REBUILD FOUNDATION Annual Report 2013

Transcription

1 REBUILD FOUNDATION

2 REBUILD FOUNDATION GOOD GOVERNANCE O PEN - MINDED L EARNING ORGANIZATION D RIVE FOR EXCELLENCE ทำ งานอย างโปร งใส ต องเป ดใจไม ปกป ด เร ยนร อย างเป นม ตร ร วมก นค ดพร อมก าวไกล A strong foundation leads to sustainability. Rebuild Foundation is the first step in our 3-step business plan for achieving our goal which is restoring profitability in The plan consists of 1) Rebuild Foundation, 2) Unlocking Value, and 3) Growth Diversification. Following the company s business plan, the 2013 year of Rebuild Foundation, the company focused on investing in human capital and strengthening employees competency by promoting their creativity and inspiration through stylish office and decorative facilities, investing in a computer system as well as accounting software, and rebranding the corporate image to pave the way for future growth and prosperity as a leader in the real estate development market.

3 Content Mission Corporate Information Financial Highlights Board of Directors Message from the Chairman Message from the President Report of the Audit Committee Policy and Overviews of Business Operations Business Structure of Golden Land Group Nature of Business Corporate Social Responsibilities Policy Management Discussion and Analysis Risk Factors Capital Structure and Shareholders Dividend Payment Policy Organization Structure Management Structure Board of Directors and Executives Corporate Governance Policy Internal Controls and Risk Management Connected Transactions Attachment Report Of The Board Of Directors Responsibilities For Financial Statements General Information of The Subsidiaries Companies Annual Financial Statements and Auditor s Report of Certified Public Accountant

4 Corporate Information Corporate Information Company Name Golden Land Property Development Public Company Limited Symbol for Trading GOLD Type of Business Real Estate and Property Development Company Registration Registered Capital Baht 16,382,133,790 as at January 7, 2014 Paid-up Capital Baht 12,763,072,610 as at January 7, 2014 Registered Shares 1,638,213,379 ordinary shares as at January 7, 2014 (Ordinary Share) Issued Shares 1,276,307,261 ordinary shares as at January 7, 2014 (Ordinary Share) Par Value Baht 10 per share Other Security Warrants of Golden Land Property Development Public Company Limited No. 1 (GOLD-W1) The total warrants of 504,065,655 units (GOLD-W1) have been listed in the Stock Exchange of Thailand. No. of remaining warrants as of December 27, ,906,118 units Head Office 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Road, Silom, Bangrak, Bangkok Tel. : Fax : Website : [email protected] Other References Vision To be a leading real estate developer in residential & commercial areas both locally and internationally Investor Relations Registrar (Share and Warrant) Mr. Khumpol Poonsonee Tel. : Fax : [email protected] Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Klongtoey, Bangkok Tel. : Fax : Call Center : Website : Auditor KPMG Phoomchai Audit Limited 48th Floor, Empire Tower, 195 South Sathorn Road, Yannawa, Sathorn, Bangkok Tel. : Fax : Mr. Nirand Lilamethwat (Certified Public Account No. 2316) or Mr. Supot Singhasaneh (Certified Public Account No. 2826) or Ms. Nittaya Chetchotiros (Certified Public Account No. 4439) or Ms. Vipavan Pattavanvivek (Certified Public Account No. 4795) Investors can obtain additional information about the securities issuer in its Annual Registration Statement (Form 56-1) in the website of The Securities and Exchange Commission ( or in its corporate website 02 / 03

5 Financial Highlights Financial Highlights Financial Highlights Unit : Million Baht and the Subsidiary Companies Financial Ratios as at 31 December 2012 (2) 2011 (1) Financial Ratios 1 Liquidity Ratio Current ratio Quick ratio Cash flow liquidity ratio (time) Accounts receivable turnover ratio Average collection period (day) Inventory turnover ratio (time) Average sales period (day) , Accounts payable turnover ratio Average payment period (day) Cash cycle (day) 1, , Profitability Ratio Gross profit margin (%) 29% 25% 29% Net profit margin (%) -27% -34% -22% Return on equity (%) -7% -9% -4% 3 Efficiency Ratio Return on total assets (%) -4% -5% -2% Return on fixed assets (%) -22% -30% -1% Assets turnover ratio Financial Policy Ratio Long-term loan to equity ratio (time) Debt to equity ratio (time) Data per Share Book value (Baht) Earning per share (Baht) Growth Rate Total assets (%) 8% -8% 15% Total liabilities (%) 16% -7% -8% Sales -5% 53% -43% Operating expenses -20% 58% -19% Net loss -27% 145% -22% (1) Calculation based on previous year financial statement. (2) Calculation based on restated financial statement compared to this year financial statement for the year ended 31 December Financial Status (2) 2011 (1) (Restated) Total Assets 12,580 11,697 12,683 Total Liabilities 6,693 5,757 5,988 Registered Capital 16,382 16,382 16,382 Paid-up Capital 12,679 11,341 11,341 Shareholder s Equity 5,887 5,940 6, Operating Performance (2) 2011 (1) (Restated) Total Revenues 1,594 1,681 1,144 Total Costs and Expenses 1,972 2,272 1,422 Loss for the Year (454) (618) (253) ,580 11,697 12,683 Total Assets Total Liabilities Registered Capital 1,594 1,681 1,144 6,693 5,757 5,988 1,972 2,272 16,382 16,382 16,382 Paid-up Capital (454) (618) (253) Total Revenues Total Costs and Expenses Net Profit (Loss) 1,422 12,679 11,341 11,341 5,887 5,940 6,695 Shareholder s Equity (1) Based on previous year financial statement. (2) Based on restated financial statement compared to this year financial statement for the year ended 31 December Unit : Million Baht Unit : Million Baht Unit : Million Baht / 05

6 Board of Directors Board of Directors Board of Directors A B C D E F G H I J K L Board of Directors A. Mr. Wanchai Sarathulthat Chairman of the Board B. Mr. Panot Sirivadhanabhakdi Vice Chairman C. Mr. Thapana Sirivadhanabhakdi Director D. Mr. Chotiphat Bijananda Director E. Mr. Sithichai Chaikriangkrai Director F. Mr. Weerawong Chittmittrapap Director G. Mr. Chainoi Puankosoom Director H. Mr. Udom Puasakul Director I. Mr. Thanapol Sirithanachai Director A B C D E F G H I J K L Audit Committee F. Mr. Weerawong Chittmittrapap Chairman of Audit Committee G. Mr. Chainoi Puankosoom Audit Committee Member H. Mr. Udom Puasakul Audit Committee Member Compensation and Nominating Committee A. Mr. Wanchai Sarathulthat Chairman of Compensation and Nominating Committee B. Mr. Panot Sirivadhanabhakdi Compensation and Nominating Committee Member G. Mr. Chainoi Puankosoom Compensation and Nominating Committee Member Executive Committee B. Mr. Panot Sirivadhanabhakdi Chairman of Executive Committee E. Mr. Sithichai Chaikriangkrai Executive Committee I. Mr. Thanapol Sirithanachai Executive Committee J. Mr. Somboon Wasinchutchawal Executive Committee K. Mr. Saenphin Sukhee Executive Committee L. Mr. Khumpol Poonsonee Executive Committee 06 / 07

7 Message from the Chairman Message from the Chairman Message from the President Message from the President Mr. Wanchai Sarathulthat Chairman of the Board Following the shareholder restructure of towards the end of 2012 in which Univentures PLC became its major shareholder, the newly appointed Board of Directors and management then targeted on a return to profitability by 2015 as - the company has quality assets that can possibly enhance higher added value and yield good investment return. In 2013, the real estate industry in Thailand has expanded across the board in all sections in comparison to The expansion contributed largely from business enthusiasm on anticipated prospects provided by the upcoming regional economic integration of the ASEAN Economic Community in Strengthening in the Bangkok office rental market is evidenced by a continued expansion in rental demand for Grade A office spaces in the past years. Demand for residential housing in the Bangkok Metropolitan Region, which also includes Bangkok and its five adjacent provinces, remains strong with an increase in transfer of property rights compared to the past years. The expansion in real estate demand in the Bangkok Metropolitan Region and the growth in public investments, particularly in transportation infrastructure, aiming to accommodate increasing economic activities brought on by the upcoming ASEAN economic integration, are two main influences that benefit the local real estate industry both in the short run and the long run. Our company is ready to respond to such opportunities by developing its commercial and residential properties, both low-rise and high-rise developments, to welcome increased demand from both foreign and domestic buyers. We are also confident that the launching of our low-rise residential developments this year will be well accepted. Lastly, on behalf of the Board of Directors of, I would like to express my sincere thanks to all our shareholders who have always supported our operations. I would also like to reiterate the commitments of the Board, our management, and our staff on all levels to work together under the principles of corporate ethics, transparency, and good governance to enhance the best and sustainable results for our Company. Mr. Thanapol Sirithanachai President 2013 was the first full year that the executive board which had been newly appointed by the current shareholders of had taken responsibility of the Company s management after a major reorganization of its shareholder structure towards the end of According to our commitment to return the Company s operational performance to profitability by 2015, the past year s achievement proved to be a first march towards our important corporate plan of the three golden steps, known as the Rebuild Foundation, in which our management has focused its first year activities towards sustainable development by reviewing its corporate setup, regrouping its business assets into core assets and non-core assets, and shaping its investment direction and operational strategy. The Company recognizes the importance of its human resources development, computer system upgrade, and professional competency enhancement. It undertakes its organizational rebranding to support a proactive campaign on public awareness. It also promotes value improvement and adding value schemes to its ongoing development projects while prudently planning for its future investment projects. All of these efforts aim to encourage a timely generation and recognition of revenues. In 2013, the Company reported over Baht 1,500 million in revenues, comprising incomes from property management which include office buildings and service apartments, as well as sales of residential homes. Heavy interest costs and sales expenses for the year pushed the Company s operation into net loss. The loss, however, should only be momentary and the Company believes that the launching of new low-rise residential projects during this coming year will significantly benefit its business and promptly turn the Company s performance into profitability. In 2014, the Company will follow the second step of its three golden steps, known as the Unlocking Value or adding value creation to its investments by (1) Beginning its property development in the prominent area on the corner of Rama IV Road and Ratchadapisek Road. This development will be a commercial complex named FYI Center which will house office space, a shopping center, and hotel. (2) Improving general facilities at Sathorn Square Building aiming to induce full occupancy. (3) Sale of non-core assets. (4) Launching new low-rise residential developments including single homes and townhouses. The development will be managed by our subsidiary, Golden Land Residence Co., Ltd. which is established to oversee and manage the Company s low-rise projects. Another notable scheme that shall be undertaken in 2014 alongside the above mentioned strategy will be the Unlocking Human Capital or employee competency enrichment plan which shall focus on additional professional training and improvement of the workplace environment. This strategy aims to reinforce the Company s organizational culture under our GOLD value which represents the abbreviations of G Good Governance, O Open-minded, L Learning Organization, D Drive for Excellence. Such values shall encourage the corporate personnel to march in unity towards a stable and sustainable future. The Company recognizes and appreciates the hard work and dedication of its staff at all levels that have enhanced positive improvements to its operations and performance during the past year, and provided a solid foundation for a prosperous future. As the President of I therefore would like to thank all parties who have supported the Company and hope for further continued supports from our shareholders and stakeholders so that the Company can successfully carry on its targeted mission to be a market leader in the property sector. 08 / 09

8 Report of the Audit Committee Report of the Audit Committee On behalf of the Audit Committee Mr. Weerawong Chittmittrapap Chairman of Audit Committee The Audit Committee of composes of three Independent Directors, who are Mr. Weerawong Chittmittrapap, the Chairman of the Audit Committee; Mr. Udom Puasakul and Mr. Chainoi Puankosoom, the Members of the Audit Committee. In 2013, the Audit Committee held four meetings to perform its duties as prescribed by the regulations of the Stock Exchange of Thailand, and under the scope of responsibilities assigned by the Company s Board of Directors. Summary of the Committee s actions are as follows: 1. Review of financial statements: The Committee aims to assure that the Company s financial statements represent a true and fair view, and provide adequate information disclosure. It therefore oversaw the reviews of the Company s quarterly and annual financial statements, significant accounting policies, changes that occurred during the year as well as their current and future impacts, material irregularities, remarks from independent auditors and internal auditors, as well as arranged discussions with the Company s executives and auditors on the scope, method and time frame of the audit. In the opinion of the Audit Committee, the financial status and the performance of the Company are presented to conform to generally accepted accounting principles, with fair disclosure of information, and there is no irregularity that may generate any material impact on the financial statements. 2. Review of connected transactions: The Committee intends to assure the rationality of such transactions and their maximized benefits to the Company, as well as their compliance with laws and regulations of the Stock Exchange of Thailand. In the opinion of the Audit Committee, the Company s connected transactions involve no conflicts of interest and are undertaken in the ordinary course of business, with acceptable rationality and no irregularity. 3. Review and proposition of the appointment of the external auditor: The Committee provides its recommendations based on the consideration and circumstances of independence, professional proficiency, experiences, as well as the audit fee, and proposes such to the Company s Board of Directors for consideration and further submission to the Annual General Meeting of the Shareholders 2013 for approval. 4. Review of the internal control system: The Committee reassures that the Company has appropriate and effective internal control and internal audit systems. In the opinion of the Audit Committee, the Company s internal control system is appropriate, adequate and efficient. The review of the internal control system also revealed no material concern on matters that may cause any operational impacts. 5. Supervision of internal audit: The Committee reviewed and approved the internal audit plan, the appointment and transfer of the senior internal auditing executive, and the appropriate number of internal audit personnel. It also ensured that the internal auditing function achieved the degree of independence necessary to effectively carry out the audit plan as targeted and in conformity with generally accepted international standards. 6. Review of legal compliance: The Committee reviewed the Company s compliance with laws on securities and stock exchange, regulations of the Stock Exchange of Thailand, as well as other laws relating to the business of the Company. The reviews indicated no outcome that could lead to any findings of material noncompliance with and/or any breach of applicable laws, rules and regulations. 7. Report of the Audit Committee: The Committee oversaw the preparation of the report signed by the Chairman of the Audit Committee and presented in the Company s Annual Report as per the Stock Exchange of Thailand s requirements. 8. Review and revision of the Audit Committee Charter: The Committee assessed the appropriateness of the Audit Committee Charter and resolved that the prescribed scope of duties therein should be maintained. 9. Other assignments: The Committee prepared its reports and submitted them to the Company s Board of Directors on a quarterly basis, and also provided the reviews of the Company s financial statements and financial reports, as well as the performances of the internal auditing function, to the Company s Board of Directors in its 2013 annual report. 10. Report of questionable transactions: The Committee has a duty to report to the Company s Board of Directors if and when it has detected any questionable transaction or action with potentially significant impact on the financial status and the performance of the Company. In the past year there were neither situations nor circumstances that indicated any threat of such occurrences. To summarize, the Audit Committee is of the opinion that the Company has reported true, complete and accurate financial statements that were audited by a qualified and independent external audit team who ensured that the audit process is efficient. The Company has an appropriate and adequate risk management scheme, with a proper internal control system, and sufficiently maintains good corporate governance that assures transparency and accountability. The internal auditing function is adequately independent in performing its audit tasks. The connected transactions or transactions that may pose a conflict of interest are monitored in compliance with applicable laws and related stock exchange regulations. 10 / 11

9 Policy and Overviews of Business Operations Policy and Overviews of Business Operations Business Structure of Golden Land Group Business Structure of Golden Land Group Information as of January 7, 2014 In 2013, set its corporate visions and missions in its three year business plan to return the Company s operational performance to profitability by 2015, and having a clear vision to be a market leader in real estate development business for residential projects and commercial high rise buildings, both domestically and internationally. It also launched a corporate plan of the Three Golden Steps, known as the (1) Rebuild Foundation, (2) Unlocking Value, and (3) Growth Diversification was the first year that the newly appointed Executive Board, under the current shareholder structure of the Company took office and fully engaged in the corporate work, following the changes in the major shareholder structure during the end of The Company s management also set a goal towards integrated and sustainable development and defined 2013 as the year of transformation. The transformation included adjustments in corporate foundation, starting with regrouping its business assets into Core Assets and Non-core Assets, and shaping its investment direction and operational strategy. It also promoted value improvement and added value schemes to its ongoing development projects while prudently planning for its future developments to encourage successful sales closure, and timely recognition of sales revenues. The new low-rise residential developments of the Company have been developed and managed by Golden Land Residence Co., Ltd., a subsidiary of the Company newly established to be responsible for residential development projects. In addition, the Company also emphasized on management of its existing properties, particularly commercial buildings for rental; both in terms of office space rental and service apartments. The target was to increase occupancy rates, and promote long-term revenue flow from rental activities. Nevertheless the Company still faced operational losses caused mainly by the burden of interest expenses and sales expenses. The management had streamlined its financial structure to encourage a stronger financial position and adequacy of liquidity for core activity investments, particularly an increase in investment proportion of low-rise residential developments which is an essential element for the revitalization of earnings within the planned timeframe. As for its organizational culture, the Company focused on human resources development, by enhancing staff competency under its corporate culture of GOLD value which represents the abbreviations of G Good Governance, O Open-minded, L Learning Organization, D Drive for Excellence. Such values also promote corporate unity. During the year, the Company reorganized its work processes, relocated its head office, and decorated its workplace to motivate staff inspiration and creativity. It also made additional investments in upgrading its computer and accounting systems, undertaking organizational rebranding to enhance its corporate image and public recognition. All of these were undertaken to form a better foundation for its future of continued sustainable growth and its stable steps to become a Sustainable Market Leader in the real estate development business. Single Detached Housing Projects Property Development 100% 100% 100% 100% Baan Chang Estate Co., Ltd. North Sathorn Realty Co., Ltd. Golden Land (Mayfair) Co., Ltd. Golden Property (Paid-up Capital THB 30 Million) (Paid-up Capital THB 639 Million) (Paid-up Capital THB 11 Million) Services Co., Ltd. (Paid-up Capital THB 1 Million) 100% United Homes Co., Ltd. 20% North Sathorn Hotel Co., Ltd. 100% Grand Mayfair Co., Ltd. 33% (Paid-up Capital THB 550 Million) (Paid-up Capital THB 1,100 Million) (Paid-up Capital THB 12 Million) 100% Sathorn Thong Co., Ltd. 80% Istithmar World Group 100% Golden Land Polo Ltd. (Paid-up Capital THB 154 Million) from Dubai (Paid-up Capital THB 1 Million) 100% 100% Grand Paradise Narayana Pavilion Co., Ltd. Property Co., Ltd. (Paid-up Capital THB 475 Million) (Paid-up Capital THB 1 Million) 100% 60% Golden Habitation Co., Ltd. (Paid-up Capital THB 5 Million) 50% Walker Homes Co., Ltd. (Paid-up Capital THB 1 Million) CBD Commercial and Hotel Projects 100% 50% Ritz Village Co., Ltd. (Paid-up Capital THB 100 Million) 25% 50% 25% Golden Land Residence Co., Ltd. (Paid-up Capital THB 50 Million) 50% CBD Residential and Service Apartment Projects 100% MSGL Property Co., Ltd. (Paid-up Capital THB 100 Thousand) Sathorn Supsin Co., Ltd. (Paid-up Capital THB 245 Million) 40% Ascott Group from Singapore Baan Jearanai Co., Ltd. (Paid-up Capital THB 20 Million) 50% Other Group Authorized Capital - THB 16, million Issued and Paid-Up Capital - THB 12, million Property Advisory Service Gold Property Fund (Lease Hold) (Paid-up Capital THB 2,060 Million) 67% Public 12 / 13

10 Nature of Business Nature of Business Nature of Business List of the ongoing projects of the Company and its subsidiary companies as at the end of the year 2013 : Project Single Detached Housing Projects : Type of project Operated by 1. Golden Legend Single detached house United Homes Co., Ltd. & Ritz Village Co., Ltd. 2. Golden Nakara Single detached house United Homes Co., Ltd. & Ritz Village Co., Ltd. 3. Golden Heritage Single detached house United Homes Co., Ltd. & Ritz Village Co., Ltd. 4. Grande Monaco Single detached house United Homes Co., Ltd. & Grand Paradise Property Co., Ltd. 5. Golden Village Single detached house and Baan Chang Estate Co., Ltd. residential high-rise 6. Baan Suan Suay Single detached house Sathorn Thong Co., Ltd. 7. Golden Avenue Single detached house and Golden Land Residence Co., Ltd. Changwattana-Tiwanon Townhouse CBD Residential / Service Apartment and Hotel Projects : 8. Mayfair Marriott Service apartment Grand Mayfair Co., Ltd. 9. The Ascott Sathorn Bangkok Service apartment Sathorn Supsin Co., Ltd. 10. Sky Villas Residential high-rise Sathorn Supsin Co., Ltd. 11. W Bangkok Hotel North Sathorn Hotel Co., Ltd. (associated company) CBD Commercial Projects : 12. Goldenland Building Office building Narayana Pavilion Co., Ltd. 13. Sathorn Square Office Tower Office building North Sathorn Realty Co., Ltd. 14. Inchcape Ramkamhaeng Office building (closed) and warehouse 15. FYI Center Office and hotel building (in progress) Others : 16. Panorama Golf and Country Club Land allotment, resort and (Original : Voyage Panorama) golf course Income structure of the Company and its subsidiary companies Products or services MB % MB % MB % Revenue from sale of real estate : Single detached housing projects CBD residential projects Other projects Revenue from rental and services : Service apartment Office building Others Revenue from golf course operation : Panorama golf and country club Other income : Investment income Management fee income Others Total 1, , , / 15

11 Nature of Business Nature of Business of the Company, its Subsidiaries, and its Affiliates The Company s business is real estate developments which can be classified into two core areas, as follows: (1) Residential Projects (2) Commercial High Rise Buildings Residential project In 2013 the Company maintained its policy strategy on low-rise residential developments for sales; namely single-detached houses, townhouses, and home offices. Ongoing projects of which their sales and developments were carried on from the past years included: Golden Heritage The project, located on Ratchaphruek Road near Sathorn Bridge, has a total site area of rai with 212 land plot units. The housing designs have a well-blended combination of Classic Grand Italian cum Modern Architecture style. During the year, sales and transfers of housing continued to flow, and presently all units have been sold out. Golden Legend The project, located on Kalpapruek Road, has a total site area of rai with 272 land plot units. The housing design concept is based on the Mediterranean Villa style. At present only 17 plots remain unsold. The Company expects to close project sales in Golden Nakara The project, located on Rama IX Road in the eastern side of Bangkok, near the Ban Thap Chang Airport Rail Link Station, has convenient and easy access to Bangkok Motorway. It has a total site area of rai with 247 land plot units. The Company expects to close project sales mid Club House In addition, the Company has also further expanded its business to the low-rise housing development segment under the management of Golden Land Residence Co., Ltd., a subsidiary of the Company established to be responsible for all its new low-rise developments. In the fourth quarter of 2013, the company launched the sales of its new project - Golden Avenue Tiwanon- Chaengwattana Project which is located in Soi Sukaprachasan 3 on Tiwanon Road. It has a total site area of rai with 411 land plot units, comprising 90 units of single-detached houses and 321 units of townhomes. The Company plans to continually launch new projects in the coming years. Grande Monaco The project, near the Eastern Ring Road and Bang Na-Trad Highway, is located on the eastern side of Bangkok. It has a total site area of rai with 181 land plot units. The Company expects to close project sales mid Golden Village The project is located at Tambol Ban Chang, Amphoe Ban Chang, Rayong Province. It is a mixed-use development with a combination of residential housing namely single-detached houses and townhouses with commercial shop houses in the same project site. The Company has been revising its marketing plan for sales of housing and land plots and aims to close project sales mid Lapis Turquoise Topaz Amethyst 16 / 17

12 Nature of Business Nature of Business Commercial High Rise Building With regards to its commercial high rise building segment, the Company plans to build up management efficiency and quality improvement to enhance higher occupancy and rental rate. These actions shall enable the Company to recurrently recognize its continuously increased sales. At present the Company is developing the following commercial high rise buildings and operates the following service apartments, hotel and office buildings: The Ascott Sathorn Bangkok and Sky Villas A modern style service apartment building situated amid the central business district of Sathorn Road, near the Chong Nonsi BTS Skytrain Station. This 35-storey building houses 177 service apartment units, managed by the Ascott Group Limited, a leading serviced residence and hotel operator from Singapore. The 21st to 35th floor of the building locates the Sky Villas the luxurious and exclusive residential high-rise apartments decorated by renowned interior designers. Mayfair Marriott Executive Apartment It is one of the most luxurious service apartment buildings in Bangkok, with a 25-storey height. It also has a hotel operation license. The Company sold its leasehold for the building to the Gold Property Fund (in which one-third of the shares belong to the Company). The building houses 164 apartment units, with various sizes ranging from 1 to 3 bedrooms, and managed by the Marriott International, Inc, a global brand hotel chain and leading hotel management company. The building is located in the middle of Soi Langsuan, not far from the BTS Skytrain Station and adjacent to Lumpini Park which is one of the famous parks within the Bangkok central business district. Sathorn Square It is a 40-storey commercial office building for rent with a rental area of over 73,000 square meters, located in the heart of the central business district, at the Sathorn - Narathivas intersection with direct passage link to the Chong Nonsi BTS Skytrain Station. The Sathorn Square Office Tower has a unique architectural design. Each floor space is designed to provide more open space, with no pillars, and increased flexibility in space usage and open floor office designs. Golden Land Building The project is an 8-storey building with one underground floor, with a total rental space of about 11,000 square meters, located near the main shopping area of central Bangkok with shopping places such as Gaysorn Shopping Centre, Central World, and Central Chidlom, as well as famous nearby hotels such as Centara Grand at Central World Hotel, Four Seasons Hotel, Grand Hyatt Erawan, and InterContinental Hotel. The building is only a few minutes walk from the Chidlom and Ratchadamri BTS Skytrain Stations. The building is also designed to afford the occupants increased adaptability and greater design flexibility. Additionally, in 2013 the Company began its development plan for a new commercial high-rise building project at the corner of the Rama IV Ratchadapisek intersection (Soi Paising-to). This project will be an office building cum hotel complex under name FYI Center. It has a land plot area of 8 Rai and shall be completed by / 19

13 Nature of Business Nature of Business Market and Competition Residential Project In 2013, the overall industry condition of the residential market expanded, judging from the growth in the number of house registrations in all areas of the Bangkok Metropolis and its vicinity which added up to 117,900 units, or an increase of 5.5%, categorized into Self Built Residences of 21,240 units, or a decline of 2.9% from 2012 (which was 21,850 units), and Developer Built of 96,660 units, or an increase of 7.4% from 2012 (which was 89,538 units). Condominiums remained the highest growing segment among the newly launched projects in 2013, with a total launch of approximately 84,250 units from 180 projects, followed by townhouses of approximately 28,047 units from 144 projects, and single-detached houses of approximately 12,789 units from 99 projects. 140, , ,000 Unit : Unit 80,000 60,000 40,000 20, , , ,791 85,800 Source: Agency for Real Estate Affairs Company Limited. 102, % 131, Given the high number of developers in the current market place, competition is evidently severe. Consumer behavior and purchase decision processes are increasingly more rationalized and reflective. The Company has therefore set the following competitive strategies: Design and Product Strategy Due to the diversified characteristics of consumer demands at different pricing and brand-levels, consumer behavior research becomes essential and the Company has paid continual attention to study the behavior of different client categories to apply such understandings and outcomes to develop better products and satisfaction for its clients. Additionally, the Company also focuses on offering more than the normal expectations, whether in space utilization functions, conditions of development sites and its surroundings, or in other innovations which are better than competitors in the same market area. Its products represent a uniqueness of an appropriate pricing for an Affordable Stylish Living. Number of Units Launched in Real Estate Development Project in 2013 Condominium 64% Single Detached 10% Semi Single Detached 3% Commercial Building 2% Townhouse 21% Location Strategy The Company recognizes the importance of its project locations, which should provide the right solutions to different consumer groupings, and match up with its land purchase criteria. Most of the Company s developments are situated in promising locations, in and within the main business districts or prominent neighborhoods, with convenient accessibility to the heart of the city, and also to infrastructures. The Company projects are generally scattered around the Bangkok Metropolitan area and its vicinity. Pricing Strategy It is the Company s policy to set its pricings as signals and incentives for consumers, to motivate them to buy, and to offer worth and value of the items purchased. Pricings are determined to suit economic conditions and market competition, as well as other factors such as costs, locations, development styles, market conditions, and product competitors. It is also concerned about value for money and competitive pricing, while concentrating on aspects such as better design and function, desirable surroundings and completely equipped facilities, etc. Marketing Strategy It is the Company s policy to use various media channels and a combination thereof to disseminate information on its developments and projects to the best accessibility of its clientele and general consumers. Those channels include: 1) Billboard ads and billboard signs 2) Mass media such as radio, newspaper, and magazines 3) Trade show & marketing booths in shopping malls and Home & Interiors Exhibitions 4) Mobile SMS to target groups during its sales promotion periods and other corporate events 5) Internet and other social media such as its corporate website: Facebook, Instagram, as well as Web Banner on main real estate websites and target groups frequently visited websites. 6) Customer word of mouth and recommendation from existing clients in the Company s organized events such as Member Gets Member. Product Cost Management Strategy The Company manages its own construction work, by dividing the tasks into different phases such as foundation work, plaster work, constructing ensembles, flooring and roofing etc. The Company hires experienced contractors with expertise to undertake the construction tasks and manages the contractions by sending its own teams including engineers and foremen to monitor the construction work to ensure its standards and conformity with prescribed specifications. As the Company procures its own material supply, it is able to efficiently manage and control the construction costs. After-Sales Services Strategy The Company develops consumer confidence in the quality of its construction work and high-standard products. It also provides relevant warranties for different components of a project such as: 5 year quality warranty on building structure, effective from the official transfer date year house warranty on quality, effective from the official transfer date, for problems such as workmanship, electrical system, and water supply, etc. The Company s target market is middle income customer groups; mostly living in the vicinity of its project site, as well as some customers from different areas. It also classifies its product brands according to needs of target customers. Its product branding also reflects different levels of pricings. These brands are listed as follows: Categories Brands Price Level Single Detached House Single & Semi Detached House Townhouse Townhouse Mix Product (SDH + TH) Golden Prestige Golden Village Golden City Golden Town Golden Avenue Table: Products Classified by Brands and Price Level SDH 3 Fl. = 6-8 MB SDH 2 Fl. = MB TH 3 Fl. = 3-5 MB TH 2 Fl. = 2-3 MB Follow Core Categories 20 / 21

14 Nature of Business Nature of Business As for distribution channels, as the Company s products are classified as High Involvement Products its distribution strategy therefore needs to be aligned with their nature and product types which can be summarized as follows: 1. On-site Sales Activities : Sales are made by the Company s own sales forces or sales teams who are well trained under the Company s prescribed Service Standards. These sales personnel are stationed and make selling at the estate sales offices in each of the development sites. 2. Other Sales Activities : Sales are undertaken outside estate sales offices and the development sites. Sales activities are made and supported by marketing teams. Marketing activities include organizing of marketing booths in shopping malls and exhibitions related to real estate, to promote selling or to invite customers for site visits for closing sales deals. The Company maintains a policy on site acquisition, but does not maintain vacant properties for land bank purposes. Upon its interest to develop and construct any projects, the Company shall perform relevant feasibility studies, market research, competitor and competitive analysis, as well as surveys based on demand and needs of target customers of the potential development sites. Then it will start its land procurement process either by direct acquisition from the property owners or through arrangements with property agents. Comparison of offering prices with appraisal values or market prices will be used to assure that the price of the acquired land is reasonable. On project development, the Company also oversees its construction management tasks and procures its own material supply. After the Company s Procurement Department obtains details of required materials, it normally contacts each material producer to carry out a price survey and get price quotations. Usually the Company receives a rather high discount on the construction materials purchased in a large quantity or volume. Once the volumes and prices are concluded with producers of the materials, the Company shall place its order for such materials via their supply agents for direct delivery to the Company s development sites. As the Company maintains good relationships with the construction material producers and their supply agents, it is able to order any desirable amounts of materials upon demand. Additionally, the Company also applies new construction technologies in building its single-detached houses and townhouses, such as tunnel form and precast concrete construction technology for wall panels. As for environmental impacts, the Company always pays attention to the importance of environmental issues and possible impact on the surroundings of the nearby communities of its estate development sites. It thus applies strict precautions to design details of various systems in its projects to assure that all these systems are in place, well-functioning, and able to render protection against any environmental problems and any impacts to surroundings of the nearby communities. Commercial High Rise Building In general, the market of commercial high rise buildings for rent, particularly office buildings, shows signs of continued growth. Demand for office space rental and rental rates remain strong with possible upward movements, especially for Grade A office buildings in the Central Business Districts along the BTS skytrain lines or nearby MRT stations. The government s economic stimulus policies have also contributed to such growths. Registrations of new companies have risen whilst the business of companies that are already registered are also expanding. There is a tendency for foreign companies to set up new offices in Thailand to accommodate the upcoming regional economic integration of the ASEAN Economic Community. Market competition for office building for rent is quite strong with available rental spaces of 8.09 million square meters, and 0.45 million square meters under construction, 7.27 million square meters are already occupied, being an 89.8% overall space. The occupancy rate has been continually increasing since Focusing on Grade A office buildings, the occupancy rate increased to 90.1% (with 1.1 million square meters, out of a total 1.23 million square meters, already occupied). The average rental rate is as high as Baht 810 per square meter, the highest ever obtained in the market. At present, though competition in this market segment is not so severe, there are other demanding tasks such as daily services and monitoring, renovation requirements to maintain the locations, availability of full services and basic facilities, and good security systems. The Company presently has two office buildings for rent namely Golden Land Building, and Sathorn Sqaure Office tower, both located near BTS Skytrain Stations with convenient access to transportation. Golden Land Building and Sathorn Sqaure Office Tower currently have an average occupancy rate of over 90% and 70% respectively. In 2013 the Company continually renovated and improved the building quality of Sathorn Sqaure, aiming to increase the occupancy rate. The building is a superior prime office building in the heart of the Bangkok central business district, a prominent business neighborhood with direct access to a skytrain station. It is equipped with eco-friendly controls system such as a VAV (Variable Air Volume) air conditioning system and CO2 Detector, an adjustment feature to fine tune fresh air circulation according to carbon dioxide value. All these factors have enabled the Company to be awarded the LEED Gold Certification on 3 April The building has 18 high-speed elevators (3 zones) in service. The interior design for the floor plan makes use of column-free and large open spaces, with a height of 2.95 meter floor ceiling that allows the access of natural light on each floor and improved interior surroundings with panorama city view of Bangkok. The building twenty-four hour security is comprised of access control system which controls access to elevators round-the-clock, CCTV, entry alarm etc. Utilities such as service lines electric, telephone, and cable lines are well provided. There are five underground floors for parking with a car park guidance system to monitor parking space occupancy and guide drivers to the closest available parking space. The target market for Sathorn Square Office Tower Project covers both domestic and international corporate tenants of over 500 leading firms. The tenants mostly desire the superior marketing image of being in the heart of the Bangkok CBD, with a direct access to mass transportation especially to BTS skytrain, an energy efficient and eco-friendly workplace environment and flexible and open concept office landscape floor plan. The Company s marketing strategy for office space rental includes working closely with leading real estate agencies, providing them with updated and required information needed by potential tenants, and keeping regular follow-ups with the clients. For building quality improvement, in 2013, the Company building renovation plans included the rebranding of its Sathorn Square Office Tower Project by changing the building logo & signage, redecorating the surrounding landscape to be in accord with the rebranding concept. Activities and exhibitions were arranged using both internal and external spaces of the buildings to promote a bonding relationship with the building tenants, particularly during the festive seasons. Other actions comprised organizing press conferences to promote the buildings, regular checking and monitoring the building systems and building management, and improvement of communications via internet and other social media etc. As for environmental impacts, the Company arranged to have relevant designing and advisory on such matters, as well as obtaining related approvals/ licenses including the submission the approval of an Environmental Impact Assessment Report (EIA Report) prior to its request for any building construction license. It also undertook measures and procedures as prescribed in its EIA Report to assure the mitigation of construction impacts to surrounding communities. The buildings were designed and constructed to enhance energy conservation according to the international guidance standard of LEED (Leadership in Energy and Environment Design) certificated by USGBC. The Sathorn Square Office Tower Project, for example, represents a new innovation in building design and construction that focuses on an environmentally conscious design; with installations of a variable air volume controlled air conditioning system, non-chemical chilled-water air-conditioning system, and application of energyefficient T5 light bulbs (T5 Fluorescent Lamp) for electricity saving etc. 22 / 23

15 Corporate Social Responsibilities Policy Corporate Social Responsibilities Policy and its subsidiaries & affiliates pay attention to social development and mutual assistance. Social and community development indicates the sustainable strength of an economy, thus the Company has a policy to support social activities by constructing its products, being residential dwellings, that do no pollute community environment and avoid the spread of pollution. It also promotes the improvement of the surrounding areas and encourages community development efforts in neighborhood of its development sites. These actions enable it to sustain the beneficial coexistence between the Company, its surrounding communities and society as a whole. The Company has following practice guidance: 1) Survey, inspect, and assess community conditions as well as surrounding environment in the areas both close by and further away from its development sites, to assure that they are impacted by the Company s business operations or its future developments, and if they are, to what extent. The information acquired will be use to set proper measures for prevention, improvement, and remedial actions that could reassure against any potential direct or indirect impacts and harm to such communities, surroundings, and society. 2) Support volunteer activities relating to community and society development by means of cooperative efforts in preserving the environment for such areas to be clean, and safe for peaceful cohabitation. It also supports communities and society to have adequate supply of basic infrastructure such as educational equipment, trash bins, and roads etc., to sufficiently service dwellers in such communities and society. 3) Support and participate in social services such as arrangement of activities to promote good deeds and actions etc. Operation Policy under Environmental Standards 1) Arrange to have a proper environmental administrative system, together with the administration of the residential construction project, with consistent follow-up and assessment of such administrations, as well as studying of environmental protection and preservation methods such as the ecological system, global warming, pollution etc. 2) Apply technologies and a production process that meets the environmental standards, and ensure that pollutants are reduced and treated before they are released back into nature. 3) Efficient use of natural resources, with concern over energysaving measures and encouragement of natural resources recycle. 4) Develop goods/services that do not cause any environmental impacts, and are safe to use. 5) Provide employees and the general public with information on environmental impact, safety, and hygiene. 6) Encourage client's awareness on environmental cautions about the use of the Company s products and services. 7) Provide knowledge and training for employees on environmental issues, safety, and hygiene. Prepare emergency plans for any environmental problems that may occur, as well as arrange to have a proper system to immediately report to the supervisory authority upon any occurrence of such environmental problems. 8) The Company supports and encourages its stakeholders namely customers, trade counterparties, employees, as well as society and the communities around its development projects and its office to be aware of and concern over the importance of the environment, and motivate them to assist the Company in its environmental conservation efforts towards sustainable development in all aspects. Practice Guidelines on Creating Awareness and Instilling Ethical Behavior on Environment 1) Promote and provide relevant knowledge on the environment to employees such as energy-saving equipment and choices of clean energy that cause no harm to the environment. 2) Promote staff activities that encourage their motivation and cooperation in saving natural resources, maximizing beneficial use of energy, as well learning how to reduce, reuse, and recycle such as using electronic paper instead of ordinary paper, and reusing the blank back side of all paper. 3) Distribution of knowledge and information on energy conservation to employee and homebuyers through newsletters with topics such as how to save energy in the home. Additionally, the Company also pays attention to promoting social services and educational activities such as donation of school equipment, sport equipment, and scholarships to the teachers and students of Raja-Prachanukhro School 47, Tambol Sampraya, Amphoe Cha-am, Phetchaburi. Corporate and Personnel Competency Development Activities and its subsidiaries & affiliates realize that corporate competency needs to be developed along with business operations. The Company thus focuses on efficiently developing its corporate competency, upgrading its competitive advantage, while promoting transparency, honesty, and accountability, in accordance with the management principles for international standard organization. These goals can be achieved through staff professionalism development, a modern IT system, and corporate image management. The Company intends to build up its workforce to efficiently and effectively achieve its business performances towards sustainable growth. Training and Proficiency & Competency Development Staff training and development is an important tool for creation of knowledge, capability, and attitude for all levels of personnel to gear up the organization towards success, excellence, and sustainability. The Company provides opportunities for staff to learn and be trained, aiming to enhance all aspects of quality in human resources Corporate Social Responsibilities Policy development to suit the direction of its corporate growth. It arranges to provide both internal and external training programs for staff, and pays attention to monitoring, performing skill assessments, and applying new knowledge for work benefits. Application of technology for work management in the organization 1. Internal Communication The Company recognizes the importance of staff communication as the foundation of good workplace relationships. It thus applies communication technology to facilitate the sharing of information in a timely, accurate and expediting manner such as , Social Network, Facebook, Employee self-service (ESS) which is a webbased application that provides employees with access to and protection of their personal records, and other details, as well as digital media channels such as SMS, and Line. 2. Learning Organization The Company recognizes that sustainable development is a development that allows employees to learn and grow continually, under different circumstances, consistently, and suitable with everyday life. It thus applies new technology to facilitate knowledge dissemination and knowledge sharing within the organization to continually build up corporate core competencies and motivate its corporate members towards continuous learning and improvement. These actions include posting work-related knowledge and business-related tactics on the corporate website, implementation of an intranet system as an internal communication channel and information network for employees to express views, exchange information, ask or answer questions, and discuss internal issues, etc. As previously mentioned, the Company focuses on a continual human resource development, that covers aspects such as promotion of corporate value and culture, creation of good workplace environment, teamwork building, quality of living, work-life balance, equitable treatment, and appropriate fringe benefits. It also promotes and encourages staff to abide by transparency, accountability, good governance, as well as pays attention to factors such as open-minded conversation, common communication, learning organization, continual knowledge sharing, professionalism, and drive for excellence. To achieve all these targets, the Company has launched various activities and programs such as: 24 / 25

16 Corporate Social Responsibilities Policy Corporate Social Responsibilities Policy Training: MS Office (Tricks of Outlook and Power Point) Training: Communication Team Building: GOLD CAMP 2013 Training: Tactics to Success in Construction Work In addition to the training organized by the Company, it also provides opportunities for staff to choose to attend seminars or external training courses arranged by private or public institutions for proficiency development in the issues related to work and their interests. Corporate Culture and its subsidiaries & affiliates realize that it is an important duty in business to excel and grow towards sustainability under the ever changing environment of globalization. Human resource development is a major corporate mission. The Company thus fosters its corporate culture of GOLD value to motivate and inspire its human resources to apply this value to their work and their interactions with coworkers, clients, and corporate stakeholders. The GOLD value represents the following abbreviations of: Training: Work Achievements and Satisfaction Training: Business Taxes for Real Estate, Home & Condominium Sales Activity: RUN FOR GOLD 26 / 27

17 Management Discussion and Analysis Management Discussion and Analysis Risk Factors Risk Factors 1. Operating results 1.1 Revenues The Company had total revenues of Baht 1, million, Baht million decreasing from last year. Resulting from decrease in ownership transfer of housing projects Baht million due to the Company still could not recognized revenues from new housing project under development and reducing in number of housing units in existing projects. And increase Baht million in revenue from rental and services; mainly from Sathorn Square Office Tower project which still have about 25% of unoccupied rentable areas. 1.2 Expenses The Company had total expenses of Baht 1, million, Baht million decreasing from last year. The changes were mainly from the following reasons: - Cost of real estate sales decreased Baht million, along with the decreasing sales. - Cost of rental and services increased Baht million, mainly from Sathorn Square Office Tower project. - Selling expenses was Baht million lower than last year, due to decrease of selling expenses of the housing and Sathorn Square Office Tower projects. - Administrative expenses down Baht million due to Baht million decrease in provision on litigation, Baht million decrease in asset devaluation, Baht million decrease in termination benefit and Baht 7.49 million decrease in specific business tax, whereas Baht million increase in bad and doubtful debt expenses. - Finance costs decreased Baht million as a result of the refinance loan as interest rate down. 1.3 Income tax expense The Company had Baht 6.95 million income tax expense mainly due to net decreasing of deferred tax assets. The Company recorded net loss attributable to the equity holders in the amount of Baht million for this year, Baht million decreases from last year. 2. Financial position as of 31 December Assets The Company had total assets of Baht 12, million, Baht million increasing from 2012 mainly from real estate projects under development. The Company invested in five new housing projects. 2.2 Liabilities and Equity The Company had total liabilities of Baht 6, million, Baht million increasing from Due to increasing from long-term loan from financial institutions amount Baht 1, million to support new investments in housing projects. On the other hand current portion of long-term loan from financial institutions decreased Baht 1, million, which the Company paid by borrowed from short-term loan from financial institutions Baht 865 million. And trade accounts payable increased Baht million as a result of increase in land development and construction cost. Equity attributable to equity holders of the Company was Baht 6, million, net decreased Baht million from Due to the operating loss during this year Baht million and cash proceed Baht million from exercising warrant. 1) Risk factor relating to operation Residential Project There are four main risk factors which are: 1) Operational risk: In the past, the Company s residential developments were large size projects with an average plot size of 70 sq. wah. Target customers were high-income homebuyers. The applied construction method were a masonry and brickwork plastering technique which requires up to months in construction time. The long construction period exposes a developer to delivery risks as well as dependency on labors which further induces other potential risks such as labor shortage, wage fluctuations, and other operating risks linked to management of construction contracts and contractors. This year the Company has targeted to develop low-rise residential projects such as single detached house and townhouse for middle-income and lower middle-income homebuyers, as well as change its home construction method from masonry and brickwork plastering technique to precast construction for houses and tunnel form construction for townhouses. These newly applied construction techniques only require 3-4 months of construction time and less labor, thereby lowering completion and delivery risks, as well as risks relating to labor shortage. Nevertheless, the Company is still exposed to risks relating to production of precast concrete and supply of precast moldings; which need specifications, undisrupted supply, appropriate design choices, and cost management. The Company perceives that this segment is a good market niche with gap in the market, but requires affordable pricing, appropriate design, suitable materials. Thus, instead of using a traditional general contractor, it oversees architectural design and construction management tasks, directly hires subcontractors, procures its own material supply, and manages efficiency in purchasing plans that match accordingly with the annual sales target of each particular year. 2) Risks relating to market and selling: The Company s target customers are those with purchase budgets for a housing price between 2-6 million Baht. The Company therefore focuses on the development projects that offer products such as townhouses, as well as small single-detached houses and semi-detached houses, which have a large customer base, and also more competition. The Company needs to focus on better locations, facilities & functions, and surroundings, as well as competitive pricing. It also oversees marketing and selling aspects of the projects, by performing surveys on locations and market conditions before making its land acquisition decision, then choosing appropriate products that match market demand, cautiously estimating potential sales that reflect reality, building customer database for marketing and sales analysis aiming to better identify its target customers and to properly match products to target groups, and proposing suitable sales promotion. 3) Financial risks: Precast and tunnel form constructions are applied for cost control purposes. Product designs are undertaken simultaneously with estimations of construction costs for overall infrastructure and housing units. Selection of appropriate material choices and stock controls are required. Choices of substitute materials for same price levels need to be assured for cost controls. Construction planning, and appropriate cost layouts that match with sales targets are required to properly canvass applicable financial projections and to correctly impose mitigation measures for relevant financial risks. 4) Management risks: Divided into two scopes of duties: 1. Project Development Teams: Development sites need to be managed in such a way so as not to create problems to surrounding neighborhood and communities. Products are 28 / 29

18 Risk Factors Risk Factors to meet quality standards, with construction carried out according to the building s design. Standard specifications of construction materials, and selling processes are clearly defined. Customers are well-informed about relevant warrantees & guarantees to enhance buyer confidence. After-sales services are well in place, and able to help build a better understanding for customers. 2. Project Support Teams: Work schedules must be accordingly set to well support and be in line with project development plans to enhance efficiency in project management. 5) Risks relating to site acquisition: 1. Risk relating to an inability to purchase the target plot of land: The Company may fail to get the target plot of land it so desires due to various reasons such as: - Other competing buyers bid a higher price or offer better conditions. - Land owners increase the selling prices, to be much higher than earlier proposed. - The Company cannot materialize an acquisition of connected land plots sufficient enough to create a promising site for its planned development due to the fact that some landowners have changed their sale terms or other parties may have already made purchase arrangements with some of the landowners. 2. Risk relating to a purchasing error: Though the Company has already set a clear process on land acquisition, and has completed a check list prior to a submission of acquisition request to the Company s Executive Board for approval, The Company also rechecks all relevant details before making any deposits on such land purchase, errors and unexpected problems can arise such as different interpre tations made by different government agencies involved on land utilization conditions, or an inability to thoroughly investigate the land prior to the completion of the purchase contracts etc. In an event that such an error occurs, the Company has set a remedial measure which involves an adjustment of the development plan to suit the land site and its utilization conditions to minimize any potential loss or impact to the Company, or to avoid such loss and impact. 3. Risk relating to an ability to achieve its sales target set for the invested project on the purchased land site, and to obtain the expected return target for such investments: The Company controls this risk by analyzing market situations on market demand and supply of other developers inventories in each area to update its marketing database in the real estate sector, as well as continually updating its information on the changes in property prices in various locations. This helps the Company to adjust its development directions to better and properly respond to prevailing market conditions and economic environment. All the aforementioned measures assure that the Company can properly mitigate the risks relating to site acquisition. 6) Risks relating to land allocation process and land allocation laws: This risk relates to the ability to achieve the set development plan with no obstacles regarding regulations, laws, or rules. The Company controls this risk by cautiously reviewing current and applicable prescribed regulations, laws, and rules relating to the land allocation process, as well as those which shall be enacted in the near future such as urban land use regulations, building construction regulations, land allocation regulations, and municipal and district rules, all of which have impacts on project developments. The reviews also include land ownership investigations, as well as other transfers and assignments performed in relation to the land plots. Following this, the Company shall start its conceptual layout plan on the land plot which also takes into account all these legal and regulatory aspects to assure that the outcome is in line with the Company s intention before making any land acquisition. Commercial High Rise Building The Company develops commercial projects by leasing land in promising downtown locations from its owners, most of which are on a 30 year lease term plus an additional 30 year lease option thereafter. The lands are used for developments of commercial high rise buildings such as office buildings, hotels or service apartments. These developments may have a risk factor namely high investment costs. The Company expects the long-term returns from the rental incomes. In a normal condition of continual economic growth and increasing preferences on urban lifestyle as per proven international trends, demand for commercial high rise buildings also expand, which will have a positive drive on an increase in rental rates. However, in this development segment, the Company needs to be cautious and strictly comply with all prescribed conditions in the lease agreement, whilst also maintaining the utmost efficiency in financial management planning, effective controls of its costs of funds, as well as proper mentoring of loan sources and interest rate administration. During the construction phrase, investment costs should be well managed and kept within the planned investment budget. It is also important to select qualified contractors to assure timely completion as per the assigned timeframe and plans. The high rise developments require approval from relevant government agencies and public authorities such as construction licenses from the Bangkok Metropolitan Authority, approvals of the Environmental Impact Assessment Reports from Office of Natural Resources and Environmental Policy and Planning (ONEP) etc. In addition, the Company is required to study all relevant laws and make proper preparations to assure the obtaining of all required licenses and approvals. On the marketing aspects the Company studies its target customers and carries out relevant market surveys to identify needs and demands. This information is useful for architectural designs to ensure that the planned designs suit customer needs and are competitively compatible with other competitors in the market. The Company also monitors other circumstance changes to assure prompt and proper response. Additionally, there may be other risk factors with is beyond the Company s controls, and may impact its development projects such as changes in the policies of government agencies and authorities, political rallies, natural disasters, labor shortage, material shortage, etc. In the past, the Company has been closely monitoring these situations to assure its prompt responsive actions. In 2013, the Company completed its construction and development of a high rise building of which its premises are on the former Russian Embassy site. The Company plans to begin the construction of the FYI Center in This project, which is an office building cum-hotel complex, is situated at the corner of the Rama IV Ratchadapisek intersection (Soi Paisingto), opposite the Queen Sirikit National Convention Center (QSNCC) and the Stock Exchange of Thailand. The Company leased this piece of land from the Crown Property Bureau. The construction of the project is expected to be completed and be ready for commercial operation in ) Risk factor relating to debt obligations with financial institutions In 2013, the Company and its subsidiaries had loans from financial institutions which totaled Baht 3, million, borrowing to use for real estate developments. For the financing of high rise developments, the Company has a long-term loan with approximate tenures of 10 years. The Company efficiently manages its financial planning, particularly on the cash flow aspect. It also closely monitors current economic conditions, interest trends, and inflation outlook to possibly mitigate relevant risks and to assure that even in the events of unusual situations, the Company is capable of repaying its debts to its lenders according to the obligations of its loan agreements, and such situations will not impact its operations of various developments projects, as well as its operating results. The revenues continually generated from real estate development for sales, rents, and other service fees assure the confidence that the Company can repay its loan obligations within the prescribed repayment schedules. The Company also anticipates a growth in revenues upon the completion of its future projects. 30 / 31

19 Risk Factors 3) Risk factor relating to guarantee obligations (a) Sathorn Supsin Co., Ltd. The Company guarantees loans extended to Sathorn Supsin Co., Ltd. which is a subsidiary in which the Company holds 60% of its Baht 245 million registered capital. Sathorn Supsin Co., Ltd. has loan facilities from financial institutions totaling Baht 535 million, out of which Baht 321 million or 60% thereof are presently secured loans. The loans are borrowed for the financing of The Ascott Sathorn, Bangkok which is an A Grade service apartment that sells its long-term leasehold rights on some units and makes short-term rental arrangement for others units. The building is located on South Sathorn Road. The Company believes that the revenues from sales and from rental of this building will enable Sathorn Supsin Co., Ltd. to repay its loans as per the prescribed conditions of the loan agreements. (b) United Homes Co., Ltd. The Company guarantees loans extended to United Homes Co., Ltd. which is a wholly owned subsidiary of the Company. The Company holds 100% of its Baht 550 million registered capital. United Homes Co., Ltd. has an overdraft facility from a financial institution totaling Baht 50 million, and at present this facility has no debt outstanding. The company keeps this credit line for working capital to support its operations of two housing estate projects namely Golden Legend Project and Grande Monaco Project. (c) Ritz Village Co., Ltd. The Company guarantees loans extended to Ritz Village Co., Ltd. which is a wholly owned subsidiary of the Company. The Company holds 100% of its Baht 100 million registered capital. Ritz Village Co., Ltd. has an overdraft facility from a financial institution totaling Baht 40 million, and at present this facility has no debt outstanding. The company keeps this credit line for working capital to support its operations of Golden Heritage Project. (d) North Sathorn Realty Co., Ltd. The Company guarantees loans extended to North Sathorn Realty Co., Ltd. which is a wholly owned subsidiary of the Company. The Company holds 100% of its Baht million registered capital. North Sathorn Realty Co., Ltd. has loan facilities from a financial institutions totaling Baht 2,460 million, out of which Baht 1, million are presently secured loans. The loans are used for investment purpose to support its operations of Sathorn Square Project. (e) Golden Land Residence Co., Ltd. The Company guarantees Baht 614 million project loans extended by financial institutions to Golden Land Residence Co., Ltd. which is a subsidiary of the Company. The Company directly and indirectly holds 100% of its Baht 50 million registered capital. At present Golden Land Residence Co., Ltd. owns rights to operate a housing estate project named Golden Town Pinklao Project which has outstanding loans of Baht 253 million as of 31 December Indeed, for the guarantees given to support these loans and credit facilities, if the Company s subsidiaries cannot repay their relevant obligations on time, the Company may suffer a loss of the similar guarantee amounts. So far, the Company has arranged to construct and sell its real estate developments, as well as properly manage their projects and make prompt deliveries of their products to their customers. There are no repayment problems on those loans and credit facilities of the Company s subsidiaries, as well as no adverse repayment impacts of such loans and credit facilities on the Company.

20 Capital Structure and Shareholders Capital Structure and Shareholders Capital Structure and Shareholders Capital Structure (1) Ordinary Shares The ordinary shares of have been listed and traded in the Stock Exchange of Thailand since March 21, 1994 and March 29, 1994 respectively. As of January 7, 2014, the Company has the registered capital of Baht 16,382,133,790, consisting of 1,638,213,379 ordinary shares at a par value of Baht 10 per share. The Company has the issued and paid-up capital of Baht 12,763,072,610 consisting of 1,276,307,261 ordinary shares at a par value of Baht 10 per share. (2) Warrants Warrants of No. 1 (GOLD-W1) The warrants of No.1 (GOLD- W1) have been listed and traded in the Stock Exchange of Thailand since April 26, Details of Warrants GOLD-W1 as at December 27, 2013 are as follows: Type of Security Symbol for Trading Total No. of Warrants Total No. of Reserved Shares for Exercise Issuer Rights of Warrants Type of Warrants Terms of Warrants Exercise Period The warrants representing right to purchase ordinary shares of No. 1 (GOLD-W1) GOLD-W1 504,065,655 units 504,065,655 shares issued 504,065,655 units of warrants (GOLD-W1) to the existing shareholders of the Company who had subscribed for and been allocated the newly issued ordinary shares of the Company through the Right Offering free of charge at the ratio of 1 newly issued ordinary share allocated for 1 unit of warrant. 1 unit of warrant is entitled to purchase 1 ordinary share at Baht 3 per share (unless the exercise price is adjusted under the conditions of the rights adjustment). In name certificated form and transferable 3 years from the issuance date (April 1, 2011). The Company will not extend the term of warrants. The expiry date of the warrants is on March 31, The warrant holder is entitled to exercise the warrants on the last Business day of March, June, September and December of each calendar year throughout the term of the warrants. The first exercise date is on June 30, 2011 and the last exercise date is on March 31, 2014 which the warrants reach 3 years from the issuance date. Type of Security Total Exercised Warrants 142,159,537 units Total Warrants Remaining 361,906,118 units No. of Reserved Shares 361,906,118 shares for Outstanding Exercise The warrants representing right to purchase ordinary shares of No. 1 (GOLD-W1) (3) Shareholder Structure The Company s top ten shareholders as at the closing date of the share register book on December 27, 2013 were as follows: Name Number of Shares % Total Shares 1. Univentures PLC 747,789, Well Base Development Ltd. 282,366, Thai NVDR Co., Ltd. 1/ 36,007, The Bualuang Top-Ten Open-end Fund 20,088, The Bualuang Infrastructure Retirement Mutual Fund 9,469, Mr. Chukiati Rujanapornpaji 8,300, The Bualuang Infrastructure Open-end Fund 7,453, Mr. Boonkiat Uesudkij 5,590, Mr. Sanit Dusadeenode 3,620, Mrs. Soodjai Vuthisaksilpa 3,550, Thai Shareholders 4,305 persons 977,129, Foreign Shareholders 33 persons 290,740, Total 4,338 persons 1,267,870, Remarks : - 1/ Thai NVDR Co., Ltd. (Thai NVDR) is a subsidiary of The Stock Exchange of Thailand. Thai NVDR is responsible for issuing and selling Non-Voting Depository Receipts (NVDRs) to investors, and executing the purchase or sale of those listed company shares whose investors wish to trade through NVDRs. This service is offered to all, irrespective of the number of securities held or the holder s nationality. NVDR holders receive the same full financial benefits as they would receive had they invested directly in shares (i.e. dividends, rights, and warrants) but there are no voting rights for NVDR holders. - The Company has no knowledge of the beneficial shareholders of some of the top ten largest shareholders who are foreign financial institutions or business enterprises acting as trust companies or custodians. - The investors can update the current major shareholders of the Company from the Company s website before the Annual General Meeting of Shareholders. Please visit 34 / 35

21 Dividend Payment Policy Dividend Payment Policy (1) The Company s Dividend Payment Policy The Company s policy is to pay dividends at a rate of no more than 60% of the Company s net profit each year. The payment of dividends will, nonetheless, depend on economic conditions, operating profits, investment plans, and other relevant factors. The resolution of the Board of Directors regarding the payment of dividends will be proposed to a shareholders meeting for approval. In addition, payment of dividend as mentioned will be within the framework of the law as set forth for the Company to be able to pay dividend only when there is no deficit balance. (2) Subsidiaries Dividend Payment Policy For the other subsidiaries, the Company does not set the rate of subsidiaries dividend payment, but the policy of subsidiaries dividend payment to the Company has to be complied with subsidiaries regulation on dividend payment which is resolved by the shareholders meeting. The subsidiaries payment of dividend will be determined mainly by the performance of the company s earnings which depends on the performance of its operations and economy. In addition, for the dividend payment, subsidiaries shall allocate not less than one of twentieth (1/20) from its net profit until this account reaches an amount not less than 10% of the registered authorized capital..

22 Organization Structure Organization Chart Board of Directors Compensation and Nominating Committee Executive Committee President Audit Committee Internal Audit Residential Development Group Managing Director Commercial Building Development Executive Vice President Finance & Accounting Sr. Executive Vice President Business Development Executive Vice President Corporate Services Senior Vice President Corporate Communications Assistant Vice President Housing Project Development Accounting Business Development Human Resource Marketing Communications Town House Asset Management Finance Corporate Secretary Administration Legal Compliance Information Technology 36 / 37

23 Management Structure Management Structure Management Structure The management structure of comprises the Board of Directors and 3 committees, namely Executive Committee, Audit Committee, Compensation and Nominating Committee, as follows: 1) Board of Directors The Articles of Association of the Company stated that the Company shall have a Board of Directors comprising at least 5 Directors but not more than 11 Directors. Not less than half of the total number of directors must have residence in the Kingdom of Thailand. Directors must also be in possession of the qualifications as specified by law. The Company s Board of Directors consists of 9 members as follows: Executive Director 1 person Non-Executive Director 8 persons (consists of 3 Independent Directors, equivalent to one-third of the total number of directors) Name-Surname 1. Mr. Wanchai Sarathulthat Chairman of the Board December 26,2012 6/6 2. Mr. Panot Sirivadhanabhakdi Director / Vice Chairman December 25,2012 6/6 3. Mr. Thapana Sirivadhanabhakdi Director April 23,2013 4/6 4. Mr. Chotiphat Bijananda Director April 23,2013 3/6 5. Mr. Sithichai Chaikriangkrai Director December 26,2012 6/6 6. Mr. Weerawong Chittmittrapap Independent Director December 27,2012 6/6 7. Mr. Chainoi Puankosoom Independent Director December 27,2012 6/6 8. Mr. Udom Puasakul Independent Director December 27,2012 6/6 9. Mr. Thanapol Sirithanachai Director / President December 25,2012 6/6 Board of Directors resigned in 2013 Name-Surname Director resigned on the resolution of the 20 th Annual General Meeting of Shareholders (April 23,2013) Company Secretary : Position Position 1. Mr. Somboon Wasinchutchawal Director / Senior Executive August 29,2012 2/6 Vice President Accounting and Finance Mr. Khumpol Poonsonee Date of Appointment Date of Appointment Attendance of Meetings (Times) Attendance of Meetings (Times) Definitions Executive Director refers to a director who is an executive and who is involved in the regular management of the company. Non-Executive Director refers to a director who is not an executive and who has no part in the regular management of the company. He or she may or may not be an independent director. Independent Director refers to a director whose qualifications are in line with the requirements of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand, whereby he or she must possess the qualifications and must not have the prohibited descriptions as follows: 1. Not holding more than 1% of the total numbers of shares with the voting right issued by the Company, its parent, its major shareholder, its subsidiaries, its affiliates, or any juristic persons that might cause any conflict of interest. Such holding includes the shares held by related persons to such independent director. 2. Not having any involvement in the Company s management; nor being employees, staff, or consultants who obtain regular salaries from the Company; nor being an individual with controlling authority of the Company, its parent, its subsidiaries, its affiliates, or any other subsidiaries of a similar rank level, or any juristic persons that might cause any conflict of interest, as of present and not less than two years prior to the date of becoming an Independent Director. 3. No blood relationships or any legal relationships (in the manner of parent, spouse, sibling, son or daughter and their spouse) with executives, major shareholders, person with controlling authority, or persons who will be nominated as executives or will have controlling authority of the Company and its subsidiaries. 4. No business relationships with the Company, its parent, its subsidiaries, its affiliates, or any juristic persons that might cause any conflict of interest, that may impair the Independent Director s ability to make independent judgments, as of present and not less than two years prior to the date of becoming an Independent Director. 4.1 Shall not be the auditor of Company, or a major shareholder, non-independent director, management, or managing partner of the Company s audit firm. 4.2 Shall not be the Company s professional service provider (such as legal advisor, financial advisor, assets appraiser etc.) who provides more than Baht 2 million per year of services to the Company, its parent, its subsidiaries, its affiliates, or any juristic persons that might cause any conflict of interest; nor a major shareholder, non-independent director, management, or managing partner of the Company s professional service provider. 4.3 Shall not receive direct or indirect benefits from or interests in any commercial or business transactions (such as those related to the common business transactions, real-estate lease/ rent, transactions of assets/ services, and transactions of granting or receiving financial assistances) with the Company, its parent, its subsidiaries, its affiliates, for a value of more than Baht 20 million or for the amount equivalent to, or more than, 3% of the net tangible assets of Company, whichever is the lower amount. The consideration of value of such transaction shall include transaction incurred during the period of one year prior to the date on which the business relationship. The prohibited relationships also include being a major shareholder, non-independent director, management, or managing partner of any entity that may have such business relationships. 5. Not a director appointed as representative of the Board of Directors of the Company, its major shareholders, or the shareholder who is a related to the Company s major shareholders. 38 / 39

24 Management Structure Management Structure 6. Not having any other characteristic which may impair the independent director s ability to make independent judgments. 7. The independent director with the qualifications as prescribed in items 1-6 may be assigned by the Board of Directors to make decisions on the business operations of the Company, its parent, its subsidiaries, its affiliates, or any other subsidiaries of the similar rank level, or any juristic persons that might cause any conflict of interest on the basis of collective decision. Directors Authorized to Sign on Behalf of Company Any two of whom jointly sign and affix the common seal of the Company that 1) Mr. Panot Sirivadhanabhakdi or 2) Mr. Sithichai Chaikriangkrai or 3) Mr. Thanapol Sirithanachai or 4) Mr. Chotiphat Bijananda Scope of Powers, Duties and Responsibilities of the Board of Directors 1. The Board of Directors should conduct their duties in accordance with applicable laws, the Company s objectives and regulations, and the resolutions of the shareholder meeting. The Board members should perform their roles with honesty, carefully safeguard the benefits of Company and ensure equitable treatments of all shareholders. 2. The Board of Directors sets the Company s corporate policy and operational direction, while overseeing that the Company s management efficiently and effectively conducts its business operations according to policies and regulations of the Company. It also assures that the Company operates its business according to the principles of good corporate governance that shall contribute to the maximization of the Company s enterprise value and its shareholders wealth. 3. The Board of Directors shall report to the Company s shareholders about its operational performance in the shareholder meeting and in the Company s annual report. 4. The Board of Directors shall oversee that the Company maintains efficiency and accountability in its accounting system, financial reporting process, internal controls and internal audits. 5. The Board of Directors shall afford a good corporate governance policy in writing and regularly review such policy. 6. The Board of Directors shall oversee and monitor the Company s management to ensure that it ethically provides equitable treatments to all stakeholders. 7. Independent and outsider directors are capable to freely exercise their independent judgments upon reviewing the Company s strategy, administration, resource utilization, director appointments, and operational standards. A role of the independent and outsider directors is to counterbalance management or other directors in any conflicting issues or actions that may otherwise impact the equitability of all stakeholders. 8. If necessary, the Board of Directors may seek advice or professional opinions from external consultants on the Company s operations. The costs thereto shall be absorbed by the Company. 9. The Board of Directors shall oversee that there is a Company Secretary to assist and administer certain activities of the Company and its Board such as the shareholder meetings, and Board of Directors meetings. The Company Secretary shall also provide appropriate advice to the Company and its Board regarding their compliance of requisite duties to applicable laws and regulations and shall assure that the disclosure of information by the Company and its directors is accurate, complete, transparent and in a timely manner. 10. If any of the Board member has any knowledge of material inside information that may impact the price movement of the Company s stocks, that Board member must refrain from any trading of the Company s shares for a given period of appropriate timeframe prior to an official public release of such material inside information. No Board member shall disclose such material inside information to other person or persons; any violation thereof shall then carry the legal punishment in connection therewith. 11. The Board of Directors shall oversee to have the Report on the interest of director/ executive prepared as prescribed by the Company s regulation. 12. New Board members should attend an orientation session on the Company s business operations. 2) Executive Committee The Board of Directors has approved the setting up of the Executive Committee, which at present comprises 6 members, as per the following list: 1. Mr. Panot Sirivadhanabhakdi Chairman of Executive Committee / Non-Executive Director 2. Mr. Sithichai Chaikriangkrai Executive Committee / Non-Executive Director 3. Mr. Thanapol Sirithanachai Executive Committee / Executive Director 4. Mr. Saenphin Sukhee Executive Committee / Executive Director 5. Mr. Somboon Wasinchutchawal Executive Committee / Executive Director 6. Mr. Khumpol Poonsonee Executive Committee / Executive Director Secretary to the Executive Committee : Scope of Powers, Duties and Responsibilities of Executive Committee The Committee, together with the Company s management reviews and proposes corporate policy, direction, strategy, objectives, business plan, budget and authority framework of the Company and its subsidiaries to the Board of Directors for their approval. It also oversees and governs the Company s business operations to be in line with its targeted objectives and approved business plan. The Committee is involved in the approval of the Company and its subsidiaries business activities under the framework of authorized power assigned by the Board of Directors. It also scrutinizes matters proposed by the Company s management for submission to the Board of Directors, if such matters are not within the scope of its proper authority. Approvals by the Committee shall not involve transactions that the approvers, being either the committee members or its assigned power of attorney, or related persons have any material relationship or any conflict of interest or a possible perceived conflict of interest with the Company or its subsidiaries, except for the approvals made in accordance with the permitted policy and authorized regulatory framework which have already been approved by the Board of Directors. (The conflict of interest is defined as prescribed in the Notification of the Securities and Exchange Commission.) 3) Audit Committee The Audit Committee consists of at least 3 Independent Directors who are qualified according to the conditions prescribed by securities and exchange law and the Stock Exchange of Thailand. At least one of the Committee members must possess adequate knowledge and experience in accounting or finance to review the integrity and accountability of the Company s financial statements. The Committee member who is qualified in this respect is Mr. Chainoi Puankosoom. The names and meeting attendance records of the Audit Committee are as follows: Name-Surname Name-Surname Secretary to the Audit Committee : Mr. Khumpol Poonsonee Position Ms. Suppamas Vatjanasatit Position Date of Appointment Attendance of Meetings (Times) 1. Mr. Weerawong Chittmittrapap Chairman of Audit Committee December 27, /4 2. Mr. Udom Puasakul Audit Committee Member December 27, /4 3. Mr. Chainoi Puankosoom Audit Committee Member December 27, /4 40 / 41

25 Management Structure Management Structure Scope of Powers, Duties and Responsibilities of the Audit Committee The Committee is required to report to the Board of Directors and has the following role, duty and responsibility: 1. Arrange to review and assure that the Company presents its financial reports with accuracy and sufficient disclosure. It shall coordinate with the external auditor and relevant executives who are assigned the responsibility of the quarterly and annual financial reports. During the audit process, the Committee may offer its suggestions to the auditor to review or audit certain transactions or items that it deems necessary and material. 2. Arrange to review and assure that the Company has internal control and audit systems which include: 2.1 Consider the appointment, removal, and termination of the Chief of the Internal Audit Department in order to assure the independence of the internal audit function. 2.2 Assess the independence of the internal audit function by reviewing its actions, reports, and authority structure. 3. Review that the Company acts in compliance with the securities and stock exchange laws, the regulations of the Stock Exchange of Thailand, and the laws and regulations which relate to its business operations. 4. Assess, select, and make relevant proposal for appointment and remuneration of the Company s external auditors, which include: 4.1 Review the independence of the auditor. 4.2 Hold at least one meeting annually with auditors, without the presence of any members of the Company s management team, to seek the auditor s views and opinions. 5. Review connected transactions or transactions that may be perceived as causing any conflict of interest to assure lawful practices and regulatory compliances, as well as rationality and maximized corporate interest. 6. Arrange to have the Audit Committee Report disclosed and published in the Company s annual report. The report is undersigned by the Chairman of the Audit Committee and includes at least the following information: 6.1 Opinions on accuracy, completeness and accountability of the Company s financial statements. 6.2 Opinions on adequacy of the Company s internal control system. 6.3 Opinions on compliance with the securities and stock exchange laws, the regulations of the Stock Exchange of Thailand, and the laws and regulations which relate to business operations of the Company. 6.4 Opinions on suitable qualifications of the auditor. 6.5 Opinions on transactions that may be perceived as causing any conflict of interest. 6.6 Number of meetings of the Audit Committee and the record of attendance of each member of the Audit Committee. 6.7 Opinions or general remarks of the Audit Committee regarding its actions according to the Audit Charter. 6.8 Other issues under the assigned scope of the Audit Committee s duty and responsibility that it perceives that shareholders and stakeholders ought to be aware of. 7. Other tasks assigned by the resolution of the Board of Directors, and approved by the Audit Committee. 8. In conducting its duty, if the Audit Committee discovers or has any doubts that there are any transactions or actions that may materially impact the Company s financial position and operational performance, the Audit Committee shall report to the Board of Directors for appropriate rectification within the Audit Committee s prescribed timeframe. Appointment of Audit Committee Members The Board of Directors or shareholders meeting shall appoint at least 3 Audit Committee members by selecting from the Independent Directors of the Company who have qualifications as stipulated by the securities and exchange laws and the Notification of the Capital Market Supervisory Board, including the notifications rules, and/or regulations of the Stock Exchange of Thailand governing qualifications and the scope of power and duties of the Audit Committee. At least one member of the Audit Committee must possess sufficient knowledge and understanding of accounting or finance and has adequate experience to review the integrity of the financial statements of the Company. The term of each member of the Audit Committee shall be 3 years and shall terminate upon the directors retirement by rotation. Internal Control and Internal Audit System The Company emphasizes the importance of the internal control and internal audit system by setting up an internal audit department, which is an independent unit to be responsible for reviewing an internal operating system on a regular basis, to ensure that management and employees strictly comply with the rules and regulations. These functions are under the supervision of the Audit Committee. 4) Compensation and Nominating Committee The Board of Directors has approved the setting up of the Compensation and Nominating Committee, which at present comprises 3 members, as per the following list: Name-Surname 1. Mr. Wanchai Sarathulthat Chairman of Compensation and Nominating Committee 2. Mr. Panot Sirivadhanabhakdi Compensation and Nominating Committee 3. Mr. Chainoi Puankosoom Compensation and Nominating Committee Secretary to the Compensation and Nominating Committee : Position Mr. Thanapol Sirithanachai Scope of Powers, Duties and Responsibilities of Compensation and Nominating Committee 1. Define rules and policies for the selection of the members of the Board of Directors and the members of the Sub-Committees. 2. Review and select qualified candidates to fill the directorship positions in the event of the vacancy thereof, and submit its recommendation to the Board of Directors for approval and/or for reconsideration prior to its further proposal to the shareholder meeting for its approval, whatever the case may be. 3. Review and select qualified candidates to fill the senior management positions from the level of the Managing Director or above in the event of a vacancy thereof. 4. Screen the name list of qualified candidates for the members of the Sub-Committees in the event of a vacancy thereof and propose to the Board of Directors for their consideration and appointment. 5. Review and set necessary and appropriate remuneration and benefit schemes, both in monetary and non-monetary terms, that are a suitable incentive for attracting and retaining the members of the Board of Directors and the members of the Sub-Committees and/or to propose such remuneration and benefit schemes to the shareholder meeting for its approval. 6. Prepare rules and policies on remuneration of the Board of Directors, the Audit Committee, and the Compensation and Nominating Committee itself to submit to the Board of Directors and/or the shareholder meeting for its approval, whatever the case may be. The consideration criteria shall be based on the Company s operational performance, the scope of duty and responsibility of each of the committee, as well as experience, knowledge, and responsibility of each of the director and committee member in comparison to other companies in the same industry. 42 / 43

26 Management Structure Management Structure 7. Review and set necessary and appropriate remuneration and benefit schemes, both in monetary and non-monetary terms that are a suitable incentive for attracting and retaining the senior management from the level of the Managing Director or above. The consideration criteria shall be based on assessments of their work dedication and the Company s operational performance. 8. Provide explanations and answers to the shareholders questions on director remunerations in the shareholder meetings. 9. Undertake any other tasks as may be assigned by the Board of Directors and approved by the Compensation and Nominating Committee. Nomination, Appointment and Office Term Board of Directors According to the Articles of Association of the Company, the Board of Directors comprises at least 5 and not more than 11 Directors, and not less than one-half of the total number of directors must have a residence in the Kingdom, and the directors of the Company must have possessed the qualifications and must not have prohibited descriptions as prescribed by law. The directors are appointed by the meeting of shareholders by a majority of votes according to the following criteria and procedures: 1. Every shareholder shall have one vote per share he/she has held. 2. Each shareholder may exercise all of his/her votes to elect one or several persons as directors, but he/she may not allot his/her votes to any candidates unequally. 3. Candidates who have received the highest number of votes in respective order shall be elected as directors equivalent to the required number of directors or the number of directors to be elected at the time. In the case the candidates in subsequent order have had equal number of votes, which would cause the required number of directors or the number of directors to be elected at that time to be exceeded, the Chairman of the Meeting shall cast deciding vote. In the case of a vacancy in the position of director, for reasons other than completion of his/her term, the Board of Directors shall, by a majority of votes not less than three-fourths of the remaining number of directors, select any person who has possessed the qualifications and has not had the prohibited descriptions under the law as a replacement director in the next meeting of the Board of Directors. If the remaining term of that director is less than 2 months, no replacement will be appointed. Other than retirement on the expiration of the term, a Director s term will be terminated in case of: a) Death b) Resignation c) Disqualified or falling under conditions as prohibited under the Public Limited Companies Act d) Resignation due to the resolution of the Annual General Meeting of Shareholders e) Resignation due to a court order The meeting of shareholders may pass a resolution that any director to resign from his/her post prior to the completion of his/her term by a majority of not less than three-fourths of the number of shareholders attending the Meeting and having the voting rights, and with the total number of shares altogether not less than one-half of the number of shares held by the shareholders attending the Meeting and having the voting rights. In every Annual General Meeting of Shareholders of the Company, the company has prescribed that one-thirds of the total number of directors shall resign from office. Should the number of directors not be divisible by three, a number of directors closest to one-thirds of all directors shall resign. The directors to resign from office in the first and second years after the registration of the Company shall be selected by drawing lots. In subsequent years, the longest-serving directors shall resign, but if they vacate office under this condition, they may be re-elected. Sub-Committees The Company s Sub-Committees; Executive Committee, Audit Committee and Compensation and Nominating Committee, shall be appointed by the Board of Directors. The President and Executives The President and Executives of and subsidiary companies of the Company comprise the following: The President and Executives* of Name-Surname Position 1. Mr. Thanapol Sirithanachai President 2. Mr. Saenphin Sukhee Managing Director Residential Development 3. Mr. Somboon Wasinchutchawal Senior Executive Vice President Finance and Accounting 4. Mr. Khumpol Poonsonee Executive Vice President Business Development 5. Mr. Withawat Koottatep Executive Vice President Commercial Development Note : * An executive refers to director, managing director or person holding the first four positions of executive level right after the President, and every person holding the position equivalent to the fourth person holding the executive level position, including those holding executive level positions in accounting or finance at the level of the department manager or higher, or equivalent. All directors and executives of the Company have possessed full qualifications as required by laws and have not been convicted of any offence against the laws, the Notification of the Office of the Securities and Exchange Commission (SEC) and the Stocks Exchange of Thailand (SET). They must not been convicted of crime in relation to: 1. Having been judged that they committed a criminal offence. 2. Having been declared a bankrupt or having had their assets placed under receivership. 3. Having been an executive or a person with a controlling authority in any company or a partnership that has been declared bankrupt or has had assets placed under receivership. The highest-level management of the Company is Mr. Thanapol Sirithanachai, who possesses the position of the Company s President. The Company s President is responsible for overall operations of the Company and other duties as assigned by the Board of Directors. Assigned authority by the Board of Directors shall not be a grant of authority to allow the President or power of attorney of the President to approve any transactions that approvers may have any material relationship or any conflict of interest or a possible perceived conflict of interest with the Company. Such transactions shall be proposed to the Board of Directors meeting and/or shareholders meeting for consideration and approval in accordance with the Articles of Association of the Company and related laws, except for the approvals made in accordance with the permitted policy and authorized regulatory framework which have already been approved by the Board of Directors or the Executive Committee. (The conflict of interest is defined as prescribed and notified by the Securities and Exchange Commission.) Scope of duties and responsibilities of President 1. Operate and manage the company s business complying with plan and budget approved by the Board of Directors 2. Operate and manage the company s business entirely complying with the Company s objectives, policies, regulations, Articles of Association, orders, as well as resolutions of the Board of Directors Meetings or Executive Committee s Meetings 3. Act as the company s representative in the public event and for the related business beneficial to the Company 4. Have an authority to issue the announcement, rules, orders or memorandum in order to control the Company s business operation complying with the Company s policies and benefit and to maintain the disciplines in the organization. 5. Approve the appointment of staff and consultants in any fields necessary for the Company s operation. 6. Perform any tasks assigned by the Board of Directors or Executive Committee under the Company s Rules and Articles of Association. The approval of transactions under such scope of duty and responsibility has to comply with the approval authority permitted by the Board of Directors. 44 / 45

27 Management Structure Management Structure Company Secretary Company Secretary of is Mr. Khumpol Poonsonee. Scope of duties and responsibilities of Company Secretary 1. Manage and coordinate the meeting of the Board of Directors, the meeting of other Board-appointed committees, and the shareholder meeting. It also oversees that actions are taken in compliance with the Company s objectives and regulations, the Board s resolutions, the resolutions of the shareholder meeting, as well as in accordance with applicable laws and regulations. 2. Prepare, keep, and safeguard the Company s documents such as director record, notification of meeting invitation, minutes of the Board of Director meeting, minutes of the shareholder meeting, annual report etc. 3. Keep and safeguard the report on the interest of directors and executives, and submit such report to the Chairman of the Board of Directors and the Chairman of the Audit Committee within 7 business days from the date of its receipt. 4. Other actions prescribed by the Capital Market Supervisory Board. Remuneration for Directors and Executives Remuneration for Directors 1. Monetary Remuneration The 20th Annual General Meeting of Shareholders on 23rd April 2013 resolved the approval of the setting of the directors remuneration, proposed by the Compensation and Nominating Committee and the Board of Directors, which total amount of remuneration per year is not more than Baht 5 million. Details of remuneration are as follows: Remuneration for the Board of Directors consists of monthly compensation and meeting allowances. The Chairman of the Board of Directors shall receive a monthly retainer fee of Baht 20,000 per month and a meeting allowance of Baht 25,000 for each meeting. Each director shall receive a monthly retainer fee of Baht 10,000 per month and a meeting allowance of Baht 20,000 for each meeting. Remuneration for Executive Committee* consists of monthly compensation only. The Chairman of the Executive Committee shall receive a monthly retainer fee of Baht 25,000 per month. Each member of Executive Committee shall receive a monthly retainer fee of Baht 20,000 per month. Note: *Except executive committee member holding executive post of the company. Remuneration for Audit Committee consists of monthly compensation only. The Chairman of the Audit Committee shall receive a monthly retainer fee of Baht 40,000 per month. Each member of Audit Committee shall receive a monthly retainer fee of Baht 30,000 per month. Remuneration for Compensation and Nominating Committee consists of meeting allowances only. The Chairman of the Compensation and Nominating Committee shall receive a meeting allowance of Baht 22,000 per meeting. Each member of Compensation and Nominating Committee shall receive a meeting allowance of Baht 18,000 per meeting. The total amount of yearly remuneration for directors including monthly compensation, meeting allowances, as well as special remuneration (if any), shall not exceed Baht 5,000,000. In 2013 the remuneration for the Board of Directors and Sub-Committees are as follows: Remunerations of Company s Directors of 2013 Name-Surname Position Board of Directors Audit Committee Compensation and Nominating Committee 1. Mr. Wanchai Sarathulthat Chairman of the Board / 320,000-22, ,000 Chairman of Compensation and Nominating Committee 2. Mr. Panot Sirivadhanabhakdi Vice Chairman / 200,000-18, , ,000 Chairman of Executive Committee / Compensation and Nominating Committee 3. Mr. Thapana Sirivadhanabhakdi Director 160, , Mr. Chotiphat Bijananda Director 140, , Mr. Sithichai Chaikriangkrai Director / Executive Committee 200, , , Mr. Weerawong Chittmittrapap Independent Director / 200, , ,000 Chairman of Audit Committee 7. Mr. Chainoi Puankosoom Independent Director / 200, ,000 18, ,000 Audit Committee / Compensation and Nominating Committee 8. Mr. Udom Puasakul Independent Director / 200, , ,000 Chairman of Audit Committee 9. Mr. Thanapol Sirithanachai* Director / Executive Committee 200, , Mr. Somboon Wasinchutchawal** Director / Executive Committee 40, ,000 Total 1,860, ,000 58, ,000 3,328,000 Note: * Except executive committee member holding executive position of the company ** Director resigned on the resolution of the 20th Annual General Meeting of Shareholders (April 23, 2013) 2. Non-monetary Remuneration - None - Remunerations (Baht) Executive Committee Total Board Remunerations (Baht) 1. The Board of Directors 1,860, The Audit Committee 870, The Compensation and Nominating Committee 58, The Executive Committee* 540, Total 3,328, Note: Current remuneration rate effective May * Except executive committee member holding executive position of the company. 46 / 47

28 Management Structure Remuneration for the Company s Executives 1. Monetary Remuneration The Compensation and Nominating Committee will determine the remuneration of the Company s President and Executives, and propose to the Board of Directors for consideration and approval. The remuneration of the Company s Executives consists of salary and bonus. Year 2012 Year 2013 Number of Executives Baht Number of Executives Baht Salary and Bonus 8 40,351, ,811, Total 8 40,351, ,811, Remark : - Year 2013: The remuneration in 2013 paid to 5 executive officers, Mr. Thanapol Sirithanachai, Mr. Saenpin Sukhee, Mr. Somboon Wasinchutchawal, Mr. Khumpol Poonsonee and Mr. Withawat Koottatep - Year 2012: The remuneration in 2012 paid to 8 executive officers, Mr. Christopher Michael Delaney, Mr. Tasporn Guptarak, Mr. Somboon Wasinchutchawal, Mr. David Grover Litz, Mr. Kawee Siribhadra, Ms. Bussakorn Bunmak, Mr. Thanin Kamthornthip and Ms. Mayranee Ningsanond. 2. Non-monetary Remuneration Non-mometary remuneration for executives consists of provident fund and other compensations including social security, medical expenses and health & life insurance premiums. Year 2012 Year 2013 Number of Executives Provident Fund 8 368, ,085, Other 8 30,404, ,990, Total 8 30,773, ,075, Baht Number of Executives Baht

29 Board of Directors and Executives Board of Directors and Executives 1. Positions held by the Directors and Authorized Directors of and Subsidiaries as of February 28, 2014 Directors GOLD 1 Mr. Wanchai Sarathulthat Subsidiaries Company BE NS UN RV NR GMF GM SS ST WH GP PO MSGL GH GPS BJ NSH GLR 2 Mr. Panot Sirivadhanabhakdi /and// 3 Mr. Thapana Sirivadhanabhakdi / 4 Mr. Chotiphat Bijananda and/ 5 Mr. Sithichai Chaikriangkrai /and// 6 Mr. Weerawong Chittmittrapap / 7 Mr. Chainoi Puankosoom / 8 Mr. Udom Puasakul / 9 Mr. Thanapol Sirithanachai /and// and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ 10 Mr. Somboon Wasinchutchawal // and x and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ /and and/ 11 Mr. Saenphin Sukhee // and x and/ and/ and/ and/ and/ and/ and/ 12 Mr. Khumpol Poonsonee // and x and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ and/ 13 Mr. Withawat Koottatep x Remark : = Chairman of the Board = President = Authorized Director / = Director // = Executive Committee x = Executive Director List of Subsidiaries Companies and Associated Companies GOLD : BE : Baan Chang Estate Co., Ltd. ST : Sathorn Thong Co., Ltd. GM : Grand Mayfair Co., Ltd. NS : North Sathorn Realty Co., Ltd. WH : Walker Homes Co., Ltd. SS : Sathorn Supsin Co., Ltd. UN : United Homes Co., Ltd. GP : Grand Paradise Property Co., Ltd. GPS : Golden Property Services Co., Ltd. RV : Ritz Village Co., Ltd. PO : Golden Land Polo Ltd. GMF : Golden Land (Mayfair) Co., Ltd. NR : Narayana Pavilion Co., Ltd. MSGL : MSGL Property Co., Ltd. GH : Golden Habitation Co., Ltd. BJ : Baan Jearanai Co., Ltd. NSH : North Sathorn Hotel Co., Ltd. GLR : Golden Land Residence Co., Ltd. 48 / 49

30 Board of Directors and Executives Board of Directors and Executives 2. Details of Board of Directors, Management Team and Person with Controlling Power of 2.1 Board of Directors Board of Directors of Golden Land Property Development PLC consists of 9 members who had no legal record in the past 10 years. Information as of February 28, Mr. Wanchai Sarathulthat Director Type : Non-Executive Director Present Position : Chairman of the Board Chairman of Compensation and Nominating Committee Age : 67 Years Highest Education Master of Political Science Ramkhamhaeng University Thai Institute of Directors Association (IOD) GOLD Shareholding Year of Directorship 1 Year 3 Months Position in Other Listed Companies in SET Position in Non-Listed Companies in SET Chairman - Thai Beverage Logistics Co., Ltd. - N.C.C. Management & Development Co., Ltd. - N.C.C. Image Co., Ltd. - F & B International Co., Ltd. - N.C.C. Exhibition Organizer Co., Ltd. Director - TCC Land Logistics Co., Ltd. - TCC Trade & Convention Center Co., Ltd. - TCC Exhibition & Convention Center Co., Ltd. - TCC Engineering Service Co., Ltd. - TCC L 1 Co., Ltd. - VNU Exhibition Asia Pacific Co., Ltd. Position in Rival Companies / Connected Business that May Cause Conflict of Interest Experience Permanent Secretary, Ministry of Transport Chairman of the Board of Directors, Port Authority of Thailand Director, State Railway of Thailand Legal Record in The Past 10 Years 2. Mr. Panot Sirivadhanabhakdi Director Type : Authorized Director Present Position : Vice Chairman of the Board Chairman of Executive Committee Compensation and Nominating Committee Age : 36 Years Highest Education Master of Science in Analysis, Design and Management of Information System, London School of Economics and Political Science, England and Industrial Engineering and Economics from Massachusetts University, U.S.A. Thai Institute of Directors Association (IOD) Director Certification Program (DCP 46/2004) Director Accreditation Program (DAP 10/2004) Finance for Non-Finance Directors (FND 10/2004) GOLD Shareholding Year of Directorship 1 Year 3 Months Position in Other Listed Companies in SET Director / Executive Director - Univentures PLC - Siam Food Products PLC - Berli Jucker PLC Position in Non-Listed Companies in SET Director - Thai Beverage PLC - Frasers Centrepoint Ltd. - Thip Sukhothai Bio-Tech Co., Ltd. - Thip Suphanburi Bio Energy Co., Ltd. - TCC Assets (Thailand) Co., Ltd. - Kasem Subsiri Co., Ltd. - SMJC Development Co., Ltd. - TCC Sports and Recreations Co., Ltd. - TCC Exhibition and Convention Center Co., Ltd. - TCC Trade and Convention Center Co., Ltd. - Thip Sukhothai Bio Refinery Co., Ltd. - Thip Kampangpetch Bio Energy Co., Ltd. - Thip Nakhonsawan Bio Energy Co., Ltd. - Thip Sukhothai Bio Energy Co., Ltd. - Thip Sugar Kampangphet Co., Ltd. - Thip Sugar Nakhon Sawan Co., Ltd. - Thip Sugar Sukhothai Co., Ltd. - The Suphanburi Sugar Industry Co., Ltd. - North Park Real Estate Co., Ltd. - Nong Khai Country Golf Club Co., Ltd. - TCC Holding Co., Ltd. - Terragro Fertilizer Co., Ltd. - TCC Land Retail Co., Ltd. - Norm Co., Ltd. - North Park Golf and Sports Club Co., Ltd. - Paksong Capital Co., Ltd. - Adelfos Company Limited - Eastern Seaboard Industrial Estate (Rayong) Co., Ltd. - Siriwana Co., Ltd. - Cristalla Co., Ltd. - Plantheon Co., Ltd. - TCC Land Co., Ltd. - Beerthip Brewery (1991) Co., Ltd. - T.C.C. Technology Co. Ltd. Position in Rival Companies / Connected Business that May Cause Conflict of Interest Legal Record in The Past 10 Years 3. Mr. Thapana Sirivadhanabhakdi Director Type : Non-Executive Director Present Position : Director Age : 38 Years Highest Education Master of Science Administration in Financial Economics from Boston University, USA Thai Institute of Directors Association (IOD) Directors Accreditation Program (DAP 10/2004) GOLD Shareholding Year of Directorship 1 Year Position in Other Listed Companies in SET Vice Chairman - Univentures PLC - Siam Food Products PLC Vice Chairman / Executive Chairman - Oishi Group PLC Director - Berli Jucker PLC Position in Non-Listed Companies in SET Director / President & CEO - Thai Beverage PLC Director / Executive Vice Chairman - Beer Thai (1991) PLC Director - Adelfos Co., Ltd. Position in Rival Companies / Connected Business that May Cause Conflict of Interest Legal Record in The Past 10 Years 4. Mr. Chotiphat Bijananda Director Type : Authorized Director Present Position : Director Age : 50 Years Highest Education MBA Finance University of Missouri, USA Thai Institute of Directors Association (IOD) Directors Certification Program (DCP 155/2012) GOLD Shareholding Year of Directorship 1 Year Position in Other Listed Companies in SET Chairman of Executive Board - Southeast Insurance PLC - Southeast Life Insurance PLC Second Vice Chairman of Board of Director / Executive Director - Sermsuk PLC Position in Non-Listed Companies in SET Advisor - TCC Holding Co., Ltd. President - Southeast Group Co., Ltd. Chairman of Executive Board - Southeast Capital Co., Ltd. Director - T.C.C. Technology Co., Ltd. Position in Rival Companies / Connected Business that May Cause Conflict of Interest Legal Record in The Past 10 Years 50 / 51

31 Board of Directors and Executives Board of Directors and Executives 5. Mr. Sithichai Chaikriangkrai Director Type : Authorized Director Present Position : Director Executive Director Age : 59 Years Highest Education Mini MBA, Leadership Management Kasetsart University Thai Institute of Directors Association (IOD) Directors Certification Program (DCP 26/2003) DCP Refresher Course (2/2006) GOLD Shareholding Year of Directorship 1 Year 3 Months Position in Other Listed Companies in SET Director / Executive Director - Univentures PLC - Siam Food Products PLC - Berli Jucker PLC Director / Vice Chairman of Executive Committee - Oishi Group PLC Director / Vice Chairman of Executive Committee No. 2 - Sermsuk PLC Position in Non-Listed Companies in SET Director / Director and Executive Vice President - Thai Beverage PLC Director / Director and Senior Vice President - Beer Thip Brewery (1991) Co., Ltd. Director - Eastern Seaboard Industrial Estate (Rayong) Co., Ltd. Position in Rival Companies / Connected Business that May Cause Conflict of Interest Legal Record in The Past 10 Years 6. Mr. Weerawong Chittmittrapap Director Type : Independent Director Present Position : Independent Director Chairman of the Audit Committee Age : 55 Years Highest Education Barrister at Law Institute of Thai Bar Association Master of Laws (LL.M) University of Pennsylvania, U.S.A. Thai Institute of Directors Association (IOD) Directors Certification Program (DCP / 2000) GOLD Shareholding Year of Directorship 1 Year 3 Months Position in Other Listed Companies in SET Independent Director / Audit Committee - Berli Jucker PLC - GMM Grammy PLC - Thai Airways International PLC - SCB Life Assurance PLC Position in Non-Listed Companies in SET Chairman - Weerawong, Chinnavat & Peangpanor Ltd. (Former name White & Case (Thailand) Ltd. ) Director - National Power Supply Co., Ltd. Position in Rival Companies / Connected Business that May Cause Conflict of Interest Legal Record in The Past 10 Years 7. Mr. Chainoi Puankosoom Director Type : Independent Director Present Position : Independent Director Audit Committee Member Compensation and Nominating Committee Age : 63 Years Highest Education Master of Management (MM) Sasin Graduate Institute of Business Administration, Chulalongkorn University Thai Institute of Directors Association (IOD) Directors Accreditation Program (DAP 63/2007) Financial Institutions Governance Program (Year 2011) GOLD Shareholding Year of Directorship 1 Year 3 Months Position in Other Listed Companies in SET Chairman - IRPC PLC Position in Non-Listed Companies in SET Acting Executive Director - Energy Fund Administration Institute (Public Organization) (EFAI) Position in Rival Companies / Connected Business that May Cause Conflict of Interest Experience Advisor - PTT PLC Chairman Executive Environment Committee - The Federation of Thai Industries President & CEO - PTT Aromatics & Refining PLC Senior Executive Vice President - PTT PLC President - PTT Aromatics & Refining PLC Senior Executive Vice President - PTT PLC Legal Record in The Past 10 Years 8. Mr. Udom Puasakul Director Type : Independent Director Present Position : Independent Director Audit Committee Member Age : 62 Years Highest Education Master of Political Science (Politics and Government) Chiangmai University Thai Institute of Directors Association (IOD) Directors Certification Program (DCP 109/2008) GOLD Shareholding Year of Directorship 1 Year 3 Months Position in Other Listed Companies in SET Position in Non-Listed Companies in SET Position in Rival Companies / Connected Business that May Cause Conflict of Interest Experience 20 October September 2012 Director General, Department of Public Works and Town & Country Planning 13 November October 2008 Governor of Uthaithani Province Legal Record in The Past 10 Years 9. Mr. Thanapol Sirithanachai Director Type : Authorized Director Present Position : Director Executive Director President Years : 46 Years Highest Education Master of Business Administration The University of Texas at Austin, Texas, U.S.A. Thai Institute of Directors Association (IOD) Directors Certification Program (DCP 39/2004) Directors Accreditation Program (DAP 10/2004) Audit Committee Program (ACP 39/2012) GOLD Shareholding Year of Directorship 1 Year 3 Months Position in Other Listed Companies in SET Director / Executive Director / Managing Director - Univentures PLC Director - Bangkok First Investment & Trust PLC Position in Non-Listed Companies in SET Director - Grand Unity Development Co., Ltd - Grand U Living Co., Ltd 52 / 53

32 Board of Directors and Executives Board of Directors and Executives - Golden Land Residence Co., Ltd. - Baan Chang Estate Co., Ltd. - Golden Habitation Co., Ltd. - Golden Land (Mayfair) Co., Ltd. - Golden Land Polo Ltd. - Golden Property Services Co., Ltd. - Grand Mayfair Co., Ltd. - Grand Paradise Property Co., Ltd. - MSGL Property Co., Ltd. - Narayana Pavilion Co., Ltd. - North Sathorn Realty Co., Ltd. - Ritz Village Co., Ltd. - Sathorn Supsin Co., Ltd. - Sathorn Thong Co., Ltd. - United Homes Co., Ltd. - Walker Homes Co., Ltd. Position in Rival Companies / Connected Business that May Cause Conflict of Interest Legal Record in The Past 10 Years 2.2 Management Team Management Team of Golden Land Property Development PLC consists of 4 members who had no legal record in the past 10 years. Information as of February 28, Mr. Saenphin Sukhee Present Position : Executive Committee Managing Director - Residential Development Age : 49 Years Highest Education MBA (Ex.MBA) Chulalongkorn University Thai Institute of Directors Association (IOD) GOLD Shareholding Position in Non-Listed Companies in SET Director - Golden Land Residence Co., Ltd. - Baan Chang Estate Co., Ltd. - United Homes Co., Ltd. - Ritz Village Co., Ltd. - Walker Homes Co., Ltd. - Grand Paradise Property Co., Ltd. - Golden Habitation Co., Ltd. Experience Managing Director - Casaville Co., Ltd. Assistant Managing Director - Quality House PLC Senior Vice President - Housing Project - Quality House PLC Vice President Condominium - Quality House PLC Legal Record in The Past 10 Years 2. Mr. Somboon Wasinchutchawal Present Position : Executive Committee Senior Executive Vice President - Finance and Accounting Age : 51 Years Highest Education Master Degree (Business Administration) Thammasat University Thai Institute of Directors Association (IOD) Directors Certification Program (DCP 102/2008) GOLD Shareholding Position in Non-Listed Companies in SET Director - Golden Land Residence Co., Ltd. - Baan Chang Estate Co., Ltd. - Golden Habitation Co., Ltd. - Golden Land (Mayfair) Co., Ltd. - Golden Land Polo Ltd. - Golden Property Services Co., Ltd. - Grand Mayfair Co., Ltd. - Grand Paradise Property Co., Ltd. - MSGL Property Co., Ltd. - Narayana Pavilion Co., Ltd. - North Sathorn Realty Co., Ltd. - Ritz Village Co., Ltd. - Sathorn Supsin Co., Ltd. - Sathorn Thong Co., Ltd. - United Homes Co., Ltd. - Walker Homes Co., Ltd. - Baan Jearanai Co., Ltd. - North Sathorn Hotel Co., Ltd. Experience Executive Vice President (Chief Financial Officer) Pruksa Real Estate PLC Executive Vice President / Corporate Secretary Areeya Property PLC Senior Vice President Property Perfect PLC Legal Record in The Past 10 Years 3. Mr. Khumpol Poonsonee Present Position : Executive Committee Executive Vice President Business Development Age : 42 Years Highest Education Master of Business Administration University of Newcastle upon Tyne, U.K. Thai Institute of Directors Association (IOD) Directors Accreditation Program (DAP 87/2011) Director Certification Program (DCP 185/2014) GOLD Shareholding Position in Non-Listed Companies in SET Director - Golden Land Residence Co., Ltd. - Baan Chang Estate Co., Ltd. - Golden Habitation Co., Ltd. - Golden Land (Mayfair) Co., Ltd. - Golden Land Polo Ltd. - Golden Property Services Co., Ltd. - Grand Mayfair Co., Ltd. - Grand Paradise Property Co., Ltd. - MSGL Property Co., Ltd. - Narayana Pavilion Co., Ltd. - North Sathorn Realty Co., Ltd. - Ritz Village Co., Ltd. - Sathorn Supsin Co., Ltd. - Sathorn Thong Co., Ltd. - United Homes Co., Ltd. - Walker Homes Co., Ltd. - Baan Jearanai Co., Ltd. Experience Senior Vice President - Univentures PLC Director / Managing Director - Univentures Consulting Co., Ltd. Investment Committee - Kinnaree Property Fund 2002 Present Director - Cathay Asset Management Co., Ltd. Legal Record in The Past 10 Years 4. Mr. Withawat Koottatep Present Position : Executive Vice President - Commercial Development Age : 42 Years Highest Education Master of Business Administration Chulalongkorn University Master of Engineering University of Florida, USA. Thai Institute of Directors Association (IOD) GOLD Shareholding Position in Non-Listed Companies in SET Experience Director of Business Development - Fico Corporation Co., Ltd Senior Structural Engineer - Asian Engineering Consultants Co., Ltd. Legal Record in The Past 10 Years 54 / 55

33 Good Corporate Governance Good Corporate Governance recognizes the importance of applying good corporate governance practices as a vital factor to its sustainable business success. It also puts emphasis on the significance of corporate moral, transparency and accountability which are perceived as the fundamental requirements for improvement in its operational efficiency and effectiveness, and also keenly focuses on maximizing shareholders value with concern on the benefit of all stakeholders. The Board of Directors as its governing body, oversees the compliance of prescribed governance policies and best practices, and makes relevant adjustments thereto from time to time to be in accordance with the prevailing circumstance. The Company s governance policies and best practices are prescribed into 5 categories, which are: 1. Rights of Shareholders 2. Equitable Treatment of Shareholders 3. Role of Stakeholders 4. Disclosure and Transparency 5. Responsibilities of the Board of Directors 1.Rights of Shareholders The Company recognizes the rights and equitability of all shareholders and applies equitable treatment towards each of them. Shareholders are entitled to be informed of information, operation results and management policy. They are also entitled to their share of the company profit and their rights to participate in the shareholders meetings. Each shareholder is entitled to fair treatment as prescribed in the Company s regulations and under applicable laws. In order to assure the equitable treatment of its shareholders, the Company ensures that their shareholders meeting procedures are transparent and efficient. It oversees appropriate uses of inside information, proper control and monitoring of connected transactions, as well as sufficient disclosure of information, and the following procedures are also applied to accommodate its shareholders in each of the shareholders meetings: 1) Send the meeting invitations together with full details on the material aspects of each meeting agenda, as prescribed by applicable laws and regulations of the Stock Exchange of Thailand and in compliance with the Company s regulations. The details include sufficient information and data concerning the proposed agenda as well as the clearly described opinions of the Board of Directors on each agenda for the shareholders perusal in advance of their decision making. The attached supporting information also contains the minutes of the previous meeting, the Company s annual report, supportive documents, proxy form with clear guidelines for proxy voting. These information packages shall be sent to the shareholders at least 14 days in advance of the shareholder meeting date, the shareholders are thus provided with sufficient disclosure of information and an adequate timeframe for their proper perusal of such information before the meeting date. The meeting invitations shall be distributed to all shareholders whose names are listed on the Company s share registration book. In addition, shareholders could appoint a proxy or Independent Directors to act as their proxy and vote on their behalf, in the event that they were unable to attend the meeting. The Company shall also provide to shareholders with a list of its Independent Directors and their relevant background profile in the information packages attached to the meeting invitations for the shareholders perusal. In 2013, the Company held the Annual General Meeting of Shareholders 2013 (No.20) on 23rd April, 2013 at Victor 2-3, Victor Club, 8th Floor, Park Ventures Ecoplex, 57 Wireless Road, Lumpini, Patumwan, Bangkok The directors participated in the Meeting were: 1. Mr. Wanchai Sarathulthat Chairman of the Board 2. Mr. Panot Sirivadhanabhakdi Vice Chairman/Chairman of Executive Committee 3. Mr. Sithichai Chaikriangkrai Director/ Executive Director 4. Mr. Weerawong Chittmittrapap Independent Director/ Chairman of Audit Committee 5. Mr. Chainoi Puankosoom Independent Director/ Member of the Audit Committee 6. Mr. Udom Puasakul Independent Director/ Member of the Audit Committee 7. Mr. Thanapol Sirithanachai Director/ Executive Director/ President 8. Mr. Somboon Wasinchutchawal Director/ Executive Director/ Senior Executive Vice President (Finance & Accounting) During the Annual General Meeting of Shareholders 2013 (No.20), votes were taken on each prescribed agenda item. At the beginning of each shareholders meeting, the Chairman of the Meeting shall explain to the meeting participants about the procedural guidelines applied for vote casting, vote counting, and rules for voting by ballot. 2) Annually presents the proposal to the shareholders meeting for consideration and approval of the directors remuneration, and also submits its clear policy and criteria on the directors remuneration determination to shareholders. 3) In compliance with the Principles of Good Corporate Governance for Listed Companies 2006, the Company provides its minority shareholders with their entitled rights to propose the agenda for the shareholders meeting and director nominees in advance via the corporate website 4) Shareholders are allowed to access the information on the meeting process and meeting agenda through corporate website in advance of the dissemination and dispatch of the meeting notification. On the meeting date, the Company allows registration of shareholders at least one hour prior to the meeting time. 5) The meeting is conducted and processed in accordance with the outlined agenda, without insertion of non-agenda items or changes of material information in a manner that shall deprive shareholders of provision of advance notices. Sufficient time is allotted to the meeting, whereby the meeting shall be conducted in an appropriate and transparent manner. Shareholders are thoroughly given the opportunity to ask questions and express their opinions before casting their votes and making any conclusion on each agenda. 6) Shareholders who arrive after commencement of the shareholders meeting, will be allowed to cast their vote on the agenda both being considered and all subsequent agenda. 7) The Company regularly provides the shareholders with information via channels provided by the Stock Exchange of Good Corporate Governance Thailand, and other media & publications, as well as its corporate website. 8) Provide a direct channel for minority shareholders to request for more information such as directors activities, corporate governance, and audit etc, via mail, or corporate address [email protected]. In addition, minority shareholders can contact the Corporate Secretary for further information. 2. Equitable Treatment of Shareholders The Company emphasizes on the importance of equitable and fair treatment of all shareholders by conducting the following actions: Shareholders Meeting 1) The Company invites its shareholders to propose agenda items for the shareholder meeting in advance, by publicly notifying such invitation via channels provided by the Stock Exchange of Thailand. It also posts the relevant consideration criteria and clear procedures on its corporate website well in advance of the meeting date. 2) The Company allows its shareholders to propose candidates for the director nominees. The proposed candidates must be entirely qualified under the criteria as prescribed by the Company s regulations and the nominees must also give consent that they are willing to run for the director positions. The nomination procedures as well as its relevant rules and criteria shall be posted well in advance before the meeting date via channels provided by the Stock Exchange of Thailand and on its corporate website. During the shareholders meeting, the selection of directors shall be made via vote casting for each directornominee on an individual basis. In 2013, the Company had invited its shareholders to propose appropriate agenda items for the meeting in advance and to nominate their proposed candidates for the director nominees to be approved and appointed by the Annual General Meeting of Shareholders The proposal and the nomination was made in advance from 4th November 2013 to 31st December Shareholders were notified in advance via channels provided by the Stock Exchange of Thailand. Relevant rules and procedures thereof were posted on its corporate website at under the Shareholders Meeting menu in Investor Relations category. 56 / 57

34 Good Corporate Governance Good Corporate Governance 3) Rights to vote is allocated to each shareholder according to the portion of shares held in the Company. 4) It is the Company s policy to conduct its shareholders meeting in accordance with the outlined agenda and in the sequence as set out in the meeting notification to the shareholders, without insertion of non-agenda items that its shareholders have not been informed of in advance. This process is intended to provide the shareholders with sufficient time to study the agenda and its supportive information prior to their decision making. 5) The Proxy Form type B, which allows the Company s shareholders to determine direction on their vote casting on each agenda item, is usually distributed as an attachment to the shareholders meeting invitations to facilitate its shareholders who are not able to personally attend the meeting, can appoint another person or any of the Company s Independent Directors to be their proxy. The form is also posted on corporate website so that shareholders can download it if so required. 6) The Company encourages its shareholders to use voting ballots for vote casting on each agenda item as deemed appropriate. Such voting ballots will be collected during the meeting and calculated together with the votes casted earlier via proxy. The final results of each agenda item are then declared during the meeting. 7) The Company duly prepares and submits the minutes of the meeting to the Stock Exchange of Thailand and the Securities and Exchange Commission within 14 days after the meeting date and also posts them on its corporate website. 8) The Company prescribes in writing its guideline policies on keeping corporate information and preventing inside information to reassure equitable treatment of shareholders. The Company also notifies its warning against any using of inside information by its Directors and employees, as well as their connected persons such as spouses, underage children, and nominees, for insider trading purposes. Such inside information includes any material information that may affect the Company s share trading activities, its share price movement, and any information that has not yet been disclosed to public. The Company s directors and executives who have access to inside information are prohibited from security trading, for a period of 30 days, prior to an official public release of the Company s operational performance and financial position; or before the public revelation of any significant news and material data that may impact the movement of the Company s share prices, the imposed security trading prohibition will last for at least 24 hours after the public revelation of any such significant news. According to the Securities and Exchange Act, B.E. 2535, which prescribes that directors and executives are required to report their current shareholding status of the listed companies of which they are directors or executives upon resuming their posts and within 30 days thereafter. In addition, each related trading transactions needs to be reported to the Securities and Exchange Commission within 3 business days after such transaction date. 3. Role of Stakeholders The Company focuses on the importance of its social and environmental responsibilities, as well as its accountability towards other stakeholders. It also recognizes the significance and relevance of the stakeholders roles. It operates its business with honesty and legality and abides by governing regulations. It does not assist, support, and encourage any illegal activities or unlawful conducts. It will also not participate in any violation of human rights. Furthermore, it respects intellectual properties and copy rights and does not support and partake in any breach of such properties and rights The Company neither requests nor accepts any monies, and gifts or awards or compensations from other persons, except if such acts are righteously and customarily acceptable. The Company also opposes corruption and bribery, and supports public and private measures aiming to fight against corruption. The Company promotes effective and efficient use of natural resources, while encouraging its employees to pay attention to the environmental and safety impacts of their business activities. It also encourages its stakeholders to participate in community development and social programs. 1) The Company prescribes the following practice guidelines for its various stakeholders: Shareholders The Company pays attentions to transparency, accuracy, validity, and timeliness of material information that it has disseminated to its shareholders via various media channels such as the online electronic media of the Stock Exchange of Thailand, corporate website, newspapers, press releases, and corporate letters, etc. Customers The Company believes in the importance of upholding the highest ethical standards towards treating each customer with attentiveness and responsibility. It aims to provide high quality and superior service standards to its customers. It also pays attention to responding promptly to any customer complaints and takes suitable action to solve the situation and to achieve customer satisfaction. Trading Counterparts and/or Creditors / Debtors The Company treats its trading counterparts and/or creditors / debtors with equality and fairness, with common concerns on possible maximization of corporate benefits and fair mutual returns. It also strictly abides by its commitments and avoids situations which may create any conflicts of interest. Competitors The Company applies customary business practices and fair competition in its business conducts while abiding by the good ethics not to discredit its competitors by means such as spreading false information and deceptive allegations, unlawful penetration of competitor s trade secrets, and conducting of any wrongful business actions. Employees The Company applies unbiased and equitable treatment towards its employees, justly compensating them with appropriate remuneration. It has set up employee provident funds and provides an employee handbook to all employees to clearly inform them about its relevant corporate welfare policy. It emphasizes on the importance of knowledge development, skill improvement, and staff competency enhancement by encouraging its employees to participate in both its in-house and public seminars. These actions help in improving employees; capabilities, and enable them not only to work efficiently but also be able to adjust to changes and new innovations. The Company also equips its employees with understanding of applicable rules and regulations from its governing agencies by encouraging its employees to participate in seminars and conferences that cover issues such as the regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission, applicable accounting standards, computer programs, etc. Society and Community The Company consistently supports social related activities. It occasionally provides assistance and donations to various foundations and organizations which are active in social and community work. It also encourages social responsibility among all employee levels and campaigns on efficient utilization of natural resources and promotion of energy conservation. Governing Authorities and Government Agencies The Company complies with laws, rules and regulations of its governing authorities and relevant regulatory agencies such as Department of Business Development, Ministry of Commerce, Revenue Department, Ministry of Finance, the Stock Exchange of Thailand and the Securities and Exchange Commission. It also cooperates and works in close relations with other private entities. Environment The Company emphasizes on the importance of the environment and recognizes that during the construction period of its development projects, there may be environmental impacts on surrounding communities. The Company thus strictly abides with applicable rules and laws of relevant government authorities. 2) The Company provides contact channels for any requests, suggestions, and/or complaints regarding its corporate governance, as well as reports of fraudulent actions or misconducts of the Company s personnel, employees, and stakeholders. The process is undertaken in compliance with the principle of good corporate governance. The 5 contact channels provided are listed as follows: 1. Telephone number: (662) or (662) Facsimile number: (662) , Extension 2 3. Corporate website or address: [email protected] 4. Direct contact with the Corporate Secretary or by mails to the Corporate mailing address. 5. Direct to any or all of the Company s three Independent Directors whom are the member of the Audit Committee. In order to assure confidentiality, the Company emphasizes the importance of safeguarding the secrecy of complaint information and clearly prescribes in writing its complaint proceedings and investigation. The access to complaint information and records is limited to authorized personnel who officially engage in such complaint proceedings and investigation. 4. Disclosure and Transparency Information disclosure is a key principle of good corporate governance. The Company recognizes the importance of the 58 / 59

35 Good Corporate Governance Good Corporate Governance accuracy, adequacy, timeliness and equitable distribution of its information revelation to the Stock Exchange of Thailand, its shareholders and stakeholders, and thus prescribes the following practice guidelines: 1) The disclosure of the Company s material information, both financial and non-financial, particularly information related to its financial statements, must be reviewed/audited by authorized auditors and accompanied by their opinion confirming a true and fair view of its actual financial position in accordance with generally accepted accounting practice, and duly approved by the Company s Audit Committee and the Company s Board of Directors prior to its submission to the Stock Exchange of Thailand and relevant authorities, and before publicly releasing it to its shareholders and investors. 2) The information disclosure such as the Company s financial statements, annual statements (SEC Form 56-1), and annual report (SEC Form 56-2) in both Thai and English shall be posted in corporate website. 3) The Company discloses in its annual statements (SEC Form 56-1) and annual report (SEC Form 56-2) the roles and duties of its Board of Directors and Sub-Committees, the record of attendance of the members of the Board of Directors and relevant Sub-Committees, and the remuneration policy on Company s Directors and executives compensation. 4) The Company discloses the Report on the Board of Director s Responsibilities for Financial Statements together with the Auditor s Report in its annual report (SEC Form 56-2). 5) The Company reveals its Report on the Interest of Directors and Executives as prescribed by the notification of the Capital Market Supervisory Board (Reference Number: Thor. Jor 2/2552) dated 26 January 2009 which required the publically listed companies to make preparation and submission of such report for the first time in July 2009 and regularly update any changes therein within 3 business days after such changes have taken place and submit the updated report to the Corporate Secretary. 6) The Company discloses background information of its Directors and Executives by posting them on its corporate website. Disclosure of Information and Relationship with Investors The Company recognizes the importance of accuracy, validity, transparency and completeness of its information disclosure which includes its financial information and other general information, as well as material information that may impact its share price movement. The Company disseminates such information to its investors and related parties via various media channels such as the online electronic media of the Stock Exchange of Thailand, corporate website, and press releases, etc. 5. Board of Directors and Sub-Committees Responsibilities Nomination and Appointment of Directors and Top Management 1. Board of Directors The Company s Board of Directors has important governance roles towards the maximization of the Company s interest. The Board has the duty of responsibility to shareholders and must maintain its independency from the management, while following the prescribed corporate vision, mission and business ethics, as well as focusing on prevailing risks and good governance principles. Board Structure 1) The Company s Board of Directors comprises no less than five members and no more than eleven members. The number of Independent Directors on the Board must be equivalent to one-third of the Board size, and no less than three members. The Independent Directors must be qualified under the requirements prescribed by the Securities and Exchange Commission and the Stock Exchange of Thailand. The Company also prescribed the qualifications of its directors and Independent Directors as follows: Directors Qualifications 1. An individual who possesses knowledge, proficiency, and experiences that are of benefit to the Company s business operations. 2. An individual who is honest, ethical, virtuous, and responsible, whilst making sound decisions based on facts and rationality. 3. An individual who has leadership, vision and courage to express an independent and different opinion. 4. An individual who is able provide sufficient time to monitor the Company s business operations. 5. An individual who is qualified according to the conditions prescribed under the Public Limited Companies Act, the Securities and Exchange Act, and the notification of the Stock Exchange of Thailand, as well as not disqualified according to the conditions prescribed thereunder. The qualifications and disqualifications include: (1) Reaching the age of majority and considered sui juris. (2) Not having been declared by the court as an insolvent, and incompetent or a quasi-incompetent person. (3) Never been imprisoned under a final judgment on any corruption charge. (4) Never been punished, or dismissed from employment from any organization, government entity, and government agency for any fraudulent or dishonest conduct (5) Not named among the name list of the Stock Exchange of Thailand for disqualified individuals banned under its regulations from being a company director. Independent Directors Qualifications 1. Not holding more than 1% of the total numbers of shares with the voting right issued by the Company, its parent, its major shareholder, its subsidiaries, its affiliates, or any juristic persons that might cause any conflict of interest. Such holding includes the shares held by related persons to such independent director. 2. Not having any involvement in the Company s management; nor being employees, staff, or consultants who obtain regular salaries from the Company; nor being an individual with controlling authority of the Company, its parent, its subsidiaries, its affiliates, or any other subsidiaries of a similar rank level, or any juristic persons that might cause any conflict of interest, as of present and not less than two years prior to the date of becoming an Independent Director. 3. No blood relationships or any legal relationships (in the manner of parent, spouse, sibling, son or daughter and their spouse) with executives, major shareholders, person with controlling authority, or persons who will be nominated as executives or will have controlling authority of the Company and its subsidiaries. 4. No business relationships with the Company, its parent, its subsidiaries, its affiliates, or any juristic persons that might cause any conflict of interest, that may impair the Independent Director s ability to make independent judgments, as of present and not less than two years prior to the date of becoming an Independent Director. 4.1 Shall not be the auditor of Company, or a major shareholder, non-independent director, management, or managing partner of the Company s audit firm. 4.2 Shall not be the Company s professional service provider (such as legal advisor, financial advisor, assets appraiser etc.) who provides more than Baht 2 million per year of services to the Company, its parent, its subsidiaries, its affiliates, or any juristic persons that might cause any conflict of interest; nor a major shareholder, non-independent director, management, or managing partner of the Company s professional service provider. 4.3 Shall not receive direct or indirect benefits from or interests in any commercial or business transactions (such as those related to the common business transactions, real-estate lease/ rent, transactions of assets/ services, and transactions of granting or receiving financial assistances) with the Company, its parent, its subsidiaries, its affiliates, for a value of more than Baht 20 million or for the amount equivalent to, or more than, 3% of the net tangible assets of Company, whichever is the lower amount. The consideration of value of such transaction shall include transaction incurred during the period of one year prior to the date on which the business relationship. The prohibited relationships also include being a major shareholder, non-independent director, management, or managing partner of any entity that may have such business relationships. 5. Not a director appointed as representative of the Board of Directors of the Company, its major shareholders, or the shareholder who is a related to the Company s major shareholders. 6. Not having any other characteristic which may impair the independent director s ability to make independent judgments. 7. The independent director with the qualifications as prescribed in items 1-6 may be assigned by the Board of Directors to make decisions on the business operations of the Company, its parent, its subsidiaries, its affiliates, or any other subsidiaries of the similar rank level, or any juristic persons that might cause any conflict of interest on the basis of collective decision. 2) The Company s directors and executives can take their positions as a director, an executive, or a controlling authority in the Company s subsidiaries or in other companies as per the conditions prescribed by the Securities and Exchange Commission, the Stock Exchange of Thailand, and other relevant agencies, as well as any appropriate approvals from the Board of Directors. 60 / 61

36 Good Corporate Governance Good Corporate Governance 3) Each member of the Board must disclose their detailed resume to the public and when any change is made in the Company s directors. Appointment of the Board of Directors The appointment of members of the Board of Directors is undertaken in accordance with the Company s regulations and in compliance with the Public Limited Companies Act. The selection process for any nominated director posts shall be undertaken by the Compensation and Nominating Committee which shall select qualified candidates for the required directorship role and subsequently nominate the selected candidates to the shareholders meeting for their appointments. The Company s regulations prescribe that the appointment of the members of the Board of Directors must comply with the Public Limited Companies Act, and shall proceed as follows: 1. The shareholders meeting elects any additional members of the Board of Directors or the replacement thereof under the following rules and procedure: A. Each share held in common stock shall be equivalent to one vote. B. Each shareholder is required to cast all their voting rights under A. to elect a candidate (or candidates) to be a director (or directors). Individual s votes cannot be fractionally divided evenly among all candidates. C. The candidate with the most votes shall be first elected; the next-ranked director position shall go to the candidate with the next highest number of votes and so on until the vacancies of all directorship position are filled. If the next-ranked candidates get an equal number of votes, the chairman chairing the meeting will have the casting vote. 2. The Board of Directors shall select a candidate for any vacancy of directorship post caused by any cause other than a termination of their term. Term of Office for the Board of Directors In each of the Annual General Meeting of the Shareholders, one third of the Company s Board members shall complete their term of office which shall then expire on that date. If the number of the Board members cannot be split into three, then the number shall be rounded to the nearest number of one third. Drawing lots shall be applied to end the office term of Board members on the first year and the second after the listing of the Company in the stock exchange. As for the subsequent years thereof, the Board members with the longest service term shall then resign from their posts. Resigned directors can be reelected for a new term of service. Other than completion of their term of service, members of the Board of Directors can be removed from their position under the following circumstances: 1. Death 2. Resignation 3. Disqualified or falling under conditions as prohibited under the Public Limited Companies Act 4. Resignation due to a resolution of the Annual General Meeting of the Shareholders 5. Resignation due to a court order Roles, Duties and Responsibilities of the Board of Directors 1. The Board of Directors should conduct their duties in accordance with applicable laws, the Company s objectives and regulations, and the resolutions of the shareholder meeting. The Board members should perform their roles with honesty, carefully safeguard the benefits of Company and ensure equitable treatments of all shareholders. 2. The Board of Directors sets the Company s corporate policy and operational direction, while overseeing that the Company s management efficiently and effectively conducts its business operations according to policies and regulations of the Company. It also assures that the Company operates its business according to the principles of good corporate governance that shall contribute to the maximization of the Company s enterprise value and its shareholders wealth. 3. The Board of Directors shall report to the Company s shareholders about its operational performance in the shareholder meeting and in the Company s annual report. 4. The Board of Directors shall oversee that the Company maintains efficiency and accountability in its accounting system, financial reporting process, internal controls and internal audits. 5. The Board of Directors shall afford a good corporate governance policy in writing and regularly review such policy. 6. The Board of Directors shall oversee and monitor the Company s management to ensure that it ethically provides equitable treatments to all stakeholders. 7. Independent and outsider directors are capable to freely exercise their independent judgments upon reviewing the Company s strategy, administration, resource utilization, director appointments, and operational standards. A role of the independent and outsider directors is to counterbalance management or other directors in any conflicting issues or actions that may otherwise impact the equitability of all stakeholders. 8. If necessary, the Board of Directors may seek advice or professional opinions from external consultants on the Company s operations. The costs thereto shall be absorbed by the Company. 9. The Board of Directors shall oversee that there is a Company Secretary to assist and administer certain activities of the Company and its Board such as the shareholder meetings, and Board of Directors meetings. The Company Secretary shall also provide appropriate advice to the Company and its Board regarding their compliance of requisite duties to applicable laws and regulations and shall assure that the disclosure of information by the Company and its directors is accurate, complete, transparent and in a timely manner. 10. If any of the Board member has any knowledge of material inside information that may impact the price movement of the Company s stocks, that Board member must refrain from any trading of the Company s shares for a given period of appropriate timeframe prior to an official public release of such material inside information. No Board member shall disclose such material inside information to other person or persons; any violation thereof shall then carry the legal punishment in connection therewith. 11. The Board of Directors shall oversee to have the Report on the interest of director/ executive prepared as prescribed by the Company s regulation. 12. New Board members should attend an orientation session on the Company s business operations. Meeting of the Board of Directors 1. The Board meets regularly, at least once every quarter, and additionally as necessary. 2. Except for emergencies, the Company usually delivers the meeting invitation for the upcoming Board of Directors meeting with clear details of the meeting s agenda and the attached supplementary information to its Board members at least 7 days before the meeting date to allow them sufficient time for review and consideration. 3. For each Board of Directors meeting, a quorum, as defined in the Company s regulations, is required. 4. The Chairman of the Board shall be the one who approves the agenda items by consulting with the Company s management on such matters. The management shall consider any requests from other members of the Board regarding the insertion of additional items to meeting agenda for the Board s consideration. 5. The Chairman of the Board shall be responsible for appropriate allocation of time for the management to propose their documents and information for discussion, and for the Board to discussion matters of relevance. 6. During the Board meeting, the Chairman of the Board shall summarize important agenda issues for Board review and offer opportunities for any Board members to express their opinions prior to the finalizing of meeting resolutions. 7. In reviewing any items on the meeting agenda, Board members with a personal interest or material relationship to such items must excuse themselves from the decision making process and take no part in the discussion or the vote. 8. The Board members are entitled to access or request of essential information, advice and assistance from the Company s management on issues relating to the Company s operation, and can request for independent opinions from external consultants. Self-Assessment of the Board of Directors The Board of Directors establishes an annual self-assessment of the Board performance at least once a year to review and set an improvement framework for Board governance performance. Remuneration for the Board of Directors 1. The Board of Directors are appropriately compensated in relation to their assigned roles, duties and responsibilities. 2. The Board shall disclose the report of the Board member remunerations individually and as a collective body, in the Company s annual report in compliance with its good corporate governance policy. 3. The remuneration of the Board members shall be proposed by the Compensation Committee to the shareholders 62 / 63

37 Good Corporate Governance Good Corporate Governance meeting for its approval. Details of the remuneration of the Board members and the management for 2013 are disclosed under the topic of Remuneration for Directors and Executives of this annual report. Knowledge Development The Company supports the participation of its Board members, executives and employees in relevant training and seminars as a part of its knowledge management scheme. Such training and seminars include the courses organized by the Thai Institute of Directors, the Stock Exchange of Thailand, the Securities and Exchange Commission, and other agencies. 2. Sub-Committees The Board of Directors appointed the following three sub-committees to undertake the assigned tasks: 1) Executive Committee 2) Audit Committee 3) Compensation and Nominating Committee 1) Executive Committee Composition of the Executive Committee 1. The Executive Committee comprises skilled and qualified individuals in management. 2. The Chairman of the Executive Committee can only be selected from the Board members. Appointment of the Executive Committee The members of the Executive Committee are appointed by a resolution of the Board of Directors. Roles, Duties and Responsibilities of the Committee The Committee, together with the Company s management reviews and proposes corporate policy, direction, strategy, objectives, business plan, budget and authority framework of the Company and its subsidiaries to the Board of Directors for their approval. It also oversees and governs the Company s business operations to be in line with its targeted objectives and approved business plan. The Committee is involved in the approval of the Company and its subsidiaries business activities under the framework of authorized power assigned by the Board of Directors. It also scrutinizes matters proposed by the Company s management for submission to the Board of Directors, if such matters are not within the scope of its proper authority. Approvals by the Committee shall not involve transactions that the approvers, being either the committee members or its assigned power of attorney, or related persons have any material relationship or any conflict of interest or a possible perceived conflict of interest with the Company or its subsidiaries, except for the approvals made in accordance with the permitted policy and authorized regulatory framework which have already been approved by the Board of Directors. (The conflict of interest is defined as prescribed in the Notification of the Securities and Exchange Commission.) Remuneration for the Executive Committee The Compensation and Nominating Committee shall initially set the remuneration for Executive Committee and subsequently submit its proposal to the relevant Board of Directors meeting for reconsideration prior to final proposal to the shareholders meeting for approval. 2) Audit Committee The Board of Directors emphasizes the importance of a good corporate governance system, transparent business operation, and legitimate actions. It encourages honest conduct towards the Company s shareholders, business partners, and customers. Thus, the Audit Committee maintains an important role in assisting the Board of Directors in its good governance functions. The Committee assures the Company s stakeholders of its compliance with corporate regulations, operational code of conducts, and appropriate maintenance of efficient internal controls, without compromising on matters such as conflict of interest and fraud. The Board of Directors prescribes the Audit Charter as follows: Composition of the Audit Committee 1. The Audit Committee consists of at least three Independent Directors who are non-executive of the Company. 2. At least one member of the Audit Committee must possess enough knowledge and experience in accounting and finance to review the accountability of the Company s financial statements. The member of the Audit Committee who is qualified in this respect is Mr. Chainoi Puankosoom (See Annex 1 : Detailed information on Directors, Executives, and Executives with controlling authority in the Company) 3. The Secretary to the Audit Committee may be the Corporate Secretary or the Chief of the Internal Audit Department. Appointment of the Audit Committee The Board of Directors shall select and appoint members of the Audit Committee. Roles, Duties and Responsibilities of the Committee The Committee is required to report to the Board of Directors and has the following role, duty and responsibility: 1. Arrange to review and assure that the Company presents its financial reports with accuracy and sufficient disclosure. It shall coordinate with the external auditor and relevant executives who are assigned the responsibility of the quarterly and annual financial reports. During the audit process, the Committee may offer its suggestions to the auditor to review or audit certain transactions or items that it deems necessary and material. 2. Arrange to review and assure that the Company has internal control and audit systems which include: 2.1 Consider the appointment, removal, and termination of the Chief of the Internal Audit Department in order to assure the independence of the internal audit function. 2.2 Assess the independence of the internal audit function by reviewing its actions, reports, and authority structure. 3. Review that the Company acts in compliance with the securities and stock exchange laws, the regulations of the Stock Exchange of Thailand, and the laws and regulations which relate to its business operations. 4. Assess, select, and make relevant proposal for appointment and remuneration of the Company s external auditors, which include: 4.1 Review the independence of the auditor. 4.2 Hold at least one meeting annually with auditors, without the presence of any members of the Company s management team, to seek the auditor s views and opinions. 5. Review connected transactions or transactions that may be perceived as causing any conflict of interest to assure lawful practices and regulatory compliances, as well as rationality and maximized corporate interest. 6. Arrange to have the Audit Committee Report disclosed and published in the Company s annual report. The report is undersigned by the Chairman of the Audit Committee and includes at least the following information: 6.1 Opinions on accuracy, completeness and accountability of the Company s financial statements. 6.2 Opinions on adequacy of the Company s internal control system. 6.3 Opinions on compliance with the securities and stock exchange laws, the regulations of the Stock Exchange of Thailand, and the laws and regulations which relate to business operations of the Company. 6.4 Opinions on suitable qualifications of the auditor. 6.5 Opinions on transactions that may be perceived as causing any conflict of interest. 6.6 Number of meetings of the Audit Committee and the record of attendance of each member of the Audit Committee. 6.7 Opinions or general remarks of the Audit Committee regarding its actions according to the Audit Charter. 6.8 Other issues under the assigned scope of the Audit Committee s duty and responsibility that it perceives that shareholders and stakeholders ought to be aware of. 7. Other tasks assigned by the resolution of the Board of Directors, and approved by the Audit Committee. 8. In conducting its duty, if the Audit Committee discovers or has any doubts that there are any transactions or actions that may materially impact the Company s financial position and operational performance, the Audit Committee shall report to the Board of Directors for appropriate rectification within the Audit Committee s prescribed timeframe. Meeting of the Audit Committee 1. The Audit Committee meets at least four times a year, and the Chairman of the Audit Committee may additionally call a special or extraordinary meeting as necessary if an emergency decision needs to be made. 2. Before each meeting date, the meeting notification with 64 / 65

38 Good Corporate Governance Good Corporate Governance clear details of the meeting agenda and the attached supplementary information shall be delivered to the Audit Committee members, as well as other meeting participants, to allow them sufficient time for review and consideration, and for further request of extra information if so required. 3. For each Audit Committee s meeting, at least two-thirds of the Committee members should be present in order to make a quorum. 4. In reviewing any items on the meeting agenda, the Audit Committee members with a personal interest or material relationship to such items must excuse themselves from the decisionmaking process and take no part in the discussion or the vote. 5. The Secretary to the Audit Committee has no voting right. 6. The Chairman of the Audit Committee shall regularly report on each of the Committee s meetings to the Board of Directors in the upcoming Board meeting. Term of Office for the Audit Committee 1. The Audit Committee members have a three years term of office. Upon completion of their term of services, they should not be automatically reappointed, but can be reappointed if agreed upon by the resolution of the Board of Directors. 2. The Audit Committee members can be additionally appointed and removed in accordance with the discretionary decisions of the Board of Directors or by the resolution of the shareholders meeting. 3. The term of office of the Audit Committee members shall end under the following circumstances: Death Resignation Completion of their term of service Resignation from their directorship Disqualified or falling under conditions as prohibited under the Company s regulations or the regulations of the Stock Exchange of Thailand Resignation due to a resolution of the Board of Directors 4. If there is any vacancy of the Audit Committee members position other than a relevant completion of the members term of service, the Board of Directors shall appoint any qualified individual to replace such vacancy. The newly appointed member shall complete the remaining term of office of his predecessor. The notification of such appointment should be made to the Stock Exchange of Thailand. In the event that the Company asks for the resignation of the Audit Committee members prior to the completion of their term of service, the Audit Committee can supply the relevant reasons thereof to the Stock Exchange of Thailand and the Securities and Exchange Commission. Remuneration for the Audit Committee The Compensation Committee shall initially review the Audit Committee s remuneration and subsequently submit its recommendation to the relevant Board of Directors meetings for reconsideration prior to its final proposal to the shareholders meeting for its approval. 3) Compensation and Nominating Committee Appointment of the Compensation and Nominating Committee The Board of Directors shall be responsible for selection and appointment of the Compensation and Nominating Committee. Roles, Duties and Responsibilities of the Committee 1. Define rules and policies for the selection of the members of the Board of Directors and the members of the Sub-Committees. 2. Review and select qualified candidates to fill the directorship positions in the event of the vacancy thereof, and submit its recommendation to the Board of Directors for approval and/or for reconsideration prior to its further proposal to the shareholder meeting for its approval, whatever the case may be. 3. Review and select qualified candidates to fill the senior management positions from the level of the Managing Director or above in the event of a vacancy thereof. 4. Screen the name list of qualified candidates for the members of the Sub-Committees in the event of a vacancy thereof and propose to the Board of Directors for their consideration and appointment. 5. Review and set necessary and appropriate remuneration and benefit schemes, both in monetary and non-monetary terms, that are a suitable incentive for attracting and retaining the members of the Board of Directors and the members of the Sub-Committees and/or to propose such remuneration and benefit schemes to the shareholder meeting for its approval. 6. Prepare rules and policies on remuneration of the Board of Directors, the Audit Committee, and the Compensation and Nominating Committee itself to submit to the Board of Directors and/or the shareholder meeting for its approval, whatever the case may be. The consideration criteria shall be based on the Company s operational performance, the scope of duty and responsibility of each of the committee, as well as experience, knowledge, and responsibility of each of the director and committee member in comparison to other companies in the same industry. 7. Review and set necessary and appropriate remuneration and benefit schemes, both in monetary and non-monetary terms that are a suitable incentive for attracting and retaining the senior management from the level of the Managing Director or above. The consideration criteria shall be based on assessments of their work dedication and the Company s operational performance. 8. Provide explanations and answers to the shareholders questions on director remunerations in the shareholder meetings. 9. Undertake any other tasks as may be assigned by the Board of Directors and approved by the Compensation and Nominating Committee. Remuneration for the Compensation and Nominating Committee The Board of Directors shall set the Committee s remuneration and propose to the shareholders meeting for its approval. 3. Company Secretary Roles, Duties and Responsibilities of the Company Secretary 1. Undertake its duty with responsibility, cautiousness, honesty, and in accordance with applicable laws and regulations. 2. Manage and coordinate the meeting of the Board of Directors, the meeting of other Board-appointed committees, and the shareholders meeting. It also oversees that actions are taken in compliance with the Company s objectives and regulations, the Board s resolutions, the resolutions of the shareholders meeting, as well as in accordance with applicable laws and regulations. 3. Prepare, keep, and safeguard the Company s documents such as director record, notification of meeting invitation, minutes of the Board of Director meeting, minutes of the shareholders meeting, annual report etc. 4. Keep and safeguard the report on the interest of directors and executives, and submit such report to the Chairman of the Board and the Chairman of the Audit Committee within 7 business days from the date of its receipt. 5. Other actions prescribed by the Capital Market Supervisory Board. Corporate Governance for the Company s Subsidiaries and Affiliates The Company has seconded its corporate representatives to be the directors, executives and executives with controlling authority in its subsidiaries and affiliates in accordance with its proportionate shareholding quota, to oversee business operations of its subsidiaries and affiliates. (See Annex 1.3 : Shareholding Structure of the Company s Group and Annex 2 : Detailed information on directors of the Company s subsidiaries) The Directors and executives of the Company can take the assigned positions as directors, executives and executives with controlling authority in the Company s subsidiaries and affiliates, subject to conditions as prescribed by the regulations of the Securities and Exchange Commission, Stock Exchange of Thailand, and other relevant authorities, as well as any appropriate approvals from the Board of Directors. The persons who are assigned to be directors, executives, and executives with controlling authority in the Company s subsidiaries and affiliates shall have the duty to best serve those entities. In addition, for any resolution or any vote casting on important matters of the Company s subsidiaries and affiliates, which require the Company s Board of Directors approval, if required to be undertaken by such subsidiaries and affiliates, the assigned Directors and executives must seek appropriate approval from the Company s Board of Directors prior to the making of such resolution or casting of any such vote on those important matters. In the case of the Company s subsidiaries, the assigned Directors and executives must ensure that the subsidiaries collect and safeguard their information and accounting records for review and compilation that may be required for the purpose of the preparation of the Company s consolidated financial statements, as well as to oversee that such subsidiaries have relevant regulations, which are compatible with the Company s practices, to monitor related party transactions. 66 / 67

39 Good Corporate Governance Good Corporate Governance Monitoring of Internal Information Usage The Company pays attention to the monitoring of internal information usage to be in accordance with the principles of good corporate governance. The Company abides by the principles of good governance and business honesty. In order to assure that its security investors shall promptly and equitably receive reliable information, the Company prescribes its governance rules for the monitoring of internal information usage and for trading of the Company s shares by its Directors, executives and employees, to be in line with applicable securities laws, while focusing on the transparency of its business activities. These rules can be summarized as follows: Its Directors, Executives and employees at all levels must not make use of the Company s internal information that may significantly impact the movement of the Company s share prices, for their own benefits or the benefits of others, before the revelation of such information to the public or to the Stock Exchange of Thailand. These individuals are prohibited from trading of the Company s securities, for a period of 30 days prior to the public disclosure of the Company s financial statements and at least 24 hours after the public revelation of any such statements. Its Directors and Executives are required to report on their holding of the Company s securities, as well as on the holding thereof of their spouse and underage children to the Securities and Exchange Commission. The Company maintains strict rules on safeguarding its computer system and its information to protect against any possible leakage of material internal information due to any misappropriation committed by its Directors, Executives and employees. The Company also prescribes a severe punishment for such misappropriation, of which the consequence could be a disciplinary action and a legal penalty. Internal Controls The Company s Board of Directors and Executives are responsible for the efficiency of the Company s internal control system and recognize the importance of its continuity, while focusing on the adequacy and business appropriateness of such system to further enhance the Company s operation efficiency and effectiveness. The Company promotes the accountability of its accounting system and financial reports. It also strictly complies with laws, rules, and regulations applicable to the Company s business operations. The Company s Board of Directors assigns the Audit Committee to review the assessment of the Company s internal controls. The Board meeting quarterly sets an important agenda items for the Audit Committee to report its views on the Company s internal controls, and to provide its recommendations to the management on any appropriate revision and/or improvement thereof. Each year the Audit Committee meets, on a quarterly basis, with the Company s external and internal auditors to follow up and query the status of the Company s internal controls. During the year the Internal Audit Department performed system reviews and control assessments on building management, general purchases, and overall controls of the information system, and reported that there were no significant deficiencies on the Company s internal controls system; improvements are merely required for some issues such as having an operational policy be made in writing and governed by sufficient and suitable control systems. The responsible division has already taking appropriate action. The Company s Board of Directors and the Audit Committee mutually agree that at present, the Company s internal control system is adequate and appropriate for its business operations. Auditor Fees Audit Fee The Company and its subsidiaries paid the following audit fees to KPMG Phoomchai Audit Ltd. Annual Audit Fee Audit Fee for the Financial Statements of the Company 900, ,000 1,000, Audit fee for Annual and Quarterly Consolidated 2,800,000 3,100,000 3,300,000 Financial Statements of the Company and Financial Statements of its 17 Subsidiaries* Total Audit Fees for the Company and All Its Subsidiaries 3,700,000 4,000,000 4,300,000 *In year 2013, the company has set up the new subsidiary company which has the auditor fee of Bath 100,000. KPMG Phoomchai Audit Ltd., the Company s auditor has no relationship, nor any interests in the Company, its subsidiaries, or with the Company s executives, its major shareholders or any related parties thereof. Other Non-Audit Fees Other Non-Audit Fees Service Fee for IFRS converging 390, , , Other Expenses - 85,550 37,000 Compliance with other Principles of Good Corporate Governance In order to clearly segregate duty and responsibility between the Board and the management, the Chairman of the Board and the President shall not be the same person. The Chairman of the Board has his duty to oversee activities of the Board of Directors which supervise and govern the management s business operations. The President is the chief of the management team who manages corporate activities according to the policy guidelines and targets approved by the Board of Directors. The fact that the Chairman of the Board and the President is not the same person also creates a check-and-balance mechanism and allows the Chairman of the Board to have his independency in undertaking his duty. The Board of Directors also comprises a lesser number of executive member than the non-executive members, in a proportionate ratio of 1:8 for the total sum of 9 board members. The very minor number of an executive members in the Board of Directors can assure the check-and-balance mechanism, as well as guarantee that the Board will not be controlled by the management. 68 / 69

40 Good Corporate Governance Summary of the Board of Directors Meeting Attendance for 2013 Meeting Attendance / Total Number of Meetings Director Names Board of Audit Compensation & Executive Directors Commitee Nominating Committee Committee 1. Mr. Wanchai Sarathulthat 6 / 6-2 / 2-2. Mr. Panot Sirivadhanabhakdi 6 / 6-2 / 2 11 / Mr. Thapana Sirivadhanabhakdi 4 / / Mr. Chotiphat Bijananda 3 / Mr. Sithichai Chaikriangkrai 6 / / Mr. Weerawong Chittmittrapap 6 / 6 4 / Mr. Chainoi Puankosoom 6 / 6 4 / 4 2 / 2-8. Mr. Udom Puasakul 6 / 6 4 / Mr. Thanapol Sirithanachai 6 / / 11 Remarks: 1. Mr. Somboon Wasinchutchawal resigned from his directorship at the end of his term in the Annual General Meeting of the Shareholders 2013 (No. 20) on 23rd April Mr. Chotiphat Bijananda was appointed as a Director to replace Mr. Somboon Wasinchutchawal as per the resolution of the Annual General Meeting of the Shareholders 2013 (No. 20) on 23rd April Mr. Thapana Sirivadhanabhakdi was appointed as a Director as per the resolution of the Annual General Meeting of the Shareholders 2013 (No. 20) on 23rd April Holding of the Company s Securities by Directors and Executives Number of shares held as of 27 th December 2013 Director 1. Mr. Wanchai Sarathulthat - 2. Mr. Panot Sirivadhanabhakdi - 3. Mr. Thapana Sirivadhanabhakdi - 4 Mr. Chotiphat Bijananda - 5. Mr. Sithichai Chaikriangkrai - 6. Mr. Weerawong Chittmittrapap - 7. Mr. Chainoi Puankosoom - 8. Mr. Udom Puasakul - 9. Mr. Thanapol Sirithanachai - Executives 1. Mr. Thanapol Sirithanachai - 2. Mr. Somboon Wasinchutchawal - 3. Mr. Saenphin Sukhee - 4. Mr. Khumpol Poonsonee - 5. Mr. Withawat Koottatep - Internal Controls and Risk Management Internal Controls and Risk Management The Company recognizes the importance of internal controls; the Company s Board of Directors and the executives in charge of the internal control efficiency are constantly aware that an internal control system is essential to an effective business operation. It is the Company s policy to emphasize on the adequacy of internal controls and the appropriateness of such a system in the overall operational areas, aiming to monitor the efficiency and effectiveness of its operations and the reliability of its accounting system and financial reporting, as well as to act in strict compliance with applicable laws, rules, and regulations that govern the Company s business conducts. The Company s Board of Directors thus assigned the Audit Committee to review the assessment results of the Company s internal control system. In each quarterly board meeting, an agenda is set to regularly allow the Audit Committee to present to the meeting its opinions on the Company s internal control system, and to provide its recommendations to the management on such aspects in order to properly remedy and/or improve the internal control system. The Company arranges to have regular compliance reviews for implementation of effective internal control, and consistently monitors according to the audit work plan of the Internal Audit Office. The review outcomes are directly reported to the Audit Committee, allowing the internal auditors to perform their role effectively and independently. The Audit Committee meets with external and internal auditors on a quarterly basis, to follow up and discuss the Company s internal control system. During the year, the Internal Audit Office inspected internal systems and internal controls of issues such as hiring of construction contractors, information system controls, and petty cash audit. The inspections and audits reported no material error or irregularity except for some matters that required remedial actions such as a need for putting operational policies in writing and having sufficient control procedures therein. The responsible business unit is in the process of taking relevant actions. The Company also monitors that the involved business units are taking appropriate actions to amend or remedy errors or irregularities related to such internal controls. On the legal compliance aspect, the Company implements measures to assure that its business operations are conducted accordingly with applicable laws in order to mitigate any potential legal risk and preserve corporate reputation. 70 / 71

41 Related Parties Transactions Associates Related Parties Transactions 1. Related parties transactions List of associated companies in which the Company and subsidiaries had some transactions with: Name of entities 1. Gold Property Fund (Lease Hold) 33 - A subsidiary leased out land and building to - Another indirect subsidiary leased back land and building to operates service apartment and hotel by paying fixed amount rental fee and variable fee on operating results 2. North Sathorn Hotel Co., Ltd A subsidiary leased out land to - The Company provided construction management and accounting and financing services - The Company provided financial support on shareholding percentage basic 3. Baan Jearanai Co., Ltd The Company provided financial support on shareholding percentage basic List of related companies in which the Company and subsidiaries had some transactions with: Name of entities % of shareholding Nature of relationships Nature of transactions 1. Univentures PLC Major shareholders, and directors Provided management services are representatives of the Company 2. Siam Holding Limited Shareholder of a subsidiary Provided financial support on shareholding percentage basic 3. Ascott International Management Related company of one of Provided service apartment and hotel (Thailand) Limited shareholder of a subsidiary management service 4. The South East Insurance PLC Common director Insurance service 5. South East Capital Co., Ltd. Common director Car rental service Nature of transactions 6. T.C.C. Technology Co., Ltd. Common director Provided computer technology service and computer equipment rental Significant transactions for the year ended 31 December with related parties were as follows: Year ended 31 December Associates Rental income Management fee income Dividend income - - Interest income Rental expense Related companies Rental and service income Management fee expense Central charge expense Professional fee expense Interest expense Other expense Balances as at 31 December with related parties were as follows: Amounts due from related parties (current) Associate North Sathorn Hotel Co., Ltd Short-term loans to related parties (including interest receivable) Associate North Sathorn Hotel Co., Ltd Movements during the years ended 31 December of short-term loans to related parties were as follows: Short-term loans to related parties (including interest receivable) At 1 January Increase Transfer to long-term loans to related parties (271.31) Related Parties Transactions At 31 December Unit : Million Baht Unit : Million Baht Unit : Million Baht 72 / 73

42 Related Parties Transactions Related Parties Transactions Long-term loans to related parties (including interest receivable) Unit : Million Baht Associates North Sathorn Hotel Co., Ltd Baan Jearanai Co., Ltd Total Less allowance for doubtful accounts (117.53) (20.94) Net Bad and doubtful debt expenses for the year Movements during the years ended 31 December of long-term loans to related parties were as follows: Long-term loans to related parties (including interest receivable) At 1 January Transfer from short-term loans to related parties At 31 December Trade account payable Associate Gold Property Fund (Lease Hold) Current portion of deferred income Associate North Sathorn Hotel Co., Ltd Accrued expenses Related party Ascott International Management (Thailand) Limited Long-term loans from shareholder of subsidiary Siam Holding Limited Unit : Million Baht Unit : Million Baht Movements during the years ended 31 December of long-term loans from shareholder of subsidiary were as follows: Unit : Million Baht Long-term loans from shareholder of subsidiary At 1 January Increase At 31 December Deferred income Associate North Sathorn Hotel Co., Ltd Interest payable Related party Siam Holding Limited Summary of Significant Connected Transactions Significant agreements with related parties (a) During 2007, Golden Land (Mayfair) Co., Ltd., a wholly-owned subsidiary of the Company, entered into a lease agreement with Gold Property Fund (Lease Hold) (the Fund ), an associated company in which the Company holds 33% of the Fund Units. The agreement provided that the Fund would lease the land and building of the Mayfair Marriott Project (the Project ), a residential project and related business, from the subsidiary for 30 years from 8 May 2007 to 7 May 2037 for a sum of Baht 1,700 million, payable on commencement of the lease, and an additional sum of Baht 259 million, also payable on commencement of the lease, in respect of an extension of the lease for an additional 30 years. The leasehold rights were valued by two independent valuers at Baht 2,200 million and Baht 2,351 million. The Fund has, under the terms of the lease, options to purchase the leased assets for Baht 405 million at the completion of the first 30 years of the lease term or Baht 984 million upon completion of the second 30 year term. The subsidiary had given guarantees to the Fund in respect of minimum rental income to be received by the Fund from the Project amounting to Baht 107 million for the remainder of 2007 and Baht 164 million per annum for the four years of 2008 to 2011 inclusive. The subsidiary has mortgaged the leased assets and pledged its 100% shareholding in Grand Mayfair Co., Ltd. to the Fund as collateral for its performance under the agreement. The Company has also given guarantees to the Fund in this respect. The subsidiary accounted for the above transaction as a sale of the Mayfair Marriott Project to the Fund for the total consideration received from the Fund and recorded a gain of Baht 1,203 million against the book value of the Project and related expenses in the financial statements for the year ended 31 December In addition, the Group recorded 67% of this gain in the consolidated statement of comprehensive income and the remaining 33% was set off against the carrying value of the Fund in the consolidated statement of 74 / 75

43 Related Parties Transactions (b) (c) financial position. The 33% of the gain which has been deferred will only be recognised in the consolidated statement of comprehensive income upon disposal of the Company s 33% interest in the Fund Units. During 2007, Grand Mayfair Co., Ltd., a whollyowned subsidiary of Golden Land (Mayfair) Co., Ltd., entered into an agreement with Gold Property Fund (Lease Hold) to sub-lease the land and buildings and to lease furniture and equipment of the Mayfair Marriott Project (See (a) above) for approximately 16 years from 8 May 2007 to 15 March 2023 unless the Fund exercises its right to renew the agreement for an additional 10 years. The rental payable to the Fund under the agreement comprises a fixed monthly sum of Baht 4 million and a variable monthly sum to be determined based on the operating results of Grand Mayfair Co., Ltd. During 2007, the Company entered into a joint venture agreement with a third party to develop the North Sathorn Hotel Project. A joint venture company, North Sathorn Hotel Co., Ltd. ( NSH ), was formed to carry out the Project, in which the Company holds 20% and the third party holds 80% of the equity. In August 2007, North Sathorn Realty Co., Ltd. ( NSR ) sub-leased the Hotel Plot to NSH under two sub-lease agreements. The sub-leases contain the same terms and conditions as the head-leases except that in addition to the annual payments to be made by NSH to NSR as lessor, which are the same amounts as have to be paid under the head-lease by NSR to the Crown Property Bureau, the first sublease agreement required NSH to make an Initial Payment of Baht 989 million to NSR in consideration of NSR agreeing to sub-lease the land to NSH. The Crown Property Bureau has acknowledged and accepted the conditions of the sub-leases to NSH. The Initial Payment was received by NSR. NSR will amortise the income, including the Initial Payment referred to above, and costs relating to the lease and sub-lease over the term of the lease in accordance with its accounting policy for leasehold interests in land. Opinion of Audit Committee regarding to Related Transactions The Company s Audit Committee is in charge of reviewing and monitoring the process, practice, rules and regulations of the company in order to consider and approve the transactions and disclosure in compliance with the rules and regulations of the Stock Exchange of Thailand or the Securities and Exchange Commission. The disclosed transactions conducted between them was considered as those conducted in the normal course of business and by no means benefited any concerned party nor caused any conflicts whatsoever. The pertinent information was sufficiently released. Company s Policy in Relation to the Connected Transactions A related party transaction must be considered at a meeting of the Board of Directors attended by Audit Committee and approved at a shareholders meeting depending upon the case. The Board of Directors or those authorized by it may not approve any transaction with its members or parties with potential conflicts of interests with the company or its subsidiaries. It must also be in compliance with laws on securities and stock exchange, regulations, notifications, orders and requirements of the Stock Exchange of Thailand and the requirements pursuant to disclosure of related party transactions and the acquisition and disposal of assets. Provided that the company is to make related party transactions in the future, it will be considered by basing on necessity and accountability for the utmost benefit and interest of the company. Appropriateness as to the cost and accountability of the transactions are to be inspected and commented by the company s audit committee, auditors or independent experts, as the case may be. Report of the Board of Directors Responsibilities for Financial Statements Report of the Board of Directors Responsibilities for Financial Statements The Board of Directors is responsible for the financial statements of Golden Land Property Development PLC and the consolidated financial statements of and its subsidiaries, including the financial information presented in this annual report. The aforementioned financial statements have been prepared in accordance with generally accepted accounting principles, using careful judgment and the best estimation. Important information is adequately and transparency disclosed in the notes to financial statements for the Company shareholders and investors. The Board of Directors has provided and maintained the appropriate and efficient internal control system and risk management system to ensure that accounting records are accurate, reliable and adequate to protect its assets and uncover any weakness that may be presented in order to prevent fraud or materially irregular operations. In this regard, the Board has appointed an Audit Committee consisting of independent directors to be responsible for reviewing the accounting policy, financial reports, internal controls, internal audit and risk management system. The Audit Committee has also reviewed a disclosure of related party transactions. All their comments on these issues have included in the Audit Committee Report, which presented in this annual report. The financial statements of the Company and the consolidated financial statements of the Company and its subsidiaries have been examined by an external auditor, KPMG Phoomchai Audit Ltd. To conduct the audits and express an opinion in accordance with generally accepted auditing standards, the auditor was provided with all of the Company s records and related data as requested. The auditor s opinion is presented in the auditor s report as part of this annual report. The Board of Directors is of the opinion that the overall internal control system of the Company has functioned at a satisfactory level and rendered credibility and reliability to the financial statements of and the consolidated financial statements of Golden Land Property Development PLC and its subsidiaries for the year ended December 31, The Board of Directors also believes that all these financial statements have been prepared in accordance with generally accepted accounting principles and related regulations. Mr. Wanchai Sarathulthat Chairman of the Board 76 / 77

44 General Information of The Subsidiaries Companies General Information of The Subsidiaries Companies General Information of The Subsidiaries Companies 5. Golden Land (Mayfair) Co., Ltd. 7. Ritz Village Co., Ltd. 1. Golden Land Residence Co., Ltd. Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 50,000,000 Baht No. of Issued Shares : 5,000,000 Shares Par Value : 10 Baht Paid-up Capital : 50,000,000 Baht Percent of Shareholding : 100% 2. Baan-chang Estate Co., Ltd. Type of Business : Property Development Head Office : 130/206 Moo 5, Sukhumvit Road, Km. 195 Tambol Baan-chang, Amphur Baan-chang, Rayong Tel. : (038) Fax : (038) Registered Capital : 30,000,000 Baht No. of Issued Shares : 300,000 Shares Par Value : 100 Baht Paid-up Capital : 30,000,000 Baht Percent of Shareholding : 100% 3. Narayana Pavilion Co., Ltd. Type of Business : Property Development and Office Building Head Office : 8th Floor, Goldenland Building, 153/3 Soi Mahardlekluang 1, Rajdamri Road, Lumpini, Pathumwan, Bangkok Tel. : Fax : Registered Capital : 475,000,000 Baht No. of Issued Shares : 4,750,000 Shares Par Value : 100 Baht Paid-up Capital : 475,000,000 Baht Percent of Shareholding : 100% 4. United Homes Co., Ltd. Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 550,000,000 Baht No. of Issued Shares : 55,000,000 Shares Par Value : 10 Baht Paid-up Capital : 550,000,000 Baht Percent of Shareholding : 100% Type of Business : Investment Holding Head Office : Mayfair Marriott Executive Apartment Building, 60 Soi Langsuan, Lumpini, Pathumwan, Bangkok Tel. : Fax : Registered Capital : 11,000,000 Baht No. of Issued Shares : 1,100,000 Shares Par Value : 10 Baht Paid-up Capital : 11,000,000 Baht Percent of Shareholding : 100% 6. North Sathorn Realty Co., Ltd. Type of Business : Property Development and Office Building Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 638,600,000 Baht No. of Issued Shares : 63,860,000 Shares Par Value : 10 Baht Paid-up Capital : 638,600,000 Baht Percent of Shareholding : 100% Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 100,000,000 Baht No. of Issued Shares : 10,000,000 Shares Par Value : 10 Baht Paid-up Capital : 100,000,000 Baht Percent of Shareholding : 100% 8. Golden Land Polo Ltd. Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 1,000,000 Baht No. of Issued Shares : 100,000 Shares Par Value : 10 Baht Paid-up Capital : 1,000,000 Baht Percent of Shareholding : 100% 78 / 79

45 General Information of The Subsidiaries Companies General Information of The Subsidiaries Companies 9. Grand Paradise Property Co., Ltd. 11. Golden Habitation Co., Ltd. 13. Sathorn Supsin Co., Ltd. 15. MSGL Property Co., Ltd. Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 1,000,000 Baht No. of Issued Shares : 100,000 Shares Par Value : 10 Baht Paid-up Capital : 1,000,000 Baht Percent of Shareholding : 100% Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 5,000,000 Baht No. of Issued Shares : 500,000 Shares Par Value : 10 Baht Paid-up Capital : 5,000,000 Baht Percent of Shareholding : 100% Type of Business : Residential Building for Rent Head Office : 187 South Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 245,000,000 Baht No. of Issued Shares : 24,500,000 Shares Par Value : 10 Baht Paid-up Capital : 245,000,000 Baht Percent of Shareholding : 60% Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 100,000 Baht No. of Issued Shares : 10,000 Shares Par Value : 10 Baht Paid-up Capital : 100,000 Baht Percent of Shareholding : 100% 10. Golden Property Services Co., Ltd. Type of Business : Property Development Managements Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 1,000,000 Baht No. of Issued Shares : 100,000 Shares Par Value : 10 Baht Paid-up Capital : 1,000,000 Baht Percent of Shareholding : 100% 12. Sathorn Thong Co., Ltd. Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 220,000,000 Baht No. of Issued Shares : 22,000,000 Shares Par Value : 10 Baht Paid-up Capital : 154,000,000 Baht (Currently paid-up capital was 70% of par value) Percent of Shareholding : 100% 14. Walker Homes Co., Ltd. Type of Business : Property Development Head Office : 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 1,000,000 Baht No. of Issued Shares : 100,000 Shares Par Value : 10 Baht Paid-up Capital : 1,000,000 Baht Percent of Shareholding : 50% Remark: and 50% held by Narayana Pavilion Co., Ltd. Remark : indirectly held through Golden Land Polo Ltd. 16. Grand Mayfair Co., Ltd. Type of Business : Residential Building for Rent Head Office : 60 Soi Langsuan, Lumpini, Pathumwan, Bangkok Tel. : Fax : Registered Capital : 15,000,000 Baht No. of Issued Shares : 1,500,000 Shares Par Value : 10 Baht Paid-up Capital : 12,020,000 Baht Percent of Shareholding : 100% Remark : indirectly held through Golden Land (Mayfair) Co., Ltd. 80 / 81

46 General Information of The Subsidiaries Companies 17. North Sathorn Hotel Co., Ltd. Type of Business : Property Development Head Office : 106 North Sathorn Rd., Silom, Bangrak, Bangkok Tel. : Fax : Registered Capital : 1,100,000,000 Baht No. of Issued Shares : 11,000,000 Shares Par Value : 100 Baht Paid-up Capital : 1,100,000,000 Baht Percent of Shareholding : 20% 18. Baan Jearanai Co., Ltd. 19. Gold Property Fund Type of Business : Investment in Property for Sale or Rent Head Office : Kasikorn Asset Management Co., Ltd. 6th Floor, Kasikornbank Building, 400/22 Phahon Yothin Avenue, Samsen Nai, Phaya Thai, Bangkok Tel. : Fax : Registered Capital : 2,060,000,000 Baht No. of Issued Shares : 206,000,000 Shares Par Value : 10 Baht Paid-up Capital : 2,060,000,000 Baht Percent of Shareholding : 33% Type of Business : Property Development Head Office : 8th Floor, Goldenland Building, 153/3 Soi Mahardlekluang 1, Rajdamri Road, Lumpini, Pathumwan, Bangkok Tel. : Fax : Registered Capital : 20,000,000 Baht No. of Issued Shares : 2,000,000 Shares Par Value : 10 Baht Paid-up Capital : 20,000,000 Baht Percent of Shareholding : 50%

47 36th Floor, Sathorn Square Office Tower, 98 North Sathorn Road, Silom, Bangrak, Bangkok Thailand T F