Ps 08 by Brother Roger

Contents 1 2 3 4 5

9 10 11

12 13 14 15 16 17 18

5 Years Financial Highlights Yearly Financial Information Message from the Chairman Vision & Mission Business Operations 5.1 5 Years History of Development 5.2 Product Category 5.3 Revenue Structure 5.3.1 Production and Marketing Management 5.4 Capital Structure 5.5 Business Trend and Key Factors 5.6 Risk Factors 5.6.1 Business Risk Factors 5.6.2 Other Risk Factors Shareholding Structures 6.1 Major shareholders 6.2 Restriction on Foreign Shareholding 6.3 Dividend Policy 6.4 Subsidiaries' Shareholding Structure Management Structure 7.1 Organizational Structure 7.2 The Board of Directors 7.3 Working Committees 7.3.1 Audit Committee 7.3.2 Risk Management Committee 7.3.3 Corporate Governance Committee 7.3.4 Nomination and Remuneration Committee 7.4 Executive Committee 7.5 Management 7.6 The Board & Management Profile 7.7 Controlling Persons of the Company and its Subsidiaries Remuneration of Directors and Management 8.1 Monetary remuneration 8.2 Other remuneration Good Corporate Governance Internal Control 10.1 Control of information exploitation Connected Transactions 11.1 Disclosure of connected transactions 11.2 Necessity and Appropriateness of Connected Transactions 11.3 Measures or procedures for approving connected transactions Management Discussion and Analysis The responsibility for the Financial Reporting of the Board of Directors Audit Committee Report Audit fee Corporate Social Responsibility General Information Annual financial statements and Audit report of Certified Public Accountant

2 3 4 7 8 11 11 17 23 27 30 30 34 35 35 35 36 37 38 38 39 44 44 47 49 51 53 55 57 71 72 72 74 75 83 85 86 87 88 88 89 91 92 95 96 100 101

5 Years Financial Highlights

Issued and Paid-Up share capital 3,000 Million share and Million Baht 2,500

2,174

2,125 2,000 1,500

2,180

Million Baht 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

2,191

1.700 1,388

1,000 500 0

2003

2004

2005

2006

2007 Restated

2008

Million Baht 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

8,913

8000

6,568

6,136

7,074

5,331

6000 4,333 4000 2000

Baht per share 9 8 7 6 5 4 3 2 1

16,292

11,095 9,843

8,783

10,110

9,386 6,270

5,348

5,003 3,780

2,857

6,182

3,573

2,491

2003

8,206

7,338

2004

2005

2,049

2,889

2006

2007 Restated

2008

Housing Unit transferred

Units 10000

Consolidated Assets, Liabilities, Equities Assets Liabilities Equities

2003

2004

2005

2006

2007

2008

Result of Operations 16,187

Booking Revenue Net Profit

13,646

7,516

7,149

9,093

8,203

6,083

5,112

4,872

3,741

2,373 930

954

2003

1,272

2004

2005

Time 1.5

Per share basis (Baht)

7,635

13,033

1,303

2006

1,302

2007 Restated

2008

Debt to Equity Ratio 1.32

8.4 Book Value per share Earning per share Maket Pice at Year-end (Stated 2005)

1.2 0.9

4.86

4.6

4.4

3.8

3.4

0.46

2.2 0.69

0.61

0.57

0.6

3.0 2.1

D : E ratio Int. Bearing D : E (Debt - Cash Ending) : E ratio (Int. Bearing Debt - Cash Ending) : E ratio

0.87

5.85

0.28 0.64

0.73

0.60

2005

2006

2007 Restated

1.08

0.3

2008

0.0

0.36

0.35 0.15

0.22

0.21 0.02

2003

2004

2003

2004

2005

2006

2007 Restated

2008

Yearly Financial Summary

2004

2005

2006

Booking (million Baht) Housing Unit transferred

6,083 5,331

7,516 6,136

Assets Liabilities Equities Revenue Net Profit Per Share basis (Baht per share) Book Value per share Earning per share Market Price at Year-end (started 2005)

8,783 5,003 3,780 4,872 930

Paid- Up capital (Million Baht, Million share) Market Cap. (million Baht) Dividend Paid during the year (million Baht) Financial Ratio Return on Assets (%) Return on Equity (%) Net Profit Margin (%) P/E (times) P/BV (times)

7,149 6,568

2007 (Restated) 13,646 7,074

2008 16,187 8,913

9,843 3,573 6,270 7,635 1,272

9,386 2,049 7,338 8,203 1,303

11,095 2,889 8,206 9,093 1,302

16,292 6,182 10,110 13,033 2,373

2.2 0.64 n/a

3.0 0.73 4.9

3.4 0.60 5.9

3.8 0.60 8.4

4.6 1.08 4.4

1,700 n/a

2,125 10,328

2,174 12,675

2,180 18,314

2,191 9,598

319.2

464.9

388.8

434.8

480.9

11% 25% 19% n/a n/a

13% 20% 17% 8.6 1.6

14% 18% 16% 9.6 1.7

12% 16% 14% 16.2 2.2

15% 23% 18% 4.9 1.0

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Message from the Chairman

Dr. Pisit Leeahtam Chairman of the Board of Directors

However, adjustment of the business strategy, high competitiveness, and the efficient teamwork could still drive its leaping growth and stability in 2008. Sales in the first quarter were record high at 4,884 million baht. The second quarter saw a record value of house ownership transfers which totaled 3,270 million baht. This record was broken in the fourth quarter when the value of ownership transfers was at a new high of 4,265 million baht. With these impressive figures, the Companyûs sales in 2008 totaled 16,188 million baht – an increase of 19% over 2007, and the total value of ownership transfers rose by 43% to 12,969 million baht.

Thongma Vijitpongpan Chief Executive Officer 4

The impact of the global economic crisis was evident in 2008 and has now in 2009 become widespread. All business sectors are now under the pressure of the economic recession and decreasing consumer confidence and spending. Business investment has declined and the Thai economy is now likely to grow at a depressive rate . As part of the Thai economy, and as one of the country没s leading property developers, Preuksa has undeniably been affected in terms of market demands since the fourth quarter, despite the fact that the Company has been constantly wary of the situation. However, adjustment of the business strategy, high competitiveness, and the efficient teamwork could still drive its leaping growth and stability in 2008. Sales in the first quarter were record high at 4,884 million baht. The second quarter saw a record value of house ownership transfers which totaled 3,270 million baht. This record was broken in the fourth quarter when the value of ownership transfers was at a new high of 4,265 million baht. With these impressive figures, the Company没s sales in 2008 totaled 16,188 million baht - an increase of 19% over 2007, and the total value of ownership transfers rose by 43% to 12,969 million baht. Preuksa presently offers a complete range of products to serve all target segments. Houses offered are in three main categories: townhouses, single-detached houses and condominiums, and are designed to serve the needs of all customer levels. The Company can still maintain leadership in the markets for middle to low income target customers. With such diverse products, it stands a very good chance to grow further in terms of sales and market share. This was the case in 2008 for all the three categories. The success such as that witnessed in the previous year was attributed mainly to its competitive advantages, a flexible management system and modern construction technology, all of which enabled it to manage the work and control the costs efficiently and effectively and to adjust business strategies swiftly.

For 2009, recognizing the severity of the economic difficulties lying ahead, we have adjusted our policy, strategies and overall targets. However, the aim is still the same - to maintain the growth of the business continually and consistently through constantly prudent management, at the same time preparing ourselves for an opportunity to expand in order to maintain growth. We will take advantage of our strength - our competitive advantages, streamline business approaches, maintain operational flexibility, and manage inventory efficiently, to weather this economic storm, to ensure long-term stability of the business, as well as to maintain our financial strength. In addition to business expansion, importance has been placed on strengthening the organization to ensure readiness to seize the opportunity when the economy recovers. One of the actions taken was adoption of a supply chain management system for maximum efficiency through cost reduction, which is deemed very important. Introduction of the PS Precast technology in the construction of houses and high-rise buildings has also significantly reduced the construction time and enabled the company to keep costs lower than the competition. 2009 targets are: total sales of 18,000 million baht - 11% increases from 16,188 million baht of 2008; total revenues of 17,000 million baht - 31 % increase from 12,969 million baht generated from ownership transfers in 2007; 22 new projects to achieve the said targets, broken down into 8 townhouse projects, 11 single-detached house projects, 2 condominium projects and 1 project in India. Expansion into foreign markets has been incorporated in the Company没s long-term business plan which calls for maintenance of the growth rates. As it has been forecast that domestic demands will shrink to no more than 50,000-60,000 units per year, the Company sees foreign markets as a business opportunity. India, being one of the largest markets in Asia, has been chosen as the

The Company is not only proud of the operational results. It has also enjoyed recognition in various areas; e.g., the Innovative Organizational Culture Award 2008, received at the 2008 Thailand Most Innovative Company Award Presentation event. In addition to conducting business with fairness, corporate governance, transparency and ethics, the Company is firmly committed to Corporate Social Responsibility (CSR) activities, which have been promoted both in and after the business process. These included social contributions, assistance to the underprivileged, and community and social development initiatives. Such CSR activities, coupled with continued improvement of the management and administration systems for customer satisfaction, clearly reflected the Companyûs commitment to its responsibility to the customers. Granting of scholarships, which had been continued for more than six years, and support extended to the 2008 World Robo Cup were examples of other contributions made. The Company firmly believes that, with its determination, expertise, competence of the management team and cooperation from all levels of employees, the targets set will all be achieved, and çPreuksaé will be further driven to become a leading organization in Thailand and the region.

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first foreign country to invest in. Following legislative changes and removal of certain obstacles to foreign investment, the country has become an attractive investment site. The first project is in Bangalore where demands for housing are strong - demands that are in line with the types of products in which the company specializes and has competitive advantages.

Dr.Pisit Leeahtam Chairman of the Board of Directors

Thongma Vijitpongpan Chief Executive Officer

Vision & Mission Vision : To be the top-ranked property developer in Thailand, highly valued, trusted and recognised as the highest top of mind brand by customers in all of our market segments from the çValue for moneyé house quality and excellent services we dedicate to deliver

Mission :

PS Value 1. To be the leader and the largest revenue earner among 1. Passion to win Thailandûs property developers by the year 2010. 2. Getting Things Done 2. To be a strictly customer centric company, turning out 3. Trust worthiness innovative products and services with a positive attitude to 4. Customer Focus fulfill customersû needs, satisfactions and expectations. 5. Delivery Excellence 3. To be a Company employing sophisticated supply chain 6. Taking Ownership for Customer Experience management and advanced technology to gain overall cost 7. Synergy of Team leadership and, in turn, to offer affordable housing to 8. Creativity and Innovation customers. 9. Pride in Belonging 4. To be a Company full of proud and continuously selfdeveloping employees and attractive as the Employer of Competitive Business Strategy in Real Estate Sector 1. Manage a business with Win-Win situation in both product Choice. and service that customers, related business partners and 5. To be a Company with positive image and good Corporate employees can mutually enjoy the benefit and profit. Governance. 2. Aim to developing a superior quality product and service. 6. To be a good corporate citizen with commitment to 3. Always be innovative in product and service development. Corporate Social and Environmental Responsibility. 4. Focus on developing a leading product for each segment to 7. To be a Company committed to adding value to Shareholdersû guarantee customer need and enhance customer wealth. satisfaction. 5. Create competitive products and differentiate service to ensure customer need and satisfaction. 6. Be a leader in cost-reduction strategy. 7. Unremittingly enhance business process. 7

Business Operations

Major Developments during the past 5 years Year 2003 - The Companyûs paid-up capital increased from Baht 920 million The Stock Exchange of Thailand has granted a listing of common shares of Preuksa Real Estate Public Company Limited under the to Baht 1,388 million ticker çPSé of which trading began on December 6, 2005 Year 2004 - The Companyûs paid up capital increased from Baht 1,388 million Year 2006 The Company increased its paid-up capital from Baht 2,125.0 to Baht 1,700 million million to Baht 2,159.7 million on January 9, 2006 - The Company started building its Precast Concrete Factory with a semi-automated pallet circulating system in production, the most The Company increased its paid-up capital from Baht 2,159.7 modern technology in Thailand. The project cost was approximately million to Baht 2,166.7 million on July 5, 2006, to accommodate the first exercise of warrants by the Companyûs directors, employees Baht 650.0 million (excluding the cost of land) and advisors and/or the subsidiaries (PS-WA), in a total amount of - The Company has enhanced its operating work system by 6,992,400 units on June 30, 2006 employing Enterprise Resource Planning or ERP framework. SAP computer software was installed to support such Companyûs The Company has adopted Business Process Improvement (BPI), system and to upgrade its information technology system. The Business Intelligence (BI) and Balance Score card Software to enhance the Companyûs operations and management investment cost was Baht 30 million. Precast Concrete Factory was modified for more efficiency in Year 2005 - The Precast Concrete Factory completed and started producing production process housing parts The Company has set up two new subsidiaries named Putthachart - The Precast Fence and Pillar Factory, with approximately Baht Estate Company Limited and Phanalee Estate Company Limited, 150 million project cost (excluding the value of the land at location), with an initial registered share capital of Baht 1 million each and later registered to increase the authorised share capital to Baht 50 was completed and has commenced production million on November 22, 2006 the business expansion, to increase the competitive edge in the The Company was granted approval of issuance of short-term Bill future and to reduce the operating cost of Exchange (BE) (within 270 days) to investors at a total amount The Company converted itself into a public company and increased of Baht 1,000 million its registered capital from Baht 1,700 million to Baht 2,232.5 million and reduced the par value from Baht 100 to Baht 1

Year 2007 The Company increased its paid-up capital from Baht 2,166.7 million to Baht 2,173.8 million on January 10, 2007, to accommodate the second exercise of warrants by the Companyûs directors, employees and advisors and/or the subsidiaries (PS-WA), in a total amount of 7,104,600 units, on December 29, 2006

At the 2007 Annual General shareholdersû Meeting held on April 9, 2007, the shareholders approved the issuance and offer for sale of Debt Securities under the project (Shelf Filing) to decrease the financial cost of the Company and to provide an alternative of sources of funds for project development. The maximum amount of Debt Securities must not exceed Baht 2,000 million within three years. The Company issued 2 Tranche of unsubordinated and As per the 2007 Annual General shareholdersû Meetingûs approval, unsecured debentures in an aggregate amount of Baht 1,000 the Company registered the decrease in authorised share capital million as follow: through eliminating non-traded shares of the Company in the amount of 7,746,600 shares at a par value of Baht 1, and also registered Tranche 1: Debenture of Baht 600 million (600,000 units at the Amendment of Memorandum of Association Article no.4 to be Baht 1,000), issued on August 8, 2007, bears interest at in line with the decrease of the Companyûs registered capital, from 4.91% per annum, semi-annually payable and matures on Baht 2,232.5 million to Baht August 9, 2010. 2,224.75 million, with the Ministry of Commerce, on April 20, 2007

Tranche 2: Debenture of Baht 400 million (400,000 units at Baht 1,000), issued on August 15, 2007, bears interest at 4.68% per annum, semi-annually payable and matures on August 17, 2009.

As per the 2007 Annual General shareholdersû Meetingûs approval, the Company registered the increase in authorised share capital and also registered the Amendment of Memorandum of Association Article no.4 to be in line with the increase of the Companyûs The Company has adopted a SBU (Strategic Business Unit) structure registered capital, from Baht 2,224.75 million to Baht 2,255.75, to accommodate its long-term growth with the Ministry of Commerce, on April 23, 2007 The Company increased its paid-up capital from Baht 2,173.8 As per the 2007 Annual General shareholdersû Meetingûs approval, million to Baht 2,180.2 million on August 9, 2007, to accommodate the Company registered the Amendment of Memorandum of the third exercise of warrants by the Companyûs directors, employees Association Article no.3 in respect of the Companyûs Objectives, and advisors and/or the subsidiaries (PS-WA), in a total amount of from 36 to 42 clauses, with the Ministry of Commerce, on April 23, 6,327,800 units on July 31, 2007 2007

Year 2009 - At the 2008 Annual General shareholders没 Meeting held on April 11, 2008, the shareholders approved the issuance and offer for sale of Debt Securities under the project (Shelf Filing). The maximum amount of Debt Securities must not exceed Baht 2,000 million within three years. The Company issued unsubordinated and unsecured debentures in an aggregate amount of Baht 1,500 Year 2008 - The company increased its paid up capital from Baht 2,180.2 million with 3 years tenor. The interest was fixed at 5.25% for the million to Baht 2,185.95 million on 6 Febuary 2008 to accommodate first 1.5 years and 5.75% for the 1.5 year later. Date of issuance the fourth exercise of warrants by the Company没s directors, was 29 January 2009 with the maturity date of 29 January 2012. employees and advisors and/or the subsidiaries (PS-WA), in a total - The company increased its paid up capital from Baht 2,191.39 amount of 5,774,500 units on January 31, 2008. million to Baht 2,196.6 million on 5 Febuary 2009 to accommodate The company builted a plant manufacturing precast steel-reinforced the sixth exercise of warrants by the Company没s directors, employees concrete panel with special element. The project value is Baht 90 and advisors and/or the subsidiaries (PS-WA), in a total amount of million excluding land cost and is on stream in June 2008 with 400- 5,169,900 unit on 31 January 2009 cubic-metre-per-month capacity. This locates in the same area of the first and second plant) A subsidiary named Phanalee Estate Company Limited had registered to increase authorised share capital on September 22, 2007, from Baht 50 million to Baht 200 million (2,000,000 shares at Baht 100 par value) with the Ministry of Commerce without additional cash received

- The company increased its paid up capital from Baht 2,185.95 million to Baht 2,191.39 million on 8 August 2008 to accommodate the fifth exercise of warrants by the Company没s directors, employees and advisors and/or the subsidiaries (PS-WA), in a total amount of 5,441,500 units on July 31, 2008.

Product Category The Company operates real estate development in the categories of townhouses, single-detached houses and condominiums, in high growth potential areas with high population growth rate, focusing on all areas of Bangkok Metropolis, its suburbs and its commercial centre as aforementioned. Townhouse projects are under the brands çBaan Preuksaé, çPreuksa Villeé, çThe Connecté and çThe Plant Cityé. Single-detached house projects are under the brands çPreuksa Villageé, çPassorné and çThe Planté. In addition, condominium projects are under the brands çIvyé, çThe Seedé and çCity Villeé. From 1993 to December 31, 2008, the Company has launched 143 housing projects with total revenues from sales of real estate in the amounts of Baht 12,969.0 million and Baht 9,055.0 million, in 2008 and 2007, respectively. The revenues are divided as follows:

Product Category Townhouses Single-detached Houses Condominiums Land Total revenues from sales of real estate (1)

2005 Million Baht 4,255.9 3,339.0 1.0 7,595.9

% 56.0 44.0 0.0 100.0

For the year ended 31 December 2006 2007 Million Baht % Million Baht % 4,840.8 59.4 5,302.3 58.5 3,309.1 40.6 3,735.7 41.3 17.0 0.2 2.2 0.0 0.0 0.0 8,152.1 100.0 9,055.0 100.0

2008 Million Baht 7,634.8 4,788.7 539.0 6.0 12,968.5

% 58.9 36.9 4.1 0.1 100.0

Notes : (1) = Revenues shown above excluded revenues from cancellation and amendment of contracts to purchase and to sell the units, and sales of vacant land

Active Projects as at 31 December 2008

Product Category Townhouses Townhouses Townhouses Townhouses Single-detached Houses Single-detached Houses Single-detached Houses Condominiums Condominiums Condominiums Total

Project Brand Baan Preuksa Preuksa Ville The Connect The Plant City Passorn The Plant

Amount of Projects 22 15 8 1 7

Total Project Units Million Baht 16,333 15,924 4,517 6,718 2,098 3,688 71 320 2,585 9,634

Units 9,573 2,028 1,154 41 1,992

Sold Million Baht 8,988 2,939 2,032 188 7,321

Unsold Units Million Baht 6,760 6,935 2,489 3,779 944 1,656 30 132 593 2,312

519

2,152

160

597

359

1,555

Preuksa Village

4,251

9,824

2,113

4,788

2,138

5,036

City Ville Ivy The Seed

1 5 5 82

370 2,589 1,090 34,423

280 8,502 2,083 59,124

344 2,030 880 20,315

254 5,793 1,686 34,588

26 559 210 14,108

26 2,709 397 24,536 11

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The Company aims to focus on low-to-middle income earners who desire to have their own houses and are not buying for speculation. The Company has constructed townhouses under the concept çA House for Everyoneé in order to respond to basic needs of customers for housing of comparable quality but lower prices when compared to other developersû housing of similar designs, sizes, and locations. Generally, the Companyûs sale prices for townhouses are 15-20% lower than those offered by other developers. This is because the Company manages the construction itself and, as a result, it can efficiently control the costs of construction and shorten the construction period.

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Baht 1.8-3.5 million per unit under the brand çThe Plant Cityé

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Baht 1.4-1.8 million per unit under the brand çThe Connecté; and

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Baht 0.9-1.4 million per unit under the brand çPreuksa Villeé; and

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Baht 0.6-1.2 million per unit under the brand çBaan Preuksaé; and

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1. Townhouses The Company has undertaken townhouse construction under the brands çBaan Preuksaé, çPreuksa Villeé and çThe Connecté The Company has also launched a new product under the brand çThe Plant Cityé, which is a 2-storey and 3-storey townhouses located in the inner areas of Bangkok Metropolis. There are 4 price ranges as follows:

Ownership Transfer of Townhouses (Total Units) 1 Revenues from sales of townhouses (Million Baht) 1 Proportional revenues from sales of townhouses to total revenues from sales of real estate (%) Additional registered townhouses, commercial buildings, and duplex houses in Bangkok Metropolis and its suburbs 2 Market shares 3 Notes :

2005 5,041

2006 5,374

2007 5,716

2008

4,255.9

4,840.8

5,302.3

7,535.6

55.9%

59.2%

58.3%

58.1%

12,046

15,501

16,367

13,149

41.8%

34.7%

34.9%

51%

6,803

(1)

Total ownership transfer of townhouses and revenues from sales of townhouses shown above included commercial buildings, duplex houses, and single-detached house projects or condominiums consisting of commercial buildings and duplex houses only. The ownership transfer of single-detached houses sold in some townhouse projects are classified into single-detached house category. (2) Source: Real Estate Information Center (Only townhouse construction by developers is used) (3) The calculation is based on the total ownership transfer of townhouses and the increase in registered house at the same period. This may be inaccurate due to the discrepancy in timing between the registration and the transfer.à

In 2008, townhouses, 58% of all products, are the Companyûs main product owing to the expansion of products and new brands covering more various customers. Besides, new projects were launched to respond to customersû needs of housing at the inner areas of Bangkok Metropolis and its suburbs. This results in an increase in the Companyûs market shares. BOI promotion Privileges - townhouse The Company is one of a very few real estate developers granted with the Board of Investment (BOI) promotion privileges. Realising the demand of the low-to-middle income earners to have their own residence, the Company has a policy to build houses at a unit price not exceeding Baht 600,000 as the Companyûs construction costs are lower than those of other real estate developers, most of whom are not granted BOI promotional privileges as they are not able to manage construction costs so efficiently, especially at the inner areas of Bangkok Metropolis and its suburbs

due to high cot lands. To reduce the construction costs, they turn to develop townhouses with less useable areas than that developed by the Company. The Company has exercised the granted BOI privileges in implementing townhouse projects under major BOIprescribed conditions as follows: 1. The Company must have Thai nationals holding in aggregate not less than 51 % of its registered capital 2. The sale price of a housing unit shall not exceed Baht 600,000, including the land cost 3. The useable area of each unit shall not be less than 31.0 square 4. The project must contain no less than 150 units and be located in an area as prescribed

5. The Company must have a certificate of quality at ISO9000 this growth of townhouse business in 2008. According to real estate business stimulus measures through waivers of transfer standard or equivalent fees, mortgage loan fee, property tax incentives, effective till 28 Major BOI privileges granted to the Company are as follows: March 2010, as well as housing demand stimulus measures through 1. Exemption from corporate income tax on net profits derived tax policy such as tax breaks of Baht 300,000.- on principal payment, from sale of residential units in the promoted projects for a period effective till 31 December 2009, the Company will even enter into of five years commencing from the date income from such projects the new segment by launching 3-storey and 2-storey city townhouse is first generated. The total amount of tax exemption for each projects under the brand çThe Plant Cityé at the price range of Baht promotional certificate, however, varies (from Baht 6.6 million to 1.8 - 3.5 million per unit. In addition, the Companyûs competitiveness Baht 183.4 million, according to investment capital excluding land of townhouse product is being studied in order to develop new cost, and net working capital on the commencement date of operation businesses in foreign countries and the provinces. of such projects 2. In case a BOI-promoted project incurs losses during the 2. Single-detached Houses The Company has constructed single-detached houses under period of corporate income tax exemption, the Company can carry such losses forward for deduction from net profits for up to five the çPreuksa Villageé and çPassorné names and the brand çThe years after the expiration date and the Company may choose to Planté has just been launched in the first quarter of 2008. The take the deduction in either any specific year or over several years. target customers with the price ranges are as follows: In addition, the Companyûs shareholders are exempt from income tax on dividend income from the BOI-promoted activities during the corporate income tax exemption period.

Baht 1.7 - 2.2 million per unit under the brand çPreuksa Villageé; and

Baht 2.4 - 5.0 million per unit under the brand çPassorné; and Future Plan - Townhouse With the successful launches of the two new townhouse products Baht 2.5 - 5.0 million per unit under the brand çThe Planté under the brands çThe Connecté and çPreuksa Villeé in Bangkok Metropolis and its suburbs as well as the successful expansion of The Company focuses on customers in the low-to-middle income its coverage areas during 2007, the Company further enhanced brackets responding to their demand for ownership of a large

single-detached house with internal useable areas that offers the most çValue for moneyé, compared with single-detached houses with similar designs, sizes and locations offered by other developers. Generally, the prices of the Companyûs single-detached houses are about 10-15 % lower than those of other developers. By rebranding one of its single-detached house products - çPassorné and promoting another - çPreuksa Villageé during 2007 brought the Company success launches of single-detached housing projects. In 2008, the Company entered into new single-detached house market by developing a new product under the brand çThe Planté,

Ownership Transfer of single-detached houses (Total Units) 1 Revenues from sales of single-detached houses (Million Baht) 1 Proportional revenues from sales of single-detached houses to total revenues from sales of real estate (%) Additional registered single-detached houses in Bangkok Metropolis and its suburbs 2 Market shares 3 Notes :

stylish single-detached house with price range of Baht 2.5 - 5.0 million per unit. According to the stateûs real estate business stimulus measures through waivers of transfer fees, mortgage loan fee, property tax incentives, effective till 28 March 2010, as well as housing demand stimulus measures through tax policy such as tax breaks of Baht 300,000.- on principal payment, effective till 31 December 2009, the Company has adjusted the investment aim by investing more in single-detached house projects with medium size, so the Company can exercise the granted real estate stimulus measures.

2005 1,093

2006 1,193

2007 1,331

2008

3,339.0

3,309.1

3,735.7

4,869.0

43.8% 23,889

40.4% 16,700

41.1% 16,374

37.5% 13,229

4.6%

7.1%

8.1%

11.5 %

1,668

(1)

Total ownership transfer of single-detached houses and revenues from sales of single-detached houses shown above excluded commercial buildings and duplex houses compounded with single-detached house projects. The revenues from sales of the said commercial buildings and duplex houses are classified into townhouse category. (2) Source: Real Estate Information Center (Only single-detached house construction by developers is used) (3) The calculation is based on the total ownership transfer of single-detached houses and the increase in registered house at the same period. This may be inaccurate due to the discrepancy in timing between the registration and the transfer.

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From the business restructure in term of condominium, the company was able to acquire 1.7% condominium market share as follow

2008

○

2007

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

421 563.9

4.3%

29,681 1.7%

Notes :

(1) (2)

Source : Real Estate Information Center The Calculation is based on total ownership transfer of Condominiums and its increase in registered unit at the same period. This may be inaccurated due to the discrepancy in timing between the registration and the transfer.

○

Ownership transfer of condominium Unit 27 Revenue from condominium sale 17 Proportional revenue from sales of condominium to total revenues from sales of real estate (%) 0.2% Additional Registered condominium in Bangkok Metropolis and its suburbs1 16,229 2 Market share 0.26%

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In 2007 and 2008, the Company transferred the ownership of 27 and 421 condominium units, with the sales revenues of Baht 17 million and Baht 563.9 million, representing 0.2% and 4.3% of the Companyûs total revenue from sales of real estate, respectively.

○

3. Condominium As anticipated rapid changes in lifestyles and housing demands in Bangkok Metropolis and its suburbs, especially increasing demands in condominium development in areas surrounding the new extensions of the mass transit systems i.e. sky train and subway, the Company clarified its marketing strategy and revenue structure in 2007, together with adopted Strategic Business Unit organizational structure to swiftly identify and respond to market as well as satisfy certain customer demands, resulted in successful launches of new condominium projects under the brands çIvyé, çThe Seedé and çCity Villeé. The Company is then recognised as an emerging leader in condominium market within a short period of time. In 2008, the Company will develop condominium projects to respond and satisfy those modern lifestyle segments, as well as will continuously piece into the same condominium market developed in 2007 for the greater expansion.

○

Single-detached houses are the Companyûs minor product of which the proportion has much increased, especially the amount of new sales. Its revenue proportion will gradually increase later due to the longer construction period than that of townhouses. Generally, the single-detached house market has been shrinking for the past 3 years. However, new projects can be well expanded, resulting in the much more increase in the Companyûs market shares owing to the strategy adjustment and the fulfillment of new efficient market.

Production and Marketing Management Construction Management - townhouses The Company organizes construction management into two departments as follows: Construction Management Department: This department supervises and implements the construction of all projects under the agreed plans and models. Besides, it has a duty to keep the construction costs within the budget and to coordinate with the Company没s Budget Department. Quality Assurance Department: This department has a duty to inspect the quality of each individual housing unit to ensure that it is up to the standards required. Besides, the Company has central departments to support construction management, with duties to support both townhouse and single-detached house projects. The support departments are as follows: Contractor Recruiting Department: This department has a duty to recruit specialized contractors and laborers to help in each project as required. Research and Development Department: This department has a duty to introduce appropriate technologies for application in design and construction work.

House Design: In designing housing units for each project, the Marketing and Sales Department will coordinate with the Project Development Department to determine conceptual design guidelines, including the budget for construction. After that the Project Development Department will hire outside architects to design the project under the guidelines on the agreed conceptual design. If the project design proposed by the architect is agreed by the Project Development Department, the architect will continue with the detailed design to ensure completeness of the design before the launch of each project. In a townhouse construction project, the Company divides the work into production lines, each of which is able to build about 40 townhouse units per month. In each project, there may be more than one production line, depending on the size of the project. The Company assigns about 10 staff members to supervise the construction work at each production line, with the project manager being the project supervisor, and project engineers, field engineers, and foremen supervising construction work at each stage and specialised contractors hired to carry out detailed work, such as foundation work, masonry, parts installation, floor tiling, and roofing. The Company hires specialised contractors and labourers at appropriate numbers for each production line. During the construction period, the Company没s quality assurance department inspects the house quality periodically and the overall quality after completion of the house construction, prior to sale or delivery to the customer.

Project Development Department: This department serves as the coordinator and participates in the development of The Company is able to build this type of house at a lower cost, housing designs. with comparable quality and more useable area than houses built by other developers, with similar designs, sizes and locations. In Purchasing Department: This department has a duty to addition to the ability to manage construction work by itself, the purchase materials for use in construction. Company has another advantage, i.e., the Company employs

production technologies to reduce the construction period. This can save costs and labour expenses, while maintaining work quality. The Company uses Cast-Institu Load Bearing Wall Structure system in the construction of Baan Preuksa projects and the RC Load Bearing Wall Prefabrication system in the construction of singledetached houses in the çPreuksa Villeé and çThe Connecté projects.

about 60-80 days. This method is much quicker, compared with the conventional method, which requires about 180 days. The Company has used this technology in the construction of Baan Preuksa 3 project and the subsequent projects. In addition to the construction of townhouses, this technology can be used in the construction of 8-storey condominiums.

For Cast-Institu Load Bearing Wall Structure system, the Company purchased this technology from France. This system uses walls to bear the weights in place of pillars and beams, skipping the step of cement pouring for pillars and beams. The walls are assembled and installed at the construction site. Then the walls are tied with a steel structure into which cement is poured. By this method, the work is done more quickly. The Company was among the first few developers that employed this system in the construction of one-story townhouses, requiring about 30 days from the commencing date to complete the construction of a house, which is more efficient than the conventional method of construction, which requires about 90 days. The Company had used the conventional method in the construction of early townhouse projects such as Baan Preuksa 1 and Baan Preuksa 2.

The advantages of this technology are as follows: 1) The house structure is solid and strong because the precast steel-reinforced concrete walls are longer lasting than walls built by conventional methods. 2) Easier quality control as the system has an assured standard. 3) The construction period can be easily controlled as unnecessary construction steps are skipped, thus requiring shorter time for the construction than the conventional method. 4) Appropriate for major products which have the same models. 5) It depends less on skilled labour, which is an important part of the construction cost. 6) Bricklaying and masonry on walls is omitted in addition to concrete pouring for beams and pillars.

Later, with constant development efforts, the Company has come up with new construction technologies to boost house construction efficiency. The Company has employed the Tunnel Technology in the construction of two-story townhouses. The 7) The problem on wastes from work - which is a major problem construction starts with the fitting of steel-framed walls and the in construction - is reduced, resulting in cost saving and an upper floor at the same time, followed by the step of concrete orderly working condition in the construction site. pouring for the lower walls and the upper floor, also as one step. Then the upper walls and roof frames are fitted in. By this method, For the details of RC Load Bearing Wall Fabrication technology, the outside working period is much shorter than the conventional please see item construction management of Single-detached method and a solid, strong and beautiful house is obtained. By housing projects (2) using Tunnel Technology in construction, a house is completed in

This technology not only has the similar advantages to those of Besides using the aforementioned technology in the construction of townhouses, the Company has a factory, using a battery mold Cast-Institu Load Bearing Wall Structure but it also has other major system, to produce precast fences and pillars for single-detached advantages including more useable area rather than a space for houses and townhouses (çPreuksa Villeé and çThe Connecté projects). beams and pillars. Moreover, the walls are better fire-proof, heat insulating, sound-opaque, and water-proof than those built by other Therefore, the Company is able to build townhouses in mass materials. In addition, houses built under this technology require and in effect to manage construction costs efficiently, thus achieving low maintenance as it has a precast structure and the insurance premium is low as a precast structure house is better fire resistant, the economies of scale. more solid and more durable. Construction Management - single-detached house The construction period is about 75 - 90 days for a house Managing a single-detached house project is similar to managing a townhouse construction project. However, for the construction of under this technology, compared with approximately 180 days each project, the Company divides responsible staff by project required for constructing a house by a conventional method. rather than by product line, as the number of housing units in each However, in the early stage of using this technology, each part was single-detached house project is smaller than that of a townhouse cast on the construction site and not all of the parts were able to be project. About 30-40 staff members are assigned to supervise the cast. Therefore, the early housing projects had to use parts produced construction of each project and specialised contractors and under this technology and those produced under conventional methods (except for single-detached houses under Passorn 11 daily-wage workers are hired for each project as appropriate. project, which were entirely built under conventional methods.) RC Load Bearing Wall Prefabrication: At the beginning, the The Company built the Precast Concrete Factory by using this Company cooperated with the Asian Institute of Technology (AIT) technology in producing the parts. The factory, built in 2004 and in developing the RC Load Bearing Wall Prefabrication technology completed in January 2005, has a capacity to build parts for up to (or çprecast wall technologyé as it is often referred to) for its 3,600 single-detached houses per year. The factory has started construction work at each site. Later, in 2004, the Company built production of parts and the production increased from 60 % to 80 its own Precast Concrete Factory by purchasing the technology % of the total capacity in June 2006. from Germany, which uses the Semi-Automated Pallet Circulating The Company also has a factory to produce finished fences System, the most advanced system in Thailand. The Company has used this construction technology with two-story single-detached and pillars by using the Battery Mold system. In the production house projects as single-detached houses have diverse wall designs. process, steel molds are placed and removed by a hydraulic control Each house has 30-60 parts, which under this technology are system to ensure the exact distance required between the molds precast in the factory and delivered to the construction site for before cement pouring. The factory has a total capacity to produce fences and pillars for 12 houses per day. At present, the factory assembly. increases the production of pillars fences for single-detached house projects and townhouse projects, and decoration pillars and townhouse parapets.

The Company has strategies to promote its products as follows: Product strategies: In 2007, the Company developed a number of new products and expanded coverage areas with the objective of being the leader in middle-to-low income market in all of products covering all of Bangkok Metropolis, its suburbs and also commercial centre areas. Besides, the Company has continued to use more efficient construction technologies, enabling it to complete the construction quickly. Using advanced construction technologies, the Company can build quality houses with shorter construction period. The Company also has inventory management methods to maintain the inventory level appropriate to the sales of housing units.

sponsoring various TV programs such as çFaen Phan Thaeé or applying the concept of Customer Relation Management, such as offering scholarships to the children of dwellers in the Companyûs housing projects, providing mobile medical services to the Companyûs housing project dwellers for free health check-ups and organising various activities in the housing projects.

Distribution Strategies: The Company has a direct channel of distribution, mainly through the Companyûs sales offices, in addition to sales offered at housing fairs. Besides, the Company offers the sales of the Companyûs new housing projects to expand the Companyûs customer base by various means, such as the çMembers Get Membersé project, where the customer who introduces new Pricing strategies: With a view of a niche in the real estate customers to the Company are entitled to referral fees. Currently, market for low-to-middle income earners, the Company has focused the Company has a customer base of over 40,000 households. on this segment. The Companyûs construction costs are also lower than those of other developers as the Company manages Besides, the Company has a plan to expand business units in construction work itself and uses advanced and efficient construction order to be support units and to help increase competitiveness of technologies. The Company is therefore able to maintain low the major business of the Company as well as to utilise the customer production costs and shorten the construction periods. Therefore, base of over 40,000 households for the long-term growth. the Company is able to offer prices lower than those of other developers by 15-20% for townhouses and 10-15% for single- Procurement of New Products and Services detached houses. And since the Companyûs main objective is to 1. Land Purchase build housing units for low income earners, in order to help society, The Company has no policy to hold a land bank. If it is interested the Company is one of the very few real estate developers granted in developing a real estate in a certain area, it will conduct a project BOI promotional privileges, with corporate income tax exemption feasibility study, and market condition and competition surveys, for incomes from sales of housing units with a spelling price not including the customer demand in the target location. Then it will exceeding Baht 600,000 each. negotiate the land purchase directly with the land owner or broker, comparing the proposed price with the official appraisal price or Advertising and public relations strategies: To support sales, market price, to ensure that the land prices are not unreasonably the Company has launched advertising and public relations high. campaigns through newspapers, in addition to billboards that advertise the Companyûs projects in their respective localities. Besides, the Company has advertising campaigns for brand-building purposes, aiming to boost public awareness of the Company, by

2. Construction Materials Since the Company manages construction work itself, it is the direct buyer of construction materials. After the Purchasing Department is informed of the material requirements in detail, it will contact each material producer directly to compare prices. Generally, the Company is given a considerable discount as its purchases are of high volumes. After the Company has agreed with the producer on the material quantities and prices, it will order the materials through the producer没s agent for delivery to the project sites. The Company has a credit term of 15 - 90 days. Since 2006, it made change to the procurement of major construction materials, such as cement, steel, and tiles, by inviting tenders and entering into long-term price agreements, such as one year or 3-6 months. These methods have reduced the risks of price fluctuations. Having good relationship with suppliers, the Company is able to obtain construction materials at a desired quantity and has never suffered a shortage of construction materials. However, it does not rely on any one supplier of construction materials.

4. Production Technologies The Company utilises construction technologies in the construction of townhouses, single-detached houses and condominiums. (More details, please see Construction Management for Townhouses and Single-detached Houses)

5. Environmental Impact The project没s housing and utilities constructions are subject to the Ministry of Natural Resources and Environment没s Notification on the Criteria, Methods, Procedures, and Guidelines on the Preparation of the Report on Environmental Impact Analysis issued by virtue of the Environment Quality Promotion and Maintenance Act B.E. 2535. The notification requires companies engaged in land development for housing or commercial purpose in a plot divided into 500 or more sub-plots or in a plot of over 100 rai to submit a report on the environment impact analysis (EIA) together with the application for land development under the land development law. Prior to the project construction, the companies must also submit the EIA report to the Office of Natural Resources and 3. Construction Contractors Environment Plans and Policy. On this matter, the Company has The Company is one of the very few real estate developers who the required EIA report prepared by outside experts and has never manage construction work themselves. In running a project, it had any problem on environment impact. determines the project concept and details of the design. For project construction, the Company manages the construction work In housing construction, especially in a single-detached house by dividing it into parts such as foundation work, masonry, parts project, there may be environment impact from waste water. The installation, floor tiling, and roofing. It hires specialized contractors Company therefore has provided a waste water treatment system to implement the work and supervises the implementation by for each individual house and set up a central waste water treatment assigning its engineers and foremen to work at the project site to system for each project, so as to avoid any impact on public water ensure that construction specifications and standards are met. The sources. Company is also able to manage construction costs efficiently as it procures construction materials itself.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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As for the Companyûs Precast Concrete Factory, which is subject to the provisions of the Factory Act B.E. 2535, the Company has established standards and methods to control the release of pollutants or any substances that may have environmental impact as a result of the factoryûs operations. To ensure that it operates with responsibility for environmental impact, the Company has three pollution control measures; (a) water pollution control by providing water treatment ponds and water sediment ponds to prevent the release of waste water to the community areas; (b) air pollution control by installing water sprays in the factory area to prevent dust. In early July 2005, the Company installed vapor fans inside the factory to reduce heat and also prevent dust; (c) noise pollution control by installing noise barriers to prevent noise pollution that may arise from construction work inside the factory.

Capital Structure

The Company没s Securities 1. Common Shares As at 31 December 2008, Preuksa Real Estate Public Company Limited had registered capital of Baht 2,255,753,400 (2,255,753,400 ordinary shares with Baht 1 par value) with issued and paid-up share capital of Baht 2,191,394,200 (2,191,394,200 ordinary shares with Baht 1 par value). 2. Warrants (PS-WA) The Company has issued a number of warrants to the Directors, Management and advisors of the Company and/or the subsidiaries (PS-WA) as per the following details : Category

Warrants to purchase the ordinary shares of Preuksa Real Estate Public Company Limited (PS-WA)

Type

Being entered in a name certificate and non-negotiable

Term of warrants

Four years from the date of issuance

Issue Date

November 28, 2005

Expiry Date

November 30, 2009

Number of Warrants Issued

64,401,500 units

Offering price per unit

Baht 0

Exercise Ratio

One Warrant per one ordinary share

Exercise price per unit

Baht 1

Warrant exercise period

The holder of the Warrant shall be entitled to exercise the right to purchase the newly issued ordinary shares of the Company on a semi-annual basis, except for the exercising of right at the last time when the right may be exercised within the maturity date of the Warrant. In this case, the directors, employees and advisors of the Company and/or its subsidiary shall have the right to purchase the ordinary shares in a number not exceeding one-eighth of the total number of the Warrants allotted to each of the directors, employees and advisors of the Company. However, the directors, employees and advisors of the Company and/or subsidiary companies shall be able to exercise such right only upon completion of the sixmonth period from the day on which the ordinary shares of the Company start to be traded on the Securities Exchange of Thailand, until the maturity of the Warrant. If the directors, employees and advisors of the Company and/or subsidiary company cannot exercise the right to purchase the ordinary shares up to one-eighth of the total number of the Warrants allotted to each of the directors, employees and advisors of the Company and/or subsidiary company, such directors, employees and advisors may apply the remaining Warrants in the subsequent exercising of right

Number of ordinary shares reserved for the exercise of warrants

Not exceeding 65,000,000 shares

control dilution

In the case that all 64,401,500 warrants are exercised, whereas, at present, the Company has 2,173,850,400 paid-up shares, the profit sharing or voting right of existing shareholders (control dilution) will fall by approximately 2.88%, of the profit sharing and the voting right of the existing shareholders, respectively

After the ordinary PS shares started trading in Securities Exchange of Thailand, there have been chronological change as follows :

Date

29/12/2006 20/04/2007 (1) 23/04/2007 (2) 31/07/2007 31/01/2008 31/07/2008 (1) (2)

Registered Capital Warrants exercised Shares Purchased (Baht) (unit) from warrants exercised (Baht) 2,232,500,000 2,232,500,000 2,224,753,400 2,255,753,400 2,255,753,400 2,255,753,400 2,255,753,400

7,104,600 6,327,800 5,774,500 5,441,500

Date of Capital Registered Inc. / (Dec.)

Paid-Up Capital (Baht)

10/01/2007 20/04/2007 (1) 23/04/2007 (2) 09/08/2007 06/02/2008 08/08/2008

2,166,745,800 2,173,850,400 2,173,850,400 2,173,850,400 2,180,178,200 2,185,952,700 2,191,394,200

According to 2007 Annual General Meeting of Shareholders held on 9 April 2007, the company has changed its registered capital with the Ministry of Commerce as follows : Registered a decrease of the Company没s authorised share capital from Baht 2,232,500,000 (2,232,500,000 ordinary shares with Baht 1 par value) to Baht 2,224,753,400 (2,224,753,400 ordinary shares with Baht 1 par value) on April 20, 2007. Registered an increase of the Company没s authorized share capital to Baht 2,255,753,400 (2,255,753,400 ordinary shares with Baht 1 par value) on April 23, 2007

3. Debenture As of December 31, 2008, there were 1 million units unredeemed debentures at Baht 1,000 par value per unit. Such debentures can be divided into 2 tranches as follows : Name of Debentures

: Debentures of Preuksa Real Estate Public Company Limited No. 1/2007 Due 2010

Type of Debentures Status

: Name Registered Debenture, without Debenture holders没 representative : Unsubordinated and unsecured

Lead Underwriter

: Capital Nomura Securities Public Company Limited

Registrar and Paying Agent

: TMB Bank Public Company Limited or any person duly appointed to act as the replacement of the Registrar and Paying Agent

Par Value Issue Price

: 1,000 Baht : 1,000 Baht

Issue Size

: 600 Million Baht

400 Million Baht

No. of Debenture Duration

: 600,000 Units : 3 years from issuing date

400,000 Units 2 years from issuing date

Issuing Date

: 8 August 2007

15 August 2007

Maturity Date Coupon Rate

: 9 August 2010 17 August 2009 : Fixed rate of 4.91 % p.a until maturity, Fixed rate of 4.68 % p.a until maturity, payable semiannually payable semiannually : 8 August and 8 February 15 August and 15 February

Coupon Payment Date Redemption

Repurchase of Debenture Credit Rating

Debenture of Preuksa Real Estate Public Company Limited No.2/2007 Due 2009

: The Issuer shall redeem the Debentures on the Maturity Date by repayment of principal amounts of the denomination of the Debentures and unpaid interest of the final interest payment (if any). : The Issuer at any time is entitled to repurchase the Debentures from the secondary market or otherwise. : The rating as disseminated by TRIS Rating Co., Ltd. on July 11, 2007, is BBB+ / Stable

Business trend and Key Factors

Economic Situation : Trends and Factors influencing Real Estate Business From US. economic crisis or çHamburger Crisisé caused by mortgage loans especially in Sub-Prime credit, with collapse in US financial institution, these has led to a momentous downfall of global economy as well as liquidity crisis for whole financial and real Sectors. Thailand and its economy are inevitably effected from such consequence. In addition, local politic conflicts throughout the year was another factor associated with the 2008 economic key data as follows :

Nominal Gross Domestic Product (Billion Bt.) Real Gross Domestic Product (base 1988) (Billion Bt.) Gross Domestic Product (Percent) Banksû 1- year Fixed Deposit Minimum Lending Rate (MLR) (Percent)

2003

2004

2005

2006

2007

2008

5,917.4

6,489.5

7,095.6

7,830.3

8,485.2

n/a

3,468.2 6.9 0.75 5.69

3,685.9 6.1 0.75 5.69

3,855.1 4.5 2.25-4.0 6.81

4,052.0 5.0 3.5-5.13 7.99

4,244.6 4.6 2.0-3.5 6.88

n/a 4.5-5.5 2.5-3.5 6.0-6.5

Source : Bank of Thailand

From the world economy downturn and local politic problem, Thai economy are therefore facing unpleasant progression. Bank of Thailand has forecasted weaken 2009 GDP growth from that of 2008. The key success factors to resolve are to settle local politic disagreement and to stimulate domestic economy. Moreover, Thailand needs to minimize the consequences from world economic and US financial crisis. It has been forecasted that US economy will deeply shrink consistently until June 2009. The US Federal Open Market Committee (FOMC), aiming to relieve the circumstance via monetary mechanism, has reduced the Fed Funds Rate from 4.25% in early 2008 to 0 - 0.25% in 16 December 2008. In addition, it brought down the Discount rate to 0.50% in order to boost liquidity and to augment US economy. Moreover, the fiscal policy was employed to rescue several US financial institutions, such as Fannie Mae and Freddie Mac, the US biggest mortgage banks and

Top world insurance such as AIG as well as automobile industries. Such rescue plans included liquidity injection, i.e. equity financing, assisting companies in Merger - Acquisition - Amalgamation. All things were to improve financial market. This operations certainly impact world financial and liquidity status. To follow FOMC, Asian countries with large economy needed to reduce their local interest. For Thailand, this reflects to 1% , historical utmost drop, in Thailand repurchase rate on 3 December 2008 from 3.75% to 2.75% by Bank of Thailand. Nevertheless, Thailand economy is still exposed to future risks and facing the probability of Baht strengthening to adjust the difference of US and Thai interest rates. This may harm competitive advantage of Thai exporters.

Beside financial market, companiesû cost of productions were very volatile. In early 2008, oil, steel, commodities prices reached their new-high. However, those numbers sharply declined at year end. These has tremendously effect Thailandûs businesses in term of cost and inventory management. Real estate companies needed to adjust themselves promptly to handle rising cost or risk from advance purchase in production materials with later sharp drop in prices. All business needed to arrange plans and adjust their strategy to sustain their 2009 profitabilities. For property sector, 2009 is the year that Thai government focus on as an economic driver effecting the countryûs GDP and employment. Thus, the country still maintain tax policies to help real estate developer and home buyers through transfer fee reduction from 2% to 1%. In addition, it still maintains specific business tax at 0.1% until the first quarter of 2010 from 3.3% as charged until early 2008. These bring about merit to home buyers and real estate businesses as a whole.

○ ○ ○ ○ ○ ○

○

To stimulate with more long term stability and to prevent Thai economy from global slowdowns, Thailandûs interest rate is likely to fall throughout the first half of 2008.

In conclusion, although Thailand没s Politic is partly resolved by However, there are still economic factors influencing property rightful government establishment, the dispute is still needed to developers in 2009 as follows : further resolve in some length of time while world economy is 1. Deterioration in consumers没 confidence from internal and worsen than expected. Thus, the 2009 Thai economy may probably grow at minimal pace or even negative growth. It can be forecasted external economy that reflects in unemployment rate. that 2009 is an exhausted year that companies must manage to 2. Stringent lending policy from commercial banks demolishing sustain growth and stability, not only local market but outside consumption, business expansion and home sales. The companies Thailand such as China, India, Vietnam, and Indonesia. These are needed to survive during the crisis where world finance is facing need to adjust their strategies for such downturn. great concern of deflation. 3. Market and price structure which has changed from economic slowdown. For instance, there is a growth in demand for medium townhouses of less than 2 million Baht price. 4. Policy to increase subway and sky train in central Bangkok brings up more demand for residences along trains没 route. Such demand change causes Property firms to restructure their investment to fulfill the markets. Moreover, the firms also need to follow up the government没s investment in the related infrastructures or expansion. This requires business restructuring for the company to maintain competitive advantage in long term. 5. From world economy which has been partly rescued, waves of crisis may be emerging again in 2009. Domestic consumption will be depressed due to caution in spending. This forces companies to seek new opportunity and new channel to invest for their long term growth. For instance, considering foreign markets and strategy adjustment can be alternatives.

Risk Factors

Business Risk Factors 2. Increases in construction material prices and shortage of the materials The Company adopts presale strategy, in most cases, land and houses are sold before constructions and later transferred to its customers. If materials costs or wages increase after selling agreement contract are executed, certain variance or even effect from below-target transfer of ownership will lead to higher cost of From the aforementioned risk, the Company has appointed sales which results in lower gross profit margin. a working committee to regularly monitor and track on the banksû Cost of construction materials is crucial. Prices of main loan policy and the economic status in order to adapt the appropriate strategy according such changes. Additionally, the company has construction materials have significantly increased as a result of a collaborated to the commercial banks and Government Housing growth in demand both from the real estate sector and the new Bank to offer the best services and shorten loan approval period to mega-projects. Certain rising prices of raw materials including steel, copper and coal, coupled with upwards trends of oil prices in the companyûs customers. the world market, have driven the transportation cost, a main factor for the increase of the prices of construction materials, and subsequently, result in an increase of the Companyûs cost. If the Company cannot raise its sales prices forthwith or can not raise its 1. Inconsistency of policy on mortgage loans More than 90 percent of companyûs home buyers borrow by mortgage. Thus, changes in policy from commercial banks or Government Housing Bank on mortgage loans, loan controlling procedures and available funds would directly effect customersû purchasing power, and companyûs revenue as the consequence.

adopted a tender process in procurement of major items of construction materials since 2006 in order to ensure fixed construction costs throughout the year. The policy is also in line with the Companyûs code of conduct. Besides, the Company holds a monthly procurement meeting to perceive any movements in material prices and effects on costs of sales in order to adjusting the selling prices or seeking for substituted materials . 3. Shortage of Specialized Contractors and Skilled Labors According to the Companyûs construction technology, Precast Concrete Panels are the main parts of housing construction which require assembly at construction sites. Moreover, the Company manages construction itself and require no contractors for major constructions. It only hires contractors to work on specific housing tasks, such as laying foundation, installing building parts, tiling and prices to the levels that correspond with such increased costs, this roofing. The Companyûs engineers and foremen supervise and can affect its sales volume and as a consequence would have a oversee the work conducted by those contractors. significant negative effect on the Companyûs business, financial Currently, there are more entrepreneurs taking on real estate condition and operating results. development projects or engaging in overseas construction while a Moreover, rise in of property developers may result in a number of large scale infrastructure projects will be implemented, shortage of construction materials. If those events occur and the thus resulted in a shortage of contractors with specific skills to Company cannot buy construction materials within the prescribed work in its construction projects. Consequently, the construction period or in a sufficient amount to respond to its need, or the may be delayed or may not be completed and the Company may Company cannot find construction materials at all, the Company not be able to transfer units to the buyers as scheduled, or may not will not be able to complete the construction within the prescribed be able to do so at all. period or according to the required volumes or cannot continue the Fortunately, there are a large number of skilled contractors construction at all. As a consequence, it would have a material affect on the Companyûs business, financial condition and results and skilled labors in the industry. As parts of outsourcing contract, the Company will hire certain workforce at reasonable market rate of operation. on a continual basis, whereas payments to contractors are on a Nevertheless, adoption of construction technologies enables fair and regular manner and within acceptable periods, which could the Company to construct townhouses and a single-detached house help the contractors with their financial burdens. The contractors within only 60 days and 120 days, respectively. These are much therefore are pleased to work for the Company. Currently, there quicker than that of conventional method and therefore reducing are approximately 4,600 contractors in the Companyûs work system. risk. In addition, to better control certain risks, the Company has Besides, to reduce risks resulting from the shortage of contractors

with specific skills, the Company therefore regularly set up training courses for contractors to enhance their efficiency together with follow up hiring such well-trained workforce. As for high value projects or urgent tasks (for example, a bridge crossing a canal to the project site, a gate arch, or a swimming pool), the Company would outsource through tender and contracting in much the same way as procurement of major materials. This method enables the Company to find competent contractors who can provide deliveries according to the Companyรปs set standards, conditions and budget.

5. Acquisition of land for development The Company has no a policy to accumulate land for future projects because it views that purchase of land without clear development plans will add financial burden effecting Companyรปs liquidity, especially during an economic downturn. The Company will purchase land only when it needs to develop a specified project. As such, when the Company actually purchase land for a new project, the purchase price could be higher than earlier anticipated, or it cannot purchase the land in the amount it wants. In addition, the company incurs fixed cost from the Precast Concrete Factory. These factors may result in higher cost when unit production is not as planned. The Company, therefore, may not be able to fulfill its expansion plans, and, as a result, would have a significant effect on the Companyรปs business, financial condition and operating results.

4. Dependence on highly skilled personnel The company adopts modern technologies in housing construction process, specifically, Cast-Institu Load Bearing Wall Structure system or Tunnel Technology and RC Load Bearing Wall Fabrication technology. Thus, it relies on the experience, knowledge and skills of its employees in its business operations, especially engineers and foremen. If the Company is unable to retain its key For land procurement, the Company purchases land from personnel, its business may be interrupted, and would significantly owners and agents or at reasonable market prices. Consequently, affect its financial condition. the companyรปs development cost is lower than others and so The Company then sets up policies to retain qualified people, enables the company to lower its selling prices. This increase more and continue to seek qualified work force with long term employment opportunities in unit sold as well as more opportunities to acquire by providing competitive compensation and benefits. At the same more land. Besides, the land payments to agents are in a fair and time, it has consistently organized training programs, especially to regular manner within acceptable periods, so they are pleased to develop quality work. In addition, the Company may conduct offer more. At present, there are over 10 agents offering land internship programs with educational institutes for future business pieces to the Company. Due to the fact that the Companyรปs housing products are diversified therefore enables the Company to set a expansions. wider range to purchase and for development of projects

6. Stringent laws and regulations The business of the Company is regulated under stringent laws and regulations such as obtaining land appropriation permission, land trading permission and construction permission from the relevant government authorities. In case of sizeable projects or condominium projects, the Company must submit the EIA report to the Office of Natural Resources and Environment Plans and Policy. Such consent is needed prior to the project construction. If such government authorities do not issue the permits in timely manner or disapprove, it may result in interruption or implementation delays, or the Company may not be able to pursue the projects, which will significantly affect the Company没s business.

Company would not be much affected by the Escrow Account law, due to the fact that the down payment terms are rather short, at 3-6 months and in just small amounts. As for condominium projects, down payment terms are quite longer. The Company, however, can finish the projects through self-funding, meanwhile, it also seek alternative sources of funds with lower cost, to compare with direct borrowing from financial institutions.

Any establishment or change of laws, regulations or policies, such as the requirement for implementing the law governing escrow account (the draft of which is being reviewed by the Juridical Council Office before being proposed to the Parliament for consideration) which requires real estate developers to maintain down payments or installment payments they receive from buyers in a separate escrow account. This may put the Company to be insufficient in working capital or to incur funding cost . This effects the Company没 business and financial position In this regards, the Company set up working team to study related laws and the amendment, especially the Escrow Account law. The working team meets regularly on a monthly basis to update and improve working process as well as to ensure the company没s compliance on such regulations. Nevertheless, the

Other Risk Factors 1. Control of Major Shareholders As at 13 Febuary 2009, the largest group of shareholders is Mr. Thongma Vijitpongpun没s Group, who hold 1,695.4 million shares, or 77.18 % of the total paid-up capital. Therefore, the Group is able to control shareholders没 resolutions in relation to major matters, which are required by the laws or Articles of Association of the Company to be passed by a majority vote of shareholders with voting rights attending the meetings. Moreover, Mr. Thongma, a major shareholder, will continue to be the Chairman of the Executive Committee, Chief Executive Officer and Authorized Director of the Company. Therefore, other shareholders may not be able to obtain sufficient votes to achieve proper balance.

2. Dilution Effect from Exercised Warrants In November 2005, the Company offered a sale of warrants exercisable into ordinary shares of the Company of not exceeding 65.0 million units at a price of 0 Baht per unit to directors, employees and advisors of the Company and/or its subsidiary. The directors and employees are entitled to exercise their right to purchase the Company没s ordinary shares on a one-for-one basis at Baht one per share, which is lower than the price offered to the public in this offering. These warrants are exercisable every six-months except for the last exercise date, which is exercisable at the maturity date of warrants for the amount of 12.5% of the total units of allotted warrants. The first exercise date is 30 June 2006. Should such warrants be exercised in full, the Company will be required to issue an additional 65.0 million shares or 3.1% of the total paid-up capital after this offering. Investors may then be affected if the trading price of the Company没s shares on the SET decreases as a result of the future sale of shares by directors, employees and advisors of the Company and its subsidiaries. Nevertheless, a number of warrants were cancelled from resignation of employees. As of December 31, 2008. and 31 January 2009, net exercisable warrants were 15,889,400 and 10,719,500 units.

Shareholding Structures

As reported in the latest Ministry of Commerce没s certification dated February 5, 2009, Preuksa Real Estate Public Company Limited had registered capital of Baht 2,255,753,400 comprising 2,255,753,400 ordinary shares at Baht 1 par value with issued and paid-up share capital of Baht 2,196,564,100 comprising 2,196,564,100 ordinary shares at Baht 1 par value. The top ten shareholders of the Company as of the latest share register book closing, on February 13, 2009, are as follows:

List of Shareholders (a) 1 Mr.Thongma Vijipongpun Group (b) and the Company's Management 1.1 Mr.Thongma Vijipongpun Group 1.2 Preuksa Real Estate Pcl.'s Management 2 Thailand Equity Fund 3 CHASE NOMINEES LIMITED 1 4 SOMERS (UK) LIMITED 5 Social Security Office 6 Thai NVDR Company Limited 7 Phatra Securities Public Company Limited 8 HSBC (SINGAPORE) NOMINEES PTE LTD. 9 THE BANK OF NEW YORK NOMINEES LTD. 10 SCBLT1 Fund 70/30 Total Top 10 Shareholders Total paid-up share capital

No. of Shares held 1,699,372,300 1,695,390,600 3,981,700 106,000,000 52,432,000 43,228,400 35,580,500 17,151,600 16,402,800 10,070,900 9,419,600 9,332,400 1,998,990,500 2,196,564,100

% 77.37% 77.18% 0.18% 4.83% 2.39% 1.97% 1.62% 0.78% 0.75% 0.46% 0.43% 0.42% 91.01% 100.00%

Notes: (a) (b)

There is none of nominee of Mr.Thongma Vijipongpun Group in the top ten shareholders list Mr.Thongma Vijipongpun Group consists of 1) Mr.Thongma Vijitpongpun 2) Mrs.Tipsuda Vijitpongpun 3) Chanya Vijitpongpun 4) Mrs.Rattana Promsawad 5) Mr.Chamlong Promsawad 6) Miss Malinee Vijitpongpun 7) Mr.Thavorn Vijitpongpun

Restriction on Foreigners没 Shareholding The foreign shareholders are able to hold in an aggregate portion of no more than 40% of the Company没s total issued and paid-up shares. As of February 13, 2009, foreign shareholders held approximately 6.91 % of the Company没s issued and paid-up capital.

Dividend Payment Policy & Information The Company没s Board of Directors may consider paying annual dividends, subject to approval by a shareholders meeting. However, due to the fact that Federation of Accounting Professions (FAP) announced that the Thai Accounting Standard No. 44 "Consolidated Financial Statements and Accounting for Investments in Subsidiaries" under which FAP announcement No. 26/2006 requires a parent company has to record investments in a subsidiaries and associates with the cost method instead of the equity method. By this respect, the Company has adopted the accounting change according to foregoing announcement since January 1, 2007, which resulted that the net profit amount shown in the Company's Consolidated Financial Statements are not equivalent to the Company's Separate Financial Statements. In order to ensure the same understanding between the Company and its shareholders and investors, the Board of Directors at the meeting No.5/2007 on August 7, 2007 has approved the Company's

dividend payment policy of making annual dividend payment to its shareholders at a rate of not less than 30.0% of the Company没s net profit after deduction of all legal reserves, however, are subject to change depending on the Company's investment plans, necessities as well as other justifications and considerations that the Board of Directors deems appropriate. In respect of dividend payment policy by the subsidiaries, such subsidiaries will pay dividends to the Company from their net profits. The dividend payment is, however, subject to many factors such as their financial condition and results of operations, liquidity, business expansion and factors related to the operation of their business. Moreover, dividends from net profits from the businesses with BOI privileges are exempted from income tax and the Company is not obligated to deduct withholding tax from such dividend payments.

The following are dividends that the Company paid to its shareholders from 2005 onwards: (Net Profit was revised as in Notes) Performance of the year

Net Profit** (million Baht)

Legal reserves (million Baht)

% of dividend payment*

2007 2006 2005

1,269.88 1,303.28 1,272.37

2.33 53.25

37.87* 33.36* 30.55

Notes:

Amount of dividend Dividend per paid (million Baht) share (Baht)

480.91 434.77 388.76

0.22 0.20 0.18

Payment Date

May 8, 2008 May 4, 2007 April 21, 2006

* In comparison of amounts of dividend paid to the Company没s net profits, dividend payment for 2007 performance and for 2006 performance are 40.74% and 34.27% respectively. ** 2007 Net Profit has been restated to 1,302.1 million Baht as reported in latest audited financial statement.

Subsidiaries

Kaysorn Construction

99.93%

Preuksa Overseas

99.99% 99.99%

Panalee Estate

Preuksa Real Estate

99.99%

Phuttachart Estate

ORGANIZATION CHART PREUKSA REAL ESTATE PUBLIC COMPANY LIMITED Management Structure

The Board of Directors As reported in the latest Ministry of Commerceûs certification dated 8 December 2009, the Board of Directors of Preuksa Real Estate Public Company Limited, who possessed qualifications in accordance with section 68 the Public Company Act B.E.2535 and the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand, consisted of 10 members as follows:

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

6 Mr.Piya Prayong Director 7 Mr.Kanchit Bunajinda Director 8 Professor Emeritus Dr.Trungjai Buranasomphop Independent Director 9 Mr.Weerachai Ngamdeevilaisak Independent Director 10 Mr.Adul Chandanachulaka Independent Director

○

1 Dr.Pisit Leeahtam Chairman and Independent Director 2 Mr.Thongma Vijitpongpun Executive Vice Chairman 3 Mr.Narong Manavapat Director 4 Mr.Prasert Taedullayasatit Director 5 Mrs.Ratana Promsawad Director

○

Authorised Directors who can sign on behalf of the Company Authorised Directors who can jointly sign and bind the Company are: either Mr.Thongma Vijitpongpun or Mrs.Rattana Promsawad jointly signing with Mr.Narong Manavapat or Mr.Piya Prayong or Mr.Prasert Taedullayasatit with the Companyûs seal affixed.

Scope of powers and duties of the Board of Directors : 1. The Board of Directors shall perform with responsibility, caution, and faithfulness and conduct the Companyûs business according to the laws, Companyûs objectives, Articles of Association, and resolutions of the shareholdersû meetings, except for matters which require prior approval at shareholdersû meetings, such as matters required by law to be approved by a shareholdersû meeting, entering into connected transactions, and any purchase or sale of material assets pursuant to the regulations of the SET or those prescribed by other government authorities. 2. To consider approval of the business policy, target, operation plan, business strategy and annual budget of the Company. 3. To consider appointment of a person who possesses qualifications and does not posses any characteristics prohibited under the Public Company Act B.E. 2535 and the laws governing securities and exchange and any relevant rules, regulations and/or notifications, to be Director in case there is a vacancy due to a cause other than retirement by rotation.

4. To consider appointment of Executive Directors from Directors of the Company and prescribe their roles, powers, duties and responsibilities. 5. To consider appointment of independent Directors by taking into consideration qualifications and prohibited characteristics under the laws governing securities and exchanges, including relevant rules, regulations and/or notifications of the SET or propose to a shareholdersû meeting for such appointment. 6. To consider appointment of Audit Committee members who have qualifications under the laws governing securities and exchange including rules, regulations and/or notifications of the SET. 7. To prescribe and change the names of Directors who can have the power to sign to bind the Company. 8. The Board of Directors may, as deemed appropriate, also appoint any persons to conduct the business under the control of the Board of Directors and may authorise such persons to have powers and/or prescribe the period of such powers and the Board of Directors may terminate, withdraw, or amend such powers. 9. To consider approval of transactions relating to acquisition or disposition of assets, except where such transactions require approval by a shareholdersû meeting. Such approval must be in compliance with the SETûs relevant rules, regulations and/or notifications.

10. To consider approval of connected transactions, except Composition and Appointment of the Board of Directors where such transactions require approval by a shareholdersû Composition of the Board of Directors and appointment, removal meeting. Such approval must be in compliance with the or release of Directors as stipulated in the Companyûs Articles of SETûs relevant rules, regulations and/or notifications. Association can be summarised as follows: 11. To consider approval for interim dividend payment when it 1. The Board of Directors shall consist of not less than five (5) considers that the Company has sufficient profits to do so Directors. No less than half (1/2) of the total number of Directors and to report such payment to the following shareholdersû shall have domicile in Thailand. meeting. 2. The election of Directors by the shareholdersû meeting shall The Board of Directors shall elect a Director to be the Chairman. be in accordance with the following rules and procedures: If it is deemed appropriates, the Board of Directors may consider (1) A shareholder shall have one vote for one share. electing a vice Chairman or vice chairmen, who shall be assigned (2) Each shareholder shall use all his or her votes under (1) by the Chairman to perform duties to conduct the Companyûs to elect one or several persons as a Director. However, business according to the Articles of Association. The Board of he or she may not divide his or her votes among the Directors shall meet at least once every three months. candidates. (3) The persons who receive the most votes in ranking However, in granting of powers, duties and responsibilities, the order will be elected as Directors up to the number of Board of Directors shall not be granted power, or sub-grant powers Directors required or the number that shall be elected at to a grantee to approve transactions in which the Board of Directors, that meeting. In case the persons or any person who may have any conflict of interest (as defined in the notification of the SEC), have a vested interest, or may have elected in subsequent order have equal votes but their any other conflict of interest with the Company or its subsidiaries, election would exceed the number of Directors required or except where the approval of such transaction is consistent with the number that shall be elected at that meeting, the Chairman the policy and criteria approved by the meeting of shareholders or of the meeting shall have a casting vote. of the Board of Directors.

3. At each Annual General Meeting of shareholders, one-third Criteria for Appointment of Independent Directors Qualifications of Independent Directors: of the Company没s Directors shall retire in rotation. Should the (a) Holding shares representing not more than 5% of shares number of Directors to retire in rotation not be divisible by three, with voting rights of the Company, parent company, the number of Directors nearest to one-third (1/3) of all Directors subsidiaries, associated companies or any juristic persons shall retire. In the first and second year of the registration of the with a potential conflict of interest. Company, Directors shall draw lots to decide who shall retire the longest-serving Directors shall retire in the third and subsequent (b) Not being an employee, a staff member or a salaried years. Directors who retire may be re-elected. advisor or a controlling person of the Company, parent company, subsidiaries, associated companies or any juristic 4. A Director may resign from office by submitting a resignation person with a potential conflict of interest. letter to the Company. The resignation shall become effective from the date the resignation letter arrives at the Company. (c) Not being a person who has a blood or legally registered relationship in the form of fatherhood, motherhood, spouse, 5. A resolution for any Director to leave office prior to the siblings, offspring, including spouse of siblings of the expiration of his term requires the votes of at least three-fourths (3/ executives, 4) of the number of the shareholders attending the meeting and having voting rights and holding in aggregate shares amounting to major shareholders, controlling person or persons who are not less than half (1/2) of the number of shares held by shareholders about to be nominated as executives or controlling persons of the who attend the meeting and have voting rights. Company or its subsidiaries. (d) Having no business relationship with the Company, parent company, subsidiaries, associated companies or any juristic person with a potential conflict of interest, which may interrupt his independent discretion and not having any characteristics that may affect the giving of independent opinions on the

Company没s operations. Board of Directors Meeting In 2007 and 2008, the Company没s Board of Directors held 8 meetings in both years. The details of meeting attendance are as follows:

Name of director 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Dr. Pisit Leeahtam Mr. Thongma Vijitpongpun Mr. Narong Manavapat Mr. Prasert Taedullayasatit Mrs. Rattana Promsawad Mr. Piya Prayong Mr. Kanchit Bunajinda Professor Emeritus Dr. Trungjai Buranasomphop Mr. Weerachai Ngamdeevilaisak Mr. Adul Chandanachulaka

Number of Meeting attended 2008 2007 8/8 8/8 8/8 7/8 7/8 8/8 7/8 8/8 8/8 8/8

5/8 8/8 8/8 6/8 8/8 8/8 7/8 8/8 8/8 8/8

Audit Committee The Audit Committee consisted of the Independent Directors with qualifications in accordance with section 68 the Public Company Act B.E.2535 ,the Announcements of Capital Market Supervision Board and the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand. The Committee must consist of at least 3 members, at least 1 must be qualified in accounting & finance and has adequately experience to review the integrity of the financial statement of the Company. Audit Committee comprised of 3 Independent Directors as follows:

○

1 Professor Emeritus Dr.Trungjai Buranasomphop Chairman of the Audit Committee 2 Mr.Adul Chandanachulaka Member 3 Mr.Weerachai Ngamdeevilaisak Member

Scope of Powers, Duties and Responsibilities of the Audit Committee 1. To review the Charter of the Audit Committee at least once a year and make adjustments that necessary and appropriate. 2. To review to have in place the system for financial reports and disclosure of financial statements in accordance with accounting standards stipulated by laws in transparent, accurate and sufficient manner. 3. To consider and approve any changes in significant accounting principles or procedure as proposed by management of the Company.

11. To consider any related reports or any potential conflict of interest issue pursuant to the laws and notification from the Security Exchange Committee in order to ensure that those reports are reasonable and most beneficial to the Company. 12. To make report of the Board of Audit Committee for disclosure in the Companyûs annual report to be signed by the Chairman of the Audit Committee and it shall be at least included with following information; 12.1 Opinion regarding accuracy, completeness and integrity of the Companyûs financial report.

4. To inspect that the Company has appropriate and efficient internal control and internal audit system in accordance with procedure and standards generally accepted.

12.2 Opinion regarding adequacy of internal control system.

5. To consider the independency of Internal Audit Unit and to make decision in appointment, removal and termination of the Chief Internal Auditor.

12.3 Opinion regarding the compliance of the Security laws and regulations of Security Exchange of Thailand or the laws relating to the business of the Company.

6. To review internal audit reports submitted to the management and to review the managementûs decision in relation to said report as submitted and reported.

12.4 Opinion regarding appropriateness of auditors.

7. To have unrestricted access to Management and employees and relevant information. 8. To do the review with relevant units (such as Legal) for the Company to comply with laws related to the Security and Stock Exchange and any other laws related to the companyûs business.

12.5 Opinion regarding transactions which may have conflict of interest. 12.6 The number of Audit Committeeûs meetings and their attendance of each member of the Audit Committee. 12.7 Opinion or observation the Audit Committee recognizes by performing the Charter.

9. To do selection and appointment of independent persons to act as external auditors of the Company and propose their remuneration.

12.8 Any other items that the shareholders and general investors shall know under duties and responsibilities obtained from the Companyûs Board of Directors.

10. To have a meeting with external auditors without the management, at least once a year.

13. To perform other tasks within the scope of its duties and responsibilities stipulated in its Charter, including any tasks as may be assigned by the Board of Directors which the Audit Committee agrees. 45

○

Selection of Audit Committee The Board of Directors shall appoint at least 3 Audit Committee members from Independent Directors of the Company who have qualifications as stipulated by the laws governing securities and exchange and the announcements of the Capital Market Supervision Board including the rules, regulations and/or notifications of the Security Exchange of Thailand governing qualifications and scope of power and duties of the Audit Committee. At least one member of the Audit Committee must have accounting and related financial expertise and has adequately experience to review the integrity of the financial statement of the Company . The term of each member of the Audit Committee shall be 3 years according to the maximum service term of Director.

○

14. In performing their duties if it is appeared or when in doubt that any transactions may have a potential conflict of interest or corrupt practice or an uncommon or improper in the internal control system or any violation of laws and regulations relating to Security or Security Exchange or any laws relating to the business of the Company which may significantly affect financial status and performance of the Company, a report to the Board of Directors shall be submitted in order to adjust or improve within timeframe as the Audit Committee considers.

Audit Committee Meeting In 2007 and 2008, the Companyûs Audit Committee held 12 meetings each. The details of meeting attendance are as follows:

NAME

1. Professor Emeritus Dr.Trungjai Buranasomphop 2. Mr.Adul Chandanachulaka 3. Mr.Weerachai Ngamdeevilaisak

Number of meetings attended 2007 2008 12/12 12/12 12/12

12/12 12/12 11/12

Risk Management Committee The Board of Directors appointed the Risk Management Committee on April 28, 2005, currently consisting of 4 members as follows:

1 Mr.Weerachai Ngamdeevilaisak Chairman of Risk Management Committee 2 Mr.Thongma Vijitpongpun Member 3 Mr.Prasert Taedullayasatit Member 4 Mr.Somboon Wasinchutchawal (1) Member

Notes : (1) Mr.Somboon Wasinchutchawal is appointed as member of the Risk Management Committee on March 7, 2008, replacing Mr.Veera Srichanachaichok, who resigned from his position as member of the Risk Management Committee, effective February 1, 2008

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Risk Management Committee is to prescribe policy guidelines and provide recommendations to the Board of Directors with respect to the management of external and internal risks to Companyûs operations to ensure they are within the appropriate and acceptable level. Risk Management Committee Meetings In 2007 and 2008, the Companyûs Risk Management Committee held 10 and 9 meetings, respectively. The details of meeting attendance are as follows:

NAME

1. Mr.Weerachai Ngamdeevilaisak 2. Mr.Thongma Vijitpongpun 3. Mr.Prasert Taedullayasatit 4.Mr.Somboon Wasinchutchawal (1)

Number of meetings attended 2007 2008 10/10 9/9 10/10 8/9 8/10 8/9 7/7

Notes: (1) Mr.Somboon Wasinchutchawal is appointed as member of the Risk Management Committee on March 7, 2008, replacing Mr.Veera Srichanachaichok, who resigned from his position as member of the Risk Management Committee, effective February 1, 2008

○

Scope of Powers, Duties and Responsibilities of Risk Management Committee

Corporate Governance Committee The Board of Directors appointed the Corporate Governance Committee on February 22, 2006, currently consisting of 6 members as follows:

1 Mr.Adul Chandanachulaka Chairman of Corporate Governance Committee 2 Mr.Thongma Vijitpongpun Member 3 Mr.Prasert Taedullayasatit Member 4 Mr.Kanchit Bunajinda Member 5 Mr.Wirasak Kaewnoo Member 6 Mr.Somboon Wasinchutchawal (1) Member

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Corporate Governance Committee is responsible for overseeing and reviewing major best practices of the Company to ensure its compliance with good governance. This includes reviewing corporate governance policy, principles and practices; making recommendations on business ethical requirements and best practices for Directors, Management, employees; ensuring that such requirements are met effectively; making reports to the Board of Directors about the Companyûs corporate governance, giving opinions on best practices adopted in order to improve or adjust them as needed; reviewing and proposing publicizing of the Companyûs efforts with respect to good corporate governance. Corporate Governance Committee Meetings In 2007 and 2008, the Companyûs Corporate Governance Committee held 4 meetings each. The details of meeting attendance are as follows:

○

Scope of Powers, Duties and Responsibilities of Corporate Governance Committee

1. 2. 3. 4. 5. 6.

Mr.Adul Chandanachulaka Mr.Thongma Vijitpongpun Mr.Prasert Taedullayasatit Mr.Kanchit Bunajinda Mr.Wirasak Kaewnoo(1) Mr.Somboon Wasinchutchawal(2)

Number of meetings attended 2007 2008 4/4 4/4 4/4 4/4 4/4 4/4 4/4 4/4 2/4 4/4 2/3

Notes: (1) Mr.Wirasak Kaewnoo is appointed as member of the Corporate Governance Committee on August 7, 2007

○

NAME

(2)

Mr.Somboon Wasinchutchawal is appointed as member of the Risk Management Committee on March 7, 2008, replacing Mr.Veera Srichanachaichok, who resigned from his position as member of the Risk Management Committee, effective February 1, 2008

Nomination and Remuneration Committee The Board of Directors appointed the Nomination and Remuneration Committee on December 28, 2005, currently consisting of 4 members as follows:

1 Mr.Weerachai Ngamdeevilaisak Chairman of Nomination and Remuneration Committee 2 Mr.Thongma Vijitpongpun Member 3 Dr.Pisit Leeahtam Member 4 Mr.Wirasak Kaewnoo Member

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

The Nomination and Remuneration Committee is responsible for nominating persons to be appointed as new Directors, Chairman of Executive Committee and Chief Executive Officer or as replacements at the end of the term of office or when vacancies occur for other reasons. Furthermore, the Nomination and Remuneration Committee has the responsibility to propose guidelines and methods for payment of remuneration and other benefits to the Directors, Committee Members, Chairman of Executive Committee and/or Chief Executive Officer. This includes setting criteria for review and evaluation of remuneration to make it commensurate with their duties and responsibilities, overall business performance of the Company and the general business circumstances. Nomination and Remuneration Committee Meeting In 2007 and 2008, the Companyûs Corporate Governance Committee held 1 and 7 meetings, respectively. The details of meeting attendance are as follows:

○

Scope of Powers, Duties and Responsibilities of Nomination and Remuneration Committee

1. 2. 3. 4.

Mr.Weerachai Ngamdeevilaisak Mr.Thongma Vijitpongpun Dr.Pisit Leeahtam Mr.Wirasak Kaewnoo(1)

Number of meetings attended 2007 2008 1/1 7/7 1/1 7/7 1/1 7/7 7/7

Notes: (1) Mr.Wirasak Kaewnoo is appointed as member of the Nomination and Remuneration Committee on December 20, 2007

○

NAME

Executive Committee Executive Committee, with qualifications in accordance with section 68 the Public Company Act B.E.2535 and the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand, currently consists of 5 members as follows:

○

1 Mr. Thongma Vijitpongpun Chairman of Executive Committee 2 Mr. Narong Manavapat Member 3 Mr. Prasert Taedullayasatit Member 4 Mrs. Rattana Promsawad Member 5 Mr. Piya Prayong Member

Powers and Duties of Executive Committee 1. To prepare and propose business policies, strategies, targets, operation plans and the annual budget to the Board of Directors for approval. 2. To determine business plans, budget and administrative powers and propose to the Board of Directors. 3. To oversee operation according to the policies of the Company, targets, business strategy, and budget as approved by the Board of Directors in an efficient manner and corresponding to the condition of the business. 4. To consider and approve capital expenditure or operating expenses, borrowing or seeking credit facilities from financial institutions, including acting as a guarantor in the normal course of business in an amount not exceeding Baht 500 million or equivalent. 5. To establish an organization structure and efficient management and administration, covering recruitment, training, hiring and termination of employees, who are executives or members of senior management The Executive Committee may authorise Chief Executive Officer of the Company to act on the Company没s behalf in signing employment agreements. 6. To supervise, control and approve matters relating to the operations of the Company. The Executive Committee may appoint or authorise one or more persons to take any action on behalf of the Executive Committee as it may deem appropriate and may terminate, change or amend such authority. 7. To carry out other duties as assigned by the Board of Directors.

However, in the granting of powers, duties and responsibilities, the Executive Committee shall not be granted or sub-grant power to a grantee that causes the Executive Committee or the grantee to approve transactions in which the Executive Committee or the grantee, or any person who may have any conflict of interest (as defined in the notification of the SEC), may have a vested interest, or any other conflict of interest with the Company or its subsidiaries. Approval of such transaction is recurred to be presented to the Board of Directors Meeting and/ or the Shareholders. Meeting as the case may be, for approval, as required by the Articles of Association of the Company or the subsidiaries or the relevant laws, except where the approval of such transactions is consistent with normal business practice and has a clearly defined scope.

Management The management must be qualified under Public Limited Companies Act B.E. 2535 and other related announcements of Securities and Exchange Commission and Stock Exchange of Thailand. The company没s management consists of 7 persons as follows :

Name 1. 2. 3. 4. 5. 6. 7.

Mr. Thongma Mr. Narong Mr. Prasert Mr. Somboon Mr. Wirasak Mr. Prasert Ms. Sujittra

Notes :

Vijitpongpun Manavapat Taedullayasatit Wasinchutchawal (1) Kaewnoo Suppakitpiput (2) Bupphajaroen

Position Chief Executive Officer Chief Operation Officer I Chief Operation Officer II Chief Financial Officer Chief Corporate Service Vice President, Accounting Dept. Senior Manager, Finance Dept.

Management (as defined by SEC) mean Chief Executive Officer or person (s) in the next four executive levels immediately under Chief Executive Officer including every person (s) who is equivalent to that fourth level and also include the Financial Officer in the case that the Financial Officer is not in the same level as the fourth-executive level Management has qualifications in accordance with section 68 the Public Company Act B.E.2535 and the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand. (1) Mr. Somboon Wasinchutchawal is appointed as Chief Financial Officer on January 16, 2008 (2) Mr. Prasert Suppakitpiput is appointed as Vice President of Accounting Department on February 15, 2008

Scope of Powers and Duties of Chief Executive Officer 1. To be responsible for overall and day-to-day operations of business. 2. To coordinate with Internal Audit Department in relation to accounts and payment procedures of the Company should he find or suspect that it is not in accordance with the Company没s policy. 3. To establish an organization structure and efficient management in accordance with the guidelines which may be set up by the Executive Committee. This shall include recruitment, training, hiring and termination of employees who are not Management or members of senior management. Chief Executive Officer is authorised to sign employment agreements on behalf of the Company. 4. To consider and approve any capital expenditure or operating expenses for the Company没s business operation or any borrowing or seeking credit facilities from financial institutions, including acting as a guarantor in the normal course of business, in an amount not exceeding Baht 20 million, or equivalent. 5. To conduct any other affairs necessary for operation of the Company as assigned by the Board of Directors or Executive Committee. 6. To participate in the review of budget with the Board of Directors or Executive Committee. 7. To negotiate and review agreements or documents in relation to the normal business operations of the Company, advise and propose such matters to the Board of Directors and/or Executive Committee and/or persons in charge of such matters for consideration, review and finding solutions.

8. To have the power to authorise and/or appoint a person or persons to undertake specific business on his behalf, provided that such authorization and/or appointment is subject to the scope of authority given under the power of attorney and/or in accordance with the rules, regulations or orders empowering the Board of Directors and/or Executive Committee and/or the Company or Chief Executive Officer to cancel, change or amend such powers. However, the granting of powers, duties and responsibilities to Chief Executive Officer shall not empower Chief Executive Officer to approve transactions in which he or any person who may have a conflict of interest may have a vested interest or any other conflict of interest with the Company or subsidiaries (as defined in the notification of the SEC). Approval of such transactions is required to be reported to the Board of Directors Meeting or Shareholders Meeting, as the case may be, for approval as prescribed by the Articles of Association of the Company or the subsidiaries or the relevant laws, except where the approval of such transaction is consistent with normal business practice and has a clearly defined scope.

The Board & Management Profile

Dr.Pisit Leeahtam Chairman of the Board of Directors / Member of Nomination and Remuneration Committee / Independent Director

Age 58 Years Shareholding 0.051% (as of 13 February 2009) Family Relationship Among the Executives Positions - Chairman of the Board of Directors / Member of Nomination and Remuneration Committee / Independent Director Education - Doctorate Degree (Economics), Erasmus University, Rotterdam, The Netherlands - Master Degree (Economics), Erasmus University, Rotterdam, The Netherlands - Bachelor Degree (Economics), Erasmus University, Rotterdam, The Netherland

Other Position(s) Work Experience - Country Chairman (Thailand) - Jardines Matheson (Thailand) - 2001-2003 President & CEO, TT&T pcl. Ltd. - 1997-2001 Deputy Minister of Finance, Ministry of Finance - Vice Chairman of the Board of Directors / Chairman of the - 1995-1997 Executive Vice President, Head of Investment Audit Committee - KGI Securities (Thailand) Plc. Banking Group, Bangkok Bank pcl. - President - Provident Fund Association - 1991-1994 Director, Office of the Governor, Bank of Thailand - Director - National Synchroton Research Center Committee - 1987-1990 Economist, Exchange and Trade Relations - Council Member - King Mongkut没s University of Technology, Department, The International Monetary Fund, Washington Thonbur D.C., USA - Council Member - Khon Kaen University Training - Council Member - Faculty of Commerce and Accountancy, - Directors Certification Program - DCP 18/2002, Thai Institute Thammasart University of Director (IOD)

Mr. Thongma Vijitpongpun Authorised Director / Executive Vice Chairman of the Board of Directors / Chairman of Executive Committee / Member of Risk Management Committee / Member of Corporate Governance Committee / Member of Nomination and Remuneration Committee / Chief Executive Office

Age 51 Years Shareholding 61.6% (as of 13 February 2009) Family Relationship Among the Executives Elder brother of Mrs. Rattana Promsawad Positions - Authorised Director / Executive Vice Chairman of the Board of Directors / Chairman of Executive Committee / Member of Risk Management Committee / Member of Corporate Governance Committee / Member of Nomination and Remuneration Committee / Chief Executive Officer Education - Bachelor Degree (Engineering), Chulalongkorn University Other Position(s) - Director - Kaysorn Construction Co., Ltd. (a subsidiary of PS) - Director - Preuksa Overseas Co., Ltd. (a subsidiary of PS) Work Experience - 1998-2004 Managing Director - Kaysorn Restaurant Co., Ltd. (stopped operating the business on January 28, 2005) - 1985-2001 Manager - Siam Engineering Limited Partnership Training - Directors Certification Program - DCP 51/2004, Thai Institute of Director (IOD) - Finance for Non-Finance Directors, Thai Institute of Director (IOD) 59

Mr. Narong Manavapat Authorised Director / Member of Executive Committee / Chief Operation Officer I Age 57 Years Shareholding 0.076% (as of 13 February 2009) Family Relationship Among the Executives PositionsĂ&#x; - Authorised Director / Member of Executive Committee / Chief Operation Officer Education - Bachelor Degree (Engineering), Prince of Songkla University Other Position(s) - Director - Preuksa Overseas Co., Ltd. (a subsidiary of PS) Work Experience - 2004-2005 Executive Vice Chairman (Operation) - K-Tech Construction Pcl. - 1997-2004 Director / Executive Director - K-Tech Construction Pcl - 1989-1997 Director / Executive Director - Philip Holzman (Thailand) Co., Ltd. - 1980-1988 Project Manager - Thai International Airways Pcl - 1974-1980 Field Engineer - Pranakorn Construction Co., Ltd. Training - Directors Certification Program - DCP 67/2005, Thai Institute of Director (IOD)

Mr. Prasert Taedullayasatit Authorised Director / Member of Executive Committee / Member of Risk Management Committee / Member of Coporate Governance Committee / Chief Operation Officer

Age 41 Years Shareholding 0.032% (as of 13 February 2009) Family Relationship Among the Executives Positions - Authorised Director / Member of Executive Committee / Member of Risk Management Committee / Member of Coporate Governance Committee / Chief Operation Officer II Education - Master Degree (Business Administration (Marketing & Finance)), Chulalongkorn University - Bachelor Degree (Accountancy: 2nd class Honor) ,Thammasat University Other Position(s) - Director - Thai Condominium Association Work Experience - 2002-2005 Director / Executive Director / Executive Vice President (Business Development) - Lalin Property Pcl. - 1999-2002 Senior Marketing and Business Development Manager - Lalin Property Co., Ltd. - 1993 - 1999 Marketing and Business Development Manager - Lalin Property Co., Ltd. Training - Directors Certification Program - DCP 56/2005, Thai Institute of Director (IOD) - Director Accreditation Program - DAP 1/2003, Thai Institute of Director (IOD) - Public Economic Management for Executives Program - 5/2007, King Prajadhipok没s Institute 61

Mrs. Rattana Promsawad Authorised Director / Member of Executive Committee / Director of CEO Office Age 48 Years Shareholding 3.87% (as of 13 February 2009) Family Relationship Among the Executives Younger sister of Mr. Thongma Vijitpongpun Positions - Authorised Director / Member of Executive Committee / Director of CEO Office Education - Bachelor Degree (Law), Ramkhamhaeng University Other Position(s) - Director - Kaysorn Construction Co.,Ltd. - Director - Preuksa Overseas Co.,Ltd. (both are subsidiary of PS) Work Experience - 2003-2005 Finance Advisor - Preuksa Real Estate Co., Ltd. - 1998-2004 Director - Kaysorn Restaurant Co., Ltd. (stopped operating the business on January 28, 2005) - 1993-2003 Finance Manager - Preuksa Real Estate Co., Ltd. - 1993-2003 Finance Manager - Preuksa Real Estate Co.,Ltd. Training - Directors Certification Program - DCP 52/2004, Thai Institute of Director (IOD)

Mr. Piya Prayong Authorised Director / Member of Executive Committee / Executive Vice President (Townhouse Construction)

Age 39 Years Shareholding 0.04% (as of 13 February 2009) Family Relationship Among the Executives Positions - Authorised Director / Member of Executive Committee / Executive Vice President (Townhouse Construction) Education - Bachelor Degree (Engineering), Kasetsart University Other Position(s) - Director - Kaysorn Construction Co.,Ltd. (a subsidiary of PS) Work Experience - 2003 Production Manager - Siam Engineering Limited Partnership - 2002 Assistant Director - Siam Engineering Limited Partnership Training - Directors Certification Program - DCP 59/2005, Thai Institute of Director (IOD)

Mr. Kanchit Bunajinda Director / Member of Risk Management Committee / Member of Coporate Governance Committee Age 41 Years Shareholding Family Relationship Among the Executives Positions - Director / Member of Risk Management Committee / Member of Coporate Governance Committee Education - Master Degree (Finance & International Business), Sasin Graduate Institute of Business Administration - Bachelor Degree (Engineering), Chulalongkorn University Other Position(s) - Director - Central Plaza Hotel Pcl. - Independent Director - True Vision Pcl. - Director - Central Pattana Pcl. - Deputy Managing Director - Private Equity (Thailand) Co.,Ltd. (Lombard Investment Group) - Co-Director - Asian Corporate Governance Association, Hong Kong Work Experience - 1991-2002 Senior Vice President of Investment Banking Department / Head of Merger & Acquisition Working Team, Merrill Lynch Phatra Co.,Ltd. (present: Phatra Securities pcl.) Training - Directors Certification Program - DCP 30/2003, Senior Honorary Member, Thai Institute of Director (IOD) - Directors Accreditation Program - DAP 35/2005, Thai Institute of Director (IOD) - Audit Committee Program - ACP 14/2006, Thai Institute of Director (IOD) 64

Professor Emeritus Dr.Trungjai Buranasomphop Independent Director / Chairman of the Audit Committee

Age 66 Years Shareholding 0.008% (as of 13 February 2009) Family Relationship Among the Executives Positions - Independent Director / Chairman of the Audit Committee Education - Doctorate Degree (Architecture), Ecole Des Beaux-Arts, Paris, France - Doctorate Degree (City Planning), Sor Bonne, Paris, France - Post Grad Certificate (Energy Conscious Building Design), Sogesta, Italy - Post Grad Diploma (Housing Planning and Building), Bouwcentrum, The Netherlands - Master Degree (Architecture), Pratt Institute, New York, USA - Bachelor Degree (Architecture), Chulalongkorn University Other Position(s) - President - Nont-Truengiai Archs Planners Co., Ltd. - President - NT Interior Design Co., Ltd. - President - NT Estate International Co., Ltd. - Senator

Training Work Experience - 1968-2008 Professor Emeritus Level 11 - Faculty of - Directors Certification Program - DCP 67/2005, Thai Institute of Director (IOD) Architecture, Silpakorn University - 2002-2008 Chairman of the International Special Programs - Directors Accreditation Program - Thai Institute of Director (IOD) of Master and Doctorate Degrees in Ă§Architectural Heritage - Audit Committee Program - Thai Institute of Director (IOD) Management and TourismĂŠ - Silpakorn University - Public Administration and Public Law - 7/2008 , King Honorary Advisor of the Governor of Bangkok Prajadhipok's Institute - 2006-2007 Advisory Council - Bangkok Governor - 2002-2007 Vice President - Council of Architects - 2004-2006 President - Zonta International Association Bangkok 7 - 1996-2000 President - Silpakorn University - 1988-1992 Dean, Faculty of Architecture - Silpakorn University - 1989-2000 Committee Member of Energy Control - Civil Department - 1989-2000 Committee Member of Energy Conservation Fund - Office of Energy Plan and Policy - 1989-2000 President of Land Readjustment Association - City Planning & Development Association - 1975-1981 Director - Siam Architects Association - 1966-1967 Architect - Alfred Easton Poor, New York, USA - 1965-1966 Architect - Louis Berger Inc. / Architect - Ammann & Whtney Inc. / Architect - Intaren Co.,Ltd.

Mr. Weerachai Ngamdeevilaisak Member of the Audit Committee / Chairman of Risk Management Committee / Chairman of Nomination and Remuneration Committee / Independent Director

Age 46 Years Shareholding 0.071% (as of 13 February 2009) Family Relationship Among the Executives Positions - Member of the Audit Committee / Chairman of Risk Management Committee / Chairman of Nomination and Remuneration Committee / Independent Director Education - Bachelor Degree (Commerce and Accountancy), Thammasat University Other Position(s) - Director - Professional Outsourcing Solutions Co., Ltd Work Experience - 1999-2003 Executive Director - Arthur Andersen Thailand没s Group of companies - 1996-1999 Assistant Director - SGV-Na-Thalang Co., Ltd - 1992-1996 Audit Manager - SGV-Na-Thalang Co., Ltd - 1985-1992 Assistant Auditor - SGV-Na-Thalang Co., Ltd Training - Directors Certification Program - DCP - Train the Trainer, Thai Institute of Director (IOD)

Mr. Adul Chandanachulaka Member of the the Audit Committee / Chairman of Corporate Governance Committee / Independent Director Age 63 Years Shareholding 0.013% (as of 13 February 2009) Family Relationship Among the Executives Positions - Member of the the Audit Committee / Chairman of Corporate Governance Committee / Independent Director Education - Bachelor Degree (Commerce and Accountancy), Chulalongkorn University Other Position(s) - Independent Director and member of the Audit Committee of Jutha Maritime Plc. Work Experience - 2003-2004 Director - Siam Press Management Co., Ltd. - 2001-2002 Chairman of the Board of Directors - Siam Integrated Service Co., Ltd., Director - Dusit Sinthorn Co., Ltd. - 2000-2002 Director - Jalaprathan Cement Plc. - 1968-2002 Last Position: Executive Vice President - Siam Commercial Bank Plc. Training - Directors Accreditation Program - DAP 5/2003, Thai Institute of Director (IOD) - Audit Committee Program - ACP 7/2005, Thai Institute of Director (IOD) - Role of the Compensation Committee - 3/2007, Thai Institute of Director (IOD) 68

Mr. Somboon Wasinchutchawal Member of Risk Management Committee / Member of Corporate Governance Committee / Chief Financial Officer Age 46 Years Shareholding 0.01% (as of 13 February 2009) Family Relationship Among the Executives Positions - Member of Risk Management Committee / Member of Corporate Governance Committee / Chief Financial Officer Education - Master Degree (Business Administration), Thammasat University. - Graduate Diploma (Auditing), Thammasat University. - Bachelor Degree (Accountancy), Thammasat University. Other Position(s) - Director - Preuksa Overseas Co., Ltd. (a subsidiary of PS) Work Experience - 2003-2007 Executive Vice President / Corporate Secretary - Areeya Property Pcl. - 1993-2003 Senior Vice President, Property Perfect Pcl. Training - Modern Real Estate Management #14 Faculty of Architecture Chulalongkorn University - Directors Certification Program - DCP 102/2008, Thai Institute of Director (IOD)

Mr. Wirasak Kaewnoo Member of Corporate Governance Committee / Member and Secretary of Nomination and Remuneration Committee / Chief Corporate Services Age 50 Years Shareholding 0.0007% (as of 13 February 2009) Family Relationship Among the Executives Positions - Member of Corporate Governance Committee / Member and Secretary of Nomination and Remuneration Committee / Chief Corporate Services Education - Master Degree (Public Administration), National Institute of Development Administration (NIDA) Other Position(s) - Director - Preuksa Overseas Co., Ltd. (a subsidiary of PS) Work Experience - Director (Human Resources Management Department) - Microchips Technology (Thailand) Co., Ltd. - Director (Human Resources Management Department) - Toshiba (Thailand) Co., Ltd. - Manager (Human Resources Management Department) Chromalloy (Thailand) Co., Ltd. - Manager (Human Resources Management Department) - AT&T (Thailand) Inc. - Manager (Quality Improvement Program) - AT&T (Thailand) Inc. Head of Production Section - Philips Semiconductors Thailand Co., Ltd. Training - Role of the Compensation Committee, Thai Institute of Director (IOD) 70

Controlling Persons of the Company and its Subsidiaries

As at 31 December 2551

Name

1. Dr.Pisit 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

The Company

The Kaysorn Construction Co.,Ltd

// / / / // // // // / -

X / / -

X / / / /

Leeahtam

Mr. Thongma Vijitpongpun Professor Emeritus Trungjai Buranasomphop Mr. Adul Chandanachulaka Mr. Weerachai Ngamdeevilaisak Mr. Narong Manavapat Mr. Prasert Taedullayasatit Mrs. Rattana Promsawad Mr. Piya Prayong Mr. Kanchit Bunajinda Mr. Wirasak Kaewnoo Mr. Somboon Wasinchutchawal

Phanalee Putthachart Preuksa Estate Co.,Ltd Estate Co.,Ltd Overseas Co.,Ltd

Note : X = Chairman, / = Director, // = Executive Director

Remuneration of Directors and Management

1. Monetary remuneration 1.1

Remuneration of Independent Directors The 2008 Annual General Shareholders没 Meeting, held on 11 April 2008, approved remuneration of Directors in an amount of not exceeding Baht 12 million for 2008 to Independent Directors and to Directors who are Chairman of the Board of Directors, Chairman of Audit Committee, Chairman of Risk Management Committee, Chairman of Corporate Governance Committee and Chairman of Nomination and Remuneration Committee, whilst other Directors will not receive any. The details of remuneration paid in 2008 compared to that of 2007 are as follows:

Unit : Baht Name & Position

2008

2007 (1)

Remuneration

Bonus

Remuneration

Bonus(1)

1. 1. Dr.Pisit Leeahtam And Chairman of the Board of Directors and Chairman of Nomination and Remuneration Committee Meeting

3,170,000

1,168,695

3,140,000

709,093

2. Professor Emeritus Dr.Trungjai Buranasomphop Director and Chairman of Audit Committee

1,372,800

3. Mr. Adul Chandanachulaka Director and Member of Audit Committee

1,110,000

4. Mr.Weerachai Ngamdeevilaisak Director and Chairman of Nomination and Remuneration Committee, Chairman of Risk Management Committee Total

1,422,800

4,338,695

3,849,093 514,226

1,372,800

1,887,026

312,001

1,684,801 420,730

1,110,000

1,530,730

255,273 1,365,273

514,226

1,937,026 7,075,600 2,617,876 9,693,476

1,392,800

312,001

1,704,801 7,015,600 1,588,368 8,603,968

Notes : (1) The 2008 Bonus included the second half-year bonus, paid on January 31, 2009 (2) The 2007 Bonus included the second half-year bonus, paid on January 31, 2008

1.2 Remuneration of Executive Directors and Management Total remuneration of Executive Directors and Management was Baht 50,875,504 and Baht 39,544,484 in 2008 and 2007 respectively. The details of which are as follows:

Nature of Compensation No. of Management (1) Salary / Wage Bonus (2) Contribution to Provident Fund Others Total

9 9 9 9 9

2008 Amount in Baht

34,286,362 11,739,120 1,274,073 3,575,950 50,875,504

No. of Management (1) 8 8 8 8 8

2007 Amount in Baht

27,912,880 10,258,385 1,116,509 256,710 39,544,484

No. of Management (1) 8 8 8 8 8

2006 Amount in Baht

26,447,637 9,051,027 1,050,652 1,138,892 37,688,208

Note : (1) The total remuneration of Executive Directors and Management are based on such yearûs Organizational Structure. (2) Bonus are paid on January 31, 2008, and on January 31, 2007, respectivrly. 1.3 Other remuneration Other remuneration was in the form of share warrants offered to the directors, employees and advisors of the Company and/or the subsidiaries, with a conversion ratio of 1 warrant to 1 ordinary share and semi-annual exercisable (For more details, see item çWarrants (PS-WA)é). The Exercise Period of warrants represents the right to purchase the newly issued shares of the Company from the last business day of June and December of each year to the last business day of July and January of each year, whereas other conditions remain the same. Therefore the warrants were exercised twice in 2006, on June 30 and December 29, once in 2007. In 2006, the warrants were exercised on July 30 and 29 December.

As per the 2008 Organizational Structure, cumulative of 9,152,300 units of warrants were allocated to 8 Directors and Management. All Directors and Management exercised their rights to purchase the Company没s common shares in a total amount of 2,288,100 unit, 1,144,000 units and 2,288,000 units in 2008, 2007, and 2006 respectively. Details are shown for Directors and Management positions as at 31 December 2008

Name (1)

1. Dr.Pisit Leeahtam 2. Professor Emeritus Dr.Trungjai Buranasomphop 3. Mr.Adul Chandanachulaka 4. Mr.Weerachai Ngamdeevilaisak 5. Mr.Narong Manavapat 6. Mr.Prasert Taedullayasatit 7. Mrs.Rattana Promsawad 8. Mr.Piya Prayong Total

No. of Warrant Allocated (unit)

No. of Warrant Exercised (Unit) 2008 2007 2006

1,500,000

375,000

187,500

375,000

700,000 700,000 700,000 2,252,300 1,440,000 300,000 1,560,000 9,152,300

175,000 175,000 175,000 563,100 360,000 75,000 390,000 2,288,100

87,500 87,500 87,500 281,500 180,000 37,500 195,000 1,144,000

175,000 175,000 175,000 563,000 360,000 75,000 390,000 2,288,000

Note : (1) Excluded Mr.Veera Srichanachaichok who resigned from his position as Director and Management, effective February 1, 2008.

Good Corporate Governance

The Company adheres to corporate governance principles which are consistent with international principles and the Stock Exchange of Thailandûs policy, the Company therefore has establishe çThe Principles of Good Corporate Governanceé in order to ensure the ethical conduct of its business. The Company strongly believes that its good corporate governance procedures are beneficial to the Companyûs performance, being one of the keys to achieving its basic goal. The Companyûs Corporate Governance Policy is divided into seven categories, as follows: The Board of Directors Rights of shareholders Equitable Treatment of Shareholders Role of Stakeholders Disclosure and Transparency Internal Controls and Risk Management Philosophy and Code of Conduct

1.1 Structure of the Board of Directors The Board of Directors comprises at least five directors, of whom at least one third, but no fewer than three, shall be independent directors. Chairman of the Board of Directors and Chairman of Executive Committee should not be the same person The Board of Directors of Preuksa Real Estate Public Company Limited comprises 5 non-management Directors (4 Independent Directors: Dr.Pisit Leeahtam, Professor Emeritus Dr.Trungjai Buranasomphop, Mr.Weerachai Ngamdeevilaisakand Mr.Adul Chandanachulaka, which exceeds one third of the entire Board) and 5 management Directors. Besides, Chairman of the Board of Directors (Dr.Pisit Leeahtam) and Chairman of the Executive Committee (Mr.Thongma Vijitpongpun) are not the same person.

1.2 Director Qualifications Directors on the Board of Directors shall possess all the qualifications stated in the public company law and other related The Company communicated çThe Principles of Good Corporate laws.They shall not possess any characteristic unsuitable for Governanceé on the Companyûs website, www.ps.co.th, has trustworthy to manage business which the general public is the encouraged the Directors, Management and employees to shareholders pursuant to the notifications of the Office of the Securities and Exchange Commission. acknowledge and observe. 1. The Board of Directors The Board of Directors is accountable to the shareholders for ensuring that the business of the Company is managed properly in the best interests of the shareholders and other stakeholders, as well as the general public. The Board of Directors has a key role in making sure that management commit themselves to performance excellence, with due consideration to the risk exposure of the Company

Directors must also have sufficient knowledge and expertise, and a high standard of integrity and business ethics. In addition, they must be able to commit enough time to contribute their knowledge and expertise to perform their duties for the Company. Independent directors must additionally meet the independence criteria adopted by the Company and in compliance with the same qualifications in accordance with the Notification of the Stock Exchange of Thailand on Qualifications and Scope of Work of the Audit Committee.

By making unconditional opinions, independent directors pursuant to laws and the regulations of the Stock Exchange of are expected to be capable of safeguarding the interests of all the Thailand to ensure the reasonableness of the transaction and to the most benefit of the company; Preparing the Audit Committee shareholders Report for disclosure in the Companyรปs Annual Report; Reviewing to ensure compliance with the regulations of the Securities and 1.3 Term of Service A Board of directorรปs term of service is fixed for three Exchange Commission and the Stock Exchange of Thailand or years. A period of one year is hereby defined as the period between laws and regulations relevant to the business of the Company; the Annual General Meeting of Shareholders of the year of Making recommendations on the appointment of external auditors appointment and the Annual General Meeting of Shareholders of of the Company and propose their remuneration, for consideration the following year. Upon the expiration of the term, a director may of the Board of Directors; Performing any other tasks within the scope assigned by the Board; Reviewing and giving opinions in an be re-elected by the shareholders. independent and objective manner on any internal auditing tasks Sub-Committeesรป term of service is in line with the term of performed by Internal Audit Department; and Consulting regularly the Boardsรป. Upon the expiration of the term, a committee may be with the external auditors. re-elected by the Boards. 1.4.2 Risk Management Committee The Risk Management Committee is responsible 1.4 Sub-Committees The Company has established the Audit Committee pursuant for prescribing policy and guidelines and providing recommendations to the regulations of the SET and has also established the following to the Board with respect to the management of external and sub-committees to carry out duties as assigned by the Board of internal risks to Company operations to ensure they are within the Directors: the Risk Management Committee, the Corporate appropriate and acceptable level. Governance Committee, and the Nomination and Remuneration 1.4.3 Nomination and Remuneration Committee Committee. The Nomination and Remuneration Committee is responsible for nominating persons to be appointed as new Directors, 1.4.1 Audit Committee The Audit Committee is responsible for reviewing Chairman of Executive Committee and Managing Director or as the Companyรปs financial statements and financial reports to ensure replacements at the end of the term of office or when vacancies the accuracy and completeness of the financial statements and occur for other reasons. the reports with adequate and effective internal control and internal Besides, the Nomination and Remuneration audit system ; Contemplating the independency of internal audit and also approve the appointment, removal and termination of the Committee has the responsibility to propose guidelines and methods Chief Internal Auditor or any other function responsible for internal for payment of remuneration and other benefits to the Directors, auditing; Considering the disclosures of information, connected Committee Members, Chairman of Executive Committee and transaction(s) and transactions with a potential conflict of interest Managing Director. This includes setting criteria for review and

1.7 Remuneration for Directors and Management evaluation of remuneration to make it commensurate with their The Company remunerates the directors for their service duties and responsibilities, overall business performance of the at an appropriate and motivating level in order to retain quality Company and the general business circumstances. directors. The remuneration is offered both in monetary and nonmonetary forms. The Nomination and Remuneration Committee is 1.4.4 Corporate Governance Committee Corporate Governance Committee is responsible responsible for reviewing and proposing appropriate remuneration for overseeing and reviewing major best practices of the Company for directors, for approval by shareholders annually. to ensure its compliance with good governance. This includes Management directors shall only be remunerated only for reviewing corporate governance policy, principles and practices; making recommendations on business ethical requirements and their service in the capacity of Management. Such remuneration best practices for directors, executives, employees; ensuring that shall be based on the Company没s operation performance and their such requirements are met effectively; making reports to the Board individual performance. of Directors about the Company没s corporate governance, giving 1.8 Knowledge Development and Training for Board of Directors opinions on best practices adopted in order to improve or adjust A newly appointed director shall be adequately informed of them as needed; reviewing and proposing publicizing of the Company没s efforts with respect to good corporate governance. the rules and regulations and business of the Company on a continual basis. In addition, the Board of Directors shall participate in training courses regularly as their increased knowledge and 1.5 Charter of the Board of Directors The Company has established a charter for the Board of expertise have contributed to the efficient oversight of Company Directors and for the sub-committees in order for each to have a business. clearly-defined operating procedure. So far, 9 of the 10 Directors have attended the Director Certification Program (DCP), and one attended the Director 1.6 Conflict of Interest The Company attaches great importance to proper Accreditation Program (DAP) of the Thai Institute of Directors management of conflicts of interests of parties concerned in both (IOD). corporate level and employee level, handling them in a careful, fair 1.9 Appraisal of the Board of Directors没 Performance and transparent manner and determine best practice in handling The Board of Directors is required to carry out a selfthe conflict of interest. Full disclosure of information thereof is required in all cases. Where a member of the Board of Directors or performance appraisal, summarize overall performance and suggest an executive has an interest in a matter under consideration, he or and make recommendations for the purpose of enhancing their overall efficiency. she shall leave the meeting room or abstain.

2. Rights of shareholders Recognizing the importance of the rights of shareholders, the Company refrains from any act that may violate or curtail the rights of the shareholders, for instance, rights to attend shareholdersû meeting and vote, rights to grant proxy to any one to attend the meeting and vote on behalf, rights to ask make comments and ask questions in the shareholdersû meeting, rights to appoint directors and rights to appoint external auditors and determine auditors' fees, etc.

Invitation to Shareholdersû Meeting In attending a meeting, shareholders should carry a document showing their identity, for example, an ID card or passport. In case of attendance by a proxy of a natural person, the documents of the appointer must also be produced, i.e. a filled-out proxy, a copy of ID card or passport. In case of proxy of a juristic person, the documents of the appointer must be produced, i.e. a filled-out proxy form and a certified copy of the juristic person registration. The Company will arrange for the shareholders to register for the meeting in advance of the meeting time.

2.1 Shareholdersû Meeting Board of Directorsû attendance in shareholdersû meeting Date, time, and venue of the meeting Shareholdersû Meeting is considered very important The Company shall hold an annual general shareholdersû meeting within four months of the annual account closing date, and and the directors will normally attend such a meeting, which is will fix the date, time, and venue of the meeting that are convenient usually chaired by the Chairman of the Board of Directors. for the shareholders to attend. In addition, the Chairman of Executive Committee, The Company may call an extraordinary meeting of Managing Director, Chairman of each sub-committee, and the the shareholders if the Board of Directors deems this necessary. Companyûs auditors or representative and legal advisor will also attend the meeting to listen to comments and answer queries of The Company shall send an invitation to the shareholders the shareholders. to attend the meeting at least 14 days in advance to allow sufficient Queries and comments from the shareholders, voting, time for shareholders to consider the agenda and prepare details of the matters they wish to propose for consideration at the meeting. and minutes of the meeting Each agenda item shall clearly indicate whether it is a matter for At a shareholdersû meeting, the Company shall explain acknowledgement, deliberation or approval, and shall be to shareholders voting and vote-count procedures prior to the accompanied by opinions of the Board of Directors. meeting. During the meeting every shareholder is offered an In addition, the Company shall publish the invitation in opportunity to make comments and ask questions on a fair basis. a Thai daily newspaper for at least three consecutive days as well In voting, one share is represented by one vote and the resolution as in the Companyûs website, www.ps.co.th (Investor Relations / is passed by majority of votes. In the event of a tie, the chair shall Shareholdersû Meeting), complete with details of the date, time, have a second and casting vote. The Company shall record the venue and agenda of the meeting, downloadable proxy form B and resolutions passed at each meeting, clearly indicating the çyes,é proxy foam C and sufficient information pertaining to the matters to çno,é and çabstainé votes in the minutes of the meeting, together with the details of questions, answers and comments raised during be considered at the meeting. the meeting.

A shareholder who has an interest in a matter being 3. Equitable Treatment of Shareholders considered shall refrain from voting, except in the vote to appoint The Company is responsible for the fair and equitable treatment or remove a director. of all the shareholders in order to uphold their basic rights. 2.2 Dividend Payment The annual dividend payment must be approved at a shareholders meeting. Dividends can be paid to shareholders only when the Company has earned profit from its operation and registered no accumulated losses. The dividend amount is divided equally by the number of Company shares. In case the Company has earned profit from its operation enough to pay dividend, from time to time the Board may consider interim dividend payment and inform shareholders in the next shareholdersû meeting. The residual amount of annual dividend payment or interim payment shall be allocate to reserves and is subject to justifications and considerations that the Board of Directors deems appropriate.

3.1 Nomination of Candidates for Directorship A process for a shareholder to nominate a candidate for directorship has been established, according to which a shareholder can nominate a qualified person to be elected as director by submitting background information as well as the consent of the nominee to the Chairman of the Board of Directors three days in advance of the shareholdersû meeting In accordance with the Companyûs policy and best practice of promoting good corporate governance as well as for the purpose of equitable and fair treatment to all shareholders, the Company invited shareholders to nominate persons whom he deem qualified, knowledgeable and competent as their representatives to act as directors 3-4 months in advance of the shareholdersû meeting (during December 25,2008-January 31, 2009)

The payment of dividends shall be made within one month of the date of the shareholdersû resolution, or one month of the date 3.2 Shareholdersû Meeting of the Board of Directorsû resolution in case of interim dividend 3.2.1 Agenda payment. The shareholders will be informed in writing of the dividend Prior to each Shareholdersû Meeting, the Company payment, which will also be announced in a newspaper. will invite the shareholders to propose agenda items in advance through the Companyûs website so that the Board of Directors can 2.3 Appointment of the Companyûs Auditors consider the appropriateness of the proposed agenda items for The Shareholdersû Meeting will appoint the Companyûs inclusion in the meeting agenda external auditors and also fix the audit fee, proposed by the Board of Directors. The Companyûs auditors shall not be a director, officer In accordance with the Companyûs policy and best or employee of the Company. practice of promoting good corporate governance as well as for the purpose of equitable and fair treatment to all shareholders, the The Company shall hold an annual general shareholdersû Company invited shareholders to propose the agenda of the 2008 meeting within four months of the annual account closing date, and Annual General Shareholdersû Meeting 3-4 months in advance of will fix the date, time, and venue of the meeting that are convenient the shareholdersû meeting (during December 25, 2008-January 31, for the shareholders to attend. 2009)

3.2.2 Appointment of proxy to attend and vote at Shareholdersรป Meeting If a shareholder is not able to attend a meeting, he or she can appoint a proxy to attend and vote on his or her behalf by completing a proxy form provided with explanation in the invitation to a meeting. In the invitation, the Company will propose at least one independent director as a choice for the shareholders to appoint as their proxy. (Proxy form B and Proxy form C can be downloaded from the Companyรปs website: www.ps.co.th (Investor Relations / Shareholdersรป Meeting))

Employees

: The Company recognized value of human resources and genuinely wants its employees to feel proud of the organization by maintaining an atmosphere in which employee participation is promoted. In addition, the Company offers equal opportunities in respect of career advancement to its employees and consistently supports their endeavors to learn and gain new skills so that the Company can add value and uphold business excellence.

3.3 Prevention of the Use of Inside Information The Company has set out and communicated guidelines The Company promotes equal treatments in terms of gender, for safeguarding inside information and the use thereof to the employees for their observance. The Company also requires that race, ethnicity, religion and belief the directors and executives who are required by law to hold The Company is committed to enhancing the wellbeing of its securities report on their holdings to the Board regularly. employees and surrounding community, and maintaining a decent working condition. The Company set up work safety procedures in 4. Role of Stakeholders The Company recognizes and respects the rights of all accordance with the laws and relevant regulations. stakeholders and has established a code of conduct outlining the Customers : The Company aims to build customer guidelines in this respect. The purpose is to ensure that the lawful engagement and gain their confidence from rights of stakeholders, whether it be shareholders, employees, its quality services and products at affordable executives, customers, partners, creditors, or the general public, prices, and to maintain good relationship are properly protected and cooperation among these groups is with the customers. Guidance is as follows: promoted and benefits generated to all concerned in a fair manner. It is believed that these factors will ensure the sustainable growth Products & Services of Companyรปs business. The Company has paid attention to and has been responsible Shareholders : The Company intends to be good for customers. It has produced product with quality and up to representative of shareholders operates standards business in such a way that satisfy shareholders the most; to ensure long-term growth of the Companyรปs value with sustainable growth of return on equity as well as disclosure and transparency

Customersû confidential information Directors Management and employees at all level are committed to keep the customersû information confidential, despite permission granted, or it is required by the law and regulations to disclose information to concerned parties

5. Disclosure and Transparency It is a policy of the Company to fully and sufficiently disclose useful information, both financial and non-financial, in a timely, manner in accordance with the rules and regulations of the SEC and the SET, as well as relevant laws

The Company has established an Investor Relations Department, tasked with coordinating with shareholders, securities analysts, investors, government agencies and other parties concerned, on an equitable basis. Company information is reported via the ELCID platform of the SET for displaying on its website, www.set.or.th. Relevant information is also reported to the SEC and displayed in both Thai and English on the Companyûs own website, www.ps.co.th Business : The Company and its business partner carry (Investor Relations) Partners and out business with justifiability and impartiality Throughout the year 2007, the Investor Relations Department Creditors in accordance with the ethical framework and for the mutual interest and for value arranged investor relations activities on a regular basis as follows: chain delivery. The Company will refrain from Dissemination of news and information annually and acting in bad faith to the detriment of its quarterly; for instance, the Financial Statements, the Annual Report, reputation. the Annual Registration Statement (Form 56-1), Notice of the : The Company has complied with the Annual General Meeting of Shareholders as well as letters inviting conditions as agreed in the borrowing: to shareholders to propose agenda items and/or to nominate persons deemed capable and suitable to represent them as members of repay principal and interest. the Board of Directors 3-4 months in advance of the shareholdersû Social : The Company conducts its business in a meeting, notification to the SET, documents such as those for manner responsible for environment, analyst & investor meetings, Company visits and presentations for road shows which are displayed on the Companyûs website, community and society www.ps.co.th The Company complies with the provisions of the relevant Organizing Annual Analyst & Investor Meetings to convey laws, rules and regulations to take good care of the rights of these quarterly operating result (4 times / year) and the Companyûs stakeholders annual business plan announcement (once a year), after submission of the Financial Statements and the Analytical Report of Operating Results to the SEC and the SET Competitors : The Company supports an ethical way of business competition. It seeks to outperform its competitors within the good competition framework, on the basis of fairness and honesty, and will refrain from acting in bad faith to the detriment of competitors.

Producing and publicizing information and documents 6. Internal Controls and Risk Management pertaining to the Annual Business Plan and the Companyûs operating The Company has comprehensive internal control and internal results to securities analysts, investors and interested parties on a audit systems, covering matters concerning finance, operations, quarterly basis compliance, and risk management. Creating opportunities for securities analysts and investors to pay a Company visit or have a conference call with the executives to discuss policies, strategies and business plans, as well as financial information (audited by the Certified public Auditor accountant, following notification to the SET and the SEC), non-financial issues and progress of the implementation of various projects of the Company, including exchange of business views on a regular basis

6.1 Internal Control and Internal Audit systems The Company requires that its internal control system be reviewed and reported by responsible executives regularly while the Internal Audit Department, which is an independent unit, is responsible for internal auditing on a regular basis, to ensure that management and employees strictly comply with the rules and regulations, as well as the Management Authorities. These functions are under the supervision of the Audit Committee.

Organizing visits for securities analysts and investors to 6.2 Risk management the precast concrete factory which uses the Semi-Automated Pallet The Companyûs risk management policy requires that internal Circulating System, the most advanced system in Thailand, as well and external risk factors be reviewed regularly in order to contain as visits to various single-detached house and townhouse projects risk within appropriate and acceptable levels. Such a review shall cover strategic risks, financing risks, construction management Conducting road shows domestically and internationally at risks, and other operational risks. The review also includes an the invitation of the SET and/or securities companies to provide assessment of risk exposure and possible impacts, prevention and information and attend to queries of shareholders, securities analysts impact mitigation measures, the assignment of responsible persons, and corporate investors and the setting up of reporting and follow-up procedures. The Risk Management Committee provides recommendations on guidelines Arrangement of executive interviews on television and/or policies on the handling of critical risks. participating in activities of the Thai IR Club to exchange 7. Philosophy and Code of Conduct knowledge and share experiences with a view to further developing The Company has a firm intention to encourage all the executives the Companyûs Investor Relations function and employees to adopt the same standard of conduct. Toward this purpose, we have announced çCode of Conducté and established For enquiries, shareholders, securities analysts, investors, a department to be responsible specifically for promoting the Government agencies and parties concerned should contact the established Code of Conduct so that employees at all levels Investor Relations Department at (66) 02298 0101 Extension 1863 understand it and observe it with genuine willingness. or Email: IR@ps.co.th

The Board of Directors emphasizes the necessity of internal control system that is commensurate with the level of risk exposure and working environment. At every Board of Directorûs meeting, the Audit Committee is invited to present their views on the adequacy and appropriateness of the Companyûs internal controls, and also to suggest the management for changes and/or improvements on internal control system.

1) Internal Control Environment The Company maintains the environment and organization structure which facilitate internal control function. Our business objectives and targets, as approved by the Board of Directors, which are guidelines for employees to follow in the conduct of their business, are clearly-defined and measurable. The organizational structure is also arranged so that management can perform their duties with efficiency while adhering to the principle of integrity and high ethical standards. In 2006, the Corporate Governance Policy and the Code of Conduct were established to be used as best practices for members of the Board of Directors, Management, and employees to observe.

2) Risk Assessment

○ ○

○

The Board of Directors and Audit Committee mutually agree that the current system of internal controls is appropriately managed, as described below.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

The Board of Directors emphasizes the necessity of internal control system that is commensurate with the level of risk exposure and working environment.

○

Internal Control

A Risk Management Committee has been created in recognition of the importance of this particular area of internal controls. The committee has the duty to give advice to management on appropriate risk management procedure. As a result, risk factors have been assessed and specific precautionary measures initiated, so as to minimize possible adverse effects on the Companyûs operations. At meetings of the Risk Management

Committee, representatives of line functions are invited to report on what they have done in accordance with the established risk management guidelines so that the committee members can perceive their problems and constraints. Then they will arrived at suggestion / solution afterward. In 2007 and 2008, 10 and 9 meetings were held respectively.

3) Control Activities The Balanced Scorecard System (Balanced Scorecard) and the Key Performance Indicators (KPI) have been introduced as planning and control tools, whereby lines of responsibility and accountability between departments have been clearly defined to achieve proper checks and balances. The Operational Procedures have been issued to provide guidelines for systematic and effective operations to prevent or mitigate risks of damage caused by the various departments in the course of performing their duties. Management Authorities have been established, where the scope, authority and financial approval limit at each level have been defined for the purpose of flexibility and clarity. In regard to compliance, the Company has devised methods to ensure compliance with related laws and regulations. For example, stringent measures have been implemented in cases where the Company transacts business with major shareholders, directors etc, including the requirement that such a transaction be subject to approval by persons having no vested interest in order to prevent the siphoning of the Company没s assets and interests. Moreover, the Company has strictly complied with the regulations on information disclosure of the Securities Exchange Commission (SEC) , Securities Exchange of Thailand (SET), and Thai Gennerally Accepted Accouting Standard regarding connected/related persons or businesses.

communication channels, internal and external, ensuring that the information, financial and otherwise, is complete, accurate, timely and sufficient for sound decision making. For internal communication, information necessary for conducting Company business is readily available for all employees on the Company没s Intranet. For external communication, there is a communication system that enables the Company没s to provide information and operational reports to various authorities required by the relevant laws and regulations in a timely manner. Entry and dissemination of information is subject to effective control, whereby tasks are clearly defined, responsible persons designated and access restricted to only individuals requiring such information to perform their duties

5) Follow-Up and Evaluation The Company没s follow-up and evaluation system allows the Board of Directors to regularly assess the operating results against the set objectives and targets. The Internal Audit Department meanwhile is responsible for reporting to the Audit Committee on the results of their internal control reviews, in accordance with the prescribed internal control measures.

4) Information and Communication The Company has continually improved the information system by maintaining effective and efficient information and

Utilisation of Inside Information The Company has a policy and methods of governing utilisation of the Company没s inside information by Directors and Management as follows: (1) The Company has informed its Directors and Management of their duties to disclose their holding of securities of the Company and provisions on penalties stipulated in the Securities and Exchange Act B.E 2535 and the regulations of the SET.

(3) The Company has instructed its Management that Management who have access to inside information which may affect changes in the Company share price to exercise caution in selling or buying securities of the Company 15 days before and one day after the disclosure of financial statements or such inside information to the public. The Company will instruct persons involved with any inside information not to disclose it to other persons until it is reported to the SET.

(2) The Company requires its Management to report any change Sanctions by the Company for breach of the above rules in their holding of Company securities to the Office of the Securities and Exchange Commission (SEC) in accordance include appropriate disciplinary sanctions, i.e., verbal warning, written with Section 59 of Securities and Exchange Act B.E. 2535, warning, salary cut, work suspension, employment termination and to submit one copy of the securities disclosure report to and legal actions. Company on the same day.

In case of transactions that occur regularly and continuously in the future, the Company prescribed a policy and practice guidelines to be in accordance with the general business conditions, in reliance upon prices and conditions that are suitable, fair and appropriate and can be inspected and can prevent siphoning. Such guidelines shall be proposed to the Audit Committee for consideration and approval after which execution can be made. Should the Company enter into a connected transaction, it will arrange for the Audit Committee to give an opinion as to the appropriateness of such transaction will not cause siphoning of benefits between the Company and its shareholders, and that the transaction is conducted in the best interests of all shareholders. For the accounting period ending December 31, 2008 and 2007, the Company entered into connected transaction as follows:

○ ○ ○ ○ ○

○

The Company enters into connected transactions as it may consider appropriate by complying with the laws governing securities and exchange, regulations, notifications, orders or rules of the SET as well as accounting standards regarding information disclosure of related persons or business as prescribed by the Certified Public Accountant Association of Thailand.

○

Connected transactions

Disclosure of connected transactions

Related person

Relationship with the Company

Type of transaction Connected transaction and business value (Million Baht) requirement As at 31 As at 31

Price and Detail

Dec. 2007 Dec. 2008

Item 1 Mr. Thongma Vijitpongpun

Director and Shareholder of the Company

(The contract is expired

2.04

Lease and Service Agreement dated October 1, 2005, monthly rental service will be charged and paid at Baht 146,008.80, of 851.16 square Matre area, from October 1, 2005, to September 30, 2006. From October 1, 2006, onwards, monthly rental service will be charged at Baht 255,348. Such rental and service fees are at the rates comparable to the market rates and conditions that are not different from the cases the Company enters into agreements.

0.38

Lease and Service Agreement dated October 1, 2008 of 425.58 square Metre area, monthly rental service will be charged and paid at Baht 127,674, from October 1, 2008, to 1 October 2010. Such rental and service fees are at the rates comparable to the market rates and conditions that are not different from the cases the Company enters into agreements.

Vijitpongpun for being the Company没s head office

on August 31, 2008)

Item 2 Mr.Thongma Vijitpongpun

The Company leased space in Laksi Plaza, 10th Floor, from Mr. Thongma

Director and Shareholder of the Company

The Company leased space in Laksi Plaza, 10th Floor, from Mr.Thongma Vijitpongpun to use as a traning center.

Necessity and Appropriateness of Connected Transactions The Audit Committee has issued the opinion regarding the connected transaction as mentioned was under normal business practice and no benefit to a related person or a person who might have a conflict of interest. Measures or procedures for approving connected transactions For any connected transaction of the Company, or the Company together with a person who may have a vested interest or may potentially have a conflict of interest, the Audit Committee will provide an opinion on the necessity of entering into the transaction and appropriateness of the pricing aspect of the transaction by considering various conditions to determine whether it is in accordance with the normal course of business in the industry. Further, there shall be a price comparison with a third party or the market price. In the event that the Audit Committee does not have appropriate expertise to consider the connected transaction, the Company will arrange for an independent expert or the Company没s Auditor to provide an opinion as input for the Audit committee没s decision. The opinion of the Audit Committee or the expert will be used by the Board of Directors or the Shareholders, as the case may be, to make a decision. The Director who has a vested interest shall have no voting right in the consideration of the transaction, which will be disclosed in the Notes to the Financial Statements, audited or reviewed by the auditors.

Management Discussion and Analysis

Total Revenues For the year 2008, the Company and its subsidiariesû total revenues were Baht 13,033.6 million, increased by Baht 3,038.9 million or 59.0%, resulting from an increase in revenues from sales of real estate classified to townhouse sale increasing of Baht 2,332.5 million or a 44.0% growth, single-detached house sale increasing of Baht 1,052.9 million or a 28.2% growth and condominiums sale increasing of Baht 522 million or a 28.2%

sales promotion expenses increasing by Baht 275.0 million or a 66.9% growth, as a result of brand building, marketing activities to stimulate presale and sales promotion to speed up house transferring. Other selling and administrative expenses increased by Baht 200.0 million or a 55.6% growth, whereas personnel expenses increased by Baht 152.0 million or a 39.1% growth in order to support expansions of the Companyûs business.

Selling and administrative expenses in 2008 representing 14.5% The significant revenue growth reflected the implementation of the Companyûs strategy, that is, continuous launching new projects of total revenues was decreasing when compared with 16.8% from since the late 2007, housing model development with appropriate the previous year, as a result of business expansion and benefits from the aforementioned governmentûs tax incentives since the selling prices, hence a successful real estate sale. very end of the first quarter of 2008. Cost of sale of real estate Cost of real estate sale in 2008 was Baht 8,065.6 million, Income tax representing 62.3% of revenue from sale of real estate, 3.1% Income tax in 2008 was Baht 659.3 million representing 5.1% decrease from previous year at 65.4% of revenue from sale of real of the total revenues, growth by 124.3% from the previous year of estate. Baht 293.9 million or 3.2% of the total revenues, implying that earning before tax for 2008, was Baht 3,032.7 million increased by The better gross profit margin was due to the implementation Baht 1,436.7 million or a 90.0% growth from last year. The Company of the right pricing strategy for new housing projects together with however paid a higher income tax rate as a result of lower proportion of revenue from the Board Of Investment (BOI)-promoted business. efficient cost management. The Company has shifted to expand its business in higher price housing products due to the restriction on applying for such BOI Selling and administrative expenses Selling and administrative expenses in 2008 increased by Baht support 1,187.0 million, increasing Baht 357 million or a 23.3% growth, in comparison with 43.3% of total revenues growth, as a result of Net profit significant decreases in business tax and transfer fees of Baht In summary, the Company and its subsidiariesû net profit in 270.0 million or a 73.0% decrease as governmentûs tax incentives 2008 was Baht 2,373.3 million, increased by Baht 1,071.2 million to help stimulate property sector by reducing the special business or a 82.5% growth. tax and the transfer fee to 0.11% and 0.01%, respectively, which became effective on 29 March 2008. Marketing, advertising and

Assets As at 31 December 2008, The company has total asset of Baht 16,292.3 million, increased by Baht 5,197.3 million or 46.8 % from last year. This included Baht 4,427.9 million or 54% inventory increase. In addition, there was the increase of Baht 37.8 million or 61.8% in land deposit since the company acquired more land and expand more project in 2008. Liabilities As at 31 December 2008, the company incurred debt in total of Baht 6,182.3 million, increased by Baht 3,293.6 million or 114% from last year. The reason wan mainly Baht 1,993.1 million rise in short term loan from financial institutions. Long term loan also grew by Baht 387.4 million to support business expansion. Shareholders没 Equities As at 31 December 2008, the company没s total equity was Baht 10,110.0 million, increased by Baht 1,903.7 million or 23.2 % from last year. The paid-up capital was also risen from Baht 11.2 million warrant exercised. The inappropriate retained earning also grew by Baht 1,892.4 million.

The Responsibility for the Financial Reporting of the Board of Directors

The Board of Directors of Preuksa Real Estate Public Company Limited takes responsibilities of the consolidated Financial Statements including financial data presenting in this Annual Report. In preparing the Financial Statements, the Company and its subsidiaries have used appropriate accounting standards policies and consistently applied. The Financial Statements are adequately disclosed of significant data in notes to Financial Statements, also audited with unqualified opinion from independent auditors, thus, reflects a true and fair view of Balance Sheet, Income Statement and Cash Flow Statement of the Company and subsidiaries. The Board of Directors set up and maintained effective risk management and internal audit system to ensure that the Company and its subsidiaries keep accounting records which disclose with reasonable accuracy, completeness and adequacy of financial positions, to safeguard assets of the Company and its subsidiaries and to prevent and detect fraud and other irregularities. In so doing, the Board of Directors appointed the Audit Committee which consists of independent Directors to supervise and take responsibilities of the quality of Financial Statements and effective internal audit system. The opinions of the Audit Committee are stated in the report of the Audit Committee presenting in this Annual Report. The Board of Directors is of the opinion that the Company没s internal audit system is generally satisfactory and should assure the creditability of the consolidated Financial Statements of the Company and its subsidiaries as of December 31, 2008.

Dr.Pisit Leeahtam

Mr. Thongma Vijitpongpun

Chairman of the Board of Directors

Chief Executive Officer

Audit Committee Report

On behalf of the Audit Committee

Professor Emeritus Dr. Trungjai Buranasomphop Chairman, Audit Committee Preuksa Real Estate Public Company Limited

Preuksa Real Estate Public Company Limitedรปs Audit Committee during which presentations, discussions and exchanges of views comprises Professor Emeritus Dr. Trungjai Buranasomphop as on relevant subjects were included. Below is a summary of the Chairman, and Mr. Adul Chandanachulaka and Mr. Weerachai main points: Ngamdeevilaisak as Members. 1. Approval of the audited Quarterly Financial Statements and the The Audit Committee performed the duties in accordance with the 2008 Financial Statements prior to submission to the Board of scope of the responsibilities assigned by the Companyรปs Board of Directors for approval. Inquiries were made to the Auditors on Directors, in supervising the operations of the Company to ensure the accuracy and completeness of the Financial Statements that the Company is clearly managed by the Executive Committee and the sufficiency of information disclosure. The Auditorsรป or Management with appropriate levels of integrity and accountability Management Letter which made recommendations on the internal to the shareholders, and that the Executive Committee and control system and the 2008 Audit Schedule were also reviewed. Management followed the Companyรปs policies properly, completely, The Audit Committee is of the opinion that the Companyรปs and up to professional standards. In 2008, 12 meetings were held, process of accounting and financial reporting procedures are with the attendance of executives, internal auditors, and the Auditor, under sufficient control for ensuring that the financial reports on

its financial positions and operations are accurate and up to the legally required accounting standards, and that the Financial Statements disclose sufficient information.

the procurement and material administration systems, the construction system, the project management system, sales, quality control and service, and the system for preparation and analysis of financial reports and executive reports. No significant weaknesses or deficiencies were found. In addition, assessment was carried out in accordance with the guidelines of the Office of the Securities and Exchange Commission in management, finance and compliance control. The Audit Committee is of the opinion that the Company has an appropriate, sufficient and effective internal control system.

2. Review and approval of the practice guidelines for entering into connected transactions or transactions with potential conflicts of interest, including reviews of transactions which could be categorized as connected, or ones with potential conflicts of interest, which took place during the year, as well as reviews of the disclosure of pertinent information to ensure that it was accurate, complete and in compliance with the Stock Exchange of Thailand没s relevant notifications, regulations and guidelines. 5. Reviews of the risk management system to assess the sufficiency The Audit Committee is of the opinion that Management entered and effectiveness. The reviews were carried out on the risk into such transactions for the Company没s best interests, on an factors, risk management methodology and the progress of the arm没s length basis, at reasonable prices, and with sufficient risk management work by the Risk Management Committee. disclosure of information. The Audit Committee is of the opinion that the risk management system is appropriate, sufficient and effective, with the risk 3. Review of compliance with relevant provisions, regulations factors completely identified, the risk assessment and response and laws. The Internal Audit Division was instructed to include planning processes appropriately laid down, and the assessment compliance audit of every operation system as one of its key regularly reviewed and updated. tasks. From the results of the internal audit in 2008 and the meetings with the Company没s Legal Department, the Audit 6. Supervision of the internal control function. The Audit Committee Committee found no indications leading to a belief that there considered the mission, the scope of operations, duties and had been significant deficiencies regarding non-compliance and/ responsibilities, auditor independence, organization and or practices conflicting with or violating relevant provisions, manpower of the internal control function, as well as considered regulations or laws. and approved the Internal Audit Manual and reviewed the Internal Audit Charter to ensure that it is appropriate and up to professional 4. Reviews of the internal control system to assess the adequacy standards. The Committee also reviewed the Audit Report on a and effectiveness which will help the Company achieve its monthly basis, as well as the overall performance of the internal targets. The reviews were done by considering the 2008 internal audit function, including the survey of satisfaction of executives audit report against the approved work plan and the audit report and the audited departments at all levels. The supervision also of the external consultant firm, covering major systems; e.g., included approval of the 2008 Audit Schedule, prepared in

accordance with the Companyûs risks, the Audit Quality Improvement Plan and development of the knowledge skills and expertise of the internal audit personnel. The Audit Committee is of the opinion that the Companyûs internal audit system is satisfactorily independent, sufficient and effective and is in line with the set objectives.

service of the Auditors, as well as the appropriateness of the fee and was of the opinion that the Auditors had expressed opinions and made recommendations beneficial for the preparations of financial reports and internal control. It was therefore deemed appropriate to propose that the Board of Directors request approval from the Shareholdersû Meeting to re-appoint the auditors from KPMG Phoomchai Audit Ltd, as the Companyûs Auditors, for 2009.

7. Quarterly reports on the operation of the Audit Committee to the Board of Directors. Opinions and recommendations for managerial purposes were presented to Management, who has In 2008, the Audit Committee performed its assigned duties and made appropriate improvements and adjustments as responsibilities, using the membersû knowledge and competence with carefulness and sufficient independence, without limitation to recommended. access to information from the executives, staff members or the 8. Review of the Audit Committee Charter and recommendations relevant people. The Committee also expressed opinions and made for revision made to the Board of Directors for approval. The recommendations for equitable benefits to all relevant stakeholders. recommended revisions covered the qualifications of the Audit Committee Members; the Committeeûs scope of responsibilities, As a summary of the overall perspective, the Audit Committee is of duties and authority, and meetings, in order to be in line with the the opinion that the Companyûs Board of Directors and its executives policy of good corporate governance outlined in the Notification are ethical and committed to performing their duties to achieve its of the Capital Market Supervisory Board and as required by the objectives, and have placed utmost importance to managing the Stock Exchange of Thailand. The revision has been approved operation under an effective internal control environment, appropriate and watertight risk management, sufficient good corporate by the Board of Directors. governance with transparency and trustworthiness, as well as 9. Selection of the Auditors for 2009; nominating the Auditors and continual improvement of the operations systems. proposing their fee to the Board of Directors for submission to the 2009 Shareholdersû Meeting for approval. The Audit This Audit Committee Report was reviewed and approved by the Committee considered the independence, performance and Audit Committee on February 18, 2009.

Audit Fees

Prueksa Real Estate Public Company Limited and its subsidiaries paid for its auditors from KPMG Phoomchai Audit Limited, for review and audit of the Company and its subsidiaries没 Financial Statements from 2005 to 2008 as follows : Unit : Baht

Audit Fees Other Fees Total

2008

2007

3,960,000 116,000 4,076,000

3,820,000 70,653 3,890,653

2006 3,560,000 74,500 3,634,500

In addition, There are other services as follows : Unit : Baht

BOI Review

2008

2007

2006

430,920

408,605

185,150

Corporate Social Responsibility

Success of a company is not reflected only by its operational results but also by its demonstration of responsibilities to society and its communities. Preuksa firmly believes that, in order to develop the organization into a sustainable business unit, not only does it have to generate satisfactory yields and growth for shareholders, but it also has to attain achievements for collective benefits through self-development-achievements that are widely accepted and that make employees happy. The Company has therefore been grown in a sustainable fashion along with social and environmental development.

Education and Youth Development Several different methods have been employed to deliver assistance to people and communities. Focus is now on making investments for the future of the youth by supporting their education. This has been carried out through different channels; for example, PS Scholarship Project Scholarships were granted for school children and youths whose parents were the Companyûs customers or employees, in primary and secondary schools situated near the Companyûs project sites. This project has been continued for six consecutive years. PS Precast Factory Learning Center Project Students and other interested individuals are allowed to visit the PS Precast Factory for housing construction, which has the highest capacity in concrete wall and steel reinforced concrete part production in Thailand. The PS Childrenûs Art Imagination Project1 Initiated to support the Companyûs policy to contribute to the development and promotion of young talentsû skills in visual arts, the Project was launched in 2008 with a theme çThis home is filled with loveé, to offer an opportunity for children to express their creativity to the public and to improve their skills in visual arts, as well as to transform their imagination about their home into artworks, in order to promote a sense of love and warmth in the family. Support was also provided to various educational development projects; e.g., the World Robo Cup 2008 of the Faculty of Engineering, Chulalongkorn University, and the B-KMUTT: Civil Camp of the Faculty of Engineering, King Mongkutûs University of Technology Thonburi, which offered an opportunity to students from secondary

schools throughout the country to participate in activities aimed at acquainting them with the civil engineering profession. Social, Community and Family Institution Development Recognizing its corporate citizen status and the importance of the family which is the fundamental element of communities and society, the Company is committed to making contributions to the building of healthy society. Examples of such contributions are: The PS Mobile Medical Unit Project This activity has been organized for six consecutive years to provide medical service to customers and people living in communities near the project sites. The Company cooperates with hospitals, health stations and sub-district administrative authorities in providing medical services which include general examination, blood testing for diabetes and anemia screening, and lipid and blood pressure measurements, to predict the health status as well as to educate the people and give them health advice. In addition, rabies vaccination was provided within the communities. Support has also been extended to public health activities of the customers and people in nearby communities, such as promotion of exercise training and foggy spraying to prevent dengue mosquitoes and provision of oral polio vaccine to children. PS Workshop 2008 The project was organized to promote occupation and income generation. Special trainers are invited to train participants in various kinds of occupations so that customers living in the projects who undergo the training can make use of the knowledge and skills. The training activity is backed up by financial advice from financial institutions. çPS Loves Momé Project Customers are encouraged to take their mother to the movie çWhere the Miracle Happensé in order to strengthen love and bonds within the family. çPS Loves Dadé Project Customers are invited to take their father and family to go to nine temples around Rattanakosin Island to worship the Lord Buddha to make merit as a dedication to His Majesty the King and for the good of themselves and their family. 97

Religious Activities Merit-making ceremonies are held on important religious occasions, such as Songkran Day, to preserve the Thai tradition by providing demonstration for children and the youth to observe, and to pass on the warm Thai atmosphere to younger generations. Such events also strengthen family bonds as family members have a chance to conduct activities together. Nature and Environment Conservation PS for Sea Turtles没 Home and Life Project This walk-rally activity, combined with other activities contributing to the conservation of the environment and society as a whole, was conducted jointly with the Foundation for Conservation of Sea Turtles in Chonburi. Bookshelves and school kits were also given to Chuk Samet School, Chonburi. Apart from the fun of the activities, the customers also had a chance to meet new neighbors, to engage in activities with their family members and to feel happy because they have become part of the efforts to conserve sea turtles. PS Helps Save the World Project. The company offers itself as a center for donation of milk boxes for recycling into books, tables, chairs, and bookshelves, to be given to school children of Border Patrol Police schools. The activity also helps reduce garbage and global warming. Sports Activities PS Family League This soccer event is organized to strengthen friendship among the customers of the various projects. Its main objective is to encourage the Thai youth to turn to physical exercise, to have sporting and team spirits, and to use their spare time in a useful way.

Pride Awards Selection of a Company to which the award would be given was based on the following criteria. Listed companies were first selected on the basis of their average çReturn on Invested Capitalé ratios in the previous five years. Then a survey would be conducted to gather information from business people in related industries to identify the 10 most distinguished companies by considering information from various angles related to promotion of innovation The process started with identifying the top 200 securities with the and success derived from innovation of the companies. The final largest daily average market capitalization in the pervious 12 months. decision was made by independent qualified judges. The securities were then considered based on certain prescribed criteria. The stocks should be listed for not less than six months. The selection of the securities for calculation of the indices and the They had to be actively traded, as measured by the turnover value award received reflected the Companyûs leadership in the property on the main board in relation to the average turnover value per development industry. Preuksa has therefore enjoyed acceptance common stock on the whole market in the same month. Such from customers, the media, investors, stakeholders, public and conditions were considered along with other criteria, using the private agencies as well as the general public, as a stable organization systematically managed with transparency, enjoying outstanding trading data of the period June 1, 2007 to May 31, 2008. operational results and financial strength, having modern and Other criteria included a minimum of 20% free float; not being innovative construction technologies and placing importance on securities subject to possible delisting; and not being securities community and social responsibilities. subject to possible long-period suspension. In June 2008, the Company was selected as one of the top 50 listed companies whose securities would be used in the SET 50 calculation. The selection was made by the Indices Working Group of the Stock Exchange of Thailand for use in the calculations of SET 50 and SET 100 indices in the second half of 2008 (1 July - 31 December).

In December 2008, the Company received an Innovative Organizational Culture Award in the çThailandûs Most Innovative Company Award 2008é presentation event, jointly organized by the Faculty of Commerce and Accountancy, Chulalongkorn University and the Nation Multimedia Group Public Company Limited.

General Information Preuksa Real Estate Public Company Limited Head Office 27th Floor, SM Tower, 979/83, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400 Business Type Real estate development for residential purposes, including townhouses, single-detached houses, and condominiums Company Registration No. Bor. Mor. Jor. 0107574800307 Telephone 0-2298-0101, Fascimile 0-2298-0102 Homepage www.ps.co.th PS Precast Factory Address 54/1 Moo 4, Tambon Ladsawai, Amphur Lamlookka, Pathumthani Business Type Precast Concrete Factory and Precast Fence and Pillar Factory Telephone 0-2532-8124-32, Fascimile 0-2532-8123 Kaysorn Construction Co., Ltd. (Subsidiary) Address 29th Floor, SM Tower, 979/95, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400 Business Type Contractor for Housing Decoration Telephone 0-2298-0101 Extension 172 Putthachart Estate Co., Ltd. (Subsidiary) Address 30th Floor, SM Tower, 979/99, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400 Business Type Real estate development Telephone 0-2298-0820 Phanalee Estate Co., Ltd. (Subsidiary) Address 30th Floor, SM Tower, 979/97, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400 Business Type Real estate development Telephone 0-2298-0010 Preuksa Overseas Co., Ltd. (Subsidiary) Address 30th Floor, SM Tower, 979/99, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400 Business Type Holding Company Telephone 0-2298-0101

Security Registrar Company Name Thailand Securities Depository Co.,Ltd. Head Office 62 The Stock Exchange of Thailand, Ratchadapisek Road, Klong Toey, Bangkok 10110 Telephone 0-2229-2800 Debenture No. 1 and No. 2 / 2550 Registrar Company Name TMB Bank Public Company Limited Head Office Phaholyothin Road, Chomphon, Chatuchak, Bangkok 10900 Telephone 0-2299-1111 Debenture No. 1 / 2552 Registrar Company Name Kasikornbank Public Company Limited Head Office 1 Soi Kasikornthai Rajburana Rd. Kwaeng Rajburana , Rajburana District , Bangkok Telephone 0-2222-0000, 0-2888-8888 Auditor Miss Somboon Supasiripinyo C.P.A. (Thailand) Registration No.3731 Miss Vannaporn Jongperadechanon C.P.A. (Thailand) Registration No.4098 Mr. Veerachai Ratanajaratkul C.P.A. (Thailand) Registration No.4323 Mr. Supoj Singhasaneh C.P.A. (Thailand) Registration No.2826 Company Name KPMG Phoomchai Audit Ltd. Head Office 195 Empire Tower, 22nd Floor, South Sathon Road, Yannawa, Bangkok 10120 Telephone 0-2677-2000 Legal Advisor Company Name - Weerawong Chinnavat & Peangpanor Ltd. Head Office 540 Mercury Tower, 22nd Floor, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone 0-2264-8000

100

Preuksa Real Estate Public Company Limited and its Subsidiaries Annual financial statements and Audit report of Certified Public Accountant For the years ended 31 December 2008 and 2007

101

Audit report of Certified Public Accountant

To the shareholders of Preuksa Real Estate Public Company Limited I have audited the accompanying consolidated and separate balance sheets as at 31 December 2008 and 2007, and the related statements of income, changes in equity and cash flows for the years then ended of Preuksa Real Estate Public Company Limited and its subsidiaries, and of Preuksa Real Estate Public Company Limited, respectively. The Companyûs management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial positions as at 31 December 2008 and 2007 and the results of operations and cash flows for the years then ended of Preuksa Real Estate Public Company Limited and its subsidiaries, and of Preuksa Real Estate Public Company Limited, respectively, in accordance with generally accepted accounting principles. As described in note 24 to the financial statements, the Companyûs financial statements for the year ended 31 December 2007 have been restated for the effects of the adoption of two International Financial Reporting Standards IAS 12 çIncome taxesé and IAS 19 çEmployee benefitsé. I have audited the adjustments that were applied to the restatement of the Companyûs 2007 financial statements and in my opinion these adjustments are appropriate and have been properly applied.

(Somboon Supasiripinyo) Certified Public Accountant Registration No. 3731 KPMG Phoomchai Audit Ltd. Bangkok 18 February 2009 102

Balance sheets

Preuksa Real Estate Public Company Limited and its Subsidiaries As at 31 December 2008 and 2007

Assets

Current assets Cash and cash equivalents Current investments in savings account, fixed deposits and promissory note Installment receivables Receivable from subsidiaries Short-term loans to subsidiaries Property development projects Deposits for purchase of land Other current assets Total current assets Non-current assets Investment in subsidiaries Property, plant and equipment Land not used in operations Deferred tax assets Other non-current assets Total non-current assets Total assets

Consolidated Separate financial statements financial statements 2008 2007 2008 2007 (Restated) (Restated) (in Baht)

Note

1,526,168,206

1,027,212,459

1,175,206,278

840,014,826

6 7 4 4 6, 8

3,424,107 38,316,705 12,621,939,173 99,055,113 138,156,927 14,427,060,231

54,491,432 15,137,916 8,194,038,063 61,228,901 164,510,949 9,516,619,720

3,424,107 35,460,307 199,506,187 328,670,572 11,383,647,680 99,055,113 108,986,625 13,333,956,869

54,491,432 13,432,316 34,378,374 411,137,326 7,543,189,001 61,228,901 38,937,492 8,996,809,668

9 6, 10 6 11

1,505,913,958 127,829,591 116,963,345 114,500,820 1,865,207,714 16,292,267,945

1,314,135,998 127,829,591 48,552,932 87,850,676 1,578,369,197 11,094,988,917

275,997,825 1,402,422,772 127,829,591 90,544,730 99,697,439 1,996,492,357 15,330,449,226

100,997,900 1,301,761,035 127,829,591 31,092,815 75,505,126 1,637,186,467 10,633,996,135

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

103

Balance sheets

Preuksa Real Estate Public Company Limited and its Subsidiaries As at 31 December 2008 and 2007

Liabilities and equity

Current liabilities Bank overdrafts and short-term loans from financial institutions Trade accounts payable - Subsidiary - Others Payables for purchase of land Current portion of long-term loans Current portion of long-term debenture Short-term loan from subsidiary Customers没 deposits Income tax payable Other current liabilities Total current liabilities Non-current liabilities Long-term loans Long-term debentur Provision for employees long-term benefits Total non-current liabilities

Note

Consolidated Separate financial statements financial statements 2008 2007 2008 2007 (Restated) (Restated) (in Baht)

6, 12

1,993,108,263

1,845,108,263

535,505,161 300,685,648 400,000,000 819,156,597 405,943,812 490,384,791 4,944,784,272

600,048,054 233,760,500 10,000 346,754,912 148,270,771 319,278,200 1,648,122,437

71,359,198 421,519,193 240,498,522 400,000,000 39,217,225 782,095,087 320,700,669 431,126,542 4,551,624,699

111,567,797 459,199,202 134,602,645 10,000 329,939,992 104,230,743 280,811,636 1,420,362,015

6, 12 12

606,656,710 600,000,000

219,264,970 1,000,000,000

583,055,710 600,000,000

135,263,970 1,000,000,000

30,841,233 1,237,497,943

21,292,900 1,240,557,870

29,474,916 1,212,530,626

20,710,252 1,155,974,222

6,182,282,215

2,888,680,307

5,764,155,325

2,576,336,237

6, 12 12 4, 12

Total liabilities

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

104

Balance sheets

Preuksa Real Estate Public Company Limited and its Subsidiaries As at 31 December 2008 and 2007

Liabilities and equity

Equity Share capital Authorised share capital Issued and paid-up share capital Share premium Retained earnings Legal reserve Unappropriated Total equity attributable to equity holders of the Company Minority interests Total equity Total liabilities and equity

Consolidated Separate financial statements financial statements 2008 2007 2008 2007 (Restated) (Restated) (in Baht)

Note

15 15 15

2,255,753,400 2,191,394,200 1,361,595,353

2,255,753,400 2,180,178,200 1,361,595,353

2,255,753,400 2,191,394,200 1,361,595,353

2,255,753,400 2,180,178,200 1,361,595,353

225,575,340 6,331,244,526

225,575,340 4,438,885,962

225,575,340 5,787,729,008

225,575,340 4,290,311,005

10,109,809,419 176,311 10,109,985,730 16,292,267,945

8,206,234,855 73,755 8,206,308,610 11,094,988,917

9,566,293,901 9,566,293,901 15,330,449,226

8,057,659,898 8,057,659,898 10,633,996,135

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

105

Statements of income

Note

Revenues Revenue from sale of real estate Dividend income Other income Total revenues

12,968,506,304 65,093,604 13,033,599,908

9,054,963,994 37,802,869 9,092,766,863

11,442,786,027 96,876,213 11,539,662,240

8,383,883,587 42,470,250 62,641,237 8,488,995,074

8,085,646,990 1,887,063,238 9,972,710,228

5,918,970,712 1,529,903,468 7,448,874,180

7,247,633,103 1,765,464,831 9,013,097,934

5,540,673,701 1,458,756,761 6,999,430,462

Profit before interest and income tax expenses Interest expense 19 Income tax expense 20 Profit for the year

3,060,889,680 28,198,901 659,322,472 2,373,368,307

1,643,892,683 47,867,821 293,939,822 1,302,085,040

2,526,564,306 29,982,140 518,256,901 1,978,325,265

1,489,564,612 47,860,595 241,310,985 1,200,393,032

Attributable to: Equity holders of the Company Minority interests Profit for the year

2,373,265,826 102,481 2,373,368,307

1,302,013,221 71,819 1,302,085,040

1,978,325,265 1,978,325,265

1,200,393,032 1,200,393,032

1.08 1.08

0.60 0.59

0.90 0.90

0.55 0.54

Expenses Cost of real estate sales Selling and administrative expenses Total expenses

Earnings per share Basic Diluted

21 21

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

106

Statements of changes in equity

Preuksa Real Estate Public Company Limited and its Subsidiaries For the years ended 31 December 2008 and 2007

Note

Balance at 1 January 2007 Adoption of IAS 12 and IAS Restated balance Profit for the year Dividends Appropriated for legal reserve Share capital issued Balance at 31 December 2007 Balance at 1 January 2008 Adoption of IAS 12 and IAS Restated balance Profit for the year Dividends Share capital issued Investment of minority interests Balance at 31 December 2008

23 15

Issued and paid-up Share share capital premium

Consolidated financial statements Retained earnings Total equity Minority Legal Un- attributable to interests reserve appropriated the Company' s shareholders (in Baht)

Total equity

2,173,850,400 1,361,595,353 223,250,000 3,578,844,832 7,337,540,585 - (4,876,671) (4,876,671) 2,173,850,400 1,361,595,353 223,250,000 3,573,968,161 7,332,663,914 - 1,302,013,221 1,302,013,221 - (434,770,080) (434,770,080) - 2,325,340 (2,325,340) 6,327,800 - 6,327,800 2,180,178,200 1,361,595,353 225,575,340 4,438,885,962 8,206,234,855

31,686 31,686 71,819 (29,750) 73,755

7,337,572,271 (4,876,671) 7,332,695,600 1,302,085,040 (434,799,830) 6,327,800 8,206,308,610

2,180,178,200 1,361,595,353 225,575,340 4,411,625,930 8,178,974,823 - 27,260,032 27,260,032 2,180,178,200 1,361,595,353 225,575,340 4,438,885,962 8,206,234,855 - 2,373,265,826 2,373,265,826 - (480,907,262) (480,907,262) 11,216,000 - 11,216,000 2,191,394,200 1,361,595,353 225,575,340 6,331,244,526 10,109,809,419

73,755 8,179,048,578 - 27,260,032 73,755 8,206,308,610 102,481 2,373,368,307 - (480,907,262) - 11,216,000 75 75 176,311 10,109,985,730

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

107

Statements of changes in equity

Preuksa Real Estate Public Company Limited and its Subsidiaries For the years ended 31 December 2008 and 2007

Note

Balance at 1 January 2007 Adoption of IAS 12 and IAS 19 Restated balance Profit for the year Dividends Appropriated for legal reserve Share capital issued Balance at 31 December 2007 Balance at 1 January 2008 Adoption of IAS 12 and IAS 19 Restated balance Profit for the year Dividends Share capital issued Balance at 31 December 2008

23 15

Issued and paid-up share capital

Separate financial statements Retained earnings Total equity Share Legal Unattributable premium reserve appropriated to equity holders of the Company (in Baht)

2,173,850,400 1,361,595,353 2,173,850,400 1,361,595,353 6,327,800 2,180,178,200 1,361,595,353

223,250,000 223,250,000 2,325,340 225,575,340

3,536,608,896 (9,595,503) 3,527,013,393 1,200,393,032 (434,770,080) (2,325,340) 4,290,311,005

7,295,304,649 (9,595,503) 7,285,709,146 1,200,393,032 (434,770,080) 6,327,800 8,057,659,898

2,180,178,200 1,361,595,353 2,180,178,200 1,361,595,353 11,216,000 2,191,394,200 1,361,595,353

225,575,340 225,575,340 225,575,340

4,279,928,442 10,382,563 4,290,311,005 1,978,325,265 (480,907,262) 5,787,729,008

8,047,277,335 10,382,563 8,057,659,898 1,978,325,265 (480,907,262) 11,216,000 9,566,293,901

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

108

Statements of cash flows

Preuksa Real Estate Public Company Limited and its Subsidiaries For the years ended 31 December 2008 and 2007 Consolidated Separate financial statements financial statements 2008 2007 2008 2007 (Restated) (Restated) (in Baht) Cash flows from operating activities Profit for the year Adjustments for Allowance for decline in value of property development projects Allowance for impairment loss on equipment Doubtful debts expense Depreciation and amortisation Loss (gain) on disposal of equipment Dividend income from subsidiary Provision for employees' long-term benefits Interest expense Income tax expense Changes in operating assets and liabilities Installment receivables Receivable from subsidiaries Property development projects Deposits for purchase of land Other current assets Other non-current assets Trade accounts payable - subsidiary Trade accounts payable - others Payables for purchase of land Customers' deposits Other current liabilities Income tax paid Net cash provided by (used in) operating activities

2,373,368,307

1,302,085,040

1,978,325,265

1,200,393,032

108,359,154 (627,526) (8,860,000) 189,835,038 (1,321,485) 9,548,333 28,198,901 659,322,472 3,357,823,194

22,087,754 712,227 6,204,458 154,691,243 2,226,474 7,030,578 47,867,821 293,939,822 1,836,845,417

104,696,859 (627,526) (8,860,000) 174,171,462 (1,347,743) 8,764,664 29,982,140 518,256,901 2,803,362,022

22,087,754 712,227 6,204,458 152,965,639 2,226,474 (42,470,250) 6,711,727 47,860,595 241,310,985 1,638,002,641

(23,178,789) (4,459,117,746) (28,966,212) 26,354,022 (35,746,029) (64,542,893) 66,925,148 472,401,685 171,106,591 (470,059,844)

(3,625,106) (953,875,131) 27,943,374 (95,883,158) (21,402,810) 162,712,428 25,825,958 180,174,154 182,794,394 (273,745,821)

(22,027,991) (165,127,813) (3,871,802,841) (28,966,212) (70,049,133) (32,011,909) (40,208,599) (37,680,009) 105,895,877 452,155,095 150,314,906 (361,238,890)

(1,919,506) (16,854,745) (475,382,299) 27,943,374 29,633,034 (12,746,247) 111,567,797 33,925,962 13,597,148 163,359,234 147,738,994 (236,045,383)

(987,000,873)

1,067,763,699

(1,117,385,497)

1,422,820,004

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

109

Statements of cash flows

51,067,325 (394,952,785) 23,140,358 (320,745,102)

Cash flows from financing activities Increase (decrease) in bank overdrafts and short-term loans from financial institutions 1,993,108,263 Proceeds from long-term loans 1,804,910,000 Proceeds from long-term debentures Proceeds from short-term loan from subsidiary Proceeds from capital increase, net of related expenses 11,216,000 Repayment of long-term loans (1,417,528,260) Investment of minority interests 75 Interest paid (104,097,094) Dividends paid (480,907,262) Dividends paid to minority interest in subsidiary Net cash provided by (used in) financing activities 1,806,701,722 Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

498,955,747 1,027,212,459 1,526,168,206

(7,878,300) (152,496,373) 3,067,087 (157,307,586)

51,067,325 (307,576,788) 390,043,542 (289,341,195) (174,999,925) 23,058,536 (307,748,505)

(7,878,300) (504,875,818) 116,209,769 (139,695,798) (98,000,000) 42,470,250 3,067,087 (588,702,810)

(317,247,952) 317,011,601 1,000,000,000 -

1,845,108,263 1,716,310,000 39,217,225

(317,135,704) 117,717,500 1,000,000,000 -

6,327,800 (810,008,833) (46,374,564) (434,770,080) (29,750) (285,091,778)

11,216,000 (1,268,528,260) (102,090,512) (480,907,262) 1,760,325,454

6,327,800 (694,715,732) (44,760,912) (434,770,080) (367,337,128)

625,364,335 401,848,124 1,027,212,459

335,191,452 840,014,826 1,175,206,278

466,780,066 373,234,760 840,014,826

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

110

Notes to financial statements Contents

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

○

Noteÿ

○

For the years ended 31 December 2008 and 2007

General information Basis of preparation of the financial statements Significant accounting policies Related party transactions and balances Cash and cash equivalents Assets used as collateral Installment receivables Property development projects Investment in subsidiaries Property, plant and equipment Deferred tax assets Interest-bearing liabilities Other current liabilities Provision for employeesû long-term benefits Share capital, warrants, share premium and legal reserve Segment information Selling and administrative expenses Personnel expenses Interest expense Income tax expense Earnings per share Promotional privileges Dividends Adoption of two International Financial Reporting Standards ñ IAS 12 and IAS 19 Financial instruments Lease agreements Commitments and contingent liabilities Others Events after the balance sheet date Thai Accounting Standards (TAS) not yet adopted Reclassification of accounts

111

Notes to financial statements For the years ended 31 December 2008 and 2007

These notes form an integral part of the financial statements. The financial statements were authorised for issue by the directors on 18 February 2009.

1 General information Preuksa Real Estate Public Company Limited, the çCompanyé, is incorporated in Thailand and has its registered office at 979/83, SM Tower 27th floor, Phaholyothin Road, Samsennai, Phayathai, Bangkok. The Company was listed on the Stock Exchange of Thailand in December 2005. The principal activity of the Company is sale of real estate in Thailand. Details of the Companyûs subsidiaries are as follows:

Name of the entity Direct subsidiaries Kaysorn Construction Company Limited Putthachart Estate Company Limited Phanalee Estate Company Limited Preuksa Oversea Company Limited

Ownership interest (%) 2008 2007

Type of business

Country of incorporation

Home decoration / Construction Sale of real estate Sale of real estate Investment

Thailand

99.93

Thailand Thailand Thailand

99.99 99.99 99.99

99.99 99.99 -

2 Basis of preparation of the financial statements The financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation of the financial statements has been prepared for the convenience of readers not conversant with the Thai language. The financial statements are prepared in accordance with Thai Accounting Standards (çTASé) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (çFAPé) and with generally accepted accounting principles in Thailand. The Company has adopted the following new and revised Thai Accounting Standards (TAS) which were issued by the FAP during 2007 and effective for accounting periods beginning on or after 1 January 2008: TAS 25 (revised 2007)

Cash Flows Statements

TAS 29 (revised 2007)

Leases

TAS 31 (revised 2007)

Inventories 112

TAS 33 (revised 2007)

Borrowing Costs

TAS 35 (revised 2007)

Presentation of Financial Statements

TAS 39 (revised 2007)

Accounting Policies, Changes in Accounting Estimates and Errors

TAS 41 (revised 2007)

Interim Financial Reporting

TAS 43 (revised 2007)

Business Combinations

TAS 49 (revised 2007)

Construction Contracts

TAS 51

Intangible Assets

The adoption of these new and revised TAS does not have any material impact on the consolidated or separate financial statements. The FAP has issued during 2008 a number of new and revised TAS which are only effective for financial statements beginning on or after 1 January 2009 and have not been adopted in the preparation of these financial statements. These new and revised TAS are disclosed in note 30. The financial statements are presented in Thai Baht, rounded in the notes to the financial statements to the nearest thousand unless otherwise stated. They are prepared on the historical cost basis except as stated in the accounting policies. The preparation of financial statements in conformity with TAS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. These judgements, estimates and assumptions are based on historical experience and various other factors, including management没s assessment of the potential impact on the Group没s operations and financial position of the global economic crisis. Actual results may differ from these estimates The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

113

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes: Note 14 Note 25 Note 27

Measurement of provision for employeesĂť long-term benefits Valuation of financial instruments Provisions and contingencies

3 Significant accounting policies (a) Basis of consolidation The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the Ă§GroupĂŠ). Significant intra-group transaction between the Company and its subsidiaries are eliminated on consolidation. Subsidiaries Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. (b) Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of income. Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions.

114

(c) Cash and cash equivalents Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the purpose of the statement of cash flows. (d) Other accounts receivable Other accounts receivable are stated at their invoice value less allowance for doubtful accounts. The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred. (e) Property development projects Sample houses, project under development, land, and land and houses for sale and land held for development are stated at the lower of cost and net realisable value. Property development projects are stated at individually identified cost, including borrowing costs capitalised, aggregate cost of development, materials and supplies, wages and other direct expenses less any allowance considered necessary by the management. Properties held for sale are stated at the lower of cost and their estimated net realisable value. Construction materials, excluding those that are self - manufactured, are stated at the lower of cost (first-in, first-out method) and net realisable value. Self - manufactured construction materials are stated at the lower of standard cost, which approximates current production cost, and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale. (f)

Investments Investments in subsidiaries Investments in subsidiaries in the separate financial statements of the Company are accounted for using the cost method.

115

Investments in debt securities Debt securities that the Group intends and is able to hold to maturity are stated at amortised cost less impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised by using the effective interest rate method over the period to maturity. (g) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation Depreciation is charged to the statement of income on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows: Building Machinery and equipment Furniture, fixtures and office equipment Transportation

20 5, 10 3, 5 5

years years years years

No depreciation is provided on freehold land or assets under construction. (h) Intangible assets Software licenses Software licenses that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the statement of income using the straight-line method for 10 years. (i)

Impairment The carrying amounts of the Group没s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets没 recoverable amount are estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in the statement of income.

116

Calculation of recoverable amount The recoverable amount of non-financial assets is the greater of the assets没 net selling price and value in use. In assessing 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. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cashgenerating unit to which the asset belongs. Reversals of impairment An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset没s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (j)

Interest-bearing liabilities Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of income over the period of the borrowings on an effective interest basis.

(k) Trade and other accounts payable Trade and other accounts payable are stated at cost. (l)

Employee benefits Provision for employees没 long-term benefits The Group没s net obligation in respect of long-term employee benefits (Legal Severance Payment) is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The discount rate is the yield at the reporting date on government bonds. The calculation is performed using the projected unit credit method.

(m) Provisions A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

117

(n) Revenue Revenue from sale of real estate is recognised in the statement of income when the ownership of the real estate has been transferred. Construction contracts When the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised in the statement of income by reference to the stage of completion of the contract activity at the balance sheet date. The stage of completion is assessed by reference to surveys of work performed. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately as an expense in the statement of income. Interest and dividend income Interest income is recognised in the statement of income as it accrues. Dividend income is recognised in the statement of income on the date the Group没s right to receive payments is established. Other income Other income is recognised in the statement of income as it accrues. (o) Expenses Operating leases Payments made under operating leases are recognised in the statement of income on a straight line basis over the term of the lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease payments made. Contingent rentals are charged to the statement of income for the accounting period in which they are incurred. Financial costs Interest expenses and similar costs are charged to the statement of income for the period in which they are incurred, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. (p) Income tax Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the statement of income except to the extent that it relates to items recognised directly in equity.

118

Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date and applicable to the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax Deferred tax is provided, using the liability method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profit will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. 4 Related party transactions and balances Related parties are those parties linked to the Group and the Company by as shareholders or by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices. Relationships with related parties that control or jointly control the Company or are being controlled or jointly controlled by the Company or have transactions with the Group were as follow: Name of entities Kaysorn Construction Co., Ltd. Putthachart Estate Co., Ltd. Phanalee Estate Co., Ltd. Preuksa Oversea Co., Ltd.

Country of incorporation/nationality Thailand Thailand Thailand Thailand

Nature of relationships Subsidiary, 99.93% shareholding Subsidiary, 99.99% shareholding Subsidiary, 99.99% shareholding Subsidiary, 99.99% shareholding

119

Transactions for the years ended 31 December 2008 and 2007 with the subsidiaries were as follows: Policy of pricing

Sales of raw materials Receiving of services Interest income Other income Interest expense

Separate financial statements 2008 2007 (in thousand Baht) 71,462 13,164 833,426 237 35,498 14,118 1,484 457 1,783 -

Cost plus 5-10% Cost plus 5% MLR + 1% Cost plus 5% MMR

Balances as at 31 December 2008 and 2007 with the subsidiaries were as follows: Separate financial statements 2008 2007 (in thousand Baht) Receivable from subsidiaries Kaysorn Construction Co., Ltd. Phanalee Estate Co., Ltd. Putthachart Estate Co., Ltd.

74,152 101,253 24,101 199,506

107 34,271 34,378

22,543 190,837 115,291 328,671

126,076 284,833 228 411,137

Trade accounts payable Kaysorn Construction Co., Ltd.

71,359

111,568

Short-term loans from subsidiaries Kaysorn Construction Co., Ltd.

39,217

Short-term loans to subsidiaries Kaysorn Construction Co., Ltd. Phanalee Estate Co., Ltd. Putthachart Estate Co., Ltd.

120

Movements during the years ended 31 December 2008 and 2007 of short-term loans to subsidiaries were as follows:

At 1 January Increase Decrease At 31 December

Separate financial statements 2008 2007 (in thousand Baht) 411,137 22,471 307,577 504,876 (390,043) (116,210) 328,671 411,137

Movements during the years ended 31 December 2008 and 2007 of short-term loans from subsidiaries were as follows:

At 1 January Increase Decrease At 31 December

Separate financial statements 2008 2007 (in thousand Baht) 279,411 (240,194) 39,217 -

5 Cash and cash equivalents

Cash on hand Cash at banks - current accounts Cash at banks - savings accounts Highly liquid short-term investments Cheques on hand Others Total

Consolidated statements Separate financial 2008 2007 2008 2007 (in thousand Baht) 12,333 62,976 5,035 11,099 408,602 147,580 408,419 147,361 189,087 304,269 83,842 178,684 676,571 260,072 456,127 260,072 237,097 251,746 219,402 242,230 2,478 569 2,381 569 1,526,168 1,027,212 1,175,206 840,015

121

Cash and cash equivalents of the Group and the Company as at 31 December 2008 and 2007 were denominated entirely in Thai Baht. 6 Assets used as collateral Savings account, fixed deposits and promissory note (totalling Baht 3 million as at 31 December 2008), property, plant and equipment (with net book value of Baht 854 million as at 31 December 2008), land not used in operations (with net book value of Baht 128 million) and part of property development projects (land and structure thereon) are used as collateral for overdraft lines of Baht 159 million, loan lines from banks of Baht 8,397 million and letters of guarantee lines of Baht 3,871 million. Savings account, fixed deposits and promissory note (totalling Baht 54 million as at 31 December 2007), property, plant and equipment (with net book value of Baht 922 million as at 31 December 2007), land not used in operations (with net book value of Baht 128 million) and part of property development projects (land and structure thereon) are used as collateral for overdraft lines of Baht 89 million, loan lines from banks of Baht 7,821 million and letters of guarantee lines of Baht 3,656 million. Property development projects (land and structure thereon) of the subsidiaries are used as collateral for loan lines from banks of Baht 736 million and letters of guarantee lines of Baht 484 million. (31 December 2007: Baht 1,645 million and Baht 404 million, respectively) 7 Installment receivables Ageing analyses for installment receivables were as follows: Consolidated

Overdue : Less than 3 months 3 - 6 months 6 - 12 months Over 12 months Total

2008

Separate financial statements 2007 2008 2007 (in thousand Baht)

34,601 3,209 486 21 38,317

13,333 639 1,166 15,138

32,575 2,575 310 35,460

12,002 336 1,095 13,433

122

8 Property development projects Consolidated 2008 Construction materials Sample houses Projects under development - land - land improvements - construction cost - public utilities - overhead costs - interest costs

344,219 479,366 5,354,932 359,221 1,996,408 434,629 402,283 86,389 8,633,862 2,314,908 1,016,744 12,789,099

Land, and land and houses for sale Land held for development Total Less allowance for decline in value of property development projects (167,160) Net 12,621,939 Number of projects under development: Baan Preuksa Preuksa Village Passorn Project Condominium Total Projects

60 15 13 10 98

Separate financial statements 2007 2008 2007 (in thousand Baht) 172,955 316,101 157,446 381,978 435,514 357,593

2,773,962 333,731 692,405 362,289 290,882 55,629 4,508,898 1,834,157 1,354,852 8,252,840

4,912,078 309,489 1,700,987 357,955 350,287 83,105 7,713,901 2,070,416 1,011,214 11,547,146

2,440,388 292,459 606,544 305,387 257,870 58,954 3,961,602 1,772,443 1,352,907 7,601,991

(58,802) 8,194,038

(163,499) 11,383,647

(58,802) 7,543,189

42 11 10 3 66

46 15 13 9 83

34 11 10 3 58

123

9 Investment in subsidiaries Separate financial statements 2008 2007 (in thousand Baht) 100,997 2,997 175,000 98,000 275,997 100,997

At 1 January Acquisitions At 31 December

Investment is subsidiaries as at 31 December 2008 and 2007, and dividend income from those investments for the years then ended were as follows:

Ownership interest 2008 2007 (%) Subsidiaries Kaysorn Construction Co., Ltd. Putthachart Estate Co., Ltd. Phanalee Estate Co., Ltd. Preuksa Oversea Co., Ltd. Total

99.93 99.99 99.99 99.99

99.93 99.99 99.99 -

Separate financial statements Paid-up capital Cost method 2008 2007 2008 2007 (in thousand Baht) 1,000 50,000 200,000 25,000 276,000

1,000 50,000 50,000 101,000

999 49,999 199,999 25,000 275,997

999 49,999 49,999 100,997

Dividend income 2008 2007

42,470 42,470

On 22 November 2006, two subsidiaries, Putthachart Estate Co., Ltd. and Phanalee Estate Co., Ltd., registered to increase their authorised share capital from Baht 1 million (10,000 shares at Baht 100 par value) to Baht 50 million (500,000 shares at Baht 100 par value) with the Ministry of Commerce. The Company increased its investment in the two subsidiaries during 2007. On 12 September 2007, the subsidiary named Phanalee Estate Co., Ltd. registered to increase its authorised share capital from Baht 50 million (500,000 shares at Baht 100 par value) to Baht 200 million (2,000,000 shares at Baht 100 par value) with the Ministry of Commerce. As at 31 December 2008, these additional authorised shares had been paid up. During year 2008, the Company invested in Preuksa Oversea Co., Ltd. (authorised share capital 1,000,000 shares at Baht 100 par value) amounting to Baht 25 million.

124

10 Property, plant and equipment Consolidated

Land and land improvement Building

Cost At 1 January 2007 Additions Transfers, net Disposals Allowance for impairment At 31 December 2007 and 1 January 2008 Additions Transfers, net Disposals Allowance for impairment At 31 December 2008

Construction in progress Furniture, and machinery Machinery fixtures and equipment and and office Public Transportation under equipment equipment utility equipment installation (in thousand Baht)

Total

298,508 23,053 -

338,990 89,911 -

691,172 99,894 12,017 (78,198) (712)

102,080 40,399 (12,321) -

16,741 -

109,916 16,629 1,574,036 2,630 9,571 152,494 - (12,017) 112,964 (5,730) - (96,249) (712)

321,561 7,577 3,069 332,207

428,901 13,262 84,099 526,262

724,173 186,937 35,570 (28,162) (617) 917,901

130,158 39,747 807 (11,659) 159,053

16,741 16,741

106,816 14,183 1,742,533 13,038 134,392 394,953 77 (123,622) (10,731) - (50,552) (617) 109,200 24,953 2,086,317

125

Consolidated

Land improvement Building

Accumulated depreciation At 1 January 2007 Depreciation charge for the year Disposals At 31 December 2007 and 1 January 2008 Depreciation charge for the year Disposals At 31 December 2008 Net book value At 31 December 2007 At 31 December 2008

Construction in progress Furniture, and machinery Machinery fixtures and equipment and and office Public Transportation under equipment equipment utility equipment installation (in thousand Baht)

Total

24 114 -

30,192 24,296 -

208,479 80,526 (74,773)

60,001 22,683 (11,301)

16,741 -

57,023 19,274 (4,882)

372,460 146,893 (90,956)

138 250 388

54,488 23,682 78,170

214,232 110,240 (9,924) 314,548

71,383 27,887 (9,497) 89,773

16,741 16,741

71,415 18,680 (9,312) 80,783

428,397 180,739 (28,733) 580,403

321,423 331,819

374,413 448,092

509,941 603,353

58,775 69,280

35,401 28,417

14,183 1,314,136 24,953 1,505,914

126

Separate financial statements

Land and land improvement Building

Construction in progress Furniture, and machinery Machinery fixtures and equipment and and office Public Transportation under equipment equipment utility equipment installation (in thousand Baht)

Total

298,508 23,053 -

338,990 89,911 -

691,172 90,677 12,017 (78,198) (712)

102,043 38,109 (12,321) -

16,741 -

109,916 16,629 1,573,999 2,476 8,431 139,693 - (12,017) 112,964 (5,730) - (96,249) (712)

321,561 7,577 3,069 332,207

428,901 13,262 84,099 526,262

714,956 95,139 34,430 (28,075) (617) 815,833

127,831 33,263 807 (11,659) 150,242

16,741 16,741

106,662 13,043 1,729,695 5,772 134,329 289,342 77 (122,482) (10,696) - (50,430) (617) 101,815 24,890 1,967,990

127

Separate financial statements

Land and land improvement Building

Construction in progress Furniture, and machinery Machinery fixtures and equipment and and office Public Transportation under equipment equipment utility equipment installation (in thousand Baht)

Total

24 114 -

30,192 24,296 -

208,479 80,213 (74,773)

59,990 22,551 (11,301)

16,741 -

57,023 19,267 (4,882)

372,449 146,441 (90,956)

138 250 388

54,488 23,682 78,170

213,919 98,217 (9,911) 302,225

71,240 26,591 (9,496) 88,335

16,741 16,741

71,408 17,612 (9,311) 79,709

427,934 166,352 (28,718) 565,568

321,423 331,819

374,413 448,092

501,037 513,608

56,591 61,907

35,254 22,106

13,043 1,301,761 24,890 1,402,422

The gross carrying amount of fully depreciated property, plant and equipment of the Company that was still in use as at 31 December 2008 amounted to Baht 104.0 million (2007: Baht 54.7 million). There was no fully depreciated equipment of the subsidiaries as at 31 December 2008 and 2007.

128

11 Deferred tax assets Movements in deferred tax assets during the year were as follows:

As at 1 January 2008 Deferred tax asset Property development projects Deposits for purchase of land Provision for employees没 long-term benefits Other current liabilities Customers没 deposits Others Loss carry forward Total

24,860 2,020 3,588 1,002 14,343 533 2,207 48,553

Consolidated Charged / (credited) to Statement of income (Note 20) As at 31 December 2008 (in thousand Baht) (31,258) 2,020 (1,967) (570) (36,699) (956) 1,020 (68,410)

56,118 5,555 1,572 51,042 1,489 1,187 116,963

Separate financial statement Charged / (credited) to Statement of income As at 1 January 2008 (Note 20) As at 31 December 2008 (in thousand Baht) Deferred tax asset Property development projects Deposits for purchase of land Provision for employees没 long-term benefits Other current liabilities Customers没 deposits Others Total

11,490 2,020 3,447 1,002 12,601 533 31,093

(23,501) 2,020 (1,736) (570) (35,696) 31 (59,452)

34,991 5,183 1,572 48,297 502 90,545

129

12 Interest-bearing liabilities Consolidated 2008 Current Short-term loans from financial institutions Unsecured Current portion of long-term loans from financial institutions Secured Current portion of long-term debentures Unsecured Short-term loans from subsidiary Unsecured

Non-current Long-term loans from financial institutions Secured Long-term debentures Unsecured Total

Separate financial statements 2007 2008 2007 (in thousand Baht)

1,993,108

1,845,108

400,000

2,393,108

39,217 2,284,325

606,657

219,265

583,056

135,264

600,000 1,206,657 3,599,765

1,000,000 1,219,265 1,219,275

600,000 1,183,056 3,467,381

1,000,000 1,135,264 1,135,274

Loans from financial institutions bear interest at market rates. Certain loans contain restrictions on financial ratios, debt to equity ratio and payment of dividends. At the annual general meetings of the shareholders of the Company held on 9 April 2007 and 11 April 2008, the shareholders approved the Issuance and Offer for Sale of Debt Securities under the project (Shelf Filing) to decrease the financial cost of the Company and to provide an alternative source of funds for project development. The maximum amount of Debt Securities must not exceed Baht 4,000 million.

130

In August 2007, the Company issued unsubordinated and unsecured debentures of Baht 600 million (600,000 units at Baht 1,000) and Baht 400 million (400,000 units at Baht 1,000). The debentures bear interest at 4.91% and 4.68% per annum, respectively, payable semi-annually. The debentures mature as follows: Consolidated and Separate financial statements 2008 2007 (in thousand Baht) 400,000 400,000 600,000 600,000 1,000,000 1,000,000

Maturity date August 2009 August 2010 Total 13 Other current liabilities

Consolidated 2008 Accrued for public utility Accrued bonus Retention Accrued interest expense Accrued professional fee Withholding tax deducted at source Others Total

145,655 112,201 43,725 18,913 14,584 19,836 135,471 490,385

Separate financial statements 2007 2008 2007 (in thousand Baht) 83,835 139,312 83,090 64,196 94,607 53,692 23,817 32,703 23,035 18,913 18,913 18,913 12,701 14,336 12,701 16,042 18,258 10,657 99,774 112,997 78,724 319,278 431,126 280,812

131

14 Provision for employees没 long-term benefits An independent actuary carried out an evaluation of the Company没s obligations for employees没 long-term benefits using the projected unit credit method. The Company has provided the provision for employees没 long-term benefits as follows:

Present value of unfunded obligation Expense recognised in profit or loss Current service cost Interest cost

Consolidated financial statements 2008 2007 (in thousand Baht) 30,841 21,293

8,803 745 9,548

6,532 499 7,031

2008 3.5

2007 3.5

5 and 8 3.5 and 5 60

Principal actuarial assumptions Discount rate (%) Future salary increase (%) Employees Daily wage staffs Retirement age (year old)

132

Present value of unfunded obligation Expense recognised in profit or loss Current service cost Interest cost

Separate financial statements 2008 2007 (in thousand Baht) 29,475 20,710 8,040 725 8,765

6,222 490 6,712

2008 3.5

2007 3.5

5 and 8 3.5 and 5 60

Principal actuarial assumption Discount rate (%) Future salary increase (%) Employees Daily wage staffs Retirement age (year old)

133

15 Share capital, warrants, share premium and legal reserve Share capital, ordinary shares

Authorised At 1 January ordinary shares Reduction of shares Increase of new shares At 31 December ordinary shares Issued and paid up At 1 January ordinary shares Exercise of warrants At 31 December ordinary shares

Par value per share (in Baht)

2008

2007

Number

1 1 1

2,255,753 -

2,232,500 (7,747) 31,000

2,255,753

1 1

2,180,178 11,216

2,173,850 6,328

2,191,394

2,180,178

Baht Number (thousand shares / thousand Baht)

Baht

134

On 31 January 2008, the holders of 5,774,500 warrants exercised options to purchase 5,774,500 ordinary shares at an exercise price of Baht 1 each, resulting in an increase in the issued and paid-up share capital from Baht 2,180,178,200 to Baht 2,185,952,700. The Company registered the increase in the issued and paid-up share capital with the Ministry of Commerce on 6 February 2008. On 31 July 2008, the holders of 5,441,500 warrants exercised options to purchase 5,441,500 ordinary shares at an exercise price of Baht 1 each, resulting in an increase in the issued and paid- up share capital from Baht 2,185,952,700 to Baht 2,191,394,200. The Company registered the increase in the issued and paid-up share capital with the Ministry of Commerce on 8 August 2008. On 31 July 2007, the holders of 6,327,800 warrants exercised options to purchase 6,327,800 ordinary shares at an exercise price of Baht 1 each, resulting in an increase in the issued and paid- up share capital from Baht 2,173,850,400 to Baht 2,180,178,200. The Company registered the increase in the issued and paid-up share capital with the Ministry of Commerce on 9 August 2007. At the annual general shareholders没 meeting held on 9 April 2007, the shareholders approved: (a) A decrease of the Company没s authorised share capital from Baht 2,232,500,000 (2,232,500,000 ordinary shares with Baht 1 par value) to Baht 2,224,753,400 (2,224,753,400 ordinary shares with Baht 1 par value). The Company registered the decrease in authorised share capital with the Ministry of Commerce on 20 April 2007. (b) An increase of the Company没s authorised share capital from Baht 2,224,753,400 (2,224,753,400 ordinary shares with Baht 1 par value) to Baht 2,255,753,400 (2,255,753,400 ordinary shares with Baht 1 par value) by creating 31,000,000 new ordinary shares to accommodate the exercise right of the warrants. The Company registered the increase in authorised share capital with the Ministry of Commerce on 23 April 2007. (c) The issue and offering of 31,000,000 units of free and non-transferable warrants exercisable to purchase the newly-issued ordinary shares of the Company no.2 (PS-WA2) to its directors and employees of the Company and/or its subsidiaries. At the annual general shareholders没 meeting held on 11 April 2008, the shareholders approved the withdrawal of the issue and offering of the said warrants because there were some errors contained in the relevant information disclosed to the shareholders, though the errors in the information were not important for decision making.

135

Warrants On 28 November 2005, the Company issued 64,401,500 units of free and non-transferable warrants exercisable to purchase the newly-issued ordinary shares of the Company, to its directors, employees, and advisors of the Company and its subsidiary. The warrants have a 4 year-term from 1 December 2005 and mature on 30 November 2009. The first exercise date was 30 June 2006 and the last exercise date is 30 November 2009. The exercise ratio is one warrant to one ordinary share at an exercise cost of Baht 1 per share. From the Resolution of Board of Directors没 Meeting No. 1/2007 dated 22 February 2007, the Meeting acknowledged the alteration of the exercise date of warrants, representing the right to purchase the newly issued shares of the Company from the last business day of June and December of each year to the last business day of July and January of each year, whereas other conditions remain the same. The first exercise date following this change was 31 July 2007 and the final exercise date is 30 November 2009. At the annual general shareholders没 meeting held on 11 April 2008, the shareholders approved the issue and offering of 31,000,000 units of free and non-transferable warrants exercisable to purchase the newly-issued ordinary shares of the Company no.2 (PSWB) to its directors, management and employees of the Company and/or its subsidiaries. The exercise ratio is one warrant to one ordinary share at an exercise cost of Baht 8.04 per share. During the exercise period, the holders of warrants are entitled to exercise their right to purchase shares on a semi-annual basis, except the last exercise when the right can be exercised within the maturity date of the warrants. The warrant holders have the right to purchase shares in an amount not exceeding one-eighth (12.5%) of the total number of the warrants allotted by the Company. However, if the warrant holder fails to purchase the full 12.5% of the shares on an exercise date, he may purchase the remaining shares on any subsequent exercise date. During the years ended 31 December 2008 and 2007, the holders of 11,216,000 warrants and 6,327,800 warrants, respectively, exercised their options to purchase 11,216,000 and 6,327,800 ordinary shares of Baht 1 per share. During the years 2008 and 2007, there were cancellations of 2,447,400 warrants and 5,954,500 warrants, respectively, from employees who had resigned from the Company. As at 31 December 2008 and 2007, there were 15,889,400 and 29,552,800 outstanding warrants, respectively, that can be exercised for purchase of ordinary shares in the Company.

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Share premium Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (çshare premiumé). Share premium is not available for dividend distribution. Legal reserve Section 116 of the Public Companies Act B.E. 2535 Section 116 requires that a company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (çlegal reserveé), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution. 16 Segment information Business segments Management considers that the Group operates in a single line of business, namely real-estate business, and has, therefore, only one major business segment. Geographic segments Management considers that the Group operates in a single geographic area, namely in Thailand, and has, therefore, only one major geographic segment.

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17 Selling and administrative expenses Consolidated 2008 Marketing Personnel expenses Allowance for decline in value of property development projects Professional Fee Special business tax Rent Repair Depreciation and amortisation Utilities Bank charge Transfer fee Other Total

686 541 109 90 79 46 41 41 33 30 21 170 1,887

Separate financial statements 2007 2008 2007 (in million Baht) 411 635 390 389 514 371 22 86 293 35 28 33 33 26 77 97 1,530

105 88 73 37 41 39 33 25 19 156 1,765

22 84 283 31 28 32 33 22 73 90 1,459

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18 Personnel expenses Consolidated 2008 Wages and salaries Contribution to defined contribution plans Other-bonus and welfare Total

541 14 311 866

Separate financial statements 2007 2008 2007 (in million Baht) 422 466 388 11 12 10 198 257 177 631 735 575

The defined contribution plans comprise provident funds established by companies in the Group for their employees. Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at 4% of their basic salaries and by the Group at rates ranging from 4% of the employees没 basic salaries. The provident funds are registered with the Ministry of Finance as juristic entities and are managed by licensed Fund Managers. 19 Interest expense Consolidated 2008 Interest paid and payable to financial institutions Less capitalised as part of construction costs Net

Separate financial statements 2007 2008 2007 (in million Baht)

104,097

64,557

102,090

62,944

(75,898) 28,199

(16,689) 47,868

(72,108) 29,982

(15,083) 47,861

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20 Income tax expense Consolidated Note Current tax expense Current year Under provided inprior years Deferred tax expense Movements in temporary different Benefit of tax losses recognised

Total

2008

Separate financial statements 2007 2008 2007 (in thousand Baht)

724,153 3,579 727,732

331,120 1,987 333,107

574,049 3,660 577,709

266,014 1,987 268,001

(69,430) 1,020 (68,410) 659,322

(36,960) (2,207) (39,167) 293,940

(59,452) (59,452) 518,257

(26,690) (26,690) 241,311

Reconciliation of effective tax rate Consolidated 2008 Rate (%) (in thousand Baht) Profit before tax Income tax using the Thai corporation tax rate Income tax reduction Income not subject to tax Expenses not deductible for tax purposes Eliminated income Under provided in prior years Other Total

2007 Rate (%) (in thousand Baht)

3,032,691 30

909,891 (125,102) (144,221) 11,760 6,847 3,579 (3,432) 659,322

1,596,025 30

478,808 (68,967) (138,525) 2,060 13,465 1,987 5,112 293,940

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Reconciliation of effective tax rate Separate financial statements

Profit before tax Income tax using the Thai corporation tax rate Income tax reduction Income not subject to tax Expenses not deductible for tax purposes Under provided in prior years Other Total

2008 Rate (%) (in thousand Baht) 2,496,582 30

748,975 (124,829) (116,082) 9,922 3,660 (3,389) 518,257

2007 Rate (%) (in thousand Baht) 1,441,704 30

432,511 (72,085) (122,572) 2,060 1,987 (590) 241,311

Income tax reduction Royal Decree No. 387 B.E. 2544 dated 5 September 2001 grants companies listed on the Stock Exchange of Thailand a reduction in the corporate income tax rate from 30% to 25% for taxable profit for the five consecutive accounting periods beginning on or after enactment. The subsidiary has calculated income tax for the year ended 31 December 2008 and 2007 in accordance with Royal Decree No. 471 B.E. 2551 dated 28 March 2008 on the basis of reduced corporate income tax rate of 15% on net profit up to Baht 1 million, 25% on net profit over Baht 1 million up to Baht 3 million and 30% on net profit over Baht 3 million and tax exemption on the first net profit up to Baht 150,000.

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21 Earnings per share Basic earnings per share The calculations of basic earnings per share for the years ended 31 December 2008 and 2007 were based on the profit for the years attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the years as follows: Consolidated 2008

Profit attributable to equity holders of the Company (basic) Number of ordinary shares at 1 January Effect of shares issued during year Weighted average number of ordinary shares outstanding (basic) Earnings per share (basic) (in Baht)

2007 (in thousand share)

Separate financial statements 2008 2007

2,373,266

1,302,013

1,978,325

1,200,393

2,180,178

2,173,850

2,180,178

2,173,850

7,591

2,670

7,591

2,670

2,187,769 1.08

2,176,520 0.60

2,187,769 0.90

2,176,520 0.55

Diluted earnings per share The calculations of diluted earnings per share for the years ended 31 December 2008 and 2007 were based on the profit for the years attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the years after adjusting for the effects of all dilutive potential ordinary shares as follows:

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Consolidated 2008 Profit attributable to equity holders of the Company (diluted) Weighted average number of ordinary shares outstanding (basic) Effect of diluted equivalent ordinary shares-warrants Weighted average number of ordinary shares outstanding (diluted) Earnings per share (diluted) (in Baht)

2007 (in thousand share)

Separate financial statements 2008 2007

2,373,266

1,302,013

1,978,325

1,200,393

2,187,769

2,176,520

2,187,769

2,176,520

17,063

30,729

17,063

30,729

2,204,832 1.08

2,207,249 0.59

2,204,832 0.90

2,207,249 0.54

22 Promotional privileges By virtue of the provisions of the Investment Promotion Act of B.E. 2520, the Group has been granted privileges by the Board of Investment relating to developing a housing project for persons who have low or middle income (where the usable area in each unit shall not be less than 31 square meters and the contracted sale amount is less than Baht 600,000). The principal privilege is the exemption from corporate income tax for a period of 5 years from the start of business operations related to these privileges. The promotional privileges will expire in various periods up to 6 June 2013. As promoted companies, the Company and its subsidiaries must comply with certain terms and conditions prescribed in the promotional certificates. 23 Dividends At the annual general meeting of the shareholders of the Company held on 11 April 2008, the shareholders approved the appropriation of dividends of Baht 0.22 per share, amounting to Baht 480.9 million from net profit relating solely to business operations benefiting from the privileges under the Investment Promotion Act of year 2007. The dividend was paid to shareholders during 2008. At the annual general meeting of the shareholders of the Company held on 9 April 2007, the shareholders approved the appropriation of dividends of Baht 0.20 per share, amounting to Baht 434.8 million from net profit relating solely to business operations benefiting from the privileges under the Investment Promotion Act of year 2006. The dividend was paid to shareholders during 2007.

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24 Adoption of two International Financial Reporting Standards - IAS 12 and IAS 19 Accounting for income taxes and employee benefits are topics that are currently under consideration by the Federation of Accounting Professions (çFAPé) who have issued Exposure Drafts for discussion and comment. However as of 31 December 2008 no Thai Accounting Standard (çTASé) on these topics is currently effective. The Company, therefore, has followed the guidance issued by the FAP that in instances where there is no applicable TAS, it is appropriate to look to the guidance set-down in the relevant International Financial Reporting Standard or US Accounting Standard. Consequently the Company has voluntarily adopted the requirements of IAS no. 12 çIncome taxesé and IAS no. 19 çEmployee Benefitsé. The adoption of International Financial Reporting Standards (IAS 12 and IAS 19) has been applied retrospectively and the 2007 financial statements, which are included for comparative purposes, have been restated accordingly as follows: Consolidated Separate financial statements 1 January 1 January 1 January 1 January 2008 2007 2008 2007 (in thousand Baht) Unappropriated retained earnings Balance before the adoption of IAS 12 and IAS 19 Increase in provision for employees long-term benefits Increase in deferred tax assets Balance after the adoption of IAS 12 and IAS 19

4,411,626

3,578,845

4,279,928

3,536,609

(21,293) 48,553

(14,262) 9,385

(20,710) 31,093

(13,999) 4,403

4,438,886

3,573,968

4,290,311

3,527,013

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Consolidated 2008 Profit for the year Profit for the year before the adoption of IAS 12 and IAS 19 Increase in employee benefit Increase in deferred tax asset Profit for the year after the adoption of IAS 12 and IAS 19 Earnings per share increase (Baht) Basic Diluted

Separate financial statements 2007 2008 2007 (in thousand Baht)

2,314,404 (9,548) 68,410

1,269,877 (7,031) 39,167

1,927,638 (8,765) 59,452

1,180,415 (6,712) 26,690

2,373,266

1,302,013

1,978,325

1,200,393

0.03 0.03

0.02 0.01

0.02 0.02

0.01 0.01

25 Financial instruments Interest rate risk Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group没s operations and its cash flows. Management believes that the interest rate risk is minimal. Hence, the Group does not hedge such risk. Liquidity risk The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group没s operations and to mitigate the effects of fluctuations in cash flows. Fair values The Group uses the following method and assumptions in estimating the fair values of financial instruments. Cash and cash equivalents, and current investments in savings account, fixed deposits and promissory note, and receivables and payables approximate their fair values due to the relative short-term maturity of these financial instruments. Bank overdrafts and short-term loans from financial institutions, and long-term loans approximate their fair values because these financial instruments bear interest at market rates. As at 31 December 2008, the carrying and fair value of the long-term debentures amounted to Baht 1,000 million and Baht 1,024 million, respectively.

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26 Lease agreements (a) The Company entered into lease agreements covering office space (including related service charges) for 3 years. These agreements will expire in various periods up to November 2010. The rental and service charges for the year ended 31 December 2008 amounted to approximately Baht 11.0 million (2007: Baht 9.2 million). (b) The Company entered into lease agreements covering office space (including related service charges) with a major shareholder and also a director of the Company, commencing October 2008 up to October 2010. The rental and service charges for the year ended 31 December 2008 amounted to approximately Baht 0.1 million. (c) The Company entered into a lease agreement covering office space (including service charges) with a major shareholder and also a director of the Company, commencing April 2005 and terminated the agreement on 31 August 2007. The rental and service charges for the period ended 31 August 2007 amounted to approximately Baht 2.0 million. (d) The subsidiaries have entered into lease agreements covering office space (including related service charges) for 3 years. These agreements will expire in various periods up to November 2010. The rental and service charges for the year ended 31 December 2008 amounted to Baht 7.0 million (2007: Baht 3.9 million). 27 Commitments and contingent liabilities As at 31 December 2008 and 2007, the Company and its subsidiaries had the following outstanding commitments and contingent liabilities: (a) The Company had outstanding commitments to purchase land of Baht 742 million (2007: Baht 1,129 million). (b) The Company and its subsidiaries had outstanding commitments for the development and construction of the Company没s projects of Baht 130 million (2007: Baht 87 million). (c) The Company and its subsidiaries had outstanding commitments for the service agreement and professional fee of the Company of Baht 11 million (2007: Baht 4 million). (d) The Company and its subsidiaries were contingently liable for letters of guarantee issued by certain local banks totalling Baht 1,683 million to certain government agencies (2007: Baht 1,353 million). (e) The Company was contingently liable as a guarantor of overdraft lines of Baht 40 million, loan lines from banks of Baht 736 million and letters of guarantee lines of Baht 834 million of the subsidiaries (2007: Baht 40 million, Baht 1,645 and Baht 504 million, respectively). 146

28 Others Sales with signed contracts and total project sales as at 31 December 2008 and 2007 were as follows: Consolidated 2008 Sales with signed contracts Total project sales

67,371 76,835

The ratio of sales with signed contracts against total project sales (%)

87.68

Separate financial statements 2008 2007

2007 (in million Baht) 51,183 64,158 58,164 72,327

88.00

88.71

49,556 55,935

88.60

29 Events after balance sheet date On 29 January 2009, the Company issued unsubordinated and unsecured debentures of Baht 1,500 million (1,500,000 units at Baht 1,000). The debentures bear interest at 5.25% per annum for the period of 1 year and 6 months after the issuance date and 5.75% per annum for the remaining period until the maturity date, payable quarterly. The debentures mature in 2012. On 30 January 2009, the holders of 5,169,900 warrants exercised options to purchase 5,169,900 ordinary shares at an exercise price of Baht 1 each, resulting in an increase in the issued and paid- up share capital from Baht 2,191,394,200 to Baht 2,196,564,100. The Company registered the increase in the issued and paid-up share capital with the Ministry of Commerce on 5 February 2009.

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30 Thai Accounting Standards (TAS) not yet adopted The Group has not adopted the following TAS that have been issued as of the balance sheet date but are not yet effective. These TAS will become effective for financial periods beginning on or after 1 January 2009. TAS 36 (revised 2007)

Impairment of Assets

TAS 54 (revised 2007)

Non-current Assets Held for Sale and Discontinued Operations

The adoption and initial application of these TAS is not expected to have any material impact on the consolidated and separate financial statements. 31 Reclassification of accounts Certain accounts in the 2007 financial statements have been reclassified to conform to the presentation in the 2008 financial statements. Consolidated

Separate financial statement Before After Before After Reclassification Reclassification Reclassification Reclassification Reclassification Reclassification (in thousand Baht) Statement of income Revenue from sale of real estate Other income

9,087,570 5,197

(32,606) 32,606 -

9,054,964 37,803

8,413,934 32,591

(30,050) 30,050 -

8,383,884 62,641

The reclassifications have been made because, in the opinion of management, the presentation of revenues from cancel and change contracts in other income is more appropriate.

148