Annual Report 2017 by ar.u

Content 1. Introduction

1.1 1.2 1.3 1.4 1.5

Our Vision and Core Values Financial Highlights Recently Acquired Assets Message from the Chairman Message from the Chief Executive Officer

2. Corporate Information

2.1 2.2 2.3 2.4 2.5 2.6

Board of Directors The Executive Management Organisation Structure General Information of the Company Corporate Structure Capital Structure 2.6.1 Relationship with Major Shareholders 2.6.2 Dividend Policy

3. Business Overview 3.1 3.2 3.3 3.4 3.5 3.6

Corporate Policy and Nature of Business Operation Important Events of the Company Industry and Business Overview Management Discussion & Analysis Business Outlook 2018 Risk Factors

4. Corporate Governance Report

4.1 Corporate Governance Structure 4.2 Corporate Governance Policy 4.3 Selection, Appointment and Remuneration of Directors and the Chief Executive 4.4 Profiles of Director and Executive 4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies 4.6 Internal Control and Risk Management 4.7 Related Party Transactions 4.7.1 Audit Fee 4.8 Corporate Social Responsibility Policy 4.9 Human Resources Policy

1 2 3-5 6-7 8 10-11 12 13 14 16-36 37-42 43-44 45 47-55 56-58 59-63 64-70 71-72 73-74 76-85 86-104 105-109 110-120 121-128 129-130 131-136 137 138-140 141-143

5. Financial Report

5.1 5.2 5.3 5.4 5.5

Report of the Board of Directorsâ&#x20AC;&#x2122; Responsibilities for the Financial Statements Report of the Audit Committee Independent Auditorâ&#x20AC;&#x2122;s Report Audited Financial Statement Notes to Consolidated Financial Statements

145 146-147 148-152 153-161 162-223

INTRODUCTION

1.1

OUR VISION AND CORE VALUEs

OUR VISION

TO BE THE LEADING INVESTOR AND DEVELOPER OF DIVERSIFIED REAL ESTATE TO CREATE SUSTAINABLE GROWTH

OUR CORE VALUES

“To engage in sustainable growth that is responsive to contemporary consumer lifestyles and conscious of local environmental and social needs”

Vienna House Andel’s Lodz

1.2

Financial Highlights STATEMENT OF COMPREHENSIVE INCOME (THB Million)

Operating Revenue Total Revenue Operating Gross Profit EBITDA EBIT Recurring Net Profit Net Profit Total Comprehensive Income for the Year

2013 186.9 764.1 74.0 458.7 377.1 295.7 295.8 279.1

2014

2015

2016

2017

265.9 965.2 1,089.9 4,029.7 338.6 1,258.2 1,164.8 4,452.6 179.7 581.5 723.3 2,563.4 -413.1 45.5 63.6 208.5 -527.8 -148.5 -160.6 -327.6 -328.8 34.3 -321.6 -127.2 -607.7 -277.1 -321.6 -1,049.4 -606.9 -258.4 -581.6 -1,185.1

STATEMENT OF FINANCIAL POSITION (THB Million) Total Assets Net Debt Shareholdersâ&#x20AC;&#x2122; Equity

5,686.7 -272.2 4,500.9

12,785.9 21,995.2 25,148.6 40,051.8 1,135.7 -885.1 4,414.2 14,219.4 10,229.1 19,437.4 18,855.7 17,795.7

CASH FLOW (THB Million) Net Cash (used in) Operating Activities Capital Expenditures

-977.8 166.4

-2,272.0 305.4

630.7 -1,393.2 1,120.7 1,511.2

110.1 509.3

PER SHARE DATA (THB/Share) Earnings per Share (Basic) Book Value per Share

0.00210 -0.00288 -0.00055 -0.00057 -0.00187 0.03233 0.04841 0.03875 0.03360 0.03170

KEY RATIOS

Operating Gross Margin (%) EBITDA Margin (%) EBIT Margin (%) Net Debt to Equity (Times) ROA (%) ROE (%)

39.6% 60.0% 49.4% -0.06 8.0% 10.9%

67.6% -122.0% -155.9% 0.11 -6.6% -8.3%

60.3% 4.5% -11.8% -0.05 -1.6% -1.9%

66.4% 4.0% -13.8% 0.23 -1.3% -1.7%

63.6% 4.7% -7.4% 0.80 -3.2% -5.7%

SHARE INFORMATION

Par Value (THB/Share) Share Price (THB) Outstanding Shares (Million Shares) Market Capitalization (THB Million)

1.2 Financial Highlights

1.0 1.0 1.0 1.0 1.0 0.05 0.05 0.03 0.03 0.03 180,637.7 361,275.4 561,362.3 561,362.3 561,362.3 10,838.3 18,063.8 16,840.9 16,840.9 16,840.9

1.3

Recently Acquired Assets Vienna House

Germany 1. Vienna House Easy Amberg Germany - 110 keys 2. Vienna House Easy Bad Oeynhausen Germany - 146 keys 3. andelâ&#x20AC;&#x2122;s by Vienna House Berlin Germany - 557 keys

8 1.3 Recently Aquired

4. Vienna House Easy Berlin Germany - 152 keys

5. Vienna House Easy Braunschweig Germany - 176 keys 6. Vienna House Easy Castop-Rauxel Germany - 84 keys 7. Vienna House Easy Coburg Germany - 123 keys 8. Vienna House Easy Guenzburg Germany - 100 keys ANNUAL REPORT 2017

9. Vienna House Easy Landsberg Germany - 103 keys 10. Vienna House Easy Limburg Germany - 99 keys 11. Vienna House Easy Neckarsulm Germany - 94 keys 12. Vienna House Easy Trier Germany - 105 keys

13 13. Vienna House Easy Wuppertal Germany - 130 keys 14. Vienna House QF Dresden Germany - 95 keys 15. Vienna House Easy Leipzig Germany - 206 keys 16. Vienna House Easy Kroenberg Germany - 96 keys

1.3 Recently Aquired

Poland 17. Vienna House Andel’s Cracow Poland - 159 keys 18. Vienna House Easy Cracow Poland - 220 keys 19. Vienna House Angelo Katowice Poland - 203 keys 20. Vienna House Andel’s Lodz Poland - 277 keys 21. Vienna House Amber Baltic Miedzyzdroje Poland - 191 keys 22. Vienna House Warsaw Poland - 164 keys

20 21

Romania

Czech Republic

23. Vienna House Easy Pilsen Czech Republic - 144 keys 24. Vienna House Diplomat Prague Czech Republic - 398 keys

25. Vienna House Easy Airport Bucharest Romania - 176 keys

Slovakia

26. Vienna House Easy Bratislava Slovakia - 166 keys

Office Building

United Kingdom 27. 33 Gracechurch Street London United Kingdom 28. 6-14 Underwood Street London United Kingdom

27 1.3 Recently Aquired

28 ANNUAL REPORT 2017

1.4

Message from THE Chairman

Having assumed the position of Chairman of the Board of Directors of U City with the intention of reviving U City, change has begun. We’ve restructured the business, refined policies for investment and business operations and are divesting non-core assets. U City is no longer just a generic real estate development company, but a company ready and willing to invest in diverse real estate opportunities globally. Our overseas acquisitions have contributed to U City’s growth, as is clearly seen from the increase in total revenue compared to last year. Our local and international management teams are ready to invest in real estate and turn opportunities into value. In January 2018, the Company held an Extraordinary Shareholders’ Meeting to seek shareholders’ approval for a capital increase and to use proceeds from the capital increase to transfer the real estate businesses under Unicorn Enterprise Limited (UE). The assets acquired will generate income for the Company, especially revenues from sales of condominium projects along mass transit lines under our joint venture with Sansiri Public Company Limited. The proceeds of the capital increase are sufficient to drive the business forward. We would like to thank the shareholders for their support and confidence in the new direction that U City is taking. Having completed the transfer of UE, the Board of Directors and executives are confident that in the future, the Company will return to profit and pay dividends to its shareholders.

1.4 Message from the Chairman

All of these important milestones mark the rebirth of U City as a leader in investing and developing real estate globally with solid fundamentals, and sustainable, high growth potential in the future. Of paramount importance shall be the creation of value for shareholders. To that end, the Board of Directors’ focus is on good corporate governance and transparency. Every policy and investment shall be prudently reviewed for the benefit of the shareholders. On behalf of the Board of Directors, I would like to express my appreciation to all stakeholders for their trust, hard work and dedication. I especially express my appreciation to all U City executives and employees in locally and overseas for their support and adaptability during a time of significant change. On the cusp of an increasingly buoyant future I am steadfastly confident and optimistic that U City will become bigger, stronger and better.

Mr. Keeree Kanjanapas Chairman of the Board of Directors U City Public Company Limited

ANNUAL REPORT 2017

1.5

Message from the Chief Executive Officer

In 2017, U City Public Company Limited has created a solid foundation for expansion along numerous dimensions for long term profitable growth. Our investment in a hotel business including an attractive portfolio of hotels, a hotel management platform in Europe, mainly in Germany, Czech Republic and Poland, has firmly propelled us to become a leading hospitality player in Thailand. The contribution of Vienna House to the performance of the Company has and will continue to be considerable. Future upside can be achieved through this platform as we continuously increase the number of hotels under ‘Vienna House’ and ‘Vienna House Easy’. Moreover, we are excited by the prospect of a future brand in the pipeline, which will address contemporary preferences and trends. To achieve sustainable growth, we are not focusing only on revenue and long term profitable growth but also on investment management and capital allocation. In order to reach sustainability, the Company’s 5-pronged strategy includes: (i) diversified and prudent investment (ii) efficient use of capital and capital recycling (iii) sustainability through responsiveness to changes in consumer preferences as well as consciousness of the environment and community, (iv) partnerships that enable us to access expertise and new business opportunities and finally (v) undertaking development and investment of property located in close proximity to mass transit lines to benefit from the ‘mass transit premium’.

The aforementioned corporate strategy cannot be effectively executed without the support of capable, dedicated human resources. To ensure we remain on track, we are committed to develop technical competency within the organization, to create transparency, to motivate management and employees and to share know-how within the organization and allow best practices to take root. Our long and exciting journey has only begun. In March 2018, we successfully raised additional capital to finance the acquisition of the selected property businesses of BTS Group Holdings Limited (BTSG) and to strengthen our capital base for future expansion. The condominium development joint-venture with Sansiri creates a significant income source from sales and gives a good balance with our recurring income assets. The Asian-base hospitality portfolio under U and Eastin brand, an office building and an international school will unlock future synergies that will benefit all shareholders. Finally, on behalf of the management team, I would like to express our appreciation to our shareholders, directors, executives, financial institutions, business partners and customers for their unwavering trust, support and commitment to our company.

Ms. Piyaporn Phanachet Chief Executive Officer U City Public Company Limited

1.5 Message from the Chief Executive Officer

Corporate information 2.1 2.2 2.3 2.4 2.5 2.6

Vienna House Andelâ&#x20AC;&#x2122;s Lodz

2.1

Board Of Directors

1. Mr. Keeree Kanjanapas Chairman of the Board of Directors 2. Mr. Rungson Sriworasat Independent Director, Chairman of The Audit Committee and Nomination and Remuneration Committee

3. Mr. Chaiwat Atsawintarangkun Independent Director, Chairman of The Nomination and Remuneration Committee and Audit Committee 4. Mr. Surajit Gongvatana Independent Director, Audit Committee and Nomination and Remuneration Committee 5. Mr. Plakorn Wanglee Independent Director, Audit Committee and Nomination and Remuneration Committee

2.1 Board of Directors

6. Mr. Kavin Kanjanapas Director 7. Mr. Kong Chi Keung Director

9. Mr. Weerawat Wattanatchariya Director and Executive Director 10. Mr. Voraphot Chanyakomol* Director, Executive Director and Chief Financial Officer

8. Mr. Burin Pusiri Director and Executive Director Note: * On February 14, 2018, the Company appointed Ms. Piyaporn Phanachet as the Companyâ&#x20AC;&#x2122;s Director and Executive Officer to replace Mr. Voraphot Chanyakomol.

2.1 Board of Directors

ANNUAL REPORT 2017

2.2

The Executive Management

1. Ms. Piyaporn Phanachet* Chief Executive Officer, Director and Executive Director 2. Mr. Burin Pusiri Director and Executive Director 3. Mr. Weerawat Wattanatchariya Director and Executive Director 4. Mr. Voraphot Chanyakomol** Director, Executive Director and Chief Financial Director

5. Ms. Soraya Satiangoset*** Chief Financial Officer 6. Mr. Veerapong Rodjanawarodom** Chief Operation Officer 7. Mr. Sayam Siwarapornskul Chief Legal Officer and the Company's Secretary 8. Ms. Nuttapun Giramethakul Vice President, Accounting Department

Note: * On February 14, 2018, the Company appointed Ms. Piyaporn Phanachet as the Companyâ&#x20AC;&#x2122;s Director and Executive Officer to replace Mr. Voraphot Chanyakomol. ** Mr. Voraphot Chanyakomol has resigned as Director of the Company and Chief Financial Officer effectively on 15 February 2018 *** On March 1, 2018, the Company appointed Ms. Soraya Satiangoset as Chief Financial Officer to replace Mr. Voraphot Chanyakomol.

2.2 The Executive Management

2.3

Organisation Structure

Board of Directors

Company Secretary

Audit Committee

Executive Committee

Nomination & Remuneration Committee

Chief Executive Officer (CEO) Internal Audit Chief Financial Officer (CFO)

Chief Legal Officer (CLO)

VP - Invesment

VP - Accounting

Investment

Accounting

Business Development & Strategic Planning Human Resource & Administrative

Chief Operating Officer (COO)

Executive Office

Finance

Compliance

Project Development

Investor Relations & Public Relations

Legal

Property Management

Procurement

Executive Director (ED)

Acquisition & Structuring

Information Technology

2.3 Organisation Structure

ANNUAL REPORT 2017

2.4

General Information of the Company (as of 16 March 2018) Company : U City Public Company Limited Company Registration Number : 0107537000459 Nature of Business : Real estate development for rent, service and sale Head Office : 21 TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon Sub-district, Chatuchak District, Bangkok 10900, Thailand Telephone : 0-2273-8838 Fax : 0-2273-8858 Website : www.ucity.co.th Registered Capital : THB 1,682,739,052,821 Paid-Up Registered Capital : THB 935,429,212,116 Number of Issued Ordinary Shares : 935,429,212,116 shares Par Value : THB 1 per share Shares Offered : Ordinary Shares : 561,371,695,976 shares Preferred Shares : 374,057,516,140 shares The Other securities Warrants (U-W1) : 180,637,710,882 units Warrants (U-W2) : 106,500,000,000 units Warrants (U-W3) : 45,133,272,059 units

Auditors of the Company for Financial Statement Year 2017

Auditorsâ&#x20AC;&#x2122; Names : Mr. Narong Puntawong, Certified Public Account No. 3315 and/or Ms. Siraporn Ouaanunkun, Certified Public Account No. 3844 and/or Mr. Supachai Phanyawattano, Certified Public Account No. 3930 Company : E Y Office Company Limited Location : 33rd Fl, Lake Rajada Office Complex, 193/136-137 Rajadapisek Rd, Klongtoey District, Bangkok 10110 Telephone : +66 2264-0777 Fax : +66 2264-0789-90

Legal Advisor for Year 2017 Office Name Location Telephone Fax

: The Capital Law Office Limited : 44 Smooth Life Tower 15th Fl., North Sathorn Rd., Bangrak, Bangkok 10500 Thailand. : +66 2633-9088 : +66 2633-9089

2.4 General Information of the Company

Vienna House Easy Wuppertal

2.5

Corporate Structure Investment Structure of the Company

As of 31 December 2017, the Company’s investments in subsidiaries and associated companies are as follows:

U CITY PLC. Real Estate Development for Rent, Service and Hotel (Overseas) 100%

Lombard Estate Holding Limited Thirty Three 100% Gracechurch 1 Limited Thirty Three 100% Gracechurch 2 Limited 100% Underwood Street Limited Vienna House 100% Capital GmbH 100% 100% 100% 100% 100% 100%

Recoop Tour Czech Republic UBX Plzen Czech Republic UBX Plzen Real Estate Czech Republic Amber Baltic Poland Andel’s Lodz Poland Comtel Focus Romania

100% Vienna International Hotel

Management Austria

99% 1%

100% 99.99% LP 100% 100% 100% 100% 1%

33.33%

KDAG Data Austria**

100%

33.33%

VI Europäische Franchise Austria**

94.9%

100% 100%

100% 100% 100%

Khon Kaen Buri Co., Ltd.

100%

Boonbaramee Metta Property Co., Ltd.

100%

LH Unit Trust

100%

OOO Employee Management Rusia Andel’s Berlin Hotelbetriebs Germany VH Dresden Hotelbetriebs Germany VHE Bratislava Slovakia6

100%

Real Estate Development for Rent, Service and Hotel (Domestic)

100% 100% 100%

GP 1 Share

VHE Cracow7 SKA Poland HM Angelo Katowice Poland UBX Krakow Poland UBX Katowice Poland Vienna House Real Estate Austria 99%

VHE Bratislava Real Estate Slovakia Vienna House Cluster Polen Poland2 Vienna House Cluster Tschechien Czech Republic5 VH Warsaw Hotel Poland3 VHE Darmstadt Hotelbetriebs Germany VHE Berlin Hotelbetriebs Germany Vienna International Asset Germany

94.9% LP

Vienna House Cluster Deutschland Germany4 VHE Leipzig Hotelbetriebs Germany

94.9% LP

VH Kronberg Hotelbetriebs Germany

94.9% LP

2.5 Corporate Structure

Pacific Hotel Chiangmai Co. Ltd.

VHE Cracow Poland1

94.9% LP

Pacific Chiangmai Co., Ltd.

Calvus Germany Enigma Germany Fabella Germany Fabio Germany Fiora Germany

Joint Venture 100%

Kamkoong Property Co., Ltd

100%

BTS Assets Co., Ltd.

Real Estate Development for Sale

100%

Project Green Co., Ltd.

Other Real Estate

100% 71.57%

50%

Prime Area 38 Co., Ltd.

100%

Npark Global Holding Co., Ltd.

100%

50%

MHG NPARK Development Co., Ltd.

100% 100%

Natural Panwa Hotel Co., Ltd.** Natural Hotel Sukhumvit Co., Ltd.** Natural Hotel Park Ville Co., Ltd. ** Natural Real Estate Co., Ltd.** Park Opera Co., Ltd.**

99.94%

Richee Property Management Co., Ltd.**

100%

Park Gourmet Co., Ltd.**

GP = General Partnership LP = Limited Partnership ** Inactive subsidiaries 1 VHE Cracow Poland = former name “Helston Sp. z o.o.” 2 Vienna House Cluster Polen Poland = former name “Employee Management Sp. z o.o.” 3 VH Warsaw Hotel Poland = former name “Zammia Investments Sp. z o.o.” 4 Vienna House Cluster Deutschland Germany = former name “Vienna International Deutschland GmbH” 5 Vienna House Cluster Tschechien Czech Republic = former name “VI Travel Management s.r.o.” 6 VHE Bratislava Slovakia = former name “VI Bratislava s.r.o.” 7 VHE Cracow SKA Poland = former name “WX Krakow Sp. z o.o. SKA”

2.5 Corporate Structure

ANNUAL REPORT 2017

And as of 16 March 2018, the Company’s investments in subsidiaries and associated companies are as follows:

U CITY PLC. Real Estate Development for Rent, Service and Hotel (Overseas) Lombard Estate Holding Limited

100%

100% 100% 100% 100%

100% 100% 100% 100% 100% 100%

Thirty Three Gracechurch 1 Limited Thirty Three Gracechurch 2 Limited Underwood Street Limited Vienna House Capital GmbH Recoop Tour Czech Republic UBX Plzen Czech Republic UBX Plzen Real Estate Czech Republic Amber Baltic Poland Andel’s Lodz Poland Comtel Focus Romania

100% Vienna International Hotel

Management Austria

100% 100% 100% 100% 33.33% 33.33% 100% 100% 100%

OOO Employee Management Russia Andel’s Berlin Hotelbetriebs Germany VH Dresden Hotelbetriebs Germany VHE Bratislava Slovakia6 KDAG Data Austria** VI Europäische Franchise Austria**

100%

Real Estate Development for Rent, Service and Hotel (Domestic)

Tanayong Hong Kong Limited * 100%

99% 1%

LH Unit Trust

Khon Kaen Buri Co., Ltd.

Thanacity Golf and Sports Club Co., Ltd.* 100% Boonbaramee Metta Property Co., Ltd. 100%

100% 100% 99.99% LP 100% 100% 100% 100% 1%

100% 100%

100%

VHE Cracow Poland1 GP 1 Share

VHE Cracow7 SKA Poland HM Angelo Katowice Poland UBX Krakow Poland UBX Katowice Poland Vienna House Real Estate Austria

50%

Absolute Hotel Services Co., Ltd.* Travelodge (Thailand) Co., Ltd.* 99% Absolute Golf Service Co., Ltd.* 80%

75.47% 12.26%

99%

VHE Bratislava Real Estate Slovakia

Absolute Hotel Services Hong Kong Limited* 60% Absolute Hotel Services Indochina Limited* 58.04% AHS Hospitality India Private Limited*

Vienna House Cluster Polen Poland2 Vienna House Cluster Tschechien Czech Republic5

VH Warsaw Hotel Poland3 VHE Darmstadt 100% Hotelbetriebs Germany VHE Berlin 100% Hotelbetriebs Germany 94.9% Vienna International Asset Germany 100%

94% LP

Calvus Germany

Vienna House Cluster Deutschland Germany4 VHE Leipzig Hotelbetriebs Germany

94% LP

VH Kronberg Hotelbetriebs Germany

94% LP

Fabio Germany

94% LP

Fiora Germany

2.5 Corporate Structure

Pacific Chiangmai Co., Ltd. Pacific Hotel Chiangmai Co. Ltd.

94% LP

Enigma Germany Fabella Germany

100%

Joint Venture

100%

BTS Assets Co., Ltd.

100%

Kamkoong Property Co., Ltd.

100%

Tanayong Property Management Co., Ltd.*

100%

Unison One Co., Ltd.*

100%

Muangthong Assets Co., Ltd.*

Real Estate Development for Sale

100% 100% 100%

BTS Land Co., Ltd.* Tanayong Food and Beverage Co., Ltd.* Mak 8 Co., Ltd.*

50% 50% 50%

100%

Ratburana Property Co., Ltd.*

50%

100%

Nine Square Property Co., Ltd.*

50%

100%

PrannaKiri Assets Co., Ltd.* Siam Paging Communication Co., Ltd.*

50%

Project Green Co., Ltd.

50%

100% 100% 50%

Prime Area 38 Co., Ltd.

100%

Npak Global Holding Co., Ltd.

50%

MHG NPARK Development Co., Ltd

50%

50% 50%

BTS- Sansiri Holding One Limited* BTS- Sansiri Holding Two Limited*

50%

BTS- Sansiri Holding Three Limited* BTS- Sansiri Holding Four Limited*

50%

BTS- Sansiri Holding Five Limited* BTS- Sansiri Holding Six Limited*

50%

BTS- Sansiri Holding Seven Limited* BTS- Sansiri Holding Eight Limited* BTS- Sansiri Holding Nine Limited*

50%

Nuvo Line Agency Co., Ltd.*

50%

50% 50%

50%

Other Real Estate

BTS Sansiri Holding Eleven Limited* BTS Sansiri Holding Twelve Limited* BTS Sansiri Holding Fourteen Limited* BTS Sansiri Holding Fifteen Limited* BTS Sansiri Holding Sixteen Limited*

50%

Keystone Estate Co., Ltd.* 50% Keystone Management Co., Ltd.* 100% Natural Panwa Hotel Co., Ltd.** Natural Hotel 71.57% Sukhumvit Co., Ltd.** 100%

Natural Hotel Park Ville Co., Ltd.** Natural Real Estate Co., Ltd.**

BTS Sansiri Holding Seventeen Limited* BTS Sansiri Holding Eightteen Limited*

100% 100%

Park Opera Co., Ltd.**

BTS Sansiri Holding Nineteen Limited* BTS Sansiri Holding Twenty Limited* BTS Sansiri Holding Twenty One Limited* BTS Sansiri Holding Twenty Two Limited*

99.94%

Richee Property Management Co., Ltd.**

100%

Park Gourmet Co., Ltd.**

GP = General Partnership LP = Limited Partnership

* The Entire Business Transfer transaction from Unicorn Enterprise Limited under the resolution the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018. ** Inactive subsidiaries 1 VHE Cracow Poland = former name “Helston Sp. z o.o.” 2 Vienna House Cluster Polen Poland = former name “Employee Management Sp. z o.o.” 3 VH Warsaw Hotel Poland = former name “Zammia Investments Sp. z o.o.” 4 Vienna House Cluster Deutschland Germany = former name “Vienna International Deutschland GmbH” 5 Vienna House Cluster Tschechien Czech Republic = former name “VI Travel Management s.r.o.” 6 VHE Bratislava Slovakia = former name “VI Bratislava s.r.o.” 7 VHE Cracow SKA Poland = former name “WX Krakow Sp. z o.o. SKA”

2.5 Corporate Structure

ANNUAL REPORT 2017

General Information of Companies in which the Company holds more than 10% as of March 16, 2018 Real Estate Development for Rent, Service and Hotel Business (Domestic)

No.

Company

Address

Shareholding of Paid-up Capital the Company (THB) (%)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

1. Khon Kean Buri Company Limited (KK)1 Hotel Business

999 Moo 4 Prachasamosorn Road, Tambon Nai Mueang, Amphoe Mueang Khon Kean, Khon Kean Tel. 043-209-888 Fax. 043-209-889

100.00

800,000,000

8,000,000

100

2. Boonbaramee Metta Property Company Limited (BMP)1 Investment in Hotel and Real Estate Development Business

21, TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

700,000,000

7,000,000

100

3. Pacific Chiangmai Company Limited (PC)1 Leasing land and Buildings to Pacific Hotel Chiangmai Company Limited

100.00 21, TST Tower, Soi Choei Phuang, (Hold by BMP) Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

200,000,000

2,000,000

100

4. Pacific Hotel Chiangmai Company Limited (PHC)1 Hotel Business

100.00 21, TST Tower, Soi Choei Phuang, (Hold by BMP) Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

600,000,000

6,000,000

100

5. Kamkoong Property Company Limited (KKP) Real Estate Development Business

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

1,100,000,000

11,000,000

100

2.5 Corporate Structure

100.00

No.

Company

Address

Shareholding of Paid-up Capital the Company (THB) (%)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

6. BTS Assets Company Limited (BTSA) Hotel and Real Estate Development Business

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

2,955,000,000

29,550,000

100

7. Unison One Co., Ltd.2 Office Building Rental

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

340,000,000

3,400,000

100

8. Tanayong Property2 Property Management

100-100/1 Moo 4 K.M. 14 Bangna-Trad Road, Bang Chalong, Bang Phli, Samut Prakan

100.00

1,000,000

10,000

100

9. Thana City Golf and Sports Club Co., Ltd.2 Golf Course and Sports Club Management

100-100/1 Moo 4 KM. 14, Bangna-Trad Rd., Bang Chalong, Bang Phli, Samut Prakan

100.00

10,000,000

100,000

100

Note: 1 Disposal asset according to the resolution of Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018. 2 The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018.

2.5 Corporate Structure

ANNUAL REPORT 2017

Real Estate Development for Rent, Service and Hotel Business (Overseas)

No.

Company/Type

Address

Shareholding of the Company (%)

Issued Shares (Shares)

Paid-up Capital

Registered Capital

100.00

GBP 76,500,001

103,900,001

GBP 1

Par Value

1. Lombard Estate Holdings Limited (LEH) Property Investment Business

Room 501, The Lucky Building, 39, Wellington Street, Central, Hong Kong

2. Thirty Three Gracechurch 1 Limited (TTG 1) Investment in LH Unit Trust

26 New Street, St. Helier, Jersey, JE2 3RA Tel. +44 (0) 1534 507000 Fax. +44 (0) 1534 507001

100.00 (Hold by LEH)

GBP 15,140,001

GBP 15,150,000

15,140,001

GBP 1

3. Thirty Three Gracechurch 2 Limited (TTG 2) Investment in LH Unit Trust

26 New Street, St. Helier, Jersey, JE2 3RA Tel. +44 (0) 1534 507000 Fax. +44 (0) 1534 507001

100.00 (Hold by LEH)

GBP 154,001

GBP 164,000

154,001

GBP 1

4. LH Unit Trust (LHUT) Investment in long-term leasehold right of an Office Building in the United Kingdom

100.00 (Hold by TTG1 and TTG2)

GBP 4,924,000

49,294

GBP 1,000

5. Underwood Street Limited (USL) Investment in long-term leasehold right of an Office Building in the United Kingdom

26 New Street, St. Helier, Jersey, JE2 3RA Tel. +44 (0) 1534 507000 Fax. +44 (0) 1534 507001

100.00 (Hold by LEH)

GBP 3,300,001

3,300,001

GBP 1

6. Vienna House Capital (VHC) Securities Investment

Dresdner Straße 87, 1200 Vienna Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

100.00 (Hold by LEH)

EUR 35,000

7. Vienna House Real Estate GmbH (VHRE) Securities Investment

Dresdner Straße 87, 1200 Vienna Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

100.00 (Hold by VHC)

EUR 17,500

EUR 35,000

8. Vienna International HotelManagement AG (VI) Hotel Management

Dresdner Straße 87, 1200 Vienna Tel. +43 1333 73 73-0 Fax +43 1333 73 73-13

100.00 (Hold by VHC)

EUR 3,375,000

22,500

EUR 150

2.5 Corporate Structure

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital

EUR EUR 3,140,000.01 3,140,000.01

Dresdner Straße 87/5 Stock, 1200 Vienna Tel +43 1 333 73 73-0 Fax +43 1 333 73 73-13

33.33 (Hold by VI) (The other 33.33 % hold by Amber Provatstiftung and other 33.33 % hold by Bocca Provatstiftung)

10. VI Europäische Franchise Dresdner Straße 87/5 Stock, 1200 Vienna GmbH Tel. +43 1 333 73 73-0 Non-Operating Fax. +43 1 333 73 73-13

33.33 (Hold by VI) (The other 33.33 % hold by Dr. Franz Jurkowith and other 33.33 hold by dkfm. Georg Folian)

EUR 80,000

9. KDAG Data GmbH Non-Operating

Registered Capital

Issued Shares (Shares)

Par Value

EUR 80,000

11. Andel’s Berlin Hotelbetriebs GmbH Asset Owner and Hotel Business

Landsberger Allee 106, 10369 Berlin Tel. +49 30 453 053 2000 Fax. +49 30 453 053 2099

100.00 (Hold by VI)

EUR 25,000

25,000

EUR 1

12. VHE Berlin Hotelbetriebs GmbH Asset Owner and Hotel Business

Landsberger Allee 106, 10369 Berlin Tel. +49 30 666 4440 Fax. +49 30 666 444 999

100.00 (Hold by VI)

EUR 25,000

25,000

EUR 1

13. VH Dresden Hotelbetriebs GmbH Asset Owner and Hotel Business

Landsberger Allee 106, 10369 Berlin Tel. +49 351 563 3090 Fax. +49 351 563 309911

100.00 (Hold by VI)

EUR 25,000

25,000

EUR 1

14. VHE Leipzig Hotelbetriebs GmbH Asset Owner and Hotel Business

Hermann & Kollegen Rechtsanwälte PartG mbB, Maximilianstr. 2, 80539 Munich

100.00 (Hold by VI)

EUR 25,000

25,000

EUR 1

15. VH Kronberg Hotelbetriebs GmbH Asset Owner and Hotel Business

c/o Hermann & Kollegen Rechtsanwälte Part GmbH, Hr. RA Dr. Wolfgang Hermann, Maximilianstr. 2, 80539 Munich

100.00 (Hold by VI)

EUR 25,000

25,000

EUR 1

2.5 Corporate Structure

ANNUAL REPORT 2017

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital

Registered Capital

Issued Shares (Shares)

Par Value

16. VHE Darmstadt Hotelbetriebs GmbH Asset Owner and Hotel Business

c/o Hermann & Kollegen Rechtsanwälte Part GmbH -Herr RA Dr. Wolfgang Hermann Maximilianstraße 2, 80539 Munich

100.00 (Hold by VI)

EUR 25,000

25,000

EUR 1

17. Vienna International Asset GmbH (VI Asset) Securities Investment and Hotel Business

Leuchtenbergring 20 c/o Angelo DesignHotel Munich, 81677 Munich Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

94.90 (Hold by VI) (The other 33.33 % and other 5.10 % hold by Asia Hong Kong Engineering Limited))

EUR 25,000

18. Calvus Grundstücksverwaltungs GmbH & Co. Vermietungs KG Asset Owner and Hotel Business

Emy-Roeder-Straße 2, 55129 Mainz Tel +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

94.00 (Hold by VI Asset as a limited liability company)

EUR 5,000

19. Enigma Grundstücksverwaltungs GmbH & Co. Objekt Wuppertal KG Asset Owner and Hotel Business

Emy-Roeder-Straße 2, 55129 Mainz Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

94.00 (Hold by VI Asset as a limited liability company) (The other 6% hold by Calvus GmbH as a limited liability company)

EUR 5,000

20. Fabella Grundstücksverwaltungs GmbH & Co. Vermietungs KG Asset Owner and Hotel Business

Emy-Roeder-Straße 2, 55129 Mainz Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

94.00 (Hold by VI Asset as a limited liability company) (The other 6% hold by Fabella GmbH as a limited liability company)

EUR 5,000

2.5 Corporate Structure

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital

Registered Capital

Issued Shares (Shares)

Par Value

21. Fabio Grundstücksverwaltungs GmbH & Co. Vermietungs KG Asset Owner and Hotel Business

Emy-Roeder-Straße 2, 55129 Mainz Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

94.00 (Hold by VI Asset as a limited liability company) (The other 6% hold by Fabio GmbH as a limited liability company)

EUR 5,000

22. Fiora Grundstücksverwaltungs GmbH & Co. Vermietungs KG Asset Owner and Hotel Business

Emy-Roeder-Straße 2, 55129 Mainz Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

94.00 (Hold by VI Asset as a limited liability company) (The other 6% hold by Fabio GmbH as a limited liability company)

EUR 5,000

23. Vienna House Cluster Deutschland GmbH2 Business relate to Hotel Management Service

Leuchtenbergring 20, c/o Holiday Inn Munich-Leuchtenbergring, 81677 Munich Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

100.00 (Hold by VI)

EUR 25,000

24. Recoop Tour a.s. Asset Owner and Hotel Business

Evropská 370/15, Dejvice, 160 00 Praha 6 Tel. +420 296 559 111 Fax. +420 296 559 207

100.00 (Hold by VHC)

CZK 24,000,000

160

CZK 150,000

25. UBX Plzen s.r.o. Hotel Business

Václavské . 837/11, PSC 11000 Praha 1 Tel. +420 378 016 111 Fax. +420 378 016 016

100.00 (Hold by VHC)

CZK 200,000

26. UBX Plzen Real Estate s.r.o. Asset Owner

Václavské námestí 837/11, 110 00 Praha 1 Tel. +420 378 016 111 Fax. +420 378 016 016

100.00 (Hold by VHC)

CZK 200,000

27. Vienna House Cluster Tschechien s.r.o. 3 Business relate to Hotel Management Service

Praha 6 - Dejvice, Evropská 370/15, PSC 16041 Tel. +420 2963530 Fax. +420 296353488

100.00 (Hold by VI)

CZK 200,000

2.5 Corporate Structure

ANNUAL REPORT 2017

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital

Registered Capital

Issued Shares (Shares)

Par Value

28. Amber Baltic Sp. z o.o. Asset Owner and Hotel Business

ul. Promenada Gwiazd, 72-500,Miedzyzdroje, Tel. +48 91 3228 760 Fax. +48 91 328 1022

100.00 (Hold by VHC)

PLN 38,325,000

76,650

PLN 500

29. Andels Lodz Sp. z o.o. Asset owner and Hotel Business

ul. Ogrodowa, nr 17, 91-065, Lodz, Tel. +48 4227 91000 Fax. +48 4227 91001

100.00 (Hold by VHC)

PLN 5,208,000

5,208

PLN 1,000

30. UBX Krakow Sp. z o.o. Asset Owner and Hotel Business

ul. Pawia, nr 3, 31-154, Krakow, Tel. +48 12 6600100 Fax. +48 12 6600001

100.00 (Hold by VHC)

PLN 50,000

PLN 1,000

31. UBX Katowice Sp. z o.o. Asset Owner

ul. Sokolska, nr 24, 40-086, Katowice, Tel. +48 3278 38100 Fax. +48 3278 38103

100.00 (Hold by VHC)

PLN 50,000

PLN 1,000

32. Hotel Management Angelo Katowice Sp. z o.o. Hotel Business

ul. Sokolska, nr 24, 40-086, Katowice, Tel. +48 3278 38100 Fax. +48 3278 38103

100.00 (Hold by VHC)

PLN 202,400

4,048

PLN 50

33. VHE Cracow Sp. z o.o. (VHE Cracow)4 Securities Investment

ul. Przy Rondzie, 31-547, Krakow, Tel. +48 12299 0000 Fax. +48 12 2990 001

100.00 (Hold by VHC)

PLN 5,000

100

PLN 50

34. VHE Cracow Sp. z o.o. SKA5 Asset Owner and Hotel Business

ul. Przy Rondzie, nr 2, 31-547, Krakow, Tel. +48 12299 0000 Fax. +48 12 2990 001

100.00 (99.99% hold by VHC as a limited liability company and 1 share hold VHE Cracow as a limited liability company)

PLN 11,206,950

224,139

PLN 50

35. VH Warsaw Hotel Sp. z o.o. 6 Asset Owner and Hotel Business

ul. Nowogrodzka, nr 50, 00-695, Warsaw,

100.00 (Hold by VI)

PLN 5,000

100

PLN 50

2.5 Corporate Structure

No.

Company/Type

Address

Shareholding of the Company (%)

Issued Shares (Shares)

Paid-up Capital

Registered Capital

PLN 40,000

400

PLN 10

RON 42,703,016

111,788,000

RON 0.382

Par Value

36. Vienna House Cluster Polen Sp. z o.o.7 Business relate to Hotel Management Service

ul. WSPĂ&#x201C;LNA, nr 50, lok. 13, 00-684, Warsaw Tel. +43 1 333 73 73-0 Fax. +43 1 333 73 73-13

100.00 (Hold by VI)

37. Comtel Focus S.A. Asset Owner and Hotel Business

Calea BUCURESTILOR, Nr. 283, Ilfov County075100 Otopeni Tel. +40 21 2036500 Fax. +40 21 2036510

100.00 (Hold by VHC)

38. VHE Bratislava s.r.o.8 Hotel Business

Galvaniho 28 821 04, Bratislava Tel +421 232299100 Fax. +421 232299530

100.00 (Hold by VI)

EUR 6,638.78

39. OOO Employ Management Business relate to Hotel Management Service

2A, 2. Ulitsa Maryâ&#x20AC;&#x2122;inoy Roschi , 129594, Moscow Tel.+7 495 646 2077

100.00 (Hold by VI)

RUB 231,948

40. Tanayong Hong Kong Limited1 Securities Investment

11th Floor, Malahon Centre, 10-12 Stanley Street Central, Hong Kong Tel. +852 9188 3886 Fax. +852 2868 3626

100.00

HKD 10,000

10,000

HKD 1

Note: 1 The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 hold on 4 January 2018. 2 Vienna House Cluster Deutschland GmbH former name Vienna International Deutschland GmbH 3 Vienna House Cluster Tschechien s.r.o. former name VI Travel Management s.r.o. 4 VHE Cracow Sp. z o.o. former name Helston Sp. z o.o. 5 VHE Cracow Sp. z o.o. SKA former name WX Krakow Sp. z o.o. SKA 6 VH Warsaw Hotel Sp. z o.o former name Zammia Investments Sp. z o.o. 7 Vienna House Cluster Polen Sp. z o.o. former name Employee Management Sp. z o.o. 8 VHE Bratislava s.r.o. former name Vienna International Bratislava s.r.o.

2.5 Corporate Structure

ANNUAL REPORT 2017

Real Estate Development for Sale

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

1. Project Green Company Limited (P-Green) Real Estate Development Business

21, TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

100,000,000

1,000,000

100

2. NPARK Global Holding Company Limited (NHC) Real Estate Development Business

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

1,000,000

10,000

100

3. BTS Land Co., Ltd.1 Land Owner and Property Development

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8522-25 Fax. 0-2273-8526

100.00

10,0000,000

10,000,000

100,000

100

4. Tanayong Food and Beverage Co., Ltd.1 Land Owner and Property Development

100-100/1 Moo 4 K.M. 14 Bangna-Trad Road, Bang Chalong, Bang Phli, Samut Prakan Tel. 0-2273-8522-25 Fax. 0-22273-8526

100.00

10,0000,000

10,000,000

100,000

100

5. Muangthong Assets Co., Ltd.1 Hotel Business

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8511-15 Fax. 0-2273-8516

100.00

125,000,000

125,000,000 1,250,000,000

100

6. Mak 8 Co., Ltd.1 Land Owner and Property Development

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chompon, Chatuchak, Bangkok Tel. 0-2273-8511-15 Fax. 0-2273-8516

151,000,000

100

2.5 Corporate Structure

100.00

1,510,000

No.

Company/Type

Shareholding of the Company (%)

Address

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

7. Ratburana Property Co., Ltd.1 Land Owner and Property Development

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8511-15 Fax. 0-2273-8516

100.00

10,0000,000

10,000,000

100,000

100

8. Nine Square Property Co., Ltd.1 Land Owner and Property Development

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8511-15 Fax. 0-2273-8516

100.00

10,0000,000

10,000,000

100,000

100

9. PrannaKiri Assets Co., Ltd.1 Land Owner and Property Development

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8511-15 Fax. 0-2273-8516

100.00

311,000,000

3,110,000

100

10. Siam Paging Communication Co., Ltd.1 Land Owner and Property Development

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8511-15 Fax. 0-2273-8516

100.00

5,000,000

50,000

100

Note: 1 The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018.

Joint-ventures No.

Company

Joint-venture between the Company, Amanresorts Services Limited and Silverlink Holdings Limited (JV)1

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

N/A

Remark: 1 The Ratchapatsadu Land at Rong Pasee Roi Chak Sam Development Project with the Treasury Department, Ministry of Finance

2.5 Corporate Structure

ANNUAL REPORT 2017

Real Estate Development for Rent, Service and Hotel or Sale No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

1. MHG NPARK Development Company Limited (MHGNP) Real Estate (residential) Development Business

99, Berli Jucker House, 16/F, Soi Rubia, Sukhumvit 42 Road, Phra Khanong, Khlong Toei, Bangkok

50.00 (The other 50.00% hold by Hua-Hin Resources Limited)

100,000,000

10,000,000

2. Prime Area 38 Company Limited (Prime-A) Hotel and Real estate Development Business

475, Siripinyo Building, 8/F, Si Ayutthaya Road, Thanon Phaya Thai, Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

50.00 (The other 50.00% hold by Sansiri Plc.)

10,000,000

100,000

100

3. Absolute Hotel Services Co., Ltd.2 Hotel Management Services

1091/343, 4th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok Tel. 0-2255-9247 Fax. 0-2255-9248

50.00 (The other 50.00% hold by Mr. Jonathan Maxwell Wigley, Mr. John Mark Westoby, Mrs. Thitiya Westoby, Ms. Nopparat Pongwatanakulsiri)

8,000,000

25,000,000

2,500,000,000

5. Travelodge (Thailand) Co., Ltd. 2 Hotel Management and Development

1091/343, 4th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok Tel. 0-2255-9247 Fax. 0-2255-9248

80.00 % hold by Absolute Hotel Services Co., Ltd. and 20.00% hold by Travelodge Hotel (Asia) Co., Ltd.

500,000

2,000,000

400,000

6. Absolute Golf Services Co., Ltd.2 Golf and Sport Club Management service

1091/343, 4th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok Tel. 0-2255-9925 Fax. 0-2255-9929

99.00% hold by Absolute Hotel Services Co., Ltd. and 0.99% by Mr. Jonathan Maxwell Wigley and 0.01% hold by Ms. Nopparat Pongwatanakulsiri

4,000,000

200,000

2.5 Corporate Structure

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

7. Keystone Management Co., Ltd.2 International School Management

50.00 21 Soi Choei Phuang, Viphavadi-Rangsit Road, (The other 49.00% Chomphon, Chatuchak, hold by Fortune Hand Ventures Bangkok Limited and 1.00% Tel. 0-2273-8522-25 hold by Mr. Prasert Fax. 0-2273-8526 Arayakarnkul)

125,000,000

500,000,000

5,000,000

100

8. Keystone Estate Co., Ltd.2 Land Owner and Property Development

1,874,000,000 50.00 21 Soi Choei Phuang, Viphavadi-Rangsit Road, (The other 49.00% hold by Gold Chomphon, Chatuchak, Diamond Holding Bangkok Limited and 1.00% Tel. 0-2273-8522-25 hold by Mr. Prasert Fax. 0-2273-8526 Arayakarnkul)

1,874,000,000

18,740,000

100

9. BTS Sansiri Holding One Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

10. BTS Sansiri Holding Two Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

11. BTS Sansiri Holding Three Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

12. BTS Sansiri Holding Four Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

2.5 Corporate Structure

ANNUAL REPORT 2017

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

13. BTS Sansiri Holding Five Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo Building, Sri Ayutthaya (The other 50.00 % Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

14. BTS Sansiri Holding Six Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo Building, Sri Ayutthaya (The other 50.00 % Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

15. BTS Sansiri Holding Seven Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo Building, Sri Ayutthaya (The other 50.00 % Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

16. BTS Sansiri Holding Eight Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo Building, Sri Ayutthaya (The other 50.00 % Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

17. BTS Sansiri Holding Nine Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo Building, Sri Ayutthaya (The other 50.00 % Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

18. Nuvo Line Agency Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo Building, Sri Ayutthaya (The other 50.00 % Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

19. BTS Sansiri Holding Eleven Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo Building, Sri Ayutthaya (The other 50.00 % Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

2.5 Corporate Structure

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

20. BTS Sansiri Holding Twelve Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

21. BTS Sansiri Holding Fourteen Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

22. BTS Sansiri Holding Fifteen Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

23. BTS Sansiri Holding Sixteen Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

24. BTS Sansiri Holding Seventeen Limited/2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904 50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.)

100,000,000

1,000,000

100

25. BTS Sansiri Holding Eighteen Limited2 Land Owner and Ratchathewi, Bangkok Property Development for Sale Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

26. BTS Sansiri Holding Nineteen Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

2.5 Corporate Structure

ANNUAL REPORT 2017

No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

27. BTS Sansiri Holding Twenty Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

28. BTS Sansiri Holding Twenty One Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

29. BTS Sansiri Holding Twenty Two Limited2 Land Owner and Property Development for Sale

50.00 475, 8th Floor, Siripinyo (The other 50.00% Building, Sri Ayutthaya Road, Tanon Phayathai, hold by Sansiri Plc.) Ratchathewi, Bangkok Tel. 0-2202-3905-6 Fax. 0-2202-3904

100,000,000

1,000,000

100

Note: 1 On 15 November 2017, the Company has disposed shares in Prime Area 38 Company Limited amounted to 50,000 shares which is a 50 percent of Prime-Aâ&#x20AC;&#x2122;s total share to Sansiri Public Company Limited and on 4 January 2018, company has changed the address to Siripinyo Building , Floor 8 , 475 Sri Ayutthaya Road, Ratchathewi, Bangkok. 2 The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018.

2.5 Corporate Structure

Associated Companies Engaging in Real Estate Development for Rent, Service and Hotel No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital

Registered Capital

1. Absolute Hotel Service Hong Kong Limited1 Hotel Management Service

87.73 (75.47 % Hold HKD 6,930,687 HKD 6,930,687 Flat/RM 908 by Absolute Hotel Dominion Centre, 43-59 Queenâ&#x20AC;&#x2122;s Road Services Co., Ltd., and 12.26 % hold by East, Wanchai, Tanayong Hong Kong Hong Kong Limited) (The other 9.82 hold by Mr. Jonathan Maxwell Wigley and 2.45% hold by Mr. John Mark Westoby)

2. Absolute Hotel Services Indochina Limited1 Hotel Management Service

60.00 (Hold by Flat/RM 908 Absolute Hotel Hong Dominion Centre, Kong Limited) 43-59 Queenâ&#x20AC;&#x2122;s Road (The other 40.00 East, Wanchai, % hold by Phany Hong Kong Hotel & Restaurants Service Co., Ltd.)

3. AHS Hospitality India Private Limited1 Hotel Management Service

309, Atlanta Estate, Dr. Ambedkar Chowk, Off. W.E. Highway, Goregaon (East), Mumbai 400 063 India

Issued Shares (Shares)

Par Value

6,930,687

HKD 1

HKD 780,000

780,000

HKD 1

INR 34,443,450 INR 35,000,000 58.04 (Hold by Absolute Hotel Hong Kong Limited)

3,444,345

INR 10

HKD 780,000

Note: 1 The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 hold on 4 January 2018.

2.5 Corporate Structure

ANNUAL REPORT 2017

Inactive Subsidiaries No.

Company/Type

Address

Shareholding of the Company (%)

Paid-up Capital (THB)

Registered Capital (THB)

Issued Shares (Shares)

Par Value (THB)

5/3 Moo 8, Ao Yon-Khao Khat Road, Tambon Wichit, Amphoe Mueang Phuket, Phuket Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

143,000,000

1,430,000

100

2. Natural Hotel Sukhumvit 555/5 Soi Sukhumvit 63 Company Limited (NHSK) (Ekkamai), Sukhumvit Road, Khlong Ton Nuea, Hotel Business Watthana, Bangkok

71.57

41,352,750

1,500,000

100

1. Natural Hotel Panwa Company Limited (NHP) Hotel Business

3. Natural Park Ville Company Limited (NPV) Management Business

21, TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

43,000,000

430,000

100

4. Natural Real Estate Company Limited (NRE) Real Estate Development Business

21, TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

33,000,000

330,000

100

5. Park Opera Company Limited (PO) Real Estate Development Business

21, TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

22,555,000

50,000,000

5,000,000

100

6. Richee Property Management Company Limited (RPM) Real Estate Development Business

21, TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

99.94

1,000,000

10,000

100

7. Park Gourmet Company Limited (PG) Restaurant Business

21, TST Tower, Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok Tel. 0-2273-8838 Fax. 0-2273-8858

100.00

25,000,000

50,000,000

500,000

100

2.5 Corporate Structure

2.6

Capital Structure Company’s Securities

As of 31 December 2017, the Company’s registered capital details are as follows: Registered Capital

THB 861,413,132,646

Paid-Up Registered Capital

THB 561,755,887,152

Number of Issued Common Shares

561,371,695,976

Number of Issued Preferred Shares

26,384,191,176

Par Value

THB 1.00

Per Share

As of 16 March 2018, the Company’s registered capital details are as follows: Registered Capital

THB 1,682,739,052,821

Paid-Up Registered Capital Number of Issued Ordinary Shares Par Value

THB 935,429,212,116 935,429,212,116 THB 1.00

Shares Per Share

Detail of Common Shares and Preferred Shares as follows: Ordinary Shares

561,371,695,976

Preferred Shares

374,057,516,140

Shareholders

The top 10 shareholders as of 26 January 2018 No.

Name – Surname / Company

1. BTS GROUP HOLDINGS PLC.

Number of Shares

% Shareholding

200,086,877,212

35.64

62,459,634,965

11.13

3. Mr. Wanchai Panwichien

9,660,000,000

1.72

4. Mrs. Sukanya Thongphan

9,151,375,650

1.63

5. Thailand Securities Depository Company Limited (NVDR)

8,717,457,341

1.55

6. Mr. Komol Jungrungreangkit

7,929,542,672

1.41

7. Mr. Vichit Singwongsornkul

7,255,800,000

1.29

8. Mr. Somkiat Chatsakulwilai

5,598,591,572

1.00

9. Mr. Chaiyan Chakarakul

4,900,489,608

0.87

4,595,854,122

0.82

2. UOB KAY HIAN (HONG KONG) LIMITED - Client Account

10. Mr. Thongplew Siripornpitak

2.6 Capital Structure

ANNUAL REPORT 2017

Majority Preferred Shareholders As of 16 March 2018 Name

Number of Shares

% of listing preferred shares

1. BTS Group 1.1 BTS Group Holdings Public Company 1.2 Unicorn Enterprise Company Limited

163,882,352,942 100,000,000,000 63,882,352,942

43.81 26.73 17.08

2. Bangkok Bank Public Company Limited

90,384,191,176

24.16

3. UOB KAY HIAN (HONG KONG) LIMITED â&#x20AC;&#x201C; Client Account

58,967,707,972

15.76

4. Mr. Komol Jungrungruangkit

6,343,634,137

1.70

5. Mr. Wanchai Panvichian

5,000,000,000

1.34

6. Mr. Chaiyan Chakarakul

3,920,391,686

1.05

7. KIM ENG SECURITIES (HONG KONG) LIMITED

2,488,000,000

0.67

8. Ms. Panthigun Suwankeeree

1,721,073,065

0.46

9. Mr. Thongplew Siripornpitak

1,280,000,000

0.34

10. Mr. Anurit Gerdsinchai

1,200,000,000

0.32

The Other securities

Warrants to purchase ordinary shares of U City Public Company Limited No.1 (U-W1) Name of warrants

: Warrants to purchase the ordinary shares of U City Public Company Limited No.1 (U-W1) Allocation method : The Company will allocate the U-W1 Warrants to the existing shareholders who have subscribed for and been allocated with the newly issued preferred shares, at no cost, according to the allocation ratio set forth. Every 1 newly issued common share for 1 unit of U-W1 Warrant. Type of warrants : Named certificate and transferable Number of warrants to be allocated : 180,637,710,882 units Number of ordinary shares reserved : 180,637,710,882 shares, at the par value of THB 1.00 per share for warrants exercise Offering price : THB 0 per unit Issued date : 7 November 2014 Term of warrants : 5 years from the date of issuance Exercise ratio : 1 unit of U-W1 Warrants to 1 ordinary share (unless it is adjusted otherwise according to the conditions concerning the rights adjustment) Exercise price : THB 0.06 per share (unless it is adjusted otherwise according to the conditions concerning the rights adjustment)

2.6 Capital Structure

Exercise period

Secondary market of the warrants Secondary market of the ordinary shares issued on the exercise of the warrants

: The warrant holders shall be eligible to exercise their rights to purchase the Company’s ordinary shares after 2 years from the date of issue of the Warrants in unlimited number on every last business day of each quarter in each calendar year (i.e. the last business day of March, June, September and December) after the first anniversary of the warrant issue date, and the last exercise date will be on the date falling the fifth anniversary of the warrant issue date. In case the last exercise date is not a business day, the last exercise date shall be postponed to the next business day. First Exercise Date is 30 December 2016 and last Exercise Date is 6 November 2019. : Stock Exchange of Thailand (“SET”) : Stock Exchange of Thailand (“SET”)

Warrants to purchase ordinary shares of U City Public Company Limited No.2 (U-W2) Name of warrants

: Warrants to purchase the ordinary shares of U City Public Company Limited No.2 (U-W2) Type of warrants : Specified names of the holders - Transferable under the restriction that the Company shall not register any transfer of the warrants if such transfer may effect to nature of the Private Placement offering scheme. Number of warrants to be allocated : 100,043,438,606 units Number of ordinary shares reserved : The issuance of not more than 106,500,000,000 shares at the par value for warrants exercise of THB 1 per share. Together with the number of shares reserved for the exercise of U-W1, the new issued share will represent 50% of the total issued shares of the Company. (After the Company completed issuing share to BTSG and the registration of the increase of registered capital, the registered capital of the Company will be THB 561,362,298,976.) Allocation method : The Company will allocate the U-W2 Warrants to BTSG at no cost, according to the allocation ratio set forth. Every 2 newly issued ordinary share for 1 unit of U-W2 Warrant. Issued date : 20 April 2015 Offering price : THB 0 per unit Term of warrants : The same maturity date of U-W1 on 6 November 2019 Exercise ratio : 1 unit of U-W2 Warrants to 1 ordinary share (unless it is adjusted otherwise according to the conditions concerning the rights adjustment)

2.6 Capital Structure

ANNUAL REPORT 2017

Exercise price

Exercise period

Secondary market of the warrants Secondary market of the ordinary shares issued on the exercise of the warrants

2.6 Capital Structure

: THB 0.047 per share at the par value of THB 1 per share, unless the exercise price is adjusted otherwise pursuant to the conditions concerning the right adjustment. In this regard, such exercise price is lower than the registered par value of the Company, which is practicable providing that the Company incurs a loss and approval of the meeting of shareholders is being granted according to Section 52 of the Public Limited Company Act B.E. 2535 (as amended). Furthermore, the exercise price is not lower than 90 percent of the Market Price of the Company’s ordinary share. The Market Price of the Company’s ordinary share means the weighted average of the Company’s ordinary share price trading on the Stock Exchange of Thailand for 8 consecutive business days prior to the date on which the Board of Directors resolves to propose the Extraordinary General Meeting of Shareholders No. 2/2014 to approve the agenda item in relation to the offering for sale of the newly issued ordinary shares, the period from 23 September 2014 to 2 October 2014, which is equivalent to Baht 0.052 (information from SETSMART in www.setsmart.com of the Stock Exchange of Thailand). : The warrant holders shall be eligible to exercise their rights to purchase the Company’s ordinary shares after 2 years from the Date of Issue of the Warrants in unlimited number on every last business day of each quarter in each calendar year (i.e. the last business day of March, June, September and December) after the first anniversary of the warrant issue date, and the last exercise date will be on the date falling the fifth anniversary of the warrant issue date. In case the last exercise date is not a business day, the last exercise date shall be postponed to the next business day. First Exercise Date is 30 December 2016 and last Exercise Date is 6 November 2019. : The warrant will not be listed and traded on the SET. : Stock Exchange of Thailand (“SET”)

Warrants to purchase the ordinary shares of U City Public Company Limited No.3 (U-W3) Name of warrants

: Warrants to purchase the ordinary shares of U City Public Company Limited No.3 (U-W3) Type of warrants : Specified names of the holders - Transferable under the restriction that the Company shall not register any transfer of the warrants if such transfer may effect to nature of the Private Placement offering scheme. Number of warrants to be allocated : Up to 45,133,272,059 units Number of ordinary shares reserved : Up to 45,133,272,059 shares, at the par value of THB 1.00 per share for warrants exercise Allocation method : The Company will allocate the U-W3 Warrants to BBL 13,192,095,588 units and UE 31,941,176,471 units for subscribing for the newly issued preferred shares via a private placement at no cost, at a ratio of 2 newly issued preferred shares to 1 unit of the U-W3 Warrants Issued date : 16 March 2018 Offering price : THB 0 per unit Term of warrants : 5 years from the date of issuance Exercise ratio : 1 unit of U-W3 Warrants to 1 ordinary share (unless it is adjusted otherwise according to the conditions concerning the rights adjustment) Exercise price : THB 0.05 per share, unless the exercise price is adjusted otherwise pursuant to the conditions concerning the rights adjustment. In this regard, such exercise price is lower than the registered par value of the Company, which is practicable providing that the Company incurs a loss and approval of the meeting of shareholders is being granted according to Section 52 of the Public Limited Company Act B.E. 2535 (as amended). Furthermore, the exercise price is not lower than 90 percent of the Market Price of the Company’s ordinary share. The Market Price of the Company’s ordinary share means the weighted average of the Company’s ordinary share price trading on the Stock Exchange of Thailand for 7 consecutive business days prior to the date on which the Board of Directors resolves to propose the Extraordinary General Meeting of Shareholders No. 1/2018 to approve the agenda item in relation to the offering for sale of the newly issued ordinary shares, the period from 17 October 2017 to 27 October 2017, which is equivalent to THB 0.03 (information from SETSMART in www.setsmart. com of the Stock Exchange of Thailand).

2.6 Capital Structure

ANNUAL REPORT 2017

Exercise period

Secondary market of the warrants Secondary market of the ordinary shares issued on the exercise of the warrants

2.6 Capital Structure

: The warrant holders shall be eligible to exercise their rights to purchase the Company’s ordinary shares after 1 years from the Date of Issue of the Warrants in unlimited number on every last business day of each quarter in each calendar year (i.e. the last business day of March, June, September and December) after the first anniversary of the warrant issue date, and the last exercise date will be on the date falling the fifth anniversary of the warrant issue date. In case the last exercise date is not a business day, the last exercise date shall be postponed to the next business day. First Exercise Date is 29 March 2019 and last Exercise Date is 16 March 2025. : The warrant will not be listed and traded on the SET. : Stock Exchange of Thailand (“SET”)

2.6.1

Relationship with Major Shareholders As at 28 April 2015, BTSG acquired 35.64% of the total issued shares of the Company and also directly or indirectly engages in the property business through its subsidiaries under Unicorn Enterprise Company Limited which is a subsidiary of BTSG. To eliminate the current business conflict of interest or overlap between the Company and BTSG, the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018, has approved the entire business transfer (Entire Business Transfer: EBT) of Unicorn Enterprise Company Limited (UE), a subsidiary in which BTS Group Holdings Public Company Limited (“BTSG”) holds 100 percent of its total shares where UE engages in business through holding shares in 36 companies (Holding Company) which engage in the property business. After the completion of the EBT Transaction, BTSG will still hold some of the remaining property entities engaged in the property business directly or through its subsidiaries. Therefore, to manage conflicts of interest in the property development business between BTSG and the Company after completion of the EBT Transaction, as long as BTSG is a shareholder of the Company directly or indirectly holding not less than 10 percent of the total issued shares of the Company in aggregate. BTSG agrees to grant the Company the following three rights: (A) Right of first refusal to purchase or to take on lease of land and/or buildings of BTSG and/or its subsidiaries and to purchase shares in BTSG’s subsidiaries holding land and/or buildings (“ROFR”).

In the event that BTSG or any of its subsidiaries wishes to (a) sell or lease out any land and/or buildings used in the property business, or (b) sell shares in any subsidiary holding land and/or buildings used in the property business which are currently held by or will be acquired in the future, to a third party, BTSG shall first offer, or shall cause its respective subsidiary to agree to first offer the right to purchase or to take on lease of the respective land and/or buildings, or to purchase shares in such subsidiary (as the case may be), to

2.6.1 Relationship with Major Shareholders

the Company and/or its subsidiaries subject to the conditions and at the price not less favorable than those offered by BTSG or its respective subsidiary to the third party.

ROFR granted for (a) the land and/or buildings used in the property business, or (b) the purchase of shares in BTSG’s subsidiaries holding land and/or buildings used in the property business that BTSG or it subsidiaries currently hold (which will not be transferred to the Company in the Entire Business Transfer Transaction).

(B) Call option to purchase or to take on lease of land and/or buildings and to purchase shares in any subsidiary holding land and/or buildings (the “Call Option”).

In the event that the Company and/or any of its subsidiaries wishes to (a) purchase or to take on lease of land and/or buildings used in the property business or (b) purchase shares in any subsidiary holding land and/or buildings used in the property business which are currently held by or will be acquired in the future by BTSG or its subsidiaries, BTSG undertakes to sell or lease or to cause its respective subsidiary to sell or lease, such land and/or buildings or shares in such subsidiary (as the case may be) to the Company and/ or its subsidiaries, at a fair value appraised by an independent appraiser, whose name appears on the SEC’s list, and whom the Company and BTSG jointly appoint, provided that Company must exercise the Call Option before BTSG or its respective subsidiary obtain an offer to purchase land and/or buildings or an offer to purchase shares in the subsidiary holding land and/ or buildings from a third party. For example, if BTSG obtains an offer to purchase a land from a third party at a price higher than the appraised value, and has issued a letter to the Company inquiring whether the Company wishes to exercise ROFR as set out on clause 2 above, in such case, the Company will only be able to exercise ROFR to purchase the land and will not

ANNUAL REPORT 2017

be able to exercise the Call Option to purchase the land at the appraised value.

The Call Option granted for (a) the land and/or buildings used in the property business, or (b) the purchase of shares in BTSG’s subsidiaries holding land and/or buildings used in the property business that BTSG or it subsidiaries currently hold (which will not be transferred to the Company in the Entire Business Transfer Transaction).

(C) Right to be appointed as a property manager under a property management agreement and right to be appointed as a real estate agent under a real estate agency agreement. 1) For the property projects which are currently owned by BTSG or its subsidiaries (which will not be transferred to the Company in the Entire Business Transfer Transaction), BTSG shall appoint, or shall cause its respective subsidiary to appoint, the Company and/or its subsidiaries as a property manager of the relevant projects where BTSG or its respective subsidiary will enter into a property management agreement, whose terms and conditions will be agreed on an arm’s length basis, with the Company and/ or its subsidiaries. 2) In addition, for the land and/or buildings which are currently owned or will be acquired in the future by BTSG or its subsidiaries, including property projects which are currently for sale or lease and are owned by BTSG or its subsidiary (which will not be transferred to the Company in the Entire Business Transfer Transaction), BTSG shall appoint, or shall cause its respective subsidiary to appoint, the Company and/or its subsidiaries as a real estate agent to sell or lease such property where BTSG or its respective subsidiary will enter into a real estate agency agreement, whose terms and conditions will be agreed on an arm’s length basis, with U City and/or its subsidiaries. 44

However, in the case that (a) the Company refuses the aforementioned appointment as the property manager or real estate agent to sell or lease such property or (b) the Company and/or its subsidiaries do not comply 2.6.1 Relationship with Major Shareholders

with the property management agreement, or the real estate agency agreement (as the case may be), giving rise to BTSG and/or its respective subsidiary to terminate such agreement, BTSG and/or its respective subsidiary shall have the right to manage and/or sell or lease such property on its own and/or to appoint a third party as a property manager or a real estate agent to sell or lease such property (as the case may be).

In addition to the foregoing, BTSG has set a policy on its property business where BTSG will not engage in the property development business that competes with or overlaps or may compete with or overlap the property development business of the Company and/or its subsidiaries. However, BTSG and/or its subsidiaries will still be able to engage in land trade business and may invest in properties so long as the foregoing is not for the property development. However, BTSG and/ or its subsidiaries will still be able to engage in the following businesses: (a) Land trade business and investment in properties so long as the foregoing is not for the development of property projects; and (b) Investment in securities of any entities engaging in the property business in the proportion of not more than 10 percent of the total issued shares of such entity and BTSG must not have control in such entity, excluding BTSG’s shareholdings in entities, which engage in the property business, acquired prior to the entire business transfer date. Moreover, in consideration for the purchase or investment in the land or property, the management of the Company will preliminarily consider the appropriateness of the land or property in which the Company will purchase or invest before proposing the same to the Board of Directors for consideration and approval. In the invitation letter to the Board of Directors’ meeting, the company secretary of the Company will specifiy the names of the directors having conflict of interest in each agenda where such directors shall not attend or vote in such agendas.

2.6.2

Dividend Policy The Company’s dividend policy is to pay to shareholders not less than 30 percent of net profit as stated in the separated financial statement of the Company after deduction of reserves, as determined in the Memorandum of Association of the Company and Thai law. Nonetheless, the dividend payment will incorporate the following factors such as the performance and financial position of the Company, liquidity of the Company in business expansion and other factors related to managing the Company. The dividend payment is subject to approval by the shareholders and the Board of Directors of the Company. However, during 1 January 2018 to 31 December 2022, the Company has a policy to pay dividends to preferred shareholders before ordinary shareholders. The details are as follows. 1. When the Company pays dividends, holders of the preferred shares shall be entitled to receive dividends in each calendar year before holders of the ordinary shares at the rate of Baht 0.0022 per preferred share and per calendar year. In distributing dividends, in case the total amount of dividends entitled to receive by any shareholder is less than 1 Satang, such amount shall be discarded. 2. In case, during any calendar year between 1 January 2018 and 31 December 2022, the Company pays no dividends or pays dividends less than the rate specified in (a), the holders of the preferred shares shall be entitled to cumulative dividends during such calendar year at the following rates: • At the rate of Baht 0.0022 per preferred share and per calendar year in the event that the Company pays no dividends in such calendar year; or • At the rate equal to the difference between the actual dividends received per preferred share in that calendar year and the rate specified in (a) in case the Company pays dividends to the holders of the preferred shares at a rate lower than the rate specified in (a).

2.6.2 Dividend Policy

In this regard, the preferred shares’ right to cumulative dividends during the calendar years between 1 January 2018 and 31 December 2022 as specified in (b) shall remain in full force until the cumulative dividends are paid to all holders of the preferred shares in full even though such payment is made after 31 December 2022. 3. In case during any calendar year the Company pays dividends more than the rate specified in (a) and cumulative dividends as specified in (b) (if any), the holders of the preferred shares and the holders of the ordinary shares shall be entitled to receive such excess dividends per share at the same rate. 4. In making each payment of dividends, the Company shall pay cumulative dividends as specified in (b) to the holders of the preferred shares in full first then pay dividends as specified in (a) to the holders of the preferred shares. 5. In case the Company has fully paid dividends as specified in (a), then the Company can pay dividends to the holders of the preferred shares and the holders of the ordinary shares as specified in (c). In this regard, after 31 December 2022, in making each payment of dividends. The preferred shares’ right to dividends shall be the same as that of the ordinary shares except in the event that the Company has not paid the cumulative dividends as specified in (1)(b) where the preferred shares shall be entitled to receive the cumulative dividends as specified in (1) (b) in full.

ANNUAL REPORT 2017

Business Overview 3.1 3.2 3.3 3.4 3.5 3.6

Corporate Policy and Nature of Business Operation Important Events of the Company Industry and Business Overview Management Discussion & Analysis Business Outlook 2018 Risk Factors

Vienna House Easy Braunschweig

3.1

Corporate Policy and Nature of Business Operation The Company aims to operate prudently and transparently by focusing on investing and developing real estate, predominantly near future or existing mass transit lines as well as other related businesses to generate sustainable revenue growth and profitability. Since 2016, the Company has adjusted its investment and development policy to the ‘five pillars of sustainable value accretion’, which are detailed as follows: 1. Investment • Growth via development of ‘greenfield’ projects and/or acquisitions of operating assets or businesses • Attain a diversified portfolio, which enables mitigation of business cycles • Enhancing the potential and value of assets through effective, prudent management. 2. Efficient use of capital • Recycling capital for future investment through capital markets and potentially securitise assets for future reinvestment and potentially generate fee-based income 3. Sustainability • Respond to changes in consumer lifestyles and technological disruptions • Having environmental awareness and minimising environmental impact • Creating a positive impact to communities • Generating corporate value and shareholder return

5. Mass Transit Link - benefiting from the ‘mass transit premium’

Nature of Business Operation

The Company currently develops and invests in various types of real estate, which can be categorized as follows: (1) Real estate development for rent, service and hotel business; and (2) Real estate development for sale business.

Nature of Products and Services 1. Real Estate Development for Rent, Service and Hotel Business

1.1 Current Projects The real estate development for rent, service and hotel business, which is the main business of the Company, consists of: (a) Domestic Hotel Business The Company, through its wholly owned subsidiaries, owns 4 hotels in Thailand. (1) Avani Khon Kaen Hotel and Convention Center; (2) Anantara Chiang Mai Resort and Spa; (3) Eastin Grand Sathorn Bangkok; (4) U Sathorn Bangkok;* (5) U Chiangmai;* (6) U Inchantree Kanchanaburi. * Leaseshold

4. Partnerships • To gain the access to new expertise and business opportunities • Reducing development and investment risk • Increasing long-term firm value and synergies

3.1 Corporate Policy and Nature of Business Operation

ANNUAL REPORT 2017

Details are as follows: (1) Avani Khon Kaen Hotel and Convention Center1 Location

999 Moo 4 Prachasamosorn Road, (Route 209), Tambon Nai Mueang, Amphoe Mueang, Khon Kaen 40000

Project Area

12-1-36.9 rai

Hotel Details

A 4-star hotel with a large meeting room that can accommodate up to 4,000 seats, located in downtown Khon Kean

Owner

Khon Kean Buri Company Limited

Management

Minor Hotel Group

No. of Keys

196 keys

Type

Freehold

(2) Anantara Chiang Mai Resort and Spa2 Location

123 Charoen Prathet Road, Tambon Chang Khlan, Amphoe Mueang Chiang Mai, Chiang Mai 50100

Project Area

7-0-91 rai

Hotel Details

A resort and spa style hotel surrounded by a lawn and garden facing the Ping River

Owner

Pacific Hotel Chiang Mai Company Limited

Management

Minor Hotel Group

No. of Keys

84 keys

Type

Freehold

(3) Eastin Grand Sathorn Bangkok Location

33/1 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120

Project Area

2-1-57 rai

Hotel Details

A 5-star 33-storey city hotel

Owner

BTS Assets Company Limited

Management

Absolute Hotel Services

No. of Keys

392 keys

Type

Freehold

(4) U Sathorn Bangkok3 Location

105, 105/1 Soi Ngam Duphli, Thung Maha Mek Sub-district, Sathorn District, Bangkok

Project Area

16-0-81.1 rai

Owner

Muangthong Assets Company Limited

Management

Absolute Hotel Services

No. of Keys

86 keys

Type

Leasehold

The Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018, approved the sale of all ordinary shares of Khon Kean Buri Company Limited, which is the owner of Avani Khon Kaen Hotel and Convention Center. The Company is currently negotiating with the buyer on the sale of such assets as approved by the shareholdersâ&#x20AC;&#x2122; meeting. 2 The Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018, approved the sale of (a) all ordinary shares of Boonbaramee Metta Property Company Limited or (b) all ordinary shares of Pacific Chiangmai Company Limited and Pacific Hotel Chiangmai Company Limited, which are the owners of Anantara Chiang Mai Resort and Spa. The Company is currently negotiating with the buyer on the sale of such assets as approved by the shareholdersâ&#x20AC;&#x2122; meeting. 1

3.1 Corporate Policy and Nature of Business Operation

(5) U Chiangmai3 Location

Ratchadamnoen Road, Sri-Poom, Muang District, Chiang Mai

Project Area

1-1-38 rai

Owner

Muangthong Assets Company Limited

Management

Absolute Hotel Services

No. of Keys

41 keys

Type

Leasehold

(6) U Inchantree Kanchanaburi3 Location

Mae Nam Kwai Road, Thamakham Sub-district, Muang Kanchanaburi District, Kanchanaburi

Project Area

5-1-30 rai

Owner

Muangthong Assets Company Limited

Management

Absolute Hotel Services

No. of Keys

50 keys

Type

Freehold

(B) Overseas Hotel Business In 2017, the Company has expanded its hotel business significantly through an overseas acquisition of (1) 26 hotels located in Europe, which are owned by the subsidiaries/affiliates of Vienna House Capital GmbH (“VHC”) (VHC is a wholly owned subsidiary of the Company) and (2) a hotel management platform and proprietary brands, which currently manages 11 third-party owned hotels that are located in Europe under Vienna International Hotelmanagement AG (“VIHM”) (VIHM is a wholly owned subsidiary of the Company). Further details are as follows: (1) Hotels under Vienna House Capital GmbH No.

Hotel Name

Location

Brand

No. of Keys

Type

1. Vienna House Diplomat Hotel Prague

Prague, the Czech Republic

Vienna House

398

Freehold

2. angelo by VH Hotel Pilsen

Pilsen, the Czech Republic

Angelo by VH Hotel

144

Freehold

3. angelo by VH Hotel Katowice

Katowice, Poland

Angelo by VH Hotel

203

Freehold

4. angelo by VH Airporthotel Bucharest

Bucharest, Romania

Angelo by VH Hotel

176

Freehold

5. Vienna House Easy Amberg

Amberg, Germany

Vienna House Easy

110

Freehold

6. Vienna House Easy Bad Oeynhausen

Bad Oeynhausen, Germany

Vienna House Easy

143

Freehold

7. Vienna House Easy Braunschweig

Braunschweig, Germany

Vienna House Easy

176

Freehold

The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018.

3.1 Corporate Policy and Nature of Business Operation

ANNUAL REPORT 2017

No.

Hotel Name

Location

Brand

No. of Keys

Type

8. Vienna House Easy Castrop-Rauxel

Castrop-Rauxel, Germany

Vienna House Easy

Freehold

9. Vienna House Easy Coburg

Coburg, Germany

Vienna House Easy

123

Freehold

10. Vienna House Easy Guenzburg

Gunzburg, Germany

Vienna House Easy

100

Freehold

11. Vienna House Amber Baltic Miedzyzdroje

Miedzyzdroje, Poland

Vienna House

191

Financial Lease

12. VH Easy Chopin Hotel Cracow

Cracow, Poland

VH Easy Chopin Hotel

220

Financial Lease

13. andel’s by Vienna House Lodz

Lodz, Poland

Andel’s by Vienna House

227

Financial Lease

14. Vienna House Easy Landsberg

Landsberg, Germany

Vienna House Easy

103

Financial Lease

15. Vienna House Easy Limburg

Limburg, Germany

Vienna House Easy

191

Financial Lease

16. Vienna House Easy Neckarsulm

Neckarsulm, Germany

Vienna House Easy

Financial Lease

17. Vienna House Easy Trier

Trier, Germany

Vienna House Easy

105

Financial Lease

18. Vienna House Easy Wuppertal

Wuppertal, Germany

Vienna House Easy

130

Financial Lease

19. andel’s by VH Hotel Krakow

Cracow, Poland

Andel’s by Vienna House

159

Operating Lease

20. andel’s by Vienna House Hotel Berlin

Berlin, Germany

Andel’s by Vienna House

557

Operating Lease

21. Vienna House Easy Berlin

Berlin, Germany

Vienna House Easy

152

Operating Lease

22. Vienna House QF Dresden

Dresden, Germany

Vienna House

Operating Lease

23. Vienna House Kronberg

Kronberg, Germany

Vienna House

Operating Lease

24. Vienna House Easy Leipzig

Leipzig, Germany

Vienna House Easy

199

Operating Lease

25. Vienna House Mokotow Warsaw

Warsaw, Poland

Vienna House

164

Operating Lease

26. Vienna House Easy Chopin

Bratislava Slovakia

Vienna House Easy

176

Freehold

(New)

Bratislava (New)

3.1 Corporate Policy and Nature of Business Operation

(2) Hotels managed by VIHM: No.

Hotel Name

Location

1. Vienna House Martinspark Dornbirn

Dorbirn, Austria

2. angelo by VH Hotel Prague

No. of Keys

Type

Managed

Prague, the Czech Republic

168

Managed

3. andel’s by Vienna House Hotel Prague

Prague, the Czech Republic

290

Managed

4. Vienna House Dvorak Karlovy Vary

Karlovy Vary, the Czech Republic

126

Managed

5. Vienna House Dream Castle Hotel

Paris, France

397

Managed

6. Vienna House Magic Circus Hotel

Paris, France

396

Managed

7. angelo by Vienna House Munich Leuchtenbergring

Munich, Germany

146

Managed

8. andel’s Vienna House Hotel Munich Westpark

Munich, Germany

207

Managed

9. angelo by Vienna House Airporthotel Ekaterinburg

Ekaterinburg, Russia

211

Managed

10. Liner Airporthotel Ekaterinburg

Ekaterinburg, Russia

152

Managed

11. Marriott Minsk

Minsk, Belarus

217

Managed

(c) Office Building Rental Business In September 2016 and June 2017, the Company expanded into the office building rental business in order to diversify segmentally and geographically its source of its income through acquisitions of office buildings in London, the United Kingdom. Details are as follows: (1) Office Building at 33 Gracechurch Street Address

33 Gracechurch Street, City of London, the United Kingdom

Total Floor Area

The total floor area is 13,083.5 sq.m. and the net leasable area is 9,701.4 sq.m., divided into: • Office area

7,124.6 sq.m.;

• Retail area

1,798.7 sq.m.; and

• Storage area

778.1 sq.m.

Building Details

A 6-storey grade A office building with 1 basement

Project Owner

Thirty Three Gracechurch 1 Limited and Thirty Three Gracechurch 2 Limited through Lombard Estate Holdings Limited

Lease Period

Approximately 145 years

3.1 Corporate Policy and Nature of Business Operation

ANNUAL REPORT 2017

(2) Office Building at Underwood Street Address

6-14 Underwood Street, City of London, United Kingdom

Total Floor Area

The total usable area is 2,378.7 sq.m.

Building Details

A 4-storey building with 1 basement

Project Owner

Underwood Street Limited

Lease Period

Approximately 38 years

(3) TST Tower Bangkok3 Address

21 Soi Choei Phuang, Viphavadi-Rangsit Road, Chomphon, Chatuchak Bangkok

Total Floor Area

The total usable area is 30,475 sq.m.

Building Details

A 24-storey building

Project Owner

Unison One Company Limited

Lease Period

Freehold

1.2 Future Projects (1) Phaya Thai Project (Unicorn Enterprise Company Limited) Project Location

At the intersection of two mass transit systems, i.e. the BTS system and the Airport Link system and adjacent to Phaya Thai Road and BTS Phaya Thai Station

Project Area

6-2-31.4 rai

Project Details

The project will be a 51 storey and 2 story basement mixed-use complex building with 52,000 sq.m. total usable area comprising: • Retail space for rent; • Grade A office space for rent; • a 4-5 star hotel; and • Parking space.

Construction Area

Around 120,000 sq.m.

Project Value

Around THB 9,500 mn

Project Status

The project was EIA approved in December 2016.

Project Schedule

The construction period is expected to last around 48 months where construction was started in 2017.

The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018.

3.1 Corporate Policy and Nature of Business Operation

(2) Mo Chit Project Project Location

The project is adjacent to a mass transit system, i.e. the Green Line northern extension of the BTS system, and Phahonyothin Road and also connects to BTS Mo Chit Station.

Project Area

11-0-44.8 rai

Project Details

It is expected that the project will be developed into 2 towers, 34-storey mixed-use complex buildings with 79,000 sq.m. total usable area comprising: • Retail space for rent; • Grade A office space for rent; and • Parking space.

Construction Area

Around 170,000 sq.m.

Project Value

Around THB 9,000 mn

Project Status

Pending project design and EIA submission

Project Schedule

The construction period is expected to last around 50 months.

(3) Roi Chak Sam Bangkok Project Project Location

The project is adjacent to the Chao Phaya River and opposite The Icon Siam Project and it can be accessed via Soi Charoen Krung 36, Bang Rak, Bangkok.

Project Area

5-0-60 rai

Project Details

It is expected that the project will be developed into a 5-star boutique hotel, whose design has been made under a heritage development concept focusing on the harmony between the Neoclassical preserved building (Rong Phasi Roi Chak Sam), which has a long history of more than 130 years, and the new buildings that will be constructed. The design was intended to create additional usable area and adjust the area within the preserved building to meet the needs of the hotel without destroying the beauty of the historic building.

Usable Area

Around 14,000 sq.m.

Project Value

Around THB 2,000 - 2,500 mn

Project Status

The project is pending reconciliation by the Administrative Court. The Company has submitted a proposal and a new development model to the Treasury Department in the fourth quarter of 2016 and is awaiting the conclusion and handover of the leased area from the Treasury Department.

Project Schedule

The construction period is expected to last around 36 months.

3.1 Corporate Policy and Nature of Business Operation

ANNUAL REPORT 2017

(4) Residential Project at Thanacity3 Project Location

At Thanacity, Bangna

Project Area

2-1-11.4 rai

Project Details

Hotel and/or Service Apartment

Usable Area

Around 2,000 sqm.

Book Value

THB 132.65 mn (as of 16 March 2018)

Project Value

Around THB 111 mn (Construction Value)

Project Status

Under Construction

Project Schedule

The construction is expected to complete in September 2018.

Project Location

At Thanacity, Bangna

Project Details

Hotel and/or Service Apartment

Project Area

3-1-55.1 rai

Usable Area

Around 4,000 sqm.

Book Value

THB 234.74 mn (as of 16 March 2018)

Project Value

Around THB 222 mn (Construction Value)

Project Status

Under Construction

Project Schedule

The construction is expected to complete in September 2018.

Project Location

At Thanacity, Bangna

Project Details

Hotel and/or Service Apartment

Usable Area

Around 4,000 sqm.

Project Area

2-1-51.5 rai

Book Value

Around THB 192.97 mn (as of 16 March 2018)

Project Value

Around THB 222 mn (Construction Value)

Project Status

The construction is expected to complete in September 2018.

(5) International School Project 3 Project Location

At Thanacity, Bangna

Project Details

Under Construction

Project Area

167-3-57.8 rai

Usable Area

Around 46,000 sqm.

Book Value

THB 1,630.82 mn (as of 16 March 2018)

Project Value

Around THB 5,000 mn

Project Status

The construction period is expected to last around 36 months.

The Entire Business Transfer transaction of Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2017 hold on 4 January 2018.

3.1 Corporate Policy and Nature of Business Operation

2. Real Estate Development for Sale Business

The Company has been developing residential projects for sale since 2013 under the “PARK” brand. The developed projects are located both in urban and rural areas as follows: (1) PARK Ramindra Project1 Project Location

Ram Inthra Road, Soi 47, Tha Raeng, Bang Khen, Bangkok

Project Area

2-1-14.2 rai

Project Type

A low-rise 8-storey condominium with 206 units and parking space for 86 vehicles, accounting for 41percent of the total units

Room Type

1-bedroom and 1-bathroom studios whose usable area is around 29.45-36.50 sq.m per unit

Project Value

Around THB 400 mn

Project Status

Pending registration of the condominium juristic person with the Land Office

(2) PARK Aran Boulevard Project2 Project Location

Moo 7, Sri Phen Road, Tambon Pa Rai, Amphoe Aranyaprathet, Sa Kaeo

Project Area

5-0-17.75 Rai

Project Type

3-and-a-half-storey commercial buildings

Room Type

62 units of commercial buildings whose usable area is 163 sq.m. per unit and located on a plot of 16 sq. wa. per unit and parking space for 62 vehicles, accounting for 100 percent of the units

Project Value

THB 60 mn

Project Status

17 units are still available for sale

The Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018, approved the sale of the PARK Ramindra project. The Company is currently negotiating with the buyer on the sale of such asset as approved by the shareholders’ meeting. 2 The Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018, approved the sale of the PARK Aran Boulevard project. The Company is negotiating with the buyer on the sale of such asset as approved by the shareholders’ meeting. 1

3.1 Corporate Policy and Nature of Business Operation

ANNUAL REPORT 2017

3.2

Important Events of the Company The major change was in 2015 when the Company has completed the acquisition of BTS Assets Company Limited (“BTSA”) and Kamkoong Property Company Limited (“Kamkoong”) from BTS Group Public Company Limited or “BTSG” on 20 April 2015. The Company has issued ordinary shares amounted for 35.64 percent of total issued shares and warrants as a return for the acquisition to BTSG. In 2016, the Company started to expand the business oversea by investing in LH UNIT TRUST (“LHUT”) which is the Jersey Property Unit Trust (“JPUT”) established under the law of Jersey. LHUT invested in long-term lease (approximately 145 years) of office building at 33 Gracechurch Street, London, U.K. According to the investment policy, the Company has invested in long-term lease of the second office building located in 6-14 Underwood Street, Shoreditch, London during May 2016 with the remaining lease term of approximately 38 years. In June 2016, the Company has acquired 24 hotels under Vienna House in 4 countries in Eastern Europe as well as the hotel management business. As a result, the Company became an owner of hotels and hotel management under the administration of Vienna House.

Important Events of the Company in 2017 January 2017

• On 16 January 2017, the Company appointed Ms. Piyaporn Phanachet as Chief Executive Officer.

February 2017 •

On 23 February 2017, the Company signed a sales and purchase agreement (SPA) to acquire a hotel business in Europe by CHSH Kalea Holding GmbH (AcquiCo), now known as Vienna House Capital GmbH (VHC), the company’s subsidiary in Austria held through Lombard Estate Holdings Limited (LEH), the company’s subsidiary in

3.2 Important Events of the Company

Hong Kong. To be acquired are Vienna International Hotel Management AG from Amber Privatstiftung and Bocca Privatstiftung and shares/ juristic rights and duties of another 10 companies from Warimpex Finanz- und Beteiligungs AG.

March 2017

• On 22 March 2017, the Company appointed Mr. Chaiwat Atsawintarangkun as Chairman of the Board of Directors. • On 29 March 2017, the Company disposed of all ordinary shares of Natural Project Chaophraya Company Limited (a wholly-owned subsidiary of the company) and Natural Hotel Chaophraya Company Limited (a wholly-owned subsidiary). The two former subsidiaries owned land in Bangkrachao project.

May 2017 • •

On 3 May 2017, the Company acquired the long-term lease of an office building located at 6-14 Underwood Street in London, U.K. for GBP 7.3 mn or approximately THB 316.1mn by Underwood Street Limited (USL), a newly established subsidiary held through LEH. On 5 May 2017, the Company has formed a new subsidiary named “Helston Sp.z.o.o.” in Poland.

July 2017

• On 7 July 2017 1) The Board of Directors of the Company appointed Mr. Surachit Gongvatana as Independent Director, Audit Committee and Nomination and Remuneration Committee member to replace Mr. Manu Maniwatana 2) The Board of Directors of the Company appointed Mr. Plakorn Wanglee as Independent Director, Audit Committee, and Nomination and Remuneration Committee member to replace Mr. Sakthip Krairiksh

3) 4) 5) 6)

The Board of Directors of the Company appointed Mr. Kavin Kanjanapas as Director to replace Mr. Surayut Thavikulwat The Board of Directors of the Company appointed Mr. Kong Chi Keung as Director to replace Mr. Daniel Ross The Board of Directors of the Company appointed Mr. Keeree Kanjanapas as Director to replace Mr. Sumate Sangsiri Mr. Chaivat Atsawintarangkun resigned from his position as Chairman of the Board of Directors, but remains as an Independent Director, Chairman of the Audit Committee and Chairman of the Nomination and Remuneration Committee). The Board of Director’s meeting appointed Mr. Keeree Kanjanapas as the Chairman of the Board of Directors as replacement.

October 2017

• On 30 October 2017, the Board of Director’s meeting resolved to propose for shareholders’ approval at the Extraordinary Shareholders’ Meeting to be held on 4 January 2018, the following agenda items: 1) To approve the entire business transfer (EBT) of Unicorn Enterprise Company Limited (“UE”) 2) To approve the reduction of the Company’s registered capital 3) To approve the amendment to Clause 4 of the Memorandum of Association of the Company

3.2 Important Events of the Company

4) To approve the increase of the Company’s registered capital 5) To approve the issuance of preferred shares and U-W3 warrants at no cost and their allocation via private placement 6) To approve the issuance of preferred shares and U-W4 warrants at no cost and their allocation to existing shareholders via a rights offering 7) To approve the disposal of certain assets and shares in subsidiaries of the Company

November 2017

• On 15 November 2017, the Company disposed of 50% of its stake in Prime Area 38 Company Limited or PA38 (a wholly-owned subsidiary of the Company) and assigned 50% of the claims on the promissory notes issued by the PA38 to Sansiri Public Company Limited (SIRI) Consequently, Prime Area 38 is now an associate company of U City. • On 22 November 2017, the Company has formed a new subsidiary named “Zammia Investments Sp.z.o.o. in Poland.

December 2017

• On 19 December 2017, the Board of Directors of the Company appointed Mr. Rungson Sriworasat as an Independent Director, Audit Committee and Nomination and Remuneration instead of Mr. Thavisakdi Tanta-nanta who resigned from his position.

ANNUAL REPORT 2017

Important Events of the Company after FY 2017 January 2018 • • • •

On 5 January 2018, the Company has disposed registered capital from THB 861,413,132,646 to THB 842,043,448,464 through cancellation of unpaid ordinary shares of 19,369,684,182 shares at the par value of THB 1 as approved from the Extraordinary General Meeting of Shareholders No.1/2018. On 6 January 2018, Vienna House Capital GmbH (“VHC”) which is a subsidiary of LEH has formed a new subsidiary named Vienna House Real Estate GmbH in Austria with the main objective in real estate investment. Total registered capital amounted to Euro 35,000 (per 1 share) with paid-up capital of 50 percent. The VHC hold 100 percent of its total issued shares. On 9 January 2018, the Company has increased the registered capital from THB 842,043,448,464 to THB 1,682,739,052,821 through newly issued ordinary shares of 280,231,868,119 shares at the par value of THB 1 and preferred shares of 560,463,736,238 shares at the par value of THB 1 according to the approval of the Extraordinary General Meeting of Shareholders No.1/2018. At the same day, the company also issued the U-W1 Warrants amounted to 9,397,000 shares. All in all, the registered shares have increased from THB 561,362,298,976 to THB 561,371,695,976. On 22 January 2018, the Company has increased paid-up capital from THB 561,371,695,976 to THB 587,755,887,152 through private placement to Bangkok Bank Public Company Limited (“BBL”) amounted 26,384,191,176 shares.

March 2018 • On 16 March 2018, the Company has completed the transaction as follows: • To transfer the entire business of UE to the Company, which shall include all assets and liabilities of UE as at the transfer date according to the Entire Business Transfer Agreement among the Company, BTS Group Holdings Public Company Limited (“BTSG”), and Unicorn Enterprise Co., Ltd. (“UE”) dated 30 October 2017 and the Amendment 58

3.2 Important Events of the Company

Agreement on 4 December 2017. UE is a subsidiary in which BTSG holds 100 percent of its total shares where UE engages in business through holding shares in 36 companies (Holding Company) which engage in the property business. • The Company successfully registered the increase of paid-up capital by THB 347,673,324,964 comprising: • The increase of paid-up capital by THB 63,882,352,942 from the issuance and offering of 63,882,352,942 newly issued preferred shares, with a par value of THB 1 per share, to UE at an offering price of THB 0.034 per share as consideration for the EBT Transaction via a private placement and • The increase of paid-up capital by THB 283,790,972,022 from the issuance and offering of 283,790,972,022 newly issued preferred shares, with a par value of THB 1 per share, to the existing shareholders (Rights Offering) at an offering price of THB 0.031 per share. As a result, the Company currently has paid-up capital of THB 935,429,212,116 divided into 561,371,695,976 ordinary shares and 374,057,516,140 preferred shares, with a par value of THB 1 per share. • The Company has issued 45,133,272,059 units of Warrants to Purchase the Ordinary Shares of U City Public Company Limited No. 3 (the “U-W3 Warrants”), comprising: • 13,192,095,588 units allocated to Bangkok Bank Public Company Limited (“BBL”) at no cost, together with the issuance and offering of the newly issued preferred shares (Sweetener) via a private placement and • 31,941,176,471 units allocated to UE at no cost, together with the issuance and offering of the newly issued preferred shares (Sweetener) as consideration for the EBT Transaction via a private placement. In this regard, the Company would not list such U-W3 Warrants on the SET.

3.3

Industry and Business Overview Overview of the Thai Economy in 2017

GDP growth for 2017 was 3.9%. This was a marked improvement from the previous year’s growth of 3.3%. Key factors for the growth were the surge in exports of 9.7%, growth in private consumption of 3.2% and private investment of 1.7% being partially offset by a decline in public investment of 1.2%. Economic expansion of major trading partners, particularly the USA, Eurozone countries, China and Japan drove broad demand for Thai manufactured and agricultural products. Headline inflation for the year remained benign at 0.7% but on an upward trajectory. The Bank of Thailand has maintained its policy rate unchanged throughout the year at 1.5%. The Baht continued to appreciate to the USD up 3.9% to 33.93 Baht per USD. The strong Baht remains a concern for exporters and to a lesser extent the tourism sector as this makes Thai goods and services relatively more expensive in USD terms. The Baht owes its strength to the considerable current account surplus of 10.8% of GDP in 2017.

Overview of the Hotel Business in Thailand in 2017

According to data from the Ministry of Tourism and Sports, total international arrivals were 35.4mn, growing 8.8% from the previous year. Total tourism receipts amounted to THB 1.82tn, an increase of 11.7% from last year. The nationalities of tourists remains dominated by 3 countries: China, Malaysia and South Korea. Despite the year’s 10-month mourning period leading up to His Majesty King Bhumibol Adulyadej’s Cremation, where many people and corporates in respect to the late King and in sombre spirit, cancelled a number of celebratory events, weddings and the like, the tourism sector seems to continue to perform perennially well. In 2017 Thais undertook approximately 156.2mn trips and spent some THB 930bn within the country. The government’s encouragement of domestic tourism has been a boon to hotel operators for the most part, where the majority of tourist spending is made.

3.3 Industry and Business Overview

Millions of persons

19.2

2011

22.1

2012

CAGR + 10.3% 26.5

24.5

2013

2014

29.9

2015

35.4

32.6

2016

2017

Certain challenges remain in the industry. Tourism activity is highly concentrated. A handful of provinces - some 5% of the total according to the Tourism Authority of Thailand - have enjoyed the vast majority of interest, development and investment. Such concentrated development places a strain on the environment, the local infrastructure, inequity and distortions to local market conditions. Despite pushback from the government, hotel associations and other interest groups, online marketplaces for lodging such as ‘Airbnb’ remains a major supplier of rooms for the market at often very competitive prices. Hotels have responded with offering its guests more personalised services, technology, big data and conveniences. Online Travel Agencies (OTAs) dominate in the way people find, compare and book their lodging. Hotel operators need to bear considerable commissions expenses which often undermine their margins. Hotels have put considerable effort and investment in loyalty programs, direct bookings or increasing their bargaining power to mitigate these costs.

Overview of European Hotel Business in 2017

According to the UN World Tourism Organisation (UNWTO), international tourist arrivals grew by approximately 6.7% in 2017 to reach 1,322mn. This is well above the 7-year long-term growth rate of 4.0% and is the strongest result recorded within that time period. Europe in particular recorded enviable growth of 8.48% whereas Asia-Pacific grew 5.8%, Middle East grew 4.8% and the Americas grew 2.9%. Within Europe, international tourist arrivals to Southern Europe and the Mediterranean rose by 12.6%, Western Europe by 6.6% and Northern Europe by 5.1% and Central and Eastern Europe by 5.0%. The upswing in global economic growth, which the IMF estimated at 3.7%

ANNUAL REPORT 2017

for 2017, the rebound in tourism spending from traditional and emerging countries such as Russia and Brazil and increasingly ubiquitous cost-effective air travel options were the propulsive forces for growth in tourism overall. Million sqf

CAGR + 4.9% 1,400

994

2011

2012

1,088

2013

1,134

2014

1,184

2015

1,235

2016

1,322

2017

According to the European Travel Commission Report, our key markets in Europe, namely Germany - which is considered a developed tourist destination - and Poland and Czech Republic, which are considered emerging destinations, all enjoyed robust tailwinds with the growth in international arrivals recorded at 5.0%, 10.8% and 10.4% from the previous year, respectively. This compares well with the European average of 8.4%. International overnights also rose 3.5%, 10.8% and 9.5% over the same period last year, respectively. Europe itself faces its own set of challenges in sustaining its tourism industry. Crime and terrorism has risen over the last few years, causing significant anxiety among travellers and disrupting the traditional image of many major European capitals as safe and stable as well as increasing competition from non-European countries for tourism, which often have less stringent visa requirements.

Overview of Thailand Condominium Business in 2017

According to Colliers Thailand, the number of condominium launches increased by 49.6% to over 58,400 units while average take-up rate fell slightly to 57%. Of that amount, 55.1% of total condominiums launched were priced between THB 50,000 - 100,000/sqm - otherwise known as the ‘Mid-level’ segment. For almost all the remaining condominium launches, some 43.1% of total launches were in the ‘Upper-end’ segment or higher where prices go for over THB 100,000/sqm and above. Developers continue to focus on developing near mass transit stations where take-up rates are generally substantially higher despite higher prices for buyers (mass transit premium). Condominiums located within 200m or less enjoyed takeup rates of 82% (up from 75% last year) and 61% for condominiums located between 500 to 1,000m from mass transit stations. 60

3.3 Industry and Business Overview

50,105

25,000 20,000 12,000 10,000

34,666 61%

56%

5,000 0

2014 1Q

35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

2015 3Q

39,046 60%

58,424 57%

2016

2017

Average Take-up Rata (RHS)

46%

49% 28%

13%

45%

29%

42%

22% 2%

Below THB 50,000/sq.m THB 50,000 - 100,000/sq.m THB 100,00 - 200,000/sq.m 2015 2016 2017

12%

THB 200,000/sq.m

Overall land prices, though still at historically elevated levels and still transacting at record prices, has slowed down somewhat in its upward march. According to CBRE, banks have also been conservatively on its lending and that may have had a significant impact on speculative land buying, thereby slowing down overall land price appreciation rate. Nevertheless demand for prime areas continues to be strong not only for condominiums but as developers increasingly look towards diversifying their revenue mix to including recurring income from office, retail and hotel developments.

Overview of UK Office Business in 2017

According to JLL Research, the overall UK office space market last year recorded stable net absorption and prime rents, despite the uncertainty of Brexit negotiations, some companies announcing publicly their plans to scale back their London operations and historically high amount of office space being supplied from development completions. There were expectations that the ongoing Brexit negotiations would precipitate a steep fall in occupier demand. A slowdown in take-up rates was recorded within the year, albeit temporary, as momentum recovered, keeping the take-up rate above the 10-year average. Million sqm

7.1

7.0

6.8 5.4

6.2

4.2

2012

2013

2014

2015

Total Office Space Take-Up

2016

2017

According to research by Colliers UK, Tech and Media companies, Financial Services and Flexible Workspace customers were the key segments driving take-up rates in Grade A office spaces in London. Investment in London property in 2017 totaled approximately GBP 15.6bn, roughly on par with the previous year. Investment flows, especially from Asia-Pacific continues to be strong with yield compression pressures particularly evident in the City of London were investor appetite and competition for assets increased.

Overview of Thailand Office Business in 2017

According to CBRE Research, overall vacancy rate increased slightly to 7.8% at the end of 2017 from 7.7% at the end of the previous year. Total supply of office space stood at 8.8mn sqm, up 2.6% from the previous year as additional office buildings became operational, particularly in nonCBD areas. As a result of the steady demand and take-up for office space, office rental rates continued to appreciate with grade A office rents in CBD areas averaging THB 994/ sqm/month, up 4.3% from the previous year. The highest rental growth rates were achieved by grade A office rents in non-CBD areas at an average of THB 810/sqm/month, up 5.2% from last year. A majority of new office space supply was located in these areas where strong demand for quality office space allowed landlords to retain strong asking power. Million sqm 9.6%

8.6%

7.52

2014

7.72

2015

7.8% 8.99

8.78

8.56

8.45

8.32

7.7%

7.90

2016

Total Supply

9.34

9.10

9.36

8.09

2017

2018F

Total Take-Up

2019F

2020F

Vacancy Rate

2021F

To date, CBRE expects 584,000 sqm in additional supply of office space to become operational by 2021. This represents an average 3-year supply growth of just below 194,700 sqm per year. CBRE expects naturalised demand to be sufficiently able to absorb the new supply, though there may be differences in local supply and demand conditions on a location-by-location basis.

3.3 Industry and Business Overview

Overview of the Company’s Hotel Business

The Company’s hotel business overview in 2017 saw a continuous uptrend from 2016. Despite more intense competition in terms of new hotel investments as well as mergers or acquisitions of hotels in the market, most new operators focused on developing 3-star hotels by purchasing existing hotels to remodel and rebrand to attract more tourists. Moreover, the recovery of event hosting market such as meetings, seminars, weddings and events should help generate income for venue service providers, allowing the hotel business to grow by 3.7 - 5.5 percent, a slight decrease from 2016’s growth at 6 percent (Source: Kasikorn Research Center). However, the Company’s hotel business comprises mostly 4 - 5-star hotels, which have lower competition. As a result, the operating results of Company’s hotel business grew at a rate of 4 - 16 percent, which is higher than the estimated market average. At present, the Company invests in 3 domestic hotels comprising:

1) Avani Khon Kaen Hotel and Convention Center

Target Customer Khon Kaen is the center of trade and education of the northeastern region of Thailand as well as a top destination for tourists who wish to experience traditional customs and way of life. Moreover, it is the center point of the “Economics Corridor Development Plan” connecting Thailand, Myanmar and Vietnam together. Moreover, it is the center of trade and transportation as well as the gate to Indochina and south China, making Khon Kaen one of the leading MICE (Meetings, Incentives, Conventions, and Events) cities in Thailand. Therefore, the hotel’s target customers are tourists as well as private and public sectors seeking seminar venues, as the hotel has the biggest venue in the province catering to a variety of activities. Thai tourists made up most of the hotel’s customer group. However, British and American tourist arrivals were higher than the past year. The occupancy rate for 2017 was approximately 69 percent.

ANNUAL REPORT 2017

Distribution Channels The hotel was originally managed by the Central Group under the “Centara” brand. However, the hotel later changed its brand to “Avani” under the management of the Minor Hotel Group, which is a well-known brand extensively recognized by Thai and international tourists for its room and service standards. It utilizes both online and offline distribution channels, which are geared towards reaching a wider range of customers and offering greater efficiency, where the percentage of the reservation made through key reservation channels are as follows: Reservation Channels

Percentage

1. Discount sale channel

2. Government sale channel

3. Corporate sale channel

4. Others

2) Anantara Chiang Mai Resort and Spa

Target Customer Chiang Mai is one of the most popular tourist destinations as it is ideal for traveling all seasons of the year but especially during winter and holiday seasons, such as Songkran, Loi Krathong and New Year. With its mountainous landscape and location in the north of Thailand, the weather is relatively cool all year round. Moreover, there are also unique cultural attractions. As a result, Chiang Mai is one of the top tourism spots in the country for both Thai and foreign tourists. Anantara Chiang Mai Resort and Spa focuses on upscale Thai and foreign tourists who prefer exclusive privacy in 5-star hotels. This group of customers have higher purchasing power and are less sensitive to economic uncertainties. Most of the guests were Chinese and American tourists. The occupancy rate for 2017 was approximately 74 percent. Distribution Channels The Minor Hotel Group is a hotel manager who has a worldwide sales network, especially in the Asia-Pacific region, under the “Anantara”, “Four 62

3.3 Industry and Business Overview

Seasons”, “JW Marriot”, “The St. Regis” and “Avani” brands, which can reach various groups of customers. Hotels under the “Anantara” hotel chain are located in most regions of Thailand. It utilizes both online and offline distribution channels, which are geared towards reaching a wider range of customers and offering greater efficiency, where the percentage of the reservation made through key reservation channels are as follows: Distribution Channels

Percentage

1. Discount sale channel

2. Wholesale channel

3. Retail channel

4. Others

3) Eastin Grand Sathorn Bangkok

Target Customer The hotel is a city hotel located in central Bangkok. It offers accommodation that meets the needs of all sorts of business and leisure purposes. The hotel is located in a central business district with convenient transportation via expressways and public transport. It is also connected to a BTS sky train station for the guest’s convenience. In addition, the hotel is located near the Chao Phraya River and its attractions, so the hotel focuses on both Thai and foreign clients as well as business travellers who come to Bangkok. Most of the guests were Korean and Chinese tourists. The hotel market in Bangkok, especially the hotels in central business districts such as Eastin Grand Sathorn Bangkok, continues to generate revenue. The occupancy rate for 2017 was approximately 87 percent. Distribution Channels Absolute Hotel Services is the hotel manager of various hotels under the “Eastin Grand”, “Eastin Hotel”, “Eastin Easy” and “U Hotel” brands, and has a network in countries such as Vietnam, Indonesia, India and Oman where business is growing. The “Eastin” brand is well-known among both foreign and Thai customers. It utilizes both online and offline distribution channels, which are

geared towards reaching a wider range of customers and offering greater efficiency, where the percentage of the reservation made through key reservation channels are as follows: Reservation Channels

Percentage

1. Online travel agent (OTA) sale channel

2. Wholesale channel

3. Corporate sale channel

4. Others

4) Vienna House and Vienna House Easy Hotel

Target Customer Currently, there are 37 hotels owned, leased or managed by Vienna House in Europe. The hotels are located across Europe in countries including

3.3 Industry and Business Overview

Germany, Czech Republic, Poland, Romania, France, Austria, Slovakia and Russia. Vienna House has operated for over 25 years in the hotel business within the 3 â&#x20AC;&#x201C; 5 star accommodation segment. Through its two brands, Vienna House, the upscale 4 star, business and traveler hotel located in cities with convenient transportation and Vienna House Easy, a 3-star smart-casual, smaller format hotel suitable for both business and leisure travelers with family, Vienna House plans and has the ability to expand its hotel portfolio in a capital efficient manner. The occupancy rate for 2017 as follows: Type of Hotel

Percentage

Hotel owned by the Company

67.9

Hotel under lease contract

80.0

Managed Hotel

75.6

ANNUAL REPORT 2017

3.4

Management Discussion & Analysis Revenue Structure Business Types

Operated by

2017

2016

2015

Revenue

(THB mn)

Real Estate Development for Rent, Service and Hotel

Office Building for Rent Business

161.98

3.64

62.79

5.39

0.00

33 Gracechurch Street

LHUT

155.74

3.50

62.79

5.39

0.00

6.24

0.14

0.00

3,867.71

86.87

1,027.06

88.18

806.44

64.10

6-14 Underwood Street

Hotel Business

Avani Khon Kaen Hotel and Convention Center

Khon Kaen Buri Co., Ltd.

156.39

13.43

157.64

12.53

157.55

46.52

Anantara Chiangmai Resort and Spa

Pacific Hotel Chiangmai Co, Ltd.

299.55

25.71

271.54

21.58

85.30

25.19

Eastin Grand Sathorn Bangkok Subsidiaries of Vienna House

BTS Asset Co., Ltd. VHC

593.74 2,747.30

13.33 61.70

571.12 0.00

49.03 0.00

377.26 0.00

29.98 0.00

Real Estate Development for Sale

0.00

158.71

12.61

PARK Aran Boulevard

U City PLC.

0.00

158.71

12.61

Other income

422.86

9.50

74.91

6.43

293.02

23.29

Dividend income

5.97

0.13

22.19

1.90

33.96

2.70

Interest income

58.37

1.31

6.30

0.54

57.98

4.61

Gain on sales of assets

47.86

1.07

0.45

0.04

151.66

12.05

184.63

4.15

0.00

126.03

2.83

46.10

3.95

49.42

3.93

4,452.55 100.00

1,164.76

100.00

Gain on sales of investments in subsidiaries Others

Total Revenues

3.4 Management Discussion & Analysis

1,258.17 100.00

Operating Performance and Financial Status

Real estate development for rent, service and hotel

Consolidated Operating Performance â&#x20AC;&#x201C; Financial Status

Revenue from hotel business accounted for 86.9% of total revenues.

Hotel Business

In 2017, the Companyâ&#x20AC;&#x2122;s revenue was mainly from Avani Khon Kaen Hotel and Conventional Center, Anatara Chiangmai Resort and Spa, Eastin Grand Sathorn Hotel, 33 Gracechurch Street office in U.K. and new business that we had invested during the second quarter which were 6-14 Underwood Street office in U.K. and hotels operated and managed by Vienna House in Europe.

In 2017, the Company had revenue from hotel business of THB 3,867.7mn, an increase of THB 2,840.6mn or 276.6% from last year. The increase in revenue was primarily from consolidation of the acquired hotel business in Europe that the Company had invested during the second quarter of THB 2,747.3mn. For our domestic hotels, the overall revenue increased in line with the growth of the Thai tourism market last year.

Revenue Breakdown from the Hotel Business by type and source of revenue 100.0%

100.0%

100.0% 7.0%

10.3%

12.1%

21.3%

24.4%

25.4%

18.5%

20.7%

36.5%

100.0%

71.7%

65.3%

62.4%

1Q 2016

2Q 2016

3Q 2016

4Q 2016

1Q 2017

2Q 2017

3Q 2017

4Q 2017

Owned

Leased

Thai Sourced Revenue

Managed

Average Daily Rates (ADR), Average Revenue per Available Room (RevPAR) and Occupancy rate of hotels that the Company owns (THB) 81.9% 75.1%

49.4%

80.8% 75.6% 71.1%

3,392 2,732 2,013

1Q'2016

2Q'2016

ADR

2,169

3Q'2016

66.3%

3,385

3,301 2,777 2,681

73.3%

1,992

1,901

4Q'2016

1Q'2017

RevPAR

2,786

2,718

2,736 2,674

2,494

2Q'2017

3Q'2017

1,846

4Q'2017

Occupancy

The occupancy rate of owned hotels amounted to 72.8% in 2017. This included 3 owned hotels in Thailand and 18 owned hotels (freehold and financial lease) in Europe. The Company has since the second quarter, included its acquired the aforementioned overseas hotel business. Average revenue per available room was THB 2,890 and average daily rate was THB 2,118. 3.4 Management Discussion & Analysis

ANNUAL REPORT 2017

Average Daily Rates (ADR), Average Revenue per Available Room (RevPAR) and Occupancy rate of operating lease hotels (THB) 83.2%

83.4%

73.3% 3,594

3,402

3,512 2,837

2,989

1Q'2016

2Q'2016

3Q'2016

ADR

4Q'2016

1Q'2017

2Q'2017

RevPAR

3Q'2017

2,576

4Q'2017

Occupancy

The occupancy rate of operating lease hotels for the three quarters stood at 79.9%. The Company had acquired the abovementioned overseas hotel business in the second quarter, which included 4 operating lease hotels. Average revenue per available room was THB 3,502 and average daily rate was THB 2,800. Average Daily Rates (ADR), Average Revenue per Available Room (RevPAR) and Occupancy rate of hotels that the Company manages (THB)

77.5%

76.9% 72.3%

3,118

3,532 2,716

2,415

1Q'2016

2Q'2016

ADR

3Q'2016

4Q'2016

1Q'2017

RevPAR

2Q'2017

3,075

3Q'2017

2,224

4Q'2017

Occupancy

The occupancy rate of managed hotels for the three quarters was 75.5%. The acquisition of the hotel business in Europe included a hotel management platform, which manages third party-owned hotels. The Company receives management and incentive fees for these hotels. Average revenue per available room was THB 3,241 and average daily rate was THB 2,451. 66

3.4 Management Discussion & Analysis

Direct Costs and Gross Profit from Hotel Business

Direct costs totaled THB 1,436.8mn, an increase of THB 1,073.4mn or 295.4% from the previous year. The increase was mainly from costs associated with the acquired hotel business in Europe that the Company had invested during the second quarter. Direct costs consist of food and beverages costs and expenses for providing guest services. Gross profit of the hotel business stood at THB 2,430.9mn. Gross profit margin was 62.9% and gross profit rose by THB 1,767.3mn or 266.1% compared to last year. The increase in gross profit was in line with higher revenue recognition and higher operating expenses from hotel business in Europe as mentioned above. Office Building Business for Rent Revenue from office building business for rent accounted for 3.6% of total revenue. In 2017, the Company acquired one more office building at 6-14 Underwood Street. The acquired cost amounted to GBP 7.3mn or THB 328.6mn (based on GBP 1 exchange rate of THB 45.02) during the second quarter. The Company recognised revenue from office for rent business at THB 162.1mn. The majority of the revenue was from 33 Gracechurch Street, which recorded 12-months revenue of THB 155.7mn. The remaining portion was from revenue of 6-14 Underwood Street. Direct Costs and Gross Profit for Office Building for Rent Direct costs stood at THB 29.5mn. Direct costs were mainly from operating expenses, land rent (head rent), insurance and management fees, which are collected in GBP, as a consequence, there is some variability when this is translated into THB. Gross profit of the office building business for rent stood at THB 132.5mn. Gross profit margin was 81.8%.

Overall Operating Performance Overall Operating Performance Overview

In 2017, total revenue of the Company stood at THB 4,452.6mn, which was THB 3,287.8mn or 282.3% higher 3.4 Management Discussion & Analysis

than 2016. Of this amount, revenue from real estate development for rent, service and hotel accounted for THB 4,029.7mn, an increase of THB 2,939.8mn or 269.7% compared to last year. Other income of THB 422.8mn comprised of (1) dividend income of THB 5.9mn, which declined by THB 16.3mn or 73.4% from last year, (2) interest income of THB 58.4mn, rose by THB 52.2mn or 841.9% from the previous year, (3) gain on sales of assets of THB 47.9mn, increased by THB 47.4mn or 10,591.6% from last year (4) gain on sales of investments in subsidiaries of THB 184.6mn and (5) other income of THB 126.0mn, which increased by THB 80.0mn or 173.6% when compared to 2016. The increase in other income was primarily from gain on sales of investments in subsidiaries and additional other income from the hotel business in Europe. The Company disposed of a total of two subsidiaries owning land - one in the first quarter and the other in the fourth quarter. The Company recorded total expenses of THB 4,779.1mn, an increase of THB 3,454.5mn or 260.8% from the previous year. The costs mainly consisted of direct costs of the hotel business of THB 1,436.8mn, an increase of THB 1,073.4mn or 295.4% compared to last year. Direct cost of the office building for rent business was THB 29.5mn, an increase of THB 26.4mn or 861.7% from the previous year mainly due to the full-year contribution of 33 Gracechurch Street and the acquisition of 6-14 Underwood Street in the second quarter of this year. Selling, general and administrative expenses (SG&A) amounted to THB 1,995.1mn, an increase of THB 1,251.2mn or 168.2% from last year mainly due to (1) consolidation of the SG&A costs of the hotel business in Europe, (2) non-recurring transaction-related costs associated with the acquisition of hotel business in Europe such as financial advisory fees, legal fees and appraisal fees and (3) one-time loss on impairment of assets of THB 781.5mn of Avani Khon Kaen Hotel and Conventional Centre. Gross Operating Profit amounted to THB 2,563.4mn and gross operating profit margin stood at 63.6%. Gross Operating Profit increased by THB 1,840.1mn or 254.4% compared to the previous year. The main reason for the increase was mainly from the acquisition of the European hotel business. ANNUAL REPORT 2017

Operating EBITDA amounted to THB 567.1mn and operating EBITDA margin stood at 14.1%. Operating EBITDA increased by THB 578.4 mn from THB -11.3 mn compared to the previous year. This was mainly attributable to the acquisition of the hotel business in Europe and the improving operating performance of our hotels in Thailand. The Company reported a net loss in 2017 of THB 1,048.7mn and net profit margin of -23.6% compared to the previous year’s net loss of THB 321.6mn. The increase in net loss of THB 727.1mn, mainly as a result of an increase in operating expenses comprised of (1) loss on impairment of Avani Khon Kaen Hotel and Convention Centre and (2) non-recurring transaction related expenses for the acquisition of the European hotel business.,^

Financial Posititon of the Company (Unit: THB mn)

31 December 2017

31 December 2016 (restated)

Total assets

40,051.8

25,148.6

Total liabilities

22,256.1

6,292.8

Shareholders’ Equity

17,795.7

18,855.7

Assets

As of 31 December 2017, total assets of the Company was THB 40,051.8mn, increased of THB 14,903.2mn or 59.3% when compared to last year. The increase in assets was chiefly from acquiring the hotel business in Europe. Compared to the previous year, the value of property, plant and equipment rose to THB 18,562.5mn by THB 11,697.6mn or 70.4% due primarily to the acquisition of the hotel business in Europe. The asset structure of the Company consists of: 1) Current assets stood at THB 4,325.9mn, a decrease of THB 458.8mn or 9.6% compared to last year. The decrease was mainly from (1) real estate projects under development of THB 2,326.6mn and (2) current investments of THB 145.8mn, partly offset mainly by an increase in (1) cash and cash equivalent of THB 1,072.5mn, (2) trade and other receivables of THB 603.0mn and (3) current portion of receivable from sales of investments in subsidiaries of THB 277.0mn.

3.4 Management Discussion & Analysis

2) Non-current assets were THB 35,725.9mn, an increase of THB 15,362.1mn mainly from (1) property, plant and equipment of THB 11,697.6mn, (2) estimated amount by which the purchase cost exceeds interest in net asset value of THB 1,133.7mn and (3) an increase in long-term loans to related parties and interest receivables of THB 841.1mn.

Liabilities

As of 31 December 2017, total liabilities of the Company amounted to THB 22,256.1mn, an increase of THB 15,963.3mn compared to last year. Liabilities of the Company consisted of: 1) Current liabilities of THB 2,539.3mn, a decline of THB 1,378.4mn compared to last year. The decline was mainly from a reduction in bank overdrafts and short-term loan from financial institution of THB 3,284.8mn, being partly offset by the increase in (1) trade and other payables of THB 631.5mn, (2) current portion of long-term loans from financial institutions of THB 569.5mn, (3) current portion of liabilities under financial lease agreements of THB 522.0mn and (4) other current liabilities of THB 51.1mn. 2) Non-current liabilities of THB 19,716.9mn, an increase of THB 17,341.7mn primarily due to (1) long-term loans from financial institutions of THB 13,612.0mn, (2) liabilities under financial lease agreements of THB 1,961.9mn and (3) deferred tax liabilities of THB 1,584.4mn. Shareholders’ equity As of 31 December 2017, the Company’s paid up capital was THB 561,362.3mn, which was unchanged from last year. The Company’s total shareholders’ equity slightly declined to THB 17,795.7mn by THB 1,060.1mn or 5.6% compared to the previous year. The decline in shareholders’ equity was attributable to an increase in deficit to THB 9,905.0mn, by THB 1,057.0mn or 11.9% from to the previous year and other components of shareholders’ equity to THB 386.3mn, by THB 128.8mn or 50.0%. According to Thai law, the Company is unable to distribute a dividend this year to sharholders as a result of the deficit.

Liquidity

The Company’s cash flows are as follows: (Unit: THB mn)

2017

Cash received (used) in operating activities

2016 (restated)

110.1

(1,393.2)

(5,659.1)

(3,902.4)

Cash received (used) in financing activities

6,418.0

3,525.2

Net increase in cash and cash equivalents

791.4

(1,771.7)

Cash received (used) in investment activities

At the beginning of the year, the Company had cash and cash equivalents of THB 310.5mn. Cash received from operating activities amounted to THB 110.1mn, cash used in investment activities of THB 5,659.1mn and cash received from financing activities of THB 6,418.0mn. The Company’s investment activities in 2017 included the acquisition of 6-14 Underwood Street in U.K. for THB 328.6mn and Vienna House in Europe for THB 6,396.3mn. The Company’s financing activities in 2017 included the borrowing of THB 6,522.4mn in long-term loans from financial institutions for financing the acquisitions of the aforementioned office building and European hotel business.

Financing Capability

Net debt to equity was 0.80 times whereas current and quick ratio stood at 1.70 and 1.68 times, respectively. The Company believes it has a more than adequate capability to service all its debts and liabilities and the Company remains sufficiently liquid and solvent. Moreover, the Company has the ability to obtain additional debt financing at reasonable rates, if necessary, for future developments and acquisitions.

LIQUIDITY RATIOS

2017

2016

Current Ratio

Current Assets / Current Liabilities

Times

1.70

1.22

Quick Ratio

(Current Assets - Inventory) / Current liabilities

Times

1.68

1.22

Times

0.03

(0.67)

Cash Ratio Account Receivable Turnover

Total Revenue /Average Account Receivable

Times

15.26

20.63

Average Collection Period

360 Days /Account Receivable Turnover

Days

23.58

17.45

Inventory Turnover Ratio

Times

N/A

Average Holding Period

Days

N/A

Account Payable Turnover

Cost of Goods Sold /Average Accounts Payable

Times

7.17

6.05

Payment Period

360 Days / Account Payable Turnover

Days

50.23

59.46

Cash Cycle

Average Holding Period-payment Period

Days

(26.65)

(42.01)

3.4 Management Discussion & Analysis

ANNUAL REPORT 2017

Profitability ratios

2017

2016

Gross Profit Margin

Gross Profit / Net Revenue

63.61

66.37

Operating Profit Margin

Operating Profit / Net Revenue

0.80

(21.54)

Non-Operating Profit Margin

Other Income / Total Revenue

9.50

6.43

Operating Cash Flow to Operating Profit

Operating Cash Flow/Operating Profit

342.92

N.A.

Net Profit Margin

Net Profit / Total Revenue

(23.57)

(27.60)

Return on Equity

Net Profit / Total Shareholdersâ&#x20AC;&#x2122; Equity

(5.75)

(1.68)

Return on assets

Net Profit / Average Total Assets

(3.22)

(1.36)

Return on Fixed Assets

(Net Profit+Depreciation)/Average Fixed Asset

(2.29)

(0.76)

Total Assets Turnover

Total Revenue /Average Total Assets

Times

0.14

0.05

Debt to Equity

Total Liabilities / Total Equity

Times

1.26

0.33

Interest Coverage

(Cash Flow From Operation+Interest Expense+Tax) / Finance Cost

Times

1.33

(9.73)

Operating Cash Flow to Total Cash Outflow (Cash Basis)

Operating Cash Flow /(Debt Settlement +Purchase of Shares +Purchase of Assets +Dividend Payment)

Times

0.01

(0.28)

Dividend Payout Ratio

Dividend / Net Profit

Times

EFFICIENCY RATIOS

LEVERAGE RATIOS

In 2017 In 2016

The calculation of account receivable turnover and account payable turnover included revenue from Vienna House, which was acquired since June 2017 The calculation of operating cash flow to total cash outflow already included tradable securities and avilable for sale securities. There were no additional investments during 2016. Non-current liabilities were reclassified. Available for sales securities is classified as investments in the money market.

3.4 Management Discussion & Analysis

3.5

Business Outlook 2018 The Office of the National Economic and Social Development Board (NESDB) forecasts GDP growth of 3.64.6% buoyed by accelerating global economic growth that is expected to drive exports to grow by 6.8%, expected expansion of government spending by 10% and a recovery in private consumption and investment, increasing by 3.2% and 3.7%, respectively. Headline inflation is expected at between 0.9-1.9%, an acceleration from 0.7% in the previous year, though within manageable and desirable levels. Household debt-to-GDP, remains at historically elevated levels, but is expected to continue to fall as the rate of GDP growth overtakes the increase in overall debt. The strong Baht, which appreciated in 2017 by 3.9% YoY to an average rate of THB 33.93 per USD and the potential for further appreciation (encouraged by the strong current account surplus, more positive economic outlook and slow pace of further Federal Reserve interest rate hikes) remains a concern, as that may dampen export demand and foreign tourism receipts. The Bank of Thailand’s monetary policy remains somewhat accommodative with the policy rate unchanged at 1.5%. This is broadly in line with other major central banks, which have also kept their monetary policy unchanged. The simultaneous increase in economic growth from major global economies and Thailand’s major trading partners such as the USA, countries within the Eurozone, Japan and China is an encouraging sign of the long-awaited global recovery and a major conducive factor to Thailand’s trade performance. In 2018, the USA is expected to grow by 2.5%, the Eurozone by 2.4%, Japan by 1.2% and China by 6.7%. Certain risks remain however, including the outcome and orderliness of the Brexit negotiations, which have so far yielded little confidence; President Trump’s protectionist trade policies and the potential to trigger trade wars; a possible revival of the Trans-Pacific Partnership (TPP) trade agreement and a potential renegotiation of the NAFTA trade agreement. Other political risks also remain on the table, including the further fracturing of currently

3.5 Business Outlook 2018

strained European cohesion, depending on the result of the upcoming Italian election, and Catalonian independence.

Hotel Business Outlook in Thailand for 2018

The hospitality sector in Thailand is expected to remain robust with the Ministry of Tourism and Sports forecasting around 37.8mn international tourist arrivals, up 6.8% from the previous year and total tourism receipts of THB 1.82tn, an increase of 11.7%. Tourists from China, Malaysia and South Korea comprised 42% of total arrivals in the previous year and are expected to remain major contributors of this growth. The ongoing expansion of international routes from Thailand to more second tier Chinese cities will bring further impetus. Growth in domestic tourism is also expected to be solid with an expected 165.4mn domestic trips undertaken and domestic travel spending targeted to reach THB 990.0bn, a growth of 5.9% and 6.5%, respectively. The government has signaled that it will undertake a number of supportive measures to stimulate domestic travel including the continuation of the THB 15,000 personal income tax deduction program and companies being able to deduct 100% of seminar, lodging and traveling expenses from their corporate income tax in secondary provinces across Thailand.

Hotel Business Outlook in Europe for 2018

The IMF forecasts global GDP growth at 3.7% in 2018 as business and consumer confidence improves. Growth within the Eurozone is expected at 2.0% for 2018. The uplift in global growth is expected to buoy international travel, which is forecast to grow at a CAGR of 3.3% until 2030 by the UNWTO as well as leisure and business travel spending. According to data from STR Global, optimism for the sector will help drive solid RevPAR growth in Europe, where solid demand is paired with relatively modest capacity growth in hotel room supply. In Europe, room supply is expected to grow by below 0.10% compared to the global average of around 0.16%, according to research by JLL. The solid fundamentals of the hospitality sector in Europe are also expected to support growth in net capital inflows as investors continue to view hotel assets as a

ANNUAL REPORT 2017

source of income diversification. Last year, Europe recorded the highest net capital inflows of USD 2.9bn, followed by North America with USD 1.8bn.

Condominium Sector Outlook in Thailand for 2018

According to CBRE Research, the condominium sector in Thailand is expected to benefit from the improving fundamentals as well as improving optimism. Within Bangkok the ongoing rollout of mass transit projects has sparked fierce competition among developers to secure land bank for future development. In the last few years many property developers, both large and small have signed joint-ventures with Japanese partners. Since last year partnerships have broadened to include companies in China, Hong Kong and Singapore. Foreign buyers, especially China and Japan are major contributors to property sales within Bangkok, though most buying is concentrated largely around well-known areas such as on Sukhumvit between Ploenchit and Ekamai, Wireless Road, Langsuan Road, Rama 9 Road and Ratchada. As more peripheral lines begin to open, the challenge is to attract these foreign buyers to new locations.

Office Space Outlook in U.K. for 2018

According to Jones Lang Lasalle (JLL), the overall UK office space market last year recorded stable net absorption and prime rents, despite the uncertainty of Brexit negotiations and some companies announcing publicly their plans to scale back their London operations. Depending on the outcome of the Brexit negotiations, a

3.5 Business Outlook 2018

number of assumptions on future demand remain in flux. Nevertheless, net absorption has rarely been negative over the last 10 years, the city continues to be a top global destination for business and the cityâ&#x20AC;&#x2122;s zoning laws and limited space continues to keep supply growth in check. Nevertheless, certain pressures such as a number of trends will continue to disrupt the industry including co-working spaces, hot desking (where 2 or more employees share one desk) and telecommuting. The low interest rate environment (and subsequently thinner margin spreads) also remains a general impediment to the profitability of the financial services sector, which is the largest employer within the City of London. Continued profitability pressures will push financial services companies to reduce headcount or relocate at least part of their operations to lower cost areas to buoy profits.

Office Space Outlook in Thailand for 2018

CBRE Research expects growth in new office space supply to be around 584,000 sqm by 2021. This is equivalent to an average of approximately 194,700 sqm per year on a smooth basis. Approximately 70% of new supply will be located within the CBD area and 30% of new supply would be Grade A office buildings within the CBD area. Overall, natural demand on an annual basis is sufficient for this level of supply growth, therefore it is expected that vacancy and rental rates remain stable. Competition for land remains fierce as many developers try to balance their development pipeline between generally higher returns of real estate sales with longer-dated, recurring income asset such as office buildings or mixed-use projects.

3.6

Risk Factors

Strategic Risks

• Economic Fluctuations, Economic and Political Policies • Readiness to support business expansion

Economic Fluctuation, Economic and Political Policies

The performance of the Company, either from the recurring income of our hotels and office buildings for rent or real estate projects for sale, are all affected by fluctuations or changes in the economic and political situation as well as government policies, both domestically and internationally. For example, the affirmative vote in the referendum held by United Kingdom (‘Brexit’) on the question of whether it should leave or remain in the European Union, resulted in the British Pound’s considerable depreciation and strongly affected the confidence of financial services firms in the United Kingdom. Some of those firms announced their intention to relocate or downsize their offices outside the country. This, coupled with the ongoing uncertainties of the Brexit negotiations continues to impact demand for real estate and office space for rent. Political instability and terrorism in Europe have also affected confidence and raised security concerns, which has impacted the tourism sector. Such incidents may affect the business operation of the Company in the short- and/or long-term. The Company must therefore continuously monitor and be vigilant of situations or incidents that may arise so that it can take steps to mitigate the impact its business plans.

Readiness to support business expansion

for the short-, medium- and long-term with a focus on expanding its business. In order to achieve its plans, the Company conducts analyses of the industry outlook, the economic situation, the political situation and the feasibility of investment of each project in accordance with its risk appetite, capital and human resources as a standard process. As part of its investment strategy, the Company aims to acquire operating businesses or assets, which will facilitate its business expansion and revenue growth. Simultaneously, its planned future development projects will expand the Company considerably. As such, the Company must ensure efficient capital allocation and maximize its asset utilisation to achieve a sufficient return on investment. The Company must also manage its operation and personnel in its subsidiaries to be in line with its business plan. The Company owns significant land bank for future development. In the past several years, land prices have increased significantly, especially along the mass transit routes. This has created challenges to find land with high potential while maintaining a sufficient return and keeping investment costs under control. The Company has to manage these possible risks by closely monitoring market movements, studying and analysing the expansion of major cities in each region for business opportunities. The Company values partnerships as a means to access expertise, new business opportunities, moderate risk and add value in development projects as a factor to strengthening our long-term business.

The Company has established operational business plans

3.6 Risk Factors

ANNUAL REPORT 2017

Operational Risks

• Human Resource Procurement for Business Expansion • Cost Control in Business Operation and Project Development • Compliance and Law

Human Resource Procurement for Business Expansion

the Company is strictly committed to adhering to the aforementioned rules and regulations for the overall benefit of society.

Financial Risks

• Source of fund, Liquidity and Cost of fund • Fluctuations in exchange rate

To achieve the Company’s business goals, a key factor is having human resources with sufficient competence and expertise that is able to support the growth of the business in the short- and long-term. Since 2016, the Company started to invest abroad and launch new development projects. To ensure that the Company has the necessary human resources to support this expansion, the Company provides staff training to enhance the skills and knowledge of its employees. After acquisitions, the management restructures the organisation and administration in order to support and remain aligned with the Company’s current and future business expansion plans.

Source of fund, Liquidity and Cost of fund

Cost Controlling in Business Operation and Project Development

Fluctuation in exchange rate

The Company acknowledges that changes in commodities prices such as oil prices, or the activities of external forces such as mega projects by the government or the ongoing construction projects of other developers, may affect to the price of raw and construction materials and/or create labor shortages, which will directly impact the cost and duration the Company’s projects under development, cash flows and profit of the Company. The Company manages these risks by signing construction contracts with the contractors after a bidding and selection process in order to obtain the most competitive offered prices and conditions for each project. Contractors shall be responsible for procurement of materials and costs pre-agreed in the contract between the contractor and the Company. In other cases, some materials may be ordered directly from the manufacturer to obtain the best price, best quality and best conditions.

Compliance and Law

The government has issued rules and regulations regarding new development projects to minimise their effect to surrounding communities, such as the City Planning Law and conducting an Environmental Impact Assessment (EIA). In compliance with regulations, the Company may be affected by higher costs or longer development times. Nevertheless, 74

3.6 Risk Factors

To support the business growth and continuously develop new projects as planned, the company needs various funding sources from both financial institutions and the capital market. To successfully access these sources and maintain sufficient financing for business growth, the Company is affected by several factors such as the fluctuation in interest rate, the capital market situation, confidence of financial institutions, investors and stakeholders of the Company. With strong major shareholders and new business partners, the Company can ameliorate these risks and obtain funds at the appropriate risk and funding cost profile. Since 2016, the Company has started to invest in real estate overseas. In 2017, the Company increased its overseas investment compared to the previous year. These transactions the operations of those assets are conducted in foreign currency. the Company has developed policies and best practice guidelines to manage exchange rate risk by adopting financial instruments such as Forward Contracts, Futures Contracts and Swap Options, depending on the appropriate situation.

Corporate Governance Report 4.1 4.2 4.3

Corporate Governance Structure Corporate Governance Policy Selection, Appointment and Remuneration of Directors and the Chief Executive 4.4 Profiles of Director and Executive 4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies 4.6 Internal Control and Risk Management 4.7 Related Party Transactions 4.7.1 Audit Fee 4.8 Corporate Social Responsibility Policy 4.9 Human Resources Policy

andels by Vienna House Cracow

4.1

Corporate Governance Structure The Board of Directors

The structure of the Board of Directors consists of members in the number that is suitable for the size and business strategy of the Company, but shall be no less than 5 members. As of 31 December 2017, the Board of Directors consisted of 10 members as follows: • Executive Officer 3 Members • Director 7 Members (4 members were independent directors). 1. Mr. Keeree Kanjanapas1 Chairman 2. Mr. Rungson Sriworasat2 Independent Director, Chairman of Audit Committee and Nomination and Remuneration Committee 1 3. Mr. Chaiwat Atsawintarangkun Independent Director, Chairman of Nomination and Remuneration Committee and Audit Committee 4. Mr. Surajit Gongvatana1 Independent Director, Audit Committee and Nomination and Remuneration Committee 1 5. Mr. Plakorn Wanglee Independent Director, Audit Committee and Nomination and Remuneration Committee 6. Mr. Kavin Kanjanapas1 Director 7. Mr. Kong Chi Keung1 Director 8. Mr. Burin Pusiri Director and Executive Officer 9. Mr. Weerawat Wattanatchariya Director and Executive Office 10. Mr. Voraphot Chanyakomol3 Director and Executive Office and Chief Financial Officer Mr. Sayam Siwarapornskul2/ as the Company’s Secretary Note 1 On 7 July 2017, the Board of Directors appointed • Mr. Keeree Kanjanapas as the Company’s director and Chairman of the board of directors to replace Mr. Sumet Sangsiri and Mr. Chaiwat Atsawintarangkun who have resigned. Mr. Chaiwat Atsawintarangkun who formerly held the position of Chairman of the board of directors of the Company remains as an Independent Director, Chairman of the nomination and remuneration committee and Chairman of the audit committee. • Mr. Surajit Gongvatana as the Company’s director, member of the nomination and remuneration committee and member of the audit committee to replace Mr. Manu Maniwatana. • Mr. Plakorn Wanglee as the Company’s director, member of the nomination and remuneration committee and member of theaudit committee to replace Mr. Sakthip Krairiksh. • Mr. Kavin Kanjanapas as the Company’s director to replace Mr. Surayut Thavikulwat. • Mr. Kong Chi Keung as the Company’s director to replace Mr. Daniel Ross. 2 On 19 December 2017, the Board of Directors appointed Mr. Rungson Sriworasat as the Company’s director, Chairman of the audit committee and the nomination and remuneration Committee to replace Mr. Thavisakdi Tanta-Nanta and Mr. Chaiwat Atsawintarangkun who have resigned as Chairman of the audit committee but remains as Independent Director, Chairman of the nomination and remuneration committee and the audit committee. The board of directors’ meeting 13/2017 on 19 December 2017 has resolved to appoint Mr. Rungson Sriworasat as the Chairman of the audit committee. 3 On 14 February 2018, the Board of Directors appointed Ms. Piyaporn Phanachet as the Company’s director to replace Mr. Voraphot Chanyakomol.

4.1 Corporate Governance Structure

AUTHORIZED DIRECTORS The authorized directors to sign on behalf of the Company is any one of Mr. Burin Pusiri or Mr. Weerawat Wattanatchariya or Mr. Voraphot Chanyakomol to be signing jointly with Mr. Keeree Kanjanapas or Mr. Kavin Kanjanapas or Mr. Kong Chi Keung, totaling two directors, with the Company’s seal affixed. On 14 February 2018, the Company has appointed Ms. Piyaporn Phanachet as the Company’s director in replacement of Mr. Voraphot Chanyakomol. The authorized directors to sign on behalf of the Company has changed as follows: The authorized directors to sign on behalf of the Company is any one of Mr. Burin Pusiri or Mr. Weerawat Wattanatchariya or Ms. Piyaporn Phanachet to be signing jointly with Mr. Keeree Kanjanapas or Mr. Kavin Kanjanapas or Mr. Kong Chi Keung, totaling two directors, with the Company’s seal affixed.

Duties and Responsibilities of the Board of Directors

1. To perform its duties in accordance with the laws, the Company’s objectives and the Articles of Association, and the resolutions of the shareholders’ meeting with loyalty, honesty, and due care for the Company’s interest; 2. The directors are prohibited to enter businesses or become partners or directors of juristic persons, which have the same conditions and is in competition with the Company’s business unless otherwise notified at the Shareholders Meeting before the appointment resolution is made; 3. Directors shall notify the Company without delay in the case of gaining interest from an agreement made with the Company or having increased their shareholding in the Company; 4. The Board of Directors shall appoint the Chairman and a Sub-Committee of the Company to monitor and supervise the management and internal controls to ensure the effective and efficient implementation and execution of those policies established by the Executive Committee, the Audit Committee and the Nomination and Remuneration Committee and to evaluate the annual performance of all subcommittees; 4.1 Corporate Governance Structure

5. The Board of Directors shall have the power to designate the name of authorized persons to sign on behalf of the Company with the Company’s seal affixed; 6. To determine the Company’s policy, vision, mission, value, strategy, direction, operation target, to direct, monitor, and supervise the management to ensure the effective and efficient implementation and execution of those policies as well as oversee risk management and the internal control system of the Company by defining, separating roles and responsibilities between committees and management and between the Board of Directors and shareholders clearly; 7. To monitor and prevent conflicts of interest among the stakeholders of the Company; 8. To consider and approve the acquisition or disposal of assets, investing in new business and any action required by law, unless it is required by law to obtain a resolution from shareholders’ meeting; 9. To consider and/or comment on connected transactions of the Company and its subsidiaries in compliance with applicable laws, regulations and regulations; 10. To delegate the management to set up an accounting system, financial reporting and reliable audits as well as adequate internal controls; 11. To establish a risk management policy and framework, to review the appropriateness of the risk management policy and framework on an ongoing basis, and to ensure that the risk management policy and internal control are implemented; 12. To prepare and review the succession plan in order to determine the succession procedure for the positions of Chairman of the Executive Committee, Chief Executive Officer, Deputy Chief Executive Officer and other senior executive positions in the organization; 13. To appoint the Company Secretary to ensure that the Board of Directors and the Company comply with relevant laws and regulations; and 14. To review and update the Company Charter annually.

ROLES AND DUTIES OF THE CHAIRMAN OF THE BOARD OF DIRECTORS

1. The Chairman, as the chief of the Board of Directors, has the duty and responsibility to supervise, follow up, and monitor the performance of the Board of Directors ANNUAL REPORT 2017

and other subcommittees to achieve the business objectives under the designated plans; 2. The Chairman is the person who calls the meetings of the Board of Directors whereby the Chairman, or a designated person, shall send out an invitation to all directors at least 7 days prior to the meeting date unless it is necessary and urgent and such invitation shall specify the place, date and time of the meeting and the nature of the businesses to be discussed; 3. To act as the Chairman at the meetings of the Board of Directors and to cast the casting vote in case of an equality of votes at the meetings of the Board of Directors; 4. To act as the Chairman at the shareholders’ meetings of the Company, to conduct the meeting in compliance with the Company’s Articles of Association and the agenda, and to cast the casting vote in case of an equality of votes; and 5. To perform other duties as specified specifically by the laws as the duties of the Chairman.

AUDIT COMMITTEE

The structure of the Audit Committee consists of all independent directors. As of 31 December 2017, the Audit Committee consisted of 4 members. 1. Mr. Rungson Sriworasat1 2. Mr. Chaiwat Atsawintarangkun1 3. Mr. Surajit Gongvatana2 4. Mr. Plakorn Wanglee2

Chairman of the Audit Committee Audit Committee Audit Committee Audit Committee

Duties and Authorities of the Audit Committee

The Audit Committee shall report directly to the Board of Directors. The scope of duties and responsibilities of the Audit Committee shall be: 1. To review the Company’s internal control system, internal audit system, and risk assessment policy to ensure their appropriateness and efficiency, to review the independence of the Internal Audit

Office or any other units in charge of internal audit; 2. To approve, the appointment, transfer and dismissal of the head of the Internal Audit Office or the head of any other units in charge of internal audit; 3. To review and ensure that the Company is in compliance with the securities and exchange laws, the regulations of the SET, and the laws relevant to the Company’s businesses; 4. To consider, select, and nominate independent person(s) to be elected as the Company’s external auditor(s), to propose their remuneration, and attend a meeting with the external auditor(s) without the Management at least once a year. 5. To consider connected transactions or transactions that may lead to a conflict of interest to ensure that those transactions are in compliance with the laws and regulations of the SET, are justifiable, and are transacted in the best interest of the Company; 6. To prepare the Audit Committee’s report and disclose the same in the Company’s annual report where the Audit Committee’s report must be signed by the Chairman of the Audit Committee and must consist of at least the following information: (a) An opinion on the accuracy, completeness and creditability of the Company’s financial report; (b) An opinion on the adequacy of the Company’s internal control system; (c) An opinion on the compliance with securities and exchange laws; (d) The regulations of SET, or the laws relevant to the Company’s business; (e) An opinion on the suitability of the external auditor(s); (f) An opinion on the transactions that may lead to conflicts of interests; (g) The number of audit committee meetings, and the meeting attendance by each member; (h) An opinion or overview observation the Audit Committee has obtained from performing duties under the scope of the Audit Committee Charter;

Note: 1 On 19 December 2017, the Board of Directors appointed Mr. Rungson Sriworasat as the Company’s director, Chairman of the audit committee and the nomination and remuneration Committee to replace Mr. Thavisakdi Tanta-Nanta and Mr. Chaiwat Atsawintarangkun. Mr. Chaiwat Atsawintarangkun has resigned as Chairman of Audit Committee but remains an Independent Director, the Chairman of the nomination and remuneration committee and the audit committee. The board of directors’ meeting 13/2017 on 19 December 2017 has resolved to appoint Mr. Rungson Sriworasat as the Chairman of the audit committee. 2 On 7 July 2017, the Board of Directors appointed • Mr. Surajit Gongvatana as the Company’s director, member of the nomination and remuneration committee and member of the audit committee to replace Mr. Manu Maniwatana. • Mr. Plakorn Wanglee as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Sakthip Krairiksh.

4.1 Corporate Governance Structure

(i) Other transactions which, according to the Audit Committee’s opinion, should be made known to the shareholders and general investors, and are in the scope of the duties and responsibilities assigned by the Board of Directors; 7. To perform any other duties as assigned by the Board of Directors as the Audit Committee may agree. 8. The Audit Committee may seek independent professional advice from others if it is necessary to consider matters for company’s maximum benefit. The company responsible for the costs incurred. 9. In performing the duties of the Audit Committee, if the Audit Committee discovers or suspects suspicious circumstances of fraud or law violations related to the duties of directors and executives. The Audit Committee is responsible for the investigation and shall report the results of the preliminary investigation to the SEC; 10. The Audit Committee is responsible for assessing the adequacy and effectiveness of the anti fraudulent risk policy and the risk management measures in countering fraud. The main functions of risk management are as follows: 10.1 Review the internal audit plan of the Internal Audit Office to determine if the internal controls cover the implementation of Anti-Fraud & Corruption Policy and other related policies which may be exposed to fraudulent business practices; 10.2 Acknowledge reports of fraudulent incidents during regular scheduled periods. Contents should provide detailed information on fraudulent risk management and fraudulent incidents. For serious fraudulent incidents, the report should cover results of the investigations, measures taken and penalties, if any; 10.3 Consult with the external auditor in the event of significant fraud;

11. 12.

To review and provide an opinion on the internal audit plan and the performance of the Internal Audit Office where the Audit Committee has the authority to invite the relevant Management, executives, or employees to provide their opinions, attend meetings, or submit any relevant and necessary documents; To review and update the Audit Committee Charter and present the same to the Board of Directors for consideration and approval;

THE NOMINATION AND REMUNERATION COMMITTEE

As of 31 December 2017, the structure of the Nomination and Remuneration Committee consisted of 4 Independent Directors. 1. Mr. Chaiwat Atsawintarangkun 2. Mr. Rungson Sriworasat1 3. Mr. Surajit Gongvatana2 4. Mr. Plakorn Wanglee2

Chairman of Nomination and Remuneration Committee Nomination and Remuneration Committee Nomination and Remuneration Committee Nomination and Remuneration Committee

Duties and Authorities of the Nomination and Remuneration Committee

1. To determine the criteria and process for nominating a person for the position of director by considering: • The appropriateness of his/her knowledge, experience, expertise, and availability, as well as other requirements as stipulated by the laws; • The qualifications of a director which are appropriate for and correspond with the

Note: 1 On 19 December 2017, the Board of Directors appointed Mr. Rungson Sriworasat as the Company’s director, Chairman of audit committee and nomination and remuneration Committee to replace Mr. Thavisakdi Tanta-Nanta and Mr. Chaiwat Atsawintarangkun who have resigned. Mr. Chaiwat Atsawintarangkun resigned as Chairman of Audit Committee but remains an Independent Director, Chairman of the nomination and remuneration committee and the audit committee. The board of directors’ meeting 13/2017 on 19 December 2017 has resolved to appoint Mr. Rungson Sriworasat as the Chairman of the audit committee. 2 On 7 July 2017, the Board of Directors appointed • Mr. Surajit Gongvatana as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Manu Maniwatana. • Mr. Plakorn Wanglee as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Sakthip Krairiksh. 4.1 Corporate Governance Structure

ANNUAL REPORT 2017

Company’s business strategy, structure, size and composition of the Board of Directors as determined by the Board of Directors, including the diversity in the structure (Board Diversity) and other qualifications that are necessary or are still lacking in the Board of Directors; 2. To select candidates for the position of director(s) of the Company from the recommendation of other directors, nominations by the shareholders of the Company, the service of external professional search firms, or the directors’ pools of various agencies, or other nomination procedures as the Nomination and Remuneration Committee considers appropriate. This includes vacant or expired terms of office for the positions of Chairman of Nomination and Remuneration Committee, Chairman of Executive Committee and Chief Executive Officer. In case of required appointment of new directors to be in line with the structure of the Board of Directors, the Nomination and Remuneration Committee shall nominate new directors to the Board of Directors and the Company will propose to the shareholders’ meeting to approve the appointment; 3. To consider the structure, amount, form, and criteria for all types of appropriate remuneration (monetary and non-monetary) for the Chairman of the Board of Directors, directors, and members of the subcommittees, taking into account the remuneration paid by other companies within the same industry and other listed companies with a similar market capitalisation in order to motivate and retain valuable directors with the Company, and to propose the same for the Board of Directors’ approval and for further proposal at the shareholders’ meeting for consideration and approval; 4. To consider the performance evaluation criteria of the Chairman of the Executive Committee and the Chief Executive Officer, to propose the result of such evaluation for the Board of Directors’ approval, and to propose the amount and form of remuneration of the Chairman of the Executive Committee and the Chief Executive Officer in line with the results of their performance evaluations for the Board of Directors’ approval;

5. To prepare the director development plan in order to develop the knowledge of the existing directors and the new directors to understand the business of the Company, the roles and duties of the directors, and other significant developments, including determining a guideline for new director orientations; 6. To prepare and review the succession plan in order to determine the succession procedure for the positions of Chairman of the Executive Committee, Chief Executive Officer and other senior executive positions in the organization and present to the Board of Directors every year; 7. To consider the appropriateness and conditions for offering new shares, warrants, or other securities to the directors and employees as motivation for the directors and employees to perform their duties and build long-term shareholder value, as well as retaining qualified personnel with the Company, whereas such conditions must be fair to the shareholders; 8. To perform any other acts in relation to the nomination and determination of remuneration as assigned by the Board of Directors and to perform any other acts as stipulated by the laws or regulations of the government authorities; 9. To conduct an evaluation of the performance of the Nomination and Remuneration Committee on an annual basis and report the evaluation results to the Board of Directors; 10. To report its performance of duties to the Board of Directors and determination of remuneration and report in annual report; 11. To review and update the Nomination and Remuneration Committee Charter and present to the Board of Directors for consideration and approval;

THE EXECUTIVE COMMITTEE

As of 31 December 2017, the structure of the Executive Committee consists of 3 members as follows: 1. Mr. Burin Pusiri 2. Mr. Weerawat Wattanatchariya 3. Mr. Voraphot Chanyakomol1

Executive Director Executive Director Executive Director and Chief Financial Officer

Note: 1 On 14 February 2018, the Board of Directors appointed Ms. Piyaporn Phanachet as the Company’s director and Executive Director to replace Mr. Voraphot Chanyakomol.

4.1 Corporate Governance Structure

Duties and Authorities of the Executive Committee

1. To determine policy, vision, mission, direction, strategy, management structure, objectives, and goal for the Company’s businesses to correspond to the economics and competitive environment, and to propose the same for consideration and approval by the Board of Directors; 2. To prepare a business plan, budget, set the management authorities of the Company and to propose the same for consideration and approval by the Board of Directors; 3. To review and monitor the Company’s performance results to be in line with the approved policy and business plan in an efficient and effective manner; 4 To monitor the performance of the Company’s operation to be in accordance with the approved business plan; 5. To consider and review any project investments of the Company before proposing to the Board of Directors for approval; 6. To approve opening or closing deposit accounts with financial institutions; 7. To conduct financial transactions with the financial institutions such as loans, pledges, mortgages, guarantees and other businesses, including buying, selling and registering for the ownership of land. These transactions must be in accordance with the objective of the Company and be beneficial to the operation at an amount not exceeding THB 100mn; 8. To consider and approve the Company and/or the subsidiary of the Company on an acquisition of any assets or securities, namely ordinary shares, debentures, bonds, investment units in mutual funds as well as any investments at an amount not exceeding THB 100mn per transaction or not

exceeding THB 500mn per year; 9. To perform other tasks as assigned by the Board of Directors; 10. To report its performance of duties to the Board of Directors and/or the shareholders’ meeting; The Board of Directors has delegated the authority to the Executive Committee to whatever operations fall within the duties and authorities of the Executive Committee. This said delegation is not in form of the delegation or sub-delegation, which involves cases when the Executive Committee or persons assigned by the Executive Committee can approve transactions with an interest in or a conflict of interest (as defined by a notification of the Office of the Securities and Exchange Commission and/or the Stock Exchange of Thailand) with the Company or its subsidiaries.

INVESTMENT COMMITTEE

As of 31 December 2017, the structure of Investment Committee comprising 3 members from management of the Company as follows: 1. Mr. Voraphot Chanyakomol1 Chief Financial Officer 2. Mr. Sayam Siwarapornskul Chief Legal Officer 3. Ms. Pakamas Sirianuwat Finance Director

Duties and Authorities of the Investment Committee

1. To consider and make investment decisions, including to determine the period of investment under the investment policies and principles approved by the Board of Directors’ Meeting of the Company by taking into account risk management, prevention of conflicts of interests, and the relevant notifications and regulations;

Note: 1 Mr. Voraphot Chanyakomol has submitted his resignation from the position of Director and Executive Director of the Company, effective from 14 February 2018. and his resignation from the position of Chief Financial Officer with effect from 15 February 2018. 4.1 Corporate Governance Structure

ANNUAL REPORT 2017

2. To convene a meeting at least once a month, whereby the constitution of the quorum of such meeting requires no less than one-half of the total number of members to attend the meeting, in order to determine the management of the investment fund, as well as to inspect and review the investment to be in line with the current situation;

3. To be authorized to carry out and execute documentation regarding securities trading, as well as to appoint other persons to order the purchase or sale of the securities under the investment policies and principles delegated by the Investment Committee; and 4. To report the summary of investment to the Board of Directors from time to time, as deemed appropriate;

Summary of Directors held the position in Board of Directors and Sub-Committee as of 31 December 2017 Name

Director

Audit Independent Committee Director

Nomination and Remuneration Committee

The Executive Committee

Authorized Director

1. Mr. Keeree Kanjanapas



2. Mr. Rungson Sriworasat



3. Mr. Chaiwat Atsawintarangkun



4. Mr. Surajit



5. Mr. Plakorn Wanglee



6. Mr. Burin



7. Mr. Weerawat Wattanatchariya



8. Mr. Voraphot Chanyakomol



9. Mr. Kavin

Kanjanapas



10. Mr. Kong

Chi Keung



Gongvatana Pusiri

4.1 Corporate Governance Structure



Meeting of Company Director

During the year 2017, the Board of Directors held 13 meetings with details as follows: The Board of Directors Meeting

Name

The Board of Audit Committee

The Board of Nomination and Remuneration Committee

1. Mr. Keeree

Kanjanapas1

7/13

2. Mr. Sumate

Sangsiri

6/13

3. Mr. Chaiwat

Atsawintarangkun2

13/13

8/8

4/4

4. Mr. Manu

Maniwatana

4/13

3/8

2/4

5. Mr. Surajit

Gongvatana1

6/13

3/8

1/4

6. Mr. Surayut

Thavikulwat

6/13

7. Mr. Kavin

Kanjanapas1

7/13

8. Mr. Daniel

Ross1

5/13

9. Mr. Kong

Chi Keung

10. Mr. Plakorn

Wanglee1

6/13

3/8

1/4

11. Mr. Thavisakdi Tanta-Nanta

11/13

7/8

3/4

12. Mr. Rungson

Sriworasat2

-/13

13. Mr. Burin

Pusiri

13/13

6/13

14. Mr. Weerawat Wattanatchariya

12/13

15. Mr. Voraphot Chanyakomol

13/13

Note: 1 On 7 July 2017, the Board of Directors appointed • Mr. Keeree Kanjanapas as the Company’s director to replace Mr. Sumet Sangsiri and Mr. Chaiwat Atsawintarangkun who have resigned. Mr. Chaiwat Atsawintarangkunhas resigned as Chairman of the board of directors of the Company but remains an Independent Director, Chairman of the nomination and remuneration committee and chairman of the audit committee and the board of directors’ meeting has appointed Mr. Keeree Kanjanapas as the Chairman as replacement. • Mr. Surajit Gongvatana as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Manu Maniwatana. • Mr. Plakorn Wanglee as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Sakthip Krairiksh. • Mr. Kavin Kanjanapas as the Company’s director to replace Mr. Surayut Thavikulwat. • Mr. Kong Chi Keung as the Company’s director to replace Mr. Daniel Ross. 2 On 19 December 2017, the Board of Director appointed Mr. Rungson Sriworasat as the Company’s director, Chairman of the audit committee and the nomination and remuneration Committee as replacement for Mr. Thavisakdi Tanta-Nanta and Mr. Chaiwat Atsawintarangkun who have resigned. Mr. Chaiwat Atsawintarangkun has resigned as Chairman of the audit committee but remains an Independent Director, Chairman of the nomination and remuneration committee and the audit committee. The board of directors’ meeting 13/2017 on 19 December 2017 has resolved to appoint Mr. Rungson Sriworasat as the Chairman of audit committee. 3 On 14 February 2018, the Board of Director appointed Ms. Piyaporn Phanachet as the Company’s director to replace Mr. Voraphot Chanyakomol.

4.1 Corporate Governance Structure

ANNUAL REPORT 2017

THE EXECUTIVE MANAGEMENT

Duties and Responsibilities of Management

As of 31 December 2017, the structure of the Executive Management consisted of the following members. 1. Mr. Burin Pusiri Executive Director 2. Mr. Weerawat Wattanatchariya Executive Director 3. Mr. Voraphot Chanyakomol1 Executive Director and Chief Financial Officer 4. Ms. Piyaporn Phanachet Chief Executive Officer 5. Mr. Veerapong Rodjanawarodom Chief Operation Officer 6. Mr. Sayam Siwarapornskul Chief Legal Officer and Company’s Secretary 7. Ms. Nuttapun Giramethakul Vice President, Accounting Department

Duties and Authorities of Chief Executive Officer

Chief Executive Officer shall supervise, manage, operate, and carry out day-to-day business for the interest of the Company in line with the Objectives and Articles of Association of the Company. He/She shall also comply with the regulations, resolutions, policies, plans, and budgets set forth by the Board of Directors within the scope of relevant laws and the authority defined by the Board of Directors. Chief Executive Officer shall approve any business operation as long as it does not involve the case of the CEO or any individual having a conflict of interest as defined by a notification of the Office of the Securities and Exchange Commission and/or the Stock Exchange of Thailand, or having interest in the Company or its subsidiaries.

1) To efficiently and effectively manage the business operations in accordance with the Company’s policies, direction, strategy and operational structure; 2) To prepare the business plan, budget, and management authorities of the Company for the Executive Committee’s approval and / or the Board of Directors approval; 3) To manage the Company’s business operations to be in line with the business plan and the budget as approved by the Executive Committee with loyalty, honesty, and due care in the best interest of the Company and the shareholders; 4) To regularly report the Company’s performance results to the Executive Committee and / or the Board of Directors; 5) To supervise general business operations as provided under the Company’s rules and regulations; 6) To consider and approve the Company and/or the subsidiary of the Company on any transaction at an amount not exceeding THB 10mn per transaction or not exceeding THB 100mn per year; 7) To consider and jointly approve with Chief Financial Officer and at least 1 of Chief Officer of the Company to do any transaction of the Company and/or the subsidiary of the Company at an amount not exceeding THB 50mn per transaction or not exceeding THB 200mn per year; 8) To perform other tasks as assigned by the Executive Committee and/or the Board of Directors.

Report of securities holding of Directors and Executives

The Company has set the policy for directors and executives of the Company to report on changes in shareholding of “U” and warrant “U-W1” to the board meeting quarterly by submitting a copy of the change of securities holding (Form 59-2) to Company’s Secretary on the same day as the date on which the directors and executives have filed Form 59-2. And Company’s Secretary shall summarize and submit report to the Board of Directors meeting quarterly. Summary of Securities Holdings of Directors and Executives as of 31 December 2017 Detail of Securities Holding (Shares) Name

Position

1. Mr. Voraphot Chanyakomol Chief Financial Officer / Director 2. Ms. Nuttapun Giramethakul Vice President, Accounting Department

Ordinary Shares (U)

Shareholding (%)

125,721,200

0.022

2,000

0.00

Warrants (U-W1)

200,000,000 -

Note: 1 Mr. Voraphot Chanyakomol has submitted his resignation from the position of Director and Executive Director of the Company, effective from 14 February 2018 and his resignation from the position of Chief Financial Officer with effect from 15 February 2018.

4.1 Corporate Governance Structure

COMPANY’S SECRETARY

Mr. Sayam Siwarapornskul was appointed to be the Company’s Secretary on 21 September 2016. The duty of the Company’s secretary is to facilitate the Company’s business management to effectively comply with the principal of Good Corporate Governance. The main duties and responsibilities are as follows: 1) To perform duties with responsibility, care and honesty in accordance with legal and other relevant regulations; 2) To provide advice on laws and regulations which the Board of Directors must know and practice; 3) To organise the Board of Directors’ meetings, sub-committees’ meeting and shareholders’ meetings in accordance with the applicable laws and regulations, including ensuring that such resolutions are fully complied with;

4.1 Corporate Governance Structure

4) To prepare and keep a register of directors, invitations to the Board of Directors’ meetings, minutes of the Board of Directors’ meetings, invitations to the shareholders’ meetings, and minutes of the shareholders’ meetings; 5) To conduct any other affairs of the Board of Directors; 6) To maintain a transaction report, reported by directors or executives; 7) To keep a copy of the reports on the change of securities holding of the directors or the executives; 8) To ensure that information is disclosed in accordance with the regulations of the SET, the SEC Office, and other relevant authorities, as well as the principles of good corporate governance. 9) To perform other tasks as the regulation of the SEC Office, and/or assigned by the Boards of Directors.

ANNUAL REPORT 2017

4.2

Corporate Governance Policy The Board of Directors recognises the importance of Good Corporate Governance. The Board of Directors foresee that it is significant and necessary to the Company’s long-term business operation and viability to have an effective management system and is an important factor in driving the Company’s business expansion and secure the confidence of shareholders, investors, and related parties. Therefore, the Company has established Good Corporate Governance policies in compliance with the principles of Good Corporate Governance for listed companies of the Stock Exchange of Thailand’s that are applied and monitored throughout the Company’s business. Recommendations from the Thai Institute of Directors (IOD) for corporate governance standards and best practices are also taken into account. The Board of Directors has distributed Good Corporate Governance policies to directors and all employees in order to be understood and followed. The contents of the policies shall cover the following major principles. • To treat all shareholders and other related parties equally and fairly to all parties. • The Company’s Board of Directors focus is on long-term value added to the business, managing the business prudently and carefully, responsibly performing duties with sufficient ability and efficiency in order to maximise benefit to shareholders, control conflict of interests • To operate the business ethically with integrity, with transparency and adequately disclose information to all related parties. • To operate the business prudently with adequate risk management policies by assessing and establishing strategies and instruments that continuously monitor risk appropriately and regularly. • The Board of Directors has set ethical standards for the Company and for executives and all employees to follow, which are consistent with the guidelines of the Stock Exchange of Thailand. The Board of Directors has therefore set policies and directions for Good Corporate Governance that include an

4.2 Corporate Governance Policy

internal control and audit system to monitor ensure that they effectively implement the policies for the long term benefit of shareholders • To promote and encourage all directors and executives to attend training programs held by Thai Institute of Directors Association (IOD) and other institutes offering related programs to continuously improve and refresh knowledge about roles and responsibilities of directors and executives. Since the Company has continuously focused on developing the Company’s operational guidelines in line with the good corporate governance principles. The Company has been committed to the development of corporate governance in all five areas as outlined below. In the past year, the Company received the results of the Thai corporate governance survey conducted by the Thai Institute of Directors Association (IOD) and the Company was classified as a 4-star company (80% to 89%). This is a confirmation that the Company is committed to follow good corporate governance principles and shall endeavor to improve. Since 18 December 2015, the Company announced its intention to be a party to Thailand’s Private Sector Collective Action Coalition Against Corruption (Thai CAC) initiative in order to promote good corporate governance and to be part of the effort to combating corruption. On 18 December 2017, the Thai CAC has approved the Company as a member of Thailand’s Private Sector Collective Action Coalition Against Corruption. Section 1. Rights of Shareholders Section 2. Equitable Treatment of Shareholders Section 3. Roles of Stakeholders Section 4. Disclosure and Transparency Section 5. Board Responsibilities Further details are published on the Company’s website at: www.ucity.co.th

Section 1 Rights of Shareholders

The Company realises and values the fundamental rights of shareholders, both as investors and as owners of the Company by treating shareholders equitably. The Board of Directors has set policies for the Company’s own practices pursuant to the principles of Good Corporate Governance which include the following: 1. Rights and Equivalence of the Shareholders and Stakeholders. 2. The Board of Directors focus on increasing value of the Company, manage the Company’s business carefully and be aware of risks at all times in order to maximise shareholders’ profit. 3. Operate the business transparently and adequately disclose information. 4. Operate business with the concern of business ethics The Company recognises fundamental rights of shareholders in exercising the following actions:

1. Voting rights

Shareholders of the Company shall have equal voting right prescribed in the Article of Association of the Company provided that each shareholder shall have voting right equal to 1 share for 1 vote or in other words, each shareholder shall have voting right equal to the total number of shares held by each shareholder.

2. Rights to acknowledge reports on the results of the Company’s business performance

Shareholders of the Company shall have the right to acknowledge the Company’s business report, particularly the Annual Report. The Company has precisely and sufficiency produced an appendix in the Annual Report which covers definitions and further details in relation to the business operation of the past year of the Company.

3. Rights to consider and approve the financial statement of the company

Shareholders of the Company shall have the right to consider and approve the Company’s financial statement. The statements are to be accurate, adequate and reliably cover content stipulated under the certified accounting standard. The financial statement of the Company shall be audited and an opinion provided by the auditor who 4.2 Corporate Governance Policy

is shall be independent and publicly recognised.

4. Rights to receive dividends from the Company’s business operation

Shareholders of the Company shall have the right to consider and approve dividends payment of the Company. The Company shall produce dividend calculation details, which are accurate, transparent and cover all useful or substantive information to enable the shareholders’ consideration. This includes dividend payout policies declared by the Company, a comparison between actual dividends paid and payout policies, a comparison of dividends paid in the previous years. The Company shall ensure that dividend payments declared by the Company has been followed, provided that such dividend declarations were cautiously examined and obtained approval from the Board of Directors before the shareholders’ meeting for approval. In case the Company cannot distribute dividends from the Company’s business operation performance, the Company shall explain and give reasoning why it cannot do so.

5. Rights to consider and appoint directors of the Company individually

Shareholders of the Company shall have the right to consider and appoint the Company’s directors individually. The Company shall provide accurate, clear and substantive information, which are useful for shareholders’ consideration. Such information would include for example a curriculum vitae, which outlines the name and biography of the Company’s director who is nominated as well as number of incumbent years, class of director to be nominated, the criteria and search method, shareholding in the Company, other positions held, which are either related or not related to the Company’s business operation, etc. The Company shall define the meaning of independent director in the case where the independent director is to be appointed, provided that the director, who is nominated in shareholders meeting for approval, has been carefully examined and approved by the Board of Directors before submission to the shareholders meeting for approval.

6. Rights to consider and approve remuneration of the Company’s directors

Shareholders of the Company shall have the right to consider and approve remuneration of the Company’s directors. The remuneration proposed to shareholders for ANNUAL REPORT 2017

approval has been carefully examined and approved by the Board of Directors of the Company before being proposed to shareholders for approval.

7. Rights to appoint auditor and approve audit fee

Shareholders of the Company shall have the right to consider appointing the auditor and approving the audit fee. The Company shall produce accurate, clear and substantive information for shareholders’ consideration, including for example, the name of the auditor and name of his/her audit firm, the independence of the auditor, number of years of being an auditor, remuneration of the audit, which is precisely separated between audit fee and other service charges (if any) provided that the auditor and audit fee, submitted to shareholders for approval, has been carefully examined, evaluated and approved by the Board of Directors.

8. Rights to consider and approve related transaction

For the purpose of protecting shareholders’ benefit, the shareholders of the Company shall have the right to consider and approve on the Company entering into a connected transaction which has significant value, provided that such connected transaction is in respect to the Company’s and shareholders’ best interest and was approved by the Board of Directors, which comprises of independent directors. In 2017, the Company had no related transaction but the transactions between the Company and subsidiaries.

9. Other fundamental rights of shareholders under regulations, rules and other relevant laws

The Company should produce details of a capital increase, which is accurate, transparent, and covering substantive information that is useful for shareholders’ consideration. For example, purposes and necessities for the increase in capital, approaches and conditions of the increase, effects from the increase in capital to the Company and shareholders provided that such transaction has been cautiously examined and approved by the Board of Directors before being submitted to shareholders’ consideration. The Company has scheduled the ordinary shareholder 88

4.2 Corporate Governance Policy

meeting to be held once a year within the period of not exceeding 4 months after the last day of the fiscal year of the Company. If there is an urgent/special agenda to be submitted, which affects or is related to shareholders’ benefit, regulations or laws and must be approved by the shareholders, the Company shall convene a shareholders meeting on a case-by-case basis. The Board of Directors of the Company shall monitor the shareholder meeting’s compliance with the articles of association and rules/ policies of the regulatory bodies such as the Stock Exchange of Thailand or Securities and Exchange Commission regarding code of conduct in arranging a shareholders’ meeting of listed companies, such as equitable treatment of all shareholders. In 2017, the Company invited shareholders to exercise their rights to submit matters to the Company in order to be included in the agenda of Shareholders Meeting of 2017 and to nominate the name of persons to be elected as director of the Company in advance, whilst adhering to the criteria and methods prescribed by the company and published on the website of the Company from 15 December 2016 to 31 January 2017. However, no shareholder submitted an agenda or name of a qualified person to be elected as director to the Company. In 2017, the Company held the Annual Ordinary General Shareholders Meeting 2017 on 25 April 2017 for shareholders to consider and exercise their voting rights. The Company arranged the distribution of meeting invitation letters, power of attorney forms and other related meeting documents at least 7 days or 14 days in some cases, prior to the meeting day, to provide sufficient time for the shareholders to study all the information distributed prior to the meeting. All the documents were sent to every shareholder whose details were obtained under Section 225 of Securities and Stock Exchange of Thailand Act B.E. 2535 through a book closing of the shareholder’s register. Moreover, the Company also posted the same information on the Company’s website (www.ucity.co.th) in advance so that shareholders will have sufficient time to study the information distributed prior to the shareholders’ meeting. In the Annual Ordinary General Shareholders Meeting 2017 on 25 April 2017, shareholders approved the Board of Directors’ and Committees’ remuneration for the year

2017 totaling not more than THB 6mn and assigned the Board of Directors to consider and allocate the amount to each director at the Board of Directors’ discretion. In addition, the Shareholders Meeting resolved that Mr. Narong Puntawong, Certified Public Account No. 3315 and/ or Mr. Supachai Phanyawattano, Certified Public Account No. 3930 and/or Ms. Siraporn Ouaanunkun, Certified Public Account No. 3844 of E Y Office Company Limited to be appointed as auditors of the Company in 2017 and fixed the auditor’s remuneration within the amount of not exceeding THB 2.98mn and for subsidiaries of the Company of the amount not exceeding THB 4.62mn.

Section 2 Equitable Treatment of Shareholders 2.1 Shareholder Meeting 2.1.1 2.1.2 2.1.3

The Board of Directors recognises the rights of shareholders and is obligated to treats its shareholders in a fair and equitable manner. The Company has scheduled an ordinary shareholder’s meeting to be held once a year within a period not exceeding 4 months from the last day of the fiscal year of the Company and the Company may hold additional extra-ordinary meetings as necessary and appropriate. The Company established policies to treat every shareholder equally and to protect and maintain the fundamental rights of the shareholders. As a result every shareholder shall have equal right in trading and transferring their shares, gaining equal share of the profits of the Company, receiving sufficient reports and information on the Company’s business, attending meetings of the shareholders to exercise their voting right to appoint and dismiss directors, the auditor of the Company and other issues that may affect the Company, such as dividend distribution (if any), establishing or amending Articles of Association and Memorandum of Association, a decrease or an increase in capital and approve of special transactions, etc. The shareholder of the company shall have equal voting rights prescribed in the Article of

4.2 Corporate Governance Policy

2.1.4 2.1.5 2.1.6 2.1.7 2.1.8

Association of the Company, provided that each shareholder shall have voting rights equal to 1 share for 1 vote. The Company regularly disclosed public information to all shareholders through numerous channels such as the Stock Exchange of Thailand, the Company’s website (www.ucity.co.th) and through the Investor Relations Department, which is contactable via telephone (0-2273-8838 ext. 2301) or email (IR@ucity.co.th). The Company provides the opportunity for all shareholders to submit matters to be included in the meeting’s agenda such as nominations of the persons to be elected as directors of the Company, no less than 1 month in advance The Company shall distribute meeting notices together with supplementary documentation for meetings and include under each agenda an opinion of the Board of Directors to shareholders no less than 7 days in advance, except otherwise stipulated under regulations, announcements, orders or provisions of the Stock Exchange of Thailand and publish the notice of the meeting on Newspapers for 3 consecutive days and not less than 7 days before the meeting date. The Company shall also publish the same, aforesaid documentation and information for the meeting through the Company’s website prior to the date of shareholders meeting at least 30 days in advance in order for shareholders to have enough time to study the information thoroughly and be able to make appropriate considerations. The Company shall notify shareholders on meeting attendance rules in the notice of the meeting and voting procedures for shareholders at the shareholders meeting. Moreover, the Company shall facilitate every shareholder equally by using a barcode system to register and count votes for transparency and to facilitate shareholders in registering their attendance 2 hours prior to the meeting time and continuously throughout the meeting until the end. The Company shall not restrict rights of ANNUAL REPORT 2017

2.1.9 2.1.10 2.1.11 90

shareholders to study information and agendas prior to the shareholder’s meeting. For example, to not to distribute documents containing urgent or significant information in the shareholders meeting without prior notice, not to insert additional agendas or make changes to important information without notifying shareholders, or to limit rights of shareholders who arrived late to the meeting. The Company will record the minutes of the meeting accurately and completely for shareholders’ review. The minutes shall contain information on resolutions adopted in the meeting, the list of directors, executives and advisors attending the meeting, if a quorum has been achieved, the result of the vote, including both disapproved and abstained votes on every agenda item required to vote, a summary of opinions, questions, and answers to the questions that are relevant and related to each agenda item. The Company will report the results of the vote on the Stock Exchange of Thailand website within the same day of the meeting day or no later than 09.00 a.m. on the next business day. The meeting minutes will be sent to the SET within 14 days from the date of the meeting published on the Company’s website. The Company shall facilitate and encourage shareholders to attend shareholders’ meetings in order to exercise voting rights. For example the meeting process shall follow the procedures indicated in the notice, in the election of directors, shareholders can vote to elect directors individually, there shall be opportunities for shareholders to question or comment and be provided with sufficient answers by directors. In case that shareholders cannot attend the meeting in person, the company shall facilitate by delivering proxy forms (Form B), which enables shareholders to express their opinion and exercise their voting rights. The shareholders may delegate the representatives of shareholders or independent directors of the company to attend the meeting and vote on their behalf at the shareholders’ meeting. The Company

4.2 Corporate Governance Policy

shall offer at least 1 person among the independent directors as a proxy for the shareholders. Shareholders of the Company can download the proxy forms: form A and form B from the Company’s website. The Company shall also provide stamp duty for those attending the meeting by proxy for the shareholders.

2.2 Conflict of Interest

The Board of Directors and Executives shall consider various areas of operation carefully, prevent or avoid conflict of interest and act honestly, reasonably, independently and ethically for the overall benefit of the Company. Facilitating transparency and prevent unethical behaviour, directors, executives and related persons shall disclose conflicts of interest to the Board of Directors by informing the Company’s secretary and report on their holdings of the Company’s securities in accordance with the requirements of the Office of the Securities and Exchange Commission. In executive committee meetings and at meetings of the management and the Board of Directors, any person who has any interest in any transaction or a conflict of interest with the Company shall refrain from commenting and abstaining from voting on such transactions. Moreover, the Company has established approval policies and processes for transactions to address issues of conflict of interest as well as connected party transactions. Persons shall disclose information pertaining to the relationship of the related person, price, value and Board of Director’s opinion on the transaction in compliance with rules and regulations stipulated by the Securities and Exchange Commission and the Stock Exchange of Thailand. For the benefit of the Company’s business operation, the Board of Directors have approved that Executive Directors may enter into transactions between the Company or its subsidiaries and Directors, Executives or related persons on the condition that such a transaction has the same commercial agreement as one that an ordinary person would make with any unrelated counterparty, under similar circumstances and on the basis of a fair commercial negotiation, in accordance with SECTION 89/12 of the Securities and Exchange Act (No. 4) B.E. 2551.

The Board of Directors is aware that the ultimate consideration to enter into a connected transaction shall be whether it is for the greatest benefit of the Company and its shareholders as well as being in compliance ‘armslength basis.’ Connected transactions of the Company must be approved by the audit committee which comprises of all independent directors, and the audit committee has informed the Board of Directors its acknowledgement of the nature of the transaction as a connected transaction and that issues of conflict of interest were cautiously considered in accordance with the regulations stipulated in the report by the Stock Exchange of Thailand. Such information shall also be disclosed every quarter, in the Annual Report and the Annual Information Disclosure Form (Form 56-1).

2.3 Monitoring of Insider Information

The Company is aware of the importance of preventing the use of insider information for one’s own benefit to the detriment of other shareholders. Therefore, the Company has established policies regarding utilisation of the Company’s insider information that prohibit the Company’s personnel including directors, executives, and employees from disclosing insider information to other persons or benefiting from the information through trading the Company’s securities. Below is a list of policies enacted: 2.3.1 Directors, executives, and employees of the Company are required to keep Company information confidential and shall not use the Company’s confidential and/or insider information for his/her own benefit or another person’s benefit.

2.3.2

Directors, executives, and employees of the Company realise that the Company’s directors, executives, and employees who have access to financial information and/or substantial insider information of the Company, which may affect the price of the company’s securities, should avoid trading the Company’s securities before the release of the financial statement to the public, or prior to such insider information being revealed to the public and shall not disclose such information to other persons, including spouses and children of directors, executives, and employees of the Company. If a director, executive, or employee of the Company are in breach of the Company’s policies regarding securities trading by using insider information, such director, executive or employee shall be face disciplinary processes that may include a verbal warning, notice in letter, suspension, termination with severance pay under the law or dismissal without severance pay as permitted by the law, depending on the seriousness of such misconduct.

Moreover, the Company has requested the Company’s executives and employees’ cooperation not to trade the Company’s securities within 1 month before the release of the financial statement or disclosure of other information - which may affect the price of the Company’s securities - to the public

Summary of Securities Holdings of Directors and Executives as of 31 December 2017 Detail of Securities Holding (Shares) Director/ Executive

Ordinary shares (U) (Share)

Shareholding (%)

Warrants (U-W1) (Unit)

1. Mr. Voraphot Chanyakomol

Executive Director and Chief Financial Officer

125,721,200

0.022

200,000,000

2. Ms. Nuttapun Giramethakul

Vice President, Accounting

2,000

0.00

Name

4.2 Corporate Governance Policy

ANNUAL REPORT 2017

Section 3 Roles of Stakeholders

The Company maintains a policy of equitable treatment of the rights of persons who are related to business operation of the Company. The Board of Directors is aware of the rights and appropriate treatment of stakeholders in compliance with relevant rights, conditions, laws, and regulations and has consequently set the following policies: Shareholders: Employees:

Executives:

Business Partner:

Customers: Competitors: Environment: Community/ society

The Company shall operate the business in the manner that creates the most value and benefit to shareholders by considering the Company’s long-term direction, operating transparently and disclosing reliable information. The Company recognises the importance of employees as they support the Company’s plans and enable the Company to meet its targets. Therefore the Company maintains a policy to treat its employees decently and equally as follows: 1. The Company shall adhere to the principle of fair and just compensation that is suitable and satisfactory. The Company therefore offers fixed compensation rates in compliance with the law and taking into account comparable compensation rates, cost of living and economic conditions. 2. The Company shall protect human dignity, rights and freedoms of persons by operating the Company’s business in a manner that does not violate human rights and protects the personal information and privacy of its employees. Every employee is to be treated equally, given an opportunity to lodge complaints in written format to persons responsible. 3. Offer working hours, holidays, annual leave and compensation for overtime work according to applicable laws and regulations. 4. The Company shall not hire or benefit from businesses or partners who treats its labor inequitably, unethically and without integrity. 5. The Company arranges various welfare schemes to employees as prescribed by the law, such as social security and welfare for employees’ medical care. Executives are persons who have a significant role in establishing the Company’s strategies and business plans, execution of the Company’s business in compliance with business outline, direction and target set by the Board of Directors. Therefore, the Company offers appropriate remuneration that incentivises executives to meet them. The Company realises the importance of the Company’s partners in supporting and enhancing the Company’s business operation. Therefore the Company shall treat its partners with respect, fairly, for the benefit of both sides and shall strictly follow the conditions set in business agreement between them. The Company focuses on providing services that treats customers with importance, priority and strives to maintain good relationships with customer continuously The Company shall operate business competitively yet fairly. In its efforts to be efficient, develop and improve service quality, the Company shall not engage in policies that damage the competitor or act dishonestly. The importance of environmental issues is not understated. The Company shall take steps that minimise or mitigate its environmental footprint such as saving electricity and water, and promote non-smoking in the work place. The Company engages in social activities to support and facilitate improving quality of life to people in our society and community. It shall promote and cultivate responsibility and social consciousness among all directors, executives and employees.

4.2 Corporate Governance Policy

Government authorities and other related supervisory authorities: Respect and non-violation of human rights

The Company shall cooperate in complying with rules, regulations, provisions and laws concerning the business operation of the Company. Its internal audit department reviews the Company’s business operation’s compliance and reports the result of its review to the committee for examination and potential adjustment annually.

The Company shall respect a persons’ individualism and human rights, such as equal treatment and consideration without discrimination on the grounds of race, religion, belief, gender, marital status, physical ability, education or position. It shall treat persons with dignity in line with the international norms and standards, such as policies and guidelines on sustainable management of human resources that offer protection of human rights and labor rights. Non-infringement The Company has established a policy against infringement on intellectual property or copyright, of intellectual which the directors, executives and employees are required to follow strictly. Regular inspections property or are organised to prevent any infringement of copyright and intellectual property within copyright the Company.

Filling a Complaint

In case related persons have complaints, recommendation or inquiries in regards to a potential breach of laws or ethics, incorrect financial reporting or insufficient internal control systems, communication channels are in place to inform the Audit Committee of the Company. Such information channels include contacting the secretary of the Audit Committee at the following email: InternalAudit@ ucity.co.th or mailing to the Internal Audit Department at the address of the Company as shown. The Company will perform an investigation and shall treat the matter as confidential and shall report the result of investigation to the Board of Directors. In 2017, the Company disclosed information adequately, accurately, reliably and within time in order for all related persons to receive or have access to the information equally. To prevent unequal treatment and discrimination, the Company established regulations that are impartial and straightforward. The Company has been supporting activities to benefit society, community and the environment. The Company realise the importance of taking care of the environment and use of natural resources appropriately by implementing policies to achieve that aim. For our new project development for example, the Company has conducted an environmental survey, noise and dust pollution, before and during construction. The Company has also set a strategic plan for organising social activities regularly.

4.2 Corporate Governance Policy

Section 4 Disclosure and Transparency 4.1 Disclosure of Information

The Company shall accurately, completely, punctually, and transparently disclose significant information, which affects the decision of investors, and related parties of the Company such as financial information and non-financial information in accordance with the regulations prescribed by the Stock Exchange of Thailand and the Securities Exchange Commission through the Stock Exchange of Thailand, print media, an annual information disclosure report (form 56-1) and the annual report and the website of the Company. The Board of Directors is responsible for the preparation of financial statements and financial information, which is to be prepared in accordance with the certified accounting standard in Thailand and examined by Independent Directors using the appropriate accounting policies, regulatory compliance and careful preparation. Moreover, disclosed information must be sufficiently detailed in the notes to the financial statements. The Board of Directors has appointed the audit committee to be responsible for the quality of the annual report and the internal control system by providing an opinion on such matters in the report of audit committee. All of the above is incorporated in the Company’s annual report which includes a description of roles and responsibilities, a report from the Board of Directors on the financial report together, along with the auditor’s report. ANNUAL REPORT 2017

4.2 Relationship with Investors

The Board of Directors is aware of the importance of information disclosure, which affects investors and related persons’ decisions. Information that is disclosed is to be provided with accuracy, sufficiency, reliability, thoroughness and punctuality such as financial information, non-financial information of substance and reports, which shall be distributed through various means to investors, analysts, and interested persons such as on the Securities Exchange of Thailand website, and/or print media and the Company’s website at www.ucity.co.th. The Company has an investor relations department, which produces, communicates and distributes information for the benefit of shareholders and other stakeholders. In 2017, the Company accurately and adequately disclosed substantial information such as regular financial reports according to provisions stipulated by the Office of Securities and Exchange Committee (SEC), the Stock Exchange of Thailand (SET). Such information was distributed through official and publicly accessible channels of the SEC and SET. Persons interested in obtaining information about the Company, can access and download information from www.sec.or.th and www.set.or.th. Moreover, the Company has its own website at www.ucity.co.th to disclose various information including the financial information which was prepared under regular certified accounting standards and audited by a certified public auditor and the Annual Report of the Company, which includes directors’ and executive’s’ remuneration.

Section 5 Board Responsibilities 5.1 Leadership and Vision

The Board of Directors comprises of persons who have appropriate knowledge, ability and experience and having participated in important roles that include advising or establishing policies, visions, strategies, targets and directions of the Company’s business operation in cooperation with a chief executive in operational planning, either in the short-term or long-term, including setting financial policies and the overall picture of organisation. Persons shall have significant roles in governing, examining and assessing the result of the Company’s business performance and chief executives with the Company’s overall plan. The Board of Directors shall supervise executives operating the business according to the policies 94

4.2 Corporate Governance Policy

set forth, efficiently, effectively and in-line with laws, articles of association of the Company and Shareholders Meeting’s resolutions in a responsible, honest and prudent manner that is in accordance with good governance principles, in order to maximise benefit to the Company and establish confidence with shareholders. Moreover, the Company has established an internal control, internal audit assessment and management systems that assist the Board of Directors. The Board of Directors shall consider setting and separating roles, duties and responsibilities between the Board of Directors and executives by delegating operational authority to executives.

5.2 Business Ethics

The Company has produced and strictly follows business ethics standards and codes of conduct for all directors and employees to acknowledge, understand and implement, which are outlined below: (1) Adherence to the Law The Company shall adhere to the rule of law in conducting its business. It is also the duty of directors, executives and employees to know the company’s regulations. Relevant laws and regulations, which affect or are relevant during work, shall be followed. (2) Being Transparent The Company’s decisions and procedures must be transparent, free of corruption and disclosed to stakeholders. Simultaneously, laws, regulations and procedures relevant to the prevention of information leakage of trade secrets by any person or entity shall be applied. (3) Non-discrimination and Fair Treatment The Company is committed to treating its stakeholders with fairness and integrity in order to build good relationships during the course of business operations. The Company prohibits discrimination against anyone, the unfair treatment through arbitrary judgments or personal relationships. The Company promotes equal opportunity without discrimination of race, nationality, religion or gender.

(4) Focus on Customers The Company focuses on customer satisfaction and confidence in the course of developing real estate and providing efficient services. The Company is committed to meeting customers’ needs and maintaining long-term relationships. The Company provides training and personal development opportunities for employees to assist them in performing their duties, as well as continuously improving their skills to provide the best service to customers. (5) Being Socially Responsible The Company is committed to sustainable growth and being socially responsible. The Company supports and shall contribute to the preservation of natural resources and the environment, minimising or mitigating its environmental footprint. The Company believes that doing business in an environmentally and socially responsible manner is an important contributor to sustainable development of communities and countries that we operate in. (6) Anti-Corruption Policy The Company has an Anti-Corruption Policy for all personnel in the organisation, adherant to the laws of Thailand and is committed to combating corruption and bribery to promote business or personal interests. On 18 December 2017, the Thai CAC has approved the Company as a member of Thailand’s Private Sector Collective Action Coalition Against Corruption. In addition, the Company has added reinforced its Code of Business Ethics and Code of Conduct for Directors, management and staff to perform their duties with transparency, honesty and integrity according to good corporate governance practices.

The Company requires all personnel of the Company to acknowledge, understand and comply with anti-corruption and good corporate governance policies. Directors, executives and employees of the Company are prohibited from being party to or accepting any kind of corrupt practices, either directly or indirectly, for the benefit of the Company or personally. Unethical conduct includes: receiving

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gifts, raising money, soliciting donations and other benefits from people who have business with the Company. The Company regularly reviews the implementation of the Anti-Corruption Policy on an annual basis.

In addition, the Company has defined the main channels for reporting misconduct as follows: 1. Company website at http://www.ucity.co.th/ eng/index.php/corporate-governance/ 2. Comment box 3. E-mail of Audit Committee: Auditcommittee@ ucity.co.th 4. E-mail of Internal Audit Department: Internal Audit@ucity.co.th The Chairman of the Audit Committee and the head of the Internal Audit Department shall directly take appropriate action. Said whistleblower shall be kept confidential and protected. The Company has established mechanisms to protect whistleblowers against retribution or intimidation.

5.3 Structure of the Board of Directors

1) The Nomination & Remuneration Committee will select and consider persons with appropriate skill, experience or qualifications in various areas deemed necessary for the business of the Company. The Committee shall then submit their name for consideration to be appointed as directors at the Shareholders’ Meeting; 2) The Board of Directors consists of directors in the number stipulated in the Shareholders’ Meeting, which shall have no less than five (5) persons according to the Article of Association of the Company provided that 1 out of 3 persons, but no less than 3 persons are independent directors. Each director shall have the appropriate skill, experience or qualifications in various areas deemed necessary for the business of the Company and in compliance with the Public Limited Company Act, B.E. 2535 section 69 and other related law; 3) The Board of Directors shall appoint the Chairman; 4) The Board of Directors has determined that the proportion of non-executive directors to be no more than half of the Board of Directors. This will create a balance between supervision and administration. 5) The term of directorship shall be in accordance with ANNUAL REPORT 2017

the Company Charter. The directors who retire by rotation are eligible for re-election. 6) The Company has determined the following as the definition of an “Independent Director” based on the notification of The Capital Market Supervisory Board. (1) The person shall hold “not be more than 1%” of the total number of shares with voting rights of the Company, the parent company, subsidiaries, associated companies, major shareholders, an entity or person in control of the Company. (2) The person must not be serving or having served as a director who is has a relationship with the management, a staff member, an employee or a consultant with a monthly wage. The person must not be an individual with the authority to control the Company, the parent company, associates, affiliates, the major shareholders or an entity or person in control of the Company. The exception being in the case where he or she has retired from such a position for at least two years prior to the day on which he or she is appointed as an independent director. The ineligibility however does not apply in the case where an independent director has previously served as a public servant or a consultant of a government agency, which is a major shareholder of, or an entity with the authority to control the Company. (3) The person must not be related by blood or law as father, mother, spouse, sibling or child, spouse of son or daughter of executives, major shareholders, individuals with the authority to control the company or candidates for the position of an executive or an individual with the authority to control the Company or an associate. (4) The person must not have, or have had, a business relationship with the Company, the parent company, associates, affiliates, the major shareholders or the entities or persons with the authority to control the Company, in such a manner that may interfere with one’s independent discretion. The person also must be a current or former shareholder, an individual with the authority to control the Company, or a person who has a business relationship with the Company, the parent company, associates, affiliates, the major shareholder or the entities or persons with the authority to control the Company. The exception is in the case where he 96

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or she has retired from such a position for at least two years prior to the day on which he or she is appointed as an independent director. The business relationship as described in the above paragraph is inclusive of normal trading transactions for the conduct of business; lease or letting of immovable; transactions relating to assets or service; provision or acceptance of financial assistance through acceptance or provision of loans and guarantees, the use of assets as collateral and other such practices, which result in the Company or the party to the agreement being under the obligation to repay the other party for an amount of at least 3% of net tangible assets of the Company or at least THB 20 mn, whichever is the lower amount. The calculation of such debt obligation is to be in accordance with the related transaction value calculation method as per the Announcement of the Equity Market Committee on the Related Transaction Criteria with exceptions. The said debt obligation includes that which has materialised during the period of one year prior to the day of business relationship with the same individual. (5) The person must not be, or has been, an auditor of the Company, the parent company, associates, affiliates, the major shareholders or the entities or persons with the authority to control the company. The person must not be a significant shareholder, an individual with the authority to control or a partner of the audit office appointed as auditor the Company, the parent company, associates, affiliates, the major shareholders or entities or persons with the authority to control the Company. There is an exception in the case where he or she has retired from such a position for at least two years prior to the day on which he or she is appointed as an independent director. (6) The person must not be, or has been, a provider of a professional service including as a legal consultant or a financial consultant for which a fee of greater than THB 2mn is paid per year by the Company, the parent company, associates, affiliates, major shareholders or entities or persons with the authority to control the company. The person must not be a significant shareholder or an individual with the authority to control or a partner of such provider of professional services. There is an

exception in the case where he or she has retired from such a position for at least two years prior to the day on which he or she is appointed as an independent director. (7) The person must not be a director appointed to represent as director of the Company, a major shareholder or a shareholder who is related to a major shareholder. (8) The person must not be in a business of the same nature as, or with significant competition to the Company or an associate. The person must not be a significant partner in a partnership; a director who is involved with the management; a staff member; an employee; a consultant with a monthly wage; as well as a shareholder who holds more than 1% of shares with voting rights of another company which is engaged in a business of the same nature as and of significant competition to that of the Company or an associate. (9) The person must not have any other characteristic which is an obstacle to giving opinions freely on the operation of the Company. (10) After having been appointed as an independent director following qualifications specified under items (1) through (9) above, the independent director may be assigned by the Board of Directors to make decisions on the operation of the Company, the parent company, associates, affiliates, associates of the same level, major shareholders or entities with the authority to control the Company in the manner of a collective decision.

5.4 Authorities and Responsibilities of the Board of Directors

1) Acting in accordance with the law, objectives and articles of association of the Company, as well as resolutions of the shareholders’ meeting. 2) Shall not operate, be a partner or director in a corporation with the same nature or competes with the Company’s business. Unless the notified at the shareholders’ meeting prior to the appointment. 3) Must notify the Company without delay if there is a conflict of interest with the Company or has accumulated or disposed of shares in the Company. 4) The Board of Directors shall appoint the Chairman and its subcommittees. 5) The Board of Directors has the power to appoint the 4.2 Corporate Governance Policy

authorised directors of the Company with the Company’s seal. 6) Define the Company’s vision, mission, oversight, oversee the management of the Company to be in alignment with its vision and mission, monitor risk management as well as internal control systems of the Company by defining and clearly separating roles and responsibilities between the Board of Directors and management, and between the Board of Directors and shareholders. 7) To monitor the implementation of such strategy and business plan of the past fiscal year in order to determine the strategy, the business plan for the next fiscal year. 8) To ensure that there is no conflict of interest between the Company’s stakeholders. 9) To approve the acquisition or disposal of assets, investments in new businesses and any legal action, unless required by law to obtain a resolution from shareholders’ meeting. 10) To consider and/or comment on the connected transaction of the Company and subsidiaries to comply with relevant laws and regulations. 11) To direct the management to set up accounting, financial reporting and reliable audit systems as well as adequate internal controls. 12 To supervise management in establishing effective and efficient implementation and execution of instruments such as the accounting, financial reporting and audit systems. 13) To review the succession plan in order to determine the succession procedure for the positions of Chairman of the Executive Committee, Chief Executive Officer and other senior executive positions in the organisation. 14) To supervise the Company secretary who shall oversee the Board of Directors’ compliance with laws and relevant regulations.

5.5 Board of Directors Meeting

Board of Directors Meeting The Board of Directors shall hold no less than 4 meetings in a year. The meetings shall be scheduled in advance and notification sent to each director. The Company will deliver the notice to directors no less than seven days before the meeting date in order for directors to have sufficient time to prepare and study the agenda before the meeting. ANNUAL REPORT 2017

The Board of Directors’ Meeting shall be held at least once every quarter and may hold a special meeting in case of necessity, provided that at each Board of Directors’ Meeting, the chairman or the assigned person shall deliver a notice to directors no less than seven days before the meeting date except in case of emergency, a meeting notice can be provided via other methods and the required notice period reduced. Two or more directors may request the chairman to convene the Board of Directors’ meeting. In case of at least two directors requesting a meeting, the chairman shall fix the meeting within fourteen days from the date of receiving the request. To establish the meeting agenda, the chairman and managing director shall jointly consider and provide opportunities to directors to propose the agenda of the meeting. The procedure for arranging meetings of the Board of Directors shall be defined as follows: Preliminary Procedure before the Meeting: Each director is free to propose topics to the agenda of the Company’s Board of Directors Meeting by indicating the reason and necessity of such matters. The chairman of Board of Directors will consider the meeting agenda before preparing the meeting notice. Notice of the meeting together with supplementary documents of each agenda shall be delivered to each director prior to the meeting date for the purpose of providing each director enough time to study the information sufficiently before attending the meeting. In case any director requires additional information to support the consideration in each agenda, the Board of Directors can coordinate with the Company’s secretary to facilitate. Procedure during Meeting: During the Board of Directors’ Meeting, the chairman of the Board of Directors shall be responsible for the meeting procedure by organising the agenda in sequence, in accordance with the notice of the meeting and provide opportunities for directors to enquire and express their opinion to each topic independently and adequately. Procedure after the Meeting: Minutes of the Board of Directors’ meeting is prepared by the secretary of Board of Directors of the Company who is responsible for recording the Board of Directors’ meeting. The minutes shall be prepared accurately, cover substantive information rele98

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vant to the meeting such as the date, time, and place of the meeting, starting and adjourning time of the meeting, list of the name of directors who attended/didn’t attend, details of the enquiries and discussion of each agenda and the resolution of the Board of Directors for each agenda. The minutes of Board of Directors’ meeting and any document used during the meeting shall be kept by the secretary of the Company for future review. According to the articles of association of the Company, in the meeting of the Board of Directors, the presence of no less than one half of the total number of directors is required to constitute a quorum. In the case where the chairman of the board is not present at the meeting or is unable to perform his or her duty and there is a vicechairman, the vice-chairman present at the meeting shall preside over the meeting. The decisions at the meeting shall be by a majority of votes. Each director shall have one vote, but a director who has an interest in any matter shall not be entitled to vote on such matters. In the case of tie, the chairman of the meeting shall have an additional vote as a casting vote. Audit Committee’s Meeting The Company shall arrange the Audit Committee’s meeting at least once in every quarter and may arrange additional meetings if necessary by delivering notice of the meeting at least 7 days in advance together with relevant documents for each agenda prior to the date of the meeting. The Company shall record the minutes accurately and cover relevant substantive information. Nomination and Remuneration Committee’s Meeting The Company shall arrange the Nomination and Remuneration Committee’s meeting at least once a year and may arrange additional meetings if necessary by delivering an invitation letter to the meeting at least 7 days in advance together with relevant documents for each agenda prior to the date of the meeting. The Company shall record the minutes accurately and cover relevant substantive information.

5.6 Assessment of the Performance of the Board of Directors, Sub-Committees and the Executive Management

The Board of Directors conducts an assessment of its annual performance through both group evaluation and individual

evaluation and all group of subcommittees, namely the Audit Committee, the Nomination and Remuneration Committee, the Investment Committee and the Executive Committee to assess their performance and report the assessment result to the Board of Directors on an annual basis. The purpose is to review the performance, detect problems and obstacles in the business operation in the past year so as to improve. • Assessment of the Annual Performance of the Board of Directors (Group Evaluation): The Board of Directors uses an assessment criteria, which covers 6 assessment subjects: 1) Structure and Characteristics of the Board of Directors, 2) Roles, Duties and Responsibilities of the Board of Directors, 3) Board of Directors’ Meetings, 4) Performance of the Board of Directors’ Duties, 5) Relationship with the Management, and 6) Personal Development of Directors and Executives. After each director completes the Self-Assessment Form of the Board of Directors (Group Evaluation), the Company Secretary Office will calculate the scores and provide a summary of the scores of the group assessment of the Board of Directors to the Board of Directors’ meeting in order for them to jointly consider, find a solution to improve unsatisfactory scores, use as a guideline for their performance in the following year, including considering and reviewing the comments and suggestions raised by each director in the past year and whether such comments and suggestions have been applied or taken onboard. In 2017, the average score result was 96.68%, higher than 2016 at 86.43% 90 - 100% means excellent 76 - 89% means very good 66 - 75% means good 50 - 65% means fair and below 50% means improvement needed • Assessment of the Annual Performance of the Board of Directors (Individual Evaluation): The Board of Directors uses a number of assessment criteria grading the individual performance of directors in carrying out their fiduciary duty to manage the Company’s business operations in the best interest of the shareholders, attendance and preparedness at the Board of Directors’ meetings and the Shareholders’ Meetings, their contribution through 4.2 Corporate Governance Policy

opinions, suggestions, or other guidelines to Management, the independence of opinions, compliance with the principles of good corporate governance of listed companies, and attendance of training and personal development programs necessary for performing their functions as directors of listed companies. After each director has completed their Self-Assessment Form of the Board of Directors (Individual Evaluation), the Company Secretary Office would calculate the scores and provide a summary of the scores of each director to the Board of Directors’ meeting for acknowledgement. In 2017, the average score result was 4.9, higher than the score of 4.8 in 2016 5 means very good 4 means good 3 means fair 2 means lower than standard and 1 means improvement needed • Assessment of the Annual Performance of the Audit Committee: The Audit Committee used assessment criteria, which cover 6 assessment subjects: 1) Composition of the Audit Committee, 2) Independence of the Audit Committee Members, 3) Training and Source of Information, 4) Meetings, 5) Activities of the Audit Committee and 6) Relationship with the Chief of the Internal Audit Office, the Company’s Auditors, and Management. After each member of the Audit Committee has completed the Self-Assessment Form of the Audit Committee, the Internal Audit Office would calculate the scores and provide a summary of the scores to the Audit Committee’s meeting in order for them to jointly consider, find a solution to or improve unsatisfactory scores, use as a guideline for their performance in the following year, considering and reviewing the comments and suggestions raised by each member of the Audit Committee in the past year and whether such comments and suggestions have been taken onboard. Thereafter, the result of the assessment would be proposed for consideration at the Board of Directors’ meeting where the Board of Directors may provide comments or request the Audit Committee to improve in certain areas as deemed appropriate. In 2017, the average score result was 4.8, lower than the score of 5.0 in 2016 ANNUAL REPORT 2017

5 means very good 4 means good 3 means fair 2 means lower than standard and 1 means improvement needed • Assessment of the Annual Performance of the Nomination and Remuneration Committee, Investment Committee, and the Executive Committee: The assessment criteria were used covered 5 assessment subjects: 1) Structure and Qualification, 2) Performance of Duties, 3) Training/ Source of Information, 4) Meetings, and 5) Duties and Responsibilities. After the Self-Assessment Forms (Group Evaluation) of each subcommittee are completed, the Company Secretary Office would calculate the scores and provide a summary of the scores to the relevant subcommittee’s meeting in order for them to jointly consider, find a solution to improve unsatisfactory scores, use as a guideline for their performance in the following year, considering and reviewing the comments and suggestions raised by each member of the subcommittee in the past year whether such comments and suggestions have been taken onboard. Thereafter, the result of the assessment would be proposed for consideration at the Board of Directors’ meeting where the Board of Directors may provide comments or request relevant subcommittees to improve in certain areas as appropriate. In 2017, the average score result of the Nomination and Remuneration Committee was 92.77%, lower than the score 92.96% in 2016; the average score result of the Investment Committee was 87.45%, higher than the score of 86.27% in 2016; and the average score result of the Executive Committee was 94.07%, lower than the score of 96.67% in 2016 90 - 100% means excellent 76 - 89% means very good 66 - 75% means good 50 - 65% means fair and below 50% means improvement needed Assessment of the Annual Performance of the Chief Executive Officer: • The Nomination and Remuneration Committee used assessment criteria, which cover 3 assessment 100

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subjects: 1) Success of business and projects in the past fiscal year 2) Performance of Duties and 3) Personal Development of Chief Executive Officer. In 2017, the average score result was 89.26%. (As Chief Executive Officer held the position of 16 January 2017, this is the first assessment after appointment.) 90 - 100% means excellent 76 - 89% means very good 66 - 75% means good 50 - 65% means fair and below 50% means improvement needed

5.7 Proportion of Non-Executive Directors

The Board of Directors of the Company comprises of at least five directors who are elected by the meeting to perform the duty to manage the Company. At least half of the number of directors shall have residence in the Kingdom and shall be qualified according to the relevant laws. The Company has fixed the ratio of non-executive directors to executive directors at more than half of the number of directors to balance between controlling and managing. Three independent directors shall hold position of audit directors. Those directors shall meet the qualifications prescribed in the Notification of Stock Exchange of Thailand regarding the qualification and scope of work of the audit director. As of 31 December 2017, the Board of Directors Company comprises of 10 directors as follows: • Non-executive Director 7 persons (4 persons as independent directors) • Executive Director 3 persons

5.8 Separation of Roles

The chairman of the Company shall not be the same person as the managing director for the purpose of separating duties between establishing policy and managing day-to-day operations. The Company shall clearly fix the scope of duty of the management at each level by written announcement of the authority of each position, which shall be approved by the Board of Directors. For the purpose of cross examination, the Company has strictly separated the responsibility between approval authority, recording of accounting transactions and monitoring of assets.

The Company has clearly separated the roles and responsibility between directors of the Company and management. The directors of the Company shall perform the duty of establishing policies and supervising the operation of the management while the management shall perform the duty to manage the Company according to policies established.

5.9 Directors’ and Executives’ Remuneration

The remuneration of the Company’s directors is in accordance with the resolution approved by the shareholders’ meeting. The determination of annual remuneration of company directors shall be approved by the Nomination and Remuneration Committee and then presented to the Board of Directors’ meeting and Shareholders’ meeting for approval. The remuneration for directors and chief executive officers is disclosed in the company Annual Report and Annual Information Disclosure Form.

5.10 Sub-Committee

The Company has appointed sub-committees to assist in overseeing the Company’s business, to increase operational efficiency and establish confidence in the prudent operation of the Company. The Board of Directors has clearly approved the scope of duties and responsibilities of the sub-committees. There are 3 sub-committees which include the Company directors and 1 sub-committee, which include non-director members. Details as follows: 1. The Audit Committee comprises of at least 3 Independent directors having responsibilities stipulated by the charter of the Audit Committee. 2. The Executive Committee comprises 3 directors of the Company having the scope of authority and responsibilities outlined in accordance with the Board of Director’s appointment. 3. The Nomination and Remuneration Committee comprises of at least 3 directors, who are not the chairman of the Company and at least 2 of which are independent directors. The Chairman of the Nomination and Remuneration Committee must be an independent director who holds responsibilities in compliance with the charter of Nomination and Remuneration Committee. 4. Investment Committee comprises at least 3 members who can be director, executive or employee of the Company. At present the members 4.2 Corporate Governance Policy

of the committee consists of management of the Company, namely the Chief Financial Officer, Chief Legal Officer and Director of Finance. The Investment Committee’s duty and responsibility is to consider and make decisions on investments, as well as to determine the period of investment under the investment policy and principles approved by the Board of Directors’ Meeting of the Company. Details of the duties and responsibilities of the sub-committees are referred to under Structure of the Board of Directors.

5.11 Control and Internal Audit Systems

The Company has an effective internal control system at both executive and operating level. Outlined in the Company’s Procedure Manual and power of approval chart in order to monitor the internal control systems and regularly examine significant transactions. The audit committee shall review internal control systems once a year to ensure that it is at an effective level and propose to the Board of Directors for consideration an opinion or suggestions. Business risks are specified and assessed as well as risk protection or mitigation measures. Internal Auditors independently perform their duties by directly reporting to the Audit Committee. They are responsible for assisting the Audit Committee in examining the Company’s operation in order to help improve its effectiveness. Details of the Audit Committee’s opinion on the sufficiency of internal control systems of the Company are included in Annual Report and Annual Information Disclosure Form (Form 56-1).

5.12 Report of the Board of Director

The Board of Director has assigned the Audit Committee to supervise on financial information arrangement procedure and disclosure, internal control system, internal audit in order to consider the efficiency and appropriation of internal control system and financial statement producing to ensure the correct, adequate, reliable, and effective provided that the Company’s secretary shall maintain the minutes of the Board of Directors Meeting.

ANNUAL REPORT 2017

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5.13 Knowledge and Skill Development of Board of Directors and Management

The Company has a policy to promote and develop knowledge and understanding of the principals of Good Corporate Governance, roles, duties and responsibilities of directors of the Company by recommending and supporting all directors to attend training courses arranged by the Thai Institute of Directors Association (IOD), the Director Accreditation Program (DAP) and other relevant training programs arranged by other institutions. The Company encourages and supports executives of the Company to attend programs in related to areas of the business operation to foster skill and knowledge development.

5.14 Director’s Orientation

The Company has orientation program and encourages the executives of the Company to personally give orientations of the Company and its business to new directors as a means to transfer and strengthen knowledge and understanding and thereby maximise the Company’s and shareholders’ benefit. A handbook is distributed to new directors to understand the Company’s policies and provide relevant information such as capital and shareholder structure, business performance, laws and regulations. Details of the information contained in the handbook are given below: Handbook for Directors: 1. Pubic Company Limited Act B.E. 2535 2. Securities and Exchange Act B.E. 2535 3. Affidavit of the Company 4. Objects of the Company 5. Articles of Association 6. Guidelines for Good Corporate Governance 7. Directors’ Handbook for listed company of SEC Information for Directors: 1. Recommendation for ECID for executives of listed company 2. Connected transaction of Listed Company Book 3. Principles of Good Corporate Governance for listed company 2017 4. Company’s Profile 5. The latest Annual Report

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5.15 The Company’s Secretary

The Board of Directors recognises the importance of role and duty of the Company’s secretary. It has therefore assigned an appropriate permanent employee to perform the duty of the Company’s secretary, to facilitate the Company’s business management and to effectively comply with the principals of Good Corporate Governance. The main duties and responsibilities are as follows: 1) To perform duties with responsibility, care and honesty in accordance to legal and other relevant regulations 2) To provide advice on laws and regulations which the Board of Director must know and practice 3) To oversee and coordinate activities of the Board of Directors, Sub-committee and Shareholders’ meeting to ensure the resolution of the Board of Directors and Shareholders has been effectively complied 4) To produce and possess documents such as the Director Register, Notice of the Board of Directors Meeting, Minutes the Board of Director Meeting, Notice of Shareholders Meeting and Minutes the Shareholders Meeting 5) To oversee activities of the Board of Directors 6) To maintain an interest transaction report, reported by directors or executives. 7) To record changes in the holding of securities of directors or executives. 8) To ensure disclosure of information in accordance to the regulation of SET, SEC and other relevant r egulators as well as in accordance with the principles of good corporate governance. 9) To conduct any other affairs occasionally assigned by the Board of Directors.

SUB-COMMITTEES

The Board of Directors

1) The management structure of the Company comprise of the Board of Directors, the Audit Committee, the Nomination and Remuneration Committee, and the Executive Committee. Details as follows: a) The Board of Directors As of 31 December 2017, the Board of Directors consisted of 10 members as follows:

1. Mr. Keeree Kanjanapas1 Chairman 2. Mr. Rungson Sriworasat2 Independent Director, Chairman of Audit Committee and Nomination and Remuneration Committee 3. Mr. Chaiwat Atsawintarangkun1 Independent Director, Chairman of Nomination and Remuneration Committee and Audit Committee 4. Mr. Surajit Gongvatana1 Independent Director, Audit Committee and Nomination and Remuneration Committee 5. Mr. Plakorn Wanglee1 Independent Director, Audit Committee and Nomination and Remuneration Committee 6. Mr. Kavin Kanjanapas1 Director 7. Mr. Kong Chi Keung 1 Director 8. Mr. Burin Pusiri Director and Executive Officer 9. Mr. Weerawat Wattanatchariya Director and Executive Office 10. Mr. Voraphot Chanyakomol3 Director and Executive Office and Chief Financial Officer Mr. Sayam Siwarapornskul as the Company’s Secretary Note 1 On 7 July 2017, the Board of Directors appointed • Mr. Keeree Kanjanapas as the Company’s director to replace Mr. Sumet Sangsiri and Mr. Chaiwat Atsawintarangkun. Mr. Chaiwat Atsawintarangkun has resigned as Chairman of the board of directors of the Company but remains as Independent Director, Chairman of the nomination and remuneration committee and chairman of the audit committee and the board of directors’ meeting has appointed Mr. Keeree Kanjanapas as Chairman as replacement. • Mr. Surajit Gongvatana as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Manu Maniwatana. • Mr. Plakorn Wanglee as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Sakthip Krairiksh. • Mr. Kavin Kanjanapas as the Company’s director to replace Mr. Surayut Thavikulwat. • Mr. Kong Chi Keung as the Company’s director to replace Mr. Daniel Ross.

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3 2

On 19 December 2017, the Board of Directors appointed Mr. Rungson Sriworasat as the Company’s director, Chairman of the audit committee and the nomination and remuneration Committee to replace Mr. Thavisakdi Tanta-Nanta and Mr. Chaiwat Atsawintarangkun. Mr. Chaiwat Atsawintarangkun has resigned as Chairman of Audit Committee but remains as Independent Director, Chairman of the nomination and remuneration committee and the audit committee. The board of directors’ meeting 13/2017 on 19 December 2017 has resolved to appoint Mr. Rungson Sriworasat as the Chairman of audit committee. On 14 February 2018, the Board of Directors appointed Ms. Piyaporn Phanachet as the Company’s director to replace Mr. Voraphot Chanyakomol.

b) The Audit Committee As of 31 December 2017, the Audit Committee consisted of 4 members: 1. Mr. Rungson Sriworasat Chairman of the Audit Committee 2. Mr. Chaiwat Atsawintarangkun Audit Committee 3. Mr. Surajit Gongvatana Audit Committee 4. Mr. Plakorn Wanglee Audit Committee c) The Executive Committee As of 31 December 2017, the structure of the Executive Committee consists of 3 members as follows: 1. Mr. Burin Pusiri Executive Office 2. Mr. Weerawat Wattanatchariya Executive Office 3. Mr. Voraphot Chanyakomol Executive Office and Chief Financial Officer

On 14 February 2018, the Board of Directors appointed Ms. Piyaporn Phanachet as the Company’s director to replace Mr. Voraphot Chanyakomol.

d) The Nomination and Remuneration Committee As of 31 December 2017, the structure of the Nomination and Remuneration Committee consists of 4 members of Independent Director as follows: 1. Mr. Chaiwat Atsawintarangkun Chairman of Nomination and Remuneration Committee 2. Mr. Rungson Sriworasat Nomination and Remuneration Committee 3. Mr. Surajit Gongvatana Nomination and Remuneration Committee 4. Mr. Plakorn Wanglee Nomination and Remuneration Committee Details of the Audit Committee members who have knowledge and experience in auditing and reviewing the financial statement of the Company Mr.RungsonSriworasat(ChairmanoftheAuditCommittee) Mr. Rangsan Srivorasart experience includes holding the positions of Permanent Secretary of the Ministry of Finance, ANNUAL REPORT 2017

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Deputy Permanent Secretary for Finance and Director General of the Comptroller General’s Department. He also holds the position of Audit Committee member the following listed companies: Charoen Pokphand Foods Public Company Limited and Internal Audit Committee of the Bar Association. Mr. Chaiwat Atsawintarangkun Mr. Chaiwat Atsawintarangkun, is currently Director and member of the Audit Committee in the following listed companies: Krungthai Car Rent and Leasing Public Company Limited, Eastern Printing Company Limited, Merchant Partners Securities Public Company Limited, AQ Estate Public Company Limited, and Eastern Polymer Group Public Company Limited.

Oversight Business Operation of Subsidiaries and Joint Ventures

Overseeing Mechanism The Company has a policy of delegating representatives of the Company to be a director of the invested subsidiaries or joint venture companies. The management will nominate appropriate persons for the Board of Directors’ approval. The person who is appointed shall the duty to managing the business effectively and overseeing the subsidiaries or joint venture companies to ensure compliance with regulations concerning listed companies, including topics such as entering into connected transactions, acquisition and trading of assets and arranging information for the preparation of the Company’s consolidated financial statement. In considering important matters, it must be in line with the Company’s direction. The appointed person shall report on the business operation to the Board of Directors periodically in order for the Board of Directors to carry out its duties. Oversight of the Use of Inside Information The Company places significant emphasis on the prevention of the use of inside information for their own benefits. Therefore, the Company has established a policy to prohibit the Directors, the executives, and the employees from using inside information for the benefit of trading the securities and also forbid the disclosure of inside information as follow: 1. Directors, executives, and employees of the Company shall keep the Company’s secret and/or inside

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4.2 Corporate Governance Policy

information and shall not use the Company’s secret and/or inside information neither in disclosing nor utilizing for his/her own benefit or other person’s benefit directly or indirectly and neither receiving any benefit or not except that information has been disclosed to the public. 2. Directors, executives, and employees of the Company realize that the Company’s directors, executives, and employees who perceived financial information and/or substantial inside information of the Company which affects the change of securities price should avoid the Company’s securities trading before financial statement or such inside information are revealed to the public and shall not disclose such substantial information to other persons, provided that this shall include spouse and children under age of directors, executives, and employees of the Company as well. If directors, executives, and employee of the Company breached and/or disobeyed the Company’s policies regarding securities trading by utilizing inside information, such director, executives or employee shall be determined under discipline process from verbal warning, notice in letter, suspension, termination with severance payment under the law or dismiss without severance payment under the law provided depending on the seriousness of such misconduct. Moreover, the Company requested cooperation from the Company’s executives and employees not to trade securities within the period of 1 month before financial statement or other information, which shall affect securities trading prices, has been distributed to the public.

Agreement between the Company and other shareholders in management of subsidiaries and joint venture

The Company has joint investment with Hua-Hin Resources Company Limited, a subsidiary of Minor International Public Company Limited, for management and development of Anantara Services Suite Project. Presently, the joint venture company named “MHG NPARK DEVELOPMENT COMPANY LIMITED” has been established for developing and operating this project.

4.3

Selection, Appointment and Remuneration of Directors and the Chief Executive The Board of Directors is composed of no less than 5 members elected at the shareholders’ meeting to manage the Company of which at least half of all directors must reside in the Kingdom. At least one-third of the total number of directors must be an independent director, but shall have no less than 3 members that are legally qualified.

Appointment and Removal of Directors

The appointment and removal of directors of the Company are in accordance with the criteria and procedures stipulated in in law and the Company’s Articles of Association, which are summarised as follows: 1. In every Annual General Meeting of Shareholders, at least one-third (1/3) of directors shall retire by rotation. If the number of the directors who must retire by rotation is not divisible by three, the number of directors closest to one-third (1/3) of all directors shall retire. The directors who shall retire in the first and second years after the registration of the Company shall be drawn by a draw. In subsequent years, the director with the longest term held shall retire. The directors who retire by rotation are eligible for re-election; 2. Apart from retirement by rotation, the directors shall cease to hold office if the following conditions are met; • Death • Resignation • Lack of qualifications or possession of prohibited characteristics according to the Public Limited Companies Act B.E. 2535 (1992) • Removal by a resolution of the shareholders’ meeting • Removal by a court’s order 3. In case of a vacancy in the membership of the Board of Directors for reasons other than retirement by rotation, the Board of Directors shall pass a resolution by affirmative votes of not less than three-quarters (3/4) of the number of the directors remaining in office to elect a person who

4.3 Selection, Appointment and Remunerationof Directors and the Chief Executive

has the qualifications and possesses no prohibited characteristics under the Public Limited Companies Act B.E. 2535 (1992) (as amended) as a substitute director at the next meeting of the Board of Directors, unless the remaining term of office of the said director is less than two months; 4. The shareholders’ meeting may pass a resolution to remove any director from his/her office prior to the expiration of his/her term by affirmative votes of no less than three-quarters (3/4) of the number of the shareholders attending the meeting. The election of directors at the shareholders’ meeting shall be in accordance with the following rules and procedures: 1. Each shareholder shall have one vote for one share; 2. The election of the Board of Directors shall be conducted in full or by the number of Directors to be elected at that time. The vote can be cast personally or by a proxy on the shareholder’s behalf. The shareholder can vote for any one or more persons nominated; 3. The candidates who receive the most votes in descending order will be elected as the director(s) up until the number of the directors required to be elected has been fulfilled. In the event that the candidates have an equal number of votes and their election would exceed the number of directors required to be elected at the meeting, the Chairman of the meeting shall have a casting vote;

Nomination of New Directors

The Nomination and Remuneration Committee will select candidates for the position of director(s) of the Company from a recommendation by other directors, nomination by the shareholders of the Company, the services of external professional search firms, or a directors’ pool of various agencies, or other nomination procedures that the Nomination and Remuneration Committee considers as appropriate.

ANNUAL REPORT 2017

105

Qualifications of Directors

Must have knowledge, capability, skills, experience and be able to perform the director’s duty with due care. The nominated person shall possess additional qualifications in accordance with the laws or other relevant requirements;

Must possess qualifications that are suitable for the size and business strategy of the Company, enhance the diversity of the structure of the Board of Directors (Board Diversity), have appropriate qualifications and/or skills that are necessary and/ or are still lacking in the Board of Directors;

Must not have any prohibited characteristics under the public limited companies law, securities and exchange law, rules and regulations of the Company, relevant supervisory agencies and the Company’s good corporate governance policies. In the case of nominating an independent director, such nominated person(s) shall possess qualifications and meet criteria as specified in the Company’s Definition of Independent Director;

4. Must not engage in a business, or be a partner of a general partnership, or be a partner having unlimited liability in a limited partnership, or a director in another private or public company which conducts businesses of the same nature as and/or in competition with the Company’s businesses, except that a notification is made of that fact during the shareholders’ meeting before a resolution is passed to elect such person.

Qualifications of Independent Directors

In the case of nominating an independent director, the nominated person shall possess the qualifications specified in the Definition of Independent Director of the Company, according to the notifications of the Capital Market Supervisory Board as follows: 1. Holds no more than 1% of the total number of voting shares of the Company, subsidiaries, affiliates, major shareholders or controlling persons, including shares held by related persons; 2. Is not or was not an executive director, employee, staff member, or an adviser on the payroll of a 106

4.3 Selection, Appointment and Remunerationof Directors and the Chief Executive

controlling person of the Company, a subsidiary, an associated company, subsidiary-equivalent companies, major shareholders or controlling persons, unless such status has ended no less than two years before taking up the independent directorship. An exception is made for an independent director who used to be a government official or an adviser of a government agency that was a major shareholder or a controlling person of the Company; 3. Is not related by blood or legal registration as the father, mother, spouse, sibling, or child, including spouse of a child of an executive, major shareholder, controlling person, or nominated executive or controlling person of the Company or its subsidiaries; 4. Does not or did not have a business relationship with the Company, subsidiaries, associates, major shareholders or controlling persons that may interfere with his/her independent judgment; is not or was not a significant shareholder or controlling person of any person with a business relationship with the Company, subsidiary companies, associates, major shareholders or controlling persons, unless such a relationship has ended no less than two years before taking up the independent directorship. The term ‘business relationship’ under the first paragraph includes any normal business transaction, rental or lease of immovable property, transactions relating to assets or services or granting or receiving financial assistance through receiving or extending loans, guarantees, providing assets as collateral, and any other similar action, which results in the Company or the counterparty being subject to indebtedness payable to the other party of 3% or more of the net tangible assets of the Company or THB 20mn or more, whichever is lower; the amount of such indebtedness is calculated by the method for calculating the value of connected transactions under the relevant Notification of the Capital Market Supervisory Board, mutatis mutandis; however, the consideration of such indebtedness includes indebtedness incurred during one year before the date on which the business relationship with the person begins;

5. Is not or was not an auditor of the Company, subsidiaries, associates, major shareholders or controlling persons, and is not a significant shareholder, controlling person, or partner of an audit firm that employs auditors of the Company, subsidiary companies, associates, major shareholders or controlling persons, unless such a relationship has ended no less than two years before taking up the independent directorship; 6. Is not or was not a provider of any professional services including those as a legal adviser or financial adviser that receives more than THB 2mn per year in service fees from the Company, the subsidiaries, the associated companies, the same-level subsidiaries, major shareholders or controlling persons, and is not a significant shareholder, controlling person or partner of a provider of professional services, unless such relationship has ended no less than two years before taking up the independent directorship; 7. Is not a director appointed as a representative of director of the Company, major shareholder, or shareholders related to the major shareholders; 8.

Does not undertake similar businesses in competition with the Company or subsidiary companies; is not a significant partner in a partnership or is an executive director, employee, staff, adviser on the payroll of or holds more than 1% of the total number of voting shares of other companies which undertake similar businesses in competition with the Company or its subsidiary companies;

9. Does not bear any other characteristic, which could compromise his/her expression of free views about the Companyâ&#x20AC;&#x2122;s business operations; 10.

After being appointed as an independent director in accordance with (1) to (9), the independent director may be assigned by the Board of Directors to make decisions on the operations of the Company, headquarter, the subsidiaries, the associated companies, the same level subsidiary company, major shareholders or controlling persons of the Company, in the form of collective decision.

4.3 Selection, Appointment and Remunerationof Directors and the Chief Executive

Nominees must meet qualifications of independent directors. (Details under Clause Corporate Governance Policy, Chapter 5, Responsibilities of the Board of Directors, Clause 3 of the Board of Directors)

Qualifications of Independent Directors

1. Must be appointed by the Board of Directors to be a member of the Audit Committee; 2. Must be knowledgeable and experienced in performing his/her duty as a member of the Audit Committee where at least one member must be knowledgeable and experienced in reviewing the accountability of financial statements; 3.

Must be independent in accordance with the criteria of the Securities and Exchange Commission regarding to qualifications and duties of the Audit Committee. This is to ensure equitable treatment of shareholders and avoid any conflict of interest between the Company and its management, including major shareholders or other companies with the same management or major shareholders.

4. Must not be a director who has been assigned by the Board of Directors to make decisions in the business operations of Company, the parent company, the subsidiaries, the associated companies, the same level subsidiaries, the major shareholders, or the controlling person of the Company and must not be a director of the parent company, the subsidiaries, or the subsidiaries of the same level that are listed companies; 5. Must have full and proper qualifications in accordance with the laws and regulations of the government authorities.

Succession Planning

The Company has a policy to manage the company to grow and develop continuously. The Company has established a succession plan by setting processes and successors for the positions of Executive Directors, Chief Executive Officer and other top executives in the organisation to ensure that the Company has the knowledgeable and capable executives to succeed in the organisation. ANNUAL REPORT 2017

107

DIRECTORS AND MANAGEMENT REMUNERATION Financial Remuneration

(a) Compensation for the Board of Directors In 2017, the Company paid compensation for all directors in the total amount of THB 5,161,667 as follows: Name of Director

Annual compensation (THB)

Meeting allowance (THB)

Total Amount (THB)

Chairman

291,667

140,000

431,667

Independent Director, Audit Committee and Nomination and Remuneration Committee 3. Mr. Chaiwat Atsawintarangkun2 Independent Director, Chairman of Nomination and Remuneration Committee and Audit Committee 1 Independent Director, Audit Committee and 4. Mr. Surajit Gongvatana Nomination and Remuneration Committee 5. Mr. Manu Maniwatana1 Independent Director, Audit Committee and Nomination and Remuneration Committee 6. Mr. Burin Pusiri Director and Executive Officer

186,000

120,000

306,000

431,667

370,000

801,667

175,000

150,000

325,000

186,000

130,000

316,000

260,000

7. Mr. Weerawat Wattanatchariya Director and Executive Officer

240,000

8. Mr. Voraphot Chanyakomol

260,000

186,000 175,000 186,000 175,000 175,000

120,000 140,000 100,000 120,000 150,000

306,000 315,000 286,000 295,000 325,000

348,000

320,000

668,000

1. Mr. Keeree Kanjanapas1 2. Mr. Sumate Sangsiri1

9. Mr. Surayut Thavikulwat1 10. Mr. Kavin Kanjanapas1 11. Mr. Daniel Ross1 12. Mr. Kong Chi Keung1 13. Mr. Plakorn Wanglee1 14. Mr. Thavisakdi Tanta-Nanta2 15. Mr. Rungson Sriworasat2

Director and Executive Office and Chief Financial Officer Director Director Director Director Independent Director, Audit Committee and Nomination and Remuneration Committee Independent Director, Audit Committee and Nomination and Remuneration Committee Independent Director, Chairman of Audit Committee and Nomination and Remuneration Committee

Total amount

13,000 2,528,334

2,620,000

13,000 5,148,334

Note: 1 On 7 July 2017, the Board of Directors appointed • Mr. Keeree Kanjanapas as the Company’s director to replace Mr. Sumet Sangsiri and Mr. Chaiwat Atsawintarangkun. Mr. Chaiwat Atsawintarangkun has resigned as Chairman of the board of directors of the Company but remains as Independent Director, Chairman of the nomination and remuneration committee and chairman of the audit committee). The board of directors’ meeting has appointed Mr. Keeree Kanjanapas as the Chairman as replacement. • Mr. Surajit Gongvatana as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Manu Maniwatana. • Mr. Plakorn Wanglee as the Company’s director, member of the nomination and remuneration committee and the audit committee to replace Mr. Sakthip Krairiksh. • Mr. Kavin Kanjanapas as the Company’s director to replace Mr. Surayut Thavikulwat. • Mr. Kong Chi Keung as the Company’s director to replace Mr. Daniel Ross. 2 On 19 December 2017, the Board of Directors appointed Mr. Rungson Sriworasat as the Company’s director, Chairman of the audit committee and the nomination and remuneration Committee to replace Mr. Thavisakdi Tanta-Nanta and Mr. Chaiwat Atsawintarangkun. Mr. Chaiwat Atsawintarangkun has resigned as Chairman of Audit Committee but remains as Independent Director, Chairman of the nomination and remuneration committee and the audit committee). The board of directors’ meeting 13/2017 on 19 December 2017 has resolved to appoint Mr. Rungson Sriworasat as the Chairman of the audit committee. 3 On 14 February 2018, the Board of Directors appointed Ms. Piyaporn Phanachet as the Company’s director to replace Mr. Voraphot Chanyakomol.

108

4.3 Selection, Appointment and Remunerationof Directors and the Chief Executive

All independent directors do not hold any independent director position in the parent company, subsidiaries, or other subsidiary-equivalents. Therefore, independent directors do not receive any remuneration from the parent company, subsidiaries, or other subsidiary-equivalents. (b) Total Compensation and Number of the Executive Committee and Management Members As of 31 December 2017, salaries of the Executive Committee and Management, which include the first four persons down from president and every person at the same level of the fourth person equal to 7 persons1, amounted THB 31,823,564.

Non-financial and Other Remuneration

The Company provides health insurance or group insurance as well as annual health check-ups to the Companyâ&#x20AC;&#x2122;s management and employees.

4.3 Selection, Appointment and Remunerationof Directors and the Chief Executive

ANNUAL REPORT 2017

109

4.4

Profiles of Director and Executive BOARD OF BOARD OF DIRECTOR OF THE COMPANY As of 31 December 2017 Mr. Keeree Kanjanapas

Age 68

Appointment Date

7 July 2017

Education/ Qualification

• Top Executive Program (CMA 10) Year 2010, Capital Market Academy • Director Accreditation Program (DAP) Year 2011, Thai Institute of Directors

Percentage of Securities Holding (%)

-None-

Relationship with the Management

Father of Mr. Kavin Kanjanapas

Professional Experience for the last 5 years Period

Position Chairman

Age 62

• Chairman of Audit Committee • Nomination and Remuneration Committee • Independent Director

• Chairman

2017 - Present

Mr. Rungson Sriworasat

Companies’ name U City Pcl

Other Listed Companies in Thailand

2012-Present

Chairman of the Corporate Governance Committee

BTS Group Holdings Pcl

2012-Present

Chairman

VGI Global Media Pcl

2010-Present

Chairman of the Executive Committee

BTS Group Holdings Pcl

2006-Present

Chairman

BTS Group Holdings Pcl

1993-Present

Director

BTS Group Holdings Pcl

Other Companies

2018 - Present

Director

BTS Infrastructure Service Co,. Ltd

2017 - Present

Director

Northern Bangkok Monorail Co., Ltd.

2017 - Present

Director

Eastern Bangkok Monorail Co., Ltd.

2017 - Present

Director

BTS Infrastructure Development Co., Ltd.

2017 - Present

Director

RB Services Co., Ltd.

2015 - Present

Chairman of the Executive Committee

Bangkok Mass Transit System Plc.

2015 - Present

Director

BSS Holding Co., Ltd.

2010 - Present

Chairman

Bangkok Mass Transit System Plc.

2010 - Present

Director

Rabbit Rewards Co., Ltd.

2009 - Present

Director

Bangkok Smartcard System Co., Ltd.

1996 - Present

Director

Bangkok Mass Transit System Plc.

1994 - Present

Director

Tanayong International Limited

2009 - 2018

Director

BTS Land Co., Ltd.

1993 - 2018

Director

Pranakeeree Assets Co., Ltd.

1992 - 2018

Director

Tanayong Food and Beverage Co., Ltd.

1991 - 2018

Director

Thanacity Golf and Sports Club Co., Ltd.

1990 - 2018

Director

Siam Paging and Communication Co., Ltd.

1990 - 2018

Director

Tanayong Property Management Co., Ltd.

1988 - 2018

Director

Muangthong Assets Co., Ltd.

2009 - 2015

Director

Nuvo Line Agency Co., Ltd.

2010 - 2015

Director

Kamkoong Property Co., Ltd.

1996 - 2015

Chief Executive Officer

Bangkok Mass Transit System Plc.

Appointment Date

19 December 2017

Education/ Qualification

• Master of Business Administration, Prince of Songkla University • Bachelor of Accounting, Ramkhamhaeng University • Bachelor of Law, Sukhothai Thammathirat Open University • National Defence College Program, Thailand National Defense College • Senior Executive Program, Institute of Business and Industrial Development batch 1, 2015 • Senior Executive Program, Thailand Energy Academy batch 7, 2015 • Senior Executive Program, Bhumipalung Phandin batch 3, 2014 • Top Executive Program in Commerce and Trade batch 6, 2013 • The Program for Senior Executive on Criminal Justice Administration batch 2, 2011 • Inspector General Program, Office of the Civil Service Commission, 2010 • Certificate, Capital Market Academy, Thailand, 2010 • Graduate Diploma in Politics and Govern ance in Democratic Systems for Executive Course (Class 13), King Prajadhipok’s Institute, 2010 • Justice Top Executive Program, Justice College 2006 • Certificate in Senior Executive Officers, Office of the Civil Service Commission, 2004 • International Financial Fraud Training Program (IFFT) Internal Revenue Service (IRS), Georgia, USA • Executive Program for Senior Management 2006 Development Course for Organization Leaders under Globalization Current Fiscal Policy Research Institute Foundation, Kingdom of Thailand in cooperation with Kellogg School of Management and the Maxwell School of Syracuse University, Schulich School of Business York University • IOD Director Certification Program (DCP) 2006 • IOD Successful Formulation & Execution the Strategy (SFE) 2008 • IOD Finance for Non-Finance Director (FND) 2008 • IOD Refresher Course DCP (DCP re) 2008 • IOD Audit Committee Program (ACP) 2009 • IOD Director Accreditation Program (DAP) 2010 • IOD Role of the Chairman Program (RCP) 2012 • IOD Financial Institutions Governance Program (FGP) 2013 • IOD Anti-Corruption for Executive Program (ACEP) 2015

Note: On 7 July 2017, the Board of Directors appointed Mr. Keeree Kanjanapas as the Company’s director to replace Mr. Sumet Sangsiri and Mr. Chaiwat Atsawintarangkun has resigned as Chairman of the board of director of the Company (but remain Independent Director, Chairman of nomination and remuneration committee and chairman of audit committee) and the board of directors’ meeting has appointed Mr. Keeree Kanjanapas as the Chairman in replacement.

110

4.4 Profiles of Director and Executive

Percentage of Securities Holding (%)

-None-

Mr. Chaiwat Atsawintarangkun

Relationship with the Management

-None-

• Chairman of the Nomination and Remuneration Committee • Audit Committee • Independent Director

Professional Experience for the last 5 years Period 2017 - Present

Position

Companies’ name

U City Plc. Independent Director, Chairman of Audit Committee and Nomination and Remuneration Committee

Registered Company in Thailand

2017 - Present

Independent Director

WP Energy Plc.

2016 - Present

Independent Director, Audit Committee, and Corporate Governance Committee

Charoen Pokphand Foods Plc.

2015 - Present

Independent Director

Berli Jucker Pcl.

2013 - Present

Chairmen of the Board of TMB Bank Pcl. Director

2014 - 2015

Director and Chairman of PTT Pcl. Remuneration Committee

2013

Director

General Hospital Products Pcl.

2011 - 2012

Director

Eastern Water Resources Development and Management Pcl.

Other Companies 2017 - Present

University Board Council

North Chiang Mai University

2017 - Present

Chairman of the Counsellor

Thailand Swimming Association

2016 - Present

Director of University Development

Rambhai Barni Rajabhat University

Appointment Date

28 April 2005

Education/ Qualification

• Master of Education (Curriculum and Teaching Methodology), Beijing Languages and Cultural University • Master of Business Administration, Thammasat University • Thai Barrister-at-Law • Bachelor of Arts in Chinese Languages (Trade & Economics), Beijing Languages and Cultural University • L.L.B. Literature of Law, Ramkhamhaeng University • Bachelor of Science in Business Administration, Ramkhamhaeng University • Participated in the Directors Accreditation Program (DAP), Director Certification Program (DCP), Audit Committee Program (ACP) from Institute of Directors

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

Professional Experience for the last 5 years Period

Position

Companies’ name

2017 - Present Audit Committee,

U City Plc.

2014 - Present Chairman of Nomination and Remuneration Committee

U City Plc.

2015 - Present

Prime Minister Counsellor The Secretariat of the Cabinet

2015 - Present

Internal Audit Committee The Thai Bar

2015 - Present

Director

Institute of Research and Development for Public Enterprises

2005 - Present Independent Director

U City Plc.

2017

Chairman

U City Plc.

2014 - Present

University Board Council

Prince of Songkla University

2005 - 2017

U City Plc.

2015 - 2017

Member

The National Reform Steering Assembly

Chairman of Audit Committee

2013 - 2015

Permanent Secretary

Ministry of Finance

2013 - 2015

Chairman

Government Pension Fund

2013 - 2015

Chairman

Student Loan Fund

2013 - 2015

Chairman

Office of Insurance Commission (OIC)

2013 -2015

Chairman

Life Insurance Fund and General Insurance Fund

2013 - 2015

Member of the Board

Office of Securities and Exchange Commission (SEC)

2013 - 2015

Director

Judicial Officer Commission

2014

Director

National Credit Bureau Co., Ltd

2013 - 2014

Director

State Railway of Thailand (SRT)

2012 - 2014

Director

The Government Pharmaceutical Organization

2013

Director

Deposit Protection Agency

2012 - 2013

Deputy Permanent Secretary

Ministry of Finance

2011 - 2013

Director

Tourism Authority of Thailand

2005 - 2013

Director

Bank for Agriculture and Agricultural Co-Operatives

Note: On 19 December 2017, the Company appointed Mr. Rungson Sriworasat as the Company’s director, Chairman of audit committee and nomination and remuneration Committee to replace Mr. Thavisakdi Tanta-Nanta and Mr. Chaiwat Atsawintarangkun has resigned as Chairman of Audit Committee (but remain Independent Director, Chairman of nomination and remuneration committee and audit committee). The board of directors’ meeting 13/2017 on 19 December 2017 has resolved to appoint Mr. Rungson Sriworasat as the Chairman of audit committee.

4.4 Profiles of Director and Executive

Age 63

Registered Company in Thailand

2013 - Present Chairman of Audit Committee

Eastern Polymer Group Plc.

2005 - Present Audit Committee

Eastern Printing Plc.

2004 - Present Chairman of Audit Committee

Krungthai Car Rent and Lease Plc.

2003 - Present Chairman of Audit Committee

Syntec Construction plc.

2013 - 2016

Chairman of Audit Committee

AQ Estate Plc.

2012 - 2014

Chairman of Audit Committee

General Engineering Plc.

Other Companies

2013 - Present Director

Merchant Partners Asset Management Co., Ltd.

2007 - Present Chairman of Audit Committee

Merchant Partners Securities Plc.

2005 - Present Director

Boathouse Hua Hin Co., Ltd.

2004 - Present Director

Andaman Long Beach Resort Co., Ltd.

2003 - Present Director

Chiangmai Hot Spring Co., Ltd.

1997 - Present Director

Prospect Consulting Co., Ltd.

2003 - 2014

Krabi Southern Beach Co., Ltd.

Director

Note: On 19 December 2017, Mr. Chaiwat Atsawintarangkun resigned from the position of Chairman of Audit Committee (but remain Independent Director, Chairman of nomination and remuneration committee and audit committee). The Board of Directors has resolved to appoint Mr. Rungson Sriworasat as the Chairman of audit committee.

ANNUAL REPORT 2017

111

Mr. Thavisakdi Tanta-Nanta

Age 82

Mr. Plakorn Wanglee

Age 51

• Nomination and Remuneration Committee • Audit Committee • Independent Director

Appointment Date

28 April 2003

Appointment Date

7 July 2017

Education/ Qualification

• LL.B., Thammasat University • Participated in the Directors Accreditation Program (DAP) from Institute of Directors

Education/ Qualification

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

• MBA, University of San Francisco, USA • Bachelor of Accounting, Chulalongkorn University • Executive Program in Energy Science, Thailand Energy Academy (TEA) Class 8 • Corporate Governance for Director and Senior Executive of State Enterprises and Public Organization (PDI) Class 14 • Top Executive Program (CMA 10), Capital Market Academy • Director Certification Program (DCP) Year 2016, Thai Institute of Directors

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

Professional Experience for the last 5 years Period

Position

Companies’ name

2014 - 2017

Nomination and Remuneration Committee

U City Plc.

2003 - 2017

Independent Director and U City Plc. Audit Committee

Registered Company in Thailand

2005 - 2014

PAE (Thailand) Public Company Limited

Director

Other Companies

Professional Experience for the last 5 years Period

2017 - Present

Note: Mr. Thavisakdi Tanta-Nanta resigned from the position of Director and Executive Director of the Company, with effective from 19 December 2017

Mr. Surajit Gongvatana

Age 66

• Nomination and Remuneration Committee • Audit Committee • Independent Director Appointment Date

7 July 2017

Education/ Qualification

Taylor’s School of Commerce, Australia IOD Director Accreditation Program (DAP), 2018

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

Professional Experience for the last 5 years Period

Position

Companies’ name

U City Plc. 2017 - Present Independent Director, Audit Committee and Nomination and Remuneration Committee Registered Company in Thailand -None-

Other Companies

2008 - Present Chairman

MG Distribution 2008 Co., Ltd.

2005 - Present Chairman of the Board of Thai Organic Food Co., Ltd. Directors 2001 - Present Chairman

The Federation of Inter-Asian Philately

1986 - Present Director

Thai Capital Trading Co., Ltd.

1985 - Present Chairman of the Board of Kiatthai Knitting Factory Co., Ltd. Directors 1969 - Present Chairman of the Board of Hanfah Co., Ltd. Directors 2010 - 2014

Vice President

Fédération Internationale de Philatélie

Note: On 7 July 2017, the Board of Directors appointed Mr. Surajit Gongvatana as the Company’s director, member of the nomination and remuneration committee and member of the audit committee to replace Mr. Manu Maniwatana.

112

4.4 Profiles of Director and Executive

Position Independent Director, Audit Committee and Nomination and Remuneration Committee

Companies’ name U City Plc.

Registered Company in Thailand

2016 - Present

President and Chief Executive Officer Thailand and Representative Offices

Standard Chartered Bank (Thai) Public Co., Ltd.

2012 - 2016

Senior Executive Vice President, Corporate and Institution Customer

Standard Chartered Bank (Thai) Public Co., Ltd.

2014 - 2016

Independent Director and Audit Committee

The Expressway Authority of Thailand

2007 - 2014

Board of the Counsellor

Sasin Graduate Institute of Business Administration of Chulalongkorn University

Other Companies

Note: On 7 July 2017, the Board of Diectors appoint Mr. Plakorn Wanglee as the Company’s director, member of the nomination and remuneration committee and member of theaudit committee to replace Mr. Sakthip Krairiksh.

Mr. Manu Maniwatana

Age 73

• Nomination and Remuneration Committee • Audit Committee • Independent Director Appointment Date

15 December 2011

Education/ Qualification

• Ph.D. Columbia University, New York, USA. • Participated in the Directors Accreditation Program (DAP) from Institute of Directors

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

Professional Experience for the last 5 years Period 2014 - 2017 2011 - 2017

Position

Companies’ name

Nomination and Remuneration Committee

U City Plc.

Audit Committee

U City Plc.

Registered Company in Thailand

-None-

Other Companies -None-

Note: Mr. Manu Maniwatana resigned from the position of Director and Executive Director of the Company, with effective from 7 July 2017

Mr. Kavin Kanjanapas

Age 43

Director (Authorised Director)

2017 - Present

Director

Man Food Holding Co., Ltd.

2017 - Present

Director

BTS Assets Co., Ltd.

2017 - Present

Director

Kamkoong Property Co., Ltd.

2017 - Present

Director

Natural Park Ville Co., Ltd.

2017 - Present

Director

Natural Real Estate Co., Ltd.

2017 - Present

Director

Park Opera Co., Ltd.

2017 - Present

Director

Richee Property Management Co., Ltd.

2017 - Present

Director

Park Gourmet Co., Ltd.

2017 - Present

Director

Project Green Co., Ltd.

2018 - Present

Director

Unison One Co., Ltd.

2017 - Present

Director

RB Services Co., Ltd.

2017 - Present

Director

Keystone Management Co., Ltd.

2016 - Present

Director

KMJ 2016 Co., Ltd.

2016 - Present

Director

Nine Square Property Co., Ltd.

2015 - Present

Director

Travelodge (Thailand) Co., Ltd.

2015 - Present

Director

The Community One Co., Ltd.

2015 - Present

Director

The Community Two Co., Ltd.

2015 - Present

Director

Kingkaew Assets Co., Ltd.

2015 - Present

Director

Ratburana Property Co., Ltd.

2015 - Present

Director

Keystone Estate Co., Ltd.

2015 - Present

Director

BSS Holding Co., Ltd.

2015 - Present

Executive Director

Bangkok Smartcard System Co., Ltd.

2014 - Present

Director

Little Corner Co., Ltd.

2014 - Present

Director

Primary Kitchen Co., Ltd.

2014 - Present

Director

Mak 8 Co., Ltd.

2013 - Present

Director

Man Kitchen Co., Ltd.

2010 - Present

Director

Tanayong Hong Kong Limited

2010 - Present

Director

Absolute Hotel Service Hong Kong Limited

Appointment Date

7 July 2017

2010 - Present

Director

Rabbit Rewards Co., Ltd.

Education/ Qualification

• Stonyhurst College, United Kingdom • IOD Director Accreditation Program (DAP) Year 2007 • Top Executive Program (CMA 16) Year 2013, Capital Market Academy

2010 - Present

Director

BTS Land Co., Ltd.

2009 - Present

Director

Bangkok Smartcard System Co., Ltd.

2009 - Present

Director

Bangkok Mass Transit System Plc.

2009 - Present

Director

Point of View (POV) Media Group Co., Ltd.

2009 - Present

Director

VGI Advertising Media Co., Ltd

2008 - Present

Director

Thanacity Golf and Sports Club Co., Ltd.

2008 - Present

Director

Tanayong Property Management Co., Ltd.

2008 - Present

Director

Muangthong Assets Co., Ltd.

2008 - Present

Director

Pranakeeree Assets Co., Ltd.

2008 - Present

Director

Siam Paging and Communication Co., Ltd.

2008 - Present

Director

Tanayong Food and Beverage Co., Ltd.

2008 - Present

Director

Absolute Hotel Services Co., Ltd.

2015 - 2018

Director

Unicorn Enterprise Co., Ltd.

Percentage of Securities -NoneHolding (%) Relationship with the Management

Son of Mr. Keeree Kanjanapas

Professional Experience for the last 5 years Period 2017 - Present

Position Director

Registered Company in Thailand

Companies’ name U City Plc.

2015 - Present

Chief Executive Officer BTS Group Holdings Plc.

2010 - 2015

Director

VGI Advertising China Co., Ltd.

2012 - Present

Chairman of the VGI Global Media Plc. Executive Committee

2010 - 2015

Director

888 Media Co., Ltd.

2010 - 2015

Director

999 Media Co., Ltd.

2010 - Present

Executive Director

BTS Group Holdings Plc.

2010 - 2015

BTS Assets Co., Ltd.

2007 - Present

Director

BTS Group Holdings Plc.

Executive Chairman / Director

2003 - Present

Director

VGI Global Media Plc.

2010 - 2015

Director

Kamkoong Property Co., Ltd.

2009 - 2015

Managing Director

Bangkok Smartcard System Co., Ltd.

2009 - 2015

Director

Nuvo Line Agency Co., Ltd.

2009 - 2014

Director

Midas Global Media Co., Ltd.

Other Companies

2018 - Present

Director

BTS Infrastructure Services Co., Ltd.

2017 - Present

Director

Absolute Golf Services Co., Ltd.

2017 - Present

Director

Vienna House (Thailand) Co., Ltd.

2017 - Present

Director

Northern Bangkok Monorail Co., Ltd.

2017 - Present

Director

Eastern Bangkok Monorail Co., Ltd.

2017 - Present

Director

BTS Infrastructure Development Co., Ltd.

4.4 Profiles of Director and Executive

Note: On 7 July 2017, the Board of Directors appointed Mr. Kavin Kanjanapas as the Company’s director to replace Mr. Surayut Thavikulwat.

ANNUAL REPORT 2017

113

Mr. Kong Chi Keung

Age 43

Director (Authorised Director)

2016 - 2018

Director

BTS-Sansiri Holding Seventeen Co., Ltd.

2016 - 2018

Director

BTS-Sansiri Holding Sixteen Co., Ltd.

2016 - 2018

Director

BTS-Sansiri Holding Fifteen Co., Ltd.

2016 - 2018

Director

Unicorn Enterprise Co., Ltd.

Appointment Date

7 July 2017

Education/ Qualification

• MBA (Executive) Sasin Graduate • Institute of Business Administration of Chulalongkorn University • BA (Honorary Degree) Business Administrative, University of Greenwich, United Kingdom. • IOD Director Accreditation Program (DAP) Year 2007, Thai Institue of Directors

2016 - 2018

Director

BTS-Sansiri Holding Fourteen Co., Ltd.

2016 - 2018

Director

BTS-Sansiri Holding Twelve Co., Ltd.

2016 - 2018

Director

BTS-Sansiri Holding Eleven Co., Ltd.

2015 - 2018

Director

BTS-Sansiri Holding Nine Co., Ltd.

2015 - 2018

Director

BTS-Sansiri Holding Eight Co., Ltd.

2015 - 2018

Director

BTS-Sansiri Holding Seven Co., Ltd.

Percentage of Securities Holding (%)

-None-

2015 - 2018

Director

BTS-Sansiri Holding Six Co., Ltd.

2015 - 2018

Director

BTS-Sansiri Holding Five Co., Ltd.

Relationship with the Management

-None-

2015 - 2018

Director

BTS-Sansiri Holding Four Co., Ltd.

2015 - 2018

Director

BTS-Sansiri Holding Three Co., Ltd.

2015 - 2018

Director

BTS-Sansiri Holding Two Co., Ltd.

2015 - 2018

Director

BTS-Sansiri Holding One Co., Ltd.

2015 - 2018

Director

Nuvo Line Agency Co., Ltd.

2016 - 2017

Director

Keystone Estate Co., Ltd.

2010 - 2015

Director

VGI Advertising China Co., Ltd.

2010 - 2015

Director

BTS Assets Co., Ltd.

2010 - 2013

Director

Bangkok Mass Transit System Plc.

Professional Experience for the last 5 years Period 2017 - Present

Position Director

Companies’ name U City Plc.

Registered Company in Thailand

2015 - Present

Deputy Chief Executive Officer

BTS Group Holdings Plc.

2010 - Present

Executive Director

BTS Group Holdings Plc.

2010 - Present

Nomination and BTS Group Holdings Plc. Remuneration Committee

2007 - Present

Director

BTS Group Holdings Plc.

2000 - Present

Director

VGI Global Media Plc.

Other Companies

2017 - Present

Director

Northern Bangkok Monorail Co., Ltd.

2017 - Present

Director

Eastern Bangkok Monorail Co., Ltd.

2017 - Present

Director

BTS Assets Co., Ltd.

2017 - Present

Director

Kamkoong Property Co., Ltd.

2017 - Present

Director

Natural Park Ville Co., Ltd.

2017 - Present

Director

Natural Real Estate Co., Ltd.

2017 - Present

Director

Park Opera Co., Ltd.

2017 - Present

Director

Richee Property Management Co., Ltd.

2017 - Present

Director

Park Gourmet Co., Ltd.

2017 - Present

Director

Project Green Co., Ltd.

2016 - Present

Director

Rabbit Insurance Broker Co., Ltd.

2016 - Present

Director

RABBIT-LINE PAY Co., Ltd.

2016 - Present

Director

Nine Square Property Co., Ltd.

2016 - Present

Director

The Community Two Co., Ltd.

2016 - Present

Director

The Community One Co., Ltd.

2016 - Present

Director

Kingkaew Assets Co., Ltd.

2016 - Present

Director

Ratburana Property Co., Ltd.

2015 - Present

Director

ASK Direct Group Co., Ltd.

2015 - Present

Director

Rabbit Internet Co., Ltd.

2015 - Present

Member of Executive Committee

Bangkok Mass Transit System Plc.

2015 - Present

Director

ATS Rabbit Special Purpose Co., Ltd.

2014 - Present

Director

Bangkok Payment Solution Co., Ltd.

2012 - Present

Chief Financial Officer

Bangkok Mass Transit System Plc.

2010 - Present

Director

Tanayong Hong Kong Limited

2008 - Present

Director

Absolute Hotel Services Co., Ltd.

2017 - 2018

Director

BTS-Sansiri Holding Nineteen Co., Ltd.

2016 - 2018

Director

BTS-Sansiri Holding Twenty Co., Ltd.

2016 - 2018

Director

BTS-Sansiri Holding Eighteen Co., Ltd.

114

4.4 Profiles of Director and Executive

Note: On 7 July 2017, the Board of Directors has appointed Mr. Kong Chi Keung as the Company’s director in replacement of Mr. Daniel Ross.

Mr. Burin Pusiri

Age 64

Mr. Weerawat Wattanatchariya

Age 48

• Director (Authorised Director) • Executive Director

Appointment Date

28 April 2011

Appointment Date

29 November 2007

Education/ Qualification

• Bachelor of Law, Ramkhamhaeng University • Barrister, Institute of Legal Education of Bar Association • Participated in the Directors Accreditation Program (DAP) from Institute of Directors

Education/ Qualification

Percentage of Securities Holding (%)

-None-

• J.L. Kellogg Graduate School of Management, Northwestern University, US • Bachelor of Science, Electrical Engineering, Chulalongkorn University • Participated in the Directors Accreditation Program (DAP) from Institute of Directors -None-

Relationship with the Management

-None-

Percentage of Securities Holding (%) Relationship with the Management

-None-

Professional Experience for the last 5 years Period 2011 - Present

Position Executive Director

Companies’ name U City Plc.

Registered Company in Thailand

-None-

Other Companies

2014 - Present

Director

MHG Npark Development Co., Ltd.

2014 - Present

Director

Npark Global Holding Co., Ltd.

2014 - Present

Director

Boonbaramee Metta Propety Co., Ltd.

2014 - Present

Director

Pacific Hotel Chiangmai Co., Ltd.

2014 - Present

Director

Pacific Chiangmai Co., Ltd.

2013 - Present

Director

Khon Kane Buri Co., Ltd.

2011 - Present

Director

Natural Hotel Sukhumvit Co., Ltd.

2011 - Present

Director

Natural Hotel Panwa Co., Ltd.

1988 - Present

Legal Counsel

Akirah Co., Ltd.

1998 - Present

Legal Counsel

Chaiwat Contruction Co., Ltd.

2015 - 2017

Director

BTS Assets Co., Ltd.

2015 - 2017

Director

Kamkoong Property Co., Ltd.

2011 - 2017

Director

Natural Hotel Chaophaya Co., Ltd.

2011 - 2017

Director

Natural Park Ville Co., Ltd.

2011 - 2017

Director

Natural Real Estate Co., Ltd.

2011 - 2017

Director

Park Opera Co., Ltd.

2011 - 2017

Director

Natural Project Chaophaya Co., Ltd.

2011 - 2017

Director

Richee Property Management Co., Ltd.

2011 - 2017

Director

Park Gourmet Co., Ltd.

2013 - 2015

Director

K Park Co., Ltd.

4.4 Profiles of Director and Executive

Professional Experience for the last 5 years Period 2007 - Present

Position Executive Director

Companies’ name U City Plc.

Registered Company in Thailand

-None-

Other Companies

2014 - Present

Director

MHG Npark Development Co., Ltd.

2014 - Present

Director

Npark Global Holding Co., Ltd.

2014 - Present

Director

Boonbaramee Metta Propety Co., Ltd.

2014 - Present

Director

Pacific Hotel Chiangmai Co., Ltd.

2014 - Present

Director

Pacific Chiangmai Co., Ltd.

2013 - Present

Director

Khon Kane Buri Co., Ltd.

2007 - Present

Director

Natural Hotel Sukhumvit Co., Ltd.

2010 - Present

Director

Natural Hotel Panwa Co., Ltd.

2006 - Present

Director

Amphawa Restaurants Co., Ltd.

2007 - 2017

Director

Natural Hotel Chaophaya Co., Ltd.

2007 - 2017

Director

Natural Project Chaophaya Co., Ltd.

2007 - 2015

Director

Natural Park Ville Co., Ltd.

2007 - 2015

Director

Natural Real Estate Co., Ltd.

2007 - 2015

Director

Park Opera Co., Ltd.

2007 - 2015

Director

Richee Property Management Co., Ltd.

2007 - 2015

Director

Park Gourmet Co., Ltd.

ANNUAL REPORT 2017

115

Mr. Sumate Sangsiri

Age 56

Mr. Surayut Thavikulwat, CFA

Age 45

Director (Authorised Director)

Appointment Date

29 December 2014

Appointment Date

29 December 2014

Education/ Qualification

• LL.B. Ramkhamhaeng University, Class of 1983 • Advanced Certificate Program in Law, Class of 2007, Law Institute, Lawyers Council of Thailand from Institute of Directors • Participated in the Directors Accreditation Program (DAP) from Institute of Directors

Education/ Qualification

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

• MBA, Ross School of Business, University of Michigan – Ann Arbor, USA • BA, Chulalongkorn University • TLCA Executive Development Program (EDP 7) Year 2011, Thai Listed Companies Association • Bhumipalung Pandin Program (PPP 1) Year 2012, Chulalongkorn University • How to Develop a Risk Management Plan (HRP) Year 2014, Thai Institute of Directors • Director Certification Program (DCP) Year 2016, Thai Institute of Directors

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

Professional Experience for the last 5 years Period 2015 - 2017

Position Director

Companies’ name U City Plc.

Registered Company in Thailand

2016 - Present

Safari World Public Co., Ltd.

Chairman of Audit Committee

Other Companies

2002 - Present

Managing Director

S.P.K Legal and Business Co., Ltd.

2010 - Present

Judging Member

Case Conduction Training Center, Lawyers Council of Thailand Under the Royal Patronage

2003 - Present

Member of the Lawyers Conduct Committee

Lawyers Council of Thailand Under the Royal Patronage

Note: Mr. Sumate Sangsiri resigned from the position of the Company’s director with effect from 7 July 2017.

Professional Experience for the last 5 years Period 2015 - 2017

Position Director

Companies’ name U City Plc.

Registered Company in Thailand

2011 - Present

BTS Group Holdings Plc.

Chief Financial Officer

Other Companies

2014 - Present

President

Thai Investor Relations Club

2014 - Present

Board Member

Management Accounting Committee, Federation of Accounting Profession

2017 - 2018

Director

Keystone Management Co., Ltd.

2015 - 2017

Director

BTS Assets Co., Ltd.

2015 - 2017

Director

Kamkoong Property Co., Ltd.

2015 - 2017

Director

Natural Park Ville Co., Ltd.

2015 - 2017

Director

Natural Real Estate Co., Ltd.

2015 - 2017

Director

Park Opera Co., Ltd.

2015 - 2017

Director

Richee Property Management Co., Ltd.

2015 - 2017

Director

Park Gourmet Co., Ltd.

2013 - 2014

Director of Thai Investor Relations Club

Thai Listed Companies Association

Note: Mr. Surayut Thavikulwat resigned from the position of the Company’s director with effect from 7 July 2017.

116

4.4 Profiles of Director and Executive

Mr. Daniel Ross

Age 41

Director (Authorised Director) Appointment Date

29 December 2014

Education/ Qualification

• Bachelor of Science in Mathematics (First Class Honors) King’s College, University of London, United Kingdom. • Director Certification Program (DCP) Year 2009, Thai Institute of Directors • TLCA Executive Development Program (EDP 14) Year 2014, Thai Listed Companies Association

2015 - 2017

Director

Kamkoong Property Co., Ltd.

2015 - 2017

Director

Natural Park Ville Co., Ltd.

2015 - 2017

Director

Natural Real Estate Co., Ltd.

2015 - 2017

Director

Park Opera Co., Ltd.

2015 - 2017

Director

Richee Property Management Co., Ltd.

2015 - 2017

Director

Park Gourmet Co., Ltd.

2015 - 2017

Director

Project Green Co., Ltd.

2015 - 2017

Director

Prime Area 38 Co., Ltd.

Note: Mr. Daniel Ross resigned from the position of the Company Director with the effect from 7 July 2017.

Percentage of Securities Holding (%)

-None-

Mr. Voraphot Chanyakomol

Relationship with the Management

-None-

• Director (Authorised Director) • Executive Director • Chief Financial Officer

Professional Experience for the last 5 years Period 2015 - 2017

Position Director

Companies’ name U City Plc.

Registered Company in Thailand

2015-Present

Chief Investment Officer

BTS Group Holdings Plc.

2009-Present

Head of Investor Relations

BTS Group Holdings Plc.

2009 - 2015

Financial Director

BTS Group Holdings Plc.

Other Companies

2017 - Present

Director

Vienna House Capital GmbH

2017 - Present

Director

Keystone Management Co., Ltd.

2017 - Present

Director

Underwood Street Limited

2017 - Present

Director

VHE Cracow Sp. z o.o.

2017 - Present

Director

Recoop Tour a.s.

2017 - Present

Director

UBX Plzen s.r.o.

2017 - Present

Director

2017 - Present

Director

2017 - Present

Age 50

Appointment Date

10 May 2016

Education/ Qualification

• MBA, Major of Finance, University of Dallas, Texas, USA • BE, Major in Metallurgical Engineering, Chulalongkorn University • Director Certification Program (DCP) Year 2016, Thai Institute of Directors • Chief Financial Officer Certificate Program (19)

Percentage of Securities Holding (%)

Ordinary Share: (U) - 125,721,200 shares (0.022%) Warrant: U-W1 - 200,000,000 units

Relationship with the Management

-None-

Professional Experience for the last 5 years Period

Position

Companies’ name

2016 - 2018

Director and Executive U City Plc. Director

UBX Plzen Real Estate s.r.o.

2015 - 2018

Chief Financial Officer U City Plc.

Amber Baltic Sp z. o.o.

Registered Company in Thailand

Director

UBX Katowice Sp. z o.o.

2013 – 2015

2017 - Present

Director

Hotel Management Angelo Katowice Sp. z o.o.

Other Companies

2017 - Present

Director

UBX Krakow Sp. z o.o.

2015 - 2018

Director

BTS Assets Co., Ltd.

2017 - Present

Director

Comtel Focus S.A.

2015 - 2018

Director

Kamkoong Property Co., Ltd.

2017 - Present

Director

Vienna International Hotel Management AG

2015 - 2018

Director

Natural Park Ville Co., Ltd.

2017 - Present

Director

Vienna House Cluster Deutschland GmbH

2015 - 2018

Director

Natural Real Estate Co., Ltd.

2017 - Present

Director

VHE Darmstadt Hotelbetriebs GmbH

2015 - 2018

Director

Park Opera Co., Ltd.

2017 - Present

Director

Andel’s Berlin Hotelbetriebs GmbH

2015 - 2018

Director

Richee Property Management Co., Ltd.

2017 - Present

Director

VHE Berlin Hotelbetriebs GmbH

2015 - 2018

Director

Park Gourmet Co., Ltd.

2017 - Present

Director

VH Dresden Hotelbetriebs GmbH

2015 - 2018

Director

Project Green Co., Ltd.

2017 - Present

Director

VHE Leipzig Hotelbetriebs GmbH

2015 - 2018

Director

Prime Area 38 Co., Ltd.

2017 - Present

Director

VH Kronberg Hotelbetriebs GmbH

2015 - 2018

Director

Khon Kane Buri Co., Ltd.

2017 - Present

Director

Vienna International Asset GmbH

2008 - 2013

Associate Director

Opt Asia Capital Company Limited

2017 - Present

Director

VH Warsaw Hotel Sp. z o.o.

2017 - Present

Director

Vienna House Real Estate GmbH

2016 - Present

Director

Travelodge (Thailand) Co., Ltd.

2016 - Present

Director

Absolute Hotel Services Co., Ltd.

2016 - Present

Director

Thirty Three Gracechurch 2 Limited

2016 - Present

Director

Thirty Three Gracechurch 1 Limited

2016 - Present

Director

Absolute Hotel Services Hong Kong Limited

2016 - Present

Director

Absolute Hotel Services Indochina Limited

2015 - 2017

Director

BTS Assets Co., Ltd.

4.4 Profiles of Director and Executive

Chief Financial Officer We Retails Public Company Limited

Note: Mr. Voraphot Chanyakomol has resigned from the position of Director and Executive Director of the Company, with effective from 14 February 2018 and his resignation from the position of Chief Financial Officer with the effect from 15 February 2018.

ANNUAL REPORT 2017

117

Ms. Piyaporn Phanachet

Age 50

Chief Executive Officer Appointment Date

16 January 2017

Education/ Qualification

• Master of Science in Real Estate Development, Massachusetts Institute of Technology (MIT), USA • Master of Business Administration (MBA), University of New Hampshire, USA • Bachelor of Accounting, Chulalongkorn University • Leadership Communication 2016 Certificate, Berkeley Executive Coaching Institute, UC Berkeley • IOD Director Certification Program (DCP) Year 2017

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

Professional Experience for the last 5 years Period

Position

Companies’ name

Present

Director and Executive Director

U City Plc.

2017 - Present

Chief Executive Officer

U City Plc.

Registered Company in Thailand

-None-

Other Companies

2018 - Present

Director

Khon Kane Buri Co., Ltd.

2018 - Present

Director

Unison One Co., Ltd.

2018 - Present

Director

Muangthong Assets Co., Ltd.

2018 - Present

Director

Pranakeeree Assets Co., Ltd.

2018 - Present

Director

Siam Paging and Communication Co., Ltd.

2018 - Present

Director

Tanayong Food and Beverage Co., Ltd.

2018 - Present

Director

BTS Land Co., Ltd.

2018 - Present

Director

Nine Square Property Co., Ltd.

2018 - Present

Director

Mak 8 Co., Ltd.

2018 - Present

Director

Tanayong Property Management Co., Ltd.

2018 - Present

Director

Ratburana Property Co., Ltd.

2018 - Present

Director

Thanacity Golf and Sports Club Co., Ltd.

2018 - Present

Director

Absolute Hotel Services Co., Ltd.

2018 - Present

Director

Keystone Estate Co., Ltd.

2018 - Present

Director

Keystone Management Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding One Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Two Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Three Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Four Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Five Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Six Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Seven Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Eight Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Nine Co., Ltd.

2018 - Present

Director

Nuvo Line Agency Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Eleven Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twelve Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Fourteen Co., Ltd.

118

4.4 Profiles of Director and Executive

2018 - Present

Director

BTS-Sansiri Holding FifteenCo., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Sixteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Seventeen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Eighteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Nineteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twenty Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twenty One Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twenty Two Co., Ltd.

2017 - Present

Chairwoman of Supervisory Board

Vienna International Hotel Management AG

2017 - Present

Chairwoman of Supervisory Board

Recoop Tour a.s.

2017 - Present

Director

BTS Assets Co., Ltd.

2017 - Present

Director

Kamkoong Property Co., Ltd.

2017 - Present

Director

Natural Park Ville Co., Ltd.

2017 - Present

Director

Natural Real Estate Co., Ltd.

2017 - Present

Director

Park Opera Co., Ltd.

2017 - Present

Director

Richee Property Management Co., Ltd.

2017 - Present

Director

Park Gourmet Co., Ltd.

2017 - Present

Director

Project Green Co., Ltd.

2017 - Present

Director

Prime Area 38 Co., Ltd.

2551 - Present

Vice Chairman of CPMG

Thailand Management Association

2010 - 2017

Managing Director of Asset

Soneva (Former Six Sense Resort and Spa)

2013 - 2016

Consultant

Property Management Office of Chulalongkorn University

Note: On 14 February 2018, the Board of Directors has appointed Ms. Piyaporn Phanachet as the Company’s director in replacement of Mr. Voraphot Chanyakomol.

MANAGEMENT Mr. Veerapong Rodjanawarodom

Age 45

Chief Operation Officer

Ms. Soraya Satiangoset

Age 42

Chief Financial Officer

Appointment Date

1 July 2016

Appointment Date

1 March 2018

Education/ Qualification

• Master of Business Administration (MBA), Thammasat University • Bachelor of Engineer, King Mongkut’s Institute of Technology Ladkrabang

Education/ Qualification

• Master of Business Administration (MBA), Chulalongkorn University • Bachelor of Accounting, Thammasat University

Percentage of Securities Holding (%)

-None-

Percentage of Securities Holding (%)

-None-

Relationship with the Management

-None-

Relationship with the Management

-None-

Professional Experience for the last 5 years Period 2016 - Present

Position Chief Operation Officer

Companies’ name U City Plc.

Registered Company in Thailand

- NO -

Other Companies

2018 - Present

Director

Muangthong Assets Co., Ltd.

2018 - Present

Director

Mak 8 Co., Ltd.

2018 - Present

Director

Nine Square Property Co., Ltd.

2018 - Present

Director

BTS Assets Co., Ltd.

2006 - 2016

Director

TTC Land Company Limited

Professional Experience for the last 5 years Period 2018 - Present

Position Chief Financial Officer

Companies’ name U City Plc.

Registered Company in Thailand

-NO-

Other Companies

2017 - 2018

Senior Financial Director

Fabrinet Co., Ltd.

2005 - 2017

Senior Analyst, Strategic and Business Development Group / Cash Management Manager, Financial and Accounting Group / Manager – Debt and Equity Markets, Financial and Accounting Group

PTT Exploration and Production Plc.

On March 1, 2018, the Company appointed Ms. Soraya Satiangoset as Chief Financial Officer to replacet Mr. Voraphot Chanyakomol.

4.4 Profiles of Director and Executive

ANNUAL REPORT 2017

119

Mr. Sayam Siwarapornskul

Age 40

• Chief Legal Officer • Company Secretary Appointment Date

11 January 2016

Education/ Qualification

• Master of Laws (LL.M), Duke University, USA • Bachelor of Laws, Chulalongkorn University • IOD Director Certification Program (DCP) Year 2016 • TLCA Executive Development Program 2013, Thai Listed Companies Association

2018 - Present

Director

Kamkoong Property Co., Ltd.

2018 - Present

Director

Natural Park Ville Co., Ltd.

2018 - Present

Director

Natural Real Estate Co., Ltd.

2018 - Present

Director

Park Opera Co., Ltd.

2018 - Present

Director

Richee Property Management Co., Ltd.

2018 - Present

Director

Park Gourmet Co., Ltd.

2017 - Present

Director

BTS Assets Co., Ltd.

2017 - Present

Member of Supervisory Board

Vienna International Hotel Management AG

2015 - Present

Director

Project Green Co., Ltd.

Director

Prime Area 38 Co., Ltd.

Percentage of Securities Holding (%)

-None-

2015 - Present 2017

Director

Vienna House Capital GmbH

Relationship with the Management

-None-

2011 - 2015

Legal Director

BTS Assets Co., Ltd.

Professional Experience for the last 5 years Period

Position

Companies’ name

Ms. Nuttapun

Giramethakul

Age 52

• Management • Vice President, Accounting Department

2016 - Present

Company Secretary

U City Plc.

2016 - Present

Chief Legal Officer

U City Plc.

Appointment Date

1 January 2016

Registered Company in Thailand

-None-

Education/ Qualification

• Master of Accounting, Thammasat University • Bachelor of Accounting, Chulalongkorn University

Percentage of Securities Holding (%)

Ordinary Share: (U) 2,000 shares (0.000%)

Relationship with the Management

-None-

Other Companies

2018 - Present

Director

Unison One Co., Ltd.

2018 - Present

Director

Muangthong Assets Co., Ltd.

2018 - Present

Director

Pranakeeree Assets Co., Ltd.

2018 - Present

Director

Siam Paging and Communication Co., Ltd.

2018 - Present

Director

Tanayong Food and Beverage Co., Ltd.

2018 - Present

Director

BTS Land Co., Ltd.

2018 - Present

Director

Nine Square Property Co., Ltd.

2018 - Present

Director

Mak 8 Co., Ltd.

2018 - Present

Director

Tanayong Property Management Co., Ltd.

2018 - Present

Director

Ratburana Property Co., Ltd.

2018 - Present

Director

Thanacity Golf and Sports Club Co., Ltd.

2018 - Present

Director

Keystone Management Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding One Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Two Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Three Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Four Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Five Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Six Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Seven Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Eight Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Nine Co., Ltd.

2018 - Present

Director

Nuvo Line Agency Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Eleven Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twelve Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Fourteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding fifteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Sixteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Seventeen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Eighteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Nineteen Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twenty Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twenty One Co., Ltd.

2018 - Present

Director

BTS-Sansiri Holding Twenty Two Co., Ltd.

120

4.4 Profiles of Director and Executive

Professional Experience for the last 5 years Period

Position

Companies’ name

2015 - Present

Vice President, Accounting Department

U City Plc.

2001 - 2015

Senior Vice President

U City Plc.

Registered Company in Thailand

-None-

Other Companies -None-

4.5

Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies 1

Natural Hotel Panwa Co., Ltd

Natural Park Ville Co., Ltd

Natural Real Estate Co., Ltd

Park Opera Co., Ltd

Richee Property Management Co., Ltd

Park Gourmet Co., Ltd

Khon Kaen Buri Co., Ltd

NPARK Global Holding Co., Ltd.

Boonbaramee Metta Property Co., Ltd

Pacific Hotel Chiangmai Co., Ltd

Pacific Chiangmai Co., Ltd

BTS Assets Co., Ltd

Kamkoong Property Co., Ltd

Project Green Co., Ltd.

Lombard Estate Holdings Limited

Thirty Three Gracechurch 1 Limited

Thirty Three Gracechurch 2 Limited

Name of Directors / Managements

Subsidiary Company

Natural Hotel Sukhumvit Co., Ltd

Name of Subsidiary Company

1. Mr. Burin

Pusiri

2. Mr. Weerawat

Wattanatchariya

3. Mr. Kavin

Kanjanapas

4. Mr. Kong

Chi Keung

5. Ms. Piyaporn

Phanachet /1

Mr. Voraphot

Chanyakomol /2

Mr. Veerapong

Rodjanawarodom /3

Mr. Sayam

Siwarapornskul /4

Mr. Daniel

Ross

Mankongcharoen

10. Mrs. Angsana 11. Mr. Kom

Panomreongsak

12. Mr. Lai

Kwok Kwong

13. Ms. Jacqueline

Noble

14. Mrs. Helen

Maria Hendy

15. Mr. Philip

Lewis Taylor

16. Mr. Christian

Guy

17. Mr. Paul

Michel Butel

18. Mr. Shane

Michael Hollywood

19. Mrs. Catherine

Patricia Prendergast

20. Mrs. Claire

Louis Le Brocq

21. Mr. Grant

James Barbour

22. Mr. Richard

Mark Joynt

23. Mr. Lee

Colin Anderson

24. Mr. Benjamin

William Whitchurch

25. Mr. John

Patrick Joseph Conway

/ /

26. Mrs. Lauren

Michelle Salkeld

27. Mr. Robert

David Moore

28.

Burgess

Mr. Simon

29.

Mr. Nicolas

Blair Cawley

30.

Mrs. Samantha

Anne Symons

31.

Mrs. Prapa

Pearce

32.

Ms. Amy

Claire Collins

33.

Ms. Ariel

Samantha Pinel

34.

Mr. Nicolas

James Terry

35.

Mr. Michael

Henry Richardson

36.

Mr. Ashley

Marcus Vardon

37.

Mr. Philip

Andrew Bolton

38.

Mr. Nicolas

John Cushion

39.

Mr. Rupert

Simoner

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

ANNUAL REPORT 2017

121

Natural Hotel Panwa Co., Ltd

Natural Park Ville Co., Ltd

Natural Real Estate Co., Ltd

Park Opera Co., Ltd

Richee Property Management Co., Ltd

Park Gourmet Co., Ltd

Khon Kaen Buri Co., Ltd

NPARK Global Holding Co., Ltd.

Boonbaramee Metta Property Co., Ltd

Pacific Hotel Chiangmai Co., Ltd

Pacific Chiangmai Co., Ltd

BTS Assets Co., Ltd

Kamkoong Property Co., Ltd

Project Green Co., Ltd.

Lombard Estate Holdings Limited

Thirty Three Gracechurch 1 Limited

Thirty Three Gracechurch 2 Limited

Name of Directors / Managements

Subsidiary Company 1 Natural Hotel Sukhumvit Co., Ltd

Name of Subsidiary Company

40.

Mr. Marten

Ijkema

41.

Ms. Johanna

Weichselbaumer

42.

Mr. Manuel

Simon

43.

Ms. Monika

Kowalska

44.

Mr. Ralf

Alsdorf

45.

Ms. Anna

Olszynska

46.

Mr. Tomasz

Piorkowski

47.

Mr. Marek

Palenik

48.

Ms. Ewa

Nowakowska

49.

Ms. Dorit

von der Osten

50.

Ms. Angelika

Gaudmann

51.

Mr. DI Paul

Bruck

52.

Mr. Birgit

Trapp

53.

Mr. Heinz

Gunter Hohne

54.

Mr. Ralf

Paul Noll

55.

Mr. Oliver

Rudnik

56.

Mr. Jonathan

Maxwell Wigley

57.

Mr. John

Mark Westoby

122

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

INFORMATION ON THE POSITION OF DIRECTORS, MANAGEMENTS AND ORTHORIZED PERSONS IN SUBSIDIARIES ASSOCIATED AND RELATED COMPANIES 20

Vienna House Capital GmbH

Underwood Street Limited

VHE Cracow Sp. z o.o.5

Recoop Tour a.s.

UBX Plzen s.r.o.

UBX Plzen Real Estate s.r.o.

Amber Baltic Sp. z o.o.

Andels Lodz Sp. z o.o.

VHE Cracow Sp. z o.o. SKA6

UBX Katowice Sp. z o.o.

Hotel Management Angelo Katowice Sp. z o.o.

UBX Krakow Sp. z o.o.

Comtel Focus S.A.

Vienna International Hotelmanagement AG

KDAG Data GmbH

VI Europäische Franchise GmbH

Vienna House Cluster Deutschland GmbH7

Subsidiary Company 19

LH Unit Trust

Name of Subsidiary Company

Name of Directors / Managements

Mr. Burin

Pusiri

Mr. Weerawat

Wattanatchariya

Mr. Kavin

Kanjanapas

Mr. Kong

Chi Keung

Ms. Piyaporn

Phanachet /1

///

Mr. Voraphot

Chanyakomol

Mr. Veerapong

Rodjanawarodom /3

Mr. Sayam

Siwarapornskul /4

Mr. Daniel

Ross

Mankongcharoen

10. Mrs. Angsana

11. Mr. Kom

Panomreongsak

12. Mr. Lai

Kwok Kwong

13. Ms. Jacqueline

Noble

14. Mrs. Helen

Maria Hendy

15. Mr. Philip

Lewis Taylor

16. Mr. Christian

Guy

17. Mr. Paul

Michel Butel

18. Mr. Shane

Michael Hollywood

19. Mrs. Catherine

Patricia Prendergast

20. Mrs. Claire

Louis Le Brocq

21. Mr. Grant

James Barbour

22. Mr. Richard

Mark Joynt

23. Mr. Lee

Colin Anderson

24. Mr. Benjamin

William Whitchurch

25. Mr. John

Patrick Joseph Conway

26. Mrs. Lauren

Michelle Salkeld

27. Mr. Robert

David Moore

28. Mr. Simon

Burgess

29. Mr. Nicolas

Blair Cawley

30. Mrs. Samantha

Anne Symons

31. Mrs. Prapa

Pearce

32. Ms. Amy

Claire Collins

33. Ms. Ariel

Samantha Pinel

34. Mr. Nicolas

James Terry

35. Mr. Michael

Henry Richardson

36. Mr. Ashley

Marcus Vardon

37. Mr. Philip

Andrew Bolton

38. Mr. Nicolas

John Cushion

39. Mr. Rupert

Simoner

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

ANNUAL REPORT 2017

123

Vienna House Capital GmbH

Underwood Street Limited

VHE Cracow Sp. z o.o.5

Recoop Tour a.s.

UBX Plzen s.r.o.

UBX Plzen Real Estate s.r.o.

Amber Baltic Sp. z o.o.

Andels Lodz Sp. z o.o.

VHE Cracow Sp. z o.o. SKA6

UBX Katowice Sp. z o.o.

Hotel Management Angelo Katowice Sp. z o.o.

UBX Krakow Sp. z o.o.

Comtel Focus S.A.

Vienna International Hotelmanagement AG

KDAG Data GmbH

VI Europäische Franchise GmbH

Vienna House Cluster Deutschland GmbH7

Subsidiary Company

LH Unit Trust

Name of Subsidiary Company

Name of Directors / Managements

40.

Mr. Marten

Ijkema

41.

Ms. Johanna

Weichselbaumer

42.

Mr. Manuel

Simon

43.

Ms. Monika

Kowalska

44.

Mr. Ralf

Alsdorf

45.

Ms. Anna

Olszynska

46.

Mr. Tomasz

Piorkowski

47.

Mr. Marek

Palenik

48.

Ms. Ewa

Nowakowska

49.

Ms. Dorit

von der Osten

50.

Ms. Angelika

Gaudmann

51.

Mr. DI Paul

Bruck

52.

Mr. Birgit

Trapp

53.

Mr. Heinz

Gunter Hohne

54.

Mr. Ralf

Paul Noll

55.

Mr. Oliver

Rudnik

56.

Mr. Jonathan

Maxwell Wigley

57.

Mr. John

Mark Westoby

124

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

INFORMATION ON THE POSITION OF DIRECTORS, MANAGEMENTS AND ORTHORIZED PERSONS IN SUBSIDIARIES ASSOCIATED AND RELATED COMPANIES Subsidiary Company 38

Andel’s Berlin Hotelbetriebs GmbH

VHE Berlin Hotelbetriebs GmbH

VH Dresden Hotelbetriebs GmbH

VHE Leipzig Hotelbetriebs GmbH

VH Kronberg Hotelbetriebs GmbH

Vienna House Cluster Polen Sp. z o.o.8

Vienna House Cluster Tschechien s.r.o.9

OOO Employ Management

VHE Bratislava s.r.o.10

Vienna International Asset GmbH

Calvus GmbH & Co. Vermietungs KG

Enigma GmbH & Co. ObjektWuppertal KG

Fabella GmbH & Co. Vermietungs KG

Fabio GmbH & Co. Vermietungs KG

Fiora GmbH & Co. Vermietungs KG

VH Warsaw Hotel Sp. z o.o.11

Vienna House Real Estate GmbH

Name of Directors / Managements

37 VHE Darmstadt Hotelbetriebs GmbH

Name of Subsidiary Company

1. Mr. Burin

Pusiri

2. Mr. Weerawat

Wattanatchariya

3. Mr. Kavin

Kanjanapas

4. Mr. Kong

Chi Keung

5. Ms. Piyaporn

Phanachet /1

Mr. Voraphot

Chanyakomol /2

Mr. Veerapong

Rodjanawarodom /3

Mr. Sayam

Siwarapornskul /4

Mr. Daniel

10. Mrs. Angsana

Ross

Mankongcharoen

11. Mr. Kom

Panomreongsak

12. Mr. Lai

Kwok Kwong

13. Ms. Jacqueline

Noble

14. Mrs. Helen

Maria Hendy

15. Mr. Philip

Lewis Taylor

16. Mr. Christian

Guy

17. Mr. Paul

Michel Butel

18. Mr. Shane

Michael Hollywood

19. Mrs. Catherine

Patricia Prendergast

20. Mrs. Claire

Louis Le Brocq

21. Mr. Grant

James Barbour

22. Mr. Richard

Mark Joynt

23. Mr. Lee

Colin Anderson

24. Mr. Benjamin

William Whitchurch

25. Mr. John

Patrick Joseph Conway

26. Mrs. Lauren

Michelle Salkeld

27. Mr. Robert

David Moore

28. Mr. Simon

Burgess

29. Mr. Nicolas

Blair Cawley

30. Mrs. Samantha

Anne Symons

31. Mrs. Prapa

Pearce

32. Ms. Amy

Claire Collins

33. Ms. Ariel

Samantha Pinel

34. Mr. Nicolas

James Terry

35. Mr. Michael

Henry Richardson

36. Mr. Ashley

Marcus Vardon

37. Mr. Philip

Andrew Bolton

38. Mr. Nicolas

John Cushion

39. Mr. Rupert

Simoner

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

ANNUAL REPORT 2017

125

Subsidiary Company 41

VHE Leipzig Hotelbetriebs GmbH

VH Kronberg Hotelbetriebs GmbH

Vienna House Cluster Polen Sp. z o.o. /8

Vienna House Cluster Tschechien s.r.o. /9

OOO Employ Management

VHE Bratislava s.r.o. /10

Vienna International Asset GmbH

Calvus GmbH & Co. Vermietungs KG

Enigma GmbH & Co. ObjektWuppertal KG

Fabella GmbH & Co. Vermietungs KG

Fabio GmbH & Co. Vermietungs KG

Fiora GmbH & Co. Vermietungs KG

VH Warsaw Hotel Sp. z o.o. /11

Vienna House Real Estate GmbH

Ijkema

VH Dresden Hotelbetriebs GmbH

Mr. Marten

VHE Berlin Hotelbetriebs GmbH

40.

Andel’s Berlin Hotelbetriebs GmbH

Name of Directors / Managements

37 VHE Darmstadt Hotelbetriebs GmbH

Name of Subsidiary Company

41.

Ms. Johanna

Weichselbaumer

42.

Mr. Manuel

Simon

43.

Ms. Monika

Kowalska

44.

Mr. Ralf

Alsdorf

45.

Ms. Anna

Olszynska

46.

Mr. Tomasz

Piorkowski

47.

Mr. Marek

Palenik

48.

Ms. Ewa

Nowakowska

49.

Ms. Dorit

von der Osten

50.

Ms. Angelika

Gaudmann

51.

Mr. DI Paul

Bruck

52.

Mr. Birgit

Trapp

53.

Mr. Heinz

Gunter Hohne

54.

Mr. Ralf

Paul Noll

55.

Mr. Oliver

Rudnik

56.

Mr. Jonathan

Maxwell Wigley

57.

Mr. John

Mark Westoby

126

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

INFORMATION ON THE POSITION OF DIRECTORS, MANAGEMENTS AND ORTHORIZED PERSONS IN SUBSIDIARIES ASSOCIATED AND RELATED COMPANIES Subsidiary Company 2

Tanayong Property Management Co., Ltd

Thanacity Golf and Sports Club Co., Ltd

BTS Land Co., Ltd

Tanayong Food and Beverage Co., Ltd

Muangthong Assets Co., Ltd

Mak 8 Co., Ltd

Ratburana Property Co., Ltd

Nine Square Property/ Co., Ltd

PrannaKiri Assets Co., Ltd

Siam Paging Communication Co., Ltd

Tanayong Hong Kong Limited

Name of Directors / Managements

Unison One Co., Ltd

Name of Subsidiary Company

Mr. Burin

Pusiri

Mr. Weerawat

Wattanatchariya

Mr. Kavin

Kanjanapas

Mr. Kong

Chi Keung

Ms. Piyaporn

Phanachet /1

Mr. Voraphot

Chanyakomol /2

Mr. Veerapong

Rodjanawarodom

Mr. Sayam

Siwarapornskul /4

Mr. Daniel

10. Mrs. Angsana

Ross

Mankongcharoen

11. Mr. Kom

Panomreongsak

12. Mr. Lai

Kwok Kwong

13. Ms. Jacqueline

Noble

14. Mrs. Helen

Maria Hendy

15. Mr. Philip

Lewis Taylor

16. Mr. Christian

Guy

17. Mr. Paul

Michel Butel

18. Mr. Shane

Michael Hollywood

19. Mrs. Catherine

Patricia Prendergast

20. Mrs. Claire

Louis Le Brocq

21. Mr. Grant

James Barbour

22. Mr. Richard

Mark Joynt

23. Mr. Lee

Colin Anderson

24. Mr. Benjamin

William Whitchurch

25. Mr. John

Patrick Joseph Conway

26. Mrs. Lauren

Michelle Salkeld

27. Mr. Robert

David Moore

28. Mr. Simon

Burgess

29. Mr. Nicolas

Blair Cawley

30. Mrs. Samantha

Anne Symons

31. Mrs. Prapa

Pearce

32. Ms. Amy

Claire Collins

33. Ms. Ariel

Samantha Pinel

34. Mr. Nicolas

James Terry

35. Mr. Michael

Henry Richardson

36. Mr. Ashley

Marcus Vardon

37. Mr. Philip

Andrew Bolton

38. Mr. Nicolas

John Cushion

39. Mr. Rupert

Simoner

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

ANNUAL REPORT 2017

127

Subsidiary Company

40.

Mr. Marten

Thanacity Golf and Sports Club Co., Ltd

BTS Land Co., Ltd

Tanayong Food and Beverage Co., Ltd

Muangthong Assets Co., Ltd

Mak 8 Co., Ltd

Ratburana Property Co., Ltd

Nine Square Property/ Co., Ltd

PrannaKiri Assets Co., Ltd

Siam Paging Communication Co., Ltd

Tanayong Hong Kong Limited

Ijkema

41.

Ms. Johanna

Weichselbaumer

42.

Mr. Manuel

Simon

43.

Ms. Monika

Kowalska

44.

Mr. Ralf

Alsdorf

45.

Ms. Anna

Olszynska

46.

Mr. Tomasz

Piorkowski

47.

Mr. Marek

Palenik

48.

Ms. Ewa

Nowakowska

49.

Ms. Dorit

von der Osten

50.

Ms. Angelika

Gaudmann

51.

Mr. DI Paul

Bruck

52.

Mr. Birgit

Trapp

53.

Mr. Heinz

Gunter Hohne

54.

Mr. Ralf

Paul Noll

55.

Mr. Oliver

Rudnik

56.

Mr. Jonathan

Maxwell Wigley

57.

Mr. John

Mark Westoby

Note: = / = // = /// = 2 3 4 5 6 7 8 9 10 11 1

2 Tanayong Property Management Co., Ltd

Name of Directors / Managements

Unison One Co., Ltd

Name of Subsidiary Company

The Entire Business Transfer transaction from Unicorn Enterprise Limited under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2018 held on 4 January 2018. Director, Supervisory Board, Chairwoman of Supervisory Board

On 14 February 2018, the Board of Directors of Khon Kaen Buri appointed Ms. Piyaporn Phanachet as the company’s director to replace Mr. Voraphot Chanyakomol effective from 15 February 2018. On 14 February 2018, Mr. Voraphot Chanyakomol resigned from the position of company’s director of subsidiaries as follows: 1) Natural Park Vile Co., Ltd 2) Natural Real Estate Co., Ltd 3) Park Opera Co., Ltd 4) Richee Property Management Co., Ltd 5) Park Gourmet Co., Ltd 6) Khon Kaen Buri Co., Ltd 7) BTS Assets Co., Ltd 8) Kamkoong Property Co., Ltd and 9) Project Green Co., Ltd effective from 15 February 2018. On 14 February 2018, the Board of Directors of BTS Assets appointed Mr. Veerapong Rodjanawarodom as the company’s director to replace Mr. Voraphot Chanyakomol effective from 15 February 2018. On 14 February 2018, the Board of Directors of subsidiaries as follows: 1) Natural Park Vile Co., Ltd 2) Natural Real Estate Co., Ltd 3) Park Opera Co., Ltd 4) Richee Property Management Co., Ltd 5) Park Gourmet Co., Ltd 6) Kamkoong Property Co., Ltd and 7) Project Green Co., Ltd appointed Mr. Sayam Siwarapornskul as the company’s director to replace Mr. Voraphot Chanyakomol effective from 15 February 2018. VHE Cracow Sp. z o.o. former name of Helston Sp. z o.o. VHE Cracow Sp. z o.o. SKA former name of WX Krakow Sp. z o.o. SKA Vienna House Cluster Deutschland GmbH former name of Vienna International Detschland GmbH Vienna House Cluster Polen Sp. z o.o. former name of Employee Management Sp. z o.o. Vienna House Cluster Tschechien s.r.o. former name of VI Travel Management s.r.o. VHE Bratislava s.r.o. former name of VI Bratislava s.r.o. VH Warsaw Hotel Sp.z o.o. former name of Zammia Investment Sp. z o.o.

128

4.5 Information on the Position of Directors, Managements and Orthorized Persons in Subsidiaries Associated and Related Companies

4.6

Internal Control and Risk Management Summary of the Board of Directors’ Opinions

The Board of Directors has set up the Internal Audit Division, which reports to the Audit Committee and has the duty to audit the internal control system in relation to operating processes of various units. This allows the Board of Directors to effectively follow up on the Company’s operations and ensure that the execution of the main tasks and key financial activities of the Company and its subsidiaries are effective and in compliance with the set guidelines and achieves the policies and objectives as prescribed by the Administrative Division. This also ensures that the Company abides by relevant laws and requirements. In the Board of Directors’ Meeting No. 2/2018 on 21 March 2018, four members of the Audit Committee were also present. The Audit Committee members have accounting and financial knowledge. The Board of Directors assessed the internal control and internal audit systems using the Securities and Exchange Commission’s assessment form. The Board of Directors considered and assessed the Company’s internal control system in all 5 areas as following aspects, namely Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities. The Board of Directors has an opinion that the Company has adequate internal control system suitable for the business operation to monitor that operations effectively meet targets, objectives and relevant laws and requirements; and are able to prevent property from fraud and damage. In addition, accountings and reports have been prepared correctly and credibly. The results of the assessment of the adequacy of the Company’s internal control system in each aspect are summarized below:

Control Environment

The Company has shown its commitment to integrity and ethics. The Board of Directors and the management have prescribed the policy to monitor the business and business ethics in writing, by which each and every person in the organization is to abide. The Board of Directors is independent from the management and has the duty to 4.6 Internal Control and Risk Management

supervise and develop internal controls. Sound organizational structure and environment have been provided so as to promote effective internal control systems. Everyone is encouraged to recognize the necessity of the internal control systems. Organizational structure has been appropriately designed and duties are clearly determined.

Risk Assessment

Investment in real estate development in various formats has been the Company’s core business. The Company therefore mapped out the risk management policy for every person in the organization to be aware of and comply with. The policy identifies the investment decision factors and relevant risk factors, both internal and external which might affect business operations, internal controls as well as financial reports. Investment expected rate of return and fraud opportunities are also identified. Measures and operation plans for handling those risks were drawn up. Progress of projects must be reported to the Board of Directors on a regular basis.

Control Activities

The Company has put in place control measures which bring down the risks of not achieving organizational objectives to an acceptable level. Scope, power, duties and approval limit of high-level executives are fixed in writing. Duties are clearly segregated to provide a crosscheck. The Company prescribed the policy on execution of transactions with related persons in order to prevent conflict of interest as per the requirements of the Securities and Exchange Commission and the Stock Exchange of Thailand. Information system has been employed to assist in achieving targets. Infrastructure of the information system was upgraded and standardized. Security controls were provided for information system as well as the process for proper acquisition, development and maintenance of the information system.

Information & Communication

Internal and external data used in operations are quality and relevant data, thus giving the Board of Directors ANNUAL REPORT 2017

129

adequate data which is crucial and supportive to their decision making. Invitation and supporting documents are sent out 7 days on average ahead of a meeting, giving directors sufficient time to review them. At each meeting, minutes of the meeting are prepared and completely contain opinions and resolutions of a meeting. Key information is reported to the Board of Directors regularly and the Board of Directors can access information sources necessary for carrying out their duties. The Company collects sufficient data and information for business operations. Documents are stored by category, particularly accounting documents which are crucial for the preparation of financial reports. Moreover, the Company opens a special communications channel on its website for internal and external persons to report data

or clues about fraud or corruption to the Company. Investor relations have been held to communicate key and beneficial data to external interested persons.

Monitoring Activities

The Company has an Internal Audit Division and requires that internal control system be assessed on a regular basis. Internal auditors are to report their audit findings directly to the Audit Committee and to monitor progress of defect improvement and rectification. In particular, any material defect discovered must be reported for consideration and rectification instruction in due course. For quality internal audit works to international standards, the Company encourages internal auditors to attend internal audit professional trainings.

Information of Head of Internal Audit

.Any appointment, removal or transfer of the Company’s Head of Internal Audit must be approved by the Audit Committee. Details about Head of Internal Audit of the Company Name: Ms. Ratkamol Temkasem Position: Director – Internal Audit The qualification of Head of Internal Audit • Educational Degree

Name of Institute

Major Subject

Thammasat University

Accounting

Chulalongkorn University

Financial Accounting

Bachelor’s degree Master’s degree

Diploma and Certificates Certified Public Accountant of Thailand (CPA) Work Experience and Training Involved

Work Experience Company

Training Experience Courses and Seminars

Ernst & Young Office Limited

Fraud Audit

Fabrinet Company Limited

Information Technology Audit

Thoresen Thai Agencies Public Company Limited

The Internal Audit Risk Management

Raimon Land Public Company Limited

Corporate Risk Management - COSO-ERM

Berli Jucker Public Company Limited

Board of Directors and Internal Audit Management

Laguna Resorts and Hotels Public Company Limited

Tax system related to real estate. Internal Audit in Disruptive Technology

130

4.6 Internal Control and Risk Management

4.7

Related Party Transactions Related transaction with the person who may have a conflict over the past year and the rationale of such transaction.

In 2017, the Company and its subsidiary had related transaction with natural and/or juristic person who may have a conflict of interest with the Company. The auditor is listed in the Notes to the Consolidated Financial Statements for the year ended 31 December 2017 with the following details:

1) MHG NPARK Development Co., Ltd.

Description of the relation: The Associated Company in which the Company holds 50% of registered capital (Paid-up Capital THB 100mn), registered its incorporation on 8 August 2014 Transaction value (THB) Description of transaction

Transaction Transaction Outstanding Transaction Outstanding type value in balance as of value in balance as of 2016 31 Dec. 2016 2017 31 Dec. 2017

Financial MHG NPARK Development Co., Ltd. assistance transaction took out a long-term loan from the two major shareholders in accordance with the percentage of shareholding to invest in project development.

4.7 Related Party Transactions

50,000,000

420,410.96

Rationale of the transaction

50,420,410.96 The borrowing is for normal operations, including project development in accordance with the percentage of shareholding and at the interest rate which is lower than the market rate but higher than fixed deposit rate. MHG NPARK Development Co., Ltd. would benefit from financial cost and borrowing without using companyâ&#x20AC;&#x2122;s property as collateral.

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131

2) Prime Area 38 Company Limited (*)

Description of the relation: The Associated Company in which the Company holds 50% of registered capital Baht 10 MN (Paid-up Capital), registered its incorporation on 30 November 2015 Transaction value (THB) Description of transaction

Transaction Transaction Outstanding type value in balance as of 2016 31 Dec. 2016

Financial Prime Area 38 assistance Company Limited took out a long-term transaction loan from the two major shareholders in accordance with the percentage of shareholding to invest in project development.

Transaction value in 2017

Outstanding balance as of 31 Dec. 2017

Rationale of the transaction

804,995,888.88 804,995,888.88 The borrowing is for normal operations, including project development in accordance with the percentage of shareholding and at the interest rate which is lower than the market rate but higher than fixed deposit rate. Prime Area 38 Co., Ltd. would benefit from financial cost and borrowing without using companyâ&#x20AC;&#x2122;s property as collateral.

(*) Changed status from subsidiary to joint venture during the year

3) Dnal Co., Ltd.

Description of the relation: A subsidiary of BTS Group Holding Public Company Limited, which has the same major shareholder of the Company. Transaction value (THB) Description of transaction

Transaction type

U City Public Company Limited lease office space including equipment on the 3 rd floor (Jan-Sep 2017), zone C, 11th floor (Jan-May 2017), zone B and 20th floor (Jan-Sep 2017) zone B of the TST building from Dnal Co., Ltd. a subsidiary of BTS Group Public Company Limited.

Office rental transaction, no more than 3 years.

132

4.7 Related Party Transactions

Transaction Outstanding value in balance as of 2016 31 Dec. 2016

4,794,185.67

Transaction value in 2017

2,642.90 5,211,580.10

Outstanding balance as of 31 Dec. 2017

Rationale of the transaction

Rent space including equipment in the space. It is leased to a normal tenantâ&#x20AC;&#x2122;s business premises and is subject to common commercial terms.

4) Unison One Co., Ltd.

Description of the relation: A subsidiary of Unicorn Enterprise Company Limited, which has the same major shareholder of the Company. Transaction value (THB)

Description of transaction

Transaction type

Transaction value in 2016

Outstanding balance as of 31 Dec. 2016

U City Public Company Limited lease office space including equipment on the 3 rd floor, zone C, and 20th floor of the TST building between (Sep â&#x20AC;&#x201C; Dec 2017) from Unison One Co., Ltd., a subsidiary of Unicorn Enterprise Limited.

Office rental transaction, no more than 3 years.

Transaction value in 2017

1,976,019.00

Outstanding balance as of 31 Dec. 2017

102,110.10

Rationale of the transaction

Rent space including equipment in the space. It is leased to a normal tenantâ&#x20AC;&#x2122;s business premises and is subject to common commercial terms.

5) Absolute Hotel Services Company Limited

Description of the relation: A subsidiary of Unicorn Enterprise Limited, which has the same major shareholder of the Company. Transaction value (THB) Description of transaction

Transaction type

BTS Assets Co., Ltd., Services a subsidiary of U City purchase transaction Public Company Limited, pays hotel management fees to Absolute Hotel Services Co., Ltd., which is an associate of Unicorn Enterprise. Ltd.

4.7 Related Party Transactions

Transaction value in 2016

19,714,277.68

Outstanding balance as of 31 Dec. 2016

1,888,372.41

Transaction value in 2017

Outstanding balance as of 31 Dec. 2017

23,017,405.76 2,303,832.10

Rationale of the transaction

The payment for hotel management is subject to general commercial terms.

ANNUAL REPORT 2017

133

6) Minor Hotel Group Company Limited

Description of the relation: The Company is affiliated with the associated company of MHG Park Development Co., Ltd Transaction value (THB) Description of transaction

Transaction type

Services Khon Kaen Buri purchase Company Limited, a subsidiary of U City transaction Public Company Limited, has paid hotel management fees to Minor Hotel Group Limited, a wholly-owned subsidiary of MHG Par Development Co., Ltd.

Transaction value in 2016

3,381,131.07

Outstanding balance as of 31 Dec. 2016

Transaction value in 2017

420,469.85 8,905,040.10

Outstanding balance as of 31 Dec. 2017

Rationale of the transaction

2,057,430.93 The payment for hotel management is subject to general commercial terms.

7) Minor Hotel Group Company Limited

Description of the relation: The Company is affiliated with the associated company of MHG Park Development Co., Ltd. Transaction value (THB)

Description of transaction

Transaction type

Pacific Hotel Chiang Mai Co., Ltd. a subsidiary of the Company. Boonbaramee Metta Property Co., Ltd. pays hotel management fees to Minor Hotel Group, a wholly-owned subsidiary of MHG Park Development. Ltd.

Services purchase transaction

134

4.7 Related Party Transactions

Transaction value in 2016

18,840,251.00

Outstanding balance as of 31 Dec. 2016

Transaction value in 2017

5,035,557.34 22,838,539.00

Outstanding balance as of 31 Dec. 2017

Rationale of the transaction

5,407,376.67 The payment for hotel management is subject to general commercial terms.

8) VI Europäische Franchise GmbH (“VIEF”)

Description of the relation: An associated company of Vienna International Hotel Management AG (AT) (“VIAG”) which the Company indirectly hold 33.33% in VIEF through VIAG. Transaction value (EUR) Description of transaction

Transaction type

Financial VI Europäische Franchise GmbH took assistance transaction out a long-term loan from Vienna International Hotel Management AG to use for business operation.

Transaction value in 2016

Outstanding balance as of 31 Dec. 2016

Transaction value in 2017

926,236.04

Outstanding balance as of 31 Dec. 2017

926,236.04

Rationale of the transaction

The borrowing is for normal operations, at the interest rate EURIBOR 3 months + 2.25%

In addition, the Company also has transactions with related parties as stated in the notes to the consolidated financial statements of the Company.

4.7 Related Party Transactions

ANNUAL REPORT 2017

135

Measure or process in approving related transaction

Whereas the Securities and Exchange Act (No. 4) B.E. 2551, which came into force on 31 August 2008, adds provisions under Chapter 3/1, Re: Governance of Publicly Traded Company. Section 89/12(1) provides that a director, an executive or a related person may enter into any transaction with the company or the subsidiary only after obtaining approval from the shareholders’ meeting, unless such transaction is with the same commercial terms as those an ordinary person would agree with any counterparty under the similar circumstances, on the basis of commercial negotiation and without any influence resulted from the status of the director, executive or related person, as the case may be, provided further that the said commercial terms have been approved by the board of directors or in compliance with the principle approved by the board of directors. For the benefit and appropriateness of the Company’s operation, the Board’s Meeting No. 6/2551 on 14 August 2008 passed an approval for an executive director to execute a transaction between the Company and its subsidiary, and a director, an executive or a related person, if such transaction is with the same commercial terms as those an ordinary person would agree with any counterparty under the similar circumstances, on the basis of commercial negotiation and without any influence resulted from the status of the director, executive or related person. For related transaction in other manner, the Company shall abide by the Securities and Exchange Act (No. 4) B.E. 2551

136

4.7 Related Party Transactions

and the notifications of the Capital Market Supervisory Board, provided that the Company shall present the same to the Board’s meeting for joint consideration with the Audit Committee for approval or propose the same to the shareholders’ meeting for consideration and approval, as the case may be. The Company gives importance to consideration of related transactions, thereby prescribing the transaction approval measures in compliance with the criteria and notifications of the Stock Exchange of Thailand strictly. Such transaction must be considered and approved the Board and the Audit Committee. For the Board’s meeting in the agenda in which a director has any interest, such director shall not attend the meeting so that the meeting can freely discuss. In the execution of related transactions, the Company gives importance to rationale of the transactions and utmost benefits of the Company and related person.

Policy and trend of related transactions in the future

The Company has a policy to execute related transactions in the future in accordance with the Company’s normal operations and with key attention to the Company’s utmost benefits, provided that the prices and conditions are fair. However, in the case where the Company or subsidiary (the company in which the Company holds shares either directly or indirectly over 50 percent of its paid-up capital) has related transaction, the Company must comply with the Securities and Exchange Act (No. 4) B.E. 2551 together with its amendments and relevant notifications of the Capital Market Supervisory Board.

4.7.1

Audit Fee Annual Audit fee

In the previous accounting period, the Company and its subsidiaries paid audit fee to the auditor of the Company and its subsidiaries in the amount of THB 7,140,000.

Non-Audit Fee

The Company paid non-audit fees in the amount THB 1,590,000 to EY Corporate Services Limited for the advisory services related to accounting standards and mergers consultation services.

4.7.1 Audit Fee

ANNUAL REPORT 2017

137

4.8

Corporate Social Responsibility Policy Our business operation complies with the organizational culture, which emphasizes sustainable business development, including the environment and society. The Company realizes the significant of social responsibility. We believe that the success of a business is not only determined by performance, we should create value for everyone in the community and society as well. The Company is well aware of the importance of environmentallyfriendly and cost-effective use of natural resources, and has been deployed to all new projects development. In addition, the Company also has a strategic plan for ongoing, sustainable social activities in the long. The Company also encourages its employees to be ethical and moral to the Company and all stakeholders. The Company has set a policy as a guideline for environmental and social responsibility to be part of business process management leading to sustainable development including has transparent business practices, and disclose sensitive information in accordance with applicable laws and regulations. We also concern about the benefits to all stakeholders in order to sustainable success together. The guideline as follows:

2. Anti-corruption

The Company adopts the moral and legal principle to carry out the businesses ethically by being transparent and verifiable. The Company has established accounting procedures and standards, including operation systems with clearly separated authorities. In addition, the Company prohibits its directors, executive officers and employees from accepting all forms of dishonest acts or favours, either directly or indirectly, which includes receiving and giving gifts, entertainment, monetary contributions and other benefits from any person or counterparty having business or relations with the Company. Since 18 December 2015, the Company announced to be a counterpart of Thailand’s Private Sector Collective Action Coalition Against Corruption which reflects the Company’s clear approach to combating corruption.

3. Human rights respect

Practice guideline on social responsibility

The Company emphasizes its directors, executive officers and employees within the extent permitted by the law without impairing other people’s rights. The Company is committed to protect and respect rights and freedoms as prescribed by the Constitution of the Kingdom of Thailand of all stakeholders.

1. Fair business conduct

4. Fairness to employees

In order to carry out the Company’s businesses smoothly, sustainably and to achieve the objective/strategy of the Company, the Company emphasizes fair business engagement with its clients under the business conditions mutually agreed and strictly in accordance with the customaries of business practices. We also fairly act to all concerned stakeholders, such as our shareholders, employees, community and society, clients, media, customers, general people, business competitors, creditors, government agencies and interested parties and we avoid taking actions, which may cause conflict of interest and infringement of intellectual property. Through these commitments the Company will be able to establish fruitful and long-term relationships with stakeholders. 138

4.8 Corporate Social Responsibility Policy

The Company is committed to treating its employees on a fair and equal basis. The Company adheres to remuneration principles which are fair and proper. The Company arranges for a safe and sanitary environment for the welfare of employees in the workplace, and to provide care and protection to its employees within the extent of the law.

5. Responsibility to consumers

Establishing good relationships with our customers are paramount. The Company shall accomplish this by providing property products and services as agreed and expected while not causing any harm to our customers. The Company also gives information on our products and

services which are correct, sufficient and not over-stated. We shall keep confidential customer information and shall not illegally use it for our own benefit or other relevant parties.

6. Environment protection

The Company is dedicated to the responsible and efficient use of resources and protection of the environment. The Company has created procedures for the analysis of risks and the impact to the environment. By doing so, we are aware of and can address potential environmental issues that may arise. The company includes processes that reduce electricity consumption, promoting economical

electricity usage, recycling or reusing what would normally be disposed such as office paper and promoting nonsmoking in workplaces.

7. Taking part in community and social development

It is essential for businesses to contribute to the improvement of the quality of life, economic welfare and sense of community and society. The Company is determined to be actively involved projects and activities being beneficial to society and community development, whilst encouraging, supporting and organizing employees to participate in charitable and CSR activities.

(8) Development and publication of innovation for socially responsible actions

The Company believes in publishing and informing its aforementioned values, practices and policies to positively influence stakeholders. This includes sharing innovative practices and lessons that would allow others to adopt or follow.

Training on “Anti-Corruption in Organisations” on 28 February 2016

Support Klong Toei Witthaya School Cleaning public drainage at the community near Phayathai project. 4.8 Corporate Social Responsibility Policy

ANNUAL REPORT 2017

139

Guidelines and Activities for CSR Activities

The Company focuses on CSR activities within the normal process of business operation in accordance with ethics and code of conduct, which means social responsibility activities, environment and the Company is a part of every employee’s responsibility and responsibility to the employees assigned by the company, so that “social responsibility” is cultivated into every employee. In addition, the Company is confident that the development of sustainable business organizations will be able to generate appropriate returns and growth for the shareholders. The company will also need to develop itself as a good example company by creating activities that are beneficial to the public including make employees work happily and promoting as well as preserving the environment along with business operations. The company is committed to develop sustainable business along with society, culture and environment as follows.

1. Responsibility for the operation

The Company is committed to corporate social responsibility, which is reflexed from what the Company concerning on effect to all stakeholders such as investors, employees, customers, suppliers, business partners, government officials and others related to the company by 1.1 Establish ethical values of fair business in accordance with the Code of conduct. 1.2 Taking into account of the safety and health of employees including loyalty, trust, and work in harmony. 1.3 Transparency disclosure by providing that is reliable and verifiable information which are committed to the best interests to all stakeholders. Goals and accomplishments 1. Create a positive attitude, confidence and credibility to the reputation and good image of the company to society. 2. Establish a good relationship with all stakeholders of the company in the long run. 3. Operate for the benefit and efficiency of good work and creates a continuous benefit to all stakeholders of the Company.

140

4.8 Corporate Social Responsibility Policy

2. Environmental care practices

The company encourages and creates good habits for its employees to use material and equipment with care and realisation of the best benefit according to the late King Rama Ninth's philosophy on the “Sufficiency Economy”, by taking into account on sustainable resources and creates less damage both direct and indirect to the environment as follows: 1.1 To use it economically and use it sparingly to keep resources up and running for the most benefit. 1.2 To recycle and reuse of some items once they can be reused such as plastic bags, paper, etc., which reduces the consuming of resources and environmental degradation. 1.3 To restore all items upon prolonged use may cause damage. Therefore, renovations can continue to extend usage life and cost of purchasing new equipment. 1.4 Surveillance and protection to avoiding wasteful use of natural resources and the environment, such as garbage dump monitoring, turn off electricity when not in use and use water economically. Goals and accomplishments 1. To encourage employees to be conscious social and environment. 2. To create “Sufficiency Economy Values” to employees and to use resources economically. 3. Reduce the amount of paper purchased in the office by encourage to reuse the paper

3. Practice for community and social development

The Company encourages employees to do volunteer and allow employees to contribute, donate, help the community and society, regardless of the day they are absent. To raise awareness of community and social development. In addition to working within the organization by organising community development activities.

4.9

Human Resources Policy The Company values all employees. Human resources development is regarded as a key investment maintaining competitiveness and achieving overall goals. All our employees at all levels will be continuously encouraged to grow their capabilities and build on their successes and are through active engagement with supervisors and management and skills training. The Company is focused on rewarding merit, cooperation and teamwork. The Company provided necessary training for employees to develop and improve skills and knowledge. Team Base Activities and Communicate on Company policies especially Anti-corruption are key activities for all employees To support the future growth, Human Resources prepare on manpower planning and recruitment plan to get employees on board by plan.

Recruitment and Career Development

Human Resources Management are committed to integrity, regulations and corporations within. We are committed to attracting, developing and retaining talented and dedicated people by: • Equal opportunity for employees at all levels • Recruiting and retaining people of all backgrounds • Providing a stimulating career with training, education and growth opportunities • Providing safety workplace • Providing fair policy on remuneration • Promoting ongoing communication

Employee Development

Company provide Training & development for employees to develop and improve on skills and knowledge to fulfill on competency requirement and ready for career promotion.

4.9 Human Resource and Policy on HR Development

Internal Training Programme

Company conduct internal training program as follow • Communication corporation and relation in work place • Anti-Corruption

External Training Program

Company support the external training for employees as follow • Director Accreditation Program • A New Deal for Real Estate • Land and Building Tax Program • Legal & Tax Strategies for outbound investment • Director Certification Program • Focus on Financial Reporting • Establish on Corporate for Condominium and House • Advances for Corporate Secretaries • Real estate tax system • Internal Audit in Disruption Technology • Workshop Asper sky • Ransomware • SSO Media 2.0 • Job Description workshop • Monthly book closing technique • Fundamental of Accounting • Account Payable management • Closing Account Balance workshop • International Tax Planning • Corporate Budgeting Planning Best Practice • Lean Concept • Problem Solving Decision Making and Conflict • Purchasing Negotiation : Your Most Powerful • Professional Procurement • Techniques for Executives in Examine in Commercial • Crystal Lagoons • Risk in Construction

ANNUAL REPORT 2017

141

The total number of employee training hours Company / BU

Number of Employee

Number of Training Hours

Average training hours per employee

U City PLC

347

3.50

•

Performance Management and Development The Company provide fair evaluation for all employees. The discussion between employee and superior before get consensus is provided.

•

Employee Suggestion The quarterly meeting with employee are provided to communicate to employee in all topic related and suggestion box is available

•

Impartiality The age sex race religion not consider for recruitment and career opportunity. The Company will consider Competency of applicants.

•

Work & Life Balance The Company realise in quality of work and life of employees. Employee will encouraged to do process improvement in each areas. The recreation corner is provided.

Absenteeism Rate Average Leave Taken Company / BU

Number of Employees

U City PLC

Sick Leave1

Business Leave

Vacation Leave2

Others

Remark 1 Sick leave according to accident is 0 2 Others are monkhood leave, compassionate leave ….

Safety

Safety is a key priority for the Company and supports all activities related to safety. The Company organises the Evacuation and Fire Drills. A Safety policy guide is provided for employee.

142

4.9 Human Resource and Policy on HR Development

Employees

In 2017, the Company had a total of 92 employees. The Company provided compensation to employees in accordance with the Companyâ&#x20AC;&#x2122;s operating results. The compensation consists of salaries, bonuses, overtime, dutiable allowances, provincial allowances, social security and provident fund contributions in the year 2017 totaling Baht 101,669,991 million. Compensation type

2017

2016

1) Salary

85,299,258

62,322,268

2) Bonus

10,648,641

7,403,116

867,756

734,499

4) Diligence

88,650

58,800

5) Allowance

238,551

143,050

6) Social Security

770,321

633,443

7) Provident Fund

3,756,814

2,919,808

101,669,991

74,214,984

3) Overtime pa

Total

Employee Benefits As above

4.9 Human Resource and Policy on HR Development

ANNUAL REPORT 2017

143

Financial Report 5.1

Report of the Board of Directorsâ&#x20AC;&#x2122; Responsibilities for the Financial Statements 5.2 Report of the Audit Committee 5.3 Independent Auditorâ&#x20AC;&#x2122;s Report 5.4 Audited Financial Statement 5.5 Notes to Consolidated Financial Statements

hotel andels lodz

5.1

Report of the Board of Directors’ Responsibilities for the Financial Statements The Board of Directors is responsible for the financial statements of U City Public Company Limited and its subsidiaries which have been prepared in accordance with generally accepted accounting standards in Thailand. The appropriate accounting policies are pursued and applied consistently with adequate disclosure of important information in the Notes of Financial Statements. The Board of Directors has prepared the internal control system in order to prevent any dishonest or irregular activities. Also this is to ensure reasonably conducted in normal business practices and will make most benefits. The opinion of the Audit Committee is reported in the Report of the Audit Committee in this annual report. Therefore, the Board of Directors considered the overall internal control system of the Company and its subsidiaries was at satisfactory level and believed the financial statements of the Company and its subsidiaries as of 31 December 2017 have been prepared in accordance with generally accepted accounting standards and related laws and regulations. The audit has given an unconditional opinion on this matter as shown in auditor report as the following matters: A) As discussed in Note 13.2.2 to the financial statements regarding the acquisition of hotel business in Europe for a total initial consideration that is subject to further adjustments in accordance with the terms and conditions of the agreement, the fair value measurement of the identifiable assets acquired and the liabilities assumed at the acquisition date, and the measurement of goodwill have not yet been completed. And

(Mr. Weerawat Wattanatchariya) Executive Director

5.1 Report of the Board of Directors’ Responsibilities for Financial Statement

B) As discussed in Note 35.2 c) to the financial statements regarding litigation, a subsidiary filed a lawsuit against the government agency with the Central Administrative Court in order to requested the government agency to deliver the construction site on royal land under the Rong Pasee Roi Chak Sam Land Development Project, and to approve extensions of the “project management period” and “rental period” as specified in the agreement. On 13 July 2017, the Central Administrative Court issued a judgment to extend the project utilisation period of the land in dispute for another 30 years, from the handover date or the date the Court issued the final judgment, as the case may be. The subsidiary has appealed to the Supreme Administrative Court and currently, the case is in the process of being considered by the Court. In addition, the auditors also give importance to the examination of significant issues such as: Business combination as discussed in Note 13.2.1 and 13.2.2 to the financial statements regarding the acquisition of investment in subsidiaries, revenue recognition from hotel operations which generate 86.9 percent of total revenue of the Group’s revenue, impairment of goodwill as discussed in Note 13, impairment of investment properties and property, plant and equipment as discussed in Note 18 and Note 19 and Impairment of investments in subsidiaries as discussed in Note 13. The Company aims to operate prudently and transparently by focusing on investing and developing real estate, predominantly near future or existing mass transit lines as well as other related businesses to generate sustainable revenue growth and profitability over a long run.

(Ms. Piyaporn Phanachet) Executive Director and Chief Executive Officer

ANNUAL REPORT 2017

145

5.2

Report of the Audit Committee To the Shareholders of U City Public Company Limited The Audit Committee of U City Public Company Limited comprises 4 independent directors: Mr. Rungson Sriworasat as Chairman of the Audit Committee, Mr. Chaiwat Atsawintarangkun, Mr. Surajit Gongvatana and Mr. Plakorn Wanglee as Audit Committee Members. Besides, at least one member of the Audit Committee has knowledge and experience in reviewing financial statements. The Audit Committee has performed works under the scope of duties and responsibilities as entrusted by the Company’s Board of Directors in compliance with the requirements stipulated by the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand. In 2017, the Audit Committee held 8 meetings with management, external and internal auditors as suitable including a meeting with external auditors without management, which can be summarized as follows: 1. Review company’s financial statements: The Audit Committee reviewed U City Public Company Limited’s quarterly and annual financial statements as well as the consolidated financial statements for 2017, which inquire to management and external auditor about the accuracy and completeness of the financial statements and the adequacy of financial disclosure. The Committee concluded agree with external auditor that the financial statements were in accordance with all legally defined accounting principles and were adequately and promptly disclosed for the benefit of shareholders, investors and users of such statements for the purposes of making informed investment decisions. 2. Review an adequately of internal control system: The Audit Committee reviewed internal control system from the internal audit report and consulted with external auditor for evaluated internal control systems based on guidelines from the office of the Securities and Exchange Commission. The Committee

146

5.2 Report of the Audit Committee

concluded agree with external auditor that no any concerned or significant errors discovered. 3. Overseeing the Internal Audit Department: The Audit Committee has reviewed and approved annual audit plan, followed up audit plan, reviewed audit report and suggested to improve the concerned areas as a good corporate governance and efficiently internal control, also reviewed staff’s training plan. The Committee concluded that internal control systems were adequate including to improve audit performance both internal auditor and audit methodology. Moreover, The Audit Committee advise the training to improve internal audit performance especially in the business knowledge. 4. Adherence to legal and regulations: The Audit Committee determined that the company’s operations were in compliance with regulations of The Securities and Exchange Commission, The Stock Exchange of Thailand and other relevant laws which concerned as company’s business also no significant issues regarding the non-compliance with the law, terms and obligations that the Company has with outsiders. 5. Conclude the related transaction or conflict of interest transactions: The Audit Committee concluded that the quarterly and annually transactions were fair and without conflict of interest. The Audit Committee views that such transactions were reasonable and beneficial to the Company in overall and were adequately and promptly disclosed to the public. 6. Consideration to nominate the external auditor for 2018: The Audit Committee concluded that Ms.Siraporn Auyanunkul, external auditor license number 3844 and/or Mrs. Chonlaros Suntiasvaraporn, external auditor license number 4523 and/or Mr. Chatchai Kasemsrithanawat, external auditor license number 5813, from EY Company Limited to be appointed as the official company’s external auditor for 2018 then proposed to Board of Director

to consideration and approval for nominate and approve annual audit fee at the general shareholders meeting 2018. The Audit Committee has performed works under the scope of duties and responsibilities as entrusted by the Companyâ&#x20AC;&#x2122;s Board of Directors with knowledge and independent in reviewing financial statements with no limitation in information from managements, employees and concerning parties.

In summary, the Audit Committee has considered and given the opinion that the financial statement of the Company was prepared in conformity under generally accepted accounting principles with complete Information disclosure, the effective and adequate internal control system risk management and any action of the Company comply with the law, rule and regulation relating to the Companyâ&#x20AC;&#x2122;s business and compliance with good corporate governance principles. On behalf of Audit Committee

(Mr. Rungson Sriworasat) Chairman of the Audit Committee 21 March 2018

5.2 Report of the Audit Committee

ANNUAL REPORT 2017

147

5.3

INDEPENDENT AUDITOR’S REPORT To the Shareholders of U City Public Company Limited Opinion

I have audited the accompanying consolidated financial statements of U City Public Company Limited and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2017, and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and have also audited the separate financial statements of U City Public Company Limited for the same period. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of U City Public Company Limited and its subsidiaries and of U City Public Company Limited as at 31 December 2017, their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

Basis for Opinion

I conducted my audit in accordance with Thai Standards on Auditing. My responsibilities under those standards are furtherdescribedintheAuditor’sResponsibilitiesforthe AuditoftheFinancialStatementssectionofmyreport. I am independent of the Group in accordance with the Code of Ethics for Professional Accountants as issued by the Federation of Accounting Professions as relevant to my audit of the financial statements, and I have fulfilled my other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Emphasis of matter

I draw attention to the following matters: a) As discussed in Note 13.2.2 to the financial statements regarding the acquisition of hotel

148

5.3 Independent Auditor’s Report

business in Europe for a total initial consideration that is subject to further adjustments in accordance with the terms and conditions of the agreement, the fair value measurement of the identifiable assets acquired and the liabilities assumed at the acquisition date, and the measurement of goodwill have not yet been completed. b) As discussed in Note 35.2 c) to the financial statements regarding litigation, a subsidiary filed a lawsuit against the government agency with the Central Administrative Court in order to requested the government agency to deliver the construction site on royal land under the Rong Pasee Roi Chak Sam Land Development Project, and to approve extensions of the “project management period” and “rental period” as specified in the agreement. On 13 July 2017, the Central Administrative Court issued a judgment to extend the project utilisation period of the land in dispute for another 30 years, from the handover date or the date the Court issued the final judgment, as the case may be. The subsidiary has appealed to the Supreme Administrative Court and currently, the case is in the process of being considered by the Court My opinion is not qualified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report, including in relation to these matters. Accordingly, my audit included the performance of procedures designed to respond to my assessment of the risks of material misstatement of the financial statements.

The results of my audit procedures, including the procedures performed to address the matters below, provide the basis for my audit opinion on the accompanying financial statements as a whole. Key audit matters and how audit procedures respond for each matter are described below.

Business combination

fair value of the consideration transferred and did not include acquisition-related costs, taking into account the method and significant assumptions used in measurement of fair value. I also, tested the calculations and considered the reason for the goodwill and the initial difference arising from the acquisition recognised by the Group, and reviewed the disclosures related to the acquisitions in the notes to financial statements.

As discussed in Note 13.2.1 to the financial statements regarding the acquisition of investment in a subsidiary in the year 2016, the fair value measurement of the identifiable assets acquired and the liabilities assumed as the acquisition date, and the measurement of goodwill were completed during the third quarter of the year 2017. Accordingly, the Group has restated the values of the identifiable assets acquired and the liabilities assumed, and has recorded goodwill in the financial statements of the year 2016. Moreover, as discussed in Note 13.2.2 to the financial statements regarding the acquisition of investments in subsidiaries in 2017, as at 31 December 2017, the Group provisionally recorded the acquisition using a best estimate of the values of the assets acquired and liabilities assumed, determined by applying the acquisition method. The Group will complete summarising the results of account recording to the acquisition within 2018, and the transaction amounts recorded as at 31 December 2017 may need to be changed. I have focused on this business acquisition since it is material to the financial statements as a whole. In addition, given the nature of the real estate development and hotel businesses, the management need to exercise substantial judgment to determine the assumptions used as a basis for provisional recognition of the acquisition. Therefore, there is a risk with respect to the recognition and measurement of the assets acquired and liabilities assumed, including goodwill and initial differences arising from the acquisition.

Revenue recognition

I reviewed the terms and conditions of the agreements and inquired with management as to the nature and objectives of the acquisitions in order to assess whether the acquisitions met the definition of a business combination under Thai Financial Reporting Standard No.3 (Revised 2016) Business combinations. I checked the value of the acquisitions against supporting documents and related payments to assess whether they reflected the

Impairment of goodwill

5.3 Independent Auditor’s Report

Revenue is one of the Group’s significant accounts because the amounts of revenue recorded would directly affect the Group’s profit or loss for the year. Moreover, the Group has a large number of customers and revenue is recurring daily with a variety of different type including revenue from hotel operation, rental income, dividend, interest income and etc. There are therefore risks with respect to the amount and timing of revenue recognition. I have examined the revenue recognition of the Group by • Assessing and testing the Group’s internal controls with respect to the accuracy and timing of revenue recognition in the Group’s financial statements by making enquiry of responsible executives, gaining an understanding of the controls and selecting representative samples to test the operation of the designed controls. • On a sampling basis, examining supporting documents for actual revenues transactions occurring during the year and near the end of the accounting period. • Reviewing credit notes that the Group issued after the period-end. • Performing analytical procedures on disaggregated data to detect possible irregularities in revenues transactions throughout the period. • On a sampling basis, examining revenue transactions made through journal vouchers. As discussed in Note 13 to the financial statements, impairment assessment on goodwill is a significant accounting estimate requiring management to exercise a high degree of judgment in identifying the cash generating unit, estimating the cash inflows that are expected to be generated from that group of assets in the future, and setting an appropriate discount rate and long-term growth ANNUAL REPORT 2017

149

rate. There are thus risks with respect to the amount of goodwill. I assessed the identification of cash generating units and the financial models selected by the Group’s management by gaining an understanding of management’s decisionmaking process and assessing whether the decisions made were consistent with how assets are utilised. In addition, I tested the significant assumptions applied by management in preparing estimates of the cash flows expected to be realised from the assets, by comparing those assumptions with information from both internal and external sources and comparing past cash flow projections to actual operating results in order to evaluate the exercise of management judgment in estimating the cash flow projections. I also evaluated the discount rate applied by management through analysis of the average costs of the Group and of the industry, tested the calculation of the realisable values of the assets using the selected financial model and considered the impact of changes in key assumptions on those realisable values, especially changes in the discount rate and long-term revenue growth rates. In addition, I assessed the adequacy and the appropriateness of the disclosure of information relating to impairment assessment on goodwill in the notes to the financial statements.

Impairment of investment properties and property, plant and equipment

As discussed in Note 18 and Note 19 to the financial statements, the balances of the investment properties and the property, plant and equipment used in the business operations are material to the financial statements of the Group, representing 19% and 46% of total assets, respectively. I therefore focused on auditing and considering the impairment of such assets to ensure that the book values of the assets do not exceed their recoverable amounts. The determination of the provision for impairment of assets requires management to exercise significant judgment with respect to the projections of future operating performance and the assessment of future plans, including the determination of an appropriate discount rate and key assumptions. There is thus a risk with respect to the amount of impairment loss recorded on the assets. I assessed the management’s identification of cash generating units and selection of a financial model, 150

5.3 Independent Auditor’s Report

according to the type of asset, by gaining an understanding of management’s decision-making process and evaluating whether the decisions were consistent with how assets are utilised. In addition, I gained an understanding of and assessed the following items. • The assumptions applied in preparing 5-year plans and cash flow projections of the Group, based on the understanding I gained of the process by which the figures were arrived at, comparison of the assumptions with external and internal sources of information and comparison of past cash flow projections with actual operating results in order to assess the exercise of management judgment in estimating cash flow projections, and comparison of the long-term growth rate of the Group with economic and industry forecasts. • The discount rate, based on comparison of the average cost of capital and other data with those used by comparable organisations. • The assumptions and approaches used by the independent valuer or the Group’s management in calculating the fair value of assets. I considered the scope and probability of potential changes in the key assumptions (both individually and collectively as a group) and in particular the growth rates applied in preparing the cash flow projections, by comparing them to economic and industry forecast. In addition, I reviewed the disclosure of information relating to the estimation of impairment of the assets in the notes to the financial statements.

Impairment of investments in subsidiaries

As discussed in Note 13 to the financial statements, the balance of investments in subsidiaries representing 50% of total assets, which is significant to the statement of financial position. In considering the impairment loss, the management had to exercise significant judgment with respect to the subsidiaries’ projections of future operating performance and the determination of an appropriate discount rate and key assumptions. There is thus a risk with respect to the amount of provision for impairment of investments in subsidiaries. I assessed the subsidiaries’ projections of future operating performance and the financial model prepared by the management and evaluated whether they were consistent

with the nature of business operations of the subsidiaries. In addition, I gained an understanding of and assessed the following matters. • The assumptions applied in preparing 5-year plans and cash flow projections for the subsidiaries, based on the understanding I gained of the process by which the figures were arrived at; comparison of the assumptions with external and internal sources of information and comparison of past cash flow projections with actual operating results in order to assess the exercise of management judgment in estimating cash flow projections, and comparison of the long-term growth rate of subsidiaries with economic and industry forecasts. • The discount rate, based on comparison of the average cost of capital and other data with those used by comparable organisations. • The assumptions and approaches used by the independent valuer or management in calculating the fair value of investments. I considered the scope and probability of potential changes in the key assumptions (both individually and collectively as a group) and in particular the growth rates applied in preparing the cash flow projections, by comparing them to economic and industry forecasts. In addition, I reviewed the disclosure of information relating to the estimation of impairment of the investments in subsidiaries in the notes to the financial statements.

Other Information

Management is responsible for the other information. The other information comprise the information included in annual report of the Group, but does not include the financial statements and my auditor’s report thereon. The annual report of the Group is expected to be made available to me after the date of this auditor’s report. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears 5.3 Independent Auditor’s Report

to be materially misstated. When I read the annual report of the Group, if I conclude that there is a material misstatement therein, I am required to communicate the matter to those charged with governance for correction of the misstatement.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Thai Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Thai Standards on Auditing, I exercise professional judgment and maintain professional skepticism throughout the audit. I also: ANNUAL REPORT 2017

151

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. I am responsible for the audit resulting in this independent auditor’s report.

Siraporn Ouaanunkun Certified Public Accountant (Thailand) No. 3844 EY Office Limited Bangkok: 14 February 2018

152

5.3 Independent Auditor’s Report

5.4 AUDITED Financial Statement UU CityCity Public Company Limited and its subsidiaries Public Company Limited and its subsidiaries Statement financial position Statement of of financial position As at 31 December 2017 As at 31 December 2017

Note Assets Current assets Cash and cash equivalents 7 Current investments 8 Trade and other receivables 9 Current portion of receivable from sales of investments in subsidiaries 10 Inventories Real estate projects under development 11 Other current assets Total current assets Non-current assets Restricted deposits 12 Long-term loans to related parties and interest receivables 6 Receivable from sales of investments in subsidiaries - net of current portion 10 Investments in subsidiaries 13 Investments in associates 14 Investment in joint venture 15 Other long-term investments 16 Land and project awaiting development 17 Investment properties 18 Property, plant and equipment 19 Leasehold rights 20 Intangible assets 21 Goodwill 13 Estimated amount by which the purchase cost exceeds interest in net asset value 13.2.2 Deferred tax assets 31 Other non-current assets Total non-current assets Total assets

Consolidated financial statements 2017 2016 (Restated)

(Unit: Baht) Separate financial statements 2017 2016

1,383,008,369 163,974,998 755,926,444

310,467,372 309,813,520 152,909,482

330,058,529 51,110,025 1,914,580

143,589,165 13,681,182 1,524,414

276,994,796 47,936,279 1,611,503,736 86,556,319 4,325,900,941

12,949,550 3,938,109,345 60,497,053 4,784,746,322

276,994,796 922,424,236 17,651,078 1,600,153,244

921,396,501 17,912,578 1,098,103,840

70,794,546 891,564,760

55,492,080 50,418,853

823,288 10,579,189,280

327,775 5,539,071,148

829,423,510 60,667,290 193,422,050 2,049,155,501 7,626,643,386 18,562,524,768 1,958,039,003 986,032,384 1,286,708,153

54,863,360 501,936,811 2,657,829,874 7,209,173,200 6,864,961,046 1,658,317,179 14,327,212 1,286,851,755

829,423,510 14,389,630,421 49,999,970 5,000,000 193,422,050 937,572,700 157,040,592 24,165,551 7,872,518 -

15,589,985,459 49,999,970 501,936,811 936,499,200 20,924,360 8,170,520 -

1,133,671,818 50,726,662 26,538,271 35,725,912,102 40,051,813,043

9,635,503 20,363,806,873 25,148,553,195

3,698,758 27,177,838,638 28,777,991,882

3,519,615 22,650,434,858 23,748,538,698

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

5.4 Audited Financial Statement

ANNUAL REPORT 2017

153

UU CityCity Limited and its subsidiaries PublicPublic Company Company Limited and its subsidiaries Statement financial position Statement of of financial position (continued) As at 31 December 2017 As at 31 December 2017

Note Liabilities and shareholders' equity Current liabilities Bank overdrafts and short-term loan from financial institution Short-term loans from related party and interest payables Trade and other payables Current portions of the long-term liabilities Liabilities under debt restructuring agreements Long-term loans from financial institutions Liabilities under finance lease agreements Deposits and advances received Income tax payable Other current liabilities Total current liabilities Non-current liabilities Long-term liabilities - net of current portions Liabilities under debt restructuring agreements Long-term loans from financial institutions Liabilities under finance lease agreements Provision for transaction under equity method of investment in joint venture Provision for long-term employee benefits Deferred tax liabilities Long-term provisions Other non-current liabilities Total non-current liabilities Total liabilities

22 6 23

252,976,145 845,847,966

3,537,736,105 214,374,142

306,795,254 36,962,905

3,537,736,105 75,691,857

24 25 26

31,890,060 569,530,790 522,202,796 158,171,972 38,600,080 120,043,413 2,539,263,222

18,928,738 225,328 72,876,914 4,547,160 68,926,140 3,917,614,527

188,018,453 6,552,225 2,662,280 540,991,117

225,328 6,670,253 3,658,986 3,623,982,529

24 25 26

1,136,091,106 13,611,967,671 1,961,858,090

1,167,981,166 -

10,058,388,541 -

15 27 31 28

38,282,248 64,828,048 2,436,052,839 313,251,442 154,532,549 19,716,863,993 22,256,127,215

30,947,288 851,605,231 320,504,960 4,152,567 2,375,191,212 6,292,805,739

23,152,817 117,806 10,081,659,164 10,622,650,281

16,555,647 16,555,647 3,640,538,176

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

154

5.4 Audited Financial Statement

Consolidated financial statements 2017 2016 (Restated)

(Unit: Baht) Separate financial statements 2017 2016

UU CityCity Limited and its subsidiaries PublicPublic Company Company Limited and its subsidiaries Statement financial position (continued) Statement of of financial position (continued) As at 31 December 2017 As at 31 December 2017

Consolidated financial statements 2017 2016 (Restated) Shareholders' equity Share capital Registered 861,413,132,646 ordinary shares of Baht 1 each Issued and fully paid-up 561,362,298,976 ordinary shares of Baht 1 each Share discount Deficit Other components of shareholders' equity Equity attributable to owners of the Company Non-controlling interests of the subsidiaries Total shareholders' equity Total liabilities and shareholders' equity

(Unit: Baht) Separate financial statements 2017 2016

861,413,132,646

561,362,298,976 (533,401,378,585) (9,905,027,330) (386,347,607) 17,669,545,454 126,140,374 17,795,685,828 40,051,813,043 -

561,362,298,976 (533,401,378,585) (8,848,018,929) (257,537,336) 18,855,364,126 383,330 18,855,747,456 25,148,553,195 -

561,362,298,976 (533,401,378,585) (9,493,339,516) (312,239,274) 18,155,341,601 18,155,341,601 28,777,991,882 -

561,362,298,976 (533,401,378,585) (7,763,613,113) (89,306,756) 20,108,000,522 20,108,000,522 23,748,538,698 -

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

5.4 Audited Financial Statement

ANNUAL REPORT 2017

155

UU CityCity Public Company Limited and its subsidiaries Public Company Limited and its subsidiaries Statement of comprehensive income Statement of comprehensive income For the year 31 December 2017 For the year endedended 31 December 2017

Note Continued operation Profit or loss: Revenues Revenue from hotel operation Rental income Other income Dividend income Interest income Gain on sales of assets Gain on sales of investments in subsidiaries Others Total revenues Expenses Cost of hotel operation Cost of rental Selling and servicing expenses Administrative expenses Depreciation and amortisation Loss on impairment of investments in subsidiaries Loss on impairment of assets Loss on sales of investments in subsidiaries Total expenses Loss before share of profit (loss) from investment in associates and joint venture, finance cost and income tax expenses Share of profit from investment in associates Share of loss from investment in joint venture Loss before finance cost and income tax expenses Finance cost Loss before income tax expenses Income tax expenses Loss from continued operation for the year Discontinued operation Loss from discontinued operation for the year Loss for the year

Consolidated financial statements 2017 2016 (Restated)

(Unit: Baht) Separate financial statements 2017 2016

3,867,713,574 161,984,559

1,027,064,708 62,786,068

5,966,375 58,373,255 47,860,558 184,626,275 126,030,701 4,452,555,297

22,185,655 6,218,373 447,645 46,058,099 1,164,760,548

5,966,375 318,999,808 46,856,041 675,832 372,498,056

22,185,655 147,263,126 448,470 24,330,925 194,228,176

1,436,813,950 29,511,818 321,920,737 1,673,205,776 536,128,278 781,474,278 4,779,054,837

363,441,942 3,068,613 113,057,522 630,897,045 214,119,288 1,324,584,410

366,972,618 3,997,105 247,912,681 708,403,940 421,248,720 1,748,535,064

239,049,671 4,358,670 111,015,269 354,423,610

(326,499,540) 2,842,159 (3,980,923) (327,638,304) (619,864,124) (947,502,428) (83,835,192) (1,031,337,620)

(159,823,862) 9,267,015 (150,556,847) (130,635,494) (281,192,341) (23,619,485) (304,811,826)

(1,376,037,008) (1,376,037,008) (352,590,626) (1,728,627,634) (1,728,627,634)

(160,195,434) (160,195,434) (52,707,597) (212,903,031) (212,903,031)

(17,362,553) (1,048,700,173)

(16,752,702) (321,564,528)

(1,728,627,634)

(212,903,031)

93,653,056 (222,463,327) (128,810,271)

(168,427,819) (91,620,597) (260,048,416)

(222,932,518) (222,932,518)

(91,475,071) (91,475,071)

(7,614,680) (7,614,680)

(1,098,769) (1,098,769)

Other comprehensive income for the year

(136,424,951)

(260,048,416)

(224,031,287)

(91,475,071)

Total comprehensive income for the year

(1,185,125,124)

(581,612,944)

(1,952,658,921)

(304,378,102)

14 15

13.1.1, 13.1.4

Other comprehensive income: Other comprehensive income to be reclassified to profit or loss in subsequent years Exchange differences on translation of financial statements in foreign currency Loss on changes in value of available-for-sale investments, net of income tax Other comprehensive income to be reclassified to profit or loss in subsequent years Other comprehensive income not to be reclassified to profit or loss in subsequent years Actuarial loss Other comprehensive income not to be reclassified to profit or loss in subsequent years

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

156

5.4 Audited Financial Statement

UU CityCity Company Limited and its subsidiaries PublicPublic Company Limited and its subsidiaries Statement of comprehensive income (continued) Statement of comprehensive income For the ended 31 December 2017 For theyearyear ended 31 December 2017

Note Profit attributable to Equity holders of the Company Loss from continued operation Loss from discontinued operation Non-controlling interests of the subsidiaries Profit (loss) from continued operation Loss from discontinued operation

Total comprehensive income attributable to Equity holders of the Company Total comprehensive income from continued operation Total comprehensive income from discontinued operation Non-controlling interests of the subsidiaries Total comprehensive income from continued operation Total comprehensive income from discontinued operation

Earnings per share Basic earnings per share Loss attributable to equity holders of the Company Earnings per share from continued operation Basic earnings per share Loss attributable to equity holders of the Company

Consolidated financial statements 2017 2016 (Restated)

(1,032,031,168) (17,362,553) (1,049,393,721)

(304,754,849) (16,752,702) (321,507,551)

693,548 693,548 (1,048,700,173)

(56,977) (56,977) (321,564,528)

(1,168,456,119) (17,362,553) (1,185,818,672)

(564,803,265) (16,752,702) (581,555,967)

693,548 693,548 (1,185,125,124)

(56,977) (56,977) (581,612,944)

(0.001869)

(0.001838)

(Unit: Baht) Separate financial statements 2017 2016

(1,728,627,634) (1,728,627,634)

(212,903,031) (212,903,031)

(1,952,658,921) (1,952,658,921)

(304,378,102) (304,378,102)

(0.000573)

(0.003079)

(0.000379)

(0.000543)

(0.003079)

(0.000379)

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

5.4 Audited Financial Statement

ANNUAL REPORT 2017

157

U City Public Company Limited and its subsidiaries U City Public Company Limited and its subsidiaries

Cash flow statements Cash flow statements For the 31 December 2017 For the yearyear endedended 31 December 2017

Cash flows from operating activities Loss before tax Plus loss before tax from discontinued operation Loss before tax Adjustments to reconcile loss before tax to net cash provided by (paid from) operating activities Share of profit from investment in associates Share of loss from investment in joint venture Depreciation and amortisation Allowance for long-term provision Allowance for doubtful account (reversal) Unrealised loss (gain) on exchange rate Provision for long-term employee benefits Loss on allowance for impairment of investments in subsidiaries Loss on allowance for impairment of loan to related parties Loss on allowance for impairment of assets Loss (gain) on sales of investments in subsidiaries Gain on sales of assets Loss on write-off of assets Gain on sales of current investments Gain on sales of other long-term investments Dividend income Interest income Interest expenses Profit (loss) from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Trade and other receivables Inventories Real estate projects under development Other current assets Other non-current assets Increase (decrease) in operating liabilities Trade and other payables Deposits and advances received Other current liabilities Provision for long-term employee benefits Other non-current liabilities Cash from (used in) operating activities Cash paid for interest expenses Cash paid for income tax Cash received from withholding tax refund Net cash used in operating activities The accompanying notes are an integral part of the financial statements.

158

5.4 Audited Financial Statement

Consolidated financial statements 2017 2016 (Restated)

(Unit: Baht) Separate financial statements 2017 2016

(947,502,428) (17,362,553) (964,864,981)

(281,192,341) (16,752,702) (297,945,043)

(1,728,627,634) (1,728,627,634)

(212,903,031) (212,903,031)

(2,842,159) 3,980,923 536,137,564 1,000,000 240,658,291 10,820,778 781,474,278 (184,626,275) (1,428,397) 2,004,605 (1,387,358) (45,044,803) (5,966,375) (58,373,255) 618,834,915

(9,267,015) 214,172,342 14,929,938 (213,642) 6,700,124 (447,644) 3,547,125 (20,316,331) (5,257,900) (22,185,655) (6,304,498) 128,675,172

3,997,105 36,016,796 5,498,401 247,912,681 705,531,277 2,872,663 421,248,720 (1,291,281) (519,957) (45,044,803) (5,966,375) (318,999,807) 341,594,390

4,358,670 (518,470) 2,491,448 111,015,269 (448,469) (17,434,041) (5,257,900) (22,185,655) (147,263,126) 50,722,940

930,377,751

6,086,973

(335,777,824)

(237,422,365)

(63,999,407) 3,221,310 (38,306,474) (128,480,051) (6,540,878)

(99,615,326) 1,022,582 (1,274,704,474) 1,591,715 2,409,673

(407,365) (3,850,398) 261,500 (179,143)

(206,773) (15,578,622) 7,865,593 597,927

254,366,779 14,692,086 (112,176,779) (17,344,318) 835,810,019 (629,697,381) (96,666,008) 690,450 110,137,080

63,264,541 44,331,188 10,556,986 (933,040) (1,245,989,182) (127,748,676) (22,402,682) 2,954,938 (1,393,185,602)

(38,728,952) (118,028) (996,707) (379,796,917) (348,428,376) (728,225,293)

42,500,265 (3,896,074) (1,404,023) 4,096,583 (203,447,489) (50,286,834) (2,149,192) 2,954,938 (252,928,577)

U City Public Company Limited and its subsidiaries U City Public Company Limited and its subsidiaries Cash flow statements (continued) Cash flow statements (continued) For the ended 31 December 2017 For the yearyear ended 31 December 2017

Cash flows from investing activities Decrease (increase) in current investments Decrease (increase) in restricted deposits Increase in short-term loans from related party Decrease (increase) in long-term loans to related parties Cash received from interest Cash paid for purchases of investments in subsidiaries Cash received from sales of investments in subsidiaries Cash received from sales of other long-term investments Cash paid for purchases of land and project awaiting development Cash received from sales of land and project awaiting development Cash paid for purchases of investment properties Cash paid for purchases of property, plant and equipment Cash received from sales of property, plant and equipment Cash paid for purchase of leasehold rights Cash paid for purchases of intangible assets Cash paid for long-term provisions Dividend received Net cash used in investing activities Cash flows from financing activities Cash received from bank overdrafts and short-term loan from financial institution Cash received from long-term loans from financial institutions Repayment of long-term loans from financial institutions Repayment of liabilities under debt restructuring agreements Repayment of liabilities under finance lease agreements Net cash from financing activities Decrease in translation adjustment Net increase (decrease) cash and cash equivalents Cash and cash equivalents - beginning of the year Cash and cash equivalents of subsidiaries at acquisition date Cash and cash equivalents of subsidiaries at selling date Cash and cash equivalents - end of the year Supplemental disclosures of cash flows information Non-cash item Settlement between additional investment in subsidiaries and repayment of long-term loans to subsidiaries Transfer current investments to other long-term investments Transfer real estate projects under development to investment properties Transfer deposits for purchase of land and construction to real estate projects under development Transfer deposits for purchase of land and construction to long-term loan to related parties Transfer deposits to land and project awaiting development Transfer intangible assets to property, plant and equipment Increase in investment properties from change in assumptions adjustment of long-term provision Transfer investment in subsidiary to investment in joint venture Receivable from sales of investments in subsidiaries Transfer short-term loan from financial institution to long-term loan from financial institution

Consolidated financial statements 2017 2016 (Restated)

(Unit: Baht) Separate financial statements 2017 2016

148,398,874 (4,112,119) (2,123,815) 23,884,826 (6,415,510,554) 1,285,475,473 130,105,823 (1,514,875) (313,055,431) (194,736,970) 6,828,358 (315,274,955) (2,849,688) (10,579,398) 5,966,375 (5,659,098,076)

922,315,962 (426,752) 7,293,770 (3,439,084,979) 33,856,280 (1,410,463,586) 64,002,159 (72,234,356) (28,539,543) 1,232,912 (2,502,909) 22,185,655 (3,902,365,387)

(36,319,857) (495,513) 302,000,000 (6,113,916,970) 57,289,230 (1,030,171,500) 1,285,475,473 130,105,823 (1,073,500) (157,040,592) (7,091,352) 1,598,131 (155,792) 5,966,375 (5,563,830,044)

1,117,319,463 80,417 (2,563,221,513) 217,264,033 (3,562,299,999) 33,856,280 (247,320,000) (593,452) 1,226,488 (403,345) 22,185,654 (4,981,905,974)

147,905,000 6,522,411,544 (189,935,180) (18,928,738) (43,492,259) 6,417,960,367 (77,591,592) 791,407,779 310,467,372 281,709,270 (576,052) 1,383,008,369 -

3,537,300,000 (10,161,782) (1,975,920) 3,525,162,298 (1,296,391) (1,771,685,082) 2,082,152,454 310,467,372 -

6,478,750,029 (225,328) 6,478,524,701 186,469,364 143,589,165 330,058,529 -

3,537,300,000 (1,352,400) 3,535,947,600 (1,698,886,951) 1,842,476,116 143,589,165 -

157,277,242

619,633,526 -

1,991,900,000 619,633,526 -

275,880,000

12,000,000 185,228

275,880,000 -

2,325,880 1,071,914,446

61,508,060 -

5,000,000 1,071,914,446

3,537,736,105

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

5.4 Audited Financial Statement

ANNUAL REPORT 2017

159

160

5.4 Audited Financial Statement (533,401,378,585) (533,401,378,585) (533,401,378,585)

561,362,298,976 561,362,298,976

Share discount (533,401,378,585) (533,401,378,585)

561,362,298,976

Issued and fully paid-up share capital 561,362,298,976 561,362,298,976

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

Balance as at 31 December 2016 - as previously reported Fair value adjustment of assets acquired and liabilities assumed of subsidiary (Note 13.2.1) Balance as at 31 December 2016 - as restated Increase from acquisition of subsidiaries (Note 13.2.2) Loss for the year Other comprehensive income for the year Total comprehensive income for the year Balance as at 31 December 2017

Balance as at 1 January 2016 Loss for the year - restated Other comprehensive income for the year - restated Total comprehensive income for the year - restated Balance as at 31 December 2016 - as restated

For the year ended 31 December 2017

Statement of changes in shareholdersâ&#x20AC;&#x2122; equity U City Public Company Limited and its subsidiaries For the year ended 31 December 2017 Statement of changes in shareholders' equity

(6,747,865) (8,848,018,929) (1,049,393,721) (7,614,680) (1,057,008,401) (9,905,027,330)

(8,841,271,064) 56,129 (168,427,819) 93,653,056 93,653,056 (74,774,763)

(168,483,948) (89,109,517) (222,463,327) (222,463,327) (311,572,844)

(89,109,517)

56,129 (257,537,336) (128,810,271) (128,810,271) (386,347,607)

(257,593,465)

Consolidated financial statements Equity attributable to owners of the Company Other components of equity Other comprehensive income Exchange differences on translation of financial Surplus (deficit) on Total statements in changes in value other components Deficit foreign currency of investments of shareholders' equity (8,526,511,378) 2,511,080 2,511,080 (321,507,551) (168,427,819) (91,620,597) (260,048,416) (321,507,551) (168,427,819) (91,620,597) (260,048,416) (8,848,018,929) (168,427,819) (89,109,517) (257,537,336)

U City Public Company Limited and its subsidiaries

(6,691,736) 18,855,364,126 (1,049,393,721) (136,424,951) (1,185,818,672) 17,669,545,454

18,862,055,862

383,330 125,063,496 693,548 693,548 126,140,374

383,330

Total equity Equity attributable attributable to to non-controlling owners of interests of the Company the subsidiaries 19,436,920,093 440,307 (321,507,551) (56,977) (260,048,416) (581,555,967) (56,977) 18,855,364,126 383,330

(6,691,736) 18,855,747,456 125,063,496 (1,048,700,173) (136,424,951) (1,185,125,124) 17,795,685,828

18,862,439,192

Total shareholders' equity 19,437,360,400 (321,564,528) (260,048,416) (581,612,944) 18,855,747,456

(Unit: Baht)

5.4 Audited Financial Statement

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161

561,362,298,976 561,362,298,976

Balance as at 1 January 2016 Loss for the year Other comprehensive income for the year Total comprehensive income for the year Balance as at 31 December 2016

Balance as at 1 January 2017 Loss for the year Other comprehensive income for the year Total comprehensive income for the year Balance as at 31 December 2017

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

Issued and fully paid-up share capital 561,362,298,976 561,362,298,976

For the year ended 31 December 2017

U City PublicofCompany and its subsidiaries Statement changesLimited in shareholdersâ&#x20AC;&#x2122; equity (continued) For the year ended 31 December 2017 Statement of changes in shareholders' equity (continued)

(533,401,378,585) (533,401,378,585)

Share discount (533,401,378,585) (533,401,378,585)

U City Public Company Limited and its subsidiaries

(7,763,613,113) (1,728,627,634) (1,098,769) (1,729,726,403) (9,493,339,516)

(89,306,756) (222,932,518) (222,932,518) (312,239,274)

Separate financial statements Other components of equity Other comprehensive income Surplus (deficit) on Total changes in value other components Deficit of investments of shareholders' equity (7,550,710,082) 2,168,315 2,168,315 (212,903,031) (91,475,071) (91,475,071) (212,903,031) (91,475,071) (91,475,071) (7,763,613,113) (89,306,756) (89,306,756)

Total shareholders' equity 20,412,378,624 (212,903,031) (91,475,071) (304,378,102) 20,108,000,522 20,108,000,522 (1,728,627,634) (224,031,287) (1,952,658,921) 18,155,341,601 -

(Unit: Baht)

5.5 Notes to Consolidated Financial Statements City Public Company Limited and its subsidiaries UUCity Public Company Limited and its subsidiaries Notesto to consolidated financial statements Notes consolidated financial statements year ended 31 December ForForthethe year ended 31 December 20172017 1.

General information U City Public Company Limited (â&#x20AC;&#x153;the Companyâ&#x20AC;?) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in real estate development business. The registered office of the Company is at 21, TST Tower, Soi Choei Phuang, Vibhavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok.

Basis of preparation

2.1

The financial statements have been prepared in accordance with Thai Financial Reporting Standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 11 October 2016, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2

Basis of consolidation a) The consolidated financial statements include the financial statements of the Company and the following subsidiary companies: Companyâ&#x20AC;&#x2122;s name

Subsidiaries directly owned by the Company Park Opera Company Limited Natural Real Estate Company Limited Natural Park Ville Company Limited Richee Property Management Company Limited Natural Project Chao Phraya Company Limited (*) Natural Hotel Sukhumvit Company Limited Park Gourmet Company Limited Natural Hotel Panwa Company Limited Natural Hotel Chao Phraya Company Limited (*) Khon Kaen Buri Company Limited The Joint Venture of U City Public Company Limited, Amanresorts Services Limited and Silverlink Holdings Limited N Park Global Holding Company Limited Boonbaramee Metta Property Company Limited

162

5.5 Notes to Consolidated Financial Statements

Nature of business

Country of incorporation

Percentage of shareholding 2017 2016 Percent Percent

Dormancy Dormancy Dormancy Dormancy Property development Dormancy Dormancy Dormancy Property development Hotel operation Hotel operation

Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand

100.0 100.0 100.0 99.9 64.9 100.0 100.0 100.0 -

100.0 100.0 100.0 99.9 99.9 64.9 100.0 100.0 99.3 100.0 -

Property development Investment in securities

Thailand Thailand

100.0 100.0

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 Companyâ&#x20AC;&#x2122;s name

BTS Assets Company Limited Kamkoong Property Company Limited Project Green Company Limited Prime Area 38 Company Limited (**) Lombard Estate Holdings Limited

Nature of business

Hotel /Property development Property development Property development Property development Investment in securities

Country of incorporation Thailand

Percentage of shareholding 2017 2016 Percent Percent 100.0 100.0

Thailand Thailand Thailand Hong Kong

100.0 100.0 100.0

100.0 100.0 100.0 100.0

Held by Boonbaramee Metta Property Company Limited Pacific Chiangmai Company Limited Leasing land and

Thailand

100.0

Pacific Hotel Chiangmai Company Limited

Thailand

100.0

Investment in securities/ Property development Investment in securities Property development Investment in securities

Jersey

100.0

Jersey Jersey Austria

100.0 100.0 100.0

100.0 -

Property development

Jersey

100.0

Hotel management services Hotel operation Hotel management services Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel management services Hotel management services Hotel management services Hotel management services

Austria

100.0

Germany Germany

94.9 100.0

Germany Germany Germany Germany Germany Germany Poland

100.0 100.0 100.0 100.0 100.0 100.0 100.0

Slovakia

100.0

Czech Republic

100.0

Russia

100.0

Subsidiaries indirectly owned by the Company

Held by Lombard Estate Holdings Limited Thirty Three Gracechurch 1 Limited Thirty Three Gracechurch 2 Limited Underwood Street Limited Vienna House Capital GmbH Held by Thirty Three Gracechurch 1 Limited LH Unit Trust (Held by Thirty Three Gracechurch 1 Limited 99 percent and Thirty Three Gracechurch 2 Limited 1 percent) Held by Vienna House Capital GmbH Vienna International Hotel Management AG Vienna International Asset GmbH Vienna International Deutschland GmbH Andelâ&#x20AC;&#x2122;s Berlin Hotelbetriebs GmbH VHE Berlin Hotelbetriebs GmbH VH Dresden Hotelbetriebs GmbH VHE Leipzig Hotelbetriebs GmbH VH Kronberg Hotelbetriebs GmbH VHE Darmstadt Hotelbetriebs GmbH Vienna House Clustor Sp. z.o.o. (formerly known as Employee Management Sp. z.o.o.) Vienna International Bratislava s.r.o. VI Travel Management s.r.o. OOO Employ Management RUS

5.5 Notes to Consolidated Financial Statements

structures Hotel operation

ANNUAL REPORT 2017

163

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 Company’s name

Calvus GmbH & Co. Vermietungs KG Enigma GmbH & Co. Objekt Wuppertal KG Fabella GmbH & Co. Vermietungs KG Fabio GmbH & Co. Vermietungs KG Fiora GmbH & Co. Vermietungs KG Recoop Tour a.s. UBX Plzen s.r.o. UBX Plzen Real Estate s.r.o. Amber Baltic Sp. z.o.o. WX Krakow Sp. z.o.o. SKA Andels Lodz Sp. z.o.o. UBX Katowice Sp. z.o.o. Hotel Management Angelo Katowice Sp. z.o.o. Comtel Focus S.A. UBX Krakow Sp. z.o.o. VHE Cracow Sp. z.o.o. (formerly known as Helston Sp. z.o.o) VHE Warsaw Sp. z.o.o. (formerly known as Zammia Investment Sp. z.o.o.)

Nature of business

Country of incorporation

Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Hotel operation Property development

Germany Germany Germany Germany Germany Czech Republic Czech Republic Czech Republic Poland Poland Poland Poland Poland Romania Poland Poland

Hotel operation

Poland

Percentage of shareholding 2017 2016 Percent Percent 94.0 94.0 94.0 94.0 94.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 99.9 100.0 100.0 100.0

(*) Disposed investments in subsidiaries during the

year

(**) Change status

from investment in subsidiaries to investment in joint venture on 15 November 2017

b) The Company is deemed to have control over an investee or subsidiaries if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns.

164

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

The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company.

The assets and liabilities in the financial statements of overseas subsidiary companies are translated to Baht using the exchange rate prevailing on the end of reporting period, and revenues and expenses translated using monthly average exchange rates. The resulting differences are shown under the caption of “Exchange differences on translation of financial statements in foreign currency” in the statements of changes in shareholders’ equity.

Material balances and transactions between the Company and its subsidiary companies (“the Group”) have been eliminated from the consolidated financial statements.

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 g)

Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position.

2.3

The separate financial statements present investments in subsidiaries, joint ventures and associates under the cost method.

New financial reporting standards (a) Financial reporting standards that became effective in the current year During the year, the Group have adopted the revised financial reporting standards and interpretations (revised 2016) and new accounting treatment guidance which are effective for fiscal years beginning on or after 1 January 2017. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Groupâ&#x20AC;&#x2122;s financial statements. (b) Financial reporting standards that will become effective in the future During the current year, the Federation of Accounting Professions issued a number of revised financial reporting standards and interpretations (revised 2017) which are effective for fiscal years beginning on or after 1 January 2018. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes and clarifications directed towards disclosures in the notes to financial statements. The management of the Group believe that the revised financial reporting standards will not have any significant impact on the financial statements when they are initially applied.

Significant accounting policies

4.1

Revenue recognition Revenue from hotel operation Revenues from hotel operations mainly comprise of room sales, food and beverage sales and revenues from auxiliary activities and represent the invoiced value (excluding value added tax) of goods delivered and services rendered after deducting service charges and discount. Rental income Rental income is recognised on a straight-line basis over the lease term. The rental charge depends on the area rented, the rental rate charged and the rental period stipulated in the contract. Other income Dividends are recognised when the right to receive the dividends is established.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

165

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Interest income is recognised on an accrual basis based on the effective interest rate. 4.2

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

4.3

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

4.4

Inventories Inventories are valued at the lower of weighted average cost and net realisable value.

4.5

Real estate projects under development Real estate projects under development are stated at the lower of cost and estimated net realisable value. The cost of real estate projects under development consist of the costs of land, land development, design and construction cost.

4.6

Investments a)

Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in other comprehensive income, and will be recorded in profit or loss when the securities are sold.

Investments in non-marketable equity securities, which the Group classifies as other investments, are stated at cost net of allowance for impairment loss (if any).

Investment in joint venture and associates are accounted for in the consolidated financial statements using the equity method.

Investments in subsidiaries, joint venture and associates are accounted for in the separate financial statements using the cost method.

The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of unit trusts is determined from their net asset value. The weighted average method is used for computation of the cost of investments. In the event the Group reclassifies investments from one type to another, such investments will be readjusted to their fair value as at the reclassification date. The difference between the carrying amount of the investments and the fair value on the date of reclassification are recorded in profit or loss or recorded as other components of shareholdersâ&#x20AC;&#x2122; equity, depending on the type of investment that is reclassified.

166

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss. 4.7

Land and project awaiting development Land held for future development is stated at the lower of cost and estimated net realisable value. The cost of land and project awaiting development consists of the cost of land and other related acquisition costs incurred.

4.8

Investment properties Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and allowance for loss on impairment (if any). Depreciation of investment properties are calculated by reference to their costs or the revalued amounts on the straight-line basis over the following estimated useful lives: Buildings, land and building improvement Furniture, fixture and equipment

41 - 51 years 16 years

Depreciation of the investment properties is included in determining income. No depreciation is provided on land and construction in process. On disposal of buildings and building improvement, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period when the asset is derecognised. 4.9

Property, plant and equipment/Depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Buildings are initially recorded at cost on the acquisition date. Depreciation of plant and equipment is calculated by reference to their costs or the revalued amounts on the straight-line basis over the following estimated useful lives: Buildings, land and building improvement Furniture, fixture and equipment Hotel operating equipment Vehicles

5 - 50 years 3 - 20 years 3 - 20 years 5 years

Depreciation is included in determining income. No depreciation is provided on land and construction in progress.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

167

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised. 4.10 Leasehold rights and amortisation Leasehold rights are stated at cost less accumulated amortisation and allowance for loss on impairment of assets (if any). Amortisation of leasehold rights is calculated by reference to their cost on a straightline basis over the leasehold period. Amortisation is included in determining income. 4.11 Intangible assets Intangible assets acquired through business combination are initially recognised at their fair value on the date of business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initial recognition, the intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses (if any). Intangible assets with finite lives are amortised on a systematic basis over the economic useful life 3 10 years and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss. 4.12 Goodwill Goodwill is initially recorded at cost, which equals to the excess of cost of business combination over the fair value of the net assets acquired. If the fair value of the net assets acquired exceeds the cost of business combination, the excess is immediately recognised as gain in profit or loss. Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Groupâ&#x20AC;&#x2122;s cash generating units (or group of cash-generating units) that are expected to benefit from the synergies of the combination. The Group estimates the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses relating to goodwill cannot be reversed in future periods. 4.13 Related party transactions Related parties comprise individuals and enterprises that control, or are controlled by, the Group, whether directly or indirectly, or which are under common control with the Group.

168

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

They also include associated companies and individuals which directly or indirectly own a voting interest in the Group that gives them significant influence over the Group, key management personnel, directors, or officers with authority in the planning and direction of the Group’s operations. 4.14 Long-term leases Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the lease period. The assets acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease period. Leases of property, plant or equipment which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term. 4.15 Foreign currencies The consolidated and separate financial statements are presented in Baht, which is also the Group’s functional currency. Items of each entity included in the consolidated financial statements are measured using the functional currency of that entity. Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in determining income. 4.16 Impairment of assets At the end of each reporting period, the Group performs impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. The Group also carries out annual impairment reviews in respect of goodwill. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Group could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. An impairment loss is recognised in profit or loss.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

169

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Group estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal, which exceeds the carrying amount that would have been determined, is treated as a revaluation increase. 4.17 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Group and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Group. The fund’s assets are held in a separate trust fund and the Group’s contributions are recognised as expenses when incurred. Defined benefit plans The Group has obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Group treats these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised immediately in other comprehensive income. Past service costs are recognised in profit or loss on the earlier of the date of the plan amendment or curtailment and the date that the Group recognises restructuring-related costs. 4.18 Assets held for sale and discontinued operations The Group classifies disposal assets as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the disposal assets are available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

170

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Disposal assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Gain or loss from discontinued operations are excluded from the results of continuing operations and are presented as a single amount in the profit or loss. 4.19 Provisions Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 4.20 Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax. Current tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Group recognise deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised. At each reporting date, the Group review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Group record deferred tax directly to shareholders' equity if the tax relates to items that are recorded directly to shareholders' equity. 4.21 Derivatives Interest rate swap contracts The net amount of interest to be paid to the counterparty under an interest rate swap contract is recognised as expenses on an accrual basis.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

171

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 4.22 Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between buyer and seller (market participants) at the measurement date. The Group apply a quoted market price in an active market to measure their assets and liabilities that are required to be measured at fair value by relevant financial reporting standards. Except in case of no active market of an identical asset or liability or when a quoted market price is not available, the Group measure fair value using valuation technique that are appropriate in the circumstances and maximises the use of relevant observable inputs related to assets and liabilities that are required to be measured at fair value. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into three levels based on categorise of input to be used in fair value measurement as follows: Level 1 -

Use of quoted market prices in an observable active market for such assets or liabilities

Level 2 -

Use of other observable inputs for such assets or liabilities, whether directly or indirectly

Level 3 - Use of unobservable inputs such as estimates of future cash flows At the end of each reporting period, the Group determine whether transfers have occurred between levels within the fair value hierarchy for assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis. 5.

Significant accounting judgments and estimates The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgments and estimates are as follows: Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Impairment of equity investments The Group treats available-for-sale investments and other investments as impaired when there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgment of the management.

172

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of the plant and equipment and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Goodwill The initial recognition and measurement of goodwill, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present value of those cash flows. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Provisions The subsidiaries determined the provisions using various assumptions relevant to each provision. Estimates are reviewed whenever circumstances change. Litigation The Group has contingent liabilities as a result of litigation. The Groupâ&#x20AC;&#x2122;s management has used judgment to assess of the results of the litigation and believes that no loss will result. Therefore no contingent liabilities are recorded as at the end of reporting period. 6.

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

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

173

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

(Unit: Million Baht) Consolidated financial statements

Separate financial statements

2017

2016

2017

2016

Pricing policy

Transactions with subsidiaries (Eliminated from the consolidated financial statements) Interest income Service expenses Transactions with associate Interest income

277 1

143 1

0.58 to 7.00 percent per annum With reference to market price

Cost of hotel operation

MLR - 1.25 and EURIBOR + 2.25 percent per annum With reference to market price and contract price

Transactions with joint venture Interest income Transactions with related parties Revenue from hotel operation

3.85 percent per annum

Interest income Other income Cost of hotel operation Rental and service expenses Management fee Other expenses

2 4 6 7 55 2

8 4 5 42 1

7 2

5 1

With reference to market price and contract price Contract price Contract price With reference to market price Contract price Contract price With reference to market price

As at 31 December 2017 and 2016, the balances of the accounts between the Group and related parties are as follows:

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2017

2016

2017

2016

11,660

8,426

128

219

11,660

8,426

128

219

Trade and other receivables - related parties (Note 9) Related companies Total trade and other receivables - related parties

174

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 Rental deposit - related party Related company Total rental deposit - related party Trade and other payables - related parties (Note 23) Subsidiaries Associate Related companies Total trade and other payables - related parties

1,779

1,106

1,779

1,106

1,779

1,106

1,779

1,106

11,459 14,633

11,321

373 1,028

157 40

26,092

11,321

1,401

197

Loans to related parties and interest receivables and loan from related party and interest payables As at 31 December 2017 and 2016, the balances of loans to and interest receivables and loan from and interest payables between the Group and those related parties and the movement are as follows: (Unit: Thousand Baht) Consolidated financial statements Long-term loans to related parties and interest receivables Related by

MHG NPark Development Associate Company Limited VI EuropĂ¤ische Franchise GmbH (*) Associate Prime Area 38 Company Limited (**) Joint venture Total

Balance as at 31 December 2016

Increase during the year

Decrease during the year

Translation adjustment

Balance as at 31 December 2017

50,419

2,492

(2,491)

50,420

35,503

646

36,149

804,996

50,419

842,991

(2,491)

646

891,565

(*) Increase from acquisition of subsidiaries during the year (**) Change status from investment in subsidiaries to investment in joint venture on 15 November 2017 (Unit: Thousand Baht) Separate financial statements

Long-term loans to related parties and interest receivables Park Opera Company Limited Natural Real Estate Company Limited

5.5 Notes to Consolidated Financial Statements

Related by Subsidiary Subsidiary

Balance as at 31 December 2016 232,703 3,232

Increase during the year 68

Decrease during the year -

Unrealised gain on exchange rate -

Balance as at 31 December 2017 232,703 3,300

ANNUAL REPORT 2017

175

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Natural Park Ville Company Limited Subsidiary Richee Property Management Company Limited Subsidiary Natural Hotel Chao Phraya Company Limited Subsidiary Park Gourmet Company Limited Subsidiary Khon Kaen Buri Company Limited Subsidiary The Joint Venture of U City Public Company Limited, Amanresorts Services Limited and Silverlink Holdings Limited Subsidiary Boonbaramee Metta Property Company Limited Subsidiary N Park Global Holding Company Limited Subsidiary Kamkoong Property Company Limited Subsidiary Project Green Company Limited Subsidiary Lombard Estate Holdings Limited Subsidiary Vienna House Capital GmbH Subsidiary (*) Prime Area 38 Company Limited Joint venture MHG NPark Development Company Limited Associate Less: Allowance for doubtful debts Total (*) Change

79,000

15,815

402 988 1,506,538

2 140 35,227

(404) -

583,188

29,638

7,511 720,198 84,886 1,038,625 1,547,305 50,419 5,870,810 (331,739) 5,539,071

179 16,927 269,916 25,186 467,987 5,438,028 859,740 2,492 7,145,530 (705,531) 6,439,999

(470) (1,602,049) (2,491) (1,605,414) (1,605,414)

79,000 15,815

7,902 197,631 205,533 205,533

1,128 1,541,765

612,826 7,690 737,125 354,802 1,063,811 475,419 5,635,659 804,996 50,420 11,616,459 (1,037,270) 10,579,189

status from investment in subsidiaries to investment in joint venture on 15 November 2017

Short-term loan from related party and interest payables BTS Assets Company Limited Total

Related by Subsidiary

Balance as at 31 December 2016 -

(Unit: Thousand Baht) Separate financial statements Increase Decrease Balance as at during during 31 December the year the year 2017 306,795 306,795 306,795 306,795

Directorsâ&#x20AC;&#x2122; and managementsâ&#x20AC;&#x2122; benefits During the year ended 31 December 2017 and 2016, the Group had employee benefit expenses payable to their directors and managements as below.

176

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

(Unit: Thousand Baht) Consolidated and separate financial statements

Short-term employee benefits Post-employment benefits

2017 35,043 2,230

2016 26,477 1,875

Total

37,273

28,352

Cash and cash equivalents (Unit: Thousand Baht) Separate financial statements

Consolidated financial statements Cash Bank deposits Total

2017 135,166 1,247,842 1,383,008

2016 1,933 308,534 310,467

2017 241 329,818 330,059

2016 211 143,378 143,589

As at 31 December 2017, bank deposits in saving accounts carried interests between 0.00 and 1.25 percent per annum (2016: 0.13 and 1.25 percent per annum) (The Company only: 0.13 and 1.25 percent per annum, 2016: 0.13 and 1.25 percent per annum). 8.

Current investments Consolidated financial statements 2017 2016 Fixed deposits Fixed deposits with maturity date due more than 3 months Investments in available-for-sale securities Mutual fund - cost Changes in net assets value Fair value Total current investments

(Unit: Thousand Baht) Separate financial statements 2017 2016

1,282 1,282

13,681 13,681

1 1

13,681 13,681

161,271 1,422 162,693 163,975

295,886 247 296,133 309,814

50,520 589 51,109 51,110

13,681

As at 31 December 2017, bank deposits in current investments accounts carried interests between 0.01 and 1.35 percent per annum (2016: 0.90 and 1.45 percent per annum) (The Company only: 0.90 and 1.35 percent per annum, 2016: 0.90 and 1.35 percent per annum).

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

177

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 9.

Trade and other receivables Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2017

2016

Trade receivables - related parties (Note 6) Aged on the basis of due dates Past due Up to 3 months Over 12 months

7,716 73,218

1,446 73,008

73,008

Total Less: Allowance for doubtful debts

80,934 (73,091)

74,454 (72,880)

73,008 (72,880)

7,843

1,574

128

185,266

218,297 37,996 13,424 76,513

49,452 25,669

19,894

Total Less: Allowance for doubtful debts

531,496 (65,158)

75,121 (22,893)

19,894 (19,518)

Total trade receivables - unrelated parties, net

466,338

52,228

376

Total trade receivables - net

474,181

53,802

504

Other receivables Other receivables - related parties (Note 6) Other receivables - unrelated parties Advances Interest receivables

3,817 234,619 43,239 70

6,852 92,003 164 88

1,197 210 4

91 743 164 22

Total other receivables

281,745

99,107

1,411

1,020

Total trade and other receivables - net

755,926

152,909

1,915

1,524

Total trade receivables - related parties, net Trade receivables - unrelated parties Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months

A subsidiary has pledge its trade and other receivables of approximately EUR 2.55 million (2016: Nil) to secure bank overdrafts as discussed in Note 22 to the financial statements.

178

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 10.

Receivable from sales of investments in subsidiaries As discussed in Note 13.1.1 to the financial statements, receivable from sales of investments in subsidiaries and the present value of receivable as at 31 December 2017 are as follows: (Unit: Thousand Baht) Consolidated and separate financial statements Receivable from sales of investments in subsidiaries Due within one year Due in one up to three years Total Less: Financial income awaiting recognition

Present value of receivable

280,000 895,000

276,995 829,423

1,175,000

1,106,418

(68,582)

Present value of receivable

1,106,418

Receivable from sales of investments in subsidiaries are secured by the pledge of all ordinary shares and the mortgage of all land of Natural Project Chao Phraya Company Limited and Natural Hotel Chao Phraya Company Limited to the Company. 11.

Real estate projects under development Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

Land Less: Allowance for impairment of land

2017 1,390,016 (9,730)

2016 3,526,716 (5,987)

2017 700,016 (8,809)

2016 700,016 (5,987)

Land development cost Construction cost Others

1,380,286 1,199 219,520 10,499

3,520,729 1,199 405,682 10,499

691,207 1,199 219,519 10,499

694,029 1,199 215,670 10,499

Real estate projects under development - net

1,611,504

3,938,109

922,424

921,397

The Group has mortgaged land and constructions thereon amounting to Baht 1,196 million (2016: Nil) (The Company only: Baht 506 million, 2016: Nil) as collateral against long-term loans from financial institutions as discussed in Note 25 to the financial statements. 12.

Restricted deposits As at 31 December 2017, bank deposits in Restricted deposits accounts carried interests between 0.01 and 1.50 percent per annum (2016: 0.90 and 1.50 percent per annum).

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

179

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

The Group has pledged some of its deposits at financial institutions to secure long-term loans from financial institutions and the issue of bank guarantees, as discussed in Note 25 and Note 35.3 to the financial statements, and as security with an escrow agent as stipulated in the purchase agreements, as discussed in Note 13.2.2 to the financial statements. 13.

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

Companyâ&#x20AC;&#x2122;s name Park Opera Company Limited Natural Real Estate Company Limited Natural Park Ville Company Limited Richee Property Management Company Limited Natural Project Chao Phraya Company Limited (*) Natural Hotel Sukhumvit Company Limited Park Gourmet Company Limited Natural Hotel Panwa Company Limited Natural Hotel Chao Phraya Company Limited (*) Khon Kaen Buri Company Limited The Joint Venture of U City Public Company Limited, Amanresorts Services Limited and Silverlink Holdings Limited N Park Global Holding Company Limited Boonbaramee Metta Property Company Limited BTS Assets Company Limited Kamkoong Property Company Limited Project Green Company Limited Prime Area 38 Company Limited (**) Lombard Estate Holdings Limited (GBP 77 million and EUR 27 million paid-up capital) Total Less: Provision for loss on diminution in value Net (*) Disposed (**) Change

180

Paid-up capital 2017 2016

Shareholding percentage 2017 2016 (Percent) (Percent) 100.0 100.0 100.0 100.0 100.0 100.0 99.9 99.9

22,555 33,000 43,000 1,000

1,256,000

41,353 25,000 143,000 -

41,353 25,000 143,000 737,000

800,000 1,000 700,000

22,555 33,000 243,340 999

99.9

1,255,999

64.9 100.0 100.0 -

64.9 100.0 100.0 99.3

26,841 25,000 143,000 -

26,841 25,000 143,000 736,999

800,000

100.0

800,000

1,000 700,000

100.0 100.0

1,000 290,000

100.0 100.0 100.0 -

100.0 100.0 100.0 100.0

6,762,997 2,705,848 100,000 -

6,762,997 2,705,848 100,000 10,000

4,567,470 15,722,050

3,537,300 16,694,878

(1,332,420) 14,389,630

(1,104,893) 15,589,985

2,955,000 1,100,000 100,000 -

2,955,000 1,100,000 100,000 10,000

4,567,149

3,537,300

100.0

investments in subsidiaries during the year status from investment in subsidiary to investment in joint venture on 15 November 2017

5.5 Notes to Consolidated Financial Statements

(Unit: Thousand Baht) Cost method 2017 2016

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

13.1 Subsidiaries directly owned by the Company 13.1.1 Natural Project Chao Phraya Company Limited (“NPC”) and Natural Hotel Chao Phraya Company Limited (“NHC”) On 10 May 2016, the meeting of the Board of Directors of the Company passed a resolution to approve the sale of all ordinary shares of NPC and NHC to an unrelated party. Subsequently, on 29 March 2017, the Company transferred all of the ordinary shares held in NPC and NHC to the buyer for a total consideration of Baht 1,623.5 million, with a cash payment of Baht 448.5 million paid on the agreement and share transfer date and the remainder of price to be paid in instalments within 29 March 2020, in accordance with the conditions stipulated in the share purchase and sale agreement. The balance amount is shown, net of financial income awaiting recognition, under the caption of “Receivable from sales of investments in subsidiaries” in the statement of financial position. The buyer has pledged all ordinary shares and mortgaged land of NPC and NHC as security for this debt, as described in Note 10 to the financial statements. The Company has excluded the financial statements of these subsidiaries from the consolidated financial statements since 29 March 2017. The operating results of NPC and NHC were separately presented under “Loss from discontinued operation for the year” in statements of comprehensive income for the year ended 31 December 2017 and 2016 presented for comparative purposes. Details of the book values of assets and liabilities of NPC and NHC as at 29 March 2017 are as follows: (Unit: Thousand Baht) Total

NPC

NHC

326 647,207 150,263 107 89

147 2 610,189 17 -

473 647,207 150,265 610,189 124 89

797,992

610,355

1,408,347

Other current liabilities

1,597 250

460 -

2,057 250

Total liabilities

1,847

460

2,307

796,145

609,895

1,406,040

Assets Cash and cash equivalents Real estate projects under development Other current assets Land and project awaiting development Property, plant and equipment Other non-current assets Total assets Liabilities Trade and other payables

Net assets

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

181

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Details of sales of investments in subsidiaries as at 29 March 2017 are as follows: Consolidated financial statements Cash received from sales of investments in subsidiaries Present value of receivable Less: Net assets/net investments cost of NPC and NHC Gain (loss) on sales of investments in subsidiaries

(Unit: Thousand Baht) Separate financial statements

448,500 1,071,914 (1,406,040)

448,500 1,071,914 (1,972,613)

114,374

(452,199)

The operating results relating to NPC and NHC presented under “Loss from discontinued operation for the year” are as follows: (Unit: Thousand Baht) Consolidated financial statements For the period as from 1 January 2017 to 29 March 2017

For the year ended 31 December 2016

Statements of comprehensive income Revenues Interest income

Other income

Total revenues Expenses Administrative expenses

Depreciation

6,813 -

3,284 39

Total expenses

6,813

3,323

Loss for the year from discontinued operation

(6,808)

(3,263)

13.1.2 Boonbaramee Metta Property Company Limited (“Boonbaramee”) Some ordinary shares of Boonbaramee and its subsidiaries have been pledged with a financial institution to secure liabilities under debt restructuring agreements, as discussed in Note 24 to the financial statements. 13.1.3 Lombard Estate Holdings Limited (“LEH”) On 26 May 2017, a meeting of LEH’s shareholders passed a resolution to increase its registered capital from GBP 76.5 million (76.5 million ordinary shares with a par value of GBP 1 each) to GBP 76.5 million

182

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

and EUR 27.4 million (76.5 million ordinary shares with a par value of GBP 1 each and 27.4 million ordinary shares with a par value of EUR 1 each).The Company acquired all additional ordinary shares of LEH, and as a result, its shareholding in LEH is unchanged at 100 percent. Ordinary shares of LEH and some of its subsidiaries have been pledged with a financial institution to secure long-term loans from the financial institutions, as discussed in Note 25 to the financial statements. 13.1.4 Prime Area 38 Company Limited (“PA38”) On 7 August 2017, a meeting of the Board of Directors of the Company passed a resolution to approve the sale of 50 percent of PA38’s ordinary shares to a co-investor. Subsequently, on 15 November 2017, the Company sold 49,998 ordinary shares of PA38 with a par value of Baht 100 per share, representing a 50% interest, to the co-investor. The assessment of the management was that, as a result of the disposal of ordinary shares, the Company had lost control over PA38. Therefore, the Company has excluded the financial statements of PA38 from the consolidated financial statements since 15 November 2017. The operating results of PA38 were separately presented under “Loss from discontinued operation for the year” in the consolidated profit or loss for the year ended 31 December 2017, with those of the year ended 31 December 2016 presented for comparative purposes. Details of the book values of the assets and liabilities of PA38 as at 15 November 2017 are as follows: (Unit: Thousand Baht) Assets Cash and cash equivalents Real estate projects under development Other current assets

103 1,556,684 1

Total assets

1,556,788

Liabilities Trade and other payables Short-term loans from related party and interest payables

23,340 1,602,050

Total liabilities

1,625,390

Net asset value

(68,602)

As a result of the disposal of this interest in the subsidiary, the Company retained a 50% shareholding and the investment was considered an investment in a jointly controlled entity, held by the Company and the coinvestor. The management accessed that the acquisition of the jointly controlled entity was an asset acquisition because, applying the definition in TFRS 3 (revised 2016) Business Combinations, the assets acquired do not constitute a business.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

183

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

The Company recorded a gain on the sale of the investment in profit and loss in the consolidated financial statements for the year ended 31 December 2017, as detailed below. Consolidated financial statements Selling price of investment in subsidiary Transfer price of rights in promissory notes Book value of investment in jointly controlled entity Book value of subsidiary’s net assets as at selling date Book value of investment in subsidiary as at selling date Gain on sale of investment

(Unit: Thousand Baht) Separate financial statements

836,974 (801,023) (34,301) 68,602 -

836,974 (801,023) (5,000)

70,252

30,951

The operating results relating to PA38 presented under “Loss from discontinued operation for the year” are as follows: (Unit: Thousand Baht) Consolidated financial statements For the period as from 1 January 2017 to 15 November 2017 Statements of comprehensive income Revenues Interest income Other income Total revenues Expenses Administrative expenses Total expenses Loss from discontinued operation for the year

For the year ended 31 December 2016

2 74

65 -

10,631

13,555

10,631 (10,555)

13,555 (13,490)

13.2 Subsidiaries indirectly owned by the Company 13.2.1 LH Unit Trust (“LHUT”) (held by LEH) On 8 September 2016, Thirty Three Gracechurch 1 Limited and Thirty Three Gracechurch 2 Limited, subsidiaries of LEH, invested a total of GBP 74,298,593 in units of LHUT and the Company has included the financial statements of LHUT in the consolidated financial statements since 8 September 2016. Based on assessment of the above transaction, the management of LEH believes that the investment in LHUT is a business combination because the assets acquired and liabilities assumed constitute a

184

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

business, and LEH has control over LHUT, in accordance with the definition specified in TFRS 3 (revised 2017) Business Combinations. During the third quarter of 2017, LEH completed fair value measurement of the identifiable assets acquired and liabilities assumed at the acquisition date, which was 8 September 2016. During the measurement period, LEH obtained further information on the fair value of the assets and liabilities. The Company has accordingly restated the consolidated statements of financial position as at 31 December 2016, comprehensive income for the year ended 31 December 2016, the consolidated statements of changes in shareholdersâ&#x20AC;&#x2122; equity and cash flows for the year then ended, as presented herein for comparative purposes. Details of the fair value and estimated carrying amounts of net assets acquired of LHUT as at 8 September 2016 are as follows: Fair value Assets Other current assets Investment properties Leasehold rights

(Unit: Thousand GBP) Estimated carrying amounts

23 35,500 36,000

23 35,500 39,600

71,523

75,123

146

Total liabilities

146

Net asset value Goodwill

71,377

74,977

Acquisition cost

74,299

Total assets Liabilities Trade and other payables

2,922

The amounts of adjustments affecting the consolidated statement of financial position as at 31 December 2016 were summarised below. (Unit: Thousand Baht) Increase (decrease) in consolidated statements of financial position Investment properties Leasehold rights Goodwill Estimated amount of interest in the net assets value over purchase cost

5.5 Notes to Consolidated Financial Statements

(7,035) (158,185) 128,659 (29,869)

ANNUAL REPORT 2017

185

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Deficit Other components of shareholders’ equity

(6,748) 56

The adjustments do not affect the consolidated statement of financial position as at 1 January 2016 because LEH assumed control over LHUT on 8 September 2016. The amounts of adjustments affecting the consolidated statements of comprehensive income for the year ended 31 December 2016 were summarised below. (Unit: Thousand Baht) Increase (decrease) in consolidated statements of comprehensive income Depreciation and amortisation Loss for the year Exchange differences on translation of financial statements in foreign currency Other comprehensive income for the year Total comprehensive income for the year Basic earnings per share (Baht)

1,329 1,329 22 22 (1,307) (0.000002)

13.2.2 Vienna House Capital GmbH (“VHC”) (held by LEH) On 7 February 2017, the meeting of the Board of Directors of the Company passed the key resolutions as follows: a)

To approve LEH’s acquisition of all ordinary shares of VHC, a company incorporated in Austria, from an unrelated party for an aggregate amount of EUR 35,000, to engage in investment in securities. Subsequently, LEH completed the acquisition of 35,000 shares of VHC with a par value of Euro 1 each on 10 February 2017, received all shares and paid EUR 35,000 to the seller. As a result, LEH has control over VHC from 10 February 2017 onwards. LEH’s management assessed that the assets and liabilities of VHC as at 1 January 2017 and 10 February 2017 are not materially different. LEH has therefore assumed that the date of the share acquisition was 1 January 2017 and included VHC’s operating results in the consolidated financial statements as from 1 January 2017. Based on the analysis, the management of LEH considers that the business acquisition of VHC was an asset acquisition because the assets acquired do not constitute a business applying the definition in TFRS 3 Business Combinations (revised 2016). The net assets acquired from the asset acquisition are as follows: (Unit: EUR)

186

Assets Cash and cash equivalents

11,331

Total assets

11,331

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

(Unit: EUR)

Liabilities Trade and other payables

6,555

Total liabilities

6,555

Net asset value

4,776

To approve VHC’s acquisition of hotel business in Europe from unrelated parties. Subsequently, on 31 May 2017, VHC entered into an agreement to acquire an interest in 32 entities engaged in the operation of hotels business in Europe from unrelated parties for total initial consideration price amount of EUR 167 million which comprises initial share price of EUR 130 million and initial loan acquisition costs of EUR 37 million. The total initial consideration price will then be subject to further adjustments according to the terms and conditions of the agreement. In addition, VHC has pledged some of its deposits at financial institutions with an escrow agent as a guarantee for financial price adjustments under the agreement. These are to be held in escrow until calculation of the purchase price in accordance with the agreement is finalised. VHC has included the financial statements of those entities in the consolidated financial statements since 31 May 2017. Details of those entities are as follows:

Company’s name Vienna International Hotel Management AG Vienna International Asset GmbH Vienna International Deutschland GmbH Andel’s Berlin Hotelbetriebs GmbH VHE Berlin Hotelbetriebs GmbH VH Dresden Hotelbetriebs GmbH VHE Leipzig Hotelbetriebs GmbH VH Kronberg Hotelbetriebs GmbH VHE Darmstadt Hotelbetriebs GmbH KDAG Data GmbH VI Europäische Franchise GmbH Employee Management Sp. z.o.o. Vienna International Bratislava s.r.o. VI Travel Management s.r.o. OOO Employ Management RUS OOO Employ Management BEL Vienna International Zagreb d.o.o. Calvus GmbH & Co. Vermietungs KG

5.5 Notes to Consolidated Financial Statements

Related by

Nature of business

Subsidiary Subsidiary Subsidiary

Hotel management services Hotel operation Hotel management services

Subsidiary Subsidiary Subsidiary

Hotel operation Hotel operation Hotel operation

Subsidiary Subsidiary Subsidiary Associate Associate Subsidiary Subsidiary Subsidiary Subsidiary

Hotel operation Hotel operation Hotel operation Dormancy Hotel management services Hotel management services Hotel management services Hotel management services Hotel management services

Subsidiary Business management services Subsidiary Real estate Subsidiary Hotel operation

Country of incorporation

Investment EUR 3,375,000 EUR 25,000 EUR 25,000 Germany EUR 25,000 Germany EUR 25,000 Germany EUR 25,000 Germany EUR 25,000 Germany EUR 25,000 Germany EUR 25,000 Austria EUR 3,140,000 Austria EUR 80,000 Poland PLN 40,000 Slovakia EUR 6,639 Czech Republic CZK 200,000 Russia RUB 231,948 Belarus BYR 53,000,000 Croatia HRK 20,200 Germany EUR 5,000 Austria Germany Germany

Percentage of shareholding 100.0 94.9 100.0 100.0 100.0 100.0 100.0 100.0 100.0 33.3 33.3 100.0 100.0 100.0 100.0 100.0 100.0 94.0

ANNUAL REPORT 2017

187

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Companyâ&#x20AC;&#x2122;s name Enigma GmbH & Co. Objekt Wuppertal KG Fabella GmbH & Co. Vermietungs KG Fabio GmbH & Co. Vermietungs KG Fiora GmbH & Co. Vermietungs KG Recoop Tour a.s. UBX Plzen s.r.o. UBX Plzen Real Estate s.r.o. Amber Baltic Sp. z.o.o. WX Krakow Sp. z.o.o. SKA Andels Lodz Sp. z.o.o. UBX Katowice Sp. z.o.o. Hotel Management Angelo Katowice Sp. z.o.o. Comtel Focus S.A. UBX Krakow Sp. z.o.o.

Related by

Nature of business

Subsidiary

Hotel operation

Subsidiary

Hotel operation

Subsidiary

Hotel operation

Subsidiary

Hotel operation

Subsidiary Subsidiary

Hotel operation Hotel operation

Subsidiary

Hotel operation

Subsidiary

Hotel operation

Subsidiary Subsidiary

Hotel operation Hotel operation

Country of incorporation

Investment Germany EUR 5,000 Germany EUR 5,000 Germany EUR 5,000 Germany EUR 5,000 Czech Republic CZK 24,000,000 Czech Republic CZK 200,000 Czech Republic CZK 200,000 Poland PLN 38,325,000 Poland PLN 11,206,950 Poland PLN 5,208,000 Poland PLN 50,000 Poland PLN 50,000

Subsidiary

Hotel operation

Subsidiary

Hotel operation

Subsidiary

Hotel operation

Romania

Subsidiary

Hotel operation

Poland

Percentage of shareholding 94.0 94.0 94.0 94.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

RON 42,703,016 PLN 50,000

100.0 100.0

Based on an assessment of the above transaction, the management of VHC believes that the investment is a business combination because the assets acquired and liabilities assumed constitute a business, and VHC has control over that business, in accordance with the definition specified in TFRS 3 (revised 2016) Business Combinations. Details of the acquisition are as follows: Initial acquisition cost Initial loan acquisition costs Proportionate share of net assets acquired Estimated amount by which in the purchase cost exceeds interest in net asset value

188

5.5 Notes to Consolidated Financial Statements

(Unit: Thousand EUR) 166,919 (37,266) (100,604) 29,049

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

The estimated carrying amounts of net assets acquired as at 31 May 2017 are as follows: (Unit: Thousand EUR) Assets Cash and cash equivalents Trade and other receivables Inventories Other current assets Restricted deposits Long-term loans to related parties and interest receivables Investment in associates Property, plant and equipment Intangible assets Deferred tax assets Other non-current assets Total assets Liabilities Bank overdrafts Trade and other payables Current portion of the long-term liabilities Long-term loans from financial institutions Liabilities under finance lease agreements Deposits and advances received Income tax payable Other current liabilities Long-term liabilities - net of current portions Long-term loans from financial institutions Liabilities under finance lease agreements Provision for long-term employee benefits Deferred tax liabilities

7,207 13,871 979 1,320 287 914 76 323,910 25,868 1,325 239 375,996 2,692 10,310 8,219 1,855 1,809 1,244 4,191

Other non-current liabilities

133,640 62,908 339 40,625 4,297

Total liabilities

272,129

Net asset value Less: Non-controlling interestsâ&#x20AC;&#x2122; proportionate share of net assets acquired

103,867

Proportionate share of net assets acquired

100,604

5.5 Notes to Consolidated Financial Statements

(3,263)

ANNUAL REPORT 2017

189

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

As at 31 December 2017, VHC was still in the process of determining the fair value of the acquired entities, and therefore assigned an independent appraiser to assess the fair value. In this regard, the fair values of assets acquired and liabilities assumed were the estimated values as at the date of acquisition, which might be adjusted in accordance with TFRS 3 (revised 2016) Business Combinations. Accordingly, VHC’s management is required to make a preliminary assessment of the fair values of businesses acquired as at the acquisition date. During the measurement period, which must not exceed one year from the acquisition date, VHC is to retrospectively adjust the provisional amounts recognised as at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. In addition, the fair value of the business acquired during the period is dependent on the result of the purchase price allocation exercise and this process is currently not completed. Such discrepancy is therefore recorded as “Estimated amount by which the purchase cost exceeds interest in net asset value” under non-current assets in the consolidated statement of financial position. 13.2.3 VHE Cracow Sp. z.o.o. (formerly known as Helston Sp. z.o.o.) (“VHEC”) (Held by VHC) On 5 May 2017, VHC established VHEC, in Poland to engage in real estate development business, with a registered and 100 percent called-up share capital of PLN 5,000 (100 ordinary shares with a par value of PLN 50). VHC holds a 100 percent interest in VHEC. 13.2.4 BHE Warsaw Sp. z.o.o (formerly known as Zammia Investments Sp. z.o.o.) (“VHEW”) (Held by Vienna International Hotel Management AG (“VIAG”)) On 22 November 2017, VIAG established VHEW, in Poland to engage in investment in assets business, with a registered and 100 percent called-up share capital of PLN 5,000 (100 ordinary shares with a par value of PLN 50). VIAG holds a 100 percent interest in VHEW. 13.2.5 Underwood Street Limited (“USL”) (held by LEH) On 3 May 2017, a meeting of the Board of Directors of the Company passed the key resolutions as follows: a)

To approve LEH’s establishment of USL in Jersey to engage in real estate development business, with a registered share capital of GBP 2 million (2 million ordinary shares with a par value of GBP 1 each). LEH holds a 100 percent interest in USL.

To approve USL’s acquisition of leasehold right to an office building in England from an unrelated party for GBP 7.3 million.

USL entered into an agreement to purchase the leasehold right to such building on 3 May 2017, with a condition to leaseback the property to the seller as specified in the agreement. USL has already made full payment.

190

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 14.

Investments in associates

14.1 Detail of associates:

Companyâ&#x20AC;&#x2122;s name

Nature of business

MHG NPark Property Development development Company Limited KDAG Data GmbH (*) Dormancy VI Europaische Franchise GmbH (*) Total (*) Increase

Hotel management services

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements Country of incorporation

Shareholding percentage 2017

(Percent)

2016

Equity method 2017

(Percent)

Cost method

2016

2017

2016

Thailand

50.0

55,880

54,863

50,000

Austria

33.3

Austria

33.3

4,787 60,667

54,863

50,000

from acquisition of subsidiaries during the year

14.2 Share of comprehensive income During the years, the Group recognised its share of profit from investment in associate in the consolidated financial statements as follows: Associates MHG NPark Development Company Limited VI Europaische Franchise GmbH Total

2017 1,017 1,825 2,842

(Unit: Thousand Baht) 2016 9,267 9,267

14.3 Summarised financial information about material associate Summarised information about financial position

Current assets Non-current assets Trade and other payables Current portions of long-term loans Income tax payable Other current liabilities Long-term loans - net of current portions Other non-current liabilities Net assets Shareholding percentage (Percent)

5.5 Notes to Consolidated Financial Statements

(Unit: Thousand Baht) MHG NPark Development Company Limited 2017 2016 292,743 378,071 456 519 25,493 41,152 100,000 100,000 399 53,183 16,209 108,128 2,762 2,975 111,761 109,727 50

ANNUAL REPORT 2017

191

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

55,880

Share of net assets

54,863

Summarised information about comprehensive income (Unit: Thousand Baht) MHG NPark Development Company Limited 2017 131,962 2,034

Revenue Profit for the year

15.

2016 337,823 18,534

Investment in joint venture

15.1 Details of investment in joint venture: Investment under equity method presented under â&#x20AC;&#x153;Provision for transaction under equity method of investment in joint ventureâ&#x20AC;? were detailed as follows:

Joint venture

Prime Area 38 Company Limited(*) Total (*)

Nature of business

Country of incorporation

Shareholding percentage 2017

2016

(Percent)

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

Equity method

Cost method

2017

2016

2017

2016

Property development Thailand

(38,282)

5,000

(38,282)

5,000

Change status from investment in subsidiary to investment in joint venture on 15 November 2017.

15.2 Share of comprehensive income During the year, the Group recognised its share of loss from investment in joint venture in the consolidated financial statements as follows:

Joint venture Prime Area 38 Company Limited Total

192

5.5 Notes to Consolidated Financial Statements

(Unit: Thousand Baht) For the period as from 15 November 2017 to 31 December 2017 (3,981) (3,981)

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

15.3 Summarised financial information about material associate Summarised information about financial position (Unit: Thousand Baht) Prime Area 38 Company Limited 2017 1,556,786 (1,609,992) (23,359)

Current assets Short-term loans from related parties and interest payables Other payable

(76,565)

Net assets

Shareholding percentage (Percent)

(38,282)

Share of net assets

Summarised information about comprehensive income (Unit: Thousand Baht) Prime Area 38 Company Limited 2017 77 (51,513)

Revenue Loss for the year

16.

Other long-term investments (Unit: Thousand Baht) Consolidated and separate financial statements Investments in available-for-sale securities Marketable equity securities - cost Less: Deficit on changes in value of investments Less: Allowance for loss on impairment Fair value

2017

2016

506,123 (312,651) (50) 193,422

591,244 (89,307) 501,937

During the year 2017, the Company sold available-for-sale securities with book value totalling Baht 110 million (2016: Baht 29 million) and recognised gains on the sales in profit or loss, amounting to Baht 45 million (2016: Baht 94 million).

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

193

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 17.

Land and project awaiting development Movements of the land and project awaiting development account during the year ended 31 December 2017 are summarised below.

Net book value as at 1 January 2017 Additions during the year Decrease from sales on investment in subsidiaries (Note 13.1.1) Net book value as at 31 December 2017

(Unit: Thousand Baht) Separate financial statements 936,499 1,074 937,573

Consolidated financial statements 2,657,830 1,515 (610,189) 2,049,156

The Group has mortgaged land and constructions thereon amounting to Baht 2,047 million (2016: Nil) (The Company only: Baht 935 million, 2016: Nil) as collateral against long-term loans from financial institutions as discussed in Note 25 to the financial statements. 18.

Investment properties The net book value of investment properties as at 31 December 2017 and 2016 are presented below. (Unit: Thousand Baht)

Land As at 31 December 2017: Cost Less Accumulated amortisation Translation adjustment Net book value

(Unit: Thousand Baht)

6,126,187 6,126,187

Consolidated financial statements Buildings and Construction in progress building improvement 1,546,384 (53,174) (2,015) 1,491,195

194

5.5 Notes to Consolidated Financial Statements

7,681,832 (53,174) (2,015) 7,626,643

Consolidated financial statements Land

As at 31 December 2016: Cost - restated Less Accumulated amortisation - restated Translation adjustment - restated Net book value - restated

9,261 9,261

Total

5,662,789 5,662,789

Buildings and building improvement

1,643,201 (17,021) (79,796) 1,546,384

Total

7,305,990 (17,021) (79,796) 7,209,173

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

(Unit: Thousand Baht) Separate financial statements Land Total As at 31 December 2017: Cost Less Accumulated amortisation Net book value

157,041 157,041

Movements of the investment properties account during the year ended 31 December 2017 are summarised below.

Balance at beginning of year - restated Increase from acquisition of subsidiaries Addition during the year Costs of asset improvement Increase from changing the assumption of long-term provision (Note 28) Transfer in Amortisation for the year Translation adjustment Balance at end of year

Consolidated financial statements 2017 2016 7,209,173 5,529,046 1,643,202 303,795 72,234 9,261 -

(Unit: Thousand Baht) Separate financial statements 2017 2016 157,041 -

2,326 157,277 (53,174) (2,014) 7,626,643

157,041

61,508 (17,021) (79,796) 7,209,173

The fair value of the investment properties as at 31 December 2017 and 2016 is stated below.

Land Buildings and building improvement (Including leasehold rights)

Consolidated financial statements 2017 2016 6,996,225 6,225,615 3,145,031

3,307,074

(Unit: Thousand Baht) Separate financial statements 2017 2016 245,668 -

The fair values of the above investment properties have been determined based on valuations performed by an accredited independent valuer. The fair value of the land has been determined based on market prices, while that of the buildings and building improvements has been determined using the income approach. The main assumptions used in the valuation of buildings and building improvement are rental periods, rental profit, and rate of returns. A subsidiary has mortgaged land and constructions thereon amounting to Baht 5,969 million (2016: Baht 2,667 million) as collateral against long-term loans from financial institutions as discussed in Note 25 to the financial statements.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

195

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 19.

Property, plant and equipment

Cost amount: 1 January 2016 Additions Disposals Write-off Transfer in (out) 31 December 2016 Increase from acquisition of subsidiaries (Note 13.2.2) Additions Disposals Write-off Transfer in (out) Decrease from sales of subsidiaries (Note 13.1.1) Translation adjustment 31 December 2017 Accumulated depreciation: 1 January 2016 Depreciation for the year Depreciation on disposals 31 December 2016 Depreciation for the year Depreciation on disposals Transfer out Decrease from sales of subsidiaries (Note 13.1.1) Translation adjustment 31 December 2017 Allowance for impairment loss: 1 January 2016 31 December 2016 Increase during the year 31 December 2017 Net book value: 31 December 2016 31 December 2017 Depreciation for the year 2016 2017

196

(Unit: Thousand Baht)

Consolidated financial statements

Land

Buildings and land and building improvement

2,699,351 2,699,351

5,416,478 5,416,478

328,502 6,614 (3,985) 331,131

183,052 14,539 (22) (3,547) 4,506 198,528

17,772 509 (3,862) 14,419

690,156 -

11,165,561 39,050 50,218

287,117 106,908 (27,234) 49,596

141,015 4,949 (4,301) (2,005) (163)

(4,828) -

129,209 12,413,058 43,831 194,738 (36,363) (2,005) (99,981) (330)

13,817 3,403,324

276,132 16,947,439

(199) 5,583 752,902

3,270 341,293

9,591

2,131 166,640

(199) 300,933 21,621,189

1,118,125 101,272 1,219,397 314,327 -

183,499 51,257 (3,782) 230,974 46,124 (25,631) (166)

68,665 31,529 (20) 100,174 61,143 (811) (163)

12,587 3,417 (3,282) 12,722 1,390 (4,521) -

1,382,876 187,475 (7,084) 1,563,267 422,984 (30,963) (329)

2,739 1,536,463

(75) 24 251,250

207 160,550

9,591

(75) 2,970 1,957,854

187 187 69,409 69,596

322,942 322,942 708,272 1,031,214

323,129 323,129 777,681 1,100,810

2,699,164 3,333,728

3,874,139 14,379,762

100,157 501,652

98,354 180,743

1,697 -

91,450 166,640

6,864,961 18,562,525

5.5 Notes to Consolidated Financial Statements

Furniture fixture and Hotel operating equipment equipment

Vehicles

Construction in progress

89,264 6,877 (4,691) 91,450

Total

8,734,419 28,539 (7,869) (3,547) (185) 8,751,357

187,475 422,984

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

(Unit: Thousand Baht) Separate financial statements Buildings and Furniture, fixtures Vehicles Total land and and equipment building improvement Cost amount: 1 January 2016 Additions Disposals 31 December 2016 Additions Disposals 31 December 2017 Accumulated depreciation: 1 January 2016 Depreciation for the year Depreciation on disposals 31 December 2016 Depreciation for the year Depreciation on disposals 31 December 2017 Allowance for impairment loss: 1 January 2016 31 December 2016 31 December 2017 Net book value: 31 December 2016 31 December 2017 Depreciation for the year 2016 2017

74,749 74,749 74,749

39,932 593 (3,956) 36,569 7,092 43,661

9,988 (3,861) 6,127 (4,828) 1,299

124,669 593 (7,817) 117,445 7,092 (4,828) 119,709

6,264 966 7,230 963 8,193

35,934 1,019 (3,759) 33,194 1,761 34,955

6,349 1,932 (3,280) 5,001 819 (4,521) 1,299

48,547 3,917 (7,039) 45,425 3,543 (4,521) 44,447

51,096 51,096 51,096

16,423 15,460

3,375 8,706

1,126 -

20,924 24,166 3,917 3,543

As at 31 December 2017, the Group had certain items of plant and equipment were fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation and allowance for impairment loss of those assets amounted to approximately Baht 1,112 million (2016: Baht 165 million) (The Company only: Baht 33 million, 2016: Baht 32 million). As at 31 December 2017, the Group had Land and buildings under financial lease agreements with net book values amounting to Baht 3,404 million (2016: Baht 1 million) (The Company only: Nil, 2016: Baht 1 million).

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

197

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Subsidiaries have mortgaged land and constructions thereon amounting to Baht 13,799 million (2016: Baht 5,072 million) as collateral against long-term loans from financial institutions and liabilities under debt restructuring as discussed in Note 24 and 25 to the financial statements, respectively. 20. Leasehold rights (Unit: Thousand Baht) Consolidated financial statements Costs 1 January 2016 Increase from acquisition of subsidiaries - restated (Note 13.2.1) Translation adjustment - restated

125,000 1,666,345 (81,064)

31 December 2016 - restated Additions Translation adjustment

1,710,281 315,275 4,057

31 December 2017

2,029,613

Accumulated amortisation 1 January 2016 Amortisation for the year - restated Translation adjustment - restated

44,355 7,638 (29)

31 December 2016 - restated

51,964

Amortisation for the year

19,516 94

Translation adjustment

1,658,317

31 December 2017

1,958,039

Amortisation for the year 2016 - restated 2017

198

71,574

31 December 2017 Net book value 31 December 2016 - restated

5.5 Notes to Consolidated Financial Statements

7,638 19,516

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 21. Intangible assets Consolidated financial statements Costs 1 January 2016 Additions

(Unit: Thousand Baht) Separate financial statements

19,526 2,503 185

8,551 404 -

22,214 991,343 2,850 18,146

8,955 156 -

1,034,553

9,111

5,849 2,038

343 441

7,887 40,464 170

784 454 -

31 December 2017 Net book value

48,521

1,238

31 December 2016

14,327

8,171

986,032

7,873

2016

2,038

441

2017

40,464

454

Transfer in 31 December 2016 Increase from acquisition of subsidiaries (Note 13.2.2) Additions Translation adjustment 31 December 2017 Accumulated amortisation 1 January 2016 Amortisation for the year 31 December 2016 Amortisation for the year Translation adjustment

31 December 2017 Amortisation for the year

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

199

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

22.

Bank overdrafts and short-term loans from financial institution

Bank overdrafts Short-term loans from financial institution Total

Consolidated financial statements 2017 2016 76,701 176,275 252,976

(Unit: Thousand Baht) Separate financial statements 2017 2016 -

3,537,736 3,537,736

Bank overdrafts of a subsidiary are secured by the pledge of its trade and other receivables as discussed in Note 9 to the financial statements. As at 31 December 2017, bank overdrafts carried interests between 0.75 and 2.70 percent per annum (2016: Nil) and short-term loans from financial institution carried noninterest bearing (2016: MLR minus a certain rate specified in the agreement) (The Company only: Nil, 2016: MLR minus a certain rate specified in the agreement). 23.

Trade and other payables (Unit: Thousand Baht) Separate financial statements

Consolidated financial statements 2017

2016

2017

2016

Trade payables - related parties (Note 6) Trade payables - unrelated parties Other payables - related parties (Note 6) Other payables - unrelated parties Accrued expenses

1,918 338,535 24,174 278,252 202,969

645 68,124 10,676 12,906 122,023

1,401 23,664 5,121 6,777

197 12,048 5,016 58,431

Total trade and other payables

845,848

214,374

36,963

75,692

24. Liabilities under debt restructuring agreements (Unit: Thousand Baht) Consolidated financial statements Liabilities under debt restructuring agreements Less: Current portion Liabilities under debt restructuring agreements - net of current portion

200

5.5 Notes to Consolidated Financial Statements

2017 1,167,981 (31,890)

2016 1,186,910 (18,929)

1,136,091

1,167,981

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

In 2014, a subsidiary entered into debt restructuring agreements with a financial institution. Under the conditions of such agreements, creditor has extended the repayment schedule for the subsidiary as follows: 1.

The principal amounting to Baht 1,200 million is repayable in monthly instalments commencing on 31 August 2014 and to be completed within a period of 12 years (due on 31 July 2026).

The interest rate applicable from the first to the second year is 4 percent per annum, and in the third year is 5 percent per annum. Subsequently, the interest is calculated at the rate of SPRL (Standard profit rate for prime corporate customer with long term financing) per annum.

Outstanding interest of Baht 90 million out of Baht 142 million is to be payable within September 2014. As for the remainder amounting to Baht 52 million, the financial institution agreed to forgive when the subsidiary complies with the conditions of the agreements.

Liabilities under debt restructuring agreements are guaranteed by the pledge of three subsidiariesâ&#x20AC;&#x2122; ordinary shares in proportion of each company not less than 76 percent of the total shares, the mortgage of land and constructions thereon of subsidiaries, as described in Note 13.1.2 and 19 to the financial statements, and two subsidiaries, as the co-debtors to the financial institution. The debt restructuring agreements contain covenants pertaining, among other things, prohibit of share capital reduction, merger with other entity and dividend payment.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

201

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 25.

Long-term loans from financial institutions

Loan 1 2

EURIBOR plus a certain margin specified in the agreement MLR minus a certain rate specified in the agreement

Fixed rate

EURIBOR plus a certain margin specified in the agreement Fixed rate

8 9

202

Interest rate

EURIBOR plus a certain margin specified in the agreement Fixed rate

Fixed rate

EURIBOR

Fixed rate

5.5 Notes to Consolidated Financial Statements

Repayment schedule Quarterly installments as from May 2019 to May 2022

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2017 2016 2017 2016 6,724,199 6,724,199 -

Quarterly installments as from November 2018 to November 2022 Monthly installments, completed within July 2022

3,522,208

58,774

Monthly installments, completed within December 2025 Quarterly installments, completed within July 2028 Quarterly installments, completed within December 2025 Quarterly installments, complete within December 2025 Monthly installments, completed within December 2029 Monthly installments, completed within August 2023 Monthly installments, complete within January 2024 Monthly installments, completed within April 2025 Quarterly installments, completed within July 2029 Monthly installments, completed within December 2023 Monthly installments, completed within December 2024 Monthly installments, completed within November 2025 Monthly installments, completed within December 2025 Monthly installments, completed within December 2025 Quarterly installments, completed within September 2024

15,016

243,596

365,221

190,984

144,939

41,517

194,203

82,198

172,696

68,827

240,936

46,833

47,985

139,725

14,292

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Loan

Interest rate

Repayment schedule

Fixed rate

EURIBOR plus a certain margin specified in the agreement EURIBOR plus a certain margin specified in the agreement, interest floor as stipulated in loan agreement Refer to derivatives plus a Semi-annual installments, certain margin specified in the completed within June 2028 agreement Quarterly installments, completed Refer to derivatives plus a certain margin specified in the within December 2024 agreement

23 24

Total Less: Current portion Long-term loans - net of current portion

Quarterly installments, completed within September 2024 Quarterly installments, completed within January 2031 Quarterly installments, completed within December 2022 Monthly installments, completed within December 2035

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2017 2016 2017 2016 80,490 142,342

647,684

186,509

287,499

522,825

14,181,498 (569,530) 13,611,968

10,246,407 (188,018) 10,058,389

The loan agreements contain several covenants which, among other things, require the Company to maintain a certain debt service coverage ratio, debt-to-equity ratio and security cover ratio at the rates prescribed in the agreements, and to maintain it shareholdings in subsidiaries. The agreements also stipulate conditions relating to capital increases, dividend payment and disposal of the subsidiariesâ&#x20AC;&#x2122; assets. These loans are secured by the pledge of ordinary shares of subsidiaries and the right in deposit accounts of the Company, as stipulated in the agreements and discussed in Note 12 and Note 13.1.3 to the financial statements, the mortgage of land and constructions thereon of the Group, as discussed in Note 11, Note 17, Note 18 and Note 19 to the financial statements, and the endorsement of the beneficiary rights under the insurance policies for the mortgaged land to the lender. Loans of oversea subsidiaries are secured by the Company and Vienna International Hotel Management AG and the mortgage of land and constructions thereon of those subsidiaries, as discussed in Note 19 and Note 35.3 b) to the financial statements.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

203

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 26.

Liabilities under financial lease agreements (Unit: Thousand Baht) Separate financial statements

Consolidated financial statements 2017 Liabilities under finance lease agreements Less: Deferred interest expenses Total Less: Portion due within one year Liabilities under finance lease agreements net of current portion

2016

2017

2016

2,747,498 (263,437)

247 (22)

2,484,061 (522,203)

225 (225)

1,961,858

The Company has entered into the finance lease agreements with leasing companies for rental of land and buildings for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms of the agreements are generally between 1 and 5 years. Future minimum lease payments required under the finance lease agreements were as follows: (Unit: Million Baht) As at 31 December 2017 Less than 1 year Future minimum lease payments Deferred interest expenses Present value of future minimum lease payments

595,890 (73,687) 522,203

1-5 years

Over 5 years

2,151,607 (189,749) 1,961,858

Total -

2,747,498 (263,437) 2,484,061

(Unit: Million Baht) As at 31 December 2016 Less than 1 year Future minimum lease payments Deferred interest expenses Present value of future minimum lease payments

27.

247 (22) 225

1-5 years

Over 5 years -

Total -

247 (22) 225

Provision for long-term employee benefits Provision for long-term employee benefits, which represents compensation payable to employees after they retire, was as follows:

204

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Provision for long-term employee benefits at beginning of year Increase from acquisition of subsidiaries (Note 13.2.2) Transfer from related company Included in profit or loss: Current service cost Interest cost Included in other comprehensive income: Actuarial (gain) loss arising from Demographic assumptions changes Financial assumptions changes Experience adjustments Translation adjustment Provision for long-term employee benefits at end of year

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2017

2016

30,947 12,993 -

24,247 -

16,556 -

9,968 4,097

9,868 953

5,908 792

5,081 417

2,175 316

(3,804) (1,553) 15,144 280

(3,804) (766) 5,669 -

64,828

30,947

23,153

16,556

Line items in profit or loss under which long-term employee benefit expenses are recognised are as follows:

Administrative expenses Total expenses recognised in profit or loss

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2017 10,821

2016 6,700

2017 5,498

2016 2,491

10,821

6,700

5,498

2,491

The Group expects to pay of long-term employee benefits within the next year Baht 2 million (2016: Nil) (The Company only: Baht 2 million, 2016: Nil). As at 31 December 2017, the weighted average duration of the liabilities for long-term employee benefit of the Group is 6 to 19 years (Separate financial statements: 19 years) (2016: 9 to 17 years, separate financial statements: 15 years).

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

205

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Significant actuarial assumptions are summarised below:

Consolidated financial statements Discount rate Salary increase rate (depend on age) Turnover rate (depend on age)

2017 1.6 - 3.1 0.9 - 9.0 0.0 - 30.0

2016 2.5 - 3.1 3.5 - 9.0 0.0 - 30.0

(Unit: percent per annum) Separate financial statements 2017 2.7 6.0 3.8 - 34.3

2016 3.0 5.0 - 7.0 0.0 - 25.0

The result of sensitivity analysis for significant assumptions that affect the present value of the long-term employee benefit obligation as at 31 December 2017 are summarised below: Consolidated financial statements Discount rate Salary increase rate

28.

(Unit: Thousand Baht) Separate financial statements

Increase 1%

Decrease 1%

Increase 1%

Decrease 1%

(5,904) 6,382

6,673 (5,970)

(1,438) 1,566

1,636 (1,409)

Long-term provisions (Unit: Thousand Baht) Consolidated financial statements Construction cost of car park building and skywalk Balance as at 1 January 2017 Increase from assumption adjustment Increase from revision of provision Decrease from actual payment

320,505 2,326 1,000 (10,580)

Balance as at 31 December 2017

313,251

A subsidiary, BTS Assets Company Limited, recorded provision for its contractual obligations with a bank to construct car park building and skywalk. The subsidiaryâ&#x20AC;&#x2122;s management believes that the assumptions are appropriate under the current circumstance.

206

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 29.

Warrants On 6 November 2014, a meeting of the Board of Directors of the Company approved date of issuance of the warrants to purchase the ordinary shares of the Company No.1 (“the Warrants U-W1”) issued to the Company’s existing shareholders in a ratio of 1 warrant for every 1 existing ordinary shares, without specifying the offer price. Details are as follows: Issue date Number of warrants Contractual life Exercise price

7 November 2014 180,637,710,882 units 5 years from the issue date 1 unit of the warrant can purchase 1 ordinary share at the exercise price of Baht 0.06

On 30 March 2015, a meeting of the Board of Directors of the Company approved date of issuance of the warrants to purchase the ordinary shares of the Company No.2 (“the Warrants U-W2”) issued to BTS Group Holdings Public Company Limited (“BTSG”), without specifying the offer price, in order to conform with the transactions of acquiring ordinary shares of two subsidiaries from BTSG. Details are as follows: Issue date Number of warrants Contractual life Exercise price

5.5 Notes to Consolidated Financial Statements

20 April 2015 100,043,438,606 units The maturity date of the warrant will be the same date with the Warrants U-W1 which is 6 November 2019 1 unit of the warrant can purchase 1 ordinary share at the exercise price of Baht 0.047

ANNUAL REPORT 2017

207

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 30.

Expenses by nature Significant expenses classified by nature are as follows: Consolidated financial statements 2017 Salary and wages and other employee benefits Depreciation and amortisation Consultation and professional fee Loss on impairment of investments in subsidiaries Loss on impairment of assets Loss on sales of investments in subsidiaries Commission Management fee Utility expenses Rental expenses Cost of food and beverage

31.

1,175,488 536,138 234,110 781,474 132,976 65,084 116,755 255,322 326,132

2016 (Restated) 324,800 214,172 200,933 66,668 47,695 54,392 40,121 116,247

(Unit: Thousand Baht) Separate financial statements 2017

2016

114,076 3,997 131,999 247,913 708,404 421,249 1,684 9,971 -

81,467 4,359 118,517 111,015 1,345 6,489 -

Income tax Income tax expenses for the years ended 31 December 2017 and 2016 are made up as follows: Consolidated financial statements 2017 Current income tax: Current income tax charge Deferred tax: Relating to origination and reversal of temporary differences Income tax expense reported in the statement of comprehensive income

2016

(Unit: Thousand Baht) Separate financial statements 2017

2016

(84,119)

(21,252)

284

(2,367)

(83,835)

(23,619)

The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2017 and 2016 are as follows:

208

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

(Unit: Thousand Baht) Separate financial statements

Consolidated financial statements 2017 Deferred tax on gain from the change in value of available-for-sale investments

2016

2017

2016

(235)

579

(118)

542

(235)

579

(118)

542

The reconciliation between accounting loss and income tax expense is shown below.

Loss from continued operation before income tax expense Loss from discontinued operation before income tax expense

Applicable tax rate Accounting loss before tax multiplied by income tax rate Effects of: Unrecognised deferred tax on temporary differences Loss for the year which were not recognised as deferred tax assets Non-deductible expenses Non-taxable income Deductible expenses Others Total Income tax expense reported in the statement of comprehensive income

5.5 Notes to Consolidated Financial Statements

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2017

2016

(1,728,628)

(212,903)

2016 (Restated) (947,502) (281,192) (17,363)

(16,753)

(964,865)

(297,945)

(1,728,628)

(212,903)

20-25 Percent (187,212)

20 Percent (59,589)

20 Percent (345,726)

20 Percent (42,581)

113,610

37,273

194,600

32,403

186,767 544 (27,910) (1,085) (879)

50,847 410 (4,345) (234) (743)

152,262 513 (1,193) (456) -

14,677 80 (4,345) (234) -

271,047

83,208

345,726

42,581

83,835

23,619

ANNUAL REPORT 2017

209

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

The components of deferred tax assets and deferred tax liabilities are as follows:

Deferred tax assets Fair value adjustment of assets as at business combination Unused tax loss Tax deductible goodwill Provision for long-term employee benefits Others Deferred tax liabilities Unrealised gain from revaluation of available-for-sale investments Fair value adjustment of assets as at business combination date Others Total

(Unit: Thousand Baht) Statements of financial position Consolidated Separate financial statements financial statements 2017 2016 2017 2016 6,460

12,253 7,453 4,909 50,123 81,198

284

118

2,306,013 160,227 2,466,524 (2,385,326)

851,556 851,605 (851,605)

118 (118)

As at 31 December 2017, the Group has deductible temporary differences and unused tax losses totalling Baht 7,633 million (2016: Baht 3,467 million) (the Company only: Baht 4,648 million, 2016: Baht 3,064 million), on which deferred tax assets have not been recognised as the Group believes future taxable profits may not be sufficient to allow utilisation of the temporary differences and unused tax losses. The unused tax losses amounting to Baht 3,816 million (2016: Baht 2,183 million) (the Company only: Baht 1,590 million, 2016: Baht 828 million) will expire by 2022. 32.

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

210

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Details of calculation of earnings per share for the years ended 31 December 2017 and 2016 are as below. Consolidated financial statements Loss 2017 (Thousand Baht) Earnings per share Basic earnings per share Loss attributable to equity holders of the Company Earnings per share from continued operation Basic earnings per share Loss attributable to equity holders of the Company

2016 (Thousand Baht) (Restated)

Weighted average number of ordinary shares 2017 2016 (Thousand (Thousand shares) shares)

Loss per share 2017 (Baht)

2016 (Baht) (Restated)

(1,049,394)

(321,508)

561,362,299

(0.001869)

(0.000573)

(1,032,031)

(304,755)

561,362,299

(0.001838)

(0.000543)

Separate financial statements Loss 2017

(Thousand Baht)

Earnings per share Basic earnings per share Loss attributable to equity holders of the Company (1,728,628) Earnings per share from continued operation Basic earnings per share Loss attributable to equity holders of the (1,728,628) Company

5.5 Notes to Consolidated Financial Statements

2016

(Thousand Baht)

Weighted average number of ordinary shares 2017 2016 (Thousand shares)

(Thousand shares)

Loss per share 2017

2016

(Baht)

(212,903)

561,362,299 561,362,299

(0.003079)

(0.000379)

(212,903)

561,362,299 561,362,299

(0.003079)

(0.000379)

ANNUAL REPORT 2017

211

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

An exercise price of the Warrants U-W1 and the Warrants U-W2 were higher than the average market price of the Company’s shares for the year ended 31 December 2017 and 2016. Therefore, the Company has not assumed conversion of these warrants in the calculation of diluted earnings per share. 33.

Segment information Operating segment information is reported in a manner consistent with the internal reports of the Company that are regularly reviewed by the chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its performance. For management purposes, the Group are organised into business units based on its products and services and have three reportable segments as follows:  Hotel business segment  Rental business segment  Real estate for sale business segment No operating segments have been aggregated to form the above reportable operating segments. No revenue and expense from real estate for sale business segment during the year. The chief operating decision maker monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and assessing performance. Segment performance is measured based on operating profit or loss and total assets and on a basis consistent with that used to measure operating profit or loss and total assets in the financial statements. The basis of accounting for any transactions between reportable segments is consistent with that for third party transactions. The following table present revenue and profit information regarding the Group’s operating segments for the years ended 31 December 2017 and 2016. Hotel business

Elimination Rental business

Revenues from external customers Inter-segment revenues Total revenues Segment profit Unallocated revenues and expenses: Dividend income Interest income Gain on sales of assets

212

5.5 Notes to Consolidated Financial Statements

2017

2016

2017

2016

3,868 1 3,869 2,431

1,027 1 1,028 663

162 162 132

63 63 60

2017 (1) (1) -

2016 (1) (1) -

(Unit: Million Baht) Consolidated financial statements 2017 2016 (Restated) 4,030 1,090 4,030 1,090 2,563 723 6 58 48

22 6 1

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

Hotel business Rental business 2017

2016

(Unit: Million Baht) Consolidated financial statements 2016 2017 2016 (Restated)

Elimination

2017

2016

Gain on sales of investments in subsidiaries Other income Selling and servicing expenses Administrative expenses Depreciation and amortisation Loss on allowance for impairment of assets Share of gain from investments in associates Share of loss from investment in joint venture Finance cost Income tax expenses Loss from discontinued operation Loss for the year Non-controlling interest of the subsidiaries Loss attributable to equity holders of the Company

2017

185 126 (322) (1,673) (536)

46 (113) (631) (214)

(781)

(4) (620) (84) (17) (1,048)

(131) (23) (17) (322)

(1)

(1,049)

(322)

Geographic information Revenue from external customers is based on locations of the customers. (Unit: Million Baht) 2016

2017 Revenue from external customers Thailand Overseas Total

1,121 2,909

1,027 63

4,030

1,090

Major customers For the year 2017 and 2016, the Group have no major customer with revenue of 10 percent or more of an entityâ&#x20AC;&#x2122;s revenues

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

213

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 34.

Provident fund The Group and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Both employees and the Group contribute to the fund monthly at the rate of 5 percent of basic salary. The fund, which is managed by Sin Sata Porn registered provident fund, will be paid to employees upon termination in accordance with the fund rules. The contributions for the year 2017 amounting to approximately Baht 13 million (2016: Baht 13 million) were recognised as expenses (The Company only: Baht 4 million, 2016: Baht 3 million).

35.

Commitments and contingent liabilities

35.1 Capital commitments The Group had outstanding commitments amounting to Baht 332 million and EUR 1 million (2016: Baht 199 million, EUR 1 million and SGD 1 million) (The Company only: Baht 20 million, 2016: Baht 21 million) in respect of agreements of design and consultation projects. 35.2 Lease and service commitments a)

The Group has entered into lease agreements in respect of the lease of property, plant and equipment and several service agreements in respect of operating business. The terms of the agreements are between 1 to 20 years. Future minimum rentals and service fees payable as at 31 December 2017 and 2016 are as follows: (Unit: Million Baht) Separate financial statements

Consolidated financial statements 2017 Payable within: Less than 1 year 1 to 5 years More than 5 years

2016 439 2,027 6,368

2017 52 17 -

2016 12 14 -

26 2 -

b) During the year ended 31 December 2017, the Group has loyalty and hotel business management fee under the hotel management agreements amounted to approximately Baht 55 million (2016: Baht 48 million). 1) 2) 3)

214

Type of agreement Hotel management agreement Hotel management agreement Hotel management agreement

5.5 Notes to Consolidated Financial Statements

Counter parties Khon Kaen Buri Company Limited and a related party Pacific Hotel Chiangmai Company Limited and a related party BTS Assets Company Limited and a related party

Fee rate The rates stipulated in the agreements The rates stipulated in the agreements The rates stipulated in the agreements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

c) A subsidiary (The Joint Venture of U City Public Company Limited, Aman Resorts Services Limited and Silverlink Holdings Limited) has outstanding commitments as follows: On 10 May 2005, the subsidiary entered into an agreement related to the royal land (state land) at Rong Pasee Roi Chak Sam Land Development Project with the Treasury Department, Ministry of Finance, under which the subsidiary will invest, develop and construct a hotel and other structures on the royal land, and subsequently transfer ownership of the hotel and structures to the Treasury Department. In return, the subsidiary has the right to manage the constructed hotel for 30 years commencing from the date of the execution of the agreement, with the subsidiary to pay the Treasury Department an arrangement fee of Baht 125 million on the date of the execution of the agreement and annual rental fees as follows: Years Years 1 - 11 Years 12 - 16 Years 17 - 20 Years 21 - 30

Rental rate per annum (Million Baht) 3 30 40 100

The subsidiary has consistently complied with the agreement in relation to the royal land under the Rong Pasee Roi Chak Sam Land Development Project with the Treasury Department, Ministry of Finance. However, the Treasury Department has not delivered the project site to the subsidiary in accordance with the agreement because the relocation of the Bangruk Fire Department from the project site is not complete (by no fault of the subsidiary). As a result of this problem, the subsidiary has been unable to develop and construct the project as scheduled and various contractual disputes/issues have arisen. In order to obtain a remedy for damages suffered and to provide justice to the subsidiary, the subsidiary notified the Treasury Department of various claims, including a request to consider not counting the “project management period” and “rental period” with effect from 10 May 2005. On 18 December 2015, the subsidiary filed a lawsuit against the Treasury Department, as first defendant, and the Supervising Committee for the royal land under Rong Pasee Roi Chak Sam Land Development Project, as the second defendant, with the Central Administrative Court; asking the Central Administrative Court to issue a judgment or order which (i) compels both defendants to comply with the Cabinet Resolution dated 26 August 2003, which set out a project construction period of 36 months and a project utilisation period of 30 years after construction was completed and (ii) compels the Treasury Department to exercise its authority under Section 10 of the Act on the Private Participation in the Affairs of the State of 1992, Article 34, paragraph 1 (7) and paragraph 4 of the Ministerial Regulation relating to rules and methods for administration, maintenance, utilisation and benefit arrangement on State Land B.E. 2545, and the Cabinet Resolution dated 8 July 2013, by ordering the Bangkok Metropolitan to return the royal land and expel the Bangruk Fire Station and fire officers from the site of the royal land at Rong Pasee Roi Chak Sam Land Development Project and to demarcate an area for the subsidiary to proceed with project 5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

215

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

construction as scheduled, within 30 days following the date the Court issued final judgment or within the period specified by the Court. On 13 July 2017, the Central Administrative Court issued a judgment compelling both defendants to extend the project utilisation period of the land in dispute for another 30 years, from the handover date or the date the Court issued the final judgment, as the case may be. Subsequently, on 15 August 2017, the subsidiary has submitted an appeal to the Supreme Administrative Court. The case is in the process of being considered by the Court. As at 31 December 2017, assets and liabilities related to such lawsuit recorded in the subsidiaryâ&#x20AC;&#x2122;s financial statements consist of leasehold rights amounting to Baht 72 million, construction in progress amounting to Baht 89 million and rental payable amounting to Baht 69 million. The management of the subsidiary believes that such assets and liabilities are fairly presented and have determined that the fair value of the assets is higher than the book value. 35.3 Guarantees a)

The Group had outstanding bank guarantees issued amounting to Baht 50 million and Euro 12 million (2016: Baht 50 million). The Group has pledged some of financial institution deposits as collateral against bank guarantees as discussed in Note 12 to the financial statements.

The Company and a subsidiary, Vienna International Hotel Management AG (â&#x20AC;&#x153;VIAGâ&#x20AC;?) had guaranteed loan facilities of oversea subsidiaries amounting to EUR 137 million (31 December 2016: Nil) (the Company only: EUR 82 million, 31 December 2016: Nil) as discussed in Note 25 to the financial statements.

A subsidiary, VIAG, had guaranteed building lease agreement of an oversea subsidiary amounting to EUR 1 million (31 December 2016: Nil).

35.4 Litigation On 8 April 2016, the Company filed a petition with the Minburi Province Court for an interpleader action in a legal dispute regarding the cancellation of the registration of land as public interest. The Company has an interest in this land. Currently, the litigation is in the process of being considered by the court. However, the Company received permission to open a building for use in September 2016. Subsequently, on 23 May 2017, the Company filed a petition to withdraw the interpleader action, and the Court granted the request. As a result, the Company is no longer a party to this litigation.

216

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 36.

Fair value hierarchy As at 31 December 2017, the Group had the assets and liabilities that were measured at fair value using different levels of inputs as follows: (Unit: Thousand Baht) Consolidated financial statements Level 1 Financial assets measured at fair value Investments in available-for-sale securities Assets for which fair value are disclosed Investment properties Land Office building (included leasehold rights) (GBP 71.5 million) Financial liabilities measured at fair value Financial derivative liabilities (EUR 1.7 million)

Level 2

Level 3

193,422

162,693

356,115

6,996,225 3,145,031

66,504

Level 1 Financial assets measured at fair value Investments in available-for-sale securities Assets for which fair value are disclosed Investment property Land

37.

Total

66,504 (Unit: Thousand Baht) Separate financial statements Level 2

Level 3

Total

193,422

51,109

244,531

245,668

Financial instruments

37.1 Financial risk management The Groupâ&#x20AC;&#x2122;s financial instruments, as defined under Thai Accounting Standard No.107 â&#x20AC;&#x153;Financial Instruments: Disclosure and Presentationsâ&#x20AC;?, principally comprise cash and cash equivalents, current investments, trade and other receivables, restricted deposit, loans to, investments, trade and other payables, loans from, liabilities under finance lease agreements, liabilities under debt restructuring agreements, and deposits and advances received. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Group is exposed to credit risk primarily with respect to trade and other receivables, and loans to. The Group manages the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. In addition, the Group does not have high

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

217

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

concentrations of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade and other receivables and loans to as stated in the statement of financial position. Interest rate risk The Groupâ&#x20AC;&#x2122;s exposure to interest rate risk relates primarily to its cash at banks, restricted deposit, receivables, bank overdrafts, payables, deposits and advances received, loans to, investments, loans from, liabilities under finance lease agreements and liabilities under debt restructuring agreements. Most of the Groupâ&#x20AC;&#x2122;s financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate. As at 31 December 2017 and 2016, significant financial assets and liabilities classified by type of interest rate are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.

218

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

219

Financial liabilities Bank overdrafts and short-term loan from financial institution Trade and other payables Liabilities under debt restructuring agreements Long-term loans from financial institutions Liabilities under finance lease agreements Deposits and advances received

Financial assets Cash and cash equivalents Current investments Trade and other receivables Restricted bank deposits Long-term loans to related parties and interest receivables Receivable from sales of investments in subsidiaries Other long-term investments

Consolidated financial statements

Notes to consolidated financial statements For the year ended 31 December 2017

277 410

569 522 1,344

829 1,723

892

- 13,612 - 1,962 3,538 15,574

3,538 -

253 -

14 53

1 63 69

Fixed interest rates Within 1-5 Over 1 year years 5 years 2017 2016 2017 2016 2017 2016

U City Public Company Limited and its subsidiaries

1,168 1,168

1,248

1,248 -

1,187 1,187

308

308 -

Floating interest rate 2017 2016

158 1,004

846

193 1,184

135 163 693 -

253 846

1,106 193 4,565

892

1,383 164 756 71

Note 7 Note 8 Note 12

1,187 73 5,012

Note 24 Note 25 Note 26 -

3,538 Note 22 214 -

- Note 10 502 1,380

Note 24 -

Note 22 -

Note 6

Note 7 Note 8 Note 12

Interest rate 2017 2016 (Percent per annum)

50 Note 6

310 310 153 55

Total 2017 2016

- 1,168 - 14,181 - 2,484 73 158 287 19,090

214

502 953

2 296 153 -

Non-interest bearing 2017 2016

(Unit: Million Baht)

220

5.5 Notes to Consolidated Financial Statements

Financial liabilities Bank overdrafts and short-term loan from financial institution Short-term loans from related parties and interest payables Trade and other payables Long-term loans from financial institutions Deposits and advances received

Separated financial statements

Notes to consolidated financial statements For the year ended 31 December 2017

277 278

307 188 495

829 1,684

855

- 10,058 3,538 10,058

3,538

14 -

1 9,724

50 9,724

5,489

Fixed interest rates Within 1-5 Over 1 year years 5 years 2017 2016 2017 2016 2017 2016

U City Public Company Limited and its subsidiaries

330

330 -

144

144 -

Floating interest rate 2017 2016

37 7 44

193 246

51 2 -

330 51 2 1

76 7 3,621

Note 6 Note 25 -

- Note 10 502 6,201

- 3,538 307 76 37 - 10,246 7 7 83 10,597

- 1,106 502 193 504 12,262

Note 7 Note 12

Note 22

Note 6

Note 7 Note 8 -

Interest rate 2017 2016 (Percent per annum)

5,539 Note 6

144 14 2 -

Total 2017 2016

- 10,579

2 -

Non-interest bearing 2017 2016

(Unit: Million Baht)

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 Foreign currency risk The Groupâ&#x20AC;&#x2122;s exposure to foreign currency risk arises mainly from trading transactions and borrowings that are denominated in foreign currencies. As at 31 December 2017 and 2016 the balances of financial assets and liabilities denominated in foreign currencies are summarised below. Consolidated financial statements Foreign currency

Financial assets 2017

(Thousand) US dollar Euro 11,872 SG dollar Czech Koruna 47,673 Polish Zloty 16,994 Romania Leu 199 Russia Ruble 6 Separate financial statements Foreign currency

Euro Pound Sterling

Financial liabilities

Average exchange rate

2016

2017

2016

2017

(Thousand) -

(Thousand) 88 173,179 98 -

(Thousand) 88 42 158 -

Financial assets

2016

(Baht per 1 foreign currency unit) 32.6809 35.8307 39.0273 37.7577 24.4503 24.8010 1.5260 1.3912 9.3436 8.5295 8.4055 8.3056 0.5678 0.5936

Financial liabilities

Average exchange rate 2017

2017

2016

2017

2016

(Thousand) 152,994 3,308

(Thousand) -

(Thousand) 173,601 -

(Thousand) -

2016

(Baht per 1 foreign currency unit) 39.0273 37.7577 43.9865 44.0356

37.2 Fair values of financial instruments Since the majority of the Groupâ&#x20AC;&#x2122;s financial instruments are short-term in nature or carrying interest rates closed to the market interest rates, their fair value is not expected to be materially different from the amounts presented in the statement of financial position. 38.

Capital management The primary objective of the Groupâ&#x20AC;&#x2122;s capital management is to ensure that it has appropriate capital structure in order to support its business and maximise shareholder value. As at 31 December 2017, the Group's debt-to-equity ratio was 1.251:1 (2016: 0.334:1) and the Company's was 0.585:1 (2016: 0.181:1).

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

221

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 39. Event after the reporting period 39.1 On 4 January 2018, Extraordinary General Meeting of Shareholders No. 1/2018 passed resolutions approving the following key matters: a) To approve the entire business transfer of Unicorn Enterprise Company Limited (“UE”), a subsidiary of BTS Group Holdings Public Company Limited (“BTSG”), and payment of the consideration for the entire business transfer to UE by issuing newly issued preferred shares and warrants to purchase the Company’s ordinary shares and accepting the assignment of all of UE’s loan debt to BTSG, together with interest thereon. b)

To approve the reduction of the Company’s registered capital by Baht 19,369,684,182 from the existing registered capital of Baht 861,413,132,646 to Baht 842,043,448,464, by cancelling 19,369,684,182 authorised but unissued shares with a par value of Baht 1 per share.

c) To approve the amendment of Clause 4 of the Memorandum of Association to reflect the reduction of the Company’s registered capital. d) To approve the increase of the Company’s registered capital by Baht 840,695,604,357, from the existing registered capital of Baht 842,043,448,464 to Baht 1,682,739,052,821, by issuing 280,231,868,119 new ordinary shares with a par value of Baht 1 per share and 560,463,736,238 newly preferred shares with a par value of Baht 1 per share. e) To approve the amendment of Clause 4 of the Memorandum of Association to reflect with the increase of the Company’s registered capital. f) To approve the amendment of the Articles of Association of the Company to reflect the issuance of the new preferred shares g) To approve the issuance and allocation of not more than 45,133,272,059 units of warrants to purchase the Company’s ordinary shares No. 3 (U-W3) to specific investors who have subscribed to and been allocated the newly issued preferred shares, at no cost. h) To approve the issuance and allocation of not more than 235,098,596,060 units of warrants to purchase the Company’s ordinary shares No.4 (U-W4) to the existing shareholders who have subscribed to and been allocated the newly issued preferred shares, at no cost. i) To approve the issuance and allocation of the Company’s new shares. j) To approve the disposal of 8 assets of the Company, comprising vacant land, buildings, and shares in subsidiaries. 39.2 Registration of reduction of the Company’s registered capital On 5 January 2018, the Company registered the reduction of its registered capital from the existing registered capital of Baht 861,413,132,646 to Baht 842,043,448,464, by cancelling 19,369,684,182

222

5.5 Notes to Consolidated Financial Statements

U City Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017

authorized but unissued shares with a par value of Baht 1 per share, in accordance with the resolution of the Extraordinary General Meeting of Shareholders No.1/2018. 39.3 Registration of the increase of the Company’s registered capital in accordance with the resolution of the Extraordinary General Meeting of Shareholders No.1/2018 and registration of the increase of the Company’s registered capital as a result of the exercise of Warrant of the Company No.1 (U-W1) On 9 January 2018, the Company registered the increase of its registered capital from the existing registered capital of Baht 842,043,448,464 to Baht 1,682,739,052,821, by issuing 280,231,868,119 newly issued ordinary shares with a par value of Baht 1 per share, and 560,463,736,238 newly issued preferred shares, in accordance with the resolution of the Extraordinary General Meeting of Shareholders No.1/2018. Later, on the same date, after completion of the registration, the Company also registered the increase of its paid-up capital as a result of the exercise of Warrant of the Company No.1 (U-W1) to purchase 9,397,000 shares. As a result, the Company’s paid-up capital increased from Baht 561,362,298,976 to Baht 561,371,695,976. 39.4 The offering of newly issued preference shares via private placement On 22 January 2018, the Company registered the increase of its paid-up capital from Baht 561,371,695,976 to Baht 587,755,887,152 as a result of an offering of 26,384,191,176 newly issued preference shares to Bangkok Bank Public Company Limited (“BBL”) via private placement. 40. Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 14 February 2018.

5.5 Notes to Consolidated Financial Statements

ANNUAL REPORT 2017

223