Mjd 09

Leading Developerin High End Condominiums

Annual Report 2009√“¬ß“πª√–®”ªï 2552

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Complete Project

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Annual Report 2009

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MESSAGE FROM THE CHAIRMAN

Even the economic fluctuation throughout the year 2010, especially for the first half of the year that there were not only

internal economic problem, but also political turmoil, and continuous economic downturn global wide. Such negative

factors, inevitably haul down real estate industry as a whole. However, the atmosphere is apparently picking up in the

second half of the year revealing a significant growth of the industry’s revenue which is the result from entrepreneurs’

adaptation as well as the Government’s economic stimulus measure to revive the country’s economy.

Major Development Public Co., Ltd. (MJD) has been facing the economic fluctuations; however; it has adjusted the strategy

and developed its products in order to continually respond to consumer’s needs. A deliberation concern in the company’s

good governance, the adaptive operation to respond to dynamic situations, as well as the transparency management,

are keeping the company able to maintain its satisfying performance. In 2010, MJD achieved the total revenue recognition

at Baht 2,997.86 million, or 12.84% growth of the same period last year. Perceived revenue recognition from 9 projects

Fullerton Sukhumvit, Manhattan Chidlom, Watermark Chaopraya River Tower A and Tower B, Wind Sukhumvit 23, Wind

Ratchayothin, Mykonos Hua Hin, Aguston Sukhumvit 22, and Marrakesh Hua Hin Residences, yield a net profit of Baht

406.61 million with backlog at the end of the year for over Baht 4,170.52 million. Along with interim dividend of the first

6 month of 2010 that can be paid at Baht 0.15 per share, besides of the existing projects, more housing units of Mykonos

Hua Hin and Wind Sukhumvit 23 are staring to transfer to our customers which is regarded as another step of success

that the company has committed. It is furthermore growing constantly by opening up another project namely Collezio

Sathorn-Pipat which also has received positive feedback from consumers.

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Annual Report 2009

Business overview for the year 2010: From the reviving economy that creates more confidence feeling to Thai and

international customers; unless a wide area disruption from political impact; MJD is now ready to move on to more

new projects. According to the plan, it is expected to launch at least 2-3 projects to drive the company to a sustainable

growth. A number of projects - Reflection Jomtien beach Pattaya, Royce Private Residences, and Collezio Sathorn-

Pipatz - are anticipated to contribute to the income increase which ensures the positive revenue level and continuous

growth of the company. We are also convinced that our current and new projects would receive positive feedback from

consumers with ongoing sales in accordance to the real estate direction which is believed to be growing well in the

year 2010.

Moreover, in the year 2010, MJD is reaching its 11th year of business running. Experiences from over 10 years have

been accumulating and forming into professionalism, business integrity, well-developed operation system with

international standard, good governance, management transparency, and efficient audit that can create trustworthiness.

Our quality projects with growing performance is the proof to our determination to develop the quality in order to offer

the best products to customers for the stable and sustainable growth of the company and fulfill our vision to be a

leading real estate company of the country.

Lastly, on behalf of Major Development Public Co., Ltd. and Board of director, we would like to thank you, shareholders,

investors, customers, financial institutes, as well as all employees for your continuous support. The Company is

committing to develop quality projects, create good reputation, best benefit, and maintain fairness to all parties and all

stakeholders that we have always been holding in mind.

Mr. Chumroen Poolvoralaks

Chairman of the Board of Directors

Major Development Public Company Limited

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Annual Report 2009

Ready to move in

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AUDIT COMMITTEE REPORT

Audit Committee of Major Development Public Company Limited comprised three independent persons as follows:

1. Mr. Chanin Roongsang Chairman of the Audit Committee Member

2. Mr. Smith Banomyong Audit Committee Member

3. Mr. Sanguankiat Lewmanomont Audit Committee Member

The Audit Committee had completed its duties and responsibilities according to audit committee regulations and as assigned

by the Board of Directors. In 2009, the Audit Committee held 9 meetings. It also invited the management, heads of various

departments, internal audit department and authorized auditor to relevant meetings to discuss and consider important issues

related to the Company’s activities. The Audit Committee provided comments and recommendations from an independent view

points as follows:

1. Reviewed the Company’s financial reports quarterly and annually and commented on the said report by inviting the

Company’s authorised auditor to every meetings to clarify and comments on important issues. The Audit Committee had the

opinion that the Company’s financial statement had been produced according to the general accounting standards and to the

official rules and regulations. The authorised auditor did not report any deficiencies in the Company’s financial statement.

2. Reviewed the Company’s transactions with related business or report of any Conflict of Interest that there were full,

correct, appropriate and fair disclosures.

3. Reviewed the appropriateness of the Company’s internal audit control system and oversee the internal audit activities

by approving the audit plan. Acknowledged auditing report and commented on good internal control system, including providing

guidelines for improvement follow ups so that the internal audit could be conducted appropriately and efficiently.

4. Reviewed the Company’s activities according to the regulations of the Securities and Exchange Commission and

relevant business regulations, which the Audit Committee had the opinion that the Company had conducted its businesses

according to the relevant laws appropriately.

5. Considered seek and selected the authorised auditor for 2009 to propose to the Company’s Board of Directors and

shareholders’ meeting for approval.

6. Considered and placed important emphasis on the audit activities that met good auditing practice of the Stock

Exchange of Thailand that would create confidence among shareholders, investors and all relevant persons.

Mr. Chanin Roongsang Chairman of the Audit Committee Member

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Annual Report 2009

FINANCIAL HIGHLIGHTS

Unit : Million Baht

2009 2008 2007

Financial Highlights

Total Assets 8,307.98 8,078.20 5,327.06

Total Liabilities 5,911.79 5,878.61 3,280.66

Shareholders Equity 2,396.20 2,199.59 2,046.39

Revenue from condominiums sold 2,976.53 2,636.07 2,198.65

Total Revenues 2,997.86 2,656.63 2,215.94

Gross Profit 893.04 825.30 717.84

Net Profit 406.61 445.14 279.72

Basic Earning per Share (Baht) 0.58 0.64 0.54

Basic Earning per Share (Baht) (Fully Diluted) 0.58 0.64 0.40

Financial Ratio

Current Ratio 1.77 2.16 2.63

Quick Ratio 0.49 0.56 0.83

Debt to Equity Ratio 2.47 2.67 1.60

Intevest Bearing Debt to Equity Ratio 1.68 1.73 1.04

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Unit : Million Baht

2009 2008

Projects Contractual Recoqnized Backlog Contractual Recoqnized Backlog Sale Revenue Sale Revenue

Fullerton Sukhumvit (FLT) 58.86 58.86 - - 13.22 -

Manhattan Chidlom (MHT) 89.59 89.59 - 71.41 89.19 -

Watermark Chaophraya River Tower A (WTM A) 52.76 471.95 155.68 423.76 1,025.58 574.86

Watermark Chaophraya River Tower B (WTM B) 108.19 115.96 39.44 146.94 595.12 47.22

Wind Sukhumvit 23 (Wind_23) 209.37 372.18 128.63 178.25 382.04 291.44

Wind Ratchayothin (Wind_RYT) 297.27 761.13 365.07 507.86 294.92 828.93

Aguston Sukhumvit 22 (AGT) 92.13 744.41 117.59 206.59 - 769.88

Mykonos Hua Hin (MKN) 47.41 190.26 6.23 25.90 235.99 149.15

Reflection Jomtien Beach Pattaya (RFT) 28.93 - 1,299.04 1,270.10 - 1,270.10

Marrakesh Hua Hin Residences (MRK) 250.98 172.19 956.78 877.98 - 877.98

Royce Private Residences * (Royce) 261.76 - 861.75 599.99 - 599.99

Collezio Sathorn-Pipat (COL) 240.31 - 240.31 - - -

Total 1,737.57 2,976.53 4,170.52 4,308.79 2,636.07 5,409.55

Remork : * Developed by MJAI Development Co.,Ltd.

Presales, 2009 was another great year for the Company in providing the right products for the customers. The presales value in

condominium units amounted to Baht 1,737.57 million from total 12 condominium projects, a decreased of Baht 2,571.22

million from 2008 or 59.67%. The reason for decreased of presales in 2009, besides the fluctuation of Global economy and

Thailand business climate, there also was the other reason that in 2009 the Company launched only the new one project

namely Collezio Sathorn-Pipat compare with the 3 projects that were launched in the previous year. However in 2010, the

Company plan to launch the new 2 - 3 projects, that could increase the presales value.

Presales

Contractval Sales2009 / 1,737.57 MB.

WTM A 3%

WTM B 6%

Wind_23 12%

Wind_RYT 17%

MKN 3%

MHT 5%

FLT 3%

AGT 5%

RFT 2%

MRK 15%

COL 14%

Royce* 15%

2008 / 4,308.79 MB.

WTM A 10%

WTM B 3%

Wind_23 4%

Wind_RYT 12%

MKN 1%

MHT 2%

AGT 5%

RFT 29%

MRK 20%

Royce* 14%

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Annual Report 2009

Revenue Recognition In 2009, the Company had total revenue of Baht 2,997.86 million, an increase of Baht 340.46 million from

2008 or 12.92%, 99.29% of total revenue in 2009 was realised revenue from the sales of condominium units. When considering

the revenue from the sales of condominium units in 2009 comprising 7 existing projects from last year: Fullerton Sukhumvit -

Baht 58.86 million; Watermark Chaophraya River Tower A - Baht 471.95 million; Manhattan Chidlom - Baht 89.59 million;

Watermark Chaophraya River Tower B - Baht 115.96 million and Wind Sukhumvit 23 - Baht 372.18 million, Mykonos Hua Hin

- Baht 190.26 million and Wind Ratchayothin - Baht 761.13 million and two new projects from this year: Aguston Sukhumvit

22 - Baht 744.41 million and Marrakesh Hua Hin Residences.

BacklogIn 2009, the Company had unrealised revenue (backlog) of Baht 4,170.25 million, a decrease from 2008 of Baht 1,239.03

million or 22.90%, that because the Company recognize revenue under the percentage-of-completion method, the percentage

of completion is determined based on the proportion of the actual cost already incurred up to the end of the period to the total

anticipated development costs to be incurred to completion, excluding the cost of land. As a result of the progress of construction

in 2009 from many projects were almost completed that the company recognized revenue in the higher proportion than the

presale value. Nevertheless, the Company was unrecognized revenue from sales of condominium units from 10 projects, which

spread the risk and benefited the Company’s growth as it lessened the risk from future recognized revenue.

Backlog2009 / 4,170.52 MB.

WTM A 4%

WTM B 1%

Wind_23 3%

Wind_RYT 9%

MKN 0%

AGT 3%

RFT 31%

MRK 23%

COL 6%

Royce* 20%

2008 / 5,409.55 MB.

WTM A 11%

WTM B 1%

Wind_23 5%

Wind_RYT 15%

MKN 3%

AGT 14%

RFT 24%

MRK 16%

Royce* 11%

Revenue Recognition from the sales of condominium units2009 / 2,976.53 MB.

WTM A 16%

WTM B 4%

Wind_23 12%

Wind_RYT 26%

MKN 6%

MHT 3%

FLT 2%

AGT 25%

MRK 6%

2008 / 2,636.07 MB.

WTM A 39%

WTM B 23%

Wind_23 14%

Wind_RYT 11%

MKN 9%

MHT 3%

FLT 1%

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Gross Profit and Net ProfitIn 2009, the Company had a gross profit from the sales of all projects of Baht 893.04 million, an increase from 2008 of Baht

67.74 million or 8.21%. The Company had a net profit of Baht 406.61 million, a slight decrease from 2008 of Baht 38.55 million

or 8.66%. The considerable increase in gross profit was from the increase in recognized revenue, the reduction of net profit

was from the increased cost in the higher proportion than the increase of the recognized revenue in some projects.

Liquidity Ratio and Debt to Equity Ratio

0 200 400 600 800 1000 0 100 200 300 400 5000 200 400 600 800 1000 0 100 200 300 400 500

Gross Profit

Unit : Million Baht

2009 893.04

2008 825.30

2007 717.84

Net Profit

Unit : Million Baht

2009 406.61

2008 445.16

2007 279.72

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1.0

1.5

2.0

2.5

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1.0

1.5

2.0

2.5

3.0

Current Ratio

Quick Ratio

Debt to Equity Ratio

Interest Bearing Debt to Equity Ratio

2007 2008 2009

Current Ratio

Quick Ratio

2007 2008 2009

Debt to Equity Ratio

Interest Bearing Debt to Equity Ratio

1.77

2.16

2.63

0.490.560.83

2.472.67

1.60 1.681.73

1.04

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Annual Report 2009

Liquidity Ratio and the Appropriateness of the Equity Structure

In 2009, the Company had a current ratio of 1.77 times and the quick ratio of 0.49 times, a slight decrease from previous year.

This was due to the higher increase in current liability than in current asset, that because most of the current liability was the

current portion of long-term project loans and most of the projects were almost completed therefore due date of the long-term

project loans will be valid until 1 year. However after the projects complete and transfer ownership to our customers, the current

portion of long-term project loans will be decreased, the liquidity ratio will be improved. The debt-to-equity ratio decreased from

2.67 times in 2008 to 2.47 times in 2009. The interest bearing debt to equity ratio decreased from 1.73 times in 2008 to 1.68

times in 2009. This was also due to the higher increase in shareholders’ equity than the increase in the Company’s total debt,

since the higher increase in retained earnings than in the Company liabilities. The improvement of these figures reflects the

lower risk and the higher strength of the company.

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Annual Report 2009

Current Project

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1 Mr. Chumroen Poolvoralaks (Age 78) Chairman of the Board of Directors and Chairman of

the Executives Committee

Education and Training

- More than 30 years of experience in real estate business

- DAP Course, Class of 50, on 25 January 2006

Working Experience

- Chairman of the Board of Directors and Chairman of the

Executives, Major Development Public Company Limited

- Director, Major Development Hotels and Resorts Co.,Ltd.

- Director, Major Development Residences Co.,Ltd.

2 Mrs. Prathin Poolvoralaks (Age 67) Vice Chairman of the Board of Directors and Deputy

Chairman of the Executives Committee

Education and Training

- More than 15 years of experience in real estate business

- DAP Course, Class of 50, on 25 January 2006

Working Experience

- Vice Chairman of the Board of Directors and Vice

Chairman of the Executives, Major Development Public

Company Limited

- Director, Major Development Hotels and Resorts Co.,Ltd.

- Director, Major Development Residences Co.,Ltd.

THE BOARD OF DIRECTORS

1 72

3 4 56 8 9

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Annual Report 2009

3 Mr. Suriyon Poolvoralaks (Age 37) Director, Executive Director and Chief Executive Officer

Education and Training - Master of Civil Engineering, Massachusetts Institute of Technology (MIT) - Master of Business Administration (MBA), Depaul University - DAP Course, Class of 50, on 25 January 2006

Working Experience - CEO, Major Development Public Company Limited - Director, Major Development Hotels and Resorts Co.,Ltd. - Director, Major Development Residences Co.,Ltd.

4 Dr. Suriya Poolvoralaks (Age 34) Director, Executive Director and Managing Director Education and Training

Education and Training - Doctor of Philosophy, Economics, University of Southern California (USC) - DAP Course, Class of 59, on 24 October 2006

Working Experience - Managing Director, Major Development Public Company Limited - Director, Major Development Hotels and Resorts Co.,Ltd. - Director, Major Development Residences Co.,Ltd.

5 Miss Petrada Poolvoralaks (Age 43) Director, Executive Director and Executive Vice President

Education and Training - Master of Business Administration (MBA), Illinois State University - DAP Course, Class of 49, on 2 December 2005

Working Experience - EVP-Corporate Development Division, Major Development Public Company Limited - Director, Major Development Hotels and Resorts Co.,Ltd. - Director, Major Development Residences Co.,Ltd.

6 Mrs. Jitradee Poolvoralaks (Age 35) Director, Executive Director and Executive Vice President

Education and Training - BA in Marketing, Faculty of Commerce and Accountancy, Chulalongkorn University - DAP Course, Class of 51, on 22 February 2006

Working Experience - EVP-Marketing Division, Major Development Public Company Limited - Director, Major Development Hotels and Resorts Co.,Ltd. - Director, Major Development Residences Co.,Ltd. - Deputy Managing Director, GC Distribution Co.,Ltd.

7 Mr. Chanin Roongsang (Age 43) Chairman of the Audit Committee Member

Education and Training - MA in Political Science, Kasetsart University - Certificate in Mini MPA, Thammasart University - Certificate in State Budget Management, University of California, Los Angeles (UCLA) - DAP Course, Class of 50, on 25 January 2006

Working Experience - Chairman of the Audit Committee Member, Major Development Public Company Limited - Member of Parliament for Bangkok Metropolitan

8 Mr. Smith Banomyong (Age 37) Audit Committee

Education and Training - Master of Economics, The London School of Economics and Political Science, London, UK - DAP Course, Class of 76, on 7 November 2008

Working Experience - Audit Committee Member, Major Development Public Company Limited - Director, EM Credit Trading, Citibank

9 Mr. Sanguankiat Lewmanomont (Age 35) Audit Committee

Education and Training - MSc in Information Technology, Boston University - Master of Business Administration (MBA), Boston University - DAP Course, Class of 50, on 25 January 2006

Working Experience - Audit Committee Member, Major Development Public Company Limited - Executive Director, Manomont Real Estate Co.,Ltd. - Trade Mark Sub-Committee, Ministry of Commerce - Managing Director, Lewmanomont Law Office Co.,Ltd.

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GENERAL INFORMATION OF THE COMPANY

AND SUBSIDIARY

Thai Name : บริษัทเมเจอร์ดีเวลลอปเม้นท์จำกัด(มหาชน)English Name : Major Development Public Company LimitedType of Business : Real Estate DevelopmentHead Office : 141 Soi Sukhumvit 63 (Ekamai) Sukhumvit Rd., Kwang Klongton Nua, Khet Wattana, Bangkok 10110Registration No. : 0107548000692Telephone : 0-2392-1111Fax : 0-2392-2255

Website : www.majordevelopment.co.thSecurities Depository : Thailand Securities Depository Co.,Ltd.Center 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110, Thailand

Tel: (66 2) 229 2800 Fax: (66 2) 359 1259

Auditor : Ms. Rungnapa Lertsuwankul CPA (Thailand) No.3516 Ernst & Young Office Limited 33rd Fl. Lake Rajada Office Complex Rajadapisek Rd. Klongtoey, Bangkok 10110 Tel: 0 2264 0777 Fax: 0 2264 0789-90

Subsidiary

Registered Percentage of Name & Address Registration No. Type of Business Capital Shareholder

M J A I Development Company Limited 0105550111062 Real Estate 25,000,000 51

141 Soi Sukhumvit 63 (Ekamai) Sukhumvit Rd., Development

Kwang Klongton Nua, Khet Wattana, Bangkok 10110

Tel / Fax : 0-2392-1111 / 0-2392-2255

Major Development Hotels and Resorts Company Limited 0105551063258 Hotel, Resort & 60,000,000 99

141 Soi Sukhumvit 63 (Ekamai) Sukhumvit Rd., Spa


Tel / Fax : 0-2392-1111 / 0-2392-2255

Major Development Residences Company Limited 0105551128686 Hotel, Serviced 100,000,000 99

141 Soi Sukhumvit 63 (Ekamai) Sukhumvit Rd., Apartment


Tel / Fax : 0-2392-1111 / 0-2392-2255

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Annual Report 2009

NATURE OF BUSINESS

Industry Overview

Industry Trend As we all know that the economic recession has made its impact since the 4th quarter of year 2008 from the U.S. financial

crisis that spread into global financial disruption. Many countries shown negative figures and so does Thailand that the Gross

Domestic Product had turned negative since the 4th quarter of 2008 until 2009. Export value and quantity was shrinking, investment

from private and government sectors were not revived, while Household Expenditure is slow; especially during the first half of

2009; resulting in the overall shrinkage in transportation industry, construction, and service sector. Additionally, the political

uncertainty, consumer distrust, and the decrease in foreign tourists caused the contraction of private sector’s consumption and

investment. However, overall economic situation in Thailand was recovered in the second half of the year, thanks to various

supporting factors such as the effort to drive the economy-reviving measures to be effective in a continual basis and giving the

practical result, the acceleration in Advance Payment, and fundamental investment from Government sector. The operation

under the 2009 budget framework together with the reviving world economy has led to the recovery of the export and tourism

resulting in the average GDP of the year was negative at only 2.3% better that what the government has anticipated.

Especially in the 4th quarter of 2009, Thai economy growth was at 5.8% (comparing to the same period of last year) which was

the first rebound from the contraction of 7.1%, 4.9%, and 2.7% consecutively in the first three quarters of 2009.

Gross Domestic Product (GDP)

For the year 2010, Office of the National Economics and Social Development Board has anticipated the economic growth

between 3.5% - 4.5% from the supporting factors which the global economy recovery are leading to the export growth and

Household Expenditure increase. The continuous economic revival along with the increasing price of agricultural products results

in more consumers’ confidence to spend more money in the first and second quarters of the year. Nevertheless, there are

certain risk factors that we have to be aware of - possible economic uncertainty in the second half of the year especially the

impact from China which is a major force to world economy as well as the impact from medium and small countries that are

depressed by the financial instability, Maptaphut Industrial Estate problem, investment operation of Government and Advance

Payment acceleration for year 2010 especially in fundamental structure under the Thai Khemkang action plan 2555; and drought

that would affect agricultural sector and farmers’ income level, etc.

10.0%

5.0%

-5.0%

0.0%

5.3%

-2.3%

2.6%4.5%

7.0% 6.2%

2.2%

4.8% 5.0% 4.8%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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Overall inflation rate during the year 2009 has been averagely decreased for 0.9% from the increase of 5.5% in the year

2008. The rate has been negative consecutively for the first three quarters of 2009 induced by the deterioration of consumer

products in the world market according to the weak demand in economic recession; addition to several measures of Thai

Government i.e. measure on living expenses of low-income people, measure on energy, and 15-year Free Education Policy

that help people to reduce their utility expense, traveling expense, fuel expense, school fee, as well as expenses for stationeries.

In the last quarter of 2009, however, the general inflation rate has turned positive from the pressure of supply that rose up the

cost of food and energy. The inflation pressure is expected to be intensifying later in the year 2010 due to the rising price of

agricultural products caused by the diminishing of world-supply producer. The prices of crude oil and other consumer products

are arisen in the acceleration rate after the significant recovery of world economy in the next year.

Average Minimum Loan Rate (MLR) of commercial banks

(Bank of Thailand)

During 2009, in which the economic growth was negative, MLR of major commercial banks were dropping since the

beginning of the year, and slowing down in the second half in accordance to the positive economic sign. Average Minimum

Loan Rate (MLR) of commercial banks was 6.3% which was reduced from the previous year.

Construction Price Index

Bureau of trade and Economic Indices

Construction industry was also slow down in 2008, resulting in the drop of price index of construction materials in all

categories, especially metal products. However, the economic revival in the 4th quarter has made the price rising at the end of

last year and is continuing to year 2010. Besides the economic recovery, there are the new BTS Skytrain project, Thai Khem-

kang action plan 2012 economic stimulus, and other fundamental constructions such as irrigation project and road maintenance

that is a factor leading to the price increase and fluctuation trend of construction materials throughout the year.

8.10%7.40%

6.90%

5.90% 5.90%6.80%

7.69%6.87% 7.02%

6.30%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

All Commodities Cement Concrete Iron Products

210.0220.0200.0180.0160.0140.0120.0100.080.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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Annual Report 2009

Market Situation for Condominium

2009 was regarded as the year for big companies with abundant resources and good reputation in consumers’ perception.

They, especially those who are registered in the stock market, could achieve satisfying sales from new projects and gain

dominant market share. When each period is considered, it is found that the market was sluggish in the first half of year 2009

continuous from the end of year 2008. The launch of condominium has been decreased for approximately 60% comparatively

to the same period of last year, and that most entrepreneurs were trying to liquidate their units in order to be prepared for the

crisis.

Fortunately, several impacts that people concerned of; such as the sharp price decrease in real estate, unfinished building

construction, NPL, and unemployment; did not create such turbulence as expected. Political situation has shown better stability.

Economic stimulus measure from Government launched periodically has been a crucial effect to better Consumer Confidence

Index by the end of year 2008, encouraging numerous condominium launches even the crisis in Dubai World had emerged.

Since domestic demand was actually real drive to the sector and that it was proved by a large number of real estate ownerships

had been transferred in order to take advantage from 300,000-baht tax reduction measure that has just ended last year.

From the 2009 information from real estate center, Government Housing Bank, it is found that most of the projects are

located along the BTS current and future lines (or 80% of total launched projects) Sukhumvit, Paholyothin, Ladprao, Ratchada-

Rama 9 roads. Approximately 64% are medium-range condominiums with the price of 1-3 million baht per unit. The number of

registration in Bangkok and vicinity area for the year 2008 is expected to be 27,000 units comparable to approximately 67% of

the year 2008 which are medium-range condominiums.

When we consider the trend for year 2010, several factors such as investment promotion measure from BOI is encouraging

the low-priced-range condominiums, fuel price and popularity of condominiums along BTS Skytrain lines is encouraging the

demand for medium-range condominiums. Moreover, the slowdown in new project launching from previous year would be a

crucial factor to stimulate the launch of more condominiums for year 2010 unless the economic and political quirk is beyond

expectation.

High-level condominiums are expected to be stable. The number of new launch for year 2010 might be comparable to

year 2007 which is approximately 50,000 - 60,000 units by that most entrepreneurs are focusing on developing projects that

serve real-demand customers. Regarding the condominium registration in the year 2010, there are approximate 40,000 units

to be finished and registered of which the majority are the projects that were launched during 2007 - 2008 in Sukhumvit,

Ratchada-Rama9, Paholyothin, and Ladprao areas. It can be said for the year 2010 that entrepreneurs have to be aware of

aggressive competition, the rising trend in construction costs, and economic and political situations that are still regarded as a

risk factor.

Company’s Projects (As of 31 December 2009)

1. Fullerton Sukhumvit

Location On Sukhumvit Road between Soi 59 and 61

Project value Baht 1,600 million

Project status 100% Transferred ownership

2. Manhattan Chidlom Project

Location New Petchburi Road, between Chidlom Rd. and Rajaprasong Rd.

Project value Baht 1,250 million, totaling 190 units

Project status 100% of construction completed

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3. Watermark Chaophraya River Tower A and B Projects

Location Charoen-nakorn Road, between Soi Charoen-nakorn 39 and 41

Project value Baht 5,700 million, totaling 486 units (both Tower A and B)


4. Wind Sukhumvit 23 (Soi Prasarnmitr) Project

Location Soi Sukhumvit 23 (Soi Prasarnmitr),



5. Wind Ratchayothin Project

Location Ratchayothin, near Major Cineplex Ratchayothin,


Project status 96.23% of construction completed

6. Aguston Sukhumvit 22 Project

Location Sukhumvit 22 (near The Emporium Department Store)



7. Mykonos Hua Hin Project

Location Petchkasem Road, between Soi 75-75/1 Hua Hin, Prachuab Khirikhan

Project value Baht 450 million, totaling 122 units


8. Reflection Jomtien Beach Pattaya

Location Jomtien Beach, Pattaya

Project value Baht 3,300 million, 2 buildings, totaling 332 units

Project status Construction in progress

9. Marrakesh Hua Hin Residences

Location Petchkasem Road, Hua Hin, Prachuab Khirikhan



10. Collezio Sathorn-Pipat

Location Soi Pipat, Sathorn Road

Project value Baht 550 million, totaling 95 units

Project status Construction in progress

Condominium Project to be Developed under the Joint Venture Company (MJAI Development Co., Ltd)

11. Royce Private Residences Project

Location Sukhumvit 31



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Annual Report 2009

Summary of Condominium Projects under Development

Project Value Sales Area Avg. Price Sales Construction Recognized

Project (Baht million) (sq.m.) per sq.m. Progress1 Progress2 Progress3

%

Fullerton Sukhumvit 1,600 19,905 80,224 100.00 100.00 100.00

Watermark Chaophraya 3,900 49,269 82,658 78.26 100.00 77.55

River Tower A

Manhattan Chidlom 1,250 15,477 80,510 95.07 96.82 94.77

Watermark Chaophraya 1,800 26,433 75,834 52.27 99.51 56.02

River Tower B

Wind Sukhumvit 23 1,200 13,408 89,391 77.36 96.03 66.54

Wind Ratchayothin 1,600 19,988 82,633 86.04 96.23 66.00

Aguston Sukhumvit 22 2,000 21,151 102,191 40.14 93.94 37.51

Mykonos Hua Hin 450 7,115 64,599 93.96 98.56 94.78

Reflection Jomtien Beach Pattaya 3,300 40,874 84,289 37.60 - 0.00

Marrakesh Hua Hin Residences 2,400 22,199 119,521 42.55 17.54 0.00

Royce Private Residences 3,000 26,033 131,879 25.13 6.78 0.00

Collezio Sathorn-Pipat 550 4,251 117,569 48.08 - 0.00

Note : 1 Percentage of Project Salable Area

: 2 Percentage of Project Construction Cost

: 3 Percentage of Project Value

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RISK FACTORS

Business Risks

Risk from land procurement policy for future project development

The Company does not have a policy to hold assets or lands, which are not ready to be developed. The Company would

plan to procure sufficient lands for a development cycle (2-3 years). The Company would consider the location of each plot of

land to suit the target customer before starting the development. The Company therefore did not have many plots of land in

stock for future development. By using this policy, there was a risk that the Company might have some problems in procuring

land for future developments. However, the company believed that holding lands in stock for future development might create

direct risk and increase the development cost from the fund required to procure the lands. Also the development of a condominium

project required less amount of land than other residential projects and was therefore easier to procure the required land. The

wide network the Company had also help in the procurement of land in good location at a reasonable price. The Company also

had a policy to develop projects in prime area that was not limited to the CBD area, for example; Hua Hin, Pattaya Beach. The

risk in procuring land was therefore at an acceptable level.

Risk from the fluctuation in the building material prices

From the trade economic statistics, if we use the price index in 2000 as a basement, the price of building materials had

decreased from 158.4 in 2008 to 137.7 in 2009. The decreased in building material costs was from the global economy

slowdown. However there are many signs that indicate of index increasing. An increased of the price of building materials had

a direct impact on the Company’s construction cost and profit. However, the procurement of building materials could be

divided into 2 parts; main building materials and building materials procured by the Company. The main building materials, such

as bricks, aggregate, cement, sand and steel etc., were procured by the contractor, calculated as part of the construction

contract. Therefore, if the costs of the main building materials increased during the construction period, it would not have any

impact to the Company. The contractor would take all the risk. As for the building materials procured by the company, such as

countable items with high per unit price liked lift, sanitary wares, generators etc., they accounted for only 8%-10% of the total

construction cost for each project. Therefore if the prices of these items that the Company had not agreed to the procurement

contract increased, it would only have a minimal impact on the Company’s operating profit.

Risk from having one type of product

At this moment, the Company only developed high-end residential condominiums. There were therefore risks from the

uncertainty in economy or political issues, which had direct impact on the confidence and purchasing power of the consumers.

The change in requirement of the target customers to other kinds of projects could have some impact on the Company’s

profit. However, the Company did not have the policy to focus developing only high-end residential condominium but also

seek opportunities to develop other kinds of project that could contribute to the growth of the Company, such as serviced

apartment or hotel etc. The Company had therefore established subsidiary companies to pursue business opportunities in these

projects. The Company continued to follow the market closely and to seek market opportunities for other types of projects.

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Annual Report 2009

Risk from having the Poolvoralaks Group as the major shareholder

The Poolvoralaks Group was the major shareholder of the Company, holding 71.69% of the total shares (as of 13 No-

vember 2009). The Poolvoralaks Group therefore controlled almost all of the decisions at the shareholders meeting, except

those requiring three quarter majority. It was therefore difficult for other shareholders to collectively mount check-and-balance

votes on issues proposed by the shareholders. However, the Company had appointed 3 independent directors and auditor

committee to review and check so that there was no conflict of interest and for the transparency in the management of the

company. The majority shareholding by a group also lessened the risk of takeover by other persons, even though other

shareholders might see an opportunity to increase the Company’s worth.

External Risks

Risk from interest rates

As of 31 December 2009, the Company had a total debt of Baht 5,911.79 million (consolidated), with interest bearing

debt accounted for Baht 4,021.56 million. The Company’s interest bearing debt to equity ratio was 1.68 times, a slightly improve

from previous year. The loans, which were used to develop various projects, had floating interest rates. Even though the interest

rates were on a flattening trend, but in the future the interest rates could be increased, that could have direct impact on the cost

of project development. However, most of our project constructions almost completed and waiting for transfer to our cus-

tomer that could help us to reduce a lot of project loan and would help to reduce the debt burden ratio.

Risk from the change in policies from relevant government agencies

The changes in policies from relevant agencies such as city planning law, useable area for housing estate, floor area ratio

or environmental impact assessment, especially for high-rise building attributed to the project risk. The Company reduced these

risks by studying in detailed the changes in the policies of relevant agencies and conducted feasibility studies of every projects,

taking into account the new rules and regulations. All of the Company’s projects under construction had received necessary

permissions from all relevant government agencies. Any changes in relevant laws should not impact those projects that are under

construction.

Apart from the above changes, there had been changes to tax and fees related to real estate business. In the past year,

the government had introduced measures to help real estate business by reducing special business tax and transfer fee. There

is a likelihood that these tax and fee could increase in the future. The Company has therefore use the normal rate of these tax

and fee in its business assumptions. Any future increase in tax and fee should not have any major impact on the cost of

project development.

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SHAREHOLDERS STRUCTURE, MANAGEMENT

AND INTERNAL CONTROL

Shareholders Structure

The Company has paid-up registered capital of Baht 700 million from 700 million shares at par value of Baht 1 each.

The names and shareholding ratio of the top 10 shareholders as of 13 November 2009 are as follows:

Name Shares %

1. Mr. Chumroen Poolvoralaks 252,300,000 36.04

2. Mrs. Prathin Poolvoralaks 174,000,000 24.86

3. Thai NVDR CO., LTD. 48,177,400 6.88

4. Mr. Suriya Poolvoralaks 25,000,000 3.57

5. Miss Petrada Poolvoralaks 25,000,000 3.57

6. Mr. Suriyon Poolvoralaks 25,000,000 3.57

7. Mr. Itthi Chavalitdhamrong 22,000,000 3.14

8. SKANDINAVISKA ENSKILDA BANKEN A/S 18,000,000 2.57

9. Mrs. Piangjai Chayawiwatkul 10,000,000 1.43

10. CITIBANK NOMINEES SINGAPORE PTE LTD-UBS AG ZURICH 6,251,000 0.89

Others 94,271,600 13.47

Total 700,000,000 100.00

Dividend Policy

The Company has a policy of paying dividend to the shareholders at the rate of not less than 40% of the annual net

profit after deduction of legal reserves and other reserves. The dividend may vary according to performance, expansion plan,

liquidity, necessity and other appropriate plans of the Company in the future as considered by the Board of Directors that will

have the greatest benefits to the shareholders.

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Annual Report 2009

ORGANIZATION

Corporate DevelopmentDivision

ConstructionManagement Department

Purchasing Department

Sales Department

Marketing Department

Board of Director

Risk Management Committee

Executive Committee

Chief Executive officer

Managing Director

Poject DevelopmentDivision 1

Business DevelopmentDepartment

ConstructionManagement Department

Purchasing Department

Sales Department

Marketing Department

Business DevelopmentDepartment

Product Development &Quality Control Department

Corporate MarketingDivision

Investor RelationDepartment

Finance & AccountingDepartment

Management Accounting Department

Human Resources & Administrative Department

Legal Department

Information TechnologyDepartment

Audit Committee

Nominating Compensation Committee internal Audit and Control Department

Product Development &Quality Control Department

Poject DevelopmentDivision 2

Corporate MarketingDivision

Finance & AccountingDivision

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Management structure The management structure of the Company comprised 5 committees: the Board of Directors, the Executives Committee,

the Audit Committee, Selection and Remuneration Committee and Risk Management Committee. The Board of Directors and

the Executives of the Company comprised of qualified persons according to Section 68 of Public Company Act 1992 and the

notifications of the Securities and Exchange Committee. The committees of the Company were as follows:

Board of Directors As of 31 December 2009, Selection and Risk Board of Executives Audit Remuneration Management Directors Committee Committee Committee Committee

9 6 3 5 4

1. Mr. Chumroen Poolvoralaks A A - x -

2. Mrs. Prathin Poolvoralaks B B - x -

3. Mr. Suriyon Poolvoralaks x x - - A

4. Dr. Suriya Poolvoralaks x x - - -

5. Miss Petrada Poolvoralaks x x - - x

6. Mrs. Jitradee Poolvoralaks x x - - -

7. Mr. Chanin Roongsang I - A A -

8. Mr. Smith Banomyong I - x x x

9. Mr. Sirot Setabandhu I - x x x

Note A Chairman B Vice Chairman I Independent Director

x Director

Mr. Sithipon Ratanaporn as Secretary to the Board of Directors/the Executives Committee/the Selection and Remuneration

Committee/the Risk Management Committee and Miss Montakarn Thiennetinunt as Secretary to the Audit Committee

Note : Please see details of responsibilities of committees and sub-committees in the Company’s 56-1

Authorised signatory directors of the Company were Mr. Chumroen Poolvoralaks together with Mrs. Prathin Poolvoralaks

or Mr. Suriyon Poolvoralaks with the Company’s seal.

Executives Committee

As of 1 January 2009, the Company had 6 directors

No. Name Position

1. Mr. Suriyon Poolvoralaks Chief Executive Officer

2. Dr. Suriya Poolvoralaks Managing Director

3. Miss Petrada Poolvoralaks Executive Vice President - Corporate

Development Division

4. Mrs. Jitradee Poolvoralaks Executive Vice President - Marketing Division

5. Mr. Sithipon Ratanaporn Vice President - Finance and Accounting Division

6. Mr. Jamorn Wongsathaporn Vice President - Project Development 1

Note : Please see details of responsibilities of the Chief Executive Officer in the Company’s annex 56-1

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Annual Report 2009

Other details of non-board executives

Mr. Sithipon Ratanaporn (Age 48) Vice President - Finance and Accounting Division

Education

BA in Business Administration with accounting major, Ramkhamhaeng University

Mr. Jamorn Wongsathaporn (Age 47) Vice President - Project Development 1

Education

MBA University of the Thai Chamber of Commerce

BSc in Civil Engineering, Prince of Songkla University

Selection of Board of Directors and Executives

The Company had appointed the Selection and Remuneration Committee to consider and propose qualify persons for

the positions in the Board of Directors and the high level executives of the Company to the shareholders for approval. The

Committee was also responsible for the consideration of policy pertaining to the remunerations and benefits of the Board of

Directors, the Executives Committee, the Audit Committee, Selection and Remuneration Committee and Risk Management

Committee and the employees.

The criteria for the selection, appointment, impeachment or resignation of the Board of Directors were listed in the rules

and regulations of the Company, which could be summarised as follows:

The Board of Directors comprised at least 5 persons. At least half of the Directors must have their residence in Thailand.

The Directors could be either shareholders or not.

The Selection and Remuneration Committee would process the selection and appointment of the Board of Directors and

propose its findings to the shareholders using the following regulations and procedures:

(1) Each shareholder had 1 vote per 1 share.

(2) Each shareholder could use the votes as in 1 to select one or more directors but could not give more votes to one

candidate than other candidates.

(3) The number of persons with the most votes respectively would be selected as the Directors according to the required

number of Directors. In the case of more than one person had the same number of votes, the Chairman of the meeting would

decide.

At every annual shareholders meeting, at least one third of the member of the Board of Directors must resign. If the

number of Directors could not be divided by 3, the closest number to one third would be used. The past Directors could be

reelected. The Directors that had to resign in the first and second year after the registration of the Company must draw lots.

After that the Director that served the longest must resign.

Any Directors wished to resign must submit resignation letter to the Company. The resignation would take effect on the

day that the Company received the resignation letter. The Director that resigned must also inform the registrar.

At the shareholders meeting, any director could be voted to leave the position before his term ends with at least three

quarter of the total number of shareholders with the voting rights and the total number of shares must be at least half of the

total number of shares held by the shareholders attending the meeting.

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Remuneration for the Directors and the Executives

Remuneration Type Position 2009 2008

No. Amount (Baht) No. Amount (Baht)

Director Remunerations

1. Mr. Chumroen Poolvoralaks Chairman 240,000 240,000

2. Mrs. Prathin Poolvoralaks Vice Chairman 180,000 180,000

3. Mr. Suriyon Poolvoralaks Director 180,000 180,000

4. Dr. Suriya Poolvoralaks Director 180,000 180,000

5. Miss. Petrada Poolvoralaks Director 180,000 180,000

6. Mrs. Jitradee Poolvoralaks Director 180,000 180,000

7. Mr. Chanin Roongsang Independent Director and

Chairman of the Audit Committee 240,000 240,000

8. Mr. Sirot Setabandhu Independent Director and

Director of the Audit Committee - 127,500

9. Mr. Sanguankiat Lewmanomont Independent Director and

Director of the Audit Committee 180,000 180,000

10. Mr. Smith Banomyong1 Independent Director and

Director of the Audit Committee 180,000 52,500

Total 9 1,740,000 10 1,740,000

Note : 1. Mr. Sirot Setabandhu had resigned as Independent Director and Director of the Audit Committee and Mr. Smith Banomyong

was appointed as Independent Director and Director of the Audit Committee effective as of 15 September 2008

Other remunerations : - None -

Financial Remuneration for the Executives

Remuneration Type 2009 2008 2007

No. Amount No. Amount No. Amount

(Baht Million) (Baht Million) (Baht Million)

Salary 6 14.36 6 13.72 7 14.57

Bonus 3 1.22 3 0.89 4 1.56

Provident Fund 6 0.94 6 0.74 7 0.77

Other 6 0.60 6 0.60 7 3.41

Total 6 17.12 6 15.95 7 20.31

Other remunerations : - None -

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Annual Report 2009

Principles of Good Corporate Governance

The Company has prescribed the Principles of Good Corporate Governance in accordance with the guidelines provided

by The Stock Exchange of Thailand in order to ensure efficient, transparent and able to be audited management systems, thus

fostering trust and confidence among shareholders, stakeholders, and all other related parties. The Good Corporate Governance

is a means to add a firm’s value and contribute to sustainable growth of the Company. The details of the Good Corporate

Governance are as follows:

Chapter 1 : Rights of Shareholders

The Company protects the rights of shareholders and supports basic shareholder rights as stipulated by law. To illustrate,

shareholders have right to share in the profit of the Company; buy, sell or transfer share; obtain relevant and adequate information

on the Company; participate and vote in the shareholders meetings to elect or remove members of the board; determine the

remuneration for members of the board; appoint an auditor; determine audit fee; and make decisions on any transactions that

affect the Company.

The Company has created a website to provide important information and news such as financial reports, the Company’s

annual and quarter results, annual reports, etc. In addition, in shareholders meetings, the Company shall provide facilities and

meeting venues that can be conveniently reached and allocate adequate time for meeting. During the meeting, shareholders

shall be treated in an equal way. That is, they have right to express their opinions and ask questions equally. Moreover, any

questions, issues, opinions or suggestions by the shareholders shall be noted down in a minute of meeting.

Chapter 2 : Equitable Treatment of Shareholders

The Company has a policy to treat shareholders and facilitate them in an equal way in terms of opportunities to attend

meetings, the supply of information and their rights to vote in the shareholders meeting. The Company shall send a meeting

invitation letter approved by the board of directors as well as all information regarding the meeting to the shareholders at least

7 days before the date of meeting (pursuant to the stipulations of the Securities and Exchange Commission and The Stock

Exchange of Thailand). Moreover, a notice of the meeting shall be posted in a newspaper no less than 3 days prior to the date

of the meeting whereby no new issues for consideration in the meeting other than the ones already specified in the invitation

letter are allowed to add to the notice. This is in order that the shareholders will have sufficient time to consider and study about

the meeting agendas in order to vote properly.

In case that any shareholders cannot attend the meeting, they can nominate other persons to participate in the meeting.

Shareholders are provided with an option that they may appoint an independent director as their proxy to attend the meeting and

vote, whereby a name list of nominated directors are specified in a letter of attorney attached to the meeting invitation letter.

The Company has managed to supervise the use of corporate information. That is, the Company has right to prohibit any

directors, executives, managers of departments and employees of the Company from using the corporate material information,

including information about purchase of securities that has not been disclosed to the public and might have an effect on the

stock’s price of the Company, for personal benefits. In the event that the Company finds that any shareholders, directors,

executives, managers, and employees violate the regulations specified herein, the Company shall proceed an action against and

punish the violators.

Chapter 3 : Roles of Stakeholders

The Company has prescribed business ethics with the following details:

1. Conflict of Interests Code

The Company’s directors and employees are encouraged to avoid engaging in any situation in which there is any conflict

of interests between the Company and them. The guidelines are as follows:

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- A conflict of interests include any effort to disclose the Company’s confidential information to the third party during

the period of employment by the Company and thereafter or while one’s taking a position in the Company.

- Directors or employees shall avoid a conflict of interests between self-advantage and the benefit of the Company

when dealing with the government sector or government agencies, partners and any related persons.

- The board of directors and employees are prohibited from using corporate information for their own or others’

benefits.

- During the period of time working for the Company and the time after work, directors and employees shall not disclose

any corporate confidential information for other people’s benefits.

- Directors and employees are prohibited from taking a position as a member of the board of directors or consultant

for any other companies, which may result in the conflict of interests and conflict in business provided that the management

team or shareholders have already been informed about this (as the case may be).

- Directors and employees must use the Company’s resources for the sake of the Company and must not use them

for personal benefit.

- Directors or employees must inform the Company in writing immediately in the event that their family members

engage in the business of other companies which may lead to a conflict of interests.

- In the event that any employee wants to act as a director or consultant for another company, organization or

business society, the act must have no conflict of interests in regard to their duties in the Company and they must obtain prior

permission from the board of directors.

- Directors and employees must fully devote themselves and their time to the Company’s activities without doing any

other activities that are irrelevant to their duties for their own or others’ benefits.

2. Code of Ethics for Shareholders

Any work, activities and decision-making carried out by directors and employees should be done for the utmost benefits

of the shareholders.

Shareholders have right to obtain any necessary information. Therefore, the Company shall provide a clear and accurate

report on the management of the Company, its financial status and operating results to the shareholders on a regular basis in

accordance with the regulations of the Securities and Exchange Commission and The Stock Exchange of Thailand.

The Company shall treat all shareholders equally in shareholders meetings.

3. Code of Ethics for Clients

In order to find out a method to respond to the needs of their clients more effectively and efficiently, the Company has

set up a policy and guidelines as follows:

1. Customers shall be provided with quality products and services that correspond to their need.

2. Customers shall be provided with accurate and adequate information that is the most recent so that they learn about

the Company’s products and services. The provided information shall not be exaggerated to avoid making them misunderstand

about the products and services.

3. Customers shall be treated politely and efficiently. A person acting as the Company’s representative shall be reliable.

In addition, there should be a complaint handling process available for customers. Moreover, customers shall be treated with fast

action and best efforts to serve their needs.

4. Information about customers shall be kept in secret and not to be abused for personal or others’ benefits.

5. Advice about products and services should be provided effectively for the best benefit of customers.

4. Code of Ethics for Partners

The provision of products and services by the Company must represent the highest standards in order to develop and

preserve good relationship with suppliers, government sector or government agencies, and parties to the contract. In addition,

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Annual Report 2009

directors and employees are prohibited from accepting any personal benefits offered by suppliers, government sector or government

agencies, and parties to the contract.

5. Code of Ethics for Commercial Competitors

The Company’s policy supports a fair competition in doing business yet it shall engage in competitions with strong

determination. The Company shall not use an illegal or unethical method to take advantage from the competitors. In addition, it

is not permissible to steal information or use others’ important information that is either commercial information or commercial

secret, without prior permission from its owner. Moreover, tricking present or former employees of another company into disclosing

confidential information is prohibited.

6. Code of Ethics for Creditors

The Company has a policy to obey the terms and conditions of the credit agreement that the Company has with all

creditors.

7. Code of Ethics for Employees

Through good cooperation from all employees, the Company shall prevent all employees from any accident, injury or

sickness in connection with their work. The Company shall continue doing research and managing to cope with any harmful risks

concerning work.

The Company shall provide instruments, tools, equipment and trainings about safety for workers and property of the

Company. In addition, in the case of any emergency or incident resulting from work, the Company shall get involved and take

care of the incident efficiently.

The Company shall strictly follow applicable laws, rules and regulations. Moreover, it shall develop and organize trainings

to ensure that all employees have good understanding and obtain adequate information concerning working environment, work

processes and sickness in connection with work.

8. Code of Ethics for Environment

According to the Company’s policy, its business shall be carried out without sacrificing the obedience of the law and

regulation about environment.

Chapter 4 : Disclosure and Transparency

The Company shall disclose important information relevant to the Company correctly and completely in a timely manner

in accordance with the regulations of the Securities and Exchange Commission and The Stock Exchange of Thailand via different

channels and corporate website both in Thai and English so that the information can be accessed equally by users. Actually, the

Company disclosed its information in the Annual Registration Statement (Form 56-1) and Annual Report (Form 56-2) in accordance

with the regulations of the Securities and Exchange Commission and The Stock Exchange of Thailand.

Chapter 5 : Responsibilities of the Board

The board of directors comprise 9 members: 4 management directors, 2 non-management directors, and 3 independent

directors, all of whom are knowledgeable and expert in various professional fields which contribute to the growth of the business

of the Company and are qualified to possess the position of director of listed companies in compliance with applicable law and the

rules and regulations of the Company.

The board of directors performs a leading role in determining the Company’s policies and taking part in making consideration

and approval for the Company’s vision, mission, strategies, objectives, business plans and budgets as well as supervising the

management team in implementing the policy effectively and efficiently.

The board of directors is responsible for supervising important business and corporate governance, as well as the Com-

pany’s financial statement and financial information to be disclosed to the public in the Annual Registration Statement (Form 56-1)

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and Annual Report (Form 56-2). The arrangement of the said forms shall be consistent with accounting standards used nationwide

and shall be audited by a certified public account that is certified by the Securities and Exchange Commission. An appropriate

financial policy shall be selected and practiced regularly with careful discretion. In addition, important information shall be adequately

disclosed and specified in Notes to Financial Statement.

The board of directors shall provide and maintain an effective internal control system to rationally ensure that financial data

is recorded accurately and completely in order to prevent any dishonesty or wrongful act while audit committee comprising non-

management directors and independent directors are responsible for the quality of the financial report. Meanwhile, the department

of Internal Audit and Supervisory oversees and examines different businesses of the Company to ensure that the Company follows

the rules and regulations of the government and those of the Company itself. To ensure their independent and objective audit and

to balance power, the said department shall directly report their audit results to audit committee, develop measures to manage

risks effectively, and follow up audit work regularly by themselves.

The board of directors appoints sub-committee to carry out work in different areas as assigned. Moreover, the board defines

the scope of responsibilities of committee, sub-committee and the management team by determining clearly the levels of authority

regarding financial issues. The Company has 3 groups of the sub-committee as follows:

1. Audit committee comprises 3 members appointed on 12 November 2008 with 3-year term of service starting

from 3 December 2008 until 2 December 2011

2. Nomination and remuneration committee comprises 5 members appointed on 14 May 2007 with 3-year term

of service.

3. Risks management committee comprises 4 members appointed on 4 May 2008 with 2-year term of service.

A board of directors meeting shall be organized every 3 months and special meetings may be arranged as needed. To

organize a meeting, a meeting invitation letter and information necessary for the meeting shall be provided to the committee no

less than 7 days prior of the date of the meeting in accordance with the regulations of the Company.

No. of Meetings Attended

No. Name Position No. of Meetings Attended

2009 2008 2007

1. Mr. Chumroen Poolvoralaks Chairman 13/13 15/15 15/15

2. Mrs. Prathin Poolvoralaks Vice Chairman 11/13 14/15 15/15

3. Mr. Suriyon Poolvoralaks Director 13/13 15/15 15/15

4. Dr. Suriya Poolvoralaks Director 13/13 15/15 15/15

5. Miss Petrada Poolvoralaks Director 13/13 15/15 15/15

6. Mrs. Jitradee Poolvoralaks Director 13/13 15/15 15/15

7. Mr. Chanin Roongsang Chairman of the Audit 13/13 15/15 15/15

Committee Member

8. Mr. Sirot Setabandhu Independent Director and - 9/10 13/15

Audit Committee Member

Mr. Smith Banomyong1 Independent Director and 13/13 5/5 -


9. Mr. Sanguankiat Lewmanomont Independent Director and 13/13 15/15 15/15


Note: 1. Mr. Sirot Setabandhu had resigned as Independent Director and the Audit Committee Member and Mr. Smith Banomyong

was appointed as Independent Director and the Audit Committee Member effective as of 15 September 2008

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Annual Report 2009

The Company prescribes good practices concerning the code of ethics for directors and employees so that all related

parties shall use it as guidelines for performing duties and doing assignments of the Company with care, integrity, honesty and

justice when dealing with the Company itself and all groups of stakeholders. The code of ethics has been announced to all

related parties to acknowledge and follow.

The Company provides measures to prevent conflict of interests whereby the Company strictly follows the Securities and

Exchange Act, as well as regulations, announcements, orders or requirements of the Securities and Exchange Commission. In

the event that any director, executive, shareholder or any other person with potential conflict of interests has interest in a

transaction, that person shall have no right to vote and approve the related transaction. The said transaction shall be under-

taken to support the main business of the Company whereby related prices and terms and conditions shall be determined

according to the market to ensure that they are comparable to those commonly offered. Moreover, the policy requires directors

and executives to report any changes in securities holdings to the board of the directors and the Securities and Exchange

Commission in accordance with Section 59 of the Securities and Exchange Act B.E. 2535.

The Company provides investors-protecting measures the process of which can be examined. The Company shall disclose

related transactions in Notes to Financial Statement that have already been audited by an auditor and certified by audit

committee members. The audit committee members shall express their opinions about the need and rationality of the related

transactions in the financial statement audited by the auditor.

Nomination and remuneration committee are responsible for determining clearly and transparently the remuneration for

directors in an amount that is suitable for the responsibilities of each member of the board and that is comparable to the same

industry. Managing directors are subject to an extra amount of remuneration due to their executive position that relates to the

operating results of the Company and their work performance. The Company requires that the remuneration paid to directors

and executives be disclosed in accordance with the regulations of the Securities and Exchange Commission.

The Board of Directors always put great importance to the disclosure of financial and other relevant information that was

correct, complete, transparent, trustworthy and on-time to investors and other relevant persons. The information was disseminated

via the website of the Stock Exchange of Thailand and the Company’s owned website. The Company also set up an Investors

Relation Unit to provide information and other news to the investors, analysts and the general public. Investors Relation Unit

could be contacted at tel: 0-2392-1111 ext. 111 or www.majordevelopment.co.th.

Internal Control

Audit committee is responsible for investigating the carrying out of work to ensure that the work is performed correctly in

accordance with the policy and rules of the Company as well as applicable law, and the regulations of the office of supervisory.

The audit committee shall have duties to promote the development of the financial report and accounting system to be consistent

with common audit standards, and ensure that the Company has strict, appropriate, modern and efficient internal control, internal

audit and risks management systems. The audit committee able to perform their investigation and express their opinions

independently whereby the department of Internal Audit and Supervisory reports to them.

By having a preventive audit policy that the Company can benefit from, the department of Internal Audit and Supervisory

is responsible for evaluating the internal control in accordance with the regulations prescribed by the audit committee. The

department checks the accuracy and reliability of financial reports, discloses adequate information in order to achieve transpar-

ency, monitors the practices of the Good Corporate Governance, and enhances the effectiveness and productivity of work by

following audit guidelines of international standards.

Taking into consideration the evaluation of internal control system of the Company in 5 areas, i.e. organization and

environment, risks management, the supervision of work practices of the management team, information technology and

communication, and follow-up system, the board of directors deem that the Company has adequate internal control system to

oversee transactions undertaken with major shareholders, board of directors, executives and related persons. The board of

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directors also considers that the internal control system is efficient enough to oversee other aspects of management. The

Company’s internal control system is briefly explained as follows:

1. Organization and Environment

The Company has an appropriate organizational structure, enabling effective internal control. In addition, it has clear

policies, work plans and business targets that can be evaluated, and shows efforts in promoting clear and transparent Good

Corporate Governance and code of ethics. It is thus considered that the internal control system is adequate and practiced

appropriately. Furthermore, the Company’s policies, work plans and targets are developed by taking into consideration fair treat-

ment for employees, clients and commercial competitors, and responsibilities that the Company has for shareholders, the society

and environment. What’s more, employees of the Company share good values and work guidelines continuously whereby they

are prohibited from engaging in activities that may cause conflict of interests. Moreover, it is found that the Company’s written

policy and rules and regulations concerning financial transactions, purchasing activities and good management can help prevent

any dishonest act effectively.

2. Risks Management

The board of directors focuses on risks management. The risks are determined and evaluated in order to provide preventive

measures and efficiently manage risks including those having an impact on the performance of the Company.

Risks management is supervised by the Company’s audit committee while its guiding policies are approved by the board

of directors in order to provide guidelines and get the Company ready to cope with changing situations appropriately and timely.

According to the risks management policy,

- The board of directors and executives are responsible for evaluating, tracking and supporting the carrying out of

effective risks management process;

- The Company has risks management process in place, and evaluates and follows up the process continuously and

systematically. The process is thus constantly improved to suit changing business situations; and

- Audit committee has duties of evaluating risks management and proposing suggestions to the board of directors.

The Company constantly determines internal and external risks that may affect its business by analyzing causes, providing

guidelines and management measures to reduce risks. It also reviews risk management policy for improvement. Furthermore,

the Company ensures that related employees are well informed of risks management measures and all divisions follow the risks

management plan.

3. The Supervision of Work Practices of the Management Team

The Company defines the scope of duties and responsibilities as well as approval authority of the members of the management

team in different levels clearly in writing whereby the duties of making approval, making accounting records, managing information

and looking after the Company’s property are clearly separated in order to balance power and enable effective examination.

In the event that the Company makes transactions with directors and executives, common commercial terms and condi-

tions shall be followed and the rights bestowed upon the Company’s employees shall be taken into consideration. In addition, the

Company always sticks to its own measures in controlling such transactions. To undertake a transaction, prior approval shall be

obtained from the management division or the board of directors or shareholders meeting according the regulations specified by

The Stock Exchange of Thailand. In doing so, the Company shall also disclose the information in accordance with the said

regulations. The approval for each transaction shall be made by those who are not interested persons as the utmost benefit for

the Company is always taken into consideration. Such transactions are treated in the same way as transactions made with the

third party.

The Company constantly oversees the business of its subsidiary companies and joint venture companies, and provides

directions and guidelines for those appointed as directors and executives in those companies. In addition, the Company ensures

that the management teams have followed related laws in order to reduce risks in doing business and preserve the good

reputation of the Company.

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4. Information Technology and Communication

The Company collects information and constantly provides important information to executives in each level by processing

it through the reporting system in an adequate and timely manner so that executives can use it when making decisions. What’s

more, the Company provides a network for supplying information to ensure that all employees have good understanding about

the Company’s policies, rules and regulations, that the communication reaches all levels in the Company.

The directors and executives shall obtain meeting invitation letters for a meeting of the board of directors and necessary

documents in advance within the minimum period of time as stipulated by the law except in the event of an urgent meeting.

Besides, minutes of directors meetings always contain adequate details that enable shareholders to check the work practices of

directors.

The Company arranges all documents about accounting systematically and has never been informed of any mistakes

regarding this issue by an auditor. It has been deemed by the board of directors that the Company applies the accounting policy

that is consistent with common accounting principles and appropriate for its business.

5. Follow-up System

The Company monitors and compares business performances to see whether it achieves the target or not. In the event

that corrections and improvements are required, the Company shall take action in a timely manner by analyzing and investigating

the causes of the problem to initiate preventive measures and improve the situation. Moreover, the Company works to ensure

that its internal audit system is strictly followed. In case of any mistake found, a report shall be made and submitted to the board

of directors and audit committee for improvement. According to the Company’s policy, the management team is required to

report to the board of directors any dishonesty or suspected dishonesty, illegal or wrongful act that may affect the Company’s

reputation and financial status.

Audit committee has examined internal control system and has it evaluated by executives and internal audit division. It

is found that the Company’s internal audit control is sufficient and efficient enough, there are no significant problems or major

mistakes.

The Company ensured that the Executives at all level were aware and understood their responsibility in reporting the

holding of shares by themselves, their spouses and under-aged children, including any changes in the share holding, to the

Securities and Exchange Commission. The Company established regulations for the employees regarding the disclosing or

gaining benefits of any confidential news, the protection of confidential information and the use of their position in the Company

or information received for their own benefits or reduction of benefits to the Company. The Company had clear disciplinary

procedures for breaching of these regulations.

The Company had a policy that would not allow the Directors of the Executives to use important internal information,

which had not been publicly disclosed for their own benefits or other persons’ benefits. This included the trading of the

Company’s shares by Directors, Executives and employee within the department that had the internal information. They should

avoid or refrain from trading the Company’s shares during the 1-month period prior to the public disclosure of the financial report.

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RELATED PARTY TRANSACTIONS

The related party transactions as of 31 December 2009 are as follows: (Please see more details in

56-1 form)

1. The Company gave a loan to MJAI Development Co. Ltd, which was a subsidiary company. Details : Long-term loan with TISCO standard interest rate at MLR Debt at end of 2009 : Principle Baht 220.09 million. Interest receivable Baht 23.10 million. Interest received Baht 11.17 million Audit Committee’s Comment : Approved because the said transaction was for the benefit of the company and the loan conditions was in accordance with general business practice.

2. The Company received management fee from MJAI Development Co. Ltd, which was a subsidiary company. Details : Management fee for the development of Royce Private Residences Project. Transaction in 2009 : Baht 9.00 million Audit Committee’s Comment : Approved because the said transaction was for the benefit of the Company.

3. The Company gave loan to Major Development Hotels and Resorts Co. Ltd, which was a subsidiary company. Details : Long-term loan with Bank of Ayudhya standard interest rate at MLR. Debt at the end of 2009 : Principle Baht 21.89 million. Interest receivable Baht 1.69 million. Interest received Baht 1.01 million. Audit Committee’s Comment : Approved because the said transaction was for the benefit of the company and the loan conditions was in accordance with general business practice.

4. The Company received advanced payment for land from Major Development Residence, which was a subsidiary company. Details : Advanced payment for land at Jomtien Beach Pattaya. Debt at the end of 2009 : Baht 100.00 million. Audit Committee’s Comment : Approved because the said transaction was necessary for the operation of the Company.

5. The Company designated its Directors to guarantee overdraft loan from a financial institution totaling Baht 22.30 million. Details : The Directors were Mr. Chamroen Poolvoralaks, Mrs. Prathin Poolvoralaks, Mr. Suriyon Poolvoralaks and Miss Petrada Poolvoralaks. Debt at the end of 2009 : The company had an outstanding debt of Baht 19.96 million from an overdraft loan from the financial institution. Audit Committee’s Comment : Approved because the said transaction increased the company’s liquidity.

6. The Company designated its Directors to guarantee a long-term loan from a financial institution totaling Baht 2,076.75 million. Details : The Directors were Mr. Chamroen Poolvoralaks, Mrs. Prathin Poolvoralaks and Mr. Suriyon Poolvoralaks to guarantee the long-term loan for project development. Debt at the end of 2009 : The Company had an outstanding long-term debt of Baht 1,443.60 million from the finan cial institution. Audit Committee’s Comment : Approved because the said transaction was necessary for the operation of the Company.

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7. The Company paid to Mrs. Prathin Poolvoralaks (Company’s director) as the consultant fee. Details : The company appointed Mrs. Prathin Poolvoralaks as the executive consultant in business-planning and development, marketing. Transaction in 2009 : Baht 1.20 million. Audit Committee’s Comment : Approved because the said transaction was necessary for the operation of the Company.

Policy and Trend in Related Party Transactions In the near future, the Company may have to enter into related party transaction as it deems as necessary. In doing so, the Company will comply with the Securities Exchange Act, regulations, notices, orders or regulations of the Stock Exchange of Thailand and in accordance with accounting standards regarding the disclosure of information pertaining to person(s) or related events as stipulated by the Institute of Certified Accountants and Auditors of Thailand.

Normal Related Party Transactions For normal related party transactions and transactions that will continue in the future, the Company has established the following frameworks for these transactions. The transactions must be in accordance with general trading practice with reference to appropriateness and fair general trading prices and conditions. They have to be reasonable, auditable and will not lead to transfer of benefits. The Company has submitted the frameworks to the Audit Committee for consideration and approval in order for the management to be able to proceed with these transactions that fall within the frameworks. For transactions that fall within the above policy, the Company’s management can proceed with the transactions without having to seek the Audit Committee’s approval. However, in order to follow good governance practice, the Company must submit all transactions that the Company undertakes under the frameworks to the Audit Committee for acknowledgement every quarter. All normal transactions must be in line with the definitions of the Stock Exchange of Thailand. These transactions must be those that the Company must undertake under normal operation, even if the Company does not undertake these transactions with the related party, it still has to do the same with a third party, such as the procurement of building materials and the hiring of construction contractors. The said transactions must have the general trading conditions with fair prices and conditions that will not lead to transfer of benefits. These include trading conditions that have the following prices and conditions: 1) Similar prices and conditions that the Company would give to others. 2) Similar prices and conditions that the related party would give to others. 3) Prices and conditions that the Company could show that other companies would give to others.

Unusual Related Party Transactions In case the related party transactions are not normal transactions, the Company must submit them to the Audit Committee for approval on a case by case basis. In case the Audit Committee does not have the expertise to consider such related party transactions, the Company must find an independent person that possesses the necessary knowledge and expertise, such as auditor or asset assessor, to provide comments on the related party transactions. The Board of Directors or the shareholders will then take the comments of the Audit Committee or independent expert into consideration. This will ensure that the said transactions will not lead to the relocation or transfer of benefits between the Company or the shareholders but in undertaking the transactions, the Company has focused on the greatest benefits of every shareholder. In the case of personal guarantee by shareholder(s) and/or Director(s) on loans from financial institution in past or in the future, the Company will not pay any remuneration for these personal guarantees. In the case of loan from Director(s) or shareholder(s) that have a conflict with the Company in the past or in the future, the Company must submit these transactions to the Audit Committee to consider whether these transactions are necessary and appropriate and must receive the approval of the Board of Directors. These transactions must also be in accordance with the Securities Exchange Act, regulations, notices, orders or regulations of the Stock Exchange of Thailand and in accordance with accounting standards regarding the disclosure of information pertaining to person(s) or related events as stipulated by the Institute of Certified Accountants and Auditors of Thailand. The interest rate to be paid to the person(s) that has a conflict with the Company must not be more than the rate that the Company can obtain from the financial institution.

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Beach Project

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Last Year Activities

Major Development Plc. Awarded “Best Design Property”

Major Development Plc. is awarded ‘Best Design Property’ by

“Living in Thailand Award of Excellence 2008”, hosted by Living

in Thailand Magazine. After 5 months of votes from audiences

of Living in Thailand Magazine, Major Development wins and

deserves the honor.

Major Development Public Company Limited’s 2009 General Shareholders’ Meeting

Mr. Chamroen Poolvoralaks, Chairman of the board of

Director presided over MJD’s 2009 annual general

shareholders’ meeting, which was also attended by the

management team including.

Ms. Prathin Poolvoralaks Vice Chairman

Mr. Suriyon Poolvoralaks Director and Chief

Executive Officer

Dr. Suriya Poolvoralaks Director and Managing

Director

Ms. Petrada Poolvoralaks Director

Ms. Jitradee Poolvoralaks Director

Mr. Chanin Roongsang Chairman of the Audit

Committee Member

Mr. Smith Banomyong Audit Committee

Member

Mr. Sanguankiat Lewmanomont Audit Committee

Member

at Pimarnman Room, Four Seasons Hotel.

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Annual Report 2009

Mykonos Hua Hin to host One Fine Day event during Songkran Festival

“Mykonos Hua Hin - Contemporary Mediterranean Living”

hosted a party, “One Fine Day @ Mykonos: Songkran”,

from 11 to 13 April 2009 to celebrate Songkran Festival.

Customers and guests experienced the party with the colorful

Mediterranean atmosphere and enjoyed flavorful ice-cream

and music at the site of Mykonos Hua Hin

Marrakesh Hua Hin Residences to host Marrakesh Hua Hin Festival:Tasting and shopping with the Moroccan Market Style.

Marrakesh Hua Hin, the first super luxurious beachfront residence condominium in Hua Hin, threw a party for customers and guests

to celebrate Songkran Festival with the theme “Tasting & Shopping with Moroccan Market Style” as part of the Marrakesh Hua Hin

Festival. Marrakesh Hua Hin, another quality project of Major Development Public Company Limited, invited customers and guests

to taste a variety of flavorful contemporary Moroccan food, shop exotic goods from overseas and enjoy a variety of entertainment

activities. They also received Yacht Package special promotion worth more than 300,000 baht when they made the reservation of

Marrakesh Hua Hin residences during this festival.

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Major Development hosted “The Highlights of High Living” Grand EventSuriyon Poolvoralaks, Head of Major Development; the leading developer in high-end condominiums, conducted the condominium expo “The Highlights of High Living 2009” with special offers and the best price of the year, at Siam Paragon, M floor, Hall of Fame. The event was held last August 2009 and gained plenty of interests and customers’ feedbacks.

At the event, Ms Kulnadda Patchimsawas - Nina was introducing the condominium projects and Katha Shin-Baychor was talking show regarding highlight Feng Shui, moreover, master of ceremony: Uncle Next - Ked-sepsawas Palakawong Na Ayutthaya and Ms. Joy Rinlanee Sripen was talking with Ms. Aliwassa Pathnadabutr, - Managing Director CB Richard Ellis about investment in condominium. Additionally, there are interesting activities during the event

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Annual Report 2009

Reflection Jomtien Beach Pattaya hosted the event for American Express customersReflection Jomtien Beach Pattaya Project conducted greeting event for customers during Songkran at Central Festival Beach Pattaya and The Avenue Pattaya. Special promotion available during May 1st - August 30th, 2009 for American Express customers using American Express Platinum Card and Thai American Express Platinum Credit Card for reservation, and earn 10 times of point mileage.

REFLECTION, Jomtien Beach Pattaya, set an auspicious day for piling work, ready to step forward to be the Iconic Landmark of Jomtien Beach Pattaya Major Development PLC is now getting ready to start its first super luxury condominium project on Jomtien beach Pattaya, “REFLECTION”. Set to be the new iconic landmark on Pattaya, REFLECTION’s piling work has started with SEAFCO PLC as the piling contractor.

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Collezio Sathorn-Pipat Project: The latest collection of Major Development

Collezio Sathorn-Pipat Project hosted Exclusive launch party for VIP customers at Thonglor office and received impressive customers’ feedbacks. The project offered experiences in Italian Contemporary to escape from dynamic metro living but uniquely satisfy urban lives, with distinctly-designed swimming pool and fitness equipments available.

Royce Private Residences hosted Wine tasting

In June, Royce Private Residences Project hosted wine tasting with wine guru: 2006 Thailand Best Sommelier, Khun Anuchit Saeng-on, to offer privileged customers, from Thanachart Bank and Jaguar Car, the wine from various countries, as well as exclusively-selected cuisine. Customers could sense the elegant and pleasant feeling in Royal Victorian Contemporary style in the cozy atmosphere.

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Aguston Sukhumvit 22 hosted event at The Emporium Department Store

“Aguston Sukhumvit 22” Project, the high-end condominium in the center of Sukhumvit with Exotic Spanish Contemporary Living style offered the most special promotion of the year, at 2nd floor booth, The Emporium, during November 23rd-30th 2009, with a lot of responses from customers.

Royal Homage for HRH Princess Ubolrat Ratchakalya Siriwattana Pannawadi

On last Friday, December 25th, 2009, 8pm, HRH Princess Ubolrat Ratchakalya Siriwattana Pannawadi had visited Aguston Sukhumvit 22 Project and took photo for TO BE NUMBER ONE Magazine, to promote public awareness and campaign of drug protection for youths, under her patronage of TO BE NUMBER ONE Project. Khun Pirunin Wannawong, AVP of Sales and Marketing of Major Development Plc. had presented flower bouquet, with welcome homage from company employees.

Aguston Sukhumvit 22: Celebrities join Grand Opening of Aguston Sukhumvit 22, a luxury Spanish style condominium project from Major Development, with theme “Spanish inspired by Aguston”.

Dr. Suriya Poolvoralaks (3rd left), Managing Director, and Miss Petrada Poolvoralaks (3rd right), Executive Director of Major Development, hosted grand opening of Aguston Sukhumvit 22, a luxury Spanish style condominium project in the heart of city, under concept of “Spanish inspired by Aguston”. Jay Spencer (1st right), Jariyadee Thammavit (2nd right), Meji-Anoma Saransikarin (2nd left) and Claudia Chakrabhand (1st left) honourably joined activities in the funny event held recently. Aguston Sukhumvit 22 project is ready for customers to live in a luxury Spanish atmosphere within October 2009.

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Wind Ratchayothin hosted Wind of Luck event

Suriyon Poolvoralaks, CEO of Major Development opened the forum for Wind Condominium Project in the topic “Create Feng Shui and Enjoy Luck in Cow Year”, by the distinguished speaker, Katha Shin-Baychor, feng shui specialist, at Wind Condominium Sales Office in February 2009.

Major Development Plc. had renovated the scenery in front of the project by growing trees and flowers in purpose of recovering natural environment and enhancing oxygen to Bangkok

Objectives : 1. To encourage awareness toward the importance of environment by growing trees for alleviating pollution and recovering natural surroundings 2. To improve scenery, create pleasant image in the area of project, and promote sense of belonging to preserve nature and environment 3. To enhance good corporate image (public company limited)

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Financial Statement

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To the Shareholders of Major Development Public Company Limited

I have audited the accompanying consolidated balance sheet of Major Development Public Company Limited and its

subsidiaries as at 31 December 2009, and the related consolidated statements of income, changes in shareholders’

equity and cash flows for the year then ended, and the separate financial statements of Major Development Public

Company Limited for the same year. These financial statements are the responsibility of the Company’s management as

to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these

financial statements based on my audit. The consolidated financial statements of Major Development Public Company

Limited and its subsidiaries, and the separate financial statements of Major Development Public Company Limited for the

year ended 31 December 2008 were audited in accordance with generally accepted auditing standards by another

auditor in my office who expressed an unqualified opinion on those statements under her report dated 23 February

2009.

I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a

reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of

Major Development Public Company Limited and its subsidiaries and of Major Development Public Company Limited as

at 31 December 2009, and the results of their operations and cash flows for the year then ended, in accordance with

generally accepted accounting principles.

Rungnapa Lertsuwankul

Certified Public Accountant (Thailand) No. 3516

Ernst & Young Office Limited

Bangkok: 19 February 2010

Report of Independent Auditor

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Annual Report 2009

Balance sheetsMajor Development Public Company Limited and its subsidiaries

As at 31 December 2009 and 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 2009 2008 2009 2008

Assets

Current assets

Cash and cash equivalents 53,994,952 47,835,612 47,350,058 34,877,991

Trade accounts receivable 6, 15 2,077,039,823 1,862,209,880 2,077,039,823 1,862,209,880

Accounts receivable and advances

to related parties 15 - - 45,749,544 15,159,426

Land and construction in progress - net 7 5,369,590,805 5,335,696,135 4,480,542,508 4,698,620,200

Advances for construction 45,420,829 98,115,144 45,238,078 98,115,144

Other receivables - advance payment 59,934,073 12,450,590 59,934,073 12,450,590

Deposit for purchase of land 22,600,000 7,600,000 22,600,000 7,600,000

Advances paid on behalf of

Condominium Juristic 2,396,846 1,093,607 2,396,846 1,093,607

Other current assets 15 8,720,323 17,732,597 6,263,407 13,185,686

Total current assets 7,639,697,651 7,382,733,565 6,787,114,337 6,743,312,524

Non-current assets

Pledged deposits at banks 14, 23 9,709,000 33,137,000 9,709,000 33,137,000

Investments in subsidiaries 8 - - 172,748,700 172,748,700

Long-term loans to subsidiaries 15 - - 243,989,000 162,146,000

Property, plant and equipment - net 9 436,729,266 444,810,182 178,831,880 208,654,056

Intangible assets - net 10 6,836,266 2,507,876 6,836,266 2,507,876

Land awaiting development 11 215,009,615 215,009,615 215,009,615 215,009,615

Total non-current assets 668,284,147 695,464,673 827,124,461 794,203,247

Total assets 8,307,981,798 8,078,198,238 7,614,238,798 7,537,515,771

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

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Balance sheets (continued)Major Development Public Company Limited and its subsidiaries

As at 31 December 2009 and 2008 ต่ต ต่ต


(Unit: Baht)


Note 2009 2008 2009 2008

Liabilities and shareholders’ equity

Current liabilities

Overdrafts and short-term loans from

financial institutions 12 220,513,818 190,744,705 210,556,567 183,622,554

Trade accounts payable 470,097,183 710,276,992 420,646,517 668,801,810

Current portion of liabilities under finance

lease agreements 13 129,869 1,469,667 75,792 1,469,667

Current portion of long-term loans 14 2,214,818,940 1,153,296,966 2,214,818,940 1,153,296,966

Other payables 20,452,445 25,348,843 11,938,287 20,026,004

Deposits and advances from customers 15 883,963,298 934,896,636 714,721,910 839,569,676

Retention payable 235,258,836 163,066,203 221,427,349 160,332,511

Accrued specific business tax and transfer fee 45,215,416 43,538,437 45,215,416 43,538,437

Corporate income tax payable 153,714,401 159,647,397 153,714,401 159,647,397

Accrued expenses 51,582,355 23,722,169 27,595,369 11,417,347

Advances received on behalf of

Condominium Juristic 20,888 8,432,934 20,888 8,432,934

Advance received from sale of land 15 - - 100,000,000 100,000,000

Other current liabilities 29,921,763 9,295,677 29,266,213 8,442,158

Total current liabilities 4,325,689,212 3,423,736,626 4,149,997,649 3,358,597,461

Non-current liabilities

Liabilities under finance lease agreements 13 79,341 101,056 25,264 101,056

Long-term loans from financial institutions 14 1,370,613,783 2,320,024,815 997,613,783 1,947,024,815

Long-term loan from minority shareholder

of subsidiary 15 215,404,000 134,750,000 - -

Total non-current liabilities 1,586,097,124 2,454,875,871 997,639,047 1,947,125,871

Total liabilities 5,911,786,336 5,878,612,497 5,147,636,696 5,305,723,332

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Annual Report 2009

Balance sheets (continued)Major Development Public Company Limited and its subsidiaries

As at 31 December 2009 and 2008 ต่ต ต่ต


(Unit: Baht)


Note 2009 2008 2009 2008

Shareholders’ equity

Share capital

Registered

700,000,000 ordinary shares of Baht 1 each 700,000,000 700,000,000 700,000,000 700,000,000

Issued and paid-up

700,000,000 ordinary shares of Baht 1 each 700,000,000 700,000,000 700,000,000 700,000,000

Premium on ordinary shares 714,855,000 714,855,000 714,855,000 714,855,000

Retained earnings

Appropriated - statutory reserve 16 70,000,000 54,255,352 70,000,000 54,255,352

Unappropriated 911,339,162 730,474,089 981,747,102 762,682,087

Equity attributable to the Company’s shareholders 2,396,194,162 2,199,584,441 2,466,602,102 2,231,792,439

Minority interest - equity attributable to

minority shareholders of subsidiaries 1,300 1,300 - -

Total shareholders’ equity 2,396,195,462 2,199,585,741 2,466,602,102 2,231,792,439

Total liabilities and shareholders’ equity 8,307,981,798 8,078,198,238 7,614,238,798 7,537,515,771

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Income statementsMajor Development Public Company Limited and its subsidiaries

For the years ended 31 December 2009 and 2008 ต่ต ต่ต


(Unit: Baht)


Note 2009 2008 2009 2008

Revenues

Sales of units in condominium projects 15 2,976,532,537 2,636,071,498 2,976,532,537 2,636,071,498

Management fee income 15 - - 9,000,000 10,500,000

Other income 15 21,328,136 20,562,133 30,180,042 30,027,956

Total revenues 2,997,860,673 2,656,633,631 3,015,712,579 2,676,599,454

Expenses

Cost of units in condominium projects sold 2,083,496,721 1,810,775,659 2,083,496,721 1,810,775,659

Selling expenses 104,099,197 94,756,791 92,111,968 77,779,571

Administrative expenses 15 157,583,541 146,682,661 150,090,500 142,273,616

Management benefit expenses 20,159,729 17,688,125 20,159,729 17,688,125

Other expenses 1,404,460 57,478 1,404,460 57,478

Total expenses 2,366,743,648 2,069,960,714 2,347,263,378 2,048,574,449

Income before finance cost and corporate income tax 631,117,025 586,672,917 668,449,201 628,025,005

Finance cost (70,589,466) (2,372,581) (69,721,700) (1,305,354)

Income before corporate income tax 560,527,559 584,300,336 598,727,501 626,719,651

Corporate income tax 17 (153,919,008) (151,108,161) (153,919,008) (151,108,161)

Net income for the year 406,608,551 433,192,175 444,808,493 475,611,490

Net income (loss) attributable to:

Equity holders of the parent 406,608,551 445,135,526 444,808,493 475,611,490

Minority interests of the subsidiaries - (11,943,351)

406,608,551 433,192,175

Basic earnings per share 21

Net income attributable to equity holders of the parent 0.58 0.64 0.64 0.68

57

Annual Report 2009

Statements of changes in shareholders’ equityMajor Development Public Company Limited and its subsidiaries

For the years ended 31 December 2009 and 2008

(Unit: Baht)

Consolidated financial statements

Equity attributable to the parent’s shareholders

Retained earnings

Total equity Minority interest Issued and Premium on Appropriated attributable -equity attributable to paid-up ordinary shares -statutory Unapprop to the parent’s minority shareholders Note share capital reserve -riated shareholders of subsidiaries Total

Balance as at 31 December 2007 700,000,000 714,855,000 30,474,777 89,119,138 2,034,448,915 11,943,351 2,046,392,266

Net income (loss) for the year 2008 - - - 445,135,526 445,135,526 (11,943,351) 433,192,17

Total income and expense for the year - - - 445,135,526 445,135,526 (11,943,351) 433,192,175

Dividend paid 19 - - - (280,000,000) (280,000,000) - (280,000,000)

Minority interest as at date of acquisition

of subsidiary - - - - - 1,300 1,300

Unappropriated retained earnings

transferred to statutory reserve 16 23,780,575 (23,780,575) - - -

Balance as at 31 December 2008 700,000,000 714,855,000 54,255,352 730,474,089 2,199,584,441 1,300 2,199,585,741


Net income for the year 2009 - - - 406,608,551 406,608,551 - 406,608,551

Total income for the year - - - 406,608,551 406,608,551 - 406,608,551

Dividend paid 19 - - - (209,998,830) (209,998,830) - (209,998,830)


transferred to statutory reserve 16 15,744,648 (15,744,648) - - -



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(Unit: Baht)

Separate financial statements

Retained earnings

Issued and paid-up Premium on Appropriated Note share capital ordinary shares -statutory reserve Unappropriated Total

Balance as at 31 December 2007 700,000,000 714,855,000 30,474,777 590,851,172 2,036,180,949

Net income for the year 2008 - - - 475,611,490 475,611,490

Total income for the year - - - 475,611,490 475,611,490

Dividend paid 19 - - - (280,000,000) (280,000,000)


transferred to statutory reserve 16 - - 23,780,575 (23,780,57 -



Net income for the year 2009 - - - 444,808,493 444,808,493

Total income for the year - - - 444,808,493 444,808,493

Dividend paid 19 - - - (209,998,830) (209,998,830)


transferred to statutory reserve 16 - - 15,744,648 (15,744,648) -



Statements of changes in shareholders’ equity(continued)Statements of changes in shareholders’ equity (continued)


59

Annual Report 2009

Statements of cash flowsMajor Development Public Company Limited and its subsidiaries



(Unit: Baht)


Note 2009 2008 2009 2008

Cash flows from operating activities

Net income before tax 560,527,559 584,300,336 598,727,501 626,719,651

Adjustments to reconcile net income before tax to net cash

provided by (paid from) operating activities:

Depreciation 42,826,320 41,809,095 38,563,505 40,989,960

Amortisation of intangible assets 255,853 117,781 255,853 117,781

Write-off of property, plant and equipmen 1,415,091 234,498 1,404,461 234,498

Loss (gain) on sales of equipment (79,105) 57,478 (79,105) 57,478

Interest income (1,026,621) (5,461,125) (13,141,276) (15,593,711)

Interest expense 47,629,558 2,372,581 46,761,792 1,305,354

Income from operating activities before changes in

operating assets and liabilities 651,548,655 623,430,644 672,492,731 653,831,011

Operating assets (increase) decrease

Trade accounts receivable (214,829,943) (707,044,742) (214,829,943) (707,044,742)

Accounts receivable and advances to related parties - - (18,398,146) (2,559,696)

Land and construction in progress 149,537,615 (2,023,030,106) 375,100,529 (1,915,830,813)


Other receivables - advance payment (47,483,483) (4,125,068) (47,483,483) (4,125,068)

Deposit for purchase of land (15,000,000) 82,400,000 (15,000,000) 82,400,000

Advances paid on behalf of Condominium Juristic (1,303,239) 24,192,353 (1,303,239) 24,192,353

Other current assets 9,012,274 (12,835,911) 6,922,279 (8,301,421)

Operating liabilities increase (decrease)

Trade accounts payable (240,179,809) 349,856,024 (248,155,293) 308,862,342

Other payables (4,896,398) 10,179,766 (8,087,717) 4,856,927

Deposits and advances from customers (50,933,338) 538,305,288 (124,847,766) 442,978,328

Retention payable 72,192,633 43,788,159 61,094,838 41,054,467

Accrued specific business tax and transfer fee 1,676,979 (41,379,482) 1,676,979 (41,379,482)

Accrued expenses 18,559,835 (11,316,483) 17,776,554 (12,010,332)

Advances received on behalf of Condominium Juristic (8,412,046) (22,184,784) (8,412,046) (22,184,784)

Advance received from sale of land - - - 100,000,000

Other current liabilities 20,626,086 (440,001) 20,824,055 (1,289,623)

Cash flows from (used in) operating activities 392,810,136 (1,134,421,300) 522,247,398 (1,040,767,490)

Cash paid for interest expense (234,599,395) (181,928,717) (212,405,481) (161,239,404)

Cash paid for corporate income tax (159,852,004) (98,300,524) (159,852,004) (98,290,516)

Net cash flows from (used in) operating activities (1,641,263) (1,414,650,541) 149,989,913 (1,300,297,410)

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Statements of cash flows (continued)Major Development Public Company Limited and its subsidiaries



(Unit: Baht)


2009 2008 2009 2008

Cash flows from investing activities

Decrease (increase) in pledged deposits at banks 23,428,000 (10,000,000) 23,428,000 (10,000,000)

Cash paid for acquistion of property, plant and equipment (23,399,996) (309,417,311) (3,363,106) (76,228,007)

Cash paid for acquisition of intangible assets (4,584,243) (177,567) (4,584,243) (177,567)

Cash paid for purchase of investments in subsidiaries - - - (159,998,700)

Increase in long-term loan to subsidiary - - (81,843,000) (21,896,000)

Proceeds from sales of equipment 211,254 50,000 211,254 50,000

Cash received from minority shareholders for investment

in subsidiary - 1,300 - -

Interest income 1,026,621 5,461,125 949,304 4,636,635

Net cash flows used in investing activities (3,318,364) (314,082,453) (65,201,791) (263,613,639)

Cash flows from financing activities

Increase in overdrafts and short-term loans from

financial institutions 29,769,113 28,056,427 26,934,013 20,934,276

Repayment of liabilities under finance lease agreements (1,523,745) (2,838,277) (1,469,667) (2,838,277)

Cash received from long-term loans from financial

institutions 2,432,863,040 2,898,958,000 2,432,863,040 2,773,958,000

Repayment of long-term loans from financial institutions (2,320,752,098) (1,259,759,706) (2,320,752,098) (1,259,759,706)

Dividend paid (209,891,343) (279,884,115) (209,891,343) (279,884,115)

Increase in long-term loan from minority shareholder

of subsidiary 80,654,000 - - -

Net cash flows from (used in) financing activities 11,118,967 1,384,532,329 (72,316,055) 1,252,410,178

Net increase (decrease) in cash and cash equivalents 6,159,340 (344,200,665) 12,472,067 (311,500,871)

Cash and cash equivalents at beginning of year 47,835,612 392,036,277 34,877,991 346,378,862

Cash and cash equivalents at end of year 53,994,952 47,835,612 47,350,058 34,877,991

Supplemental cash flows information

Non-cash items:

Dividend payable 223,372 115,885 223,372 115,885

Equipment purchased under finance lease agreements 162,232 227,375 - 227,375

Transferred land and construction in progress

to property, plant and equipment 6,914,833 - 6,914,833 -

61

Annual Report 2009

Notes to consolidated financial statementsMajor Development Public Company Limited and its subsidiaries


1. General information Major Development Public Company Limited (“the Company”) is a public company incorporated and domiciled in

Thailand. The Company is principally engaged in the development of properties for sales and its registered address is

at 141 Soi Sukhumvit 63 (Ekamai), Sukhumvit Road, Klongton Nua, Wattana, Bangkok.

On 24 April 2008, the 2008 Annual General Meeting of the Company’s shareholders approved the issuance and offer of

debenture of not exceed Baht 1,500 million with a period not exceed 3 years.

2. Basis of preparation 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the

Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of

the Notification of the Department of Business Development dated 30 January 2009, issued under the Accounting

Act B.E. 2543.

The financial statements in Thai language are the official statutory financial statements of the Company. The

financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the

accounting policies.

2.2 Basis of consolidation

a) The consolidated financial statements include the financial statements of the Company (“the Company”) and

the following subsidiary companies (“the subsidiaries”).

Revenues as a Assets as a percentage percentage to the to the consolidated consolidated total Country of Percentage of total assets as at revenues for the year Company’s name Nature of business incorporation shareholding 31 December ended 31 December

2009 2008 2009 2008 2009 2008 Percent Percent Percent Percent Percent Percent

M J A I Development Development of Thailand 51 51 11 8 - -

Company Limited properties for sales

Major Development Hotels Hotel Thailand 100 100 3 3 - -

and Resorts Company Limited

Major Development Property rental Thailand 100 100 - - - -

Residense Company Limited

b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company

obtains control, and continue to be consolidated until the date when such control ceases.

c) The financial statements of the subsidiaries are prepared for the same reporting period as the parent

company, using consistent significant accounting policies.

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d) Material balances and transactions between the Company and its subsidiary companies have been

eliminated from the consolidated financial statements.

e) Investments in the subsidiary companies as recorded in the Company’s books of account are eliminated

against the equity of the subsidiary companies in consolidated financial statements.

f) Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are not

held by the Company and are presented separately in the consolidated income statement and within equity

in the consolidated balance sheet.

2.3 The separate financial statements, which present investments in subsidiaries presented under the cost method,

have been prepared solely for the benefit of the public.

3. Adoption of new accounting standards In June 2009, the Federation of Accounting Professions has issued Notification No. 12/2552, assigning new numbers to

Thai Accounting Standards that match the corresponding International Accounting Standards. The numbers of Thai

Accounting Standards as referred to in these financial statements reflect such change.

The Federation of Accounting Professions has issued Notification No. 86/2551 and 16/2552, mandating the use of new

accounting standards, financial reporting standard and accounting treatment guidance as follows.

a) Accounting standards, financial reporting standard and accounting treatment guidance which are effective for the

current year

Framework for Preparation and Presentation of Financial Statements (revised 2007)

TAS 36 (revised 2007) Impairment of Assets

TFRS 5 (revised 2007) Non-current Assets Held for Sale

and Discontinued Operations

Accounting Treatment Guidance for Leasehold Right

Accounting Treatment Guidance for Business Combination under Common Control

These accounting standards, financial reporting standard and accounting treatment guidance became effective for

the financial statements for fiscal years beginning on or after 1 January 2009. The management has assessed the

effect of these standards and believes that TFRS 5 (revised 2007), Accounting Treatment Guidance for Leasehold

Right and Accounting Treatment Guidance for Business Combination under Common Control are not relevant to

the business of the Company, while Framework for Preparation and Presentation of Financial Statements (revised

2007) and TAS 36 (revised 2007) do not have any significant impact on the financial statements for the current

year.

b) Accounting standards which are not effective for the current year

Effective date

TAS 20 Accounting for Government Grants 1 January 2012

and Disclosure of Government

Assistance

TAS 24 (revised 2007) Related Party Disclosures 1 January 2011

TAS 40 Investment Property 1 January 2011

However, TAS 24 (revised 2007) and TAS 40 allow early adoption by the entity before the effective date.

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Annual Report 2009

The management of the Company has assessed the effect of these standards and believes that TAS 20 is not

relevant to the business of the Company, while TAS 24 (revised 2007) and TAS 40 will not have any significant

impact on the financial statements for the year in which they are initially applied.

4. Significant accounting policies 4.1 Revenue recognition from sales of units in condominium projects

Sales of units in condominium projects are recognised as revenue under the percentage-of-completion method

when contracts to purchase and to sell condominium units have been executed for not less than forty percent of

the area opened for sales, initial payments have been received totaling at least 20% of the sales price under the

contract, and development of the project is at least 10% complete. The percentage of completion is determined

based on the proportion of the actual cost already incurred up to the end of the period to the total anticipated

development costs to be incurred to completion, excluding the cost of land.

No income is recognised from contracts for which installments are overdue for more than three continuous periods,

and for which the percentage of completion of construction work exceeds the percentage of total payment

received.

4.2 Cost of units in condominium projects sold

In determining the cost of units in condominium projects sold, the total anticipated development costs (which include

considerations of actual costs incurred) are allocated to the units already sold on the basis of the selling price and

then recognised as cost in the income statement on a percentage of completion basis.

Development costs are stated at cost, consisting of cost of land, design fees, utilities, construction and related

interest.

4.3 Selling expenses

Selling expenses directly associated with projects, such as specific business tax and transfer fees are charged to

income statement in proportion to the percentage of total revenue recognised.

4.4 Cash and cash equivalents

Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original

maturity of three months or less and not subject to withdrawal restrictions.

4.5 Trade accounts receivable

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the

estimated losses that may be incurred in the collection of receivables. The allowance is generally based on collection

experiences and analysis of debt aging.

4.6 Land and construction in progress

Land and construction in progress are valued at the lower of cost and net realisable value. The details of cost

calculation are as follows:

Land - Land consists of the cost of land and the related expenses for acquired land on the

actual cost incurred, calculating it separately for each project.

Construction in progress - Construction in progress consists of the cost of design fees, construction, public

utility costs and interest capitalised to cost of projects. The Company and subsidiary

record cost of construction in progress based on the actual cost incurred.

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4.7 Investments in subsidiaries

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

4.8 Property, plant and equipment and depreciation

Land is stated at cost. Building and equipment are stated at cost less accumulated depreciation and allowance for

loss on impairment of assets (if any). Depreciation of building and equipment is calculated by reference to their

costs on a straight-line basis over the following estimated useful lives.

Office building 4 years

Condominium unit 20 years

Temporary buildings and temporary building improvement 2 - 5 years

Office building improvement and other fixed assets 5 years

Depreciation is included in determining income.

No depreciation is provided on land and construction in progress.

4.9 Intangible assets

Intangible assets acquired in a business combination are recognised at fair value on the date of acquisition.

Other acquired intangible assets are measured at cost. Following initial recognition, intangible assets are carried

at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for

impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and

the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisa-

tion expense is charged to the income statement.

A summary of the intangible assets with finite useful lives is as follows:

Computer software 10 years

4.10 Land awaiting development

Land awaiting development is valued at the lower of cost and net realisable value.

4.11 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether

directly or indirectly, or which are under common control with the Company.

They also include associated companies and individuals which directly or indirectly own a voting interest in the

Company that gives them significant influence over the Company, key management personnel, and directors and

officers with authority in the planning and direction of the Company’s operations.

4.12 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes

a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the re-

spective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist

of interest and other costs that an entity incurs in connection with the borrowing of funds.

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Annual Report 2009

4.13 Long-term leases

Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership to the

lessee are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased

assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance

charges, are included in other long-term payables, while the interest element is charged to the income statements

over the lease period. The property, plant or equipment acquired under finance leases is depreciated over the

useful life of the asset.

4.14 Impairment of assets

At each reporting date, the Company and its subsidiaries perform impairment reviews in respect of the property,

plant and equipment and intangible assets whenever events or changes in circumstances indicate that an asset

may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher

of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining

value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate

that reflects current market assessments of the time value of money and the risks specific to the asset. In

determining fair value less costs to sell, an appropriate valuation model is used. These calculations are

corroborated by a valuation model that, based on information available, reflects the amount that the Company and

its subsidiaries could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable,

willing parties, after deducting the costs of disposal.

An impairment loss is recognised in the income statement.

4.15 Employee benefits

Salaries, bonuses and contributions to the social security fund and provident fund are recognised as expenses

when incurred.

4.16 Provisions

Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past

event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obliga-

tion, and a reliable estimate can be made of the amount of the obligation.

4.17 Income tax

Income tax is provided for in the accounts based on the taxable profits determined in accordance with tax

legislation.

5. Significant accounting judgments and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times requires

management to make subjective judgments and estimates regarding matters that are inherently uncertain. These

judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant judgments

and estimates are as follows:

Lease

In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to

use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred,

taking into consideration terms and conditions of the arrangement.

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Allowance for doubtful accounts

In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon,

among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.

Property plant and equipment and depreciation

In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives

and salvage values of the Company’s buildings and equipment and to review estimate useful lives and salvage values

when there are any changes.

In addition, the management is required to review property, plant and equipment for impairment on a periodical basis

and record impairment losses in the period when it is determined that their recoverable amount is lower than the

carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets

subject to the review.

Intangible assets

The initial recognition and measurement of intangible assets, and subsequent impairment testing, require management

to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable

discount rate in order to calculate the present value of those cash flows.

Litigation

The Company has contingent liabilities as a result of litigation. The Company’s management has used judgment to as-

sess of the results of the litigation and believes that no loss will result. Therefore no contingent liabilities are recorded

as at the balance sheet date.

6. Trade accounts receivable(Unit: Baht)

Consolidated financial statements Separate financial statements 2009 2008 2009 2008

Trade accounts receivable - sales of property

- Installments due 12,480,197 8,561,563 12,480,197 8,561,563

- Unbilled completed work 2,064,559,626 1,853,648,317 2,064,559,626 1,853,648,317

Total 2,077,039,823 1,862,209,880 2,077,039,823 1,862,209,880

The balances of trade accounts receivable as at 31 December 2009 and 2008 aged, on the basis of due dates, are

summarised below.

(Unit: Baht)


Trade accounts receivable - sales of property

Not over 3 months 8,986,348 3,593,066 8,986,348 3,593,066

3 - 6 months 221,018 973,760 221,018 973,760

6 - 12 months 1,113,101 2,103,042 1,113,101 2,103,042

Over 12 months 2,159,730 1,891,695 2,159,730 1,891,695

12,480,197 8,561,563 12,480,197 8,561,563

Add: Unbilled completed work 2,064,559,626 1,853,648,317 2,064,559,626 1,853,648,317

Total 2,077,039,823 1,862,209,880 2,077,039,823 1,862,209,880

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Annual Report 2009

Additional information on trade accounts receivable - sales of property.

(Unit: Baht)


Total estimated project value 23,246,861,228 22,500,000,000 20,246,861,228 19,500,000,000

Total value of contracts signed 14,188,303,818 12,440,455,276 13,326,548,857 11,840,462,694

Percentage of total project sales 61% 55% 66% 61%

Installments due 7,893,494,401 5,122,061,352 7,893,494,401 5,122,061,352

Less: Collections (7,881,014,204) (5,113,499,789) (7,881,014,204) (5,113,499,789)

Accounts receivable - installments due 12,480,197 8,561,563 12,480,197 8,561,563

Revenues recognised 10,017,782,325 7,030,973,604 10,017,782,325 7,030,973,604

Less: Installments due (7,893,494,401) (5,122,061,352) (7,893,494,401) (5,122,061,352)

Installment received in advance (59,728,298) (55,263,935) (59,728,298) (55,263,935)

Unbilled completed work 2,064,559,626 1,853,648,317 2,064,559,626 1,853,648,317

As at 31 December 2009, the Company has 4 debtors (2008: 3 debtors) totaling Baht 2.75 million (2008: Baht 3.03

million) in default of payment of which the recognition of income has ceased.

7. Land and construction in progress As at 31 December 2009 and 2008, details of the land and construction in progress are as follows:

(Unit: Baht)


Land cost 3,672,777,834 3,489,050,145 3,175,797,834 2,992,070,145

Construction in progress 7,949,708,471 6,196,407,526 7,615,295,632 6,087,557,600

Capitalised interest 592,536,048 402,188,927 534,880,590 370,942,918

Total 12,215,022,353 10,087,646,598 11,325,974,056 9,450,570,663

Less: Accumulated transferred to cost of sales (6,826,377,236) (4,739,810,984) (6,826,377,236) (4,739,810,984)

Transferred to property, plant and equipment (19,054,312) (12,139,479) (19,054,312) (12,139,479)

Net 5,369,590,805 5,335,696,135 4,480,542,508 4,698,620,200

Land and construction thereon with carrying values as at 31 December 2009 amounting to Baht 5,285.45 million

(Separate financial statements: Baht 4,396.40 million) (2008: Baht 5,215.61 million, Separate financial statements: Baht

4,578.53 million) have been mortgaged with local commercial banks as collateral against bank overdrafts and long-term

loans as described in Notes 12 and 14 to the financial statements.

During the year 2009, the Company and its subsidiary capitalised interest amounting to Baht 190.35 million (Separate

financial statements: Baht 163.94 million) (2008: Baht 190.75 million, Separate financial statements: Baht 163.62 million)

to the costs of land and construction in progress. The capitalisation rates of interest are based on the borrowing costs

of the specific loans, as described in Notes 12, 14 and 15 to the financial statements.

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8. Investments in subsidiaries Details of investments in subsidiaries as presented in separate financial statements are as follows:

(Unit: Baht)

Company’s name Paid-up capital Shareholding percentage Cost

2009 2008 2009 2008 2009 2008

Percent Percent

M J A I Development Company Limited 12,750,000 12,750,000 51 51 12,750,000 12,750,000

Major Development Hotels and Resorts

Company Limited 60,000,000 60,000,000 100 100 59,999,300 59,999,300

Major Development Residense Company Limited 100,000,000 100,000,000 100 100 99,999,400 99,999,400

Total 172,748,700 172,748,700

9. Property, plant and equipment(Unit: Baht)

Consolidated financial statements Office building Temporary and office buildings and Condo building temporary minium Office Furniture Construction Land improvement building units equipment and fixtures Vehicles in progress Total

Cost

31 December 2008 287,989,965 16,638,295 150,473,394 28,803,470 18,158,400 65,991,977 18,398,600 13,282,508 599,736,609

Acquisitions - - - - 1,007,311 1,939,178 - 20,615,739 23,562,228

Disposals - - - - - (1,257,964) - - (1,257,964)

Write off - - (31,419,367) - (40,553) (25,109) - - (31,485,029)

Transfer in (out) - - 7,990,996 - 39,630 1,140,200 - (9,170,826) -

Transfer from land and

construction in progress 761,222 - - 6,153,611 - - - - 6,914,833

Capitalised interest - - - - - - - 5,815,583 5,815,583

31 December 2009 288,751,187 16,638,295 127,045,023 34,957,081 19,164,788 67,788,282 18,398,600 30,543,004 603,286,260

Accumulated depreciation

31 December 2008 - 16,638,274 89,289,963 4,041,629 10,025,342 23,152,041 11,779,178 - 154,926,427

Depreciation for the year - - 23,574,811 1,646,698 2,577,537 12,787,554 2,239,720 - 42,826,320

Depreciation on disposals - - - - - (1,125,815) - - (1,125,815)

Depreciation on write off - - (30,026,232) - (37,931) (5,775) - - (30,069,938)

31 December 2009 - 16,638,274 82,838,542 5,688,327 12,564,948 34,808,005 14,018,898 - 166,556,994

Net book value

31 December 2008 287,989,965 21 61,183,431 24,761,841 8,133,058 42,839,936 6,619,422 13,282,508 444,810,182

31 December 2009 288,751,187 21 44,206,481 29,268,754 6,599,840 32,980,277 4,379,702 30,543,004 436,729,266

Depreciation charge included in income statements for the years

2008 41,809,095

2009 42,826,320

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Annual Report 2009

(Unit: Baht)

Separate financial statements Office building Temporary and office buildings and Condo building temporary minium Office Furniture Construction Land improvement building units equipment and fixtures Vehicles in progress Total

Cost

31 December 2008 80,386,678 16,638,295 150,473,394 28,803,470 17,792,185 50,268,724 18,398,600 - 362,761,346

Acquisitions - - 995,100 - 843,045 854,807 - 670,154 3,363,106

Disposals - - - - - (1,257,964) - - (1,257,964)

Write off - - (31,419,366) - (40,553) (13,910) - - (31,473,829)

Transfer from land and

construction in progress 761,222 - - 6,153,611 - - - - 6,914,833

31 December 2009 81,147,900 16,638,295 120,049,128 34,957,081 18,594,677 49,851,657 18,398,600 670,154 340,307,492

Accumulated depreciation

31 December 2008 - 16,638,274 89,289,963 4,041,629 9,990,568 22,367,678 11,779,178 - 154,107,290

Depreciation for the year - - 23,222,141 1,646,698 2,456,853 8,998,093 2,239,720 - 38,563,505

Depreciation on disposals - - - - - (1,125,815) - - (1,125,815)

Depreciation on write off - - (30,026,231) - (37,931) (5,206) - - (30,069,368)

31 December 2009 - 16,638,274 82,485,873 5,688,327 12,409,490 30,234,750 14,018,898 - 161,475,612

Net book value

31 December 2008 80,386,678 21 61,183,431 24,761,841 7,801,617 27,901,046 6,619,422 - 208,654,056

31 December 2009 81,147,900 21 37,563,255 29,268,754 6,185,187 19,616,907 4,379,702 670,154 178,831,880

Depreciation charge included in income statements for the years

2008 40,989,960

2009 38,563,505

As at 31 December 2009, a subsidiary had an outstanding balance of land and work under construction of a hotel of

Baht 237.48 million. The hotel facility is financed by a financial institution and the Company and the amount of

borrowing costs capitalised during the year ended 31 December 2009 was Baht 5.82 million (2008: Baht 4.30 million).

The weighted average rate used to determine the amount of borrowing costs eligible for capitalisation was 4.50% to

5.25% (2008: 5.75%).

As at 31 December 2009, the Company and its subsidiaries had vehicle and equipment under finance lease agreements

with net book values amounting to Baht 3.95 million (2008: Baht 5.36 million) and in separate financial statements

amounting to Baht 3.82 million (2008: Baht 5.36 million).

As at 31 December 2009, certain building and equipment items have been fully depreciated but are still in use. The

original cost of those assets amounted to Baht 105.83 million (2008: Baht 79.01 million).

Land, building and a condominium unit with carrying values as at 31 December 2009 amounting to Baht 384.82 million

(2008: Baht 387.22 million) (Separate financial statements: Baht 140.35 million, 2008: Baht 166.33 million) have been

mortgaged with local banks as collateral against bank overdrafts, short-term and long-term loans, as described in Notes

12 and 14 to the financial statements.

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10. Intangible assets Details of intangible assets which are computer software are as follows:

(Unit: Baht) Consolidated financial statements / Separate financial statements

Net book value as at 31 December 2008 2,507,876

Additions during year - cost 4,584,243

Amortisation during the year (255,853)

Net book value as at 31 December 2009 6,836,266

11. Land awaiting development Land awaiting development is a plot of land in Nontaburi Province awaiting use in a future project. It is presented at cost,

which consists of the cost of land and related expenses.

12. Overdrafts and short-term loans from financial institutions(Unit: Baht)


Bank overdrafts 90,763,318 90,744,705 80,806,067 83,622,554

Short-term loans from banks 129,750,500 100,000,000 129,750,500 100,000,000

Total 220,513,818 190,744,705 210,556,567 183,622,554

As at 31 December 2009, short-term loans obtained from two local commercial banks amounted to Baht 109.75 million

will mature in February and April 2010 and Baht 20.00 million will mature in May 2010 and carry interest rates at 2.00%

and 6.125% per annum, respectively. The short-term loans are secured by the mortgage of the land, buildings and a

condominium unit (Note 9), land awaiting development (Note 11), the director’s bill of exchange and by the guarantees

of the directors.

Bank overdrafts carry interest at MOR per annum and are secured by the mortgage of land and construction and a

condominium unit of the Company and a subsidiary, as described in Notes 7 and 9 to the financial statements, and the

land of the director and by the guarantees of the directors.

13. Liabilities under finance lease agreements(Unit: Baht)


Liabilities under financial lease agreements 242,094 1,706,384 117,443 1,706,384

Less: Deferred interest expenses (32,884) (135,661) (16,387) (135,661)

Total 209,210 1,570,723 101,056 1,570,723

Less: Portion due within one year (129,869) (1,469,667) (75,792) (1,469,667)

Liabilities under finance lease agreements -

long-term portion 79,341 101,056 25,264 101,056

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Annual Report 2009

The Company and its subsidiaries have entered into finance lease agreements with leasing companies for rental of

equipment for use in their operations, whereby they are committed to pay rental on a monthly basis. The term of the

agreements is generally three years. As at 31 December 2009, future minimum lease payments of the Company and its subsidiaries required under the finance

lease agreements were as follows: (Unit: Million Baht)

Less than 1 year 1-5 years Total

Future minimum lease payments 0.15 0.09 0.24

Deferred interest expenses (0.02) (0.02) (0.04)

Present value of future minimum lease payments 0.13 0.07 0.20

As at 31 December 2009, future minimum lease payments of the Company required under the finance lease agreements

were as follows: (Unit: Million Baht)

Less than 1 year 1-5 years Total

Future minimum lease payments 0.09 0.03 0.12

Deferred interest expenses (0.01) (0.01) (0.02)

Present value of future minimum lease payments 0.08 0.02 0.10

14. Long-term loans from financial institutions These long-term loans from financial institutions are secured loans which the Company and its subsidiaries obtained

from local commercial banks, as detailed below.

(Unit: Baht) Credit facilities which have yet to be Consolidated financial Separate financial drawn down as at Interest rate statements statements 31 December 2009 per annum Repayment condition 2009 2008 2009 2008

(1) Loan from a bank, - MLR, Repayment when the mortgage of the - 505,027,580 - 505,027,580 with facility of Baht which is repayable condominium units in the Watermark 1,000 million monthly Chaophraya River project is redeemed, at a rate of not less than 65% of the selling price, and to be repaid within 3 years agreement date.(2) Loan from a bank, 14,768,000 MLR - 0.50%, Repayment when the mortgage of the 655,232,000 450,488,000 655,232,000 450,488,000 with facility of Baht which is repayable condominium units in the Wind Ratchayothin 670 million monthly project is redeemed, at a rate of not less than 65% of the selling price, and to be repaid within 3 years commencing from the date on which the loan is drawn down.(3) Loan from a bank, 13,185 MLR, Repayment when the mortgage of the 819,986,815 310,986,815 819,986,815 310,986,815 with facility of Baht which is repayable condominium units in the Aguston Sukhumvit 820 million monthly 22 project is redeemed, at a rate of not less than 65% of the selling price, and to be repaid within 48 months commencing from the date on which the loan is drawn down. (4) Loan from a bank, - MLR - 0.50%, Repayment when the mortgage of the - 144,448,698 - 144,448,698 with facility of Baht which is repayable condominium units in the Mykonos Hua Hin 180 million monthly project is redeemed, at a rate of not less than 65% of the selling price, and to be repaid within 2 years and 6 months commencing from the agreement date.(5) Loan from a bank, - MLR, Repayment when the mortgage of the - 403,820,688 - 403,820,688 with facility of Baht which is repayable condominium units in the Watermark 600 million monthly Chaophraya River project is redeemed, at a rate of the less than 65% of the selling price, and to be repaid within 1 year and 6 months commencing from the date on which the loan is drawn down.

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(Unit: Baht) Credit facilities which have yet to be Consolidated financial Separate financial drawn down as at Interest rate statements statements 31 December 2009 per annum Repayment condition 2009 2008 2009 2008

(6) Loan from a bank, 20,858,638 MLR - 0.50%, Repayment when the mortgage of the 425,577,475 397,550,000 425,577,475 397,550,000 with facility of Baht which is repayable condominium units in the Wind Sukhumvit 690 million monthly project is redeemed, at a rate of the less (2008: Baht 490 million) than 65% of the selling price, and to be repaid within March 2010.(7) Loan from a bank, 580,000,000 MLR - 1.75%, Repayment when the mortgage of the 475,000,000 475,000,000 475,000,000 475,000,000 with facility of Baht which is repayable condominium units in the Marrakesh Huahin 1,055 million monthly Residences project is redeemed, at a rate of the less than 65% of the selling price, and to be repaid within 3 years commencing from the date on which the loan is drawn down. (8) Loan from a bank, - MLR + 0.50%, Repayment as from March 2009, in monthly - 150,000,000 - 150,000,000 with facility of Baht which is repayable not less than installments of Baht 10 million. 150 million monthly (9) Loan from a bank, 227,000,000 MLR – 0.25%, Repayment when the mortgage of the 60,000,000 60,000,000 60,000,000 60,000,000 with facility of Baht which is repayable condominium units in the Phayathai project 287 million monthly is redeemed, at a rate of the less than 60% of selling price, and to be repaid within March 2012.(10) Loan from a bank, 443,000,000 MLR – 0.25%, Repayment when the mortgage of the 203,000,000 203,000,000 203,000,000 203,000,000 with facility of Baht which is repayable condominium units in the Surawong project 646 million monthly is redeemed, at a rate of the less than 60% of selling price, and to be repaid within September 2012.(11) Loan from a bank, - MLR(SCB) + 2.00%, Repayment not less than installments of 15,836,275 - 15,836,275 - with facility of Baht which is repayable Baht 7.3 million within 1 year commencing 50 million quarterly from the agreement date and to be repaid within 4 years commencing from the agreement date.(12) Loan from a bank, 38,000,000 MLR(SCB) + 1.00%, Repayment when the mortgage of the 254,910,155 - 254,910,155 - with facility of Baht which is repayable condominium units in the Watermark 1,083.75 million quarterly Chaophraya River project is redeemed, at a (2008: Baht rate of not less than Baht 50,000 per square 883.75 million) metre and to be repaid within 72 months commencing from the agreement date. (13) Loan from a bank, - MLR(SCB) + 2.00%, Repayment as from November 2009, in 302,890,003 - 302,890,003 - with facility of Baht which is repayable quarterly and to be repaid within 72 months. 303 million quarterly (14) Loan from a bank, 700,000,000 MLR for the first Repayment when the mortgage of the 248,000,000 248,000,000 - - with facility of Baht facility amounting to condominium units in the Royce Private 948 million Baht 248 million and Residences Sukhumvit 31 project is MOR for the second redeemed, at the higher amount of a rate of facility amounting not less than 60% of the selling price of a to Baht 700 million, unit, or at the rate of Baht 72,000 per square which is repayable metre calculated on the basis of the title monthly deed to the condominium or the mortgage value per unit sold.(15) Loan from a bank, 273,000,000 MLR-1.75%, Repayment as from March 2011, in quarterly 125,000,000 125,000,000 - - with facility of Baht which is and to be repaid within 31 December 2017. of Baht 398 million repayable monthly (16) Loan from a bank, 1,000,000,000 MLR - 1.00%, Repayment when the mortgage of the - - - - with facility of Baht which is repayable condominium units in the Reflection Pattaya 1,000 million monthly project is redeemed, at the rate of not less than 65% of the selling price, and to be repaid within 4 years commencing from the date on which the loan is drawn down.

Total long-term loans 3,585,432,723 3,473,321,781 3,212,432,723 3,100,321,781Less: Current portion (2,214,818,940) (1,153,296,966) (2,214,818,940) (1,153,296,966)Long-term portion 1,370,613,783 2,320,024,815 997,613,783 1,947,024,815

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Annual Report 2009

The Company and its subsidiaries have mortgaged the land and construction thereon (Note 7), the land, buildings and

a condominium unit (Note 9) and land awaiting development (Note 11), with banks to secure the long-term loans.

In addition, long-term loans of the Company are guaranteed by the Company’s directors, and a fixed deposit of the

Company has been placed as collateral. Long-term loan of subsidiary is guaranteed by the Company.

Some loan agreements contain covenants that, among other things, require the Company to maintain certain debt to

equity ratio.

15. Related party transactions During the years, the Company and its subsidiaries had significant business transactions with related parties, which have

been concluded on commercial terms and bases agreed upon in the ordinary course of business between the

Company and those companies. Below is a summary of those transactions.

(Unit: Baht)

Consolidated Separate financial statements financial statements Transfer pricing policy 2009 2008 2009 2008

Transaction with subsidiaries

(Eliminated from the consolidated financial statements)

Interest income - - 12,191,972 10,957,076 4.50% to 7.00%

per annum

(2008: 5.25% to

7.50% per annum)

Management fee income - - 9,000,000 10,500,000 Contract value

Transactions with related persons

Sales of units in condominium projects 5,042,141 13,514,058 5,042,141 13,514,058 Contract value

Interest expense

(charged to project costs) 10,670,673 - - - 4.50% to 7.00%

per annum

Consulting fee 1,200,000 - 1,200,000 - Contract value

As at 31 December 2009 and 2008, the outstanding balances of the related party transactions have been shown in the

balance sheets as follows:

(Unit: Baht)


Trade accounts receivable

Related persons 825,000 - 825,000 -

Accounts receivable and advances to related parties

Subsidiaries

M J A I Development Company Limited - - 30,931,652 12,728,553

Major Development Hotels and Resorts Company Limited - - 14,437,772 2,150,873

Major Development Residense Company Limited - - 380,120 280,000

- - 45,749,544 15,159,426

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(Unit: Baht)


Other current assets - prepaid consulting fee

Related persons 100,000 - 100,000 -

Long-term loans to subsidiaries

Subsidiaries

M J A I Development Company Limited - - 222,093,000 140,250,000

Major Development Hotels and Resorts Company Limited - - 21,896,000 21,896,000

- - 243,989,000 162,146,000

Deposits and advances from customers

Related persons 2,314,703 4,984,170 2,114,703 4,984,170

Advance received from sale of land

Subsidiary

Major Development Residense Company Limited - - 100,000,000 100,000,000

Long-term loan from minority shareholder of subsidiary

Tmilestone Limited 215,404,000 134,750,000 - -

On 22 December 2008, the Company entered into the contract to purchase and to sell land with its subsidiary. Selling

price set at Baht 119.1 million, which was cost of land. On the agreement date the Company received a deposit of Baht

100 million, with the remaining amount to be paid and the possessory right transferred in April 2010. During 2009, movements of long-term loans to subsidiaries and long-term loan from minority shareholder of subsidiary

are as follows:

(Unit: Baht)

Separate financial statements

1 January 2009 Increase 31 December 2009

Long-term loans to subsidiaries

Subsidiaries

M J A I Development Company Limited 140,250,000 81,843,000 222,093,000

Major Development Hotels and Resorts Company Limited 21,896,000 - 21,896,000

162,146,000 81,843,000 243,989,000

(Unit: Baht)

Consolidate financial statements

1 January 2009 Increase 31 December 2009


Tmilestone Limited 134,750,000 80,654,000 215,404,000

Guarantee obligations with related parties

The Company had Baht 398 million and Baht 10 million outstanding guarantees of a long-term loan and overdraft

facilities of Major Development Hotels and Resorts Company Limited, respectively, which obtained from a local

commercial bank.

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Annual Report 2009


Long-term loan from minority shareholder of subsidiary is for using in Royce Private Residences Sukhumvit 31

condominium project. It carries interest at the rate of TISCO’s standard loan (MLR) and matures at the earlier of 1

November 2011 or the date of the development of the project is completed and all liabilities are completely discharged

toTISCOBankPublicCompanyLimited.น

16. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a

statutory reserve at least 5% of its net income, after deducting accumulated deficit brought forward (if any), until the

reserve reaches 10% of its registered share capital. The statutory reserve is not available for dividend distribution. As at 31 December 2009 and 2008, the Company has transferred net income amounting to Baht 15.7 million and Baht

23.8 million, respectively, to the statutory reserve.

17. Corporate income tax Corporate income tax for the years 2009 and 2008 have been calculated at the rate of 25% of net income, after adding

back certain provisions and expenses which are not deductible for tax computation purposes. This tax rate is in

compliance with the provisions of Royal Decree 475 (B.E. 2551) dated 6 August 2008, issued under the Revenue Code,

regarding the reduction of income tax rates.

18. Expenses by nature Significant expenses by nature are as follows:

(Unit: Baht)


Salary and wages and other employee benefits 86,965,002 79,944,307 86,965,002 79,944,307

Depreciation 42,826,320 41,809,095 38,563,505 40,989,960

Commission expenses 30,672,424 38,755,763 26,244,216 38,755,763

Advertising expenses 63,078,604 70,246,351 56,466,547 58,921,567

Specific business tax (reversal) 5,057,982 (29,403,637) 5,057,982 (29,403,637)

Surcharges of income tax 11,025,157 10,308,564 11,025,157 10,308,564

19. Dividends paid(Unit: Baht)

Dividends Approved by Total dividends Dividend per share

Final dividends for 2007 Annual General Meeting of the 175,000,000 0.25

shareholders on 24 April 2008

Interim dividends for 2008 Board of Director Meeting on 105,000,000 0.15

28 October 2008

Total for 2008 280,000,000 0.40

Final dividends for 2008 Annual General Meeting of the 105,000,000 0.15

shareholders on 24 April 2009

Interim dividends for 2009 Board of Director Meeting on 104,998,830 0.15

28 October 2009

Total for 2009 209,998,830 0.30

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20. Provident fund The Company and its employees have jointly established a provident fund in accordance with the Provident Fund Act

B.E. 2530. Both employees and the Company contributed to the fund monthly at the rates of 3% to 10% of basic

salary. The fund which is managed by Thai Military Bank Public Company Limited will be paid to employees upon

termination in accordance with the fund rules. During the year 2009, the Company contributed Baht 2.5 million

(2008: Baht 2.1 million) to the fund.

21. Basic earnings per share Basic earnings per share is calculated by dividing net income for the year by the weighted average number of ordinary

shares in issue during the year.

22. Commitments

a) As at 31 December 2009, the Company and its subsidiary had outstanding commitments of Baht 1,440 million

(Separate financial statements: Baht 1,364 million) (2008: Baht 2,156 million, Separate financial statements: Baht

2,091 million) with respect to construction costs of condominium projects and service agreements.

b) As at 31 December 2009, the Company had outstanding commitment of Baht 141.9 million within May 2010 and

June 2011 with respect to the purchase of land under contract to purchase and to sell made with other person and

a subsidiary had outstanding commitment of Baht 19.1 million within April 2010 with respect to the purchase of land

under contract to purchase and to sell made with the Company.

c) On 18 July 2008, Major Development Hotels and Resorts Company Limited (subsidiary) has entered into a

management agreement with a company in Thailand, who is engaged to operate the subsidiary’s hotel for a period

of 5 years commencing at the opening date of the Hotel. Under the management agreement, the subsidiary is

obliged to pay a management fee at a rate of 1% of adjusted gross revenue and an incentive fee at a rate of 6%

of gross operating profit.

23. Bank guarantees As at 31 December 2009, there were outstanding bank guarantees to guarantee electricity use totaling Baht 16.3

million (2008: Baht 9.1 million) (Separate financial statements: Baht 16.2 million, 2008: Baht 8.8 million) which had been

issued by the bank on behalf of the Company and its subsidiary. The Company placed deposits at banks of Baht 9.7

million with the bank to secure the issuance of bank guarantees.

24. Litigation As at 31 December 2009, the following lawsuits have been filed against the Company.

a) Nine of the Company’s customers sued the Company seeking refunds of payments totaling Baht 90.7 million made

for condominiums purchased in the Company’s projects. The lawsuits are in the process of being conciliated

between the disputing parties.

b) Creditors sued the Company for payment of construction expenses and compensation totaling Baht 192.6 million,

in seven cases. However, the Company has lodged disputes of those lawsuits with claims totaling Baht 193.2

million on the grounds that creditors could not perform the work that met the quality and deadlines. The lawsuits

are currently in the process of being investigated by the Court of First Instance and the Office of Arbitration.

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Annual Report 2009

The management believes that no material liabilities are likely to arise as a result of the above litigations and there

fore no provision has been made in the accounts.

25. Financial instruments

25.1 Financial risk management

The Company and its subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 32

“Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade

accounts receivable and payable, loans lending, liabilities under finance lease agreements, short-term loans and

long-term loans. The financial risks associated with these financial instruments and how they are managed are

described below.

Credit risk

The Company is exposed to credit risk primarily with respect to trade accounts receivable and other receivables.

The Company manages the risk by adopting appropriate credit control policies and procedures and therefore does

not expect to incur material financial losses. In addition, the Company does not have high concentration of credit

risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of

trade accounts receivable and other receivables as stated in the balance sheet.

Interest rate risk

The Company and its subsidiaries’ exposure to interest rate risk relates primarily to their deposits at banks, loans

lending, overdrafts, liabilities under finance lease agreements, short-term and long-term borrowings. However, since

most of these financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the

current market rate, the interest rate risk is expected to be minimal.

Significant financial assets and liabilities as at 31 December 2009 classified by type of interest rates are summarised

in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based

on the maturity date or the repricing date if this occurs before the maturity date.

Consolidated financial statements Fixed interest rates within Floating Non-interest 1 year interest rate bearing Total Interest rate (Million Baht) (% p.a.)

Financial assets

Cash and cash equivalents 0.6 53.3 0.1 54.0 0.50 - 1.75

Trade accounts receivable - - 2,077.0 2,077.0 -

Pledged deposits at banks 6.3 3.4 - 9.7 0.75 - 1.75

6.9 56.7 2,077.1 2,140.7

Financial liabilities

Overdrafts and short-term loans

from financial institutions - 220.5 - 220.5 1.875 - 7.00

Trade accounts payable - - 470.1 470.1 -

Liabilities under finance lease agreements 0.2 - - 0.2 7.00, 5.50

Long-term loans from financial institutions - 3,585.4 - 3,585.4 4.50 - 7.85

Long-term loan from minority

shareholder of subsidiary - 215.4 - 215.4 6.15 - 7.00

0.2 4,021.3 470.1 4,491.6

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Separate financial statements Fixed interest rates within Floating Non-interest 1 year interest rate bearing Total Interest rate (Million Baht) (% p.a.)

Financial assets

Cash and cash equivalents 0.6 46.7 0.1 47.4 0.50 - 1.75

Trade accounts receivable - - 2,077.0 2,077.0 -

Pledged deposits at banks 6.3 3.4 - 9.7 0.75 - 1.75

Long-term loans to subsidiaries - 244.0 - 244.0 4.50 - 7.00

6.9 294.1 2,077.1 2,378.1

Financial liabilities

Overdrafts and short-term loans

from financial institutions - 210.6 - 210.6 1.875 - 7.00

Trade accounts payable - - 420.6 420.6 -

Liabilities under finance lease agreements 0.1 - - 0.1 7.00

Long-term loans from financial institutions - 3,212.4 - 3,212.4 4.50 - 7.85

0.1 3,423.0 420.6 3,843.7

Foreign currency risk

As at 31 December 2009 the Company and its subsidiaries have no significant financial instruments in foreign

currency.

25.2 Fair values of financial instruments

Since the majority of the Company and its subsidiaries’ financial instruments are short-term in nature, loans

receivable and payable bear interest rates which are close to the market rate, their fair values are not expected to

be materially different from the amounts presented in the balance sheets.

A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing

parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial

instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

26. Segment information The Company’s and its subsidiaries’ business operations involve two principal segments: (1) development of properties

for sales and (2) hotel business and related services. These operations are mainly carries on in Thailand. Below is the

consolidated financial information of the Company and its subsidiaries by segment.

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Annual Report 2009

(Unit: Million Baht)

For the year ended 31 December 2009 and 2008 Development of Hotel business and Elimination of Consolidated properties for sales related services intersegment revenues financial statements 2009 2008 2009 2008 2009 2008 2009 2008

Revenue from external customers 2,977 2,636 - - - - 2,977 2,636

Segment income 893 825 - - - - 893 825

Unallocated income and expenses:

Other income 21 20

Selling expenses (104) (95)

Administrative expenses (158) (146)

Management benefit expenses (20) (18)

Finance cost (71) (2)

Corporate income tax (154) (151)

Net income 407 433

Trade accounts receivable 2,077 1,862 - - - - 2,077 1,862

Land and construction in

progress - net 5,391 5,336 - - (22) - 5,369 5,336

Property, plant and equipment 200 230 239 216 (2) (1) 437 445

Unallocated assets 425 435

Total assets 8,308 8,078

27. Capital management The primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure

and preserves the ability to continue its business as a going concern. According to the consolidated balance sheet as at 31 December 2009, the Group’s debt-to-equity ratio was 2.5:1

(2008: 2.7:1) and according to the separate balance sheet, the Company’s was 2.1:1 (2008: 2.4:1).

28. Subsequent events

a) On 29 January 2010, the Company entered into the contract to purchase and to sell land with other party at selling

price of Baht 740.0 million. On the agreement date the Company paid a deposit of Baht 90.0 million, with the

remaining amount to be paid and the possessory right transferred in March 2010.

b) On 8 January 2010, the Company entered into two loan agreements with a local commercial bank. The first loan

facility of Baht 1,000 million is to be used for repayment of the existing long-term loan described in Note 14(12) to

financial statements and as a working capital. The second loan facility of Baht 207 million is to be used for the

Collezio Sathorn-Pipat condominium project. The interest rates of and collaterals for these loans are as stipulated

in the agreements. The Company first drew on such loans in February 2010.

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29. Reclassification Certain amounts in the financial statements for the year ended 31 December 2008 have been reclassified to conform to

the current year’s classification but with no effect to previously reported net income or shareholders’ equity. The

reclassifications are as follows:

(Unit: Baht)

Consolidated financial statements Separate financial statements As As previously As As previously reclassified reported reclassified reported


Other receivables - advance payment 12,450,590 - 12,450,590 -

Other current assets 17,732,597 27,752,362 13,185,686 23,205,453

Property, plant and equipment - net 444,810,182 445,164,008 208,654,056 209,007,880

Intangible assets - net 2,507,876 - 2,507,876 -

Administrative expenses 146,682,661 164,370,786 142,273,616 159,961,741

Management benefit expenses 17,688,125 - 17,688,125 -

30. Approval of financial statements The financial statements were authorised for issue by the Company’s Board of Directors on 19 February 2010.

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Annual Report 2009

ADDITIONAL EXPLANATIONS TO

THE FINANCIAL STATEMENT

Summary of Financial Ratio

2009 2008 2007

Consolidated Consolidated Consolidated Financial Financial Financial Statement Statement Statement

LIQUIDITY RATIO

Current ratio (Times) 1.77 2.16 2.63

Quick ratio (Times) 0.49 0.56 0.83

Account Receivable turnover (Times) 1.43 1.43 3.25

Collection days (Days) 254.70 255.85 110.70

Inventory turnover (Times) 0.39 0.50 0.58

Average number of days sales (Days) 940.68 733.08 620.77

Account payable turnover (Times) 4.43 2.55 5.25

Payment days (Days) 82.35 143.17 68.59

PROFITABILITY RATIO

Gross profit margin % 30.50 31.84 32.65

Operating profit margin % 21.05 22.08 19.48

Net profit margin % 13.56 16.31 12.62

Return on equity % 16.97 19.69 19.38

Return on equity (Fully Diluted) % 16.97 19.69 19.38

EFFICIENCY RATIO

Return on total assets % 4.89 5.36 6.89

Return on fixed assets % 60.84 62.48 191.37

Assets turnover (Times) 0.36 0.33 0.55

FINANCIAL POLICY RATIO

Debt to Equity ratio (Times) 2.47 2.67 1.60

Interest bearing Debt to Equity ratio (Times) 1.68 1.73 1.04

Interest payment ratio (Times) 9.55 247.27 1,002.89

Company Performance

The Company’s revenue has continuous increase from Baht 2,215.94 million in 2007 to Baht 2,656.64 million in 2008 and

in 2009 the Company’s revenue amounted to Baht 2,997.86 million, that comprising of Revenue from sales of units in condominium

projects and other income.

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Revenue Structure

Revenue 2009 Consolidated 2008 Consolidated 2007 Consolidated Financial Statement Financial Statement Financial Statement

M. Baht % M. Baht % M. Baht %

Revenue from sales

Hamton Thong Lor 10

Fullerton Sukhumvit 58.89 1.96 13.22 0.50 134.18 6.06

Watermark Chaophraya River Tower A 471.95 15.74 1,026.52 38.64 1,085.54 48.99

Manhattan Chidlom 89.59 2.99 89.59 3.37 638.52 28.81

Watermark Chaophraya River Tower B 115.96 3.87 595.12 22.40 296.54 13.38

Wind Sukhumvit 23 372.18 12.41 382.04 14.38 44.01 1.99

Wind Ratchayothin 761.13 25.39 294.92 11.10

Aguston Sukhumvit 22 744.41 24.83 -0.15 -0.01

Mykonos Hua Hin 190.26 6.35 234.66 8.83

Marrakesh Hua Hin Residences 172.19 5.74

Collezio Sathorn-Pipat

Reflection Jomtien Beach Pattaya

Royce Private Residences Sukhumvit 31

Rental income

Other Income 21.33 0.71 20.56 0.77 17.29 0.78

Total Revenue 2,997.89 100.00 2,656.63 100.00 2,215.93 100.00

Remark: 1. Accounting period 1 January to 31 December

2. Other revenues of the company were mainly from, deposit interest earned, the sales of parking rights,

deposit from the customer cancellation and revenue from sales of construction bids.

Revenue from sales of condominium units

In 2009, the Company had revenue from the sales of condominium units of Baht 2,976.53 million, an increase from Baht

2,636.07 million in 2008 or 12.92% growth. This was due to the recognized revenues from the increase sales in the 2 projects,

namely Marrakesh Hua Hin Residences and Aguston Sukhumvit 22 to the amount of Baht 172.19 million and Baht 744.41 million

respectively. The Company also continued to realize revenues of Baht 13.22 million from Fullerton Sukhumvit, Baht 1,026.52

million from Watermark Chaophraya River Tower A, Baht 89.59 million from Manhattan Chidlom, Baht 595.12 million from

Watermark Chaophraya River Tower B, Baht 382.04 million from Wind Sukhumvit 23, Baht 761.13 million from Wind Ratchayothin

and Baht 190.26 million from Mykonos Hua Hin, In 2009 the Company recognized revenue from 9 projects.

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Annual Report 2009

Sold Units (at the end of 2009)

Project Total (Units) Sold (Units)

Watermark Chaophraya River Tower A 282 222

Manhattan Chidlom 190 180

Watermark Chaophraya River Tower B 204 122

Wind Sukhumvit 23 220 172

Wind Ratchayothin 390 325

Aguston Sukhumvit 22 269 118

Mykonos Hua Hin 122 115

Marrakesh Hua Hin Residences 345 141

Collezio Sathorn-Pipat 95 42

Reflection Jomtien Beach Pattaya 330 107

Royce Private Residences Sukhumvit 160 107

Total 2,607 1,651

Sales of units in condominium projects are recognized as revenue under the percentage-of-completion method when

contracts to purchase and to sell condominium units have been executed for not less than forty percent of the area opened for

sales, initial payments have been received totaling at least 20% of the sales price under the contract, and development of the

project is at least 10% complete. The percentage of completion is determined based on the proportion of the actual cost already

incurred up to the end of the period to the total anticipated development costs to be incurred to completion, excluding the cost

of land. No income is recognized from contracts for which installments are overdue for more than three continuous periods, and

for which the percentage of completion of construction work exceeds the percentage of total payment received.

Other revenues Other revenues in 2009 accounted for Baht 21.33 million, increase Baht 0.77 million from 2008. Other revenues of the

company in 2009 were mainly from the sales of parking rights, deposit interest earned and revenue from sales of construction

bids.

Cost of units in condominium projects sold The costs of units in condominium projects sold of the Company were mainly from land procurement, land development,

architect fees, infrastructure expenses, construction costs and etc. In 2009, the Company’s cost of sales from the sales of

condominium units amounted to Baht 2,083.50 million, an increase of Baht 272.72 million from 2008 or 15.06%. This was due

to the increase in recognized revenues from 2 projects, namely Wind Ratchayothin and Mykonos Hua Hin, which increased the

realized cost of sales from these 2 projects to the amount of Baht 72.40 million and 500.29 million respectively.

Gross Profit In 2008 the Company’s gross profit amounted to Baht 893.04 million, an increase of Baht 67.74 million from 2008. This

was due to the recognized revenues and cost of sales from Marrakesh Hua Hin Residences and Aguston Sukhumvit 22. The

company also continued to recognize revenues from Fullerton Sukhumvit, Watermark Chaophraya River Tower A Manhattan

Chidlom, Watermark Chaophraya River Tower B, Wind Sukhumvit 23, Wind Ratchayothin and Mykonos Hua Hin

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Sales and Administrative Expenses The sales and administrative expenses comprised mainly marketing expenses, including commissions, expenses related

to employees, depreciations, taxes and ownership transfer fees and office expenses. In 2009, these expenses were Baht 283.84

million (9.75% of total revenue) compare with Baht 259.13 million in 2008, an increase from 2008 of 8.06%. The reason for the

increase in sales and administrative expenses was partly from amount of projects which are operating is more than the previous

year.

Interest Paid In 2009, the Company paid the interest to the amount of Baht 70.59 million which accounted for 2.35% of total revenue,

increase from the 2007 and 2008 that amount of Baht 0.43 million and Baht 2.37 million since the Company has to switch the

interest paid from the cost of units in condominium projects sold to finance cost item instead, accordance with the accounting

standard.

Profit before interest and tax In 2009, the Company had profit before interest and tax of Baht 631.12 million, which increased from Baht 586.67 million

in 2008. This resulted in the Company’s operating profit in 2009 accounted for 21.05% of total revenue than lower than 22.08%

in 2008. This was a decrease from 2008 because of the change of increased expense is higher than the increased revenue.

Net Profit (Loss) The Company’s net profit in 2009 amounted to Baht 406.61 million, which accounted for 13.56% of the total revenue, a

decrease from Baht 445.14 million (or 16.31% of total revenue) from the previous year. This partly was because of the

Company has the increased interest from finance cost accordance with the accounting standard that after the ownership transferring

began, the interest paid would be book as finance cost.

Rate of Return on Investment The Company’s rates of return on investment for the shareholders in 2007 were 19.38% and 19.69% in 2008. In 2009

the company’s rates of return on investment for the shareholders were 16.97%, slightly decrease from the previous year.

Assets, compositions of assets and quality of assets The Company has the total assets as of the end of 31 December 2007 - 2009 amounted to Baht 4,931.88 million, Baht

8,078.20 million and Baht 8,307.98 million respectively. The details of the assets as follows;

Lands and Costs of Projects under Construction As of 31 December 2009, the Company had lands and costs of project under construction of Baht 5,369.59 million. They

comprised Watermark Chaophraya River Tower A and B - 8.24% and 11.60%, Manhattan Chidlom - 0.87%, Wind Sukhumvit

23 - 4.80%, Wind Ratchayothin - 7.27%, Aguston Sukhumvit 22 - 17.62%, Mykonos Hua Hin - 0.31%, Reflection Justine Beach

Pattaya - 5.49%, Marrakesh Hua Hin Residences - 13.89%, projects in Phayathai area - 3.07%, projects in Surawongse area

- 6.58% Collezio Sathorn-Pipat - 3.70% and Royce Private Residences - 16.56%.

Pre-paid Construction Expenses The Company’s pre-paid construction expenses decreased from Baht 98.12 million in the end of 2008 to Baht 45.42

million in the end of 2009. This was due to the construction progress of Watermark Chaophraya River Tower A, Watermark

Chaophraya Tower B, Wind Sukhumvit 23 and Mykonos Hua Hin almost complete, the Company’s pre-paid construction

expenses were booked as the cost of units instead.

85

Annual Report 2009

Undeveloped Land In 2003, the Company acquired land in Nonthaburi to develop for future project. It had a total area of 5,283 square wah

and worth Baht 215.01 million as of 31 December 2009 or 2.59% of total assets respectively. The expenses comprised cost of

land and related expenses. The Company planned to develop a project for sales in the future.

Land Down Payment In 2009, the Company entered into a contract to purchase a plot of land in Prakhanong and Phayathai area for future

project expansion and paid a down payment of Baht 22.6 million. The Company expected to be able to transfer the ownership

of the land deed by the end of May 2010 and June 2011.

Account Receivables The Company’s net account receivables as of 31 December 2007, 2008 and 2009 amounted to Baht 1,155.17 million,

Baht 1,862.21 million and Baht 2,077.04 million respectively or 21.68%, 23.05% and 25.00% of the total assets. The details of

the Company’s account receivables:

2009 2008

Trade accounts receivable-sales of property

Not over 3 months 8,986,348 3,593,066

3 - 6 months 221,018 973,760

6 - 12 months 1,113,101 2,103,042

Over 12 months 2,159,730 1,891,695

12,480,197 8,561,563

Add: Unbilled completed work 2,064,559,626 1,853,648,317

Total 2,077,039,823 1,862,209,880

Additional information on trade accounts receivable - sales of property

2009 2008

Total estimated project value 23,246,861,228 22,500,000,000

Total value of contracts signed 14,188,303,818 12,440,455,276

Percentage of total project sales 61% 55%

Installments due 7,893,494,401 5,122,061,352

Less: Collections (7,881,014,204) (5,113,499,789)

Accounts receivable - installments due 12,480,197 8,561,563

Revenues recognized 10,017,782,325 7,030,973,604

Less: Installments due (7,893,494,401) (5,122,061,352)

Installment received in advance (59,728,298) (55,263,935)

Unbilled completed work 2,064,559,626 1,853,648,317

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Average Debt Collection Period The average debt collection period in 2009 as of 31 December 2009 was slightly decreased from the end of 2008. The

reason for the decrease in average debt collection period during 2009 was because most of our project construction almost

completed. When the transferring period began, our account receivables reduced and the average debt collection period would

be decrease.

Net Value of Land, Building and Equipment (permanent assets of the Company) As of 31 December 2009, net value of land, building and equipment amounted to Baht 436.73 million. The main items

were land, temporary buildings and improvement to the temporary buildings, condominium units, stationary, furniture and fixtures,

vehicles and others, which accounted for 64.69%, 13.74%, 5.56%, 1.90%, 9.62%, 1.48% and 2.98% respectively

Liabilities As of 31 December 2009 the Company’s long-term debt amounted to Baht 3,585.43 million. This was due to the

Company’s subsidiary had continued to develop the existing projects, and also for land acquisitions. The Company has debt from

financial institutions structure as follows:

As of 31 Dec 2009 As of 31 Dec 2008 As of 31 Dec 2007

Debt from Financial Institutions Consolidated Consolidated Consolidated

Financial Statement Financial Statement Financial Statement

M. Baht % M. Baht % M. Baht %

Short-term loans

Bank overdrafts 90.76 2.44 90.74 2.48 2.69 0.13

Short-term loans from banks 129.75 3.49 100.00 2.73 160.00 8.01

Long-term loans

Long-term loans from banks 3,585.43 96.51 3,473.32 94.79 1,834.12 91.85

- Current portion of long-term loans 2,214.82 59.62 1,153.30 31.48 555.68 27.83

- Long-term loans from financial 1,370.61 36.89 2,320.02 63.32 1,278.44 64.02

institutions

Total 3,715.18 100.00 3,664.06 100.00 1,996.81 100.00

Deposit and Advance from Customers The Company has the policy to receive the deposit for down payment on average 30% of condominium price. As of 31

December 2009, the Company’s deposit and advance received from customers increased from the end of 2008 from Baht 883.96

million to Baht 934.90 million. Due to the Company have the more ownership transferring projects and more project revenue

recognition that pushed deposit and advance received from customers higher.

Account Payables As of 31 December 2009, the Company’s account payables amounted to Baht 470.10 million, decreased by Baht 240.18

million compared to the end of 2008. The main account payables were from Watermark Chaophraya River Tower A and B - Baht

87.30 million, Wind Sukhumvit 23 - Baht 31.07 million, Wind Ratchayothin - Baht 133.40 million, Aguston Sukhumvit 22 - Baht

90.50 million, Mykonos Hua Hin - Baht 35.64 million, Marrakesh Hua Hin Residences - Baht 44.00 million, Royce Private

Residences - Baht 49.00 million and other account payables in the amount of Baht 19.63 million.

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Annual Report 2009

Potential Commitments and Liabilities As of 31 December 2009, the Company had contractual commitments for the construction of condominiums and servicing

contracts amounting to Baht 1,440.00 million and commitment to pay for land according to the land purchase agreement amounting

to Baht 141.90 million within May 2010 and June 2011. And the subsidiary has the commitment to pay to the Company for land

according to the land purchase agreement amounting to Baht 19.10 million within April 2010.

Shareholders’ Equity As the end of 2009, the Company’s shareholders’ equity amounted to Baht 2,396.20 million, an increase of Baht 196.61

million from the end of 2008 or an increase of 8.94%. This increase was due to better Company’s performance with the increase

in appropriated retained earnings to Baht 70.00 million and increase in un-appropriated retained earnings to Baht 911.34 million.

Appropriateness of Equity Structure The debt-to-equity ratio decreased from 2.67 times in 2008 to 2.47 times in 2009. The interest bearing debt to equity

ratio decreased from 1.73 times in 2008 to 1.68 times in 2009. This was also due to the higher increase in shareholders’

equity than the increase in the Company’s total debt, since the higher increase in retained earnings than in the Company

liabilities. The improvement of these figures reflects the lower risk and the higher strength of the Company.

Cash Flow Statement In 2009 the Company received cash flow from operating activities Baht 392.81 million and pay Baht 394.41 million for

interest expense and corporate income tax, therefore the Company used the net cash flow Baht 1.64 million for net operating

activities. The Company also used net cash flow Baht 3.32 million for investing activities. The Company received the net cash

flow from financing activities Baht 11.12 million, the major part of financing activities were, the Company received cash from

long-term loans from financial institutions Baht 2,432.86 million and repaid of long-term loans from financial institutions Baht

2,320.75 million. Consequently, the Company’s cash and cash equivalents at end of year is equal to Baht 53.99 million.

Liquidity Ratio In 2009, theCompany had a current ratio of 1.77 times and the quick ratio of 0.49 times, a slight decrease from previous

year. This was due to the higher increase in current liability than in current asset, that because most of the current liability was

the current portion of long-term project loans and most of the projects were almost completed therefore due date of the

long-term project loans will be valid until 1 year. However after the projects complete and transfer ownership to our customers,

the current portion of long-term project loans will be decreased, the liquidity ratio will be improved.

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