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RISK FACTORS & RISK MANAGEMENT ĝ 5& +6%A.9I& 

The company realized the important of risk management, therefore we have target to manage the risks within acceptable level. Based on the company business, the possible risk factors and the impact on our future operation are as follows.

1. Risk in construction work 1.1 Fluctuation of construction material’s price The Company realized that major construction material’s price is always change and uncontrollable. In order to minimize the risk, we have negotiated in advance and fixed price for appropriate period with major suppliers for all projects. As a result, the fluctuation of material price can be controlled as well as the construction budget. This strategy also can reduce the burden of our sub-contractors. They can buy major construction material at our negotiated price which is lower than market price. In addition, the Company also has a group of pricing analyst who perform price analysis, monitoring and searching for alternative construction material. This is to ensure that we have the latest pricing in order to determine construction price as well as to be competitive in the market. The Company also emphasized on research and development. We have established the R&D team which responsible to study new construction technology and alternative material such as tunnel form system, precast element, bathroom pods, solar cell, and mechanical lift. We believe new invention can help to reduce cost and more effective. That is support to two-storey and three-storey townhome construction period in 6-7 months. It can control the risks of price fluctuations of materials. For condominium, which must be at least 1-2 years construction the company to evaluate the fluctuations in the costs of construction. 1.2 Contractor Performance & Experience In order to reduce risk which may occur by contractors, the Company had established One Up Co. Ltd (a subsidiary with 99.99% shares hold by the Company) in November 2007. The main objectives are to be able to control construction budget, quality and delivery on time. We have employed professional top management who has experienced in local and international construction business. Most of our engineers were recruited from local top university and have direct experience in high rise and low rise building. Apart of subsidiary company, the Company also awarded contract to other contractors. The Company selected middle to big size contractors who has good performance and strong financial background. This is to ensure that this group of contractor have high responsibility and be able to pay wages to their worker on time. Therefore can minimize the risk of project delay or stop construction due to contractor stop work. 1.3 Construction standard and quality The Company is focus on quality and standard in order to reduce risk of being complaint from customer. Therefore, the Company would like to obtain international standard which is recognize worldwide. One Up Co., Ltd (its subsidiary), which is acting as construction division of the Company have conducted the process according to ISO standard. The company successfully audited and was awarded ISO 9001:2000 in 2008 and upgraded to ISO 9001:2008 in 2009 form Moody International Co., Ltd. In addition, the Company had set up Quality Assurance Department which consists of QA, QC and inspector who responsible to monitor quality of work process and report directly to management. This is to ensure that our product meet quality standard and conform to customer requirements. The Company also focuses on personal development emphasis on the staff competency. We have organized training in order to provide knowledge in term quality and standard to employees, sub contractors and direct workers. This prevention action will help to increase all party skill and therefore reduce risk of not meeting quality and standard. 1.4 The shortage of workers in the construction sector Data from the Thai Construction Industry Association. Indicate that workers in the construction sector was approximately 4 million people next year would be around 200 - 300 hundred people shortages due to migration to the agricultural sector because of the motivation of agricultural products have risen. The company has a solution by developing technology or using alternative construction materials package to solve the labor shortage.

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AREEYA AWARD WINNING ANNUAL CHIC REPORT 2010

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A_2010 AREEYA PROPERTY PCL Annual Report 2010

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