losses as of 31 December 2003 in the amount of Bt3,812,615,553.75, leaving the retained losses of Bt1,037,757,037.56. • The company allocated legal reserves in the tune of Bt60 million and paid dividend of Bt0.35 per share, totaling Bt237.88 million, to shareholders whose names appeared in the share register book closed on 10 May 2006 for its 2005’s operating results. Dividend was payable on 28 May 2006 and its yield represented 6%. • The company re-elected Mrs. Wanida Waiyawajamai, Mr. Vichai Singvicha, Mr.Somsak Toruksa and Mr. Vidhya Nativivat, who retired by rotation in this occasion. • The company had unanimously appointed Mr. Ruth Chaowanagawi, Certified Public Accountant No.3247, and/or Mr. Narong Puntawong, Certified Public Accountant No.3315, and/or Mr. Supachai Phanyawattano, Certified Public Accountant No.3930, and/or Miss Siraporn Ouaanunkun, Certified Public Accountant No.3844, of Ernst & Young Office Limited as the company’s auditors for year 2007 for another term and fix the remuneration of the auditors in the amount not exceeding Bt1,515,000. : AT the 1/2006 extraordinary shareholders’ meeting on 21 June 2006, resolution were as follows : • The 1/2006 extraordinary shareholders’ meeting on 21 June 2006 resolved the company to issue secured and unsubordinated debentures worth no more than Bt1,200 million. Details are as follows: Type : Secured and unsubordinated debentures with the one-time principal payment on maturity date. Redemption can be made with or without bearers’ trustee depending on market condition at the issuance date of each set. Outstanding amount : Not more than Bt1,200 million Offered to : Local investors and/or institutional investors and/or specific investors for all or partly and/or foreign investors for the entire amount at one time or series. Coupon rate ; Depending on market condition at the issuance date Maturity : The maximum 3 years from the issuance date Others conditions : The company’s board of directors and the executive boards has authorized to fix and amend pricing, face value, coupon rate and other conditions and details of secured and unsubordinated debentures as appropriated as well as handle with the issuance (with financial conditions, the company could not issue the debentures in the previous period) 2007 : At the 1/2007 Board of Directors’ meeting on 18 January 2007, resolutions were as follows :

Property Perfect Public Company Limited

• The company fully exercised right to subscribe to Krungthep Land Public Company Limited’s newly issued shares to retain its shareholding (see details in connected transactions) : At the 2/2007 Board of Directors’ meeting on 26 February 2007, resolutions were as follows : • The meeting passed a resolution to acknowledge a change in accounting policy for investment from equity method to cost method in compliance with Notification No. 26/ 2006 regarding Accounting Standard No. 44 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” (Amendment No. 1), issued by the Federation of Accounting Professions. The change started from the 2007 accounting period (Note to financial statements) • The meeting passed a resolution to acknowledge a withdrawal of a filing submitted to the Securities and Exchange Commission to issue warrants and new shares reserved for the warrant conversion. The company originally planned to offer warrants to the company’s directors and staff. : At the 3/2007 Board of Directors’ meeting on 2 April 2007, a resolution was as follows : • Mr. David Bryce Van Oppen, a Belgian-American, was appointed the director to replace Mr. Ka Kay Yip who resigned from the position. : At the 4/2007 Board of Directors’ meeting on 30 April 2007, resolutions were as follows : • The meeting had unanimously appointed Mr. Virayuk Puntupetch as Chairman of the Audit Committee to replace Dr. Tawatchai Nakhata who resigned from the position. • The meeting had unanimously resolved an establishment of a subsidiary, Bright Development Bangkok Co., Ltd., to be in line with a condition required by Lehman Brothers, a financial assistance provider. The meeting also had unanimously approved the board of directors to follow an debenture issuance to Lehman Brothers as land acquisition on Ratchadapisek Road with amount not exceeding Bt462,150,000. : At the 5/2007 Board of Directors’ meeting on 14 May 2007, resolutions were as follows : • The meeting had unanimously approved the company to sell a part of its project on Pattanakarn Road to Far East Stamford International Co., Ltd. and acquire land bank from Bangkok Land Public Company Limited. • The meeting had unanimously approved to pay an annual dividend to shareholders at the payout ratio not less than 50% of net profit in the company’s separate financial statements after deducted legal reserves. The company will take financial position, liquidity, business expansion and other factors related to the company’s management into a consideration for the dividend payment. The dividend policy also uses for its subsidiaries. : At the 7/2007 board of directors’ meeting on 14 August 2007, resolutions were as follows : • The meeting had unanimously resolved a formation of a property fund, to which the

Annual Report 2007

: :

company’s assets not less than Bt500 million will be sold. The company was allowed to jointly invest in the property fund with amount not exceeding the SEC’s requirement and enter into an asset management contract with the property fund. At the 8/2007 Board of Directors’ meeting on 24 September 2007, resolutions were as follows : • The meeting had unanimously resolved the company to divest its leasehold right of 5 land title deeds with the total areas of 11-1-40.1 rai of land on Ratchapisek Road in amount not less than Bt200 million. • The meeting had unanimously approved the company to jointly invest with local or foreign companies to set up “Centre Point Shopping Mall” to engage in shopping centre on land with the leasehold right on the land of Ratchadapisek Road. At the 9/2007 Board of Directors’ meeting on 14 November 2007, resolutions were as follows : • The meeting acknowledged a resolution in a meeting of Krungthep Land Public Company Limited (an affiliate firm) to issue not exceeding 623,250 units of convertible debentures registered with name of holders to specific investors and/or investors under the SEC’s announcement. Chief executive officer had been assigned to be the company’s representative in negotiating with the convertible debenture holders to extend due date for the convertible debenture exercise into common shares from “one year after the issuance” to “at least two years after the issuance” and have authority in issuing the convertible debentures and vote the amendment of Krungthep Land Public Company Limited’s Memorandum of Association to be in line with the increase in the company’s registered capital following an allocation of 45 million shares for conversion of the convertible debentures into common shares as prescribed in aforementioned resolution. Chief executive officer had been authorized to negotiate, agree with, sign and amend conditions in Shareholder Undertaking Agreement for Krungthep Land Public Company Limited’s convertible debenture issuance as mentioned earlier. • The meeting had unanimously approved an establishment of a private fund with size not exceeding Bt70 million to invest in Property Perfect Fund.

Property Perfect Public Company Limited

Management After the Central Bankruptcy Court approved the rehabilitation plan and appointed the planner on 19 February 2001, control over the company’s business and assets as well as shareholders’ legal rights, except the right to dividend payment, fell into the planner’s hands under the bankruptcy law. On 2 October 2001, the court approved the plan, having Asian International Planners Ltd as the planner. The planner had completed all plans and the company was released from the rehabilitation process on 12 April 2004. The original management team has resumed the management power. Management Structure At present, the company’s management structure comprises 5 boards (A) The board of directors (B) The audit committee (C) The director selection committee (D) The remuneration and human resources committee. (E) The executive board Each board’s authority and scope of responsibility as follows : A. The Board of Directors As of December 31, 2007, the board consists of :

No Name Title 1 Dr. Tawatchai Nakhata Chairman 2 Mr. Chainid Ngow-Sirimanee Chief Executive Officer 3 Mrs. Wanida Waiyawajamai Director 4 Mr. Vichai Singvicha* Director 5 Dr. Theerachon Manomaiphibul Director 6 Mr. Phairat Senachack Director 7 Mrs. Paneepan Tisapong* Director 8 Mr. Pramote Rermyindee*** Director 9 Mr. Vidhya Nativivat Director 10 Mr. Ka Kay Yip* Director 11 Mr. David Bryce Van Oppen** Director 12 Mr. Virayuk Puntupetch Director / Independent Director and Chairman of the Audit Committee 13 Mr. Somsak Toruksa Director / Independent Director and Auditing Director 14 Dr. Thamnoon Ananthothai Director / Independent Director and Auditing Director With Mr. Pramote Rermyindee as secretary of the board Note:

* resigned director. ** appointed to replace Mr. Ka Kay Yip who resigned in accordance with a resolution of the Board of Directors’ meeting on 2 April 2007. ***appointed in accordance with a resolution of the company general shareholders’ meeting on 30 April 2007. ****due to retire by rotation and forgo nomination for re-election.

Annual Report 2007

Authorised directors Authorised signatory directors are 1) Two-fours of the following directors - Dr.Tawatchai Nakhata , Mr. Chainid Ngow-Sirimanee, Dr. Theerachon Manomaiphibul or Mr. Phairat Senachack – are duly authorised to sign documents and affix the company’s seal. Board of Directors’ authority and scope of responsibility The Board of Directors is authorised to make decisions and ensure that the company’s operations follow the objectives, regulations, shareholders’ resolutions and legal conditions. Its authority does not cover the decisions which must be approved by shareholders as prescribed by the Securities and Exchange Commission and the Stock Exchange of Thailand. Under the company’s regulations, the Board of Directors is authorized to appoint the executive board which will monitor the daily operations of the company under the guidelines and budget approved by the Board of Directors and handle other tasks bestowed by the Board of Directors. The executive board can approve the decisions within its power granted by the Board of Directors or have to propose the issues beyond its power for the Board of Directors’ consideration. The regulations also empower the Board of Directors to appoint other officers or other working committees to assist the executive board. B. Audit Committee As of 31 December 2007, the Audit Committee consists of 3 independent directors. No. Name Title 1 Mr. Virayuk Puntupetch* Chairman of the Audit Committee 2 Mr. Somsak Toruksa Auditing Director 3 Dr. Thamnoon Ananthothai Auditing Director With Ms. Doungporn Rermyindee as the secretary. Note : * appointed to replace Dr. Tawatchai Nakhata in compliance with a resolution of the Board of Director’s meeting on 30 April 2007.

Property Perfect Public Company Limited

Audit Committee’s authority and scope of responsibility 1. Supervise the company’s operations to ensure honesty, transparency, and responsibility to shareholders. 2. Ensure that the executive board and executives handle their responsibilities in an accurate, complete and standard manner. 3. Ensure the accuracy, sufficiency, and credibility of the financial results, as well ensure the accurate and sufficient disclosure through coordination with external auditors and executives who take responsible for preparing quarterly and yearly financial statements as requested by the company’s board of directors and/or the executive board. 4. Ensure appropriate and effective internal control, through the coordination with the internal auditors and auditors. 5. Appoint the auditor and set the auditor fee, which must be approved by the shareholders and based on reliability and adequacy of human resources, audit job volume made by the audit firm and experience of staffs who are in charge of the company’s accounting audit. 6. Make sure that the company follows the legal conditions set by the Securities and Exchange Commission, the Stock Exchange of Thailand and other related agencies. 7. Prevent conflicts of interest through the inspection of the transactions of the company with connected parties and through coordination with the auditor as well as consider disclosing accurate and adequate information for connected transactions and any transactions that might cause conflicts of interest. 8. Prepare the audit committee’s report and disclose the report in the annual report, which includes at least following issues. • Opinion related to prepare the company’s financial reports and accurate and reliable information disclosure. • Opinion concerning to sufficiency of the company’s internal control system. • Reasons that the company’s auditor is appropriate for another term appointment.

Annual Report 2007

• Opinion to comply with the Securities and Exchange Act, the Stock Exchange of Thailand’s rules and laws relevant to the company’s business. • Other reports that should be acknowledged by shareholders and investors under scope of duty and responsibility assigned by the company’s directors. 9. Review the internal control’s reports. 10. Review the internal control’s findings. If finding or suspecting of any misconduct, or the insufficiency of the internal control, they must ask for the Board of Directors’ judgment. 11. Review the internal control’s inspection and the auditor’s recommendations, and follow through the improvements. 12. Authorise to examine, audit, call executive directors, executives, advisors, and accounting auditors to attend meeting to acknowledge information and seek independent opinions from other professional advisors if necessary to achieve in tasks under responsibility. 13. Perform other tasks assigned by the company’s board such as review of financial and risk management policy, and business ethics conducted by executives. The audit committee has a three-year term and it will be elected by the company’s board when their terms are ended by rotation. Independent Directors’ qualifications Independent directors must meet qualifications set by the Securities and Exchange Commission’s announcement at Kor Jor.12/2000 governing asking for permission and approving newly issued share offering, and audit committee qualifications required by the Stock Exchange of Thailand’s regulations. C. The Director Selection Committee consisted of 3 persons as of 31 December 2007. No Name Position 1 Dr. Thamnoon Ananthothai Chairman of the committee 2 Mr. Somsak Toruksa Selection committee member 3 Mr. Vidhya Nativivat Selection committee member The Selection Committee’s scope of authority and responsibility 1. Review the individuals who are fit to be the company’s directors and nominate the list to the board of directors and/or present the list to shareholders for official appointment. 2. In reviewing the individuals’ qualifications, the committee must consider their expertise, knowledge, ability and relevant experiences to ensure that the individuals’ qualifications would be useful for the company’s operations. Besides, the committee must consider that the nominations follow the legal framework particularly when it involves the nominations for independent directors and the audit committee members.

Property Perfect Public Company Limited

3. In selecting independent directors and the audit committee members, the committee must take into account; - The nominated individuals must hold no more than 5% of the paid-up capital of the company, affiliates or subsidiaries. The percentage is inclusive of the shareholding of related individuals - their spouses and underage children. - The nominated persons must not be related to the company’s executives or major shareholders. - The appointed persons must not have conflicts of interest, directly or indirectly, in terms of finances or management of the company and affiliates. They must not be the company’s major shareholders. 4. The appointed persons must be able to work and present their views with independence, free from the control from executives or major shareholders as well as their relatives. To present the selected persons to the board of directors, the Selection Committee must nominate only those who will fill the available director seats. Except when the committee members could not reach an agreement, they are allowed to present all the nominated names to the board for their consideration. (D) The Remuneration and Human Resources Committee The Remuneration and Human Resources Committee consisted of 3 persons as of 31 December 2007. No Name Position 1 Dr Tawatchai Nakhata Chairman of the remuneration committee 2 Mr. Vidhya Nativivat The remuneration committee 3 Mr. Somsak Toruksa The remuneration committee The Remuneration and Human Resources Committee’s scope of authority and responsibility 1. Consider the company’s policies and criteria in paying the Chief Operation Officer, directors, and the company’s advisors. 2. Consider the annual salary, annual pay increase, and the interim pay increase, as well as other benefits to award all employees. 3. Consider the employment terms, regulations, and penal clauses which should be appropriate and fair. 4. The committee will report directly to the board of directors, to whom they will explain and answer all questions regarding the pays for employees at all levels

Annual Report 2007

(E) Executive Board contains 10 individuals, as of 31 December 2007. No Name Position 1 Mr. Chainid Ngow-Sirimanee Chief Executive Officer 2 Mr. Pramote Rermyindee Executive Director and Secretary 3 Mrs. Wanida Waiyawajamai Executive Director 4 Mr. Vichai Singvicha Executive Director 5 Mrs. Paneepan Tisapong* Executive Director 6 Mr. Phairat Senachack Executive Director 7 Dr. Theerachon Manomaiphibul Executive Director 8 Mr. Surasak Vacharapongpreecha Executive Director 9 Ms. Supee Reodacha Executive Director 10 Mr. Kritapas Phongphakawat Executive Director Note: * Mrs. Paneepan Tisapong resigned since 15 August 2007. Executive Committee’s authority and scope of responsibility 1. Run the company’s daily operations under the guidelines set by the Board of Directors and within the scope of rules and regulations, as well as the company’s objectives and regulations. 2. Set the annual budget for the Board of Directors’ approval. 3. Consider investment projects for the Board of Directors’ approval. 4. Consider and approve borrowings and the financing of normal transactions such as the investment, land purchases or others with the maximum amount of Bt100,000,000 or Bt100 million. 5. Prepare, recommend and set business strategies for the Board of Directors. 6. Consider and approve the corporate marketing and public relations plans. 7. Evaluate the company’s performance in terms of asset management and financial management to ensure efficiency and effectiveness. 8. Conduct other tasks assigned by the Board of Directors.

Property Perfect Public Company Limited

Notably, the executive board has no authority in handing its power to any member or others to approve a connected transaction (as prescribed by the Securities and Exchange Commission) or a transaction which could pose conflicts of interest with the company or subsidiaries with exception of approval for normal course of business transactions as policy and criteria resolved by the board of directors under the Securities and Exchange Act, and the Stock Exchange of Thailand’s regulations, announcements and instructions or rules. The company’s Board of Directors considered to revamp organization management structure to be suitable for the current condition, and reset titles and scope of authority. Chief executive officer shall be in charge and take responsibility for the overall management. Chief Executive Officer Chief Executive Officer is the highest authority in the company’s management. He or she has been authorised to make any necessary alteration with power of managing director, perform duties and report operating performance to the Executive Committee, Board of Directors and shareholders as follows : 1. Set policies, direction, and strategies for the company’s business operation. 2. Set business planning, budget and authority of the company’s internal units which up to management department to seek the board’s approval. 3. Manage normal course of business activities under policies set by the company’s board, laws, conditions, regulations, memorandum of association, and the company’s rules. 4. Perform other tasks assigned by the company’s board. Managing director’s authority, duty and responsibility could not be transferred to others in a way that those who are authorised by managing director can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or the subsidiaries and affiliates, or he/she has vested interest with exception that those transactions are regarded as normal course of business as policies and principles set by the company’s board.

Annual Report 2007

Organization Chart

Board of Directors

Nominating Committee Remuneration Committee Company Secretary

Executive Committee

Legal

Chief Executive Officer

Chief Operation Officer

Assistant Chief Operation Officer General Administration and Human Resource Legal Procedure and Ownership Transfer

Assistant Chief Operation Officer Construction Management Project Development and Quality Control Design Project Management Zone I Project Management Zone II Project Management Zone III Project Management Zone IV Project Management Zone V

Sales Management Service and Customer Relations

Property Perfect Public Company Limited

Chairman of the Advisory Council Audit Committee Internal Audit

Office of the Chief Executive Officer Chief Business Development Officer

Chief Financial Officer

Assistant Chief Business Development Officer

Assistant Chief Financial Officer

Research and Business Development

Advertising

Treasury and Financial Management

Project Planning

Public Relations and Corporate Communications

Accounting

Investor Relations and Information Technology

Budgeting Propety Fund Management

Annual Report 2007

Project Property Perfect Plc. and Subsidiaryâ&#x20AC;&#x2122;s Project 1. Maneerin Park Rattanathibet Time to Develope 2547-2551 Product SDH Total Units 189 Remaining Units 189 Remaining Project Value 16 MB. 2. Perfect Place Rattanathibet- Rachapruek Time to Develope Q3/2548-2556 Product Total SDH Units 1,215 Remaining Units 1,092 Remaining Project Value 4,260 MB. 3. The Villa Rattanathibet- Rachapruek Time to Develope Q4/2549-2553 Product Total TH , DH Units 1,427 Remaining Units 1,199 Remaining Project Value 2,783 MB. 4. Perfect Masterpiece Rattanathibet- Rachapruek Time to Develope Q1/2550-2555 Product Total SDH Units 361 Remaining Units 346 Remaining Project Value 3,229 MB. 5. Maneerin Park Rangsit Time to Develope 2547-2551 Product Total SDH Units 222 Remaining Units 3 Remaining Project Value 10 MB. 6. Maneerin Park Rangsit (16 Rais) Time to Develope Q1/2550-2551 Product Total SDH Units 96 Remaining Units 54 Remaining Project Value 153 MB. 7. Maneerin Lake & Park Tiwanon-Outer Ring Time to Develope 2544-2551 Product Total SDH Units 699 Remaining Units 268 Remaining Project Value 1,168 MB.

Property Perfect Public Company Limited

8. Perfect Place RamaV - Rachapruek 2548-2551 Time to Develope Product SDH Total Units 306 Remaining Units 98 Remaining Project Value 572 MB. 9. Perfect Park Rama V- Bangyai Time to Develope Q4/2549-2553 Product SDH , DH Total Units 1,945 Remaining Units 1,700 Remaining Project Value 5,091 MB. 10. Perfect Place Ramkhamhaeng- Suvarnabhumi (The Private Zone) Time to Develope 2548-2552 Product SDH Total Units 185 Remaining Units 301 Remaining Project Value 984 MB. 11. Perfect Park Ramkhamhaeng-Suvarnabhumi Time to Develope 2548-2551 Product SDH Total Units 198 Remaining Units 39 Remaining Project Value 188 MB. 12. Perfect Place Sukhumvit 77-Suvarnabhumi** Time to Develope 2547-2553 Product SDH Total Units 1,102 Remaining Units 331 Remaining Project Value 1,690 MB. 13. Perfect Masterpiece Ekamai-RamIndra (Ultimate Zone) Time to Develope 2547-2551 Product SDH Total Units 240 Remaining Units 95 Remaining Project Value 1,154 MB. 14. Metro Park Sathorn Time to Develope 2548-2554 Product CD Total Units 4,369 Remaining Units 3,458 Remaining Project Value 7,242 MB.

Annual Report 2007

New project in 2008

1. Perfect Place Rachapruek Time to Develope Q4/2551-2553 Product SDH Total Units 443 Remaining Units 443 Remaining Project Value 2,300 MB. 2 Perfect Place Ramkhamhaeng (The Lakeside Zone) Time to Develope Q4/2551-2552 Product SDH Total Units 114 Remaining Units 114 Remaining Project Value 830 MB. 3. Perfect Park Romklao Phase 1 ** Time to Develope Q2/2551-2552 Product SDH Total Units 194 Remaining Units 194 Remaining Project Value 730 MB. 4. Perfect Masterpiece Pattanakarn Time to Develope Q4/2551-2556 Product SDH Total Units 342 Remaining Units 342 Remaining Project Value 3,200 MB. 5. The Villa Pattanakarn Time to Develope Q3/2551-2554 Product TH Total Units 599 Remaining Units 599 Remaining Project Value 2,070 MB. 6. Metro Park Ratchada*** Time to Develope Q2/2551-2553 Product CD Total Units 1,200 Remaining Units 1,200 Remaining Project Value 4,000 MB. Note: Project’s remaining value after deducted transfer as of 31 December 2007. ** Subsidiary’ s Project (Estate Perfect Co., Ltd) *** Subsidiary’ s Project (Bright Development Bangkok Co., Ltd.) SDH = Single Detached House TH = Town House CD = Condominim

Property Perfect Public Company Limited

Projectâ&#x20AC;&#x2122;s Map

Annual Report 2007

Marketing and Competition Marketing and Competition Marketing

1. Marketing Strategy The company sets marketing strategies in line with competition, as well as economic and social conditions. • Products. The company concentrates on developing the products that respond to market demand and competition. Factors that send impacts to competition are as follows: - Location: The company’s locations are in areas with high-growth potential, located along the electric train routes or new roads to satisfy target groups who demand convenient transport networks and proper infrastructure. Comparatively, the company’s projects are in the better locations than competitors’ and high potential growth such as : The company’s projects in western zone, located near electric train’s purple line (BangsueBangyai) , Red line (Bangsue-Taling Chan), Rachapruek Road, Rama 4 Bridge (cross Pakkred intersection) linked to Chaeng Wattana Road. : The company’s projects in Suvarnabhumi Airport zone, located near an orange line (Airport Rail Link) . : Metro Park Sathorn project is located near a station of Green Line electric rail route (BTSextension) and a station of Blue Line electric railway (Bang Sue-Tha Phra) The company has continuously expanded projects into new and existing locations to widen market coverage by geography, as well as target customers’ demand and purchasing power. - Quality The company has focused on screening contractors with extensive experience, good management and quality building materials and construction technology adoption to ensure customers about the company’s housing and project quality. The company has product quality inspection system during construction, and after construction before transfer or sales to customers. - Design The company has concentrated on beautiful designs and functions to response demand and lifestyle of target customers, and Thailand’s weather atmosphere by combining teams between leading interior designers and outside architects for perfect harmony. The company’s products, comprising homes nestled in garden and inside-house garden, Ban Kon Muang, and New Concept Home, have received warm welcome from target customer groups. The company has realized about taking part in environmental conservation and customer needs to

Property Perfect Public Company Limited

live in comfort and energy-efficient homes. In 2007, The company’s three housing designs then were granted Thailand Energy Award from the Department of Alternative Energy Development and Efficiency. The company’s and subsidiaries offer three housing options as follows : 1) Pre-built home - The company completes building houses before sales. This type of house is suitable for customers who need to move in as the earliest and see the house completely constructured before making a buying decision. Customers can transfer and move into the houses within one month. 2) Semi-pre-built home - The company analyzes customer demand to choose housing designs that satisfy their needs ahead of construction. This type is appropriate for customers who need longer time for down payment or ready-to-move in homes in coming months. 3) Built-to-order home - The company in 2007 considered that some customers need homes that meet their lifestyle and family size. It designed Perfect Customization program, a new innovative software program for residential search, to widen alternatives for customers in terms of housing designs, number of rooms, housing styles (Euro Metro Nature), colours, wallpaper designs and etc. to offer perfect homes to address their most satisfaction. This type of house has opened up new market for the company by allowing the company to access customers who need particular housing models that match their demand. Also, the company can better serve customers who need different interval time to move into the houses. - Project Landscape and Environment Aside from the houses, the company also emphasises home design and the focus on the environmental management in the projects, security system, and after-sale services to ensure a perfect community for all clients to add value to residents in projects. With the focus, the company won EIA Monitoring Award from the Natural Resources and Environment Ministry for three consecutive years between 2005 and 2007. The three projects received the awards were Perfect Place Rattanathibet, Perfect Place Ramkhamhaeng phase1 and Perfect Place Ramkhamhaeng phase 2. Moreover, the company develops projects with large and perfect club houses, and joins hand with business partners to create community around sport multiplexes or club house of each project for better living of the company’s customers and these differences make the company’s projects get

Annual Report 2007

edges over rivals’. The partners include Black Canyon, KPN Music Academic School, Clark Hatch, V Shop, Dokya bookstore and Sindy. The projects’ customers have better living than others. - Pricing The company has policy to set prices based on the economic condition, market demand and competition. These factors are jointly considered with costs, locations, project types and market conditions when compared with competitors. There are several guidelines for price setting such as setting higher price than rivals but better designs, and environmental and convenient facilities. The company has explored new markets, in which no property developers offer products to serve demand, and this helped improve the company’s operating results. To response various demands of customers, the company has offered various project types and prices starting from aBt1.5 million to the luxurious projects with prices in a range of Bt7 million-Bt20 million. The table described residence prices by brand

Pricing (MB.)

1.0-2.0

SDH

2.1-3.0

3.1-4.0

- Advertising & Place The company has adopted integrated communication by combining mass media with direct marketing. The company has selected media, which are suitable with target customers and campaigns. To maximise efficiency and effectiveness of media, the company has used strategy to launch one-time advertising to target customers in several projects and this slimed down costs. The company has also used new communication media such as internet, marketing activities and customer relationship management (CRM) marketing by concentrating on providing services to customers who live in the company’s projects. The Perfect Friend Club campaign was launched to extend gratitude to customers who are the company’s projects residents who introduce friends to buy homes in the company’s project. The campaign is widened accessible channel to customers efficiently with low costs.

4.1-5.0

5.1-7.0

7.1 UP

Property Perfect Public Company Limited

- Promotion The company has employed promotions, which are appropriate with target customers who have various demand to stimulate their decision making in regard to customer demand and economic environment at different periods. The promotions include a special payment conditions jointly launched with financial institutions for customers who need to buy pre-built homes such as cheap interest loans, longer loan maturity, progressive installment scheme. The company has joined hand with leading furniture manufacturers to offer design and furniture decoration at a special price and this strategy can not only offer convenience to customers, but also reduce the company’s burden in seeking interior designers to decorate homes and loans for home decoration of which interest rate are normally higher than mortgage loans. It also helps the company form alliance with other business operators to add value to homes and provide convenience to customers.

(2) Brand Building Strategy The company has focused on brand building to ensure the positive image and effective advertisement of the projects’ concept, outstanding points, and product positioning. As the projects are located along rail routes, near expressways or new roads, they are perfect for buyers who prefer convenient transport networks for their living quality. “Baan Kon Muang” The city home concept is portrayed along the company’s logo to demonstrate the higher standards in terms of locations. All houses are developed under the “perfect home” concept, deriving from a client survey, to demonstrate the product standard. There are 5 project titles to fit different target groups. 1. Perfect Masterpiece Single Detached House project, offering high-end clients with units priced above Bt 7 million. 2. Perfect Place Single Detached House project, for upper medium-income earners with houses valued between Bt3.5Bt7 million. 3. Perfect Park Single Detached House project and New concept duplex house project , For new families or want to buy the bigger house with units priced between Bt2.5-Bt5 million. 4. The Villa A townhouse and new concept duplex house project, , For new families with units priced above Bt 1.7-3million.

Annual Report 2007

5. Metro Park for condominium Condominium Project which convenient for transportation by rail transport network. With units priced at Bt1.3-3 million. This will expand the market the cover those who work or live in city areas. The company believes that good brand building that comes from customer experience can sustain the companyâ&#x20AC;&#x2122;s image, so the company has determined on construction quality, good design and project planning, project environment, utility and security system, activities to maintain good relationship with residents in the projects, create warm society in the projects to make residents happiness in living together, and good community and society. This creates word of mouth among customers and it is the brand building in a sustainable way through experience of customers who are residents in the companyâ&#x20AC;&#x2122;s projects. â&#x20AC;˘ Target Group The company has expanded projects to serve customer demand in each location and different prices to cover purchasing power, product categories and locations. The company segments market by demographic, geographic and psychographic.

Competition The company has focused on residential development, with single houses, town house and

condominiums. These are developed in four main locations. Group 1. Best locations, city areas (in 15-km radius) In 2005, the company launched a condominium project, which is conveniently accessible by Green Line electric rail route in the extension part, to broaden into new market and the project has been received good response from market. The project is Metro Park with price tags in a range of Bt1 million to Bt3 million. The company has planned to offer this product to meet customer demand in other locations. The company believes that impact from oil price would continue and there is no end in sign. However, the rising oil price has increased demand in condominium near transportation system. The company also believes that the competition would be stronger in 2008.

Property Perfect Public Company Limited

Group 2: Good locations (in 15-20 km radius) Competition in this group is intense, given higher number of new projects with locations near city unveiled because lands near city or good locations with new roads linked to city for convenient transportation. Lands along these roads including Rama V Road, On-Nuch Road, Rachapruek Road, Rattanathibet Road and Ekamai-Ramindra Road can be developed to residential projects. Customer’s behavior in buying houses has been focused on quality pre-built houses located on good locations and almost all of the company’s projects are classified under this category and that’s’ why the projects have received warm welcome from customers. The company’s target customer groups are middle- to upper middle-class and the project prices are in a range of Bt2 million to Bt5 million. Group 3: Suburban locations (20-30-km radius) The market shows high competition, as land price in suburban areas remain low and that attracts a number of developers. The supply thus exceeds demand, inducing the price war. Developers have to sell the houses at low price and reaped low profits. Some of the company’s projects are in this category. Group 4: Poor locations Houses in the areas hardly find buyers. In the past, they could as buyers hoped to gain from higher prices when infrastructure was more proper. However, most buyers shun them, due to poor traveling convenience and high traveling expenses. The company takes locations as a major part in formulating marketing strategies.

Annual Report 2007

Property Development Business Trend in 2008 Important positive factor for demand side in 2008 is optimism over the consumer confidence improvement after political stability has come back and the government has policy to go ahead mega infrastructure project investment, which would help stimulate the countryâ&#x20AC;&#x2122;s economy and increase needs of houses located near the future transportation system. However, negative factor which is depleting purchasing power this year is the rising inflation amid the skeptical economic growth. This would put consumers on alert in spending budget allocation. The Thai economy in the fourth quarter grew 5.7%, rising from the 4.4 % average growth in the first three quarters of the year.

Chart 1 : GDP in 2007 expected to rise at 4.8%. GDP in 2008 is expected to grow around 4.5-5%, driven by higher investment and consumption of public and private sectors after the investment and consumption was flat last year. Source : The National Economic and Social Development Board Consumer Confidence index

Chart 2 : Rising consumer confidence following the clearer political situation Source : The Thai Chamber of Commerce Universityâ&#x20AC;&#x2122;s Economic and Business Forecast Center

Property Perfect Public Company Limited

Inflationary Pressure increase

Chart 3 : Rising inflation trend in 2008 from consumer goods price hikes and pressure from oil price Source : The Commerce Ministry

Residential demand remains intact regardless of economic atmosphere but buying behavior may be changed to meet consumersâ&#x20AC;&#x2122; affordability and lifestyle at that time. For instance, cutting residential budget would increase demand of small-sized housing including condominiums, twin houses and townhouses. Even though the number of housing registration in 2007 marginally declined from 2006, earnings of large-scaled property developers improved dramatically as they had better competitive edge and ability to adjust business to align with the change in consumer demand and competition situation than small-sized property developers. The trend would be seen clearer in 2008.

Annual Report 2007

An increase in the number of registered houses in Bangkok and vicinities from 1997 to the first 11 months of 2007 (classified by housing category).

รูปที่ 4

An increase in the number of registered houses in Bangkok and vicinities from 1997 to the first 11 months

of 2007 (classified by housing category). Source : Real Estate Information Centre, The government Housing Bank

For supply side in 2008, low-priced projects are expected to be property developers’ main focus and have the strongest demand. Competition in this segment, however, would be intensified due to higher supply. With the sharp increase in land price in the city and the more stringent law, townhouse and condominium projects located in the heart of the city are more difficult to be developed. Limited supply of premium singledetached houses located in convenient transportation system would create strong demand in this segment and its sales would be high. Comparative number of new residential units available for sales by category between 2006 and 2

Chart 5 : Comparative number of new residential units available for sales by category between 2006 and 2007 Source : Agency for Real Estate Affairs

Property Perfect Public Company Limited

Comparative number of new residential units available for sales by price between 2006 and 2007

Chart 6 : Comparative number of new residential units available for sales by price between 2006 and 2007 Source : Agency for Real Estate Affairs

Price cutting competition tends to alleviate, given the significant increase in construction costs and land prices. However, competition in design, production quality, controlling cost, and building images of projects and property developers and selling points to take advantage in the competition and maintain profit margin would be intensified. Building material prices index on 2000 - Jan 2008

Chart 7 : Building material prices on rising trend Source : The Commerce Ministry

Annual Report 2007

Other Information Financial structure

1. The company’s securities (1) Common shares As of 31 December 2007, the company had Bt6,213,565,176 in registered capital, or 1,035,594,196 common shares at the par value of Bt6 each. A paid-up capital of Bt4,724,947,164 or 787,491,194 common shares were paid up. These are changes of registered capital during the past 3 years. Accounting year 2007 2006 2005 2004 Registered capital - Value (Bt) 6,213,565,176 6,213,565,176 6,213,565,176 7,200,000,000 /1 - No. of shares 1,035,594,196 1,035,594,196 1,035,594,196 1,200,000,000 Paid-up capital - Value (Bt) 4,724,947,164 4,695,334,290 4,695,210,150 4,682,162,664 /1 - No. of shares 787,491,194 782,555,715 782,535,025 780,360,444 Note : 1/ AS of 13 December 2004, the company’s registered capital was Bt7,200,000,000, 1,200,000,000 shares and paid-up capital of Bt4,682,162,664, 780,360,444 shares at Bt6 par value. On 26 August 2004, the company reduced the par value from Bt10 to Bt6 according to the resolution of the 1/2004 extraordinary shareholder meeting and the resolution of the 2006 annual general shareholders’ meeting. The reduced capital of Bt3,121,441,776 was used to reduce the share capital loss of Bt346,583,260 and reduce accumulated losses which stood at Bt3,812,615,554 as of 31 December 2003. After that, the accumulated losses totaled Bt1,037,757,038. On 7 April 2005, shareholders annual meeting at the 2005 ordinary meeting approved the registered capital reduction from Bt7,200,000,000 to Bt4,779,565,176, by canceling 403,405,804 unallocated shares value at the value of Bt 6 each of which value stood at Bt2,420,434,824. The new shares were reserved for warrants which were not allocated and reserved for the conversion of unsecured debts. The shareholders also approved the capital increase from Bt4,779,565,176 to Bt5,013,565,176, or by Bt234,000,000 A number of 39,000,000 shares value at the value of Bt 6 each were issued, reserved for the exercise of warrants which would be issued to directors and/or employees under the ESOP program.

Property Perfect Public Company Limited

Shareholders at the extraordinary meeting at 1/2005 on 19 September 2005 approved the capital increase from Bt5,013,565,176 (835,594,196 shares at the value of Bt6 each) to Bt6,213,565,176 (1,035,594,196 shares at the value of Bt6 each) for the conversion of debentures. The company registered the new capital with the Commerce Ministry on 7 October 2005. As of 31 December 2005, the company’s paid-up capital stood at Bt4,695,210,150 (782,535,025 shares at the value of Bt6 each) due to the exercise of warrants worth Bt13,047,486 or 2,174,581 shares in December 2004 and June 2005 (2,174,581 shares at the value of Bt6 each). The company registered the new capital with the Commerce Ministry on 12 January and 7 July, respectively. The company’s paid-up capital as of 31 December 2006 was raised by Bt4,695,334,290 (782,555,715 common shares at a the par value of Bt6 each) due to the exercise of warrants worth totally Bt124,140 (20,690 common shares at a Bt6) par value in June 2006. The company registered the new paid-up capital with the Commerce Ministry on 7 July 2006. As of 31December 2007, the company’s paid-up capital was increased to Bt4,724,947,164 (787,491,194 common shares at the par value of Bt6 each) due to the exercise of warrants worth Bt29,612,874 in December 2006 and June 2007 (4,935,479 shares at the par value of Bt6 each). The company registered the new increase with the Commerce Ministry for the exercise of warrants on 11 January 2007 and 11 July 2007, respectively. On 8 January 2008, the company registered the new increase with the Commerce Ministry for exercise of warrants worth Bt1,162,956 (193,826 shares at the par value of Bt6 each) in December 2007. The company’s paid-up capital then was raised to Bt4,726,110,120 and the number of common shares was 787,685,020 at the par value of Bt6 each. (2) Warrants Under the rehabilitation plan, the company must issue warrants to unsecured creditors, at the ratio of Bt1,000 of debt for 7 free warrants. Each warrant can be exercised for 1 common share, at the price of Bt0.01. The Securities and Exchange Commission approved the issuance of 53 million warrants, of which maturity is 10 years from 7 November 2002. The exercise period was set at the last day of Quarter 2 and Quarter 4 of each year, starting from the fourth quarter of 2002.

Annual Report 2007

The Receiver revoked the claim of some creditors. The company thus issued only 50.93 million warrants and a number of 2.07 million units remained. Shareholders at the 1/2005 meeting approved the cancellation of the unallocated warrants. At present, a number of 8,909,176 warrants are not yet exercised. The companyâ&#x20AC;&#x2122;s annual general shareholdersâ&#x20AC;&#x2122; meeting for year 2005 had a resolution to allocate free 39,000,000 warrants to directors and/or employees under ESOP program. Each warrant is entitled to exercise into a common share at the price of Bt6 each and the warrants have maturity of 5 years from the issuance date. The company has not issued the warrants yet. The companyâ&#x20AC;&#x2122;s board of directors meeting on 25 September 2006 approved the cancellation of the issuance of 1,900,000 warrants to directors and/or employees under ESOP program and the board meeting also resolved the cancellation the allocation of 37,100,000 warrants to directors and/ or employees under ESOP program. The two meeting totally cancelled the issuance of 39,000,000 warrants, the same units as approved by shareholders in the annual general meeting for year 2005. 3.

Debentures As of 31 December 2007, outstanding debentures are as follows;

(unit : Thousand Baht)

2/2004 secured debentures, set 3 1/2006 secured debentures Total Less : debentures with maturity within 1 year Debentures - Net of debentures with maturity within 1 year

2006

- 450,000 450,000 (450,000 )* -

350,000 450,000 800,000 (350,000 ) 450,000

*Full amount paid on redemption date on 8 February 2008

2007

Details of debentures The company already redeemed due secured debentures. The company redeemed the last batch of the debentures on 8 February 2008 and it now frees from debenture liabilities. Details shown below

Property Perfect Public Company Limited

1/2004 Secured debentures, Set 1* Issue date : 23 August 2004 Type : secured holder-bearing debentures, with trustee Offered to : financial institutions and public investors No. of units : 350,000 Price : Bt1,000 Maturity : 2 years and 6 months from issue date (23 August 2004) Interest rate : 365 basis points above Siam City Bankâ&#x20AC;&#x2122;s 6-month deposit rate Rate payment : Biannually. The first payment was on 23 February 2005 Redemption date : 23 February 2007 Principal payment : Full amount paid on redemption date Other conditions : collateral value-outstanding debenture value ratio must be 1.5:1 Rating : BBB+ (tha) by Fitch Ratings (Thailand) Ltd, as of 12 February 2007 * The company redeemed the debentures as scheduled on 23 February 2007.

1/2006 secured debentures Issue date : 9 February 2006 Type : secured holder-bearing debentures, with trustee Offered to : financial institutions and public investors No. of units : 450,000 Face value : Bt1,000 Maturity : 2 years from issue date on 9 February 2006 Coupon rate : 6.65% per annum Coupon rate payment : Biannually. The first payment was scheduled on 31 August 2006 Redemption date : 8 February 2008 Principal payment : Full amount paid on redemption date Other conditions : collateral value-outstanding debenture value ratio must be maintained at 1.5:1 Rating : BBB (tha) by Fitch Ratings (Thailand) Ltd on 12 February 2007 * The company redeemed the debentures as scheduled on 8 February 2008.

Unsubordinated convertible debentures 1/2005 Issue Issue date : 25 November 2005 Type : unsecured holder-bearing convertible debentures, without trustee

Annual Report 2007

Offered to

: Foreign institutions through a private placement, in US dollar, fully hedged at all cost by investors No. of units : 200,000 Price : US$100 Maturity : 5 years from issue date (25 November 2005) Interest rate : fixed 3.50% Coupon rate payment : on 25 February, 25 May, 25 August and 25 November every year until maturity. The first interest payment was made on 25 February Principal payment: Principal payment : The unconverted debentures will be redeemed in US dollar, with 31.60% premium from the issue price. The redemption is fixed with the foreign exchange rate as of the issuance date. Conversion price : Bt6.25 per share Conversion period : 18 months after offering, until the redemption date with the minimum conversion of US$1 million Conversion conditions : The company withholds the right to call holders to convert 1 third of the original number of debentures when 1. Over 10 million shares are traded on average during the 45 days before the company would exercise the right, and 2. The companyâ&#x20AC;&#x2122;s average share closing price during the 60-day period and the closing of the 5 days before the company would exercise the right accounts for - 130% of conversion price in Year 1-2 - 150% of conversion price in Year 3 - 175% of conversion price in Year 4-5 Then, the company can ask the bearers to convert one third of the original number of debentures under these conditions. 1. The bearers who were forced to convert the debentures sold out all the common shares, or 2. The company can exercise the right again at least 60 days after the first right exercise. Under this condition, the number of shares traded and the average share closing must fit the earlier conditions. Bearersâ&#x20AC;&#x2122; conditions : The company would hold a meeting to appoint an individual, nominated by any foreign institutional investor who bought and paid US$20 million upwards for the debentures, a director. The company recorded the provisons for debentures, which are not converted over the life of debentures, presented it as a separatd item in balanace sheet.

Property Perfect Public Company Limited

Major shareholders The first 10 largest shareholders as of 31 December 2007 are; Rank

1 2 3 4 5 6 7 8 9 10

Thailand Securities Depository Co., Ltd. For Depositor Japan Asia Group Co., Ltd./1 Thailand Securities Depository Co., Ltd. For Depositor MJL Intertrade Co., Ltd./2 Natee International Law Office Co.,Ltd./3 Japan Asia Group Limited Ms.Sumalee Wangprakorbsuk Mr. Pramote Rermyindee Mr. Vidhya Netivivat Krungthep Land Plc.

No. of shares

465,254,792 84,776,944 67,918,752 47,589,227 37,018,928 12,467,224 11,385,000 11,385,000 10,580,000 9,200,000

59.07 10.76 8.6 6.04 4.70 1.58 1.45 1.45 1.34 1.17

(Data from Thailand Securities Depository Co,. Ltd.) Note : /1 /2 /3

Name of 10 largest shareholders

Japan Asia Group Co., Ltd. became a shareholder as it, as a creditor in the rehabilitation plan, converted debts to equity. MJL Intertrade Co Ltd became a shareholder as it, as a creditor in the rehabilitation plan, converted debts to equity. Natee International Law Office became a shareholder as it, as the lawyer of a creditor in the rehabilitation plan who converted debts to equity. A condition for Property Perfect to exit the rehabilitation plan is the company must issue common shares to all eligible creditors. One creditor is eligible for the conversion right. However, two companies claimed that they were transferred the claim from the creditor - Loves Partner Investment Co Ltd and Glory Buy Associate Co Ltd. Both filed petitions to the Central Bankruptcy Court. Property Perfect thus agreed to have Natee International Law Office to hold the common shares on behalf of the creditor. The legal office is also assigned to oversee the given shares until the Central Bankruptcy Court would determine who the shares should be transferred to. Natee International Law Office offers legal and accounting services. Foreign shareholders who hold the company’s shares through Thai NVDR Co Ltd are entitled to the same returns as other shareholders, but not the voting right (except in the voting to revoke the company’s listing status in the Stock Exchange of Thailand. To trace the number of shares issued in the form of NVDR, investors should check the SET’s website, www.set.or.th.

Annual Report 2007

Holdings by nationalities as of 31 December 2007 Shares

No.

Corporate

Shareholders

No.

Thai Foreign Total

229 620,974,296 78.84 14 572,033,687 72.62 215 48,940,609 6.22 8 166,710,724 21.16 3 165,162,920 20.97 5 1,547,804 0.19 237 787,685,020 100.00 17 737,196,607 93.59 220 50,488,413 6.41

Note: from Thailand Securities Depository Co., Ltd.

No.

Individuals Shares

3. Dividend policy of the company and subsidiaries The 5/2007 Board of Directors’ meeting had a resolution to pay dividend not less than 50% of net profit in the company’s separate financial statements after deducted legal reserves. Determinants such as financial position, liquidity, business expansion, and other factors relevant to the company’s management must be considered as well. The company’s subsidiaries have policy to pay dividend at the rate not less than 50% of net profit after legal reserves. Financial position, liquidity, business expansion and other factors related to management should be pondered. .

Property Perfect Public Company Limited

Management and Authorized Person of the Company Equity Career experience within the past 5 years Name-Title Age Academic Qualifications Holding Relationship (%) Designation Timing

Company / Business Type

1 Dr. Tawatchai Nakhata 61 Ph.D. University of Illinois 0.00096 % 1992 - Present Chairman / Chairman of Property Perfect Chairman Audit Committee Program (ACP) 13/2006 ; the remuneration committee Public Company Limited Chairman of Director Accreditation Program (DAP) 52/2006 ; 1995 - Present Managing Director Ceda Co., Ltd. / Structural the remuneration committee Thai Institute of Directors engineering design service 1995 - Present Fellow Member The Engineering Institute of Thailand 1984 - 1995 Consultant Engineer / Ceda Co., Ltd. Managing Director 1978 - 1984 Head of Construction Public Works Department, Resource Section Ministry of the Interior 2 Mr. Chainid Ngow-Sirimanee 54 Bachelor of Laws Chulalongkorn University 0.850% 1985 - Present Chief Executive Officer / Property Perfect Chief Executive Officer/ Thai Barrister-at-Law Thai Bar Association Chief Executive Director Public Company Limited Chief Executive Director/ 2002 - Present Director Krungthep Land Director Public Company Limited / Real Estate 1999 - Present Director Estate Perfect Company Limited / Real Estate 1995- Present Director Thai Property Public Company Limited / Real Estate (Formerly known as â&#x20AC;&#x153;Rattana Real Estate Public Company Limitedâ&#x20AC;?) 3 Mr. Virayuk Puntupetch 62 Master of Science (Business Administration) 2007-Present Director / Independent Director / Property Perfect Director / Bachelor of Arts (Political Science), Chairman Audit Committee Public Company Limited Independent Director / major in Public Finance Present Retired Government Officer The Secretariat of Chairman of the Audit Committee Certificate in Financial Policy Analysis the Prime Minister Office Program International Monetary Fund, 2005-2006 Advisor to the Prime Minister The Secretariat of Washington DC, USA. on International Trade Policy and the Prime Minister Office Certificate in Stock Market Development Program head of the office of Thai Trade Thai Trade Representative Securities and Exchange Commission, Representative Washington DC, USA 2004 Advisor to the Prime Minister Office of The Prime Minister Certificate in Executive Program, 2000-2004 Inspectors-General / Director Ministry of Finance / Vayupak Fund Harvard University, USA. 1998-2000 Deputy Director -General / Fiscal Policy Office / Director Office of General Administration for 33rd Annual Meeting of the Board of Governors of Asian Development Bank 1996-2000 Director Office of the Neighboring Countries Economic Development Cooperation Fund 1994-1998 Senior Expert for Fiscal Policy Office Debt Management 1994 Director Saving & Investment Policy Division, Fiscal Policy Office 1989 Director Capital Market Development Policy Division, Fiscal Policy Office 1986 Director Financial and Financial Institution Policy Division, Fiscal Policy Office 4 Mr. Somsak Toruksa 57 Master of Laws Ramkhamhaeng University 0.000 % 1998-Present Director / Independent Director / Property Perfect Director Audit Committee Program (ACP) 13/2006 ; Audit Committee / Public Company Limited Independent Director Director Accreditation Program (DAP) 52/2006 ; Selection Committee Audit Director Thai Institute of Directors 1993 - Present Managing Director Somsak Toruksa Selection Director Law Office Co., Ltd./ Law 5 Mr. Vidhya Nativivat 54 Master of Laws 1.352 % 2004-Present Director / Selection committee Property Perfect Director The George Washington University, USA and Remuneration committee Public Company Limited Selection Director Bachelor of Laws Thammasat University 1986 - Present Managing Director Bunchong and Vidhya Remuneration Director Law Office Co., Ltd./ Law

Annual Report 2007

Equity Career experience within the past 5 years Name-Title Age Academic Qualifications Holding Relationship (%) Designation Timing

Company / Business Type

6 Dr. Thamnoon Ananthothai 50 Ph.D., International Management, 0.000% 2007-Present Director / Independent Director Property Perfect Director Walden University, Naples, Florida USA. Audit Director / Chairman of Public Company Limited Independent Director A.C.A. Certificate, American Accreditation Council for Selection Director / Audit Director / Accountancy, USA. Remuneration Director Chairman of Selection Director / M.B.A., Management, The University 2007-Present Director / Audit Committee Bangkok University Remuneration Director of Sarasota-Sarasota, Florida, USA. 2006-Present Vice Chairman / Better World Green B.A., Accountancy & Management, Chairman of the Audit Committee Public Company Limited Eckerd College-St. Petersburg, USA. 2006-Present Director / Chairman of IFS-Capital (Thailand) Audit Committee Program(ACP) 10/2005, the Audit Committee Public Company Limited Director Accreditation Program(DAP) 48/2005, 2006-Present Director / Chairman of Eastern Printing Director Certification Program (RCP) 14/2006, the Audit Committee Public Company Limited Understanding the Fundamental of Financial Statement (UFS) 2005-Present Director / Audit Committee Ua WIthaya Public Company Limited 7/2007; Thai Institute of Directors 2004-Present Executive Director / Merchant Partners Chief Economist Director Securities Limited 2001-Present Executive Board Member / Clearing House of Sub-Committee Member The Agricultural FuturesExchange of Thailand 2001-Present Committee of the Investment The National Social Security Fund. Management / Sub-Committee 1997-Present Director in Economic Sector The Federation of Thai Industries. Committee 2002-2003 Dean of College of Dhurakij Pundit University / Business Administration University 1998-2002 President & CEO DBS Thai Danu Securities Limited / Securities 7 Mrs. Wanida Waiyawajamai 54 Bachelor of Accountancy 0.026 % 1988 - Present Executive Director / Property Perfect Executive Director Chulalongkorn University Assistant Chief Operating Officer Public Company Limited Assistant Director Accreditation Program (DAP) 1985 - 1988 Chief of Accounting Division / Dhananan Finance and Chief Operating Officer 50/2006 ; Thai Institute of Directors Internal Audit and Planning Securities Co.,Ltd./ Finance Manager 8 Mrs. Paneepan Tisapong 52 M.A. Mass Communication College 0.026 % 1989 - Present Director / Executive Director Property Perfect Director of Journalism City University, England Public Company Limited Executive Director Director Accreditation Program (DAP) 50/2006 ; Thai Institute of Directors 9 Mr. Ka Kay Yip 43 A.B. degree, magna cum laude, 0.000 % 2005 - Present Director Property Perfect Director Harvard University Public Company Limited 1998 - Present A senior partner GEMS, a private equity management company with around US $ 650 Million under management for investment in Asia. 10 Mr. David Bryce Van Oppen 42 M.A. International Relations 0.000 % 2007-Present Director Property Perfect Director (Economics and Asian Studies), Public Company Limited The Johns Hopkins University, U.S.A., 1998-Present A senior partner General Enterprise Management Bachelor Degree in Arts Services Ltd., Hong Kong (International Relations), Pomona College, U.S.A. 1995-1998 Vice President, Direct Investment Lazard Asia Investment Management Ltd., HongKong. 1993-1995 Senior Financial Analyst Smith Barney, Inc., Hong Kong. 1988-1991 Manager Sunmar Shipping, Inc., U.S.A. 11 Mr. Vichai Singvicha 53 MBA Kasetsat University 0.026 % 1988 - Present Executive Director / Property Perfect Executive Director Bachelor of Laws Chulalongkorn University Chief Business Public Company Limited Chief Business Development Officer Direct Certificate Program (DCP) 74/2006, Development Officer Direct Accreditation Program (DAP) 54/2006 ; Thai Institute of Directors

Property Perfect Public Company Limited

Equity Career experience within the past 5 years Name-Title Age Academic Qualifications Holding Relationship (%) Designation Timing

Company / Business Type

12 Dr. Theerachon Manomaiphibul 46 Ph.D. Engineering The Ohio State University, USA 0.019 % 2002 - Present Director / Executive Director / Property Perfect Director Director Certification Program (DCP) 74/2006, Chief Operating Officer Public Company Limited Executive Director Director Accreditation Program(DAP) 30/2004 ; 2000 - 2002 Executive Director Bangkok Rubber Chief Operating Officer Thai Institute of Directors Public Company Limited / Footwear Manufacturer Managing Director Saharattananakorn Co., Ltd / ” Industrial Estate Managing Director Jaruphon Patana Co.,Ltd. / ” Entertainment Managing Director Maikiew Chabadaeng Co.,Ltd. / ” Entertainment 13 Mr. Phairat Senachack 59 Mini MBA Thammasat University 0.000 % 1996 - Present Director / Executive Director Property Perfect Director Bachelor of Business Administration Assistant Chief Operating Officer Public Company Limited Executive Director / Assistant Assumption University Chief Operating Officer Director Certification Program (DCP)74/2006, Director Accreditation Program (DAP)30/2004; Thai Institute of Directors 14 Mr. Pramote Rermyinde 54 Bachelor of Laws Chulalongkorn University 1.454 % 1998 - Present Executive Director / Property Perfect Executive Director Company Thai Barrister-at-Law Company Secretary Public Company Limited Secretary Graduate Diploma in Business Law Thammasat University 1992 - Present Management Partnership Thammatit Law Office Director Certification Program(DCP) 69/2006 Group of Persons/ Law Director Accreditation Program (DAP) 43/2005 1994 - 1997 Executive Director Finance House Co., Ltd./ Finance Finance for Non-Finance Director ; 1993 Executive Director Credit Fancier Srinakorn Co.,Ltd. / Thai Institute of Directors Finance 15 Ms. Supee Reodacha 49 MBA Roosevelt University 0.000 % 2002 - Present Executive Director / Property Perfect Executive Director Treasury Division Director Public Company Limited and Financial Management 1996 - 2000 Business Development Manager Chai Talay Co.,Ltd / Hotel Division Director 16 Mr. Surasak Vacharapongpreecha 44 MBA Thammasat University 0.126 % 1993 - Present Executive Director / Property Perfect Executive Director Accounting Bachelor of Accountancy Thammasat University Division Director / Deputy Director Public Company Limited Division Director Certified Public Accountant Assistant Director, Estate Perfect Project Senior Manager, Financial Management Dept., Treasury Division Senior Manager, Financial Management Dept., Accounting Division 17 Mr. Kritapas Pongpakawat 50 MBA Ramkhamheang University 0.0% 2004 - Present Executive Director / Property Perfect Executive Director Bachelor of Accounting Ramkhamheang University Division Director Public Company Limited Budgeting Office Director Certify Of Management Engineering Institute Of Thailand 2001 - 2004 Vice President / Asian International Planners Co, Ltd / Certify of Top Management Program / The Boss Institute Director of Rehab Company Financial Advisory & Planner Asian Capital Advisers Public Company Limited / Advisory - Law financial, Accounting, Marketing of commercial and Industrial Note - No.7 Mrs. Wanida Waiyawajamai resigned from Executive Director since 15 August, 2007 - No.8 Mrs. Paneepan Tisapong resigned from Director and Executive Director since 15 August, 2007 - No.9 Mr. Ka Kay Yip resigned from Director and Mr.David Brycee Van Oppen is appointed by the Broad to take this position since 2 April, 2007 - No. 11 Mr. Vichai Singvicha resigned from Executive Director since 15 August, 2007 - No.14 Mr. Pramote Rermyinde due to retire by rotation and forgo nomination for re-election.

Annual Report 2007

Details of

directors, executive directors and directors of Property Perfect Plc., subsidiary company and affiliates as of 31 December 2007

Name of subsidiary/ Name of Directors Company

Subsidiary Company

Associated Other Company Company

Subsidiary Company

PF PSS ESTPF KL REAL Bright

Centre Point

1. Mr. Tawatchai Nakhata X, / 2. Mr. Chainid Ngow-Sirimanee /, // / / / / / 3. Mr. Vichai Singvicha ** // 4. Mr.Virayuk Puntupetch *, / 5. Dr. Theerachon Manomaiphibul /, // / 6. Mr. Phairat Senachack /, // 7. Mrs. Wanida Waiyawajamai ** // 8. Mrs. Paneepan Tisapong *** / , // 9. Mr. Ka Kay Yip** / 10. Mr. Somsak Toruksa *, / 11. Dr. Thamnoon Ananthothai *, / 12. Mr. Vidhya Nativivat / 13. Mr. Pramote Rermyindee ** // / 14. Mr. David Bryce Van Oppen / 15. Ms. Supee Reodacha // 16. Mr. Surasak Vacharapongpreecha // 17. Mr. Kittapas Pongpakawat // 18. Ms. Rassamee Metavikul / 19. Ms. Sureeporn Pipatwattanapong / 20. Mr. Tongchai Peyasantiwong / 21. Mrs. Tanida Surathamrong / 22. Dr. Bhichit Rattakul / 23. Mrs. Uraiwan Bhatarakarnt / 24. Mr. Thongchai Kunakornporamut / 25. Ms. Wilawan Leongnarktongdee / 26. Mr. Prasong Wararattakul / 27. Mr. Keangkai Jiwanant / 28. Mr. Goh Yong Chian / 29. Mr. Lim EE Seng / 30. Mr. Chan Kin Fai / 31. Mr. Chainarong Ngernsopha / 32. Mr. Phurit Prapawadee /

Property Perfect Public Company Limited

Remark : 1. 2. 3. 4.

PF = Property Perfect Public Company Limited PSS = Perfect Satellite Services Company Limited ESTPF = Estate Perfect Company Limited KL = Krungthep Land Public Company Limited REAL = Real Service Company Limited Bright = Bright Development Bangkok Company Limited Centrepoint = Centrepoint Shopping Mall Company Limited X * / //

= Chairman = Independent Director = Director = Executive Director

** ***

= Resighed from director (Property Perfect Plc.) = Resighed from director and Executive director

REAL cease operations

Annual Report 2007

Executivesâ&#x20AC;&#x2122; remuneration Cash remuneration

During 2006, 13 directors were paid Bt 4,980,000 as meeting allowances, 4 independent directors paid Bt 630,000 and 3 directors paid Bt90,000 (Note: Aside from meeting allowances, directors are awarded salaries as executives and directors.) Directorsâ&#x20AC;&#x2122; remuneration on 2007

Name

Audit committee Time

Amount

Company Directors Time

Dr. Tawatchai Nakhata** 3 150,000 8 Mr. Somsak Toruksa* 7 140,000 8 Dr. Thamnoon Ananthothai *,** 7 140,000 8 Mr. Chainid Ngow-Sirimanee 7 Mrs. Wanida Waiyawajamai*** 6 Mr. Vichai Singvicha*** 6 Dr. Theerachon Manomaiphibul 7 Mrs. Paneepan Tisapong*** 5 Mr. Phairat Senachak 7 Mr. Pramote Rermyindee**** 3 Mr. Vidhya Nativivat** 5 Mr. Virayuk Puntupetch* 4 200,000 5 Mr. David Bryce Van Oppen 4 Total 630,000

Amount

Total Time

800,000 11 400,000 15 400,000 15 350,000 7 300,000 6 300,000 6 350,000 7 250,000 5 350,000 7 150,000 3 250,000 5 250,000 9 200,000 4 4,350,000

Amount 950,000 540,000 540,000 350,000 300,000 300,000 350,000 250,000 350,000 150,000 250,000 450,000 200,000 4,980,000

Note: 1. Dr. Tawatchai Nakhata resigned from chairman of audit committee and Mr. Virayuk Puntupetch is appointed to take this position since 30 April 2007. * Audit Committee and Independent directors ** Remuneration and Human resource director *** The Committee resigned **** Retired by rotation and forgo nomination for re-election

Property Perfect Public Company Limited

The remunerations for the executive board, comprising 9 persons, totaled Bt 35.12 million in 2007. Details are as follows: No. of persons Amount (Bt million) Salary 9 29.91 Bonus 9 5.21 Total 9 35.12 Expenses on employees in 2007 are: Types of expenses Amount (Bt million) Salary 203.77 Others 49.64 Total 253.41 The number of employees as of 31 December 2007 totaled 438 persons. Executives 9 persons Back office 208 persons Marketing and project management 221 persons Total 438 persons

Annual Report 2007

Corporate governance The company has regarded corporate governance as an essential system to practice transparently, sharpen competitiveness, add long-term value to shareholders under ethics, and raise the company concern about other stakeholders and the overall society. The company has pursued the 15 good corporate governance principles set by the Stock Exchange of Thailand. Details are as follows : 1. Corporate governance policies The company’s Board of Directors has realised the importance of good corporate governance as it is the operating guidelines for the company to conduct business with efficient management system and it play a key role to bolster the company’s sustainable business growth. The company’s Board of Directors has determined to follow the principles with transparency to enhance confidence of shareholders, investors, and all related parties by paying attention to control and internal audit system and management supervision in setting the company’s policies and business directions to benefit shareholders in long run under laws and business ethics frameworks. 2. Shareholders rights The company has determined to equal rights of shareholders as follows : Rights to receive the company’s information The company sends invitations to the meeting, together with the agendas and relevant information, to share holders at least 15 days in advance of the meeting date. Each agenda is accompanied by the opinions of the Board of Directors to allow shareholders to have on time and sufficient information in making decisions for the meeting. In 2008, the company sent invitations together with the agenda and related information, to shareholders at least 15 days prior to the meeting. Besides, the company reported the shareholders’ meeting schedule and agendas to the SET President and Board of Governors on 28 February 2008 as appeared in the company’s news on the SET’s and the company’s website 30 days ahead of the meeting to open up opportunity for shareholders and investors to contact the company. Rights to vote All shareholders are eligible to attend the meeting and vote equally under the company’s provisions. The company has offered an alternative for shareholders by preparing proxy forms to authorise other people or independent director to attend the shareholders’ meeting on behalf of shareholders who could not attend. These shareholders can state which agendas they would like to vote support or against and grant the proxy to vote at their desire. The minutes of the meeting are recorded accurately and completely to allow shareholders to examine. Rights to be treated fairly Shareholders have rights to be treated equally with respect to their rights and interests.

Property Perfect Public Company Limited

3. Stakeholders rights The company is aware of the importance of the rights of stakeholders including customers, competitors, creditors, product distributors or contractors, community and society, state agencies, and the company’s staff. The company has strived to implement policy to create fairness and appropriateness with all groups of stakeholders as follows : Shareholders The company is concerned about transparency in important information disclosure to all shareholders accurately, completely and timely through channels including the SET’s electronic media, the company’s website, announcement in newspapers, press releases and written notices. Customers The company has determined to not only quality construction but also code of conducts by taking care and responsible for customers, offering quality and standard services, and solving customer complaints or providing advices as the earliest. The company’s staff The company has appointed the remuneration committee to perform duties in considering proper salary to employees and preparing manual for all staff to inform them about welfare policies clearly with respect to their interests, establishing provident funds, and promoting them with appropriate procedure to create fairness for all parties. Creditors Product distributors - The company has a clear period for placing invoice and check payment after handing over/inspecting works, informs contractors before they are hired and proceed payment to be in line with regulations strictly to ensure confidence of creditors. Contractors - The company has a criteria for contractor selection to have efficient contractors and offer them equal opportunity. The company has set fair price as the reference. Even though prices of some items are greater than agreed prices, the company can maintain the average price on par with the market price. Occasionally, the company has taken degree of difficulty of working condition into account for pricing and authorised each hiring sub-committee to consider the matter properly based on objectives and success in transparent procurement. To ensure contractors’ confidence and let them growth along with the company, the company has stated the clear construction progress and fair construction payment installment, inspection, and invoice placing in agreements with contractors for equal treatment, and set payment period in compliance with the company’s regulations. Competitors The company has adhered to good competition rules and avoided dishonest practices to destroy competitors. 55

Annual Report 2007

Society and environment The company is aware of quality of life and living in society, Thai culture, and environment as substantial matters for the company’s land development. Designs for all projects not only comply with the Land Appropriation Act and regulations of related agencies but also are concerned about living quality in society after the project development. This fact is highlighted from greater space for the public areas than required by law to make project perfect with lush trees, place of exercise, and sport field for residents. To take responsibility for society, the company participated in activities to enhance local development by paving tar (partly) on Prachauthit Road to allow better flow of traffic in the community, granting scholarship to students, building bus shelters to communities and jointly holding activities related to donations of stationery, sport equipment and others to students in provincial areas. The company has determined to public service activities and participated in these activities as deemed as appropriate. 4. Sharholders’ meeting The company has policy to hold meeting transparently and give equal opportunity and adequate time to all shareholders to express opinions and raise questions in the meeting. The company’s Board of Directors, independent directors and related management are required to attend the shareholders’ meeting to answer queries in the meeting. The main questions and suggestions are recorded in the minutes of the meeting to allow shareholders to examine later. 5. Leadership and Vision The company’s Board of Directors comprises of experience, knowledge and competent persons in developing the company. They have duties to set the company’s policies and operating direction, and oversee management to efficiently follow the policies to optimise benefits to the company and ensure shareholders’ confidence. The company has clearly determined and distinguished duties and responsibilities of the Board of Directors, the Executive Committees, the Audit Committee and the Management. The company has required internal audit office to constantly examine and follow operation, and report to Board of Directors’ meeting for acknowledgement. 6. Conflict of Interests The company’s Board of Directors and management have so far prudently considered avoiding conflict of interests with integrity, reasonably and independently under ethics for the sakes of the company’s interests. To create transparency and prevent seeking personal benefits, the company requires those who have interests in any transactions or might have conflict of interests with the company to abstain from expressing opinions or voting the transactions in the Board of Directors’ and the Executive Committee’s meeting. The company set policies and procedures in approval of transactions which might have conflict of interests and connected transactions to be compliance with the SET’s announcement governing connected transactions strictly to offer equal benefits to shareholders. 56

Property Perfect Public Company Limited

Moreover, the Audit Committee has duty to report the Board of Directors to acknowledge connected and conflict of interest transactions, which are considered circumspectly as appropriate, and comply with the SET’s principles stated in report and disclose information on quarterly basis as well as explain in annual report and filing (form 56-1). The company has policy to prohibit directors and management from directly and indirectly using inside information for their own benefits. The directors, management and employees who learn about the company’s financial information must not exploit the information one month before announcement of such information to the public. The company informs directors, management and staff mentioned above to avoid trading the company’s securities before the financial statements are disclosed to the public. It also explains directors and management about duties and responsibilities in reporting their holding and change in holding in the company’s securities to the Securities and Exchange Commission as stipulated in article 59 and punishment in article 275 of the Securities and Exchange Act B.E 2535. The company has also stipulated discipline penalty for the company’s staff who breach the company’s announcements or rules and regulations. 7. Business Ethics The company has determined rules and code of conducts concerning business ethics or code of ethics, and informed all directors and staff to let them understand how to practice to meet the company’s and shareholders’ expectation and use it as the right practices in doing business. 8. Balance of power for non-executive directors The company has required at least 3 independent directors in the Board of directors. The company’s Board of Directors contains 9 experience, knowledge and competent members as follows : - Executive director 4 persons - Non-executive director 2 persons - Independent director 3 persons Each director has fully freedom to express opinions. Independent directors accounts for one third of the board of directors’ members. The company has paid attention about independent directors’ opinions. In case that they have suggestions or disagree with any matter, the issue must be reviewed to find out the clear and transparent conclusion. 9. Aggregation or Segregation of positions The company has agreed to restructure its organization chart by separating into three main units (organization chart in page 2) to be appropriate with the current circumstance. The three units are as follows : - Operation unit led by chief operating officer - Business development unit led by chief business development officer - Financial unit led by chief financial officer

Annual Report 2007

The organization restructure has determined clear authority scope of each level of management with literature in form of chairman’s announcement implemented from the announcement date on 16 July 2007. Those who are in charge of approval, accounting item record, and assets are separated absolutely to be cross check. 10. Remuneration of directors and management The company has the Remuneration and Human Resource Committee comprising non-executive directors to be transparent in considering remuneration principles for directors and high-ranking executives. The remuneration of high-ranking executives must seek approval from the committee while that of directors needs shareholders’ approval. Remuneration of directors : The Board of Directors has set remuneration for directors in clear and transparent manner and the rate is high enough to retain directors who have desired qualification. Directors who are appointed as the Audit Committee are given increased remuneration appropriate to their greater workload. Remuneration of executives : Remuneration of executives has been set based on salary rate trend of business, size of which is close to the company, and performance of the company and each executive. 11. Board of Directors’ meeting The Board of Directors has scheduled to hold the regular meeting on quarterly basis or other extraordinary meeting as the need arose to review the quarterly operating performance and monitor progress of the operation. Chairman and Chief Executive Officer jointly considered important matters included as minutes in the meeting. Each director was independent to propose agendas in the meeting. The Board of Directors’ meeting in 2007 held total 9 meetings invited directors who are in charge of the matters to explain operating performance, present operating plans in the meeting, answer the Board of Directors’ questions and receive related important policy suggestions. As for the company’s rules, at least a half of directors are required to make quorum. If Chairman of the Board of Directors is absent or can not perform duty, vice chairman is in charge of the meeting. In case that there is more than one vice chairman, directors select one of them to be chairman of the meeting. If there is no vice chairman or he or she can not perform duty, directors choose one among them as chairman of the meeting. Decision of the meeting is made by majority vote. The company has focused on developing directors and executives to run business in the future. It has organised a course entitled “Real Estate Business Management”, contents of which incorporate knowledge about real estate, law, finance, accounting and good corporate governance to prepare executives for being directors in the future. The company has encouraged its Board of Directors to attend training courses held by the Thai Institution of Directors aimed at developing and enhancing directors to apply good corporate governance practices in companies.

Property Perfect Public Company Limited

In 2007, the Board of Directors scheduled in advance to convene 4 meeting every three months to approve yearly and quarterly financial statements. Details were as follows : The 1st meeting : To review the 2007 financial statements. The meeting has to be held within 29 February 2008 The 2nd meeting : To review interim financial statements for the first quarter of 2008. The meeting must be held within 15 May. The 3nd meeting : To review interim financial statements for the second quarter of 2008. The meeting must be held within 15 August. The 4th meeting : To review interim financial statements for the third quarter of 2008. The meeting must be held within 15 November. Aside from the scheduled meeting, Chairman can call for extraordinary Board of Directors’ meeting if necessary. 12. Subcommittee The company has appointed subcommittees to assist in the company’s supervision and increase efficiency in operation. Four subcommittees, which have clear scope of duty, contain the Audit Committee, the Executive Directors, the Nomination Committee, and the Remuneration and Human Resources. To comply with good corporate governance, each subcommittee is committed to perform duty transparently. 13. Controlling and internal audit system The company has regarded an importance of internal control system for efficiency of executives and operational levels. Practices of operational staff and executives are determined and clearly written. The company has set up an internal audit office to exclusively take responsible for efficient operational examination. The internal audit reports the result directly to the Audit Committee. 14. Reports of the Board of Directors The company’s Board of Directors has authorised the Audit Committee in charged to secretary of the company committee to oversee preparation of and information disclosure in the financial reports, and internal control and internal audit system to be sufficient and appropriate for internal control system in preparing accurate, completed, adequate, reliable and efficient financial statements. 15. Investor relations The company’s Board of Directors has determined to the importance of disclosing information, which might have effect on decision making of investors, stakeholders, accurately, completely, reliably, transparently, thoroughly and timely, as well as report financial, general and important information. The information disclosure to investors, analysts and interested persons are made through the Stock Exchange of Thailand’s channels for disseminating information. The company established an Investor Relations Office to take responsible in disseminating the company’s information and providing information services. Please contact Ms. Sirirat Wongwattana by telephone at 0-2247-7106, by fax at 0-2247-3328, by e-mail at sirirat@pf.co.th or through website http://www.pf.co.th/ir.

Annual Report 2007

Reference Rehabilitation Plan Administrator Auditors Legal Advisor Share Registra

Asian International Planners Limited 195 Empire Tower 3,19TH Floor, South Sathorn Rd., Kwaeng Yannawa, Sathorn, Bangkok 10120 Tel. 0-2670-1144 Fax. 0-2670-1152 Mr. Narong Puntawong Mr. Sophon Permsirivallop Mr. Supachai Phanyawattano Miss Siriporn Aueanankul Ernst & Young Office Limited 33 rd Floor, Lake Rajada Office Complex 193/136-137 New Rajadapisek Road, Bangkok 10110 Tel. 0-2264-0777, 0-2661-6190 Fax. 0-2264-0790, 0-2661-9192 Banchong and Vidhya Law Office 33/35, 33/39-40 Wallstreet Tower 9th Flr. Surawong Road Kwaeng Suriyawongse Bangrak Bangkok Tel. 0 2236-2334 Fax. 0 2236-3916 Thailand Securities Depository Co., Ltd. 4, 6-7th Flr. The Stock Exchange of Thailand Bldg., 62 Ratchadaphisek Road, Klongtoey Bangkok 10110 Tel. 0-2359-1200 Fax. 0-2359-1259

Property Perfect Public Company Limited

Connected Transactions with Related Persons 1. Connected transactions with Estate Perfect Co., Ltd (“Estate”)

Relationship - Property Perfect is major shareholder of Estate, holding 100% stake. - Property Perfect and Estate share 1 directors - Mr. Chainid Ngow-Sirimanee - A directors of Property Perfect Plc. is the directors of Estate - Mr.Pramote Ruemyindee Details of transactions Description Item 2007 Note

Loan

(Unit : Million Baht)

Debtor 241.45 Property Perfect loaned to Estate with promissory notes Interest income 13.08 represented for partial loan disbursement. The loan carried Accrued interest 1.25 1.5% on top of Property Perfect’s weighted average financial cost. The audit committee’s meeting resolved Property Perfect to provide additional credit lined of Bt160 million to Estate to purchase land and develop project. The company charged 1.5% on top of Property Perfect’s weighted average financial cost

Guarantee Credit line

1,441 Property Perfect entered into a guarantee contract for loans borrowed from a financial institution to Estate without premium. The guarantee’s details are as follows : Loan for Romklao project with credit line of Bt434 million Loan for Perfect Place project with credit line of Bt967 million. Cash flow loan amounted to Bt40 million. Pledged-asset mortgage Property Perfect pledged 23-21 rai of land for development and 1-3-4.5 rai of land and building as collaterals for Estate’s borrowing from financial institutions. If the collaterals are redeemed as the land and building are sold, it is seemed that Property Perfect repay the debts on behalf of Estate. Audit Committee’s Opinion The loan is the necessary financial assistance for Estate’s project development and expansion as planned. In addition, Property Perfect needed to provide the guarantee as it owns a 100% stake in Estate.

Annual Report 2007

2. Connected transactions with Bright Development Bangkok Co., Ltd. (“Bright”)

Relationship - Property Perfect is the major shareholder of Bright, holding a 99.94% stake. - Property Perfect and Bright share 2 directors Mr. Chainid Ngow-Sirimanee and Dr. Teerachon Manomaiphibul. Details of transactions Description Item 2007 Note (Unit : Million Baht) Investment in Investment in 1 Property Perfect established Bright to develop a project on common subsidiary Ratchadapisek Road as required by lender. The company shares bought 9,994 shares at the par value of Bt100 each of Bright for Bt994,000. Advance Advance 81.50 Property Perfect made advance payment for land acquisition payment payment and expenses related to the project development to Bright and lending Debtor 4.36 and approved a Bt61.30 million loan to Bright for the project Interest income 0.01 sale. The loan carried 1.5% on top of Property Perfect’s weighted Accrued interest 0.01 average financial cost. Audit Committee’s Opinion The investment is in line with a condition required by the lender while advance payment and lending are the necessary financial assistance for Bright’s project development and expansion as planned.

Connected transaction with Perfect Satellite Services Co., Lrd. (“Satellite”)

Relationship - Property Perfect is the major shareholder of Satellite, holding a 99.94% stake. - Property Perfect’s 4 executives - Miss Rasamee Metavikul, Mr. Thongchai Piyasantiwong, Miss Sureeporn Pipatwattanapong and Mrs.Thanida Surathamrong - are Satellite’s directors. Details of transactions Description Item 2007 Note (Unit : Million Baht) Hire to Expenses 8.40 Property Perfect hired Satellite to manage the company’s manage Creditor 0.98 club houses at the service fee of Bt120,000 per month per club houses project. Audit Committee’s Opinion The transaction is a normal course of business transaction whereby both companies jointly set the price.

Property Perfect Public Company Limited

4. Connected transactions between Centrepoint Shopping Center Co., Ltd. (“Centrepoint”)

Relationship - Property Perfect is the major shareholder of Centre Point, holding a 59.95% stake. - Property Perfect and Centre Point share 1 director - Mr. Chainid Ngow-Sirimanee. Details of transactions Description Item 2007 Note (Unit : Million Baht) Investment in Investment in 0.60 Property Perfect bought 5,995 ordinary shares at the par common subsidiary value of Bt100 each of Centre Point for Bt599,500. shares Deposit Other creditors 80 Property Perfect entered into a leasehold right transfer receive contract for 7-3-62.1 rai of land with Centre Point in the amount of Bt200 million, Bt80 million of which was deposited. Audit Committee’s Opinion The investment is aimed at improving experience of the company’s staff in shopping center project development and the leasehold right transfer contract is a normal course of business transaction whereby both companies jointly set the price, which is not below the appraisal price made by two independent appraisers.

5. Connected transactions with Krungthep Land Plc. (“KLand”)

Relationship - Property Perfect is the one of major shareholder of Kland, holding a 20% stake. - Property Perfect and KLand share a direct - Mr. Chainid Ngow-Sirimanee. Details of transactions Description Item 2007 Note

Interest income

(Unit : Million Baht)

Interest 0.45 Property Perfect charged KLand 15% per annum as KLand income defaulted payment. However, KLand in 2007 paid out the debt.

Investment in Investment in 60 common affiliate shares Guarantee Credit line 30

Property Perfect subscribed to 5,999,994 KLand’s capital increased shares at the par value of Bt10 each in the tune of Bt60 million to maintain its shareholding. Property Perfect entered a guarantee contract for loans extended by financial institutions to KLand without premium

Annual Report 2007

Audit Committee’s Opinion Interest rate is imposed under an agreement jointly set by both companies. The investment is to maintain the company’s rights and benefits, and the guarantee is financial assistance to the subsidiary (Property Perfect at that time held 99.93%).

6. Connected transactions with Real Service Co., Ltd. (“Real Service”)

Relationship - Property Perfect is a major shareholder of Real Service, holding a 19% stake. - An employee of Property Perfect Mr. chainarong Ngernsopha - is Real Service’s director. - Property Perfect’s executives - Mr. Pornsawat Ketchulasriroj, Mr. Surasak Watcharapongpreecha, Mr. Thiti Inklinphan and Mr. Somkid Chidtrakul - own a combined stake of 38% in Real Service. - KLand’s executive - Mr. Thosaporn Jirakiatdeekul - holds a 5% stake in Real Service. Details of transactions Description Item 2007 Note

Interest income

(Unit : Million Baht)

Interest 0.12 Property Perfect charged Real Service at the default rate of income 15% per annum. However, Real Service in 2007 paid out the debt.

Audit Committee’s Opinion Interest rate is imposed under an agreement jointly set by both companies.

Property Perfect Public Company Limited

Risk factors Possible risk factors involved in investors and securities issuer are as follows :

1. Risk from need of higher amount of cash flow due to pre-built home construction The company has still maintained its policy to construct pre-built homes to ensure consumers that houses are transferred to them. The company would also construct semi-pre-built homes, which have certain models and costs. To prevent excessive pre-built homes, the company has limited its number based on moving average and number of the homes. At the same time, the company has offered semipre-built homes in the potential projects and the house category has received good response from customers as they are confident in the company’s reputation that their homes will be transferred. The company has mitigated risk in seeking source of cash flow by rolling out pre-sale of new projects and pre-built houses and financial institutions then are confident about potential in pre-sale projects. The pre-sale also helps reduce risk from unsold pre-built houses. The company has adopted Load Bearing Wall and Rigid Frame or Skeleton techniques to shorten construction period and control quality of building materials as it does not rely much on skill labours. The shorten construction period from 6-8 months to 4-5 months also allows the company to manage its inventory efficiently. The company’s planned business expansion is also attributable to the need of higher cash flow. Pre-sale, however, lowers risks of financial institutions, which are the company’s lenders, as they can get debt repayment faster. For the company’s side, it can slim down costs and manage cash flow to reduce loan payment default problem as the company can use the cash flow derived upon land and houses transfer in one project to develop another projects. The company can do so due to the different time of project development and sales of each project. Also, the company prevents the risk by using loans from financial institutions as another source of cash flow. 2. Risk from rising cost of construction and the shortage of contractors Growth of real estate and construction industries, the government’s mega infrastructure projects and the steady spike in oil prices have pushed up building material cost and increase demand of labours and these have hurt operating costs of the company and construction industry. Building material prices in November 2007 surged by 1.5% month-on-month (the price tags rose 1.9% on month in October) as steel and products price index rose 4.1% and building material price index climbed up 0.7%. Average building material price between January and November 2007 jumped 4.7% year-on-year. Price of sanitaryware went up 10.3 year-on-year, that of steel and products rose 9.6% year-on-year while that of electric appliance and water supply-related products increased 4.4% year-on-year. Therefore, large-sized property developers in 2008 must pass through the higher costs to customers by raising house price tags. The company has regarded reduction of risk associated with building material price volatility and labour costs and changed its strategy to focus on pre-built and semi-pre-built houses rather than built-toorder homes to allow the company to map out construction in advance, bargain and control building material costs at a certain level, and know the overall costs before putting projects on sales. The company, however, has raised construction costs to contractors who suffer from the higher costs than the average industry benchmark. The company has policy to directly seek supply of major building materials including piles and roofs for the company’s and subsidiaries’ projects and this allows the company to have bargaining power and set delivery conditions. 65

Annual Report 2007

To minimize risk from the possible shortage of contractors, the company has paid attention to construction management by hiring over 100 small- and medium-sized contractors and setting their qualification, pricing and handing-over period ahead of entering into contracts. The company has managed contractors’ construction volume appropriately and constantly, created supply chain to support building materials to contractors, educated them and rated contractors’ quality based on their performance. The company has fairly raised construction cost amid the rising building material prices, employed an inspection standard to comply with the required standard and create cooperation atmosphere between contractors and the company. 3. Risk from guarantee loans borrowed by the company’s subsidiaries and affiliates Krungthep Land Public Company Limited (an affiliate) The company has guaranteed loan lent by financial institutions and secured by its affiliate, Krungthep Land Public Company Limited, with outstanding amount of Bt30 million as of 31 December 2007 (details shown in connected transactions). Until now, Krungthep Land Public Company Limited has still serviced the debt, the company then is not obligated to pay the debt to the creditors who are classified in the debt restructuring plan as the 11th group of creditors. If the debt becomes default, the company, under the debt restructuring plan, is obligated to pay 8% of the defaulted principal amount by cash and the remaining 92% by debt-to-equity swap. Also, the company will allocate free warrants to the creditors. Krungthep Land Public Company Limited has entered in a debt restructuring agreement, in which conditions are favorable for Krungthep Land Public Company Limited to repay the debt, with the creditors. Krungthep Land Public Company Limited in 2007 had 8 ongoing projects with a combined value of Bt10,095 million (details presented in product categories and services) and its two projects with the combined value of Bt2,418 million are in the pipeline to be launched in 2008. Krungthep Land Public Company Limited has still repaid the debt, so the company’s risk from guarantee the affiliate’s loan is relatively low. Estate Perfect Co., Ltd. (a subsidiary) The company’s Board of Directors in 2006 resolved the company to guarantee the Bt1,441 million loans of its subsidiary’s two projects (the company holds 100%). The company entered into the loan guarantee for Romklao project in the amount of Bt434 million and Perfect Place Sukhumvit 77 project in the amount of Bt967 million with a financial institution (please see detail in connected transactions) and guaranteed cash flow loan with credit line of Bt40 million. The loan guarantee is the necessary financial assistance for Estate’s project development and business expansion as planned. Perfect Place Sukhumvit 77 project in 2008 has the remaining value of Bt1,690 million and Romklao project phase 1 has the project value of Bt730 million. Romklao project is expected to be put on sales in the second quarter of 2008. With the product, price and potential location near the Suvarnabhumi Airport, the company believes that the project would receive warm welcome from customers. 4. Risk from the tougher competition in residential market As the government has a clear policy to stimulate economy through real estate industry as seen by the real estate stimulus package including the reduction of the specific business tax and transfer fee in

Property Perfect Public Company Limited

2008, the competition in the industry - particularly in large-scaled property developers - is intensified. The company has changed its product strategy since late 2007 by sorting out its products by brand to serve demand of consumers who need housing products in a price range of Bt1.5 million to Bt20 million. All projects of the company are located near the existing or imminent mass transportation system to cover all market segmentations and locations. Moreover, the company has determined on environment in the projects by investing to create greenery in peaceful atmosphere. The company received EIA Monitoring Award for the three consecutive years. The steady development of company since 2005 has improved the company’s confidence in potential and readiness to serve the government’s real estate stimulus measures. The company and subsidiaries posted sales revenue from land and houses and condominiums amounted to Bt4,477 million and Bt6,266 million for 2006 and 2007, respectively and its total growth rate was 39.95%. The company and subsidiaries in 2005 has backlog in the amount of Bt3,255.7 million and that’s why the company is confident about its competitiveness. 5. Risk from the implementation of escrow account law With the Cabinet’s resolution to Escrow Account Act expected to be enforced within 2008, it would send impact to property developers’ working capital as they will be unable to use down payments as working capital until the construction is completed and approved from entities monitoring escrow account. In case that the company chooses to follow the law, the company may pose working capital risk as it can receive the total payments from customers in one time when the construction is completed. The company since 2006 has had low ratio of working capital from down payments compared with other sources of working capital including short-term loans, long-term financing projects, debt instruments to control financial costs and limitation of construction volume to be in line with cash flow, sales volume and inventory as the company has policy to offer pre-built homes. However, the company has realised about maintaining liquidity for operation. In 2008, the company is to seek an approval from the annual ordinary shareholders’ meeting to issue secured debentures in the sum of Bt2,000 million to finance business expansion and lower risk from working capital shortage (The company does not shoulder any burden from debenture repayment). 6. Risk from policy-based action plan governing sustainable management of green areas initiated by the Natural Resources and Environmental Policy and Planning Given a resolution of a committee who specialises in analysing environmental impact from property development, it has an adverse impact to develop high-rise and single-detached or townhouse projects with at least 100 rai of land or 500 units. The company’s project development starting from planning and project pattern strictly pursues the Land Allocation Act and other related laws. The company seeks approval on allocate land and report on environmental analysis from the committee ahead of construction. The company has so far concentrated on good environment management policy to offer peaceful atmosphere for living, lakes for relaxation, public garden maintenance for mutual benefits of residents and greater space of public areas than the act’s requirement. The company won EIA Monitoring Award for three straight years. With the policy-based action plan and strictly adhering to the law, risk from the new requirement will not affect the existing projects but it may delay future projects and affect these projects’ value.

Annual Report 2007

Explanation and Analysis of Financial and Operating Results Property Perfect Public Company Limited’s consolidated financial and operating results for year 2005-2007 were as follows :

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

In 2007, the company changed accounting policy for investments in subsidiary and affiliated companies from equity method to cost method in compliance with Accounting Standard No. 44 (amended in 2007), regarding to consolidated and separate financial statements, under which investments in subsidiaries, jointly controlled entities and affiliates are to be presented in the separate financial statements under the cost method. In this regard, the company restated the previous period’s separate financial statements as though the investments in the subsidiaries and affiliate companies had originally been recorded using the cost method. The change had the effect of decreasing net income in the separate income statements for the year ended 31 December 2007 and 2006 by Bt42.8 million (Bt 0.05 per share) and Bt 21.9 million (Bt 0.03 per share), respectively. The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the change in accounting policy for recording investments in subsidiary and associated companies” in the separate statements of changes in shareholders’ equity. Such change in the accounting policy affects only the accounts related to investments in subsidiary and affiliate companies in the separate financial statements, but does not affect the consolidated financial statements.

Overall operating performance

The company’s earnings in 2006 dropped from the previous year before recovering in 2007. The company and subsidiaries launched projects to satisfy needs of consumers. The company unveiled 5 projects in 2005 and one of which was low-rise condominium while introduced 3 projects in 2006 and one of them was townhouse. The company in 2007 launched 2 new projects and new phases in 3 existing projects. The company and subsidiaries have the total 13 ongoing projects.

Consolidated Operating Results

• Sale revenue The company realizes land and house and condominium units sales as revenues in statements of income when ownership rights are transferred to buyers. In 2005, consolidated sales revenue was divided into two parts as follows - Land and house sales revenue Land and house sales revenue is the company’s main contributor. Consolidated sales revenue in 2005 stood at Bt 4,931.89 million, representing 97.62% of total sales revenue and rising 19.52% from Bt4,126.49 million in the previous year. The growth resulted from launch of 5 new projects - concentrating on low-, middle- and high-income earners - in 2005, the continued advertising from 2004 to now to repeat the company’s image in customers’ memory and a focus on various design pre-built houses, locations which meet with customers’ need and continued demand. 68

Property Perfect Public Company Limited

- Land sales revenue Land sales revenue was Bt120 million, or 2.38% of total sales revenue. Some plots of land bank were sold as the company had no plan to develop them, so the company’s board of directors resolved the sale at the prices based on appraisal prices of independent appraisers (see additional details on notes to financial statements as of 31 December 2005 No.10 on land bank).

Consolidated sales revenue in 2006 contributed from land and house sales fell 9.22% from Bt4,931.89 million in 2004 to Bt4,477.29 million, given the slowdown economy triggered by the higher interest rates and oil price, political uncertainty and the company’s strategy change from pre-built to builtto-order houses in some projects resulting in longer period of right transfer. These projects are Perfect Park Rama 5-Bangyai and the Villa Rattanathibet-Rachapruek. In 2007, consolidated sales revenue generated from land and houses sales amounted to Bt4,697.13 million, up Bt219.85 million from 2006. The company in the year had sales revenue from condominium units of Metro Park Sathorn in the tune of Bt1,469.49 million. The condominium project’s sales were available in late 2005 and its units have been transferred to customers from the first quarter of 2007. Besides, the company sold land amounted to Bt99.31 million, accounting for 1.58% of the total sales revenue at Bt6,265.93 million - an increase of Bt1,788.64 million or 39.95% year-on-year. Consolidated sales revenue between 2005 and 2007 by project is presented in table of sales revenue structure (in Nature of business No 2.3). • Cost of sales and gross margin Calculation of costs of land and house sales and condominium units, which is the company’s and subsidiaries’ main cost, takes into account all project development costs that estimated to arise proportionately to land sold (and also actual costs) and the costs of sales are realized after the company books revenue from the sale of a particular unit. The above project development costs are presented at net cost from provision of losses from a write-down in project value.The cost covers the price of land, designs, infrastructure, construction and related interest. Consolidated selling sales in 2005 incorporated - Key cost is cost in sales of land and house totaled Bt3,227.83 million, up Bt662.43 million or 25.82%, from the previous year. The percentage increase exceeded the 19.52% year-on-year increase in sales revenue, due to higher construction material prices. - Land bank cost amounted to 120 million. This is the cost of land bank sales, estimated by independent appraisers certified by the Securities and Exchange Commission. The appraisal price was lower than the historic land cost but provisions for reduce value assets were made.

Annual Report 2007

Consolidated selling cost in 2006 was Bt3,093.99 million, down Bt133.83 million or 4.15% from the previous year. Sale cost accounted for 69.10%, higher than 65.45% in the previous year. Consolidated costs in 2007 were as follows: - Cost of land and houses sales rose by Bt203.31 million or 6.57% to Bt3,297.30 million. The selling cost represented 70.20% of the sales revenue, a 1.59% higher than the previous year. - Cost of condominium unit sales were Bt1,041.59 million. The selling cost accounted for 70.88% of the sales revenue. - Cost of land sales stood at Bt56.58 million. The cost represented 56.97% of the sales revenue. Regarding gross margin from normal business operation, gross margin from land and houses sales of the company and subsidiaries in 2006 was 30.90%, down from 34.55% in 2005, given the tough competition, and higher land development costs due to effect of reversal of the allowance for possible loss from the project’s value reduction and land bank’s depreciation in 2005 (see details in other revenues in 2005) In 2007, the company’s and subsidiaries’ gross margin from land and houses sales was 29.80%, down from 30.90% in 2006, as costs increased but the company still maintained the price tags. Gross margin from condominium unit sales was 29.12%. • Other revenues In 2005, the company and subsidiaries recorded Bt737.70 million in other revenues as detail - The reversal of allowance for loss from devaluation of projects Bt70.90 million, which sold out in the second quarter of 2005. The appraisal price of the land bank assessed by independent appraisers was greater than book value as of 31 December 2005. The company and subsidiaries in 2005 hired independent appraisers to assess fair value for “land bank” again and their prices were Bt100.68 million greater than book value. The company then reversed the aforementioned item as other revenues in the income statements. - The reversal of allowance for loss from devaluation of projects. In 2005, the company and subsidiaries arranged re-appraising the fair value of “costs of property development projects” conducted by independent appraisers and the fair value was Bt467.41 million higher than book value, the company then reversed the aforementioned item as other revenues in the income statements. - The reversal of Bt49.11 million gains from debt restructuring receivable written off was stemmed from the faster-than-expected repayment of debts in part of secured creditors. In 2006, the company and subsidiaries recorded Bt56.52 million as other revenues, most of which were contributed by utility facilities expenses of projects, club house management, and forfeit of down payment.

Property Perfect Public Company Limited

In 2007, he company and subsidiaries had Bt67.31 million in other revenues, most of which were contributed by utility facilities expenses of projects, club house management, forfeit of down payment, and gains from investments in subsidiaries and affiliates. • Selling administrative expenses Selling and administrative expenses in 2005 were Bt1,043.39 million, an increase of Bt209.97 million or 25.19%, as the company prepared to launch 6 projects and constantly employed public relations in various media to boost sales and highlight the company’s brand in consumers’ perception. Revenue from these projects started to be realized in late third quarter of 2005 to 2006. In 2006, selling and administrative expenses totaled Bt1,087.76 million, rising Bt44.37 million or 4.25% from 2005. In 2007, the company and subsidiaries’ selling and administrative expenses were Bt1,286.33 million, up Bt198.57 million or 18.26%, due to higher expenses related to specific business tax and transfer fees after the sales revenue rose by Bt1,788.64 million or 39.95% from 2006 to Bt6.265.93 million. • Net profit Consolidated net profit during 2005-2007 were (Unit : Million Baht) 2007 2006 (Restated) 2005 Net profit 411.61 11.99 1,092.64 The 2005 consolidated net profit totaled Bt1,092.64 million, up Bt77.12 million or 7.59% from the previous year, due to the higher sale revenue and other revenue. Exclusive of other revenue - the reversal of project development cost provision of Bt467.41 million, the reversal of land bank value provision of Bt171.58 million, the reversal of debt restructuring gain of Bt49.11 million and the reversal of asset value provision of Bt32.90 million, the consolidated net profit would be Bt437.45 million. But for other revenue the reversal of investment in Estate of Bt139.49 million and the allowance for doubtful loans of Bt143.41 million, the booking of debt restructuring gain of Bt47.76 million and the goodwill amortization of Bt21.58 million - the 2004 consolidated net profit was Bt706.34 million. In 2006, consolidated net profit slumped Bt1,080.64 million or 98.90% from the previous year to Bt11.99 million, given declines in sales revenue and other revenue. With the absence of items related reversal of provisions as stated above, net profit in 2005 totalled Bt437.45 million compared with the 2006 net profit, a Bt425.46 million fall year-on-year, due to sale revenues decline and the intensified competition decreased gross profit margin. In 2007, consolidated net profit was Bt411.61 million, up Bt399.61 million or 3,332.34%, due to higher land and houses sales. It realized revenue from transfer condominium units and land sales. Gross profit from land and houses sales fell slightly from 30.90% to 29.80%.

Annual Report 2007

Financial Status

Overall Picture of Financial Status Table presented consolidated financial status As of 31 December 2007 As of 31 December 2006 As of 31 December 2005

Assets 12,911.03 13,176.13 13,861.16

Liabilities 6,823.84 7,500.54 7,923.73

(Unit :Million Baht) Shareholders’ equity 6,087.19 5,675.59 5,937.43

• Assets The company and subsidiaries had total assets of Bt13,861.16 million in 2005, Bt13,176.13 million in 2006 and Bt12,911.03 million in 2007. Assets in 2006 dropped by Bt685.03 million or 4.94% from at the end of 2005 due to the decrease in cash and reversal of project development cost to selling cost. Assets in 2007 fell by Bt265.10 million or 2.01 per cent due to reversal of cost of project development to cost of sales. By item as at 31 December 2007, the project development cost was Bt7,991.85 million or 61.90 % of total assets controlled the highest portion. Following were land bank amounting to Bt 2,979.84 million, and investments in affiliates amounted to Bt401.45 million or 23.08% and 3.11%, respectively. The asset structure was deemed appropriate with the company’s and subsidiaries’ nature of business. Details of assets are as follows : Project development cost (Unit : Million Baht) 2007 2006 2005 Company - unconsolidated 6,425.48 80.40% 6,531.99 81.48% 6,442.29 84.48% Subsidiaries 1,566.37 19.60% 1,484.20 18.52% 1,183.18 15.52% Total* 7,991.85 100.00% 8,016.19 100.00% 7,625.47 100.00% Note * Project development cost in consolidated financial statements as of 31 December 2005 - 2007 - The company’s project development cost (unconsolidated) continued to rise due to the higher number and value of project developed for sales. The 2007 project development cost totaled Bt6,425.48million, including the net value worth Bt60.58million from loss provisions from project value write-down, which is booked as required by accounting standard when accounting cost exceeds independent appraisers’ evaluation price. - Subsidiaries’ project development cost belonged to Estate, which is developing 2 projects. The cost in 2007 totaled Bt1,566.32 million, of which Bt9.86 million was net value from loss provisions from project value write-down.

Property Perfect Public Company Limited

Net land bank Company - unconsolidated Subsidiaries Total *

2007 2,979.84 100.00% - - 2,979.84 100.00%

2006 3,042.35 100.00% - - 3,042.35 100.00%

(Unit : Million Baht) 2005 3,389.87 92.63% 269.70 7.37% 3,659.57 100.00%

Note * Net land bank mentioned in financial statements at 31 December 2005 - 2007 - The company’s net land bank (unconsolidated) consists of land cost, development cost, construction cost, interest expenses minus costs that would be reverted to sale cost, the land transferred for debt restructuring and repayment according to the rehabilitation plan and loss provision from impairment of land bank in 2007 of Bt127.4 million (See additional detail in notes to financial statements No.12). The company and subsidiaries will consider reverting land bank to book as project development cost only when the development starts - for example, when the land is being cleared or when development plan is plotted.

Investments in affiliates

Investments worth Bt300 million in Krungthep Land Public Company Limited represented a 20% stake in Krungthep Land Plc. (as of 31 December 2005, Krungthep Land’s paid-up capital was Bt1,500 million) and the Board of Directors’ meeting on 18 January 2007 approved the company to subscribe to Krungthep Land’s 6,000,000 capital increased shares at the par value of Bt10 each totaling Bt60 million to retain its shareholding ratio. On 16 November 2007, Krungthep Land’s 1/2007 extraordinary shareholders meeting resolved to decrease the registered capital from Bt2,100,000 million to Bt1,780,000,000 by canceling 32,000,000 unissued shares at the par value of Bt10 each for Bt320,000,000. The meeting also approved the recapitalization of Bt450,000,000 from Bt1,780,000 to Bt2,230,000,000 by issuing 45,000,000 capital increased shares at the par value of Bt10 each to reserve for exercise of convertible debentures as prescribed in notes to financial statements No.35) According to the consolidated financial statements, the company recorded profit (loss) sharing under the equity method and realized profit of Bt3.99 million in 2005, loss of Bt23.37 million in 2006 and profit of Bt11.75 million in 2007 as revenue (expenses) in the income statements Investments in affiliates under the equity method were Bt353.06 million in 2005, Bt326.69 million in 2006 and Bt401.45 million in 2007.

Annual Report 2007

Other guarantee obligations

The company holds obligations to the loan guarantee to its subsidiaries, Estate Perfect Co., Ltd., worth Bt1,441million and affiliate company, Krungthep Land public company limited, worth Bt30 million with financial institutions. The company is no need to honour the obligations as the subsidiary and the affiliate have not yet defaulted on the loans. • Asset quality The company has policy to realise revenue only when ownership rights of housing are clients. Thus, downpayments or installments would be booked as liabilities under the downpayment and clients’ advance payment items. The overdue installments would be booked in the trade debtors item. Though the company focuses on selling pre-built houses, some clients prefer to buy houses under construction. The company then sold such houses to customers who are required to pay downpayment in installments. The installments are included in trade debtors. Mostly, the debts in this item is cleared in less than a year. In 2007, consolidated trade debtors receivables totaled Bt43.252million and consolidated allowance for doubtful debts for debtors who unpaid for over 12 months worth Bt9.794million. Thus, net consolidated trade debtors totaled Bt33.45 million. The company believes that the allowances are sufficient for the current situation. Consolidated trade debtors can be broken down into 2 groups. • Customers with overdue installments Customers with overdue installments are those who failed to pay installments for houses under construction. They had overdue installments of Bt25.42 million or 58.796% of total overdue loans. • Customers with overdue transfer fee Customers with overdue transfer fee are those who did not pay all debts on the transaction date, accounting for 41.21%. However, the overdue loan worth Bt17.83million representing 0.14% of total assets, an insignificant ratio. The company also made allowance worth Bt9.79million. For clients who fail to paid the debts for 6 months or longer, the company has contacted them to pay their obligations and some cases have been brought to court. The company believes that the allowance for doubtful debts is sufficient under the present circumstances. • Liquidity Statements of cash flow between 2005 and 2007 were as follows : (Unit: Million Baht) Item 2007 2006 (Restated) 2005 Cash flow from operating activities 1,322.87 1,024.20 1,041.29 Cash flow from investment activities (386.13 ) (314.47 ) (1,258.73 ) Cash flow from financing activities (825.43 ) (899.79 ) 368.54 Net cash flow increase (decrease) 111.31 (190.06 ) 151.10

Property Perfect Public Company Limited

The company and subsidiaries had positive net cash flow of Bt151.10 million in 2005. Most of them are loans from financial institutions, and the sale of secured and unsubordinated convertible debentures. Consolidated net cash flow in 2006 was minus Bt190.06 million, though there was the positive cash flow from operating activities from the debenture and dividend payments. In 2007 the company and subsidiaries had the net positive cash flow in the amount of Bt111.31 million, thanks to the positive cash flow from operating activities as much as Bt1,382 million. Cash flow from investment activities has been in the negative area, totaling Bt1 ,258.73 million, Bt315.79million and Bt386.13million during 2005-2007, due to the company’s land bank purchases to prepare for the company’s projects.. In 2005, the company’s advance payments for land purchases amounted to Bt308.18 million and the land bank purchases of Bt902.05 million. In 2006, consolidated cash flow from investment activities incurred from advance payments for land purchases and land bank acquisitions of Bt243.10 million. . In 2007, advance payments for land purchases and land bank acquisition were Bt88.86 million, deposits pledged as collateral amounted to Bt225.28 million. The company in 2007 also invested additional Bt60 million in Krungthep Land to retain its shareholding ratio. Cash flow from financing activities totaled Bt368.54 million in 2005, respectively. Significant sources of fund in 2005 derived from the issuance of unsubordinated convertible debentures worth Bt823 million. Cash flow from financing activities in 2006 was repayments of net debts and dividend worth Bt625.90 million and Bt273.89 million, In 2007, cash flow from financing activities comprised a Bt475.42 million debt repayment and a Bt350 million debenture redemption. The company paid dividend of Bt0.35 per share in 2005, totaling Bt273.9 million, on 26 May 2006. Sources of fund • Liabilities Consolidated liabilities in 2007 totaled Bt6,823.84million (Bt6,232.52 million was the company and Bt591.32million was subsidiaries), a Bt 676.71 million lower from 2006. The decline in debenture payments-net totaling Bt350 million , a Bt472.27 million net loan repayment of Bt472.27 million and the increase in borrowing of Bt130 million and customers’ advance payments of Bt176 million were attributable to the declined consolidated liabilities. According to consolidated liabilities structure in 2007, long-term loans accounted for 51.40%of total liabilities, overdraft and short-term loans were 4.86%, unsubordinated convertible debentures represented 4.86%, debenture creditors were 6.59% and creditors in the rehabilitation plan accounted for 9.50%. Details are as follows: - Long-term loans In 2007, long-term loans amounted to Bt4,507.55 million, of which Bt3,006.96 million were borrowed by the company (Bt458.13million is due within one year) and Bt 500.59 million were borrowed by subsidiaries. (Bt4.87 million is due within one year). The loans were to finance project development and land purchases for future project development. The loan details are:

Annual Report 2007

31 December 2007

The Company Subsidiaries Total Only

Long-term loans Less :loans due within 1 years Long-term loans (net)

(Unit : Million Baht) 31 December 2006 The Company Subsidiaries Only

Total

3,006.96

500.59 3,507.55 3,468.49

640.42 4,108.91

458.13 2,548.83

4.87 463.00 940.89 495.72 3,044.55 2,527.60

0.00 940.89 640.42 3,168.02

Moreover, the company guaranteed loans from banks and financial institutions to affiliate worth Bt30 million and subsidiaries worth Bt1,441million. - Overdraft and short-term loans In 2007, the companyâ&#x20AC;&#x2122;s overdraft and short-term loans were Bt331.64 million. Of the total, Bt306.64 million were borrowed by the company and Bt25 million by its subsidiaries. Promissory notes and short-term loans lent by financial institutions amounted to Bt266.64 million, overdraft loans were Bt30 million and short-term loans lent by other companies totaled Bt10 million. Debentures - Debentures as at 31 December 2007 worth Bt450 million comprised of Secured debentures which must be redeemed in full, amounted to Bt850 million. Proceeds from the issuance of the debentures were to buy land for project expansion, repay loans and reserve as working capital. Details of the debentures are: Issue Value Issue date Maturity date Condition (Million Baht) 1/2006 debentures, set 1 450.00 9 February 8 February The ratio of collateral to 2006 2008 outstanding debentures must be maintained at 1.5:1 The ratio of total liabilities to shareholdersâ&#x20AC;&#x2122; equity must be maintained at 1.75:1 Total 450.00 The company redeemed debentures on 8 Febuary 2008

Property Perfect Public Company Limited

Unsubordinated convertible debentures The issuance objective was to refinance loans and reserve as working. Debentures details are: Issue Value Issue date Maturity date (Million Baht) Unsubordinated 823.00 25 25 convertible debentures November November (200,000 units at face 2005 2010 value of US$ 100)

Condition Conversion ratio of 1 debenture to 658.4 common shares or at Bt6.25 per share Unconverted debentures will be redeemed at US$131.60 per unit at the exchange rate of Bt41.15/US$ One individual nominated by foreign investors must be appointed a director.

The 1/2005 unsubordinated convertible debentures (only liabilities part) as at 31 December 2007 valued Bt8025.88 million (On 25 November 2005, the company issued US$20 million convertible debentures for sales). Booking convertible debentures in balance sheets will be divided into two parts - liabilities and equity - as follows : • •

Convertible debentures- liabilities component is computed from cash flow of principal and interest rate to be paid in future less the current market interest rate Convertible debentures-equity component is calculated from outstanding convertible debentures less liabilities. The difference between the liabilities’ book value and convertible debentures’ face value will be amortised based on convertible debentures’ maturity

- Creditors in business rehabilitation plan After the company’ s exit of the rehabilitation plan in 2007, creditors in the Business rehabilitation plan had outstanding loans of Bt648.41 million comprising of Bt132 million by creditors with collaterals, Bt516 million by creditors without collaterals, Bt0.1 million by land and house buyers. The principal and interest repayment terms are as follows:

Annual Report 2007

Type Outstanding Principal repayment Interest rate (Million Baht) Year % Creditors with 132 From cash flow exceeds 2004-2005 3% MLR collaterals Bt250 million at the end From 2006 but below of each quarter 10% Creditors without 516 From cash flow exceeds 2004-2005 1% MLR collaterals Bt250 million at the end From 2006 but below of each quarter 10% Land and house 0.01 Fully repaid but some - - buyers buyers have not yet received the payments Total 648.41

As stated in the business rehabilitation plan, the company is required to pay the debts within October 2008

• Shareholders’ equity Consolidated shareholders’ equity in 2007 totaled Bt6,087.20 million, increase Bt 411.61 million from 2007. resulted from the entire net profit in 2007. Shareholders’ equity structure incorporates Bt4,724.95 million paid-up capital at Bt6 par value, Bt42.71 million discount on share, 0.002 million share subscription in advance, unsubordinated convertible debentures’ equity component worth Bt23.54 million, and Bt1,381.43 million accumulated profits. In 2007, outstanding unconverted warrants issued to creditors without collaterals were 8.91 million units. Each warrant is entitled to a 1 common share conversion at the price of Bt0.01 per share. The 10-year warrants can be exercised on the last day of the second and fourth quarter, starting from the fourth quarter of 2002. • Debt to equity ratio Debt to equity ratio in 2005 stood at 1.33 times. It slumped marginally to 1.32 times in 2006 and 1.12 times in 2007. The lower ratio resulted from the decline in total liabilities and the increase in shareholders’ equity.

Property Perfect Public Company Limited

Future projects The company and subsidiaries have planned to launch 6 new projects, in addition to property development projects as mentioned in the ongoing projects. The new projects worth totally Bt13,130million are as follows : Project’s name Location Product Project value Development type period Area Number Value

(rai)

of (Unit) (Million Baht)

1 Perfect Place Rachapruek Bangrak Noi SDH 111.3 443 2,300 2 Perfect Place Ramkhamhaeng Ramkham- SDH 38 114 830 (The Lake Zone) haeng 3 Perfect Park Romklao (phase1)** Romklao SDH 42 194 730 4 Perfect Masterpiece pattanakarn Pattanakarn SDH 147.9 342 3,200 5 The Villa Pattanakarn Pattanakarn TH 51.55 599 2,070 6 Metro park Rachada*** Rachadapisek CD 11.5 1,200 4,000 Total 2,892 13,130

Q4/2008-2010 Q4/2008-2009 Q2/2008-2009 Q4/2008-2013 Q3/2008-2011 Q2/2008-2010

Remark : ** project of subsidiary (Estate Perfect Company Limited) *** project of subsidiary (Bright Development Bangkokt Company Limited) SDH = Single Detached House, TH = Townhouse, CD = Condominium

Key factors and influences which may affect the future operations and finance

The company’s and subsidiaries’ growth still depends on support from financial institutions and fiscal and monetary policies, which affect business operations of the company and subsidiaries. The company’s and subsidiaries’ businesses need high investment starting from land acquisition, seeking land development permission and environmental approval, and construction until works are completed. The company’s inventory turnover averages at 902.16 days. With high investment in developing land and building houses before realising revenue, the company needs investment from shareholders, long-term cash flow from financial institutions, other financial instruments to reduce financial costs, and partners to boost the company’s substantial growth.

Annual Report 2007

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

(หน่วย:Baht) บาท) (Unit: I have audited the accompanying consolidated balance sheets of Property Perfect Public Company Consolidated financial statements Separate financial statements 2006, the related Limited and its subsidiaries as at 31 December Note 2007 and 2007 2006 consolidated 2007 statements 2006 of (Restated) income, changes in shareholders’ equity and cash flows for the years then ended, and the separate financial statements of Property Perfect Public Company Limited for the same periods. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Property Perfect Public Company Limited and its subsidiaries and of Property Perfect Public Company Limited as at 31 December 2007 and 2006, the results of their operations, and cash flows for the years then ended, in accordance with generally accepted accounting principles. Without qualifying my opinion on the above financial statements, I draw attention to the matter as discussed in Note 4 to the financial statements whereby, in 2007, the Company changed its accounting policy for recording investments in subsidiaries and associate in the separate financial statements from the equity method to the cost method. The Company has thus restated the separate financial statements as at 31 December 2006 and for the year then ended to reflect this accounting change. Supachai Phanyawattano Certified Public Accountant (Thailand) No. 3930 Ernst & Young Office Limited Bangkok: 28 February 2008 80

Property Perfect Public Company Limited

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

BALANCE SHEETS AS AT 31 DECEMBER 2007 AND 2006 (หน่วย:Baht) บาท) (Unit: Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) ASSETS CURRENT ASSETS Cash and cash equivalents 424,055,579 312,742,938 397,595,597 271,119,989 Trade accounts receivable, net 6 33,452,438 33,779,857 32,530,838 31,923,101 Project development costs, net 7 7,991,847,276 8,016,191,069 6,425,477,543 6,531,990,915 Other current assets Advances to contractors, net 32,916,874 70,393,200 32,916,874 70,393,200 Prepaid expenses 5,440,132 9,244,664 5,440,132 9,244,664 Others 14,448,799 9,404,544 11,387,981 5,211,319 TOTAL CURRENT ASSETS 8,502,161,098 8,451,756,272 6,905,348,965 6,919,883,188 NON-CURRENT ASSETS Restricted deposits 8 226,123,159 840,659 226,123,159 840,659 Advances to related company 28 - - 81,500,000 - Loans to related companies and interest receivable, net 28 - 67,415,253 247,074,412 166,442,291 Account receivable - land 9 35,358,000 - 35,358,000 - Investments in subsidiaries 10 - - 541,057,356 539,458,456 Investment in associate 11 401,445,870 329,694,862 359,999,240 299,999,300 Other long-term investments, net 4,985,944 4,802,024 4,985,944 4,802,024 Land held for development, net 12 2,979,837,101 3,042,351,674 2,979,837,101 3,042,351,674 Advances for purchases of land 13 151,462,635 730,081,570 22,000,000 629,118,935 Property, plant and equipment, net 14 400,999,621 364,229,267 346,394,876 339,629,000 Leasehold rights, net 15 60,630,512 62,523,935 60,630,512 62,523,935 Leasehold rights awaiting sale, net 16 60,717,672 60,717,672 60,717,672 60,717,672 Other non-current assets Withholding tax deducted at source 61,287,159 39,027,390 57,329,685 38,658,509 Others 26,025,297 22,692,258 22,151,078 22,252,403 TOTAL NON-CURRENT ASSETS 4,408,872,970 4,724,376,564 5,045,159,035 5,206,794,858 TOTAL ASSETS 12,911,034,068 13,176,132,836 11,950,508,000 12,126,678,046 The accompanying notes are an integral part of the financial statements.

Annual Report 2007

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

BALANCE SHEETS (Continued) AS AT 31 DECEMBER 2007 AND 2006 (หน่วย:Baht) บาท) (Unit: Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Bank overdrafts and short-term loans from financial institutions 17 321,640,578 280,405,548 306,640,578 280,405,548 Loan from other company 18 10,000,000 - - - Trade accounts payable 420,035,595 290,128,748 374,910,923 244,995,542 Amounts due to related companies 28 - - 80,977,279 1,738,380 Advance from director 28 80,000,000 - - - Deposits and cash received in advance 6 218,593,293 280,634,844 216,462,138 265,999,802 Creditors per rehabilitation plan 19 648,410,232 - 648,410,232 - Current portion of debentures 20 450,000,000 350,000,000 450,000,000 350,000,000 Current portion of long-term loans 22 462,996,251 940,891,581 458,126,231 940,891,581 Current portion of long-term loans Current portion of liabilities under financial lease agreements 4,686,147 5,254,476 4,686,147 5,254,476 Accrued interest 33,716,874 43,071,532 33,145,704 42,716,886 Accrued expenses 116,819,145 69,643,170 104,665,102 59,292,517 Others 50,051,663 55,497,701 43,330,291 41,583,465 TOTAL CURRENT LIABILITIES 2,816,949,778 2,315,527,600 2,721,354,625 2,232,878,197 NON-CURRENT LIABILITIES Creditors per rehabilitation plan 19 - 648,410,232 - 648,410,232 Debentures, net of current portion 20 - 450,000,000 - 450,000,000 Unsubordinated convertible debentures - liability component 21 805,881,396 802,735,788 805,881,396 802,735,788 Long-term loans, net of current portion 22 3,044,557,322 3,168,021,930 2,548,833,016 2,527,597,078 Other non-current liabilities Liabilities under financial lease agreements, net of current portion 1,506,534 6,238,792 1,506,534 6,238,792 Deposits and cash received in advance for sublease agreement 61,076,419 63,077,400 61,076,419 63,077,400 Provision for unconverted debentures 21 93,864,720 46,532,744 93,864,720 46,532,744 TOTAL NON-CURRENT LIABILITIES 4,006,886,391 5,185,016,886 3,511,162,085 4,544,592,034 TOTAL LIABILITIES 6,823,836,169 7,500,544,486 6,232,516,710 6,777,470,231 The accompanying notes are an integral part of the financial statements.

Property Perfect Public Company Limited

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

BALANCE SHEETS (Continued) AS AT 31 DECEMBER 2007 AND 2006 (หน่วย:Baht) บาท) (Unit: Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) SHAREHOLDERS’ EQUITY Share capital 23 Registered 1,035,594,196 ordinary shares of Baht 6 each 6,213,565,176 6,213,565,176 6,213,565,176 6,213,565,176 Issued and fully paid 787,491,194 ordinary shares of Baht 6 each (2006: 782,555,715 ordinary shares of Baht 6 each) 4,724,947,164 4,695,334,290 4,724,947,164 4,695,334,290 Share discount 24 (42,713,192 ) (13,149,673 ) (42,713,192 ) (13,149,673 ) Share subscriptions received in advance 24 1,938 48,563 1,938 48,563 Unsubordinated convertible debentures - equity component 21 23,535,270 23,535,270 23,535,270 23,535,270 Retained earnings Appropriated - statutory reserve 25 119,100,000 100,600,000 119,100,000 100,600,000 Unappropriated 1,262,326,719 869,219,900 893,120,110 542,839,365 TOTAL SHAREHOLDERS’ EQUITY 6,087,197,899 5,675,588,350 5,717,991,290 5,349,207,815 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 12,911,034,068 13,176,132,836 11,950,508,000 12,126,678,046 The accompanying notes are an integral part of the financial statements.

Annual Report 2007

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 (หน่วย:Baht) บาท) (Unit: Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) REVENUES Revenues from sales of land and houses 4,697,134,755 4,477,287,835 4,144,223,090 3,815,290,328 Revenues from sales of residential condominium units 1,469,487,994 - 1,469,487,994 - Revenues from sales of land 99,307,500 - 99,307,500 - Other income Interest income 1,416,397 4,986,643 14,422,223 19,184,352 Revenues from forfeiture of down payments 11,569,861 7,858,840 10,831,098 7,219,925 Share of income from investment in associate 11 11,751,068 - - - Others 42,574,214 43,677,400 39,840,560 35,363,171 TOTAL REVENUES 6,333,241,789 4,533,810,718 5,778,112,465 3,877,057,776 EXPENSES Costs of sales of land and houses 3,297,303,001 3,093,994,393 2,925,647,867 2,649,707,305 Costs of sales of residential condominium units 1,041,594,307 - 1,041,594,307 - Costs of sales of land 56,578,584 - 56,578,584 - Selling and administrative expenses 1,286,329,040 1,087,757,637 1,167,957,082 965,142,984 Share of loss from investment in associate 11 - 23,371,114 - - TOTAL EXPENSES 5,681,804,932 4,205,123,144 5,191,777,840 3,614,850,289 INCOME BEFORE INTEREST EXPENSES AND CORPORATE INCOME TAX 651,436,857 328,687,574 586,334,625 262,207,487 INTEREST EXPENSES (225,442,622 ) (293,228,680 ) (217,553,880 ) (272,159,359 ) CORPORATE INCOME TAX 29 (14,387,416 ) (23,465,991 ) - - NET INCOME (LOSS) FOR THE YEAR 411,606,819 11,992,903 368,780,745 (9,951,872 ) EARNINGS PER SHARE 30 Basic earnings per share Net income (loss) 0.523 0.015 0.468 (0.013 ) Diluted earnings per share Net income 0.517 0.015 0.463 The accompanying notes are an integral part of the financial statements.

Property Perfect Public Company Limited

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 (หน่วย:Baht) บาท) (Unit: Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) Cash flows from operating activities Net income (loss) for the year 411,606,819 11,992,903 368,780,745 (9,951,872) Adjustments to reconcile net income to net cash provided by (paid from) operating activities: Share of loss (income) from investment in associate (11,751,068 ) 23,371,114 - - Depreciation and amortisation 48,074,143 42,819,181 45,000,227 40,718,852 Amortisation of prepaid expense 15,439,378 10,732,356 14,988,262 10,732,356 Amortisation of premium on debentures 3,145,608 3,023,633 3,145,608 3,023,633 Provision for unconverted debentures 47,331,977 43,094,256 47,331,977 43,094,256 Rental received in advance recognition (3,431,112 ) (3,778,646 ) (3,431,112 ) (3,778,646 ) Reversal of liablities - (8,727,575 ) - (8,727,575 ) Allowance for loss on impairment of assets 4,080,000 - 4,080,000 - Allowance for loss on impairment of investments (reversal) (183,920 ) 25,022 (183,920 ) 25,022 Doubtful debts 1,803,299 3,430,650 1,803,299 1,930,650 Loss on disposals of property, plant and equipment 6,707,888 711,927 6,618,373 711,927 Income from operating activities before changes in operating assets and liabilities 522,823,012 126,694,821 488,133,459 77,778,603 Decrease (increase) in operating assets Trade accounts receivable (1,475,880 ) (3,281,076 ) (2,411,036 ) (5,099,701 ) Account receivable - land (35,358,000 ) - (35,358,000 ) - Project development costs 732,298,717 792,287,636 750,468,296 823,611,642 Advances to contractors 37,476,326 (51,538,087 ) 37,476,326 (51,538,087 ) Withholding tax deducted at source (22,259,769 ) 6,414,049 (18,671,178 ) 4,305,194 Prepaid expenses (11,634,846 ) (14,589,526 ) (11,183,729 ) (14,589,526 ) Interest receivable 9,025,933 (4,523,894 ) 12,417,850 9,682,751 Other current assets (5,044,255 ) 9,168,662 (6,176,662 ) 8,283,610 Other non-current assets (3,333,040 ) (4,264,887 ) 101,323 (4,829,360 ) Increase (decrease) in operating liabilities Trade accounts payable 129,906,847 49,975,008 129,915,380 37,034,591 Amounts due to related companies - - 79,238,899 621,594 Deposits and cash received in advance (62,041,551 ) 175,994,785 (49,537,664 ) 168,435,982 Accrued interest (9,354,658 ) (14,486,766 ) (9,571,181 ) (14,711,053 ) Other current liabilities 41,845,126 (43,653,584 ) 47,234,599 (45,076,476 ) Net cash provided from operating activities 1,322,873,962 1,024,197,141 1,412,076,682 993,909,764 The accompanying notes are an integral part of the financial statements.

Annual Report 2007

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

CASH FLOW STATEMENTS (Continued) FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 (หน่วย:Baht) บาท) (Unit: Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) Cash flows from investing activities Increase in restricted deposits (225,282,500 ) (500,000 ) (225,282,500 ) (500,000 ) Decrease (increase) in advances to related company - - (41,500,000 ) 1,278,344 Decrease (increase) in loans to related companies 58,389,320 28,000,000 (93,049,970 ) 223,963,151 Increase in investments in subsidiaries - - (1,598,900 ) - Increase in investment in associate (59,999,940 ) - (59,999,940 ) - Increase in land held for development (26,368,888 ) (131,187,037 ) (26,368,888 ) (146,387,039 ) Increase in advances for purchases of land (62,500,000 ) (111,915,000 ) (10,000,000 ) (44,915,000 ) Increase in property, plant and equipment (71,578,306 ) (98,887,379 ) (38,410,396 ) (85,194,639 ) Proceed from disposals of property, plant and equipment 1,204,487 17,350 1,204,487 17,350 Net cash used in investing activities (386,135,827 ) (314,472,066 ) (495,006,107 ) (51,737,833 ) Cash flows from financing activities Increase (decrease) in bank overdrafts and short-term loans from financial institutions (208,764,970 ) 55,397,407 (223,764,970 ) 55,397,407 Increase in loan from other company 10,000,000 - - - Increase in advance from director 80,000,000 - - - Increase (decrease) in long-term loans (351,359,938 ) 74,000,335 (211,529,411 ) (180,236,558 ) Decrease in debentures (350,000,000 ) (750,000,000 ) (350,000,000 ) (750,000,000 ) Decrease in liabilities under financial lease agreements (5,300,586 ) (5,293,475 ) (5,300,586 ) (5,293,475 ) Dividend paid - (273,887,259 ) - (273,887,259 ) Net cash used in financing activities (825,425,494 ) (899,782,992 ) (790,594,967 ) (1,154,019,885 ) Net increase (decrease) in cash and cash equivalents 111,312,641 (190,057,917 ) 126,475,608 (211,847,954 ) Cash and cash equivalents at beginning of year 312,742,938 502,800,855 271,119,989 482,967,943 Cash and cash equivalents at end of year 424,055,579 312,742,938 397,595,597 271,119,989 Supplemental cash flow information Cash paid during the year for Interest expenses (including capitalised interest) 433,678,576 457,112,556 389,820,080 414,376,810 Corporate income tax and withholding tax deducted at source 83,565,525 59,273,495 57,331,130 38,658,508 Non-cash transactions Transfer advances for purchases of land to project development costs and land held for development 637,038,935 232,937,531 573,038,935 216,237,531 Transfer land held for development to project development costs 89,718,461 1,023,934,892 89,718,461 754,234,892 Transfer project development costs to property, plant and equipment 17,967,472 - 17,967,472 - Transfer advances for purchases of land to advances to related company 40,000,000 - 40,000,000 - Transfer advances to other company to land held for development - 183,500,566 - 183,500,566 The accompanying notes are an integral part of the financial statements.

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated)

(Unit Baht)

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

Consolidated financial statements Share subscriptions Unsubordinated Retained earnings Issued and paid received convertible debentures - share capital Share discount in advance equity component Statutory reserve Unappropriated Total Balance as at 31 December 2005 4,695,210,150 (13,025,740 ) - 23,535,270 100,000,000 1,131,714,256 5,937,433,936 Share subscriptions received in advance - - 48,770 - - - 48,770 Additional ordinary shares as a result of exercised warrants 124,140 (123,933 ) (207 ) - - - - Dividend paid (Note 31) - - - - - (273,887,259 ) (273,887,259 ) Increase in statutory reserve - - - - 600,000 (600,000 ) - Net income for the year - - - - - 11,992,903 11,992,903 Balance as at 31 December 2006 4,695,334,290 (13,149,673 ) 48,563 23,535,270 100,600,000 869,219,900 5,675,588,350 Balance as at 31 December 2006 4,695,334,290 (13,149,673 ) 48,563 23,535,270 100,600,000 869,219,900 5,675,588,350 Share subscriptions received in advance - - 2,730 - - - 2,730 Additional ordinary shares as a result of exercised warrants 29,612,874 (29,563,519 ) (49,355 ) - - - - Increase in statutory reserve - - - - 18,500,000 (18,500,000 ) - Net income for the year - - - - - 411,606,819 411,606,819 Balance as at 31 December 2007 4,724,947,164 (42,713,192 ) 1,938 23,535,270 119,100,000 1,262,326,719 6,087,197,899

FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Property Perfect Public Company Limited

(หน่วย:Baht) บาท) (Unit:

(Unit Baht)

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

Separate financial statements Share subscriptions Unsubordinated Retained earnings Issued and paid received convertible debentures - share capital Share discount in advance equity component Statutory reserve Unappropriated Total Balance as at 31 December 2005 - as previously reported 4,695,210,150 (13,025,740 ) - 23,535,270 100,000,000 1,131,714,256 5,937,433,936 Cumulative effect of the change in accounting policy for investments in subsidiaries and associate (Note 4) - - - - - (304,435,760 ) (304,435,760 ) Balance as at 31 December 2005 - as restated 4,695,210,150 (13,025,740 ) - 23,535,270 100,000,000 827,278,496 5,632,998,176 Share subscriptions received in advance - - 48,770 - - - 48,770 Additional ordinary shares as a result of exercised warrants 124,140 (123,933 ) (207 ) - - - - Dividend paid (Note 31) - - - - - (273,887,259 ) (273,887,259 ) Increase in statutory reserve - - - - 600,000 (600,000 ) - Net income for the year (restated) - - - - - (9,951,872 ) (9,951,872 ) Balance as at 31 December 2006 - as restated 4,695,334,290 (13,149,673 ) 48,563 23,535,270 100,600,000 542,839,365 5,349,207,815 Balance as at 31 December 2006 - as previously reported 4,695,334,290 (13,149,673 ) 48,563 23,535,270 100,600,000 869,219,900 5,675,588,350 Cumulative effect of the change in accounting policy for investments in subsidiaries and associate (Note 4) - - - - - (326,380,535 ) (326,380,535 ) Balance as at 31 December 2006 - as restated 4,695,334,290 (13,149,673 ) 48,563 23,535,270 100,600,000 542,839,365 5,349,207,815 Share subscriptions received in advance - - 2,730 - - - 2,730 Additional ordinary shares as a result of exercised warrants 29,612,874 (29,563,519 ) (49,355 ) - - - - Increase in statutory reserve - - - - 18,500,000 (18,500,000 ) - Net income for the year - - - - - 368,780,745 368,780,745 Balance as at 31 December 2007 4,724,947,164 (42,713,192 ) 1,938 23,535,270 119,100,000 893,120,110 5,717,991,290

FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006

STATEMENTS OF CHANGES IN SHAREHOLDERSâ&#x20AC;&#x2122; EQUITY (Continued)

PROPERTY PERFECT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Annual Report 2007

Property Perfect Public Company Limited

Property Perfect Public Company limited and its subsidiaries

Notes to consolidated financial statements FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006 1. General Information

Property Perfect Public Company Limited was incorporated as a public limited company under Thai laws. The Company operates its business in Thailand and its principal activity is property development. The Company’s registered office is located at 100/1 Vorasombat Building, 17th Floor, Rama 9 Road, Huaykwang, Bangkok.

2. Financial statements preparation basisi

2.1 The financial statements were prepared in conformity with the generally accepted accounting standards stipulated under the Accounting Profession Act B.E. 2547 and financial statements’ format was conducted in accordance with regulations in the Department of Business Development dated 14 September 2001 under the Account Act B.E. 2543. The financial statements were applied to the historic cost accounting basis excepted as disclosed in accounting policies. 2.2 Basis of consolidation A. These consolidated financial statements included the financial statements of Property Perfect Public Company Limited (hereinafter called as “the Company”) and its subsidiaries as follows :- Company Nature of business Estate Perfect Co., Ltd. Perfect Satellite Services Co., Ltd. Bright Development Bangkok Co., Ltd. Centre Point Shopping Mall Co., Ltd.

Property development Club house management Property development Property development

Country the company incorporated

Percentage of shares held by the company 2007 2006 Percent Percent

Thailand 100.00 Thailand 99.94 Thailand 99.94 Thailand 59.95

100.00 99.94 - -

Total assets which included Total revenues which in consolidated included in consolidated balance sheets Statements of income for Company on 31 December the years ended December 31 2007 2006 2007 2006 Percent Percent Percent Percent Estate Perfect Co., Ltd. 13.08 12.56 8.78 14.67 Perfect Satellite Services Co., Ltd. 0.04 0.04 0.01 0.13 Bright Development Bangkok Co., Ltd. 0.73 - - - Centre Point Shopping Mall Co., Ltd. - - - -

Annual Report 2007

Account receivables and significant connected transactions between the company and subsidiaries were eliminated from the consolidated financial statements. C. The company’s investment in subsidiaries and affiliates was already taken from shareholders’ equity of subsidiaries. D. The Board of Directors’ meeting on 30 April 2007 approved an establishment of Bright Development Co., Ltd., with the registered capital of Bt1 million (10,000 common shares at the par value of Bt100 each), to engage in property development business. E. The Board of Directors’ meeting on 24 September 2007 resolved to set up Centre Point Shopping Mall Co., Ltd., with the registered capital of Bt1 million (10,000 common shares at the par value of Bt100 each), to engage in property development business. 2.3 The company prepared the separate financial statements, in which investments in subsidiaries and affiliates under cost method are presented, for benefits of the public.

3. New accounting standards

The Federation of Accounting Professions issued Notification No.9/2007 and No.62/2007 about the implementation of new Accounting Standards as follows : A) Accounting Standards take into effect in the current year No.44 (Amendment in 2007) Consolidated and separate financial statements No.45 (Amendment in 2007) Investments in affiliates No.46 (Amendment in 2007) Interests in joint venture The above accounting standards are applied in the financial statements for accounting period started on or after 1 January 2007 onwards. In the current year, the company changed the accounting policy for investments in subsidiaries and affiliates in the separate financial statements to be in compliance with the Accounting Standards No. 44, 45, and 46 Amended version as shown in notes to financial statements No.4. B) Accounting Standards have yet become effective in the current year No.25 (Amendment in 2007) Cash flow statements No.29 (Amendment in 2007) Lease contracts No.31 (Amendment in 2007) Inventory No.33 (Amendment in 2007) Borrowing cost No.35 (Amendment in 2007) Presentation of financial statements No.39 (Amendment in 2007) Accounting policy A change in accounting estimate and error No.41 (Amendment in 2007) Interim financial statements No.43 (Amendment in 2007) Merger No.49 (Amendment in 2007) Construction contracts No.51 Intangible assets

Property Perfect Public Company Limited

The above accounting standards are applied in the financial statements for accounting period started on or after1 January 2007. The company’s management estimated that these Accounting Standards would not have significant effect to the financial statements of the first year of implementation.

4. The change in accounting policy for investments in subsidiaries and affiliates in the separate financial statements

During the current year, the company changed in accounting policy for investments in subsidiaries and affiliates in the separate financial statements from the equity method to the cost method in compliance with the Accounting Standard No.44 (Amendment in 2007) regarding to consolidated and separate financial statements, under which investments in subsidiaries, jointly controlled entities and affiliates are to be presented in the separate financial statements under the cost method. To comply with the change in accounting policy, the company restated the previous period’s separate financial statements as though the investments in the subsidiaries and affiliate companies had originally been recorded using the cost method. The change had the effect of decreasing net income in the separate income statements for the year ended 31 December 2007 and 2006 by Bt42.8 million (Bt 0.05 per share) and Bt 21.9 million (Bt 0.03 per share), respectively. The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the change in accounting policy for recording investments in subsidiary and associated companies” in the separate statements of changes in shareholders’ equity. The change in the accounting policy affects only the accounts related to investments in subsidiary and affiliate companies in the separate financial statements, but does not affect the consolidated financial statements.

5. Significant accounting policies

5.1 Revenues recognition Sales revenue of land and houses The company and subsidiaries recoginise sales of land and houses as revenue when ownership has been transferred to the buyer. Sales revenue of condominium units The company recognises sales of condominium units as revenue when ownership has been transferred to the buyer. Sales revenue of land The company recognises sales of land as revenue when ownership has been transferred to the buyer.

Annual Report 2007

5.2 Costs of sales of land and houses and residential condominium units In determining the costs of sales of land and houses, and residential condominium units, the anticipated total development costs (after recognizing the costs incurred to date) are attributed to units already sold on the basis of the salable area and then recognised .as costs in the earnings statements on a completion basis. 5.3 Project development costs Project development costs are stated at net cost less loss provisions from the project value reduction. Project development costs comprise costs of land, development and construction, and related interest. 5.4 Cash and Cash Equivalents Cash and cash equivalents are cash on hand, deposits at banks and high-liquidity shortterm investment due within 3 months and not subject to withdrawal restrictions. 5.5 Trade debtors Trade debtors are shown at the net receivables. The company and subsidiaries realize allowance for doubtful debts provided by estimated collection losses, which are generally based on collection experience and debtor age analysis. 5.6 Capitalization of interest costs The interest costs of borrowings for use in the construction of the projects are capitalized as part of the costs of those assets, with capitalization ceasing when the projects are started to transfer the ownership to the buyer, or when the construction is suspended and until active development resumes. 5.7 Advance payment for land Advance payment for land records as a part of costs of land once the ownership has been transferred to the company and subsidiaries. 5.8 Property, plant and equipment and depreciation Property, plant and equipment are stated at cost less accumulated depreciation and provision for impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on the straight-line method over the estimated useful lifes, which are as follows :- Office buildings and clubhouses 20 years Furniture and equipment for offices and clubhouses 5 years Vehicles 5 years Others 5 years Depreciation is included in calculation of operating results. No depreciation has been provided for land and construction in progress. 92

Property Perfect Public Company Limited

5.9 Leasehold rights and amortization/leasehold rights pending sales Leasehold rights are stated at cost less accumulated amortisation. Amortisation is calculated using the straight-line method over the periods of contracts. The Amortization is included in calculation of operating results. Leasehold rights pending sales are stated at cost or the estimated selling price, whichever is lower. 5.10 Investments A) Investments in affiliates are presented in the consolidated financial statements under the equity method. B) Investments in subsidiaries and affiliates are presented in the separate financial statements under the cost method. C) Investments in equity securities, which are no market need, are deemed as general investments stated at cost less the impairment (if any). 5.11 Related parties transactions Related persons or companies are persons or companies who have controlling power over the company or are controlled by the company either directly or indirectly or under the same control as the company. In addition, related persons or companies include affiliate companies, persons who have significant influence over the company, important executives, directors, and the companyâ&#x20AC;&#x2122;s employees who are empowered to plan and control the companyâ&#x20AC;&#x2122;s operation. 5.12 Financial lease Land, office and equipment leases, of which risk and most of compensation from possessing such assets are transferred to leases, are financial leases. The financial leases are recorded as equity expenses at fair value of lease assets or net present value of amount to be paid as stated in contracts, whichever is lower. Commitments under leases less financial expenses are booked as long-term liabilities. Interest expenses are booked in statements of income over the periods of contracts. Depreciation of assets under financial leases is calculated over life of lease assets or periods of contracts. 5.13 Unsubordinated convertible debentures Unsubordinated convertible debenture is presented separately as equity and liability components in balance sheets. The company has then determined the liability component by discounting the stream of future payments of principal and interest at the prevailing market rate. The company has determined the equity component by deducting the liability component from the total face value of the unsubordinated convertible debentures and amortizing the difference over the life of the unsubordinated convertible debentures.

Annual Report 2007

5.14 Depreciation The company and subsidiaries at the balance sheet date evaluate whether there is sign of depreciation of the companyâ&#x20AC;&#x2122;s and subsidiariesâ&#x20AC;&#x2122; assets. If so, the company and subsidiaries will estimate recoverable amount. In case that book value exceeds recoverable amount, the company and subsidiary companies will write down book value to the same level as recoverable amount and realize losses from impairment of assets in statements of income. (Recoverable amount is defined as the net selling price or value in use, which ever is higher.) 5.15 Employee Benefits The company and subsidiaries booked salary, bonus, and contributions to the Social Security Fund and the provident fund as expenses upon transactions. 5.16 Provisions The company and subsidiaries realise provisions when there are the current obligations occurred from the past, high possibility of loss in resources having economic benefits to settle for such obligations and reliable estimation is provided. 5.17 Corporation Income tax The company and subsidiaries booked corporate income tax calculated from net profit in accordance with laws governing the tax. 5.18 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates for certain accounting transactions and assumptions, affecting amounts reported in the financial statements and notes related thereto. Subsequent actual results may differ from these estimates.

6. Trade Accounts receivable

Trade accounts receivable balances as at 31 December 2007 and 2006 comprise :- (Unit : Baht)

Consolidated The Company Only 2007 2006 2007 2006 Total value of contracts signed 43,029,830,434 36,981,949,458 40,745,527,612 35,259,727,701 Percentage of projectâ&#x20AC;&#x2122;s total sales 75.94 67.06 78.47 66.18 Installments due 39,763,341,634 33,658,760,436 37,562,946,793 31,998,773,373 Less : Cash received (39,720,095,897 ) (33,613,939,463 ) (37,520,622,656 ) (31,955,809,156 ) Installments receivable 43,245,737 44,820,973 42,324,137 42,964,217 Less : Allowance for doubtful debts (9,793,299 ) (11,041,116 ) (9,793,299 ) (11,041,116 ) Installments receivable, net 33,452,438 33,779,857 32,530,838 31,923,101

Property Perfect Public Company Limited

Deposits and money received in advance from customer at of 31 December 2007 and 2006 comprise :- (Unit : Baht) Installments due Less : Revenue Deposits and money received in advance from customer

Consolidated The Company Only 2007 2006 2007 2006 39,763,341,634 33,658,760,436 37,562,946,793 31,998,773,373 (39,544,748,341 ) (33,378,125,592 ) (37,346,484,655 ) (31,732,773,571 ) 218,593,293

280,634,844

216,462,138

265,999,802

As at 31 December 2007and 2006, trade accounts receivable were classified by aging as follows :- (Unit : Baht)

Less than 3 months Accounts receivable - installments 14,295,874 Accounts receivable at transfer date 250,000 Total 14,545,874 Less : Allowance for doubtful debts - Trade accounts receivable, net 14,545,874

Less than 3 months Accounts receivable - installments 13,301,730 Accounts receivable at transfer date 3,930,000 Total 17,231,730 Less : Allowance for doubtful debts - Trade accounts receivable, net 17,231,730

Consolidated As at 31 December 2007 3 - 6 6 -12 Over months months 12 months 2,785,974 6,632,500 1,706,200 3,306,250 900,000 13,368,939 6,092,224 7,532,500 15,075,139 - - (9,793,299 ) 6,092,224 7,532,500 5,281,840

Total 25,420,548 17,825,189 43,245,737 (9,793,299 ) 33,452,438

(Unit : Baht) Consolidated As at 31 December 2006 3 - 6 6 -12 Over months months 12 months 2,837,126 6,985,502 2,769,600 - 1,600,000 13,397,015 2,837,126 8,585,502 16,166,615 - - (11,041,116 ) 2,837,126 8,585,502 5,125,499

Total 25,893,958 18,927,015 44,820,973 (11,041,116 ) 33,779,857

Annual Report 2007

(Unit : Baht) Less than 3 months Accounts receivable - installments 13,574,274 Accounts receivable at transfer date 250,000 Total 13,824,274 Less : Allowance for doubtful debts - Trade accounts receivable, net 13,824,274

The Company Only As at 31 December 2007 3 – 6 6 –12 Over months months 12 months 2,585,974 6,632,500 1,706,200 3,306,250 900,000 13,368,939 5,892,224 7,532,500 15,075,139 - - (9,793,299 ) 5,892,224 7,532,500 5,281,840

Less than 3 months Accounts receivable - installments 12,058,600 Accounts receivable at transfer date 3,400,000 Total 15,458,600 Less : Allowance for doubtful debts - Trade accounts receivable, net 15,458,600

The Company Only As at 31 December 2006 3 – 6 6 –12 Over months months 12 months 2,753,500 6,985,502 2,769,600 - 1,600,000 13,397,015 2,753,500 8,585,502 16,166,615 - - (11,041,116 ) 2,753,500 8,585,502 5,125,499

Total 24,498,948 17,825,189 42,324,137 (9,793,299 ) 32,530,838

(Unit : Baht)

Total 24,567,202 18,397,015 42,964,217 (11,041,116 ) 31,923,101

Property Perfect Public Company Limited

7. Project development costs Land costs Development costs Construction costs Capitalised interest Total Less : Transferred to cost of sales Land transferred to settle debt under rehabilitation plan Less : Provision for impairment Project development costs, net

(Unit : Baht) Consolidated 2007 2006 12,234,645,693 11,386,760,898 6,039,730,810 5,513,646,475 15,707,542,608 12,989,927,926 4,049,126,282 3,816,335,330 38,031,045,393 33,706,670,629 (28,444,569,946 ) (24,087,392,160 )

The Company Only 2007 2006 10,876,038,709 10,189,758,528 5,545,654,222 5,114,206,251 14,771,007,345 12,214,790,120 3,794,964,591 3,598,359,916 34,987,664,867 31,117,114,815 (26,977,416,877 ) (22,991,894,223 )

(1,524,192,396 ) (1,524,192,396 ) (1,524,192,396 ) (1,524,192,396 ) 8,062,283,051 8,095,086,073 6,486,055,594 6,601,028,196 (70,435,775 ) (78,895,004 ) (60,578,051 ) (69,037,281 ) 7,991,847,276 8,016,191,069 6,425,477,543 6,531,990,915

The company and subsidiaries mortgaged land and building, which had net book value of

Bt6,537.8 million as of 31 December 2007 (2006 : Bt6,569.8 million), with financial institutions as collateral for short- and long-term loans and guarantee for utility infrastructures.

8. Deposits pledge as collateral

The balance is the fixed-deposits pledged as collateral for loans.

9. Land debtors

During the current year, the company sold land to a company value Bt88.4 million, Bt53 million of which was paid and the remaining is paid on installment basis until June 2009.

Annual Report 2007

10. Investments in subsidiaries

(Unit: Baht)

The Company Only Company Paid-up capital Cost 2007 2006 2007 2006 Million Million Estate Perfect Co., Ltd. 1,000 1,000 538,459,056 538,459,056 Perfect Satellite Services Co., Ltd. 1 1 999,400 999,400 Bright Development Bangkok Co., Ltd. 1 - 999,400 - Centre Point Shopping Mall Co., Ltd. 1 - 599,500 - Total 541,057,356 539,458,456

11. Investments in affiliates

11.1 Details of affiliates

Company Nature Country Percentage of of the shares held by business company the company incorporated 2007 2006 Percent Percent

(Unit : Million) Consolidated Book value under equity method 2007 2006

Profit (Loss) sharing from affiliates during the year 2007 2006

Krungthep Land Property Thailand 20.22 20.00 401,445,870 329,694,862 11,751,068 (23,371,114) Public Company development Limited Total 401,445,870 329,694,862 11,751,068 (23,371,114)

(Unit: Million)

Company Only Company Nature of Country Percentage of shares Cost business the company held by the company incorporated 2007 2006 2007 2006 Percent Percent

Krungthep Land Property Thailand 20.22 20.00 Public Company Limited development Total

359,999,240 299,999,300 359,999,240 299,999,300

Property Perfect Public Company Limited

11.2 Summary financial data of affiliates

(Unit : Million)

Company

Paid-up Total assets Total liabilities capital as of as of as of 31 December 31 December 31 December 2007 2006 2007 2549 2007 2006

1,780 1,500 5,871 5,311 3,043 3,460 1,035 660

Krungthep Land Public Company Limited

Total revenue Net profit (loss) for year ended for year ended 31 December 31 December 2007 2006 2007 2006

57 (113)

The company realizes profit from investments in affiliates after restatement in profit of affiliates due to the difference accounting policy regarding sales recognition of condominium units. On 18 January 2007, the Board of Directorsâ&#x20AC;&#x2122; meeting approved the company to subscribe to 6,000,000 capital increased shares at the par value of Bt10 each of its affiliate in a total amount of Bt60 million. On 16 November 2007, the 1/2007 extraordinary shareholdersâ&#x20AC;&#x2122; meeting of the affiliate resolved the reduction of the registered capital from Bt2,100,000,000 to Bt1,780,000,000 by canceling 32,000,000 unissued shares at the par value of Bt10 each totaling Bt320,000,000. The shareholders also approved the recapitalization of affiliate in the amount of Bt450,000,000 from Bt1,780,000,000 to Bt2,230,000,000 by allocating 45,000,000 newly issued shares at the par value of Bt10 each for exercise of convertible debentures as prescribed in notes to financial statements No.35.

12. land held for development

Land costs Development costs Construction costs Capitalized interest Total Less : Transferred to cost of sales Transferred of land for debt restructuring Transferred of land to settle debt under rehabilitation plan Less : Provision for impairment Land held for development, net

(Unit : Baht) Consolidated and The Company Only 2007 2006 4,520,242,787 4,565,869,911 182,667,940 118,647,838 17,449,523 17,449,523 627,467,380 661,617,598 5,347,827,630 5,363,584,870 (548,576,325 ) (501,818,992 ) (1,540,946,166 ) (1,540,946,166 ) (151,117,368 ) (151,117,368 ) 3,107,187,771 3,169,702,344 (127,350,670 ) (127,350,670 ) 2,979,837,101 3,042,351,674

Annual Report 2007

The above land and construction, of which the net book value as at 31 December 2007 was Baht 2,057.9 million (2006: Baht 1,910.8 million), has been mortgaged with banks and financial institutions as collateral for short-term loans, debentures, long-term loans and as bank guarantees for public utilities works.

13. Advance for purchase of land

Balance as of 31 December 2006 Increase during the year Land ownership transfer during the year Less : Forfeit of advance payment Restatement as advance payment to subsidiaries Balance as of 31 December 2007

(Unit : Million) Consolidated 2007 2006 730,081,570 851,104,101 62,500,000 111,915,000 (637,038,935 ) (232,937,531 ) 155,542,635 730,081,570 (4,080,000 ) - 151,462,635 730,081,570 - 151,462,635

- 730,081,570

The Company Only 2007 2006 629,118,935 800,441,466 10,000,000 44,915,000 (573,038,935 ) (216,237,531 ) 66,080,000 629,118,935 (4,080,000 ) - 62,000,000 629,118,935 (40,000,000 ) 22,000,000

- 629,118,935

As at 31 December 2007, the Company and its subsidiary are contracted to purchase and to sell land amounting to Baht 637 million (The Company Only : Baht 74.5 million). Approximately Baht 135.4million (The Company Only : Baht 44.9 million) of the above balance represents advance paid to landowners by the Company and its subsidiary under agreements to purchase and to sell land already signed with the landowners by an agent on behalf of the Company . For approximately Bt16.1million (the Company Only : Bt12.6 million) unpaid of the advance for purchase of land, it was amount agreed by the company and subsidiary to be paid in advance to the agent who gathered land bought and land pending signing contracts to buy and sell with landowners. In 2006, the company authorised an intermediate to sign a purchase contract with land owners and made advance payment for the land acquisition in the tune of Bt40 million to the land owners. During the current year, the company set up a new subsidiary to develop project on the land, so the company restated the advance payment for land acquisition as advance payment to the subsidiary.

100

(Unit Baht)

Consolidated Office Furniture and buildings equipment and for offices and Construction Land clubhouses clubhouses Vehicles in progress Others Total Cost 31 December 2006 47,091,355 205,940,125 110,740,032 36,088,789 44,495,608 37,881,624 482,237,533 Addition - 12,903 14,654,866 32,362 56,092,375 785,800 71,578,306 Transfer from costs of real estate project development 17,967,472 - - - - - 17,967,472 Disposals - (7,372,665 ) (179,168 ) (3,135,000 ) - - (10,686,833 ) Transfer in (out) - 66,223,865 6,909,026 - (75,774,746 ) 2,641,855 - 31 December 2007 65,058,827 264,804,228 132,124,756 32,986,151 24,813,237 41,309,279 561,096,478 Depreciation 31 December 2006 - 26,925,302 50,278,651 17,079,136 - 23,725,177 118,008,266 Depreciation for the year - 11,084,822 22,535,672 6,103,993 - 5,138,562 44,863,049 Depreciation on disposals - (1,086,341 ) (58,040 ) (1,630,077 ) - - (2,774,458 ) 31 December 2007 - 36,923,783 72,756,283 21,553,052 - 28,863,739 160,096,857 Net book value 31 December 2006 47,091,355 179,014,823 60,461,381 19,009,653 44,495,608 14,156,447 364,229,267 31 December 2007 65,058,827 227,880,445 59,368,473 11,433,099 24,813,237 12,445,540 400,999,621 Depreciation for the year as included in selling and administration expenses 2006 39,608,087 2007 44,863,049

14 Property, Plant and Equipment

Property Perfect Public Company Limited

101

102

The Company Only Office Furniture and buildings equipment and for offices and Construction Land clubhouses clubhouses Vehicles in progress Others Total Cost 31 December 2006 47,091,355 197,612,797 104,729,124 34,664,589 31,984,779 30,100,959 446,183,603 Addition - 12,903 11,733,199 32,362 25,852,552 779,380 38,410,396 Transfer from costs of real estate project development 17,967,472 - - - - - 17,967,472 Disposals - (7,372,664 ) (56,168 ) (3,135,000 ) - - (10,563,832 ) Transfer in (out) - 33,026,139 - - (35,667,995 ) 2,641,856 - 31 December 2007 65,058,827 223,279,175 116,406,155 31,561,951 22,169,336 33,522,195 491,997,639 Depreciation 31 December 2006 - 25,617,669 47,101,291 16,745,874 - 17,089,769 106,554,603 Depreciation for the year - 10,101,301 21,294,578 5,819,153 - 4,574,101 41,789,133 Depreciation on disposals - (1,086,341 ) (24,555 ) (1,630,077 ) - - (2,740,973 ) 31 December 2007 - 34,632,629 68,371,314 20,934,950 - 21,663,870 145,602,763 Net book value 31 December 2006 47,091,355 171,995,128 57,627,833 17,918,715 31,984,779 13,011,190 339,629,000 31 December 2007 65,058,827 188,646,546 48,034,841 10,627,001 22,169,336 11,858,325 346,394,876 Depreciation for the year as included in selling and administration expenses 2006 37,507,758 2007 41,789,133

(Unit Baht)

Annual Report 2007

Property Perfect Public Company Limited

As of 31 December 2007, depreciation of some of the companyâ&#x20AC;&#x2122;s building and equipment was already completed but they are still functional. Costs of the assets stood at approximately Bt30.7 million (2006 : Bt16.2 million) (the separate financial statement : Bt23.7 million). The company mortgaged land with net book value of Bt22.2 million as of 31 December 2007 (2006 : Bt22.2 million) with financial institutions as collateral for long-term loans.

15. Leasehold Rights

Leasehold right â&#x20AC;&#x201C; cost Less : Accumulated amortization Less : Depreciation allowance Transfer as leasehold right pending sales-net Net Amortization as included in selling and administration expenses

(Unit : Baht) Consolidated and The Company Only 2007 2006

343,879,241 (32,687,160 ) 311,192,081 (189,843,897 ) 121,348,184 (60,717,672 ) 60,630,512 3,211,094

342,561,569 (29,476,065 ) 313,085,504 (189,843,897 ) 123,241,607 (60,717,672 ) 62,523,935 3,211,094

The balance contained leasehold right for 4 rai of land, which was sub-leased to other sub lessors throughout the remaining leasehold right term. The sub lessors paid a part of the lease fee in advance and they pay annual lease fee as stated in the contract. The company realises the lease fee received in advance as revenue over life of the sub lease contract.

16. Leasehold right pending sales

On 25 December 2007, the company entered into a contract to transfer leasehold right for land worth Bt200 million to a subsidiary, which paid the upfront of Bt80 million upon the signing contract date and the remaining amount is paid within leasehold right transfer registration date or 28 February 2008 as the latest. On 29 January 2008, the company signed the amended contract for the leasehold right transfer. Under the contract, the subsidiary will pay the remaining amount to the company within date on leasehold right transfer registration scheduled or 28 February 2008 as the latest.

103

Annual Report 2007

17. Bank overdrafts and short-term loans from financial institution

Bank overdraft and short-term loans from financial institutions as of 31 December 2007 and 2006 consisted of (Unit : Million Baht)

Interest rate (% per annum) Overdraft MOR Short-term loans from MMR, MLR, financial institutions MLR-1 Total

Consolidated 2007 2006 30 30 292 250 322

280

The Company Only 2007 2006 30 30 277 250 307

280

Overdraft and short-term loans from financial institutions guaranteed by the company’s board and secured by mortgage of some land and houses in the company’s projects Most of loan contracts stated practices and some restrictions under normal course of business of the company and subsidiaries

18. Borrowing from other companies

The borrowing carries interest of 6% per annum and the due date was in January 2008.

19. Creditors per rehabilitation plan

Down payments and deposits payable Secured creditors Unsecured creditors Less: Payment is due within one year Net

(Unit : Thousand Baht) Consolidated and The Company Only 2007 2006

144 132,335 515,931 648,410 (648,410 ) -

144 132,335 515,931 648,410 - 648,410

As stated in the business rehabilitation plan, the company would pay out debts within October 2007. The debts carry interest rate based on minimum lending rate.(MLR) Some creditors who hold approximately Bt422.4 million debts under the business rehabilitation plan become the company’s shareholders and Bt8.9 million are the shareholders and the company’s directors

104

Property Perfect Public Company Limited

20. Debentures

Secured debentures 2/2004# 3 Secured debentures 1/2006 Total Less : Current portion of debentures Debentures, net of current portion

(Unit : Thousand Baht) Consolidated and The Company Only 2007 2006

- 450,000 450,000 (450,000 ) -

350,000 450,000 800,000 (350,000 ) 450,000

The debenture issuance was a resolution of the extraordinary shareholdersâ&#x20AC;&#x2122; meeting on 24 May 2005. Detail was as follows : 1) Secured debenture 2/2004 No. 3 The company issued 350,000 secured debentures with the face value of Bt1,000 each totaling Bt350 million to financial institutions and general public. During the current year, the company completely redeemed the debentures. 2) Secured debenture 1/2006 The company allocated 450,000 secured debentures with the face value of Bt1,000, or the total value of Bt450 million, to financial institutions and the public. The two-year maturity secured debentures, carrying 6.65% interest per annum with semi-annually payment from the issuance date, was due on 8 February 2008. Under the debenture issuance condition, the company is obligated to maintain debt to equity ratio, dividend payout rate, collateral value ratio to the total amount of the debentures. The company already redeemed the debentures on 8 February 2008. The company mortgaged some land to secure the secured debentures as stated in notes to financial statements no.12.

105

Annual Report 2007

Shareholders at the 1/2006 extraordinary meeting on 21 June 2006 approved the issuance of debentures worth no more than Bt1,200 million for sale totally at one times or partly at several times. The debentures are secured and unsubordinated debentures with full amount of principal to be paid in phase or at one time on redemption date. The debentures carry a 3-year maturity from the issuance date and offered all or partly to local public investors and/or institutional investors and/or specific investors. The company has not allocated the debentures yet. On 30 April 2007, the 4/2007 Board of Directors’ meeting resolved Bright Development Bangkok Co., Ltd., a subsidiary, to issue secured debentures to an overseas investor with the amount not exceeding Bt462,150,000. The 12-month maturity debentures carry interest based on the minimum lending rate (MLR) and the debentures, guaranteed by the company, are mortgaged by land and building in some projects of the company and Bright and pledged by Bright’s common shares. Bright already received the Securities and Exchange Commission’s approval to allocate the debentures but the company has not issued the debentures yet.

21. Unsubordinated Convertible Debentures

In accordance with a resolution of the Extraordinary General Meeting of shareholders held on 19 September 2005, on 25 November 2005 the Company issued and offered 200,000 unsubordinated convertible debentures with a par value of USD 100 each, or a total value of USD 20 million, to an overseas company. The debentures have been convertible since 25 May 2007, mature in 25 November 2010, and bear interest at a rate of 3.50 percent per annum. The conversion price is Baht 6.25 per ordinary share, and the debentures are convertible in a ratio of 1 debenture per 658.4 ordinary shares. Those debentures which are not converted will be redeemed at USD 131.60 per unit, using a stipulated exchange rate of Baht 41.15 per USD. The Company recorded the provision for debentures which are not converted over the life of debentures presented it as a separate item in balance sheet. Under the Company’s debenture agreement, there are normal covenants relating to various matters on behalf of the normal business.

106

Property Perfect Public Company Limited

22. Long-term loans/current portion of long-term loans

The Company Long-term loans consist of loans from 3 local banks. Details are as follows :

1) Credit line Bt1,000 million 2) Credit line Bt793 million 3) Credit line Bt660 million 4) Credit line Bt515 million

Outstanding 2007 2006

Interest rate per annum

Principal Loan collateral repayment condition

(Million Baht) - 177.9 - 365.5

141.2 Minimum (MLR) 263.7 Minimum (MLR) 196.7 Minimum (MLR) 331.8 Minimum (MLR)

lending rate It will be repaid when a plot of land is redeemed from mortgage at a rate of at least 60% of the selling price, which is not to be less than the amount informed to the banks. lending rate It will be repaid when a plot of land is redeemed from mortgage at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the banks, and any remaining balance will be repaid within June 2008. lending rate It will be repaid when a plot of land is redeemed from mortgage at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the banks. lending rate It will be repaid when a plot of land is redeemed from mortgage at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the banks, and any remaining balance will be repaid within Feb 2010.

Guaranteed by the company’s board and mortgaged some land and houses in projects. Guaranteed by mortgage of some land and houses in the company’s projects. Guaranteed by the company’s board and mortgaged by some land and houses of the company’s projects. Guaranteed by the company’s board and mortgaged by some land and houses of the company’s projects.

107

Annual Report 2007

5) Credit line Bt1,200 million 6) Credit line Bt275 million 7) Credit line Bt742 million 8) Credit line Bt1,070 million

108

Outstanding 2007 2006

Interest rate per annum

Principal Loan collateral repayment condition

(Million Baht) 464.1 - 452.8 95.2

638.9 Minimum (MLR) 58.4 Minimum (MLR) 634.9 Minimum (MLR) 663.6 Minimum (MLR)

lending rate It will be repaid when a Guaranteed by other plot of land is redeemed companies and mortgaged from mortgage at a rate by land and building

of not less than 60% of in some projects of

the selling price, which the company and the is not to be less than the company’s shares held amount informed to the by a shareholder. banks, and any remaining balance will be repaid within April 2011. lending rate It will be repaid when a Guaranteed by the plot of land is redeemed company’s board and from mortgage at a rate mortgage some land and of not less than 65% of houses of the company’s the selling price, which projects. is not to be less than the amount informed to the banks. lending rate It will be repaid when a Guaranteed by the plot of land is redeemed company’s board and from mortgage at a rate mortgage some land and of not less than 85% of houses of the company’s the selling price, which projects. is not to be less than the amount informed to the banks. lending rate It will be repaid when Guaranteed by mortgage each unit of condominium of some land and houses is discharged from in the company’s projects. mortgage at a rate of 80% of the selling price and any remaining balance will be repaid within May 2009.

Property Perfect Public Company Limited

9) Credit line Bt1,249 million 10) Credit line Bt130 million 11) Credit line Bt1,280 million

Outstanding 2007 2006

Interest rate per annum

Principal Loan collateral repayment condition

(Million Baht) 480.2 539.3 Minimum lending rate Credit line of Bt400 Guaranteed by mortgage (MLR) million will be repaid of some land and within August 2007 and houses in the companyâ&#x20AC;&#x2122;s the remaining Bt849 projects. million will be repaid when a land lot and townhouse is redeemed from mortgage at a rate of not less than 70% of the selling price and any remaining balance will be repaid within August 2011. 15.8 - Minimum lending rate Minimum lending rate It Guaranteed by mortgage (MLR) will be repaid when a of some land and plot of land is redeemed houses in the companyâ&#x20AC;&#x2122;s from mortgage at a rate projects. of not less than 70% of the selling price, which is not to be less than the amount informed to the banks, and any remaining balance will be repaid within April 2009. 583.1 - Minimum lending rate It will be repaid when a Guaranteed by mortgage (MLR) plot of land is redeemed of some land and from mortgage at a rate houses in the companyâ&#x20AC;&#x2122;s of not less than 65% of projects. the selling price, which is not to be less than the amount informed to the banks. and any remaining balance will be repaid within July 2010.

109

Annual Report 2007

12) Credit line Bt628 million 13) Credit line Bt430 million Total Less : amount to be due within 1 year Total

110

Outstanding 2007 2006

Interest rate per annum

Principal Loan collateral repayment condition

(Million Baht) 212.7 - 159.6 - 3,006.9 3,468.5 (458.1) (940.9) 2,548.8 2,527.6

Minimum lending rate It will be repaid when (MLR) each unit of condominium is discharged from mortgage at a rate of 75% of the selling price and any remaining balance will be repaid within May 2011. Minimum lending rate It will be repaid when (MLR) each unit of condominium is discharged from mortgage at a rate of 75% of the selling price and any remaining balance will be repaid within April 2009.

Guaranteed by the companyâ&#x20AC;&#x2122;s board and mortgage some land and houses of the companyâ&#x20AC;&#x2122;s projects. Guaranteed by mortgage of some land and houses in the companyâ&#x20AC;&#x2122;s projects.

Property Perfect Public Company Limited

Its subsidiary Long-term loans were borrowed from 2 local banks as follows : 1) Credit line of Bt364 million 2) Credit line of Bt887 million 3) Credit line of Bt10 million Total Less : Portion to be due within 1 year Net

Balance 2007 2006

Interest rate per annum

Principal Loan collateral repayment condition

(Million Baht) 206.2 284.8 9.6 500.6 (4.9) 495.7

177.5 Minimum lending rate Repaid when the Guaranteed by the (MLR) minimum ratio of 60% company and subsidiaries’ of market price of each board and pledge of title deed but not lower land and houses in some than amount informed subsidiaries’ projects. banks by subsidiaries is paid and any remaining balance will be repaid within March 2010 462.9 Minimum lending rate Repaid when the Guaranteed by the (MLR) minimum ratio of 60% company and subsidiaries’ of market price of each board and pledge of title deed but not lower land and houses in some than amount informed subsidiaries’ projects. banks by subsidiaries is paid and paid out the remaining amount within April 2010. - Minimum lending rate Principal and interest Guaranteed by the (MLR) payment is made through company and subsidiaries’ 24 installments with board and pledge of amount not less than land and houses in some Bt465,000 per installment. subsidiaries’ projects. The payment must be completed within December 2009. 640.4 - 640.4

111

Annual Report 2007

Balance of long-term debts is summarized as follows

Consolidated 2007 2006

(Unit : Million Baht) The Company Only 2007 2006

3,507.5 (463.0 )

4,108.9 (940.9 )

3,006.9 (458.1 )

3,648.7 (940.9 )

3,044.5

3,168.0

2,548.8

2,527.6

Long-term borrowing Less: portion to be due within 1 year Long-term borrowing â&#x20AC;&#x201C; Net less portion to be due within 1 year

Most of loan contracts state some guidelines and restrictions under normal course of business of the company and subsidiaries. As at 31 December 2007, the company and subsidiaries had Bt3,003.5 million leftover longterm credit facilities.

23. Share Capital

As at 31 December 2006, the Companyâ&#x20AC;&#x2122;s issued and paid up share capital has increased to Baht 4,724,947,164 (787,491,194 ordinary shares of Baht 6 each), with totaling Baht 29,612,874 (4,935,479 ordinary shares of Baht 6 each) being the result of the exercise of warrants in December 2006 and June 2007. The Company registered increases in its capital with the Ministry of Commerce on 11 January and11July 2007. The company on 8 January 2008 registered the increased capital for warrant conversion worth Bt1,162,956 (193,826 common shares at Bt6-par value) with the Commerce Ministry as stated in notes to financial statements no. 24.

24. Warrants

Amount (Units) Balance as of 31 December 2006 9,182,202 Exercise right during the year (273,026 ) Balance as of 31 December 2007 8,909,176 Each unit of warrant is eligible to exercise into a common share at an exercise price of Bt0.01. The warrants carry a 10-year maturity from 7 November 2002 and the exercise date has been set at the end of the second and the fourth quarter.

112

Property Perfect Public Company Limited

Throughout 2006 and 2007, the Board of Directors’ meeting resolved the cancellation of 39,000,000 units of warrants planned to issued to the company’s directors and staff under Employee Stock Option Program (ESOP). In December 2006 and June 2007, the company received advance payment from exercise of warrants into 4,935,479 common shares at a price of Bt0.01 totalling Bt49,355. The company registered the new capital after the warrant conversion with the Commerce Ministry on 11 January 2007 and 11 July 2007. The share discount increased in the amount of Bt42,713,192. In December 2007, the company received advance payment from exercise of warrants into 193,826 common shares at a price of Bt0.01 totalling Bt1,938. The company registered the increase in its capital of Bt1,162,956 with the Commerce Ministry on 8 January 2008.

25. Legal reserves

In accordance with article 116 of the Public Act B.E. 2535, the company has to appropriate partly annual net profit as legal reserve not less than 5% of the annual net profit deducted by accumulated loss brought forward (if any) until this legal reserve holds an amount not less than 10% of the Company ’s registered share capital. The legal reserves can not be paid as dividend. 26. Number of employees and related cost Consolidated The Company Only 2007 2006 2007 2006

Number of employees at end of year (Persons) Employee costs for the year (Million Baht)

532

497

439

411

320.9

240.9

270.6

208.8

27. Provident Fund

The company, subsidiaries and employees jointly established the provident fund under the Provident Fund Act B.E. 2530. The fund is contributed by employees and the company or subsidiaries. Employees The fund is managed by Kasikornbank Public Company Limited and will pay to employees upon termination in accordance with the rules of the fund. The company and subsidiaries during the year contributed Bt13.3million (2006 : Bt12 million) (the company’s only : Bt11.5million (2006: Bt10.9 million) to the fund.

28. Related party transactions

During the year, the company and subsidiaries had significant business transactions with persons and related companies. These transactions were normal course of business under trade conditions, and principles agreed between them. The transactions are summarized as follows

113

Annual Report 2007

(Unit : Million Baht) Consolidated The Company Only 2007 2006 2007 2006 Transactions with subsidiary companies Interest income - - 13.1 14.3 Club house management expenses - - 8.4 10.8 Transactions with affiliate company Interest income 0.5 4.5 0.5 4.5

Pricing policy

7-9% per annum as contracts 15% per annum (penalty rate)

Outstanding balances of the above transactions are shown as separate items in the balance sheets as follows :- (Unit : Thousand Baht)

Consolidated The Company Only 2007 2006 2007 2006 Amounts due from related companies Bright Development Bangkok Co., Ltd. - - 81,500 - Amounts due from related companies - - 81,500 - Loans to related company and interest receivable Loans to subsidiary company Estate Perfect Company Limited(1) - - 241,453 94,376 Bright Development Bangkok Co., Ltd. - - 4,362 - - - 245,815 94,376 Interest receivable from subsidiary company Estate Perfect Company Limited - - 1,250 4,651 Bright Development Bangkok Co., Ltd. - - 9 - - - 1,259 4,651 Loans and interest receivable from subsidiary company - - 247,074 99,027 Loans to associated company Krungthep Land Public Company Limited - 56,091 - 56,091 - 56,091 - 56,091 Interest receivable from associated company Krungthep Land Public Company Limited - 66,211 - 66,211 Less : Provision for doubtful debts - (57,303 ) - (57,303 ) - 8,908 - 8,908 Loans and interest receivable form associated company, net - 64,999 - 64,999

114

Property Perfect Public Company Limited

(Unit : Thousand Baht) Consolidated The Company Only 2007 2006 2007 2006 Loans to related company Real Service Company Limited - 2,298 - 2,298 - 2,298 - 2,298 Interest receivable from related company Real Service Company Limited - 2,612 - 2,612 Less : Provision for doubtful debts - (2,494 ) - (2,494 ) - 118 - 118 Loans and interest receivable from related company, net - 2,416 - 2,416 Loans to related companies and interest receivable, net - 67,415 247,074 166,442 Amounts due to related company Perfect Satellite Services Company Limited - - 977 1,738 Centrepoint Shopping Mall Co., ltd. - - 80,000 - Amounts due to related company - - 80,977 1,738 Advance payment from directors Directors 80,000 - - - Advance payment from directors 80,000 - - -

115

Annual Report 2007

During the year 2007, loans to related companies were as follows

(Unit : Thousand Baht)

Balance As of During the year 1 January 2007 Increase Decrease

Balance As of 31 December 2007

Subsidiary Estate Perfect Company Limited Bright Development Bangkok Co., Ltd. Affiliate Krungthep Land Public Company Limited บริษัทที่เกี่ยวข้องกัน Real Service Co., Ltd.

94,376 -

150,600 4,362

(3,523) -

241,453 4,362

56,091

(56,091)

2,298

(2,298)

GUARATEE OBLIGATIONS TO RELATED COMPANIES The company is obliged to guarantees provided to related companies as stated in notes to financial statements no. 32.3.

29. Corporate Income Tax

The company was not subject to corporate income tax for the year as the company had losses carried over from the previous year

30. Earnnings per share

Basic earnings per share is calculated by dividing net earnings for that year by the weighted average number of common shares outstanding issued during the year. Diluted earnings per share is calculated by dividing net earnings for the year by the weighted average number of common shares outstanding issued during the year plus the weighted average number of shares outstanding that may be issued for conversion of all dilutive securities to common shares based on assumption that the conversion into common shares is made at the beginning of the year or the issue date of the dilutive securities.

116

Property Perfect Public Company Limited

Effect in basic earnings per share and dilutive earnings per share are shown as follows (Unit : Baht)

Consolidated For the years ended 31 December Weighted average number of common shares Weighted average Net profit (shares) Earnings per share 2007 2006 2007 2006 2007 2006 Basic earnings per share Net earnings 411,606,819 11,992,903 787,454,478 782,585,426 0.523 0.015 Effect of dilutive potential ordinate shares Warrants 8,909,176units (2006 : warrants 9,182,202 units) Unsubordinated convertible debentures - - 9,114,330 13,898,640 Diluted earnings per share Net earnings of ordinary shareholders, assuming the conversion of dilutive potential ordinary shares 411,606,819 11,992,903 796,568,808 796,484,066 0.517 0.015

(Unit : Baht)

Company Only For the years ended 31 December Weighted average number of common shares Weighted average Net profit (shares) Earnings per share 2007 2006 2007 2006 2007 2006 (Restated) (Restated) Basic earnings per share Net earnings 368,780,745 (9,951,872) 787,454,478 782,585,426 0.468 (0.013) Effect of dilutive potential ordinate shares Warrants 8,909,176 units (2006 : warrants 9,182,202 units) Unsubordinated convertible debentures - 9,114,330 Diluted earnings per share Net earnings of ordinary shareholders, assuming the conversion of dilutive potential ordinary shares 368,780,745 796,568,808 0.463

117

Annual Report 2007

Unsubordinated convertible debentures increased earnings per share in the consolidated financial statements for the year ended 31 December 2007 and 2006 and in the separate financial statements for the year ended 31 December 2007. The company then did not include the effect of the unsubordinated convertible debentures in the calculation for decrease in earnings per share in the consolidated financial statements for year ended 31 December 2007 and 2006 and the separate financial statements for the year ended 31 December 2007. Warrants and unsubordinated convertible debentures narrowed loss of earnings per share in the separate financial statements for the year ended 31 December 2006. So, the company did not include the effect of the warrants and the unsubordinated convertible debentures in the calculation of decrease in earnings per share in the separate financial statements for the year ended 31 December 2006.

31. Dividends

Dividends announced to be paid in 2006 have detailed as follows Approved by Dividends Dividend per share Dividend paid from accumulated Shareholders at profit of year 2005 the meeting on 28 April 2006 Bt273.9 million Bt0.35

32. Commitments and Contigency Liabilities

32.1 Commitments associated with capital expenditure 1) The company and subsidiaries had commitment of approximately Bt1,001.3 million in respect of construction contracts of land and houses as well as condominium projects. 2) The company and subsidiaries had commitment associated with land purchase in amount of approximately Bt541.6million . 3) The company had commitment associated with land lease for real estate project development in the amount of approximately Bt17.1 million. 4) The company had commitment with contractors associated with resident construction service by using prefabricate parts for not less than 300 units. The company is required to pay a certain amount of compensation as stated in the contracts in case that the company subcontracted lower than 300 units.

118

Property Perfect Public Company Limited

32.2 Commitments associated with operating contracts 1) The company had commitment in respect to office rental contract and service contracts as following: Million Payment within 1 year 19.8 Longer than 1 year 15.5 2) The company and subsidiaries had commitment in respect of billboard contract as following: Million Payment within 1 year 25.5 Longer than 1 year 1.5 32.3 Guarantee 1) The company guaranteed loans and credit facilities to subsidiary and affiliate companies in mount of Bt1,441 million and Bt30 million. 2) As at 31 December 2007, banks issued letter of guarantee on behalf of the company and subsidiaries with outstanding amount of Bt556.0 million. The letter of guarantee was associated with practical commitments from some normal business of the company and subsidiaries. The letter of guarantee comprised letter of guarantee for utility infrastructure with outstanding amount of Bt331 million and letter of guarantee for debentures with outstanding amount of Bt225 million.

33. Financial Information by Segment

The Company and its subsidiariesâ&#x20AC;&#x2122; operations involve principally a single industry segment, property development, and are carried on in the single geographic area of Thailand. As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.

34. Financial instruments

34.1 Financial risk management and policies Under the accounting standard issue 48 governing presentation and information disclosure for financial instruments, the company and subsidiaries have following important financial instruments stated in balance sheets.

119

Annual Report 2007

Financial assests Financial liabilities • Cash and cash equivalents • Overdraft and short-term loans from financial institutions • Account receivable – Net • Borrowings from other companies • Advance payment to associated • Account payable companies • Associated company creditors • Advance Payment to contractors • Advance payment from directors - Net • Deposits and cash received in advance from customers • Deposits pledged as collateral • Borrowings to associated companies • Creditors in the business rehabilitation plan – Net • Land debtors • Debentures • Investments in subsidiaries • unsubordinated convertible debentures • Investment in affiliates • Long-term loans • Other long-term investments - Net • Deposits and cash received in advance from • Advance payment for land acquisition sub lease contract The company and subsidiaries are exposed to the financial instrument risk and their risk management policy are as follows : Credit risk The company and its subsidiaries are involved in credit risk from trade debtors, advance payment, loans and land debtors. However, the appropriate loan control method and policy has been applied to control such risk, so the company and subsidiaries do not anticipate a significant damage from credit loans. In addition, due to the large number and diversity of entities comprising the company and its subsidiaries’ customer base, the maximum amount that the company and subsidiaries may loss from credit loans is trade debtors’ book value and loans shown in balance sheets. Interest rate risk The company and subsidiaries are exposed to interest rate risk from deposits at financial institutions, loans, overdraft and short-term loans from financial institutions, debentures, unsubordinated convertible debentures and long-term loans. However, interest rate risk is in relatively low level as most of financial assets and liabilities carry floating interest rates based on market rates or fixed interest rates close to the current rates. As at 31 December 2007, important financial assets and liabilities could be classified into interest rate types and financial assets and liabilities with fixed rates could be divided by maturity date or interest rates at reset date (If reset date was due first). Details are as follows : 120

Property Perfect Public Company Limited

(Unit : Million Baht) Consolidated Fixed interest rate Interest rate No Total Interest rate During More tied to interest (% per annum) Within 1 â&#x20AC;&#x201C; 5 than market rate rate 1 year years 5 years Financial assets Cash and cash equivalents - - - 416.5 7.5 424.0 0.125% - 0.75% Trade debtors â&#x20AC;&#x201C; Net - - - - 33.5 33.5 - Advance to contractors â&#x20AC;&#x201C; Net - - - - 32.9 32.9 - Deposits pledged as collateral 226.1 - - - - 226.1 0.125% - 2.25% Land debtors - - - - 35.4 35.4 - Investments in affiliates - - - - 401.4 401.4 - Other long-term investment- Net - - - - 5.0 5.0 - Advance for land purchases - - - - 151.5 151.5 - 226.1 - - 416.5 667.2 1,309.8 Financial liabilities Overdraft and short-term loans MOR, MMR, from financial institutions - - - 321.6 - 321.6 MLR, MLR-1 Borrowings from other companies 10.0 - - - - 10.0 6.00% Trade creditors - - - - 420.0 420.0 - Advance payment from directors - - - - 80.0 80.0 - Deposits and cash received in advance from customers - - - - 218.6 218.6 - Creditors in rehabilitation plan - - - 648.4 - 648.4 MLR Debentures 450.0 - - - - 450.0 6.65% Unsubordinated convertible debentures - 805.9 - - - 805.9 9.56% Long-term loans - - - 3,507.5 - 3,507.5 MLR Deposits and cash received in advance from sub lease contract - - - - 61.1 61.1 - 460.0 805.9 - 4,477.5 779.7 6,523.1

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(Unit : Million Baht) The Company Only Fixed interest rate Interest rate No Total Interest rate During More tied to interest (% per annum) Within 1 â&#x20AC;&#x201C; 5 than market rate rate 1 year years 5 years Financial assets Cash and cash equivalents - - - 391.7 5.9 397.6 0.125% - 0.75% Trade debtors â&#x20AC;&#x201C; Net - - - - 32.5 32.5 - Advance payment to associated companies - - - - 81.5 81.5 - Advance to contractors â&#x20AC;&#x201C; Net - - - - 32.9 32.9 - Deposits pledged as collateral 226.1 - - - - 226.1 0.125% - 2.25% Loans to associated companies - - - 247.1 - 247.1 8.03% - 8.69% Land debtors - - - - 35.4 35.4 - Investments in subsidiaries - - - - 541.1 541.1 - Investments in affiliates - - - - 360.0 360.0 - Other long-term investments - Net - - - - 5.0 5.0 - Advance for land purchases - - - - 22.0 22.0 - 226.1 - - 638.8 1,116.3 1,981.2 Financial liabilities Overdraft and short-term loans MOR, MMR, from financial institutions - - - 306.6 - 306.6 MLR Trade creditors - - - - 374.9 374.9 - Associated company creditors - - - - 81.0 81.0 - Deposits and cash received in advance from customers - - - - 216.5 216.5 - Creditors in rehabilitation plan - - - 648.4 - 648.4 MLR Debentures 450.0 - - - - 450.0 6.65% Unsubordinated convertible debentures - 805.9 - - - 805.9 9.56% Long-term loans - - - 3,006.9 - 3,006.9 MLR Deposits and cash received iin advance from sub lease contract - - - - 61.1 61.1 - 450.0 805.9 - 3,961.9 733.5 5,951.3

34.2 Fair value of financial instruments

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Since the majority of consolidated assets and liabilities are short-term and they carry interest at rates close to market rates, the company and subsidiary companies then estimate these assets’ and liabilities’ fair value close to book value described in balance sheets. Fair value is amount that buyer and seller agree to exchange assets each other while both parties have knowledge, are willing to exchange their assets and are freely negotiable in a manner without any connection. Fair value calculation depends on financial instruments. Fair value is computed from the latest market prices or basis of appropriate fair value calculation.

35. Events after financial statement date

Major events after financial statement date 1) On 21 January 2008, Property Perfect Fund (“Fund”) registered as a property fund with the Securities and Exchange Commission with the size of Bt520 million, Bt29.8 million or 5.73% of which were invested by the Company (2,980,000 unit trusts with the par value of Bt10 each). The Company entered into a contract to sell the company’s real estate to the Fund on 28 February 2008 and received Bt510 million from the sales. Under the contract, the Company guarantees the minimum revenue of the Fund (revenue from lease and services before deducted expenses) in the amount of Bt55 million a year for 5 years due on 31 December 2012. However, the minimum revenue guarantee depends on the balance value of the real estate to value of the real estate sold to the fund based on appraisal prices for the initial investment. Moreover, the company put letter of guarantee issued by financial institutions on behalf of the company to back the Fund. The company agrees to take responsible for expenses of the public utility infrastructure in real estate projects sold to the Fund for 3 years and the company has been assigned by the Fund to manage the property sold to the Fund for 5 years due on 31 December 2012. 2) On 31 January 2008, an affiliate issued 188,806 unsecured convertible debentures registered with name of holders at the fact value of US$100 each or the total value of US$18,880,600 with a 5 year-maturity to a foreign company in accordance with a resolution of the1/2008 extraordinary shareholders’ meeting of the affiliate on 14 January 2008. The debentures have a coupon rate of 3% per annum or dividend according to the convertible debentures conditions (whichever is higher). The convertible debentures are due on 31 January 2013. The exercise is available every three months after the affiliate is listed on the Stock Exchange of Thailand or the Market for Alternative Investment or one year after the convertible debenture issuance date (whenever comes first) at the conversion price of Bt13.85 per common share. The redemption price of each unconverted debenture is at 1.311651 times of the face 123

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value in equivalent to the Baht in case that the affiliate does not pay interest to the convertible debenture holder. The redemption value is subject to change depending on interest payment during lifetime of the convertible debenture. However, the affiliate will pay interest only when it pays dividend to shareholders. The interest payment will be made every six months.

3) On 28 February 2008, the Board of Directors’ meeting resolved the dividend payment for 2007’s performance to shareholders at Bt0.24 per share totaling Bt189 million. 4) On 28 February, the Board of Directors’ meeting approved the company to issue and sell debentures with amount not exceeding Bt2,000 million. The debentures’ maturity will not be longer than 5 years after the issuance date. The company’s management is considering details of the debenture issuance and the sales.

36. Item’s classification in the financial statements

In addition to the change in accounting policy as prescribed in notes to financial statements No. 4 which affected net profit and shareholders’ equity as earlier report, the company classified some items in the financial statements for the year ended 31 December 2006 to comply with accounting item classification in the current year. The classification has no additional effect on net profit or shareholders’equity from the change in accounting policy.

37. Approval of financial statements

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These financial statements were approved by the authorised directors on 28 February 2008.

Property Perfect Public Company Limited

The Board of Directors’ responsibilities for financial reports Property Perfect Public Company Limited’s and subsidiaries’ financial statements are prepared in compliance with accounting standard stipulated in the Accounting Professions Act B.E. 2547, presented in accordance with the requirements in the Business Development Department’s announcement on 14 September 2001 regarding the Accounting Act B.E 2543, and adjusts accounting practices to be in line with the Federation of Accounting Professions Notification 9/2007, 38/2007 and 62/2007 concerning the accounting standard. The Board of Directors has appointed the Audit Committee comprising non-executive directors to take responsible for financial reports to follow the account standard and related regulators, disclose adequate and on-time information, and have internal control system to supervise internal control activities and the Audit Committee’s Opinions in the Audit Committee’s reports shown in the annual report. The Board of Directors takes responsible for Property Perfect’s and its subsidiaries’ financial reports prepared to ensure that financial position, revenue, expenses and cash flow are presented accurately and reasonably. The Board of Directors prepares accurate and complete accounting records to maintain assets, and internal control system to prevent fraudulent irregularities activities. The Board of Directors has selected the appropriate and constantly practical accounting policy in preparing the financial reports to reflect the company’s actual performance in compliance with the Generally Accepted Accounting Principles and adequate information disclosure in notes to financial statements. Auditor expresses opinions on Property perfect’s and subsidiaries’ financial statements in auditors’ report. Tawatchai Nakata Chainid Ngow-sirimanee Chairman Chief Executive Officer

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Audit Committee Report 2007 Dear Valued shareholders Property Perfect Public Company Limited’s Audit Committee comprises three independent directors Dr. Tawatchai Nakhata as Chairman, and Dr. Thamnoon Ananthothai and Mr. Somsak Toraksa as directors. On 30 April 2007, Dr. Tawatchai Nakhata resigned from Chairman of the Audit Committee but he remained being Chairman of the Board of Directors to comply with good corporate governance. The 2007 shareholders’ meeting approved an appointment of Mr. Virayuk Puntupetch as Chairman of the Audit Committee with effective from 30 April 2007 onwards. In 2007, the Audit Committee performed duties under scope assigned by the Board of Directors by holding 7 meetings, in which management jointly attended to present operating results, risk management and operation’s problems and obstacles. The major activities of the Audit Committee are as follows : 1. To review quarterly and yearly financial statements, and yearly consolidated financial statements for the year 2007 The Audit Committee jointly reviewed the financial statements with executives and auditor to ensure that the financial statements were prepared appropriately, and compliance with the Generally Accepted Accounting Principles and other related regulations. The committee also has duty to assure accounting system’s accuracy and reliability and sufficient and on-time information disclosure in financial statements to benefit investors and financial statements users in making investment decision. 2. To review risk management The Audit Committee reviews the company’s risk assessment, gives suggestions about the organisation’s risk management measures, evaluates risk factors of the overall business to ensure that the company can mitigate risk to the acceptable level and achieve its objectives. 3. To review good corporate governance The Audit Committee supervises the company to disclose information transparently, follow the laws governing securities and the Stock Exchange of Thailand and the company’s business, and review connected transactions or transactions that have conflict of interests by expressing opinions that these transactions are done reasonably and regarding to shareholders’ interests to ensure that the transactions are proceeded under the normal course of business. 4. To review evaluation of internal control system The Audit Committee reviews as to whether the company’s internal control system is appropriate, achieves its objectives in using resources efficiently and effectively, and has a preventive system to reduce mistakes, damages and deplete the company’s resources as well as whether the financial statements is reliable. The company’s auditor give opinion results from the company’s internal control system evaluation do not found any substantial fault that might affect to accuracy and reliability of the company’s financial statements.

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5. To supervise internal audit activities The Audit Committee has duty to approve the annual audit plan if the internal audit office, acknowledge the 2007 internal control system evaluation’s results as approved plan, supervise internal audit tasks proceeded efficiently and effectively under the acceptable risk level and appropriately with the changed environment, set audit mission to focus on preventing risk that might happen, and let the company follow suggestions in important matters stated in the system evaluation report. Moreover, the Audit Committee messages importance and role of itself and internal audit unit to executives of all units to create good understanding and improve internal audit practices more effective. 6. To review the company’s monitoring and operating performance evaluation system The Audit Committee reviews the company’s performance to ensure that the company follows the targets and adjusts operation to be accordance with the changed situation. The committee supports the company to determine clearer performance evaluation and indicators, and constantly follow the internal control system activities, and enhance the internal control become a part of normal practice of management and related staff. 7. To present academic information concerning property development business from locally and internationally. The Audit Committee also suggests the company about financial, accounting, legal, and engineering to enable the company to accomplish its business goal. 8. To select auditor The Audit Committee selects auditor based on their independence and appropriateness of remuneration to seek approval from the company’s Board of Director and shareholders. Both the Board of Directors and shareholders appointed Ernst & Young Co., Ltd. as the auditor for 2008. The Audit Committee constantly reports resolutions of all meetings to the Board of Directors, independently practices assigned tasks on behalf of the Audit Committee with knowledge and competence, and gives suggestions straightly and appropriately for interests of the company, shareholders and other stakeholders. (Mr. Virayuk Puntupetch) Chairman of the Audit Committee 25 February 2008

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Auditor Fee Accuracy Sanctification Form Audit Fee Item Payer Auditor 1 Property Perfect Plc. Mr. Supachai Phanyawattano 2 Estate Perfect Co.,Ltd. Mr. Supachai Phanyawattano 3 Perfect Satellite Services Co.,Ltd Mr. Supachai Phanyawattano 4 Bright Development Bangkok Co.,Ltd. Mr. Supachai Phanyawattano 5 Centrepoint Shopping Mall Co.,Ltd. Mr. Supachai Phanyawattano Total fee

Fee 1,550,000 450,000 50,000 50,000 10,000 2,110,000

The above information is Accurate. I certify there is no other service I know of that the company and subsidiaries awarded to me, my auditing firm, and individuals or companies connected to me. Inaccurate. Note : ..................................................................................................................................................................................................... ....................................................................................................................................................................................................................................... To improve the above information (if any), I affirm the accuracy of all information in this form that shows the audit fee and other service fee that the company and subsidiaries pay to me, my auditing firm, and individuals or companies connected to me. (Mr. Supachai Phanyawattano) Ernst & Young Co.,Ltd Auditor of Property Perfect Public Company Limited

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