investor.charnissara.com...2013/04/10 · Notice of the Annual General Meeting No. 1/2013 Of Charn Issara Development Public Company Limited No. 2922/200, New Petchaburi Road, Bangkapi

Notice of the Annual General Meeting No. 1/2013

Of

Charn Issara Development Public Company Limited

No. 2922/200, New Petchaburi Road, Bangkapi Sub-district, Huaykwang District, Bangkok

10 April 2013

Subject: Invitation to the Annual General Meeting No. 1/2013

To: Shareholders of the Company

Attachments: 1. Copy of the minutes of the Annual General Meeting of Charn Issara Development Public Company Limited No. 1/2012 held on 25 April 2012.

2. Annual Report for the year 2012 from the Board of Directors.

3. Summary of the directors’ biographies proposed to be appointed as directors of the Company.

4. Guidelines and Articles of Association of the Company in relation to the shareholders’ meeting.

5. Document and evidence that a shareholder needs to present prior to attending the meeting, procedures for giving proxy, registration and voting in the shareholders’ meeting.

6. Information Memorandum in relation to acquisition and disposition of assets.

7. Opinion from the Independent Financial Advisor in regard to the acquisition and disposal of assets.

8. Summary of the Independent Directors’ biographies to whom you wish to give proxy to attend and vote at the meeting on your behalf.

9. Proxy forms A, B and C.

10. Map of the meeting location.

Notice is hereby given that the Board of Directors (“BOD”) of Charn Issara Development Public Company Limited (“Company”) has resolved to convene the Annual General Meeting no. 1/2013 on 25 April 2013 at 14.00 O’clock on 21st Floor, Charn Issara Tower 2, New Petchaburi Road, Klongton Sub-district, Bangkapi District, Bangkok to consider the following matters as per the following agendas:

Agenda 1: Chairman’s Announcement (if any)

Agenda 2: To confirm the previous minutes of the Annual General Meeting No. 1/2012 held on 25 April 2012.

BOD’s opinion: The BOD is of the opinion that the minutes of the Annual General Meeting No. 1/2012 were duly recorded as shown in Attachment No. 1 and therefore should be proposed to the Annual General Meeting to confirm the said minutes.

Agenda 3: To confirm the Annual Report for the year 2012.

BOD’s opinion: The BOD is of the opinion that it has produced a summary of the past performance for the year 2012 and that the same should be proposed to the Annual General Meeting to confirm the said report.

Agenda 4: To consider and approve the Balance Sheets and Profit and Loss Statements which have already been examined by the Company’s auditor for the fiscal year ended as of 31 December 2012.

BOD’s opinion: Having reviewed the above, the BOD is of the opinion that the Company’s Balance Sheets and Profit and Loss Statements for the fiscal year ended as of 31 December 2012 which have already been examined by the Company’s auditor, namely Ernst and Young Office Limited and approved by the Board of Independent Directors as shown in the Annual Report for the year 2012 in Attachment No. 2 should be proposed to the Annual General Meeting for approval.

Company’s performance for the year 2012 which can be summarized as follow:

Financial Status 2012 2011

Total Assets (Mil.Bht) 3,694 4,142

Total Liability (Mil.Bht) 2,374 2,968

Shareholders’ Equity (Net) 1,320 1,174

Agenda 5: To consider and approve the declaration of dividend payment for the year 2012.

BOD’s opinion: The BOD is of the opinion that the Annual General Meeting should approve the declaration of dividend payment for the year 2012, where by the rate of the dividend payment shall be in accordance with the Company’s policy for dividend payment. The record date for determining the shareholders who are eligible for such dividend payment is fixed on 7 May 2013 and the Company shall collect the list of shareholders in accordance with Section 225 of the Securities and Exchange Act by closing its Share Register Book on 8 May 2013.

Comparison of dividend payment paid within the past 3 years:

Description 012(proposed) 2011 2010

No. of Common Shares 120,000,000 120,000,000 120,000,000

Net profit (Mil. Bht.) 121 (20) (7)

Profit per share (Bht.) 1.01 (0.16) (0.06)

Annual Dividend (Bht./Share)

0.15 0.06 0.04

Payment date 23 May , 2013 May 24, 2012 May 20, 2011

Total dividend paid (Mil.Bht.)

18.0 7.2 4.8

Dividend payment ratio (%) 14.88 (36.59) (70.76)

Operating Results

Revenue from Sales & Services 2,061 1,038

Total Revenue 2,132 1,103

Gross Profit 755 366

Net Profit 121 (20)

Agenda 6: To consider and approve the appointment of directors to replace those retiring by rotation and fixing of remuneration for directors and chairman (details of directors’ biographies are shown in Attachment No. 3).

BOD’s opinion: The BOD is of the opinion that the Annual General Meeting should consider and approve the appointment of directors to replace one-third (1/3) of the Company’s directors retiring by rotation as follows:

Name Position Years of

1.Mr.Phisud Dejakaisaya Chairman of Audit Committee

9

2.Mr.Witit Ratchatatanun Audit Committee 9

3.Mr.Pinit Puapan Audit Committee 9

and consider re-appointing the directors retired by rotation as the Company’s directors for an additional term and fixing the remuneration for the directors and chairman for the year 2013 as follows:

Directors’ remuneration

Remuneration structure 2013(proposed) 2012

Monthly remuneration

-Chairman of the Board of Directors

- Director

(Baht/Month)

80,000.-

35,000.-

(Baht/Month)

70,000.-

30,000.-

Sub-committees’ remuneration

Remuneration structure 2013(proposed) 2012

1.Monthly remuneration

-Chairman of the Audit Committee

- Audit Committee

- Chairman of the Remuneration

(Baht/Month)

35,000.-

35,000.-

35,000.-

(Baht/Month)

30,000.-

30,000.-

30,000.-

Committee

- Remuneration Committee

35,000.-

30,000.-

2.Meeting Fees (Per time)

-Chairman of the Audit Committee

- Audit Committee

-Chairman of the Remuneration

Committee

-Remuneration Committee

(Baht/Time)

50,000.-

30,000.-

20,000.-

10,000.-

(Baht/Time)

50,000.-

30,000.-

20,000.-

20,000.-

Agenda 7: To consider and approve the appointment of the Company’s auditors approved by the Securities and Exchange Commission Thailand and fixing of the auditors’ remuneration for the fiscal year ended on 31 December 2013.

BOD’s opinion: The BOD is of the opinion that the Annual General Meeting should approve the appointment of the following auditors approved by the Securities and Exchange Commission Thailand, namely, Ernst & Young Office Limited:

1) Miss Varaporn Prapasirikul C.P.A. Licence No. 4579 or 2) Mr. Narong Pantawongse C.P.A. Licence No. 3351 or 3) Miss Siraporn Uaeanankul C.P.A. Licence No. 3844

to be the Company’s auditors for the fiscal year ended on 31 December 2013 and fixing of the auditors’ remuneration auditors for the fiscal year ended on 31 December 2013 as follows:

2013 2012 2011

Audit fee

Other service fee

2,540,000.-

-

2,741,000.-

-

2,595,000.-

-

Agenda 8: To consider and approve the disposition of assets (immovable and movable assets) used for the operation of Sri panwa Hotel Resort and Spa Phuket and Service Apartment which belong to Charn Issara Residence Co., Ltd. or the subsidiary of the Company in which the Company holds 80.4% of the shares (the “Subsidiary”) to the Fund.

BOD’s opinion: The BOD is of the opinion that the Annual General Meeting should consider and approve for the Subsidiary to dispose of its assets used in the operation of Sri panwa Hotel by transferring its ownership in the lands, buildings and other assets in relation to the operation of Sri panwa Hotel Resort and Spa Phuket and Service Apartment entailing hotel rooms in Phase 1-3 in the amount of 38 units and service apartment in the amount of 7 units, together with the building and utilities, furniture, fixtures, equipment and other facilities concerning Sri panwa Hotel Resort and Spa Phuket and Service Apartment which is situated on 21-2-55 Rai of lands with a total value of Baht, 1,978.43 Million to the Fund that is going to be set up. The BOD has considered and is of the opinion that since the acquisition and disposition of assets of the Subsidiary of the listed company is a Type 1 transaction, thus the Notification Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets B.E. 2547 (2005) of the Securities and Exchange Commission Thailand (“Notification concerning acquisition or disposition”), thus pursuant to this Notification concerning acquisition or disposition, the Company must arrange for the shareholders to approve such transaction with a vote of not less than ¾ of the total votes of the shareholders present at the meeting and have the right to vote excluding shareholders with a conflict of interest.

Agenda 9: To consider and approve the acquisition of assets of the Company, Subsidiary and Special Purpose Vehicle (SPV) by dividing the agendas for approval of the transactions as follows:

BOD’s opinion: The BOD is of the opinion that the 3 transactions in the following sub-agendas 9.1-9.3 are deemed to be the acquisition of assets which must be calculated together and as such the above 3 transactions are considered as Type 1 transaction pursuant to the Notification concerning acquisition or disposition, thus the Company has to arrange for the shareholders to approve the entering of the following transactions with a vote of not less than ¾ of the

total votes of the shareholders present a the meeting and have the right to vote excluding shareholders with a conflict of interest.

Agenda 9.1: To consider and approve for the Company and Subsidiary to invest in the Fund by purchasing approximately 60,000,000 units in the Fund with a par value of Baht 10 (ten), with a total value of approximately Baht 600 Million or 30% of the total units in the Fund.

BOD’s opinion: The BOD is of the opinion that the Annual General Meeting should consider and approve for the Company and Subsidiary to invest in the Fund that is going to be set up after the SEC has approved for the registration of the assets of the Fund as the Property Fund, by purchasing approximately 60,000,000 units in the Fund with a par value of Baht 10 (ten), with a total value of approximately Baht 600 Million or 30% of the total units in the Fund.

Agenda 9.2: To consider and approve for the Subsidiary to set up an SPV within reasonable time and hold the shares of not less than 99.99% of the total shares in the SPV with the initial registered capital in the amount of 30 Million Baht

BOD’s opinion: The BOD is of the opinion that the shareholders should consider and approve the setting up of an SPV within reasonable time to carry on a business of operating Sri panwa Hotel Resort and Spa Phuket and Service Apartment, whereby the Subsidiary shall hold not less than 99.99% of the registered capital of the SPV with the initial registered capital in the amount of 30 Million Baht and cause the Subsidiary to transfer all licences and agreements, including employees in relation to the operation of Sri panwa Hotel Resort and Spa Phuket and Service Apartment to SPV.

Agenda 9.3 To consider and approve for the SPV in which the Subsidiary holds not less than 99.99% of the registered capital of the SPV, to lease the assets (immovable and movable) that the Property Fund has invested in Sri panwa Hotel Resort and Spa Phuket and Service Apartment from the Property Fund and the rental amount.

BOD’s opinion: The BOD is of the opinion that the shareholders should consider and approve for the SPV, in which the Subsidiary

holds not less than 99.99% of the registered capital, lease the assets used in the operation of Sri panwa Hotel Resort and Spa Phuket and Service Apartment which entails the lands in the amount of approximately 21-2-55 Rai, together with the building and hotel rooms in Phase 1-3 in the amount of 38 units and service apartment in the amount of 7 units and other facilities relating to the operation of Sri panwa Hotel Resort and Spa Phuket and Service Apartment as well as, other facilities in relation to the hotel and service apartment, public utilities relating to the said business including furniture, fixtures and equipment. SPV shall for an initial term, lease the assets for the period of 15 years at a fixed rental rate of 151 Million Baht per year which shall be paid on a monthly basis. SPV shall have the right to extend the lease for another 15 years each time. The rental rate shall be adjusted from year 6 onwards at the rate of 10% every 3 years and the variable rental rate shall be paid from year 11 to year 15 of the lease term in accordance with the formula stipulated in the draft Lease Agreement (details of the Information Memorandum are shown in Attachment 6).

Agenda 10: To consider and approve for the Subsidiary to guarantee the performance in the Lease Agreement between SPV and the Fund to the Fund and for the Company to guarantee the shortfall of the rental paid by the SPV to the Fund.

BOD’s opinion: The BOD is of the opinion that the shareholders should approve for the Subsidiary to be jointly liable with the SPV as a principal debtor and joint debtor in paying the rental in accordance with the draft Lease Agreement to the Fund so as to enable the Fund to receive the guaranteed revenue. At the same time and in light of the above, the Subsidiary agrees to obtain security for the Fund in the value, at any time, equaling to 80 Million Baht of any time as stipulated in the Undertaking Agreement between the Fund and cause the Company to enter into a Shortfall Agreement with the Fund.

Agenda 11: To consider and approve to authorise the Board of Directors and/or Managing Director and/or Authorised Directors to negotiate, execute and enter into any document and agreement in relation to the setting up of the Fund, as well as, to do any act which will result in helping the action done by the Company, Subsidiary and SPV concerning the setting up of the Fund to become successful and in line with the objective.

BOD’s opinion: The BOD is of the opinion that the shareholders should approve to authorise the Board of Directors and/or Mr.

Songkran Issara, the Managing Director and/or Authorised Directors to negotiate, amend, agree, execute, deliver documents and/or agreements in relation to the setting up of the Fund, as well as, documents concerning the reservation for the purchase of the units with the parties and/or parties relating to the entering into the transactions stipulated in Agenda 8 to Agenda 10, which shall include but not limited to, to liaise for approval from the related government authorities and Securities and Exchange Commission of Thailand, together with the terms in relation to the said transaction, to amend the related information memorandum which should be disclosed, to disclose any related information, to give declaration, facts to the related authority and to appoint and/or remove sub attorney-in-fact during the performance of the above, on behalf of the Company, Subsidiary and SPV.

Agenda 12: To consider other matters (if any).

All shareholders are cordially invited to attend the meeting at the date, place and time abovementioned. Shareholders are required to present their respective shareholders’ identity or proxy for the right to attend the meeting as per enclosure No. 5 to the Chairman of the Meeting prior to the meeting time. The Company will have the registration for the right to attend the meeting from 13.00 hrs on April 25, 2013.

Any shareholder wishes to appoint a proxy to attend the meeting and vote on their behalf should fill in the proxy form as per enclosure No. 9.

For those shareholders who are not convenient to attend the meeting in person may choose to give proxy to one of the Company’s Audit Committee as per following list to attend the meeting and vote on your behalf:-

1. Mr. Phisud Dajakaisaya Position Chairman of Audit Committee 2. Mr. Witit Ratchatatanan Position Audit Committee 3. Mr. Pinit Puapan Position Audit Committee

(Profile of Audit Committee is in the enclosure No. 8)

To comply with the Securities and Exchange Act B.E. 2535 and its revision with regard to quorum of the meeting as stipulated in the Company’s regulations, there must be a minimum of 25 shareholders attending the meeting in person and by proxy (if any) or not less than one

half of all shareholders which is represented by not less than one third of the total shares subscribed.

For the good order and convenient of the meeting the Company wishes to encourage all shareholders to send a proxy form duly affixed with Baht 20 stamp duty to the Company within April 23, 2012.

The Company will list shareholders eligible to attend the Annual General Meeting of Shareholders No. 1/2013 on March 28, 2013 and to compile a name list in accordance to Article 225 of the Security and Exchange Act by closing the registration book on March 29, 2013.

Please be informed accordingly.

Yours sincerely,


By Board of Directors’ order

Songkran Issara

Managing Director

CC. The Registrar, Public Company, Ministry of Commerce

The Registrar, Thailand Securities Depository Co., Ltd.

Minutes of 1st /2012 Annual General Meeting of Shareholders of

Charn Issara Development Public Company Limited (“the Company”)

Place and time

The meeting was held on April 25, 2012 time 14.00 hrs. at 21st floor meeting room, Charn Issara Tower II, New Petchburi Road, Kwang Bangkapi, Kate Huaykwang, Bangkok

Directors present in the Meeting

1. Mrs. Srivara Issara Chairperson of the Board of Directors

2. Mr. Songkran Issara Managing Director

3. Mr. Pravesvudhi Raiva Director

4. Mrs. Linda Prasertsom Director

5. Mrs. Teeraporn Srijaroenwong Director

6. Mr. Pisud Dejakaisaya Independent Director and Chairman of the Audit committee

7. Mr. Witit Ratchatatanun Independent Director and Audit Committee

8. Mr.Pinit Puapan Independent Director and Audit Committee

Directors who did not attend the meeting

1. Mr. Niti Osathanugrah Director

Chairman of the Board of Directors act chairperson of the Meeting reported to the meeting that there are shareholders present in person and by proxy as follows:-

There are 36 shareholders present in person representing 44,963,532 shares equivalent to 37.50% of total shares

There are 16 shareholders present by proxies representing 22.906.414 shares equivalent to 19.10% of total shares

There are a total of 52 shareholders holding a total of 67,869,946 shares equivalent to 56.60% of total shares thereby the quorum was present according to the Company’s articles of association. There was an introduction of the Company’s Directors, representative from the Auditor. Then

the Chairperson went on to address overall picture of the world economy, Thailand’s economy and the past operation in brief before the meeting was called to order to transact the following businesses on agenda. The Chairperson has requested Mr.Weerachai Wijittanakul, the Finance and Accounting Manager to conduct a meeting on agenda as follows:-

1. To consider for approval the minutes of Annual General Meeting of Shareholders No. 1/2011

The Chairperson requested the meeting to consider the minutes of Annual General Meeting of Shareholders No. 1/2011 which was held on April 26, 2011 and proposed the meeting to approve such minutes.

There was a question from a shareholder on the absent of record of shareholders’ question in each item on the agenda.. Mr. Songkran Issara, the Managing Director, responded that there was no question from shareholders in each item on agenda but there was questions in other business which related to details in each project undertaken by the Company.

The Meeting had considered and resolved as follow:-

Resolution Resolved by 100% votes to approve the minutes of Annual General Meeting of Shareholders No. 1/2011

2. To approve the operating report for the fiscal year 2011 and the Directors’ report for the year 2011.

The Chairperson reported to the Meeting that the Company has sent to all shareholders annual report and notice of meeting. The Annual Report is dealing with the Company’s structure and its operation on each project which summarized the total revenue of Baht 1,117 million, an increase of 15% when comparing to the Company’s total revenue in the fiscal year 2010 and there was a net loss of Baht 19.6 million.

The Chairperson proposed the meeting to ask question.

Shareholder asked following questions:-

1) The Issara United Co.,Ltd. which is a subsidiary has entered into a Baht 192 million land sale and purchase agreement with a related company. Question was if the price is suitable.

2) From page 150 of the Annual Report for the fiscal year 2011, item 31 stated that as at December 31, 2011 the Company and its subsidiaries had an obligation to develop an approximately Baht 1,305 million worth of land, house and residential condominium of which sale and purchase agreement had been entered into. Question was if the Company is capable to deliver those.

3) Following the change of accounting record according to the new accounting standard, how the management can stabilize revenue in the future.

Mr. Songkran Issara, the Managing Director had responded to those questions as follows:-

1) The land acquisition of Issara United Co.,Ltd. from a company within the Saha Pattanapibul PLC Group was suitable as consideration was made in conjunction with the appraised value from an independent appraiser.

2) Currently the development of the Issara Ladprao Condominium project has been completed and transfer to customers has started since the end of 2011 with over Baht 400 million of transfer has been made. Transfer in the first quarter of 2012 account for approximately Baht 380 million and it is expected that no less than Baht 1,200.- million worth of transfer shall be made by the year end 2012. It is expected that approximately Baht 100 – 150 million of transfer in the Issara Village project can be made in the year 2012.

3) The Company has a direction to develop small to medium size project with a rotating development cycle of no longer than 2 years thereby generating a steady revenue realization. As property development company it takes time to operate from construction to sale. The Company has concentrated on quality project as oppose to large project. However, the Company has tried to bring in steady revenue such as rental from office building and hotel.

The Meeting had considered and resolved as follow:- Resolution Resolved by 100% votes to adopt the operating report for the fiscal year 2011 and operating results as of December 31, 2011. 3. To consider for approval the audited balance sheet and profit & lost statement for

the fiscal year ending December 31, 2011

The Chairperson requested the meeting to approve an audited balance sheet and profit & lost statement for the fiscal year ending December 31, 2011 Mr. Weerachai Wijitanakul, Finance and Accounting Manager has summarized the balance sheet and profit and loss statement to the meeting.

The Chairperson proposed the meeting to ask question. Shareholder requested an explanation of the Company’s cash flow to the meeting. Mr. Weerachai Wijitanakul, Finance and Accounting Manager has explained the Company’s cash flow to the satisfaction of the Meeting. The Meeting had considered and resolved as follow:-

Resolution Resolve by 100% vote approved the audited balance sheet and profit & lost

statement for the fiscal year ending December 31, 2011

4. To consider for approval the dividend payment for the operating results of fiscal year 2011

The Chairperson had proposed to the meeting that as the Company has net loss from operation in the year 2011 of Baht 19.6 million but its Separate financial statements show profit of Baht 8 million, the Company’s Board of Directors was of the opinion that it was due appropriate to pay dividend to shareholders of 120,000,000 ordinary shares at the rate of Baht 0.06 per share on May 24, 2012, total amount Baht 7,200,000.-. Share registration will be closed for the right to receive dividend on May 9, 2012.

The Chairperson proposed the meeting to ask question. Shareholder has made an enquiry on the Company’s dividend policy.

Mr. Songkran Issara, the Managing Director responded that the Company normally pay a

maximum dividend of 40% of net profit depending, however, on the consideration of Board of

Directors each year for recommendation to the shareholders. For the fiscal year 2011 the

Company should have had booked more profit without an irregular incident such as the big flood

which caused the delay of partial operation to the fiscal year 2012. Despite of such circumstance

it was proposed to pay higher dividend to encourage investors.

The meeting had considered and resolved unanimously as follows:-

Resolution Approved as proposed by the Board of Directors by votes from 67,637,946 shares representing 99.66% and abstain 232,000 shares representing 0.34% of shareholding structure. There was no objection.

5. To consider the appointment of Directors to replace those who are due to retire by rotation and fix remuneration for Directors in the year 2012

The Chairperson proposed to the Meeting that there are Directors who are due to retire by rotation to the minimum of 1 out of 3 and those who are due to retire are as follows:-

1. Mrs.Srivara Issara Chairperson

2. Mrs.Linda Prasertsom Director

3. Mr.Niti Osathanugrah Director

The Chairperson had proposed those who are due to retire to be re-appointed and proposed the following remuneration for Directors for the year 2012 which remain the same as that of the year 2011 as follows:-

1. Remuneration for Chairperson of the Board of Directors Baht 70,000.- per month 2. Remuneration for other Directors and Audit Committee Baht 30,000.- per month 3. Meeting fees for Audit Committee:-

- Chairman of the Audit Committee Baht 50,000.- for each meeting session - Other Audit Committee Baht 30,000.- for each meeting session - Chairman of Remuneration Committee Baht 20,000.-for each meeting session - Other Remuneration Committee Baht 10,000.-for each meeting session

The Chairperson requested the meeting to consider.

Shareholder commented that there were several Directors including independent Directors did not attend all meetings.

Mr. Songkran Issara, the Managing Director responded that some Directors has commitment with other business and therefore can not attend all meetings. But the Company has furnished information pertaining to the meeting to all Directors prior to the meeting and if any business on agenda deem important then prior discussion has always been done. However, shall endeavor to arrange for a convenient appointment to enable all Directors’ present.

The Meeting had considered and resolved as follows:-

Resolution The Meeting approved as per Chairperson’s proposal as follows:-

Appoint those Directors who are due to retire by rotation for another term as per following votes:-

1. Mrs.Srivara Issara Chairperson

Vote for 67,637,846 votes equivalent to 99.66%

Vote against none

Abstain 232,100 votes equivalent to 0.34%

2. Mrs.Linda Prasertsom Director


Vote against none


3. Mr.Niti Osathanugrah Director


Vote against none


4. Approved Directors’ remuneration for the year 2012 as proposed by the chairperson as follows:- Vote for 67,637,846 votes equivalent to 99.66%

Vote against none

Abstain 232,100 votes equivalent to 0.34 %

6. To consider for approval the appointment of auditor and fix its remuneration for the fiscal year 2012

The Chairperson had proposed to the meeting the appointment of Ernst & Young by Ms.Varaporn Prapasirikul (certified public accountant no. 4579) or Mr. Narong Pantawong (certified public accountant no. 3315) or Ms. Siraporn Au-anankul (certified public accountant no. 3844) as the Company’s Auditor for another year and fix its remuneration at Baht 2,741,000.- for the Company and its subsidiaries including quarterly audit of a total 6 companies. Such remuneration is an increase from the year 2011 by Baht 206,000 or equivalent to 8% The Meeting had considered and resolved as follows:- Resolution The Meeting approved as proposed by the Chairperson Vote for 67,637,846 votes equivalent to 99.66% Vote against none Abstain 232,100 votes equivalent to 0.34%

7. Any other business (if any)

The Chairperson had requested Project Manager of each project to report progress to shareholders and answer any questions to the satisfaction of shareholders. The Chairperson therefore adjourned the Meeting at 16.00 hrs.

_____________________________

(Mrs. Srivara Issara)

Chairperson

Certified to be true and correct

_________________________________

(Mrs. Teeraporn Srijaroenwong)

Director

(Encls.No. 3) Director’s profile for those nominated Directors to replace Directors who are due to retire by rotation MR.PHISUD DEJAKAISAYA Age : 57 years

Chairman of Audit Committee and Independent Director

Shareholding : 0.026

Education/Training Program

• LL.B Thammasat University, Thailand, 1982

M.C.L, Southern Methodist University, USA, 1984

• Diploma in Comparative Law, Southwestern Legal Foundation,

• Academy of International and Comparative Law, 1984

• Director Accreditation Program (DAP), Thai Institute of Director (IOD)

Professional career for the past five years

1990 to present Executive Partner Siam Premier International Law Office Limited

1997 to present Director Krungthai AXA Life Insurance Co., Ltd.

2005 to present Chairman of the Charn Issara Development Public Company Limited

Audit Committee

2010 to present Audit Committee Health Network Public Company Limited

2010 to present Audit Committee Paolo Medic Co., Ltd.

2009 to Present Sub Committee Evaluation of the Legal Development of the Government

April 2009 – July 2009 Sub Committee The Guideline for the Establishment of Investor Services under

the Supervisor of the Prime Minister

2008 to 2010 Advisor Thailand Post Co., Ltd.

20008 to 2009 Board of Director Office of Small and Medium Enterprise Promotion – SOMEP

2008 to 2009 Advisor Software Industry promotion Agency Organization

1984-1990 Senior Lawyer Baker& McKenzie Ltd.

No involvement, neither directorship nor management post in other business which may cause conflict of interest to the Company. Forbidden record

1. No criminal record related to assets wrongfully acquired, 2. No record of related transaction which cause conflict of interest to the Company in

past year, 3. No interest in all agenda proposed in this Shareholders’ meeting

Meeting attendance record in past year

1. Attend 7/7 meetings of the Board of Directors, 2. Attend 7/7 meeting of the Audit Committee, 3. Attend 1/1 meeting of the Remuneration Committee 4. Attend 1/1 meeting of the Annual General Meeting of Shareholders in 2012

MR.WITIT RATCHATATANUN Age : 58 years

Audit Committee and Independent Director

Shareholding : 0.23


• Doctoral Degree in Education , Harvard University, U.S.A.

• M.A. University of Essex U.K.,

• B.Sc. (Econ) London School of Economics U.K.

Professional career

Present Director, Panyaprateep School, Pak Chong, Nakhon Ratchasima Province

Board Member, Mitr Phol Sugarcane research Center Co. Ltd.

Advisor Thawsi School

2002-Present Audit Committee and Independent Director, Charn Issara Development Public Co., Ltd.

2004 Director, Community Economic Development and Income Distribution Office, NESDB

1999-2003 Assistant Secretary � General of NESDB

2001-2002 Director, International Policy Office

Director, Macro Social Policy Office

1997-2003 Director, Thai-German Institute, Ministry of Industry

2000-2004 Director, Liquor Distillery Organization, Ministry of Finance

1996-1999 Director, Office of the Joint Public/Private Consultative Committee

1993-1996 Director, Government and Private Cooperation Division


1. No criminal record related to assets wrongfully acquired, 2. No record of related transaction which cause conflict of interest to the Company in past

year, 3. No interest in all agenda proposed in this Shareholders’ meeting


1. Attend 7/7 meetings of the Board of Directors, 2. Attend 7/7 meeting of the Audit Committee, 3. Attend 1/1 meeting of the Annual General Meeting of Shareholders in 2012

MR. PINIT PUAPAN Age : 45 years


Shareholding : 0.15


• Advance Management Program, Harvard Business School (2006)

• Master Degree in Economics, The London School of Economic and Political Science (1990)

• BA, Economics & Political Science, Tufts University (1989)

• Director Accreditation Program (DAP), Thai Institute of Directors (IOD)

• Leader Program, Capital Market Academy (CMA11) Professional career for the past five years 2002 - Present Audit Committee and Charn Issara Development Public Co.,Ltd.

Independent Director

2009 – Present Director Seamico Asset Management Company Limited

2009 – Present Director Thanh Cong Securities Company (Vietnam)

2008-Present Authorized Director KT ZMICO Securities Company Limited

Managing Director

2008-Present Director Ideas 1606 Co., Ltd.

2007 – Present Authorized Director Seamico Securities Public Company Limited

2002-Present Board of Directors Thai Dairy Industry Company Limited

1999-2000 Director CapMaxx Company Limited

No involvement, neither directorship nor management post in other business which may cause conflict of interest to the Company.

Forbidden record





Nomination of Directors

The directors of the Company are nominated by the Board of Directors because the Company does not have the Nominating Committee at present. Nevertheless, the Company has laid down guidelines on the appointment of board of directors as follow:-

1. Board Directors shall carry out their duties according to the lows, the objectives and the Articles of Association of the Company, including the resolutions of the meeting of shareholders.

2. At every general shareholders meeting, one third of the directors shall vacate their office. In case the number of outgoing directors cannot be divisible by three, the number closest to one-third shall apply.

3. In case the general shareholders meeting passes a resolution that any director be vacated from office before completing his term, there must be votes of not less than three-fourths of the number of shareholders with the right to vote and attending the meeting and whose shares altogether are not less than one-half of the number of shares held by shareholders attending the meeting and have the right to vote.

4. One shareholder is entitled to one vote per one share.

5. Each shareholder must use all of his votes under (4) to vote for the election of one or more persons to be directors. However, he may not cast votes for any candidate more than the other candidates he has voted for.

(Encls.No. 4)

Article of Associations related to Shareholders Meeting

Shareholders Meeting

30. The Board of Directors shall convene an Annual Ordinary Meeting of Shareholders within four months from the last day of the Company’s fiscal period.

Shareholder’s Meeting other than aforementioned in the above paragraph shall be called Extraordinary Meetings. The Board of Directors shall convene an Extraordinary Meetings whenever it thinks appropriate or when a letter, subscribed to by shareholders holding an aggregate number of shares not less than one-fifth of the total number of shares issued, or which is subscribed to by at least 25 shareholders holding an aggregate number of not less than one-tenth of the total number of shares issued, was sent to request the meeting by clearly specifying their reasons and purpose for requesting the Board of Directors to convene such meeting. The Board of Director shall convene a meeting within one month from the date when the letter from the shareholders is received.

31. In calling a meeting of shareholders, the Board of Directors shall arrange for the notice of meeting which specifies the location, date, time and agenda and matters to be tabled in the meeting together with reasonable details, by stating action required for respective matters, for information, for consideration or approval including opinion from the Board of Directors in those matters. The Board shall arrange for the notice of meeting to send to shareholders at least 7 days prior to the date of the meeting and shall publish the Notice of the Meeting in a newspaper for at least 3 consecutive days prior to the meeting.

The Shareholders meeting may be convened at the location of the Company’s head office or other locations in the Kingdom.

32. In Shareholders meeting, shareholders may appoint proxies to attend the meeting and vote on their behalf. However, the proxy form shall be dated with signatory of the shareholders who grant such proxy and executed in the form prescribed by the Registrar. The proxy holder must submit a proxy form to the Chairman of the Board of Directors or designated chairman at the venue of the meeting prior to entering the meeting.

33. In Shareholders meeting, a quorum shall be formed by at least 25 shareholders attending the meeting both in person and by proxy(if any) or by no less than half of the total

number of shareholders attending the meeting either in person or by proxy (if any), in any case with an aggregate number of shares of no less than one-third of the total number of issued shares of the Company.

At any meeting of Shareholders, if an hour should have lapsed after the time fixed for the meeting and the quorum as prescribed above is not present, then in the event that the meeting was called at the request of shareholders, it shall be deem to be cancelled forthwith. In the event of such meeting had not been called for by shareholders, the new schedule for the meeting shall be set with a notice of meeting sent to shareholders at least 7 days before the date of the meeting. This latter meeting shall not require a quorum.

In Shareholders meeting the Chairman of the Board of Directors shall be chairman of the meeting. In the event that the Chairman of the Board of Directors is unable to attend the meeting, vice chairman (if available) shall act as chairman of the meeting and in the absent of vice chairman then the meeting shall elect one shareholders attending the meeting to be chairman of the Meeting.

34. In casting vote in the Shareholders meeting one share shall be entitle to one vote

The vote shall be casted openly except when there is a request from at lest five shareholders with approval from the meeting then a confidential vote shall be adopted. The process of confidential vote shall be in accordance to the Chairman’s prescription. Resolution of Shareholders meeting shall constitute the following votes:-

(1) In normal circumstances, majority vote of shareholders attending the meeting and entitle to vote. In the event of tie vote, the chairman of the meeting shall be entitled to a casting vote.

(2) In the following circumstances, a resolution shall be passed by no less than three-fourths of the total votes of all shareholders attending the meeting and entitled to vote:

(A) sale or transfer of the Company’s material business, either in whole or in part to third parties;

(B) purchase or acceptance of the transfer of businesses of other companies or private companies to the Company;

(C) execution, amendment or termination of agreements relating to the leasing out of the Company’s material businesses, either in whole or in part; assignment to other persons to manage the Company’s businesses; or amalgamation of the business with

other persons or legal entity with the purpose of sharing profits and loss;

(D) amendments of the Memorandum of Association or Articles of Association;

(E) increase or decrease of the Company’s capital or issuance of debentures;

(F) merger or dissolution of the Company.

34/1 It is prohibited for the Company to lend money or extend financial assistance in any case which will create a conflict of interest between the Company and its subsidiary or the Company and its joint venture company or any persons who has conflict with the Company except for those case which has been approved by not less than three-fourths of the total votes of all shareholders attending the meeting and entitle to vote.

Under this article the term “ subsidiary company”, “ the Company”, “ joint venture company”, and “persons who has conflict” shall carry the same meaning as those prescription stipulated in the prevailing laws of the security exchange.

Qualifications of Director, Director election process, Director’s retirement by rotation and Director’s remuneration

17. Directors of the Company comprise of at least five directors and not less than half of all Directors must reside in the Kingdom. Directors may or may not hold shares of the Company.

Directors of the Company must perform its duty in accordance with the law, objective and regulation of the Company including resolution of the Shareholders meeting.

18. The meeting of Shareholders shall appoint directors in accordance with the following guideline and process;

(1) a shareholder is entitled to one vote per share; (2) each shareholder must exercise all of its voting right as per (1) to elect one

candidate at a time or candidates consisting in a group but those votes shall not be distributed unequally to each candidate(s).

(3) the persons who has received the highest votes in his respective order of the votes shall be elected as Director at the number equal to the number of directors required at that time. In the event of tie vote among the candidate

elected in the order of respective high numbers of votes, which exceed the required number of directors of the Company at that time, then chairman of the meeting shall exercise a casting vote.

19. At any Annual General Meeting of Shareholders one-third of the Directors or if their number is not a multiple of three, then the number nearest to one-third shall be retired by rotation.

Those directors retired in the first and second year after the registration of a Public Company shall be drawn by lots while in subsequent year the Directors who are in the office longest shall retire. Those Directors retired by rotation shall be eligible for a re-election.

20. A Director is entitled to remuneration from the Company namely gratuities, meeting allowances, bonuses or any other nature of interests pursuant to Articles of Association or the consideration of Shareholders meeting. Such remuneration may be fixed or specified from time to time according to the regulation laid out, or let it remain effective until there is a change. In addition, a Director is entitled to per diem and any fringe benefits according to the regulations of the Company.

Dividend Payment

42. The Company is prohibited from paying out any dividend from sources other than net profit. In the event of loss carried forward, the Company is prohibited from paying dividend. Dividend shall be allocated equally to shares issued through prior approval from the Shareholders meeting.

The Board of Directors may pay an interim dividend to shareholders from time to time when the Company has sufficient profit to do so. Following the interim dividend payment the Board of Directors shall report to the next Shareholders meeting.

The dividend payment shall be made within one month from the date it was approved by the Shareholders meeting or the date it was approved by the Board of Directors whichever the case. Notice of dividend payment shall be sent to shareholders and published as such in the newspaper.

43. The Company must appropriate a portion of annual net profit as a reserve fund in the amount not less than 5 percent of the annual net profit less accumulated loss brought forward (if any) until the reserve fund reach the amount not less than 10 percent of the Company’s registered capital.

(Encls. No. 5)

Documents or evidence showing identity of a Shareholder or representative of a

Shareholder entitled to attend the meeting.

Natural person

1. In case the shareholder attend the meeting in person

Valid identification card, identification card of government officer, driving license, passport and documentation related to name change (if any) should be shown

2. In case of proxy

2.1 A completed proxy form enclosed in the notice of meeting, duly signed by the shareholder who give proxy and the proxy holder; 2.2 A certified copy of the shareholder’s identification as per 1; 2.3 A certified copy of the proxy holder’s identification similar to 1.

Juristic person

1. In case the representative (director) of juristic person attend the meeting in person

1.1 Valid identification card of the representative similar to natural person in 1; 1.2 A certified corporate affidavit which bear the authority of representative attending the meeting.

2. In case of proxy

2.1 A completed proxy form enclosed in the notice of meeting, duly signed by the juristic person (directors) who give proxy and the proxy holder; 2.2 A certified corporate affidavit which bear the authority of directors who sign the proxy form; 2.3 A copy of valid identification card of the director(s) who sign the proxy form;

2.4 A copy of valid identification card of the proxy holder similar to 1 of the natural person

3. In case of oversea shareholders who has appointed a custodian in Thailand

3.1 Show documentations similar to 1 and 2 3.2 In case the foreign shareholders has appointed a custodian to sign the proxy form there must be additional documentations as follows:-

1) a proxy from foreign shareholders appointing a custodian to sign the proxy form; 2) a certificate of custodian. Any documentation which its original is not in English

must be accompanied by a certified translation, certified by shareholder or representative of juristic person.

2. Giving proxy

The Company has sent a proxy form B which is a specific proxy form according to regulation of the Department of Business Development, Ministry of Commerce Re. form of proxy (No. 5) BE 2550

Shareholder who is unable to attend the meeting in person may appoint a person as their proxy by following the procedure below:-

1. Give proxy to a person selected by the shareholder or give proxy to one of any independent Director of the Company by specifying the name and details of the proxy holder or mark in front of one of any independent Director as listed in the proxy form,

2. Affix the Baht 20 stamp duty with specific date of proxy form written across the stamp duty,

3. Return the completed proxy form to the Company in the enclosed envelop within April 23, 2012 or before the beginning of the meeting for verification of the documents prior to the meeting.

Attachment No. 6

Information Memorandum on the Acquisition and Dispo sition of Assets of Charn Issara Development Public Company Limited

March 29, 2013 Re: Information Memorandum on the Acquisition and Disposition of Assets of Charn Issara

Development Public Company Limited To: Shareholders Charn Issara Development Public Company Limited

The Board of Directors Meeting No. 2/2013 of Charn Issara Development Public Company Limited (the “Company” or “CI”), held on March 14, 2013, has passed the important resolutions which shall be proposed to the shareholders for consideration in the Annual General Meeting of Shareholders No.1/2013 (“AGM”), on April 25, 2013 as follows: 1. Approved the disposition of assets by allowing Charn Issara Residence Co., Ltd. (“CIR”), in which

the Company holds 80.04% of the shares, to dispose the assets (immovable and movable assets) which are used for the operation of Sripanwa Hotel and Sripanwa Boutique Resort and Spa Hotel and Serviced Apartments (“Sripanwa Hotel Project”) by transferring the ownership of the lands, buildings and other assets belonging to CIR that are used for the operatio of Sripanwa Hotel Project to the property fund to be established (the “Property Fund”) in the price of approximately Baht 1,978.43 million. (Agenda 8 in AGM)

2. Approved the acquisition of assets of the Company, CIR, and a special purpose vehicle (“SPV”) by dividing the transactions for approval into the following sub-agendas: 2.1. After the Property Fund has been approved by the Securities and Exchange Commission

Thailand (“SEC”), approved for the Company and CIR to invest in the Property Fund by purchasing units in the Property Fund amounting to 30% of the total units in the Property Fund that is going to be established, 15% of which shall be purchased by the Company and the remaining 15% of which shall be purchased by CIR. The Company and CIR shall invest in the amount of 60,000,000 units with the par value of 10 Baht per unit, totaling Baht 600 million in value. (Agenda 9.1 in AGM)

2.2. Approved for CIR to set up an SPV within reasonable time and hold the shares of not less than 99.99% of the total shares in the SPV with the initial registered capital in the amount of Baht 30 million. Approved for CIR to transfer all licences and agreements, including employees in relation to the operation of Sripanwa Hotel Project to SPV. (Agenda 9.2 in AGM)

2.3. Approved for the SPV in which CIR holds not less than 99.99% of the total registered capital, to lease the assets (immovable and movable assets) that the Property Fund has invested in Sripanwa Hotel Project from the Property Fund for a long lease term. Initially, SPV shall lease the property for 15 years with the fixed annual rent of Baht 151 million for the year 1-5. The rent shall be increased 10% every 3 years of the 6 year onward. The rent also has the variable portion which shall be effective from the year 11-15 of the lease term. (Agenda 9.3 in AGM)

3. Approved for CIR to be jointly liable with the SPV as the principal debtors and joint debtors in paying the rental as required in the Draft Lease Agreement to the Property Fund so as to enable the Property Fund to receive the guaranteed revenue. Moreover, the Board of Directors approved for the Company to enter into a Shortfall Rental Payment Agreement with the Property Fund. For the whole guaranteed period, if SPV and CIR fail to pay the rental under the Lease Agreement to the Property Fund, the Company agrees to pay the shortfall to the Property Fund forthwith. (Agenda 10 in AGM) (More details in Clause (5.5) Drafted Undertaking Agreement and (5.6) Drafted Shortfall Rental Payment Agreement)

4. Approved to authorise the Board of Directors and/or managing director and/or authorized directors of the Company, CIR and SPV to be the authorized persons to co-ordinate, negotiate, amend, execute, deliver documents and/or agreements concerning the contractual party and/or any person in connection with the Property Fund, as well as, authority to act on any matter on

Attachment No. 6

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behalf of the Company, CIR and SPV in relation to the setting up of the Property Fund so that it becomes successful and is in line with the objective. (Agenda 11 in AGM)

In this regard, the above transactions are considered as the acquisition and disposition of assets as follows: • The disposition of assets as transaction 1; the transaction is considered as the disposition of

assets according to the Notification of the Capital Market Supervisory Board No. Tor Chor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposition of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets BE 2547 (2004) (“Notification of Acquisition or Disposition of Assets”). The size of the transaction is equal to 53.56% of the Company’s consolidated total assets as of 31 December 31, 2012, which is considered a type 1 transaction according to the Notification on acquisition or disposal of asset between a listed company and another listed company or its subsidiary with a transaction size of 50% or higher but lower than 100%,

• The acquisition of assets includes transactions 2.1, 2.2, and 2.3 which are considered as the acquisition of assets according to the Notification of the Capital Market Supervisory Board No. Tor Chor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposition of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets BE 2547 (2004) (“Notification of Acquisition or Disposition of Assets”). The total maximum transaction size is equal to 88.63% of the Company’s consolidated total assets as of December 31, 2012 (which are the sum of the maximum value of each acquisition transaction according to Notification on Acquisition or Disposition of Assets). It is therefore considered a type 1 transaction according to the Notification on acquisition or disposal of asset between a listed company and another listed company or its subsidiary with a transaction size of 50% or higher but lower than 100%,

• Transaction 3 is considered the financial support transaction of the other items listed above. Hence, the Company has the duty to prepare a report for disclosure of information for the said transactions to the SET and convene a shareholders’ meeting to approve the entering of such transactions with the votes of not less than 3/4 of the total votes of the shareholders present at the meeting and are eligible to vote, excluding the shareholders with a conflict of interest. The Company shall prepare a notice of the shareholders’ meeting, together with an opinion of the independent financial advisor to be sent to the shareholders at least 14 days prior to the shareholders’ meeting on April 25, 2013. In this regard, the Company sets out the details of the transactions pursuant Notification on Acquisition or Disposition of Assets as follows: 1. Information Memorandum Account 1

(1) Date of the Transaction The Company will enter into the transactions after the Company has obtained an approval

from the Annual General Meeting of Shareholders No. 1/2013, to be held on April 25, 2013, and its subsidiary companies, Charn Issara Residence Co., Ltd. ("CIR") has been approved by the Annual General Meeting of Shareholders No.1/2013 which will be held on April 25, 2013 as well. In this regard, the Company has expected to carry out various transactions completed by the end of June 2013. Currently, the Company is in the process of preparation of Detailed Fund Scheme and it has expected to submit an application for the establishment of the Property Fund and the details of project fund to the Office of the Securities and Exchange Commission (“SEC”) by the end of March 2013. Preliminary the Company estimates that the Property Fund will be established successfully within July 2013.

(1.1) The disposition of assets : Transaction 1 Transaction 1 After the Property Fund obtains an approval for registration of its establishment from the

SEC. The transfer of the assets and the ownership transfer registration are expected to complete within June 2013, or no later than July 2013. In this regard, the Company has to seek an approval from the shareholders’ meeting with the votes of not less than 3/4 of the total votes of the shareholders, presenting at the meeting and are eligible to vote, excluding the shareholders with a conflict of interest.

Attachment No. 6

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(1.2) The acquisition of assets : Transaction 2.1, 2.2, and 2.3 Transaction 2.1 After the Property Fund obtains an approval for registration of its establishment

from the SEC. The transfer of the assets and the ownership transfer registration are expected to be completed within June 2013, or no later than July 2013

Transaction 2.2 Expected to be completed before the investment of the Property Fund. Transaction 2.3 After the Property Fund to be established registers for the transfer of the

ownership and leasehold right. This is expected to be completed within June 2013, or no later than July 2013.

(2) Parties Involved and their relationships with t he Company:

(2.1) The disposition of assets Transaction. 1 : CIR disposes assets under Sripanwa Hotel Project to the Property Fund Seller : Charn Issara Residence Co., Ltd. (“CIR”) Purchaser : The Property Fund to be established (the “Property Fund”) Relationship with CI

: Charn Issara Residence Co., Ltd. is a subsidiary of the Company, in which the Company holds 80.04%. After the Property Fund obtains an approval for its establishment from the SEC, the Company and CIR plan to totally invest by holding the investment units in the Property Fund of 30% of total outstanding units of the Property Fund.

(2.2) The acquisition of assets

Transaction 2.1 : The Company and CIR invest 30% of the Property Fund. Investor : Charn Issara Development Public Company Limited and

Charn Issara Residence Co., Ltd. The Property Fund

: The Property Fund to be established

Relationship with CI

: After the Property Fund obtains an approval for its establishment from the SEC, the Company and CIR plan to invest by purchasing units in the Property Fund amounting to 30% of the total units in the Property Fund that is going to be established, 15% of which shall be purchased by the Company and the remaining 15% of which shall be purchased by CIR.

Transaction 2.2 : CIR establishs SPV and invests not less than 99.99% of the total shares of

SPV. Investor : Charn Issara Residence Co., Ltd. Company : SPV to be established Relationship with CI

: CIR is a subsidiary of the Company, in which the Company holds 80.04%. CIR will hold not less than 99.99% of the total shares of the SPV.

Transaction 2.3 : SPV long-term leases assets from the Property Fund. Lessee : SPV to be established Lessor : The Property Fund to be established Relationship with CI

: CIR will hold not less than 99.99% of the total shares of the SPV. After the Property Fund obtains an approval for its establishment from the Office of the SEC, the Company and CIR plan to invest by holding the investment units in the Property Fund of not more than 30% of total outstanding units of the Property Fund.

(3) General characteristics of the transaction, cat egory and size of the transactions

(3.1) The disposition of assets: Transaction 1 : The Company approved for CIR, a subsidiary of the Company (80.04% held

by the Company), to dispose the assets (immovable and movable assets) used for the operation of Sripanwa Hotel Project to the Property Fund to be established. The assets to be disposed are composed of lands (21 Rai-2 Ngan-55 Sq.Wah), other hotel buildings (38 units of Pool Villas, Family Suite, and Luxury Villas and 7 units of Serviced Apartments), utilities relating to the hotel business and furniture, fixtures and equipment. The selling price of these assets is approximately Baht 1,978.43 million, including transfer fee and related taxes of Baht 63.81 million.

Transaction 1 is classified as a Type 1 transaction, a transaction between a listed company or its subsidiaries with a non-listed company. The transaction size is equal to 53.56% of the Company’s consolidated total assets as of December 31, 2012, which is the maximum value according to the total

Attachment No. 6

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value of consideration criteria according to the Notification of Acquisition or Disposition of Assets, the transaction is higher than 50% but lower than 100%.

Calculation Criteria Calculation Transaction Size 1. Net Tangible Assets (NTA) Not applicable as it is not a disposition of securities 2. Net Profit Not applicable due to the disposed assets have net loss in 2012 3. Total Value of Consideration Baht 1,978.43 million/ Baht 3,693.54 million 53.56% 4. Value of Securities Issued Not applicable as there is no securities issued

(3.2) The acquisition of assets

Transaction 2.1 The Company and CIR, invest in the Property Fund by holding the

investment units in the Property Fund approximately 60,000,000 units at par value of 10 Baht per unit, amounting to the total of Baht 600 million which is accounted for 30% of the total outstanding units of the Property Fund. In this regard, the Company will invest 15% and CIR will invest the remaining 15%.

Transaction 2.2 The Company approved for CIR, to establish a special purpose vehicle

(“SPV”) to operate Sripanwa Hotel Project and to support the management of the assets of the Property Fund. CIR will manage to transfer any license, as well as the hotel’s employees, and all contracts signed with other companies, relevant to the operation of Sripanwa to SPV. CIR will hold not less than 99.99% of registered capital of SPV (initially Baht 30 million)

Transaction 2.3 SPV will lease the assets (immovable and movable assets) used for the

operation of Sripanwa Hotel Project from the Property Fund for the lease term of 15 years. The assets to be leased are the lands of approximately 21 Rai-2 Ngan-55 Sq.Wah, together with buildings and hotel rooms 38 units in Phase 1-3, namely Pool Villa, Family Suite and Luxury Villa and 7 units of serviced apartments, as well as, other facilities in relation to the hotel and serviced apartments, public utilities relating to the said business including furniture, fixtures and equipment. The rental fee comprises of a fixed and a variable portion. The fixed annual rent is Baht 151 million for the year 1-5 and will be increased in the year 6 onward at the rate of 10% every three years. The variable portion which is calculated according to the formular in the lease agreement will be effective from the year 11-15.

The mentioned transactions are deemed to be the acquisition of asset transactions which are

required to be considered together for the size calculation. These transactions are considered as type 1 transaction in that they are agreements between a listed company or subsidiary with another party that is not a listed company Having calculated the size in accordance with the rules stipulated in the Notification concerning acquisition or disposal, the value of the transactions is equal to 88.63% of the Company’s consolidated total assets as of December 31, 2012, which is the maximum value based on the total value of consideration criteria. Hence, they are considered a type 1 transaction according to the Notification on acquisition or disposal of assets between a listed company and another listed company or its subsidiary with a transaction size of 50% or higher but lower than 100%.

Calculation Criteria Transaction 2.1 Transaction. 2.2 Transaction 2.3 Total 1. Net Tangible Assets

(NTA) [30% * Baht 2,001.84 million1/] / Baht 1,071.81 million= Baht 600.55 million /Baht 1,071.81 million = 56.03%

[99.99% * Baht 30 million / Baht 1,071.81 Baht= 2.80%

Not an acquisition of securities

58.83%

2. Net Profit Not applicable as the Property Fund has no operation yet.

Not applicable as the SPV has no operation yet.

Not applicable as it is a lease transaction

-

3. Total Value of Consideration

[30% * Baht 2,001.84 million] / Baht 3,693.54 million = Baht 600.55 million / Baht 3,693.54 million = 16.26%

[99.99% * Baht 30 million] / Baht 3,693.54 million = 0.81%

Baht 2,643.00 million2/ / Baht 3,693.54 million = 71.56%

88.63%

4. Value of Securities Issued

Not applicable as there is no securities issued -

Maximum Value 88.63% Remark: 1/ Estimated initial fund raising of the Property Fund by the Company. However, the actual size of the Property Fund shall

depend on several factors such as Book Building, investor demands, market condition at the offering time, etc. 2/ Total sum of fixed rental fee over 15 leased years as specified in the drafted lease agreement and total estimated variable

rental fee on the year 11-15 based on the appraisal report of C.I.T. Appraisal Co., Ltd., which is higher than the estimated variable rental fee by Knight Frank Chartered (Thailand) Limited.

Attachment No. 6

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(4) Details of assets to be disposed of and summary of related agreements (4.1) Sripanwa Hotel Project The Sripanwa Hotel Project is located on Cape Panwa, Phuket Province. Sripanwa Hotel

Project comprises of Sripanwa Hotel and Sripanwa Boutique Resort and Spa. Sripanwa Hotel is situated at 88/11 – 88/16, 88/20 – 88/21, 88/31, 88/36 and 88/56 - 88/60 Moo 8, Wichid District, Amphur Muang, Phuket. Sripanwa Boutique Resort and Spa is situated at 88/71 – 88/93 Moo 8, Wichid District, Amphur Muang, Phuket Province. The major assets of Sirpanwa Project to be disposed to the Property Fund are lands, hotel buildings, utilities relating to the hotel business and furniture, fixtures and equipment. According to CIR’s financial statements as of December 31, 2012, the net book value of assets to be disposed is in the amount of Baht 906.48 million1. Details of the assets are explained below.

(4.1.1) Land The lands composing of 16 Nor Sor. 3 Kor located around Phase 1 - 3 of the Project at Wichid

District, Amphur Muang, Phuket Province. These 16 land plots with the area of approximately 21 Rai, 2 Ngan, and 55 Sq.Wah (8,655 Sq.Wah) are owned by CIR (In this regard, CIR will register 14 Nor Sor. 3 Kor (approximately 10 Rai, 3 Ngan, and 13.90 Sq.Wah) which are belonging to CIR as servient properties for the use of walkway, the use of road and the use for underground infrastructure system to assets disposed to the Property Fund and units sold.) The details of appraised lands (8,655 Sq.Wah) are as follows: PhasePhasePhasePhase ItemItemItemItem Nor Nor Nor Nor

Sor. Sor. Sor. Sor. 3333 Kor Kor Kor Kor No.No.No.No.

Lot No.Lot No.Lot No.Lot No. AreaAreaAreaArea (Rai(Rai(Rai(Rai----NganNganNganNgan---- Sq. WahSq. WahSq. WahSq. Wah))))

BuildingsBuildingsBuildingsBuildings AddressAddressAddressAddress No. of No. of No. of No. of UnitsUnitsUnitsUnits

(1) Hotel Villas and Serviced Apartments include:(1) Hotel Villas and Serviced Apartments include:(1) Hotel Villas and Serviced Apartments include:(1) Hotel Villas and Serviced Apartments include:

1 1 1725 27 0-2-19.9 Pool Villas (PV 01-02) 88/11, 88/12 2

2 1726 28 0-2-24.8 Pool Villas (PV 03-04) 88/13, 88/14 2

3 1727 29 0-2-31.4 Pool Villas (PV 05-06) 88/15, 88/16 2

4 1731 33 0-3-25.2 Pool Villas (PV 10-11) 88/20, 88/21 2

2 5 1771 14 0-1-62 Family Suite (FS 20) 88/60 1

6 1773 16 0-1-60 Family Suites (FS19/1 and 19/2)1/ 88/58, 88/59 2

7 1827 43 0-1-18 Family Suite (FS 05) 88/36 1

8 1828 44 0-1-45 Family Suite (FS 13) 88/57 1

9 1829 45 0-1-25 Family Suite (FS 12) 88/56 1

10 1915 44 0-0-52 Family Suite (FS 01/1) 88/31 1

3 11 321 2 10-3-64.7 Luxury Villas Type A - B 88/71-81, 88/83-86, 88/88-91

19

Serviced apartments2/ and Pool Club building

7

12 1864 28 1-3-11.3 Luxury Villas Type A - B 88/82, 88/87, 88/92, 88/93

4

Sub total (1) 17-0-39.3 Total Hotel Units 45

(2) Facilities and common areas include:(2) Facilities and common areas include:(2) Facilities and common areas include:(2) Facilities and common areas include:

3 13 350 4 1-3-97.1 Sport center building, tennis courts and staff house

14 1858 48 0-2-41.8 Spa

15 1860 20 1-0-49.8 Spa

16 1888 54 0-3-27 Reception building and Baba restaurant

Sub total (2) 4-2-15.7

Grand totalGrand totalGrand totalGrand total ((((1111) ) ) ) andandandand ((((2222)))) 21212121----2222----55555555 ((((8,655.00 Sq.Wah8,655.00 Sq.Wah8,655.00 Sq.Wah8,655.00 Sq.Wah))))

1 This figure is from CIR’s internal financial statements for the year 2012, which were audited by the Company’s auditor. It is

different from the figure in the report and specific financial information of the Sripanwa Hotel Project under CIR’s management, prepared by Ernst & Young Office Limited (“EY”), dated March 1, 2013 (“Carve Out Financial Statement”), which is equal to Baht 905 million due to decimal rounding of each item of assets by EY.

Attachment No. 6

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Source: Appraisal Report of C.I.T. Appraisal Co., Ltd., dated March 15, 2013, Clause 3.1. Remark: Land item 11 and 12 are pledged as collateral with the Siam Commercial Bank Public Company Limited (“SCB”) and land item 1-10 and 13-16 are pledged as collateral with the Islamic Bank of Thailand (“IBANK”). The pledged lands will be released from both banks before transferring to the Property Fund under conditions in the drafted sale and purchase agreement of immovable properties. 1/ Family Suite No. FS19/1 and FS19/2 are in the same building. (1 building has 2 hotel units.) 2/ 7 units of serviced apartments (or Pool Suites) are on the lower floor of Pool Club building. (1 large building has

restaurants, activities rooms, and 7 serviced apartment units.)

(4.1.2) Hotel Buildings and Facilities Hotel buildings and any fixtures located on the lands to be disposed which are the location of

Sripanwa Hotel Project (including Pool Villas, facilities buildings, reception buildings, restaurants, spa, sport center, tennis courts, M&E building and staff house). In this regard, any system, common facilities and other immovable properties which are owned by CIR and under Sripanwa Hotel Project are also considered as properties to be disposed. The details of mentioned hotel buildings and utilities are as folows:

Hotel Buildings and Facilities Phase Number of Buildings

Space (Square Metre)

Hotel Villas and Villa Serviced Apartments include: 37 buildin gs

1. One bedroom Pool Villa (PV 01-03) 1 3 711.12 2. Two bedroom Pool Villa (PV 04-06, 10-11) 1 5 1,450.35 3. One bedroom Family Suite (FS 01/1) 2 1 177.06 4. Two bedroom Family Suite (FS 05, 12, 20) 2 3 1,146.00 5. Two bedroom Family Suite (FS 13) 2 1 394.92 6. Two bedroom Family Suite (FS 19/1, 19/2) 2 2 372.87 7. One bedroom Luxury Pool VillaType A – (LV 01-04, 06-11) 3 10 2,757.50 8. One bedroom Luxury Pool VillaType A – (LV 05) 3 1 286.89 9. One bedroom Luxury Pool VillaType B – (LV 12, 17-18, 22-24) 3 6 1,640.70 10. Two bedroom Luxury Pool VillaType B – (LV 14-16, 19-21) 3 6 2,000.70 Facilities as common areas include 6 buildings

1. A 4-story reception building and restaurants with underground floor 3 1 1,245.65 2. A 3-story spa building with underground 3 1 2,109.70 3. A 4-story Pool suites as serviced apartments and Pool Club building 3 1 4,849.85 4. A 2-story building of staff hourse 3 1 584.26 5. A 2-story building of Maintenance and electric control room and staff rooms 3 1 961.20 6. Tennis courts 3 1 1,940.40 Total 43 22,629.17 Source: Appraisal Report of C.I.T. Appraisal Co., Ltd., dated March 15, 2013, Clause 1.4. (No. of buildings in some categories are different from the appraisal report of Knight Frank Chartered (Thailand) Co., Ltd., which is the other property appaiser.) Remark: The Sripanwa Hotel Project has 43 buildings, but has 45 hotel units (38 units of Villas and 7 units of serviced apartments as described in Clause (4.1.1))

(4.1.3) Main Building Systems and Main Facilities

Details of Assets 1 Electrical System includes electrical generator sets, e lectrical transformer, main distribution board and lightening

protection and grounding system etc. 2 Communication System includes telephone system, internet service system, fire alarm system, MATV System, sound

system and security system 3 Sanitary System includes main cold water system, waste water treatment system, recycle water system and

swimming pool treatment system. 4 Fire Protection System 5 Air Conditioning and Ventilation System 6 Elevator System

(4.1.4) Furniture, fixtures and equipment

Details of Assets 1 Furniture, fixtures and equipment used in the operation of Sripanwa Hotel Project

(4.2) The summary of the important related contract s of the disposition of assets

transaction (4.2.1) Summary of the drafted sale and purchase agreement of immovable assets

Contract Name Sale and purchase agreement of immovable assets (Draft) Contract parties Seller: Charn Issara Residence Co., Ltd. (“CIR”),

Purchaser: The Property Fund to be established (the “Property Fund”) Contract Date Draft for consideration March 13, 2013 Propert ies to be purchased

Lands and buildings to be purchased

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Contract Name Sale and purchase agreement of immovable assets (Draft) Lands to be purchased

Lands with the area of approximately 21 Rai, 2 Ngan, and 55 Sq.Wah located in Wichid District, Amphur Muang, Phuket Province. The said lands, comprising of 16 Nor Sor. 3 Kor (as specified in detail in Clause (4.1.1) of this document) are the location of Sripanwa Hotel Project. They also include infrastructure and the acquisition of the lands which are owned by CIR for the operation of Sripanwa Hotel Project.

Buildings to be purchased

Hotel buildings as well as utilities relating to the hotel and serviced apartment that are located on the land of Sripanwa Hotel Project. These include hotel villas, facilities buildings, reception buildings, restaurants, spa, sport center, tennis courts, M&E building and staff house. (Detail as specified in Clause (4.1.2) of this document)

Duration of the contract

Contract parties agreed to register the transfer of property to be purchased at the Land Department or relevant government office within [•] 2013, or the date and time according to the contract, the parties have agreed on. In this regard, the transfer shall be completed within [•].

Purchase price As of the date of title registration, the Property Fund will pay the price of the propertis to CIR amounting to Baht 1,933.57 million* right after the said registration is carried out completely.

Important agreements

• Once the Property Fund is completely established, CIR agrees to sell and the Property Fund agrees to purchase the specified property which is currently used for the operation of Sripanwa Hotel Project.

• As of the date of title registration, the parties agree to register the transfer of property to be purchased, unencumbered by any mortgage, pledge or any other similar rights except under the existing mortgage with the Islamic Bank of Thailand and the Siam Commercial Bank Public Company Limited which will need to redeem the mortgage as soon as the registration of transfer of property to be purchased.

• CIR must register the land which is currently the road, the car passage enter and exit within Sripanwa Hotel Project, as servient property to the lands to be purchased. This is for the purpose of project’s walk way, walk path to the beach, car passage, sewer and electric utilities so that the Property Fund has the right to fully utilize the property and such common facilities in Sripanwa Hotel Project.

• CIR has agreed to enter into an undertaking agreement and a share pledge agreement and/or any other agreement relating to the investment of the Property Fund and to strictly comply with the terms and conditions of those agreements.

• CIR is responsible for taxes and duties, fees, and other expenses relating to the registration of any transfer of property, and any other costs associated with this selling and purchasing transaction.

Conditions precedent for the buy and sell transaction

• CIR has been approved by an annual general meeting of shareholders which is required by law. • CIR has established SPV the status of a legitimate company in every respect. And CIR maintains a

shareholding of not less than 99.99% in SPV.

Remark: * The final settlement price shall be determined by the value of newly set-up Property Fund and the rate of return which investors receive shall depend on the market condition as of the offering period of the Property Fund’s units.

(4.2.2) Summary of the drafted sale and purchase agreement of movable assets

Contract Name Sale and purchase agreement of movable assets (Draft) Contract parties Purchaser : The Property Fund to be established (the “Property Fund”)

Seller: Charn Issara Residence Co., Ltd. (“CIR”) Contract Date Draft for consideration March 13, 2013 Propert ies in the contract

Furniture, fixtures and equipment used for the operation of Sripanwa Hotel Project e.g.beds, closets, shelves, collection of sanitaryware, electrical appliance, etc.

Duration of contract

Contract parties agree that ownership of movable properties under this agreement is legally in effect at the time that the transfer of title of the property is completed and the purchase price has been paid.

Purchase price On the date of title registration, the Property Fund will pay the price of the movable assets to be purchased to CIR amounting to Baht 44.86 million* (including VAT and other costs occurring due to the transfer of such movable assets), right after the said registration and the transfer of immovable assets are carried out completely.


• CIR intends to sell and the Property Fund intends to buy the specified moveable assets which are currently used for the operation of Sripanwa Hotel Project.

• The Property Fund intends to purchase the moveable property of CIR to gain benefit by leasing those moveable assets in conjunction with the lands and buildings used under Sripanwa Hotel Project.

• CIR agrees to be responsible for those costs, fees and taxes (including VAT) occurred or may be occurred due to the transfer of ownership of movable assets.

Condition precedent for the purchase of the assets

• The parties have signed the agreement to buy and to sell Immovable assets and the undertaking agreement and duly registered the transfer of assets that are going to be purchased with legal effect not later than [•].

• CIR has been approved by the shareholders with legal effect. • CIR has established an SPV to be a limited company under the law and holds shares in the SPV of

not less than 99.99%. Remark: * The final settlement price shall be determined by the value of newly set-up Property Fund and the rate of return which investors will receive shall depend on the market condition as of the offering period of the Property Fund units.

(5) Details of the acquired assets and summary of r elated agreements: Transaction 2.1, 2.2 and 2.3

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(5.1) Transaction 2.1: The Company and CIR are to invest in the Property Fund to be established. The details of this transaction are summarized below. Buyer The Company and CIR Seller The Property Fund to be established Fund manager company SCB Asset Management Co., Ltd. (SCBAM) Investment units Approximately 60,000,000 units Par value per unit Baht 10 Value invested by CI Baht 300.28 million Value invested by CIR Baht 300.28 million Total value invested Baht 600.55 million Proportion of investment 30% of the total outstanding units of the Property Fund

(5.2) Transaction 2.2: CIR establishs a special purpose vehicle (“SPV”) to operate

Sripanwa. CIR will hold no less than 99.99% of the total paid-up capital of SPV. Special purpose vehicle SPV Initial capital investment Baht 30,000,000 Value invested by the CIR Baht 30,000,000 Proportion of investment Not less than 99.99% of the total paid-up capital of SPV

(5.3) Transaction 2.3: SPV, held by CIR not less than 99.99% of its total shares, leases

the assets (immovable and movable assets) used for the operation of Sripanwa Hotel Project which are invested by the Property Fund. The drafted lease agreement is summarized as follows:

Contract Name Lease agreement (Draft) Contract parties Lessor: The Property Fund to be established (the “Property Fund”)

Lessee: SPV Co., Ltd. (“Lessee” or “SPV”) Contract date Draft for consideration March 13, 2013 Important agreements

• The Property Fund leases its assets which are lands to be leased, building and movable assets to be leased to SPV so that SPV can operate Sripanwa Hotel Project and other activities related to and supportive to Sripanwa Hotel Project such as commercial project, residential project, and spa etc.

• During the terms of this contract, the Property Fund reserves the right to co-audit SPV’s ability to manage the Project and its ability to pay the rent so long as there is no disturbance to the operation.

• Any action of SPV involved in Sripanwa Hotel Project is only considered the action as the lessee under the terms and conditions of this contract. SPV shall not be deemed an agent of the Property Fund and SPV is not allowed to take any action on behalf of the Property Fund in any way.

• From the date of this contract and as long as SPV is still listed as a lessee under a lease agreement and there is a renewal agreement, SPV agrees to do any necessary and appropriate action to seek financial support from CIR or any other individual (including the seeking for a reserve fund to cover expenses incurred during low season business under Sripanwa Hotel Project) so that SPV can meet the objectives in operating the project and can maintain highest benefits. As a result, the Property Fund will receive the highest rents.

• SPV shall not engage in any other business except for the operation of Sripanwa Hotel Project, related and supportive activities to Sripanwa Hotel Project including residence management service under the new Rental Management Agreement, the new Pool Villa Rent Back Agreement and/or Sub-Management Agreement and the second and the third part of the Project to be held in the future.

• SPV agrees not to provide loan to a person or to advance funds or any other funds of a similar nature to any person. (Including directors and employees of SPV), whether secured or not. Additionally, SPV agrees not to provide an advance to the directors and officers of SPV which will cause the outstanding balance of lending to the directors and officers of SPV aggregate at any one time exceed Baht 1,000,000 except (a) SPV obtains in advance a written approval from the Property Fund, or (b) a loan to the Company in the amount not exceeding [•] Baht per item or combination at any one time no more than [•] Baht.Such loan must have no effect on the ability of SPV to pay rent or (c) a loan to the employee according to the welfare policy or an advance for business travelling under normal business.

• SPV shall not constitute a debt or financial obligations or loans from any party (including financial institutions) in the amount excess Baht 5,000,000 as well as a guarantee of any individual except (a) a debt from CIR or other companies under CIR or (b) in the case of normal course of business which is based on normal conditions. In this regard, the outstanding balance at any one time cannot exceed Baht 2,000,000 and the guarantee of no more than one year without the written consent of the Property Fund in advance.

• SPV shall no enter into a single contract or several related contracts with the outstanding amount at any one time of Baht 4,000,000 without the written consent from the Property Fund in advance unless the event is carried out by SPV on normal commercial terms and in the normal course of business.

• SPV shall not enter into any contract or other agreement with any advisor, managing director or any other individual or entity related to SPV, including managers and directors of such entity with the amount in excess of Baht 4,000,000 for the period of 12 consecutive months without the written consent from the Property Fund in advance except for the normal operation of the lessee or normal course of business of the lessee and under the normal business condition (or the entering into a

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Contract Name Lease agreement (Draft) new Pool villa Rent Back Agreement, a new Rental Management Agreement and a Sub-Management Agreement with the residential owner who owns a residence or with CIR (as the case may be).

• SPV shall obtain insurance from an insurance company approved by the Property Fund in the amount sufficient to the standard set for the same business or as required by the Property Fund.

• On or upon the termination of this contract, the lessee, SPV shall deliver the leased property back to the Property Fund in good condition and suitable for the purpose of hotel operation.

• Each contract party shall have an option to ask the other party to renew the lease by written notice to the other party at least 12 months in advance before the termination period under this contract. With this regard, the renewal may be extended for another period of 15 years.

Propert ies to be leased

Lands, hotel buildings, and related moveable assets to be leased.

Lands to be leased

Lands with the area of approximately 21 Rai, 2 Ngan, and 55 Sq.Wah located in Wichid District, Amphur Muang, Phuket Province. The said land, comprising of 16 Nor Sor. 3 Kor are the location of Sripanwa Hotel Project. They also include infrastructure and the acquisition of the lands which are owned by CIR for the operation of Sripanwa Hotel Project. (as per the details specified in Clause (4.1.1) of this document)

Buildings to be leased

Hotel buildings as well as utilities relating to the hotel and serviced apartment business that located on the land of Sripanwa Hotel Project. These include hotel villas, facilities buildings, reception buildings, restaurants, spa, sport center, tennis courts, M&E building and staff house. (as per the details specified in Clause (4.1.2) of this document)

Movable assets Furniture, fixtures and equipment used in the operation of Sripanwa Hotel Project e.g.beds, closets, shelves, collection of sanitaryware, electrical appliance, etc. (as per the details specified in Clause (4.1.3) of this document)

Lease term 15 years, unless either party or both agree to use an option to renew the contract for another period. Rental payment SPV agrees to pay a monthly rental fee to the Property Fund and agrees to pay two-month rent to the

Property Fund in advance as the lease contract is in effect. However, for the first month this contract in effect, if the lease is in effect on the first date, SPV will pay the first two-month rent right away. In the event that the lease is in effect after the first date of the month, SPV shall pay (a) the rent of the first month proportionate in a daily basis and (b) the rent of the second month full months on the day that this contract is in effect. For the rental fee of the following month, SPV agrees to pay the rental fee within 45 days after the end of each month.

Rental rate and payment condition

SPV agrees to pay rent to the Property Fund to compensate for the usage of the leased property. The rental fee comprises of fixed and variable portion as follows. Fixed Rental Fee SPV agrees to pay fixed fee each year from the effective date of this contract. The fee is shown below: Year Rental Fee (Baht/Year) Year 1-5 151,000,000 Year 6-8 166,100,000 Year 9-11 182,710,000 Year 12-14 200,981,000 Year 15 221,079,100 This contract specifies that SPV shall pay the rental fee monthly by using percentage of each month as follows: Month Fixed monthly payment (Percentage of annual fixed rental fee) January : 11% February : 11% March : 6% April : 10% May : 3% June : 6% July : 4% August : 6% September : 4% October : 11% November : 9% December : 19% Variable Rental Fee SPV agrees to pay variable rental fee annually starting from year 11 until year 15 of the leased term, in which SPV shall make a payment within 45 days from the end of each year. The calculation can be shown as follows: Variable rental fee = [ [30%] x (a – b – c) ] a = Total revenues from the operation of Sripanwa Hotel Project and the management fee from

the beginning of the calendar year. (Income from renting rooms, service revenue, revenue sharing and revenue from other operations. excluding interest income) and / or business interruption insurance claims received by insurers from the beginning of the calendar year as shown in the financial statements of the lessee.

b = Expenses in relation to management of Sripanwa Hotel Project, area management from the beginning of the calendar year. (Excluding interest expense) as shown in the financial statements of the lessee.

c = Fixed rental fee as specified in the contract (Accrual Basis) from the beginning of the calendar year

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(5.4) Summary of the Drafted Share Pledge Agreement Contract Name Share pledge agreement (draft) Contract parties Pledgee : The Property Fund Pledgor: Shareholder Tier 1 : [•] Pledgor: Shareholder Tier 2 : [•] Pledgor: Shareholder Tier 3 : Charn Issara Residence Co., Ltd. Contract Date Draft for consideration March 5, 2013 Impo rtant agreements

CIR will make the pledgors who own shares in SPV pledge to the Property Fund all rights, title, and interest in and to the shares as a first priority security for the obligation to comply with an undertaking agreement and SPV’s obligations to pay rental fee under a lease agreement during the duration of those period. The obligation includes any damage that may arise due to a non-compliance with the agreement and the lack of benefit of the Property Fund in the use of the leased property as objectives of the said agreements

The pledgors and the pledgee agree to enter into the share pledge agreement to secure the payment of the debt pledged as security including the court fees, interest fees, costs, attorneys' fees and compensation for any damage in the pledge, litigation to enforce payment, and in connection with the legal action, and damages, the loss or any other expenses that the pledgee is entitled to claim from the company and/or the pledge or the various components of debt of the above-mentioned debt.

Debt pledged as securities

Debt pledged as securities means the following debts that are in existence or will occur in the future and whether or not is subject to a condition. • Liabilities under a lease and an undertaking agreement between the Company and the pledgee

during the duration of the said agreement and the compliance of terms and conditions of lease agreement, undertaking agreement of the Company.

• Any damage occurs as a result of a non-compliance of lease agreement and undertaking agreement by SPV and/or the pledgors.

• The loss of benefit that the pledgee cannot utilize the leased property (as defined in the lease agreement) according to the objectives described in the said agreement.

The enforcement of debt pledged as securities

In the case of any pledge enforcement, and any disposition of the shares pledged by this agreement (in whole or in part), the pledgors agree for the pledgee to use the proceeds of the sale or transfer of such share pledge to repay the debt outstanding to the pledgee under the lease agreement. In the event that the net amount proceeds is less than the amount owed on the loan outstanding under the lease agreement, the pledgors are still liable for the deficit of such amount.

(5.5) Summary of the Drafted Undertaking Agreement

Contract Name Undertaking Agreement (Draft) Contract parties Property Fund to be established (the “Property Fund”) and Charn Issara Residence Co., Ltd. (“CIR”) Contract Date Draft for consideration March 13, 2013 Duration of the contract

This agreement is effective from the date of the contract and shall be in effect until there is a termination according to the condition of this contract.


CIR agrees to comply with the terms and conditions as specified in this contract to fulfill the objective of the Property Fund in buying moveable and immoveable assets under Sripanwa Hotel Project. In this regard, the Property Fund intends to take benefit from such assets by allowing SPV to lease those assets.

Equity stake in SPV

• CIR will hold the equity stake in SPV and will maintain its shareholder status of not less than 99.99% in SPV for the whole period that SPV is the lessee under the lease agreement with the Property Fund to operate Sripanwa Hotel Project.

• CIR shall not sell, transfer or make any commitment on its shares in SPV in part or in whole or take any action that will cause shares and/or management authorization of SPV transferred to other parties without consent from the Property Fund.

• In the event of any significant default of this contract on the basis of CIR’s fault, and CIR does not resolve within [45] (forty five) days, CIR agrees to sell their holdings in SPV to the Property Fund or to any individual designated by the Property Fund. In this regard, the trading share price is qual to net book value, less the amount of the deficit (if any).

• If CIR wants to sell its shares held in SPV to any individual or causes a change in the shareholding structure of SPV, CIR must notify the Property Fund in writing of not less than 3 months. In addition, CIR has to make available any individual to buy and take assets to be purchased from the Property Fund under the price, terms and conditions that the Property Fund can accept.

Future investment of the Property Fund and CIR

• In performing any other operations in Project 2 and Project 3*, the principles and objectives of such projects shall not be resulted in any conflict of interest or any impact on revenue stream of Sripanwa Hotel Project which is invested by the Property Fund.

• In this regard, CIR is still able to take benefit from assets of Project 2 and Project 3 in the form of hotel operation.

• Within 5 (five) years from the date the Property Fund invests in Sripanwa Hotel Project, CIR and any individual associated with CIR shall not invest in any real estate located in the district of Wichid, Amphur Muang, Phuket Province to perform hotel operation, serviced apartments or any other activities that are related or similar to those of Sripanwa.

• Within 3 (three) years from the date Project 2 and Project 3 start its operation (as the case may be), if the Property Fund intends to buy, lease, obtain the title in whole or in part of assets to be used in Project 2 and/or Project 3 of CIR and/or any individual associated with CIR, CIR and/or such individual associated with CIR will grant the right to the Property Fund to buy and/or lease and/or obtain the title of assets of Project 2 and/or Project 3 with the agreed upon price. (Option to Buy/Lease)

• Within 7 (seven) years from the establishment date of the Property Fund, if CIR and/or any

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individual associated with CIR has an intention to sell, dispose, transfer, lease out in whole or in part of the assets, locating in Thailand (besides those of Project 2 and Project 3) used for the operation of the hotel and/or serviced apartment of CIR and/or of individual associated with CIR, CIR and such individual associated with CIR agrees to make the Property Fund the right of first refusal in buying and/or obtaining the title and/or obtaining the possession and/or leasing such assets.

• Throughout the life of this contract, if SPV is no longer a lessee under the lease agreement and CIR and/or any individual associated with CIR intends to sell, dispose lease out in whole or in part of the assets used for the operation of Project 2 and Project 3, CIR and/or individual associated with CIR agrees to make the Property Fund the right of first refusal in buying and/or obtaining the title and/or obtaining the possession and/or leasing such assets.

• In the event of a conversion to Real Estate Investment Trust (“REIT”), CIR and/or related individual agrees to make sure that REIT has the right to first refusal and the right to purchase and/or lease and/or be transferred, and/or be transferred the possession of Project 2 and Project 3 (Option to Buy/Lease).

Guaranteed payment of the rental to the Property Fund

• CIR agrees to be jointly liable with the lessee as the principal debtors and joint debtors for the payment of the rent as specified in the lease agreement under the following terms and conditions: (1) First guaranteed period: CIR agrees to be jointly liable with the lessee as the principal debtors

and joint debtors in paying the rental for the amount stipulated in the lease agreement for the period of 5 (five) years commencing from the date on which the Property Fund has invsided in the Sripanwa Hotel Project (“First Guaranteed Period”)

(2) Second guaranteed period: CIR agrees to be jointly liable with the lessee as the principal debtors and joint debtors in paying the rental as stipulated in the lease agreement to the Property Fund after the First Guaranteed Period (“Second Guaranteed Period”). However, the amount of rental that CIR agrees to be liable with the lessee as the principal debtors and joint debtors for the Second Guaranteed Period shall be equal to the difference between the actual financial performance of the SPV in the 5th year arising only from the assets of the Property Fund and rental in the 5th year that SPV has to pay under the lease agreement (“Shortfall”). However, at any time during the second guaranteed period, the actual financial performance of the SPV in any year arising only from the assets invested by the Property Fund is equal to or exceed the rental that has to be paid under the Lease Agreement for that particular year, the parties agree that the duty and agreement given by CIR for the second guaranteed period shall be terminated, regardless of whether in any year thereafter, the actual financial performance of the SPV in any year arising only from the assets of the Property Fund is less than the rental that has to be paid under the lease agreement of that particular year.**

• CIR agrees to do the followings: (1) during the first guaranteed period, CIR and/or person and/or other juristic person approved by

the Property Fund shall provide security to the Property Fund in a value, at any time, equaling to Baht 80 million and

(2) during the second guaranteed period, CIR and/or person and/or other juristic person approved by the Property Fund shall provide security to the Property Fund in the value, at any time, equaling to the Shortfall. The Property Fund does not have to return the security provided to the Property Fund for the first guaranteed period and such security shall impliedly be deemed to be continued in the second guarantee period.

• As a guarantee for the above performance, CIR and/or any person and/or juristic person approved by the Property Fund shall provide security for the Property Fund as follows (a) transfer the right to receive the income from the management of the residential villas to SPV so that SPV can use the said income to pay for the shortfall of the rental payment to the Property Fund prior to using for other purposes and (b) place secuirity in any form or a mixture of the followings: (a) Deliver cash to the Property Fund whereby the Property Fund shall deposit such money in the

savings account of the Property Fund in accordance with the conditions stipulated by the Property Fund and/or

(b) Prepare and provide a bank gurantee issued by a well known commercial bank in Thailand or a financial institution in and outside of the country acceptable to the Property Fund for the whole gurantee period of 5 (five) years commencing from the date of this agreement. Such bank gurantee issued by the commercial bank or financial institution in or outside of the country shall entail the terms and conditions acceptable to the Property Fund and/or

(c) Procure a pledge of government bond in the form and with ther terms and conditions acceptable to the Property Fund.

• In the event that the rental payment is not complied in accordance with the lease agreement, the Property Fund has the right to enforce such securities as mentioned above to pay for the rent for the lessee so that the Property Fund has the income as agreed in the Undertaking Agreement (draft).In this regard, if the securities enforcement due to said reasons or due to any reason that resulted in a decrease in securities value, CIR agrees to deliver securities and/or pledge additional securities with the Property Fund in order to make the velue of the securities back to value as specified in the contract within 30 days from the date the Property Fund has notified in writeen.

The compliance of the condition

• CIR agrees to help monitoring and controlling SPV to make sure that SPV properly and strictly comply with the terms and conditions of all the contracts signed with the Property Fund during the duration of the lease agreement.

• CIR agrees to manage shareholders holding its shares to pledge their shares in CIR as securities for the fulfillment of this contract.

Equity stake in Property Fund

• During 7 (seven) years from the date the Property Fund has been established, CIR and the Company agree to maintain their investment in the Property Fund as follows: (1) During the first five years, CIR and the Company shall maintain their investment not less than

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30% of the total investment units that the Property Fund has issued and offered for sale on the registration day. In addition, CIR and the Company agree not to sell, dispose, transfer investment units or make any commitment over such investment units including but not limited to pledge investment units as securities which may cause the decrease in the equity stake in the Property Fund to be less than 30% of the total investment units issued and offered for sale on the registration day of the Property Fund.

(2) During the later two years (year 6 and 7), CIR and the Company shall maintain their investment not less than 25% of the total investment units that the Property Fund has issued and offered for sale on the registration day. CIR and the Company agree not to sell, dispose, transfer investment units (or make any commitment over such investment units) which will cause the equity stake in the Property Fund reduce to not less than 25% of the total investment units issued and offered for sale on the day the Property Fund has been established except for the investment unit pledge as securities.

• except for (a) the case that the Property Fund has raised its capital or (b) the case that the Property Fund will benefit from the change. In this regard, CIR shall have a written consent from the Property Fund.

Financial support

• On the day this contract is signed, CIR agrees to lend SPV Baht 50 million to use for the operation of Sripanwa Hotel Project.

• During the whole duration that SPV is the lessee under the lease agreement, CIR agrees to provide addtional financial support including a financial provision to cover expenses incurred during low season of hotel business under Sripanwa. This said financial support also includes the amount of money that SPV or the Property Fund requests in order for SPV to be able to operate Sripanwa Hotel Project under the agreed purposes and with full benefit of the Property Fund. In this regard, CIR agrees that the amount of any loan or financial support to SPV shall be treated as subordinated debt.

• In any case that SPV has insufficient revenue to pay operating costs and expenses to manage Sripanwa Hotel Projects, as well as the costs and expenses of administration, and the rental fee during the period of the first 5 (five) years from the date of signing of this agreement, CIR agrees to be responsible in any form for costs and expenses by providing financial support to SPV.

The right to the Property Fund for property and public facilities.

• CIR consents to the Property Fund, tenant, retinue of the Property Fund, as well as its customers, suppliers, and tenants of Sripanwa hotel, the right to use the property and common facilities of the public sidewalk, an entry and exit way of the project, and the path to the beach, whether it is registered or not as the servient property to this lease. In the event that those property and common facility cannot be incorporated into the servient for any a reason, CIR will not charge any fee to the Property Fund and CIR shall not dispose the said property and common facilities of Sripanwa Hotel Project.

Remark: * Project 2 and Project 3 mean the projects to develop a land located nearby the lands to be sold under this agreement. The

project is aimed to operate hotel/serviced apartment. In this regard, such project is currently under the feasibility study. ** The second guaranteed period shall be effective only for the case that in the 5th year, SPV has the actual financial

performance arising from the assets invested by the Property Fund less than the rent of Baht 151 million. Therefore if in the 5th year, the actual financial performance of SPV arising only from the assets invested by the Property Fund is equal to or exceeds the rental of Baht 151 million that has to be paid under the Lease Agreement, the first guaranteed period shall be terminated and the second guaranteed period shall be cancelled.

(5.6) Summary of the Drafted Shortfall Rental Payme nt Agreement

Contract name: Shortfall rental payment agreement (Draft) Contract parties The Property Fund (the “Property Fund”) and

Charn Issara Development Public Company Limited (the “Company” or “CI”) Contract date: Draft for consideration March 13, 2013 Duration: This agreement shall be in effect from the date of the contract and shall be ceased between the

parties on termination or expiration of the guaranteed period.* Important agreements

• Since it could be a shortfall of rent payment under the lease agreement between SPV and the Property Fund, CI is the guarantor of such shortfall during the whole period of the warrantee period.

• CI agrees and certifies to the Property Fund that during the warranty period, if SPV is unable to pay the rent under the lease agreement and if the Property Fund by its fund manager notifies CIR in written to pay the shortfall rent within the period of any month (by copy such notification to CI), but CIR is unable to pay such shortfall, CI agrees to pay the deficit to the Property Fund without delay or within 30 days from the date CI obtained the written notification from the Property Fund.**

Remark: * Guarantee means guarantee as stipulated in the Undertaking Agreement ** In this regard, the order of liability commitment in paying the rental as required in the Lease Agreement to the Property

Fund is as follows: a) If SPV cannot pay the rental, CIR is the next debtor; b) if CIR is unable to pay such shortfall, CI will the next debtor; and c) Lastly, if CI is unable to pay such shortfall, the Property Fund has the right to enforce the guanrantee.

(6) Total value of consideration, value of assets a cquired or disposed of, the basis used

to determine the value of consideration and the con ditions of the payment. (6.1) Disposition of assets

Attachment No. 6

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Transaction 1 : CIR to sell moveable and immoveable assets used for the operation of Sripanwa Hotel Project to the Property Fund.

Value of property to be sold*: Value of immovable assets Baht 1,933.57 million Value of movable assets Baht 44.86 million

Total Baht 1,978.43 million Conditions of the payment

Immovable assets : As of the date of title registration, the Property Fund will pay the price of the property to CIR amounting to Baht 1,933.57 million; right after the said registration is carried out completely.

Moveable assets : On the date of title registration, the Property Fund will pay the price of the movable assets to be purchased to CIR amounting to Baht 44.86 million (including VAT and other costs occurring due to the transfer of such movable assets), right after the said registration and the transfer of immovable assets are carried out completely.

The basis used to determine the value of consideration

: Based on an appraisal value which is calculated by two independent appraisers approved by the Thai Values Association (TVA), the Valuers Association of Thailand (VAT) and the Office of the SEC. In this regard, appraisal value does not include cost of asset transfer. Two independent appraisers as mentioned are: 1) C.I.T. Appraiseal Co., Ltd. 2) Knight Frank Chartered (Thailand) Co., Ltd.

Remark: * The final settlement price shall be determined by the value of newly set up Property Fund and the rate of return which investors receive shall depend on the market condition as of the offering period of the Property Fund units. The basis used to determine the value of considerat ion:

Appraisers Basis Market value based on the current conditions of use

C.I.T. Appraiseal Co., Ltd. Income Approach Baht 1,818,000,000 Knight Frank Chartered (Thailand) Co., Ltd.

Income Method by using Discounted Cash Flow Technique

Baht 1,793,000,000

(6.2) Acquisition of the assets:

Transaction No. 2.1 : The Company and CIR invest in the Property Fund 30% of the total outstanding units of the Property fund.

The value of asset acquired

: Approximately Baht 600.55 million

Payment condition : Expected the payment to be made in full, at once, during the subscription period of the investment units of the property fund to be established.


: The investment value in the Property Fund is determined by the value of 30% of the total issued and offered for sale investment units of the Property Fund.

Transaction No. 2.2 : CIR establishes SPV and invests in SPV not less than 99.99% The value of asset acquired

: Not more than Baht 30 million

Payment condition : Expected the payment to be made in full, at once, on the day of registration of establishment of SPV


: The value of the shares of not less than 99.99% of the total shares of SPV which is equivalent to the value of not more than Baht 30 million.

Transaction No. 2.3 : SPV leases moveable and immovable assets from the Property Fund for the operation of Sripanwa Hotel Project.


: Approximately Baht 2,643 million

Payment condition : The total rent approximately Baht 2,643 million for the lease term of 15 years. The rental fee comprises of a fixed and a variable portion. The fixed rental fee per year is Baht 151 million for year 1 to year 5 and will be increased in year 6 onward at the rate of 10% every three years. The variable portion which is calculated according to the formular in the lease agreement will be effective from year 11 to year 15. The contract assigns the payment portion of each month.


: The value of rental fee of the assets used in the operation of Sripanwa Hotel Project, determined by comparing with the rental fees of assets used in the operation of hotel business of other property funds, with the total rental fee throughout the lease term of approximately Baht 2,643 million, while the calculation of the rental fee will be calculated according to the method as the parties may agree.

Remark: 1/ Estimated initial fund raising of the Property Fund by the Company. However, the actual size of the Property Fund shall

depend on variable factors such as Book Building, investor demands, market condition at the offering time, etc.

Attachment No. 6

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2/ Refer to the fixed rental fee over 15 leased years as specified in the drafted lease agreement and total estimated variable rental fee for the year 11 - 15 based on the appraisal report of C.I.T. Appraisal Co., Ltd., which is higher than the estimated variable rental fee by Knight Frank Chartered (Thailand) Co., Ltd. The actual rental fee shall depend on various factors such as Book Building, investors demand, and the market condition at the offering period of the offering time, etc.

(7) The expected benefit from the transaction

1) The aforementioned transactions are the transactions to dispose the Company’s assets into the property fund and other relevant transactions. The Company plans to use the proceeds from the disposition of assets to repay the short-term financing for the acquisition of business of Sripanwa Hotel Project. This will help the Company reduce financial risk, maintain a capability to generate revenues and profits, and increase liquidity and capital level as well as open for the expansion of other future potential projects.

2) The disposition of assets to the Property Fund will help the Company reducing its asset size while maintaining its revenue stream in the form of dividend payment from the investment units of the Property Fund and the hotel management fee which would be result in higher returns on asset and higher returns of equity, including reducing operating risk which is consistent with the long-term strategy of the Company.

(8) Plan to Use of the Proceeds from the Disposal o f Assets Transaction Approx. (Bt million)

Transaction 1 Proceeds from the sale of Sripanwa Hotel Project 1,978.43 Use of proceeds from the sale of the assets Transaction 2.1 Invest in 30% of the Property Fund 600.55 Repay CIR’s long-term loan borrowed from financial institutions (SCB and

IBANK), which are full repayment of debt for the Sripanwa Hotel Project, and partial repayment for other CIR’s projects.

684.00

Fee for legal advisor, asset appraiser, auditor for carve out financial statement, underwriting fee, and other expenses to establish the Property Fund

51.29

Fee for registration of lease agreement (SPV portion, 1/3) and specific business tax

73.66

Estimated corporate income tax from sale of the assets (including withholding tax)

142.44

Fee for issuance of “BG” for the first year 1.60 Reserve in the form of deposit to guarantee BG 80.00 Reserve for shortfall of SPV’s fixed rental fee (4 years) that may arise 100.00 Investment in new CIR’s projects 244.89 Total use of proceeds 1,978.43 Transaction 2.2 The Company plans to use cash from operations to pay for shares of SPV 30.00

Remark: Item (1) – (6) are estimated amount that may be changed according to various factors such as Book Building, requirement of investors, market condition during offering period of the Property Fund, business condition as actually become in the future, and tax as calculated by the Department of Land, etc. Value Added Tax of the selling price of movable assets is about Baht 3.14 million. It is not an expense of CIR and exclusive from the remained cash set out in this table because the Property Fund will pay CIR in cash about Baht 1,981.57 million, inclusive of value added tax of the movable assets (Baht 1,981.57 million – Baht 1,978.43 million = Baht 3.14 million).

(9) Condition for the Transaction The acquisition and disposition of assets are under the following conditions. 1) The Annual General Meeting of Shareholders No. 1/2013, to be held on April 25, 2013,

approves the acquisition and disposition of the assets and other related transactions. If in any case, the shareholders do not approve one of the above agendas, these acquisition and disposition of assets will not occur.

2) The Securities and Exchange Commission has approved the registration of the Property Fund's assets so that the Company and CIR can invest in the units of Property Funds in the total amount not exceeding 30% of total investment units of the Property Fund.

(10) Opinion of the Board of Directors on the Trans action The Board of Directors of the Company has considered and is of the opinion that entering

into the above transactions is treated as assets and liquidity management of the Company, which will be beneficial to the overall business operation as well as supporting the future business expansion of the group of the Company.

(11) Opinion of the Audit Committee on the Transact ion No member of the Audit Committee has a different opinion from that of the Board of

Directors.

Attachment No. 6

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2. Liability of the Board of Directors of the Compa ny to the Information Memorandum

I, Mr. Songkran Issara, the Company’s authorized director have examined and certify this Information Memorandum on a prudence basis and in the capacity of the Company’s Board of Directors, and would like to certify that such information is accurate, true and complete, and will not cause any misunderstanding or material nondisclosure on the information. 3. The qualifications of the Independent Financial Advisor to express the opinion of the

transaction (1) Shareholding and Relationship between the Indep endent Financial Advisor and

the Company -None-

(2) Consent from the Independent Financial Advisor to public the Opinion Capital Advantage Co., Ltd. as an Independent Financial Advisor consented to public its opinion.

(3) Date of Expressing Opinion March 29, 2013

4. The opinion of the Independent Financial Advisor concerning the Assets Acquisition and

Disposition Please see Attachment No. 7 (Attachment of AGM Notice)

5. The appraised value of assets by the Independent Property Appraisers

The Company has appointed two independent property appraisers, C.I.T. Appraisal Co., Ltd. and Knight Frank Chartered (Thailand) Co., Ltd. They are independent property appraisers approved by Thai Valuers Association (“TVA”), the Valuers Association of Thailand (“VAT”), and the Securities and Exchange Commission (SEC). They have appraised the value of assets for the public purpose as per the appraisal reports dated March 15, 2013. 6. Liabilities

(1) Total outstanding debentures -None-

(2) Total outstanding term loans including collater al

(2.1) Liabilities under hire-purchase and finance l ease agreements

Consolidated financial stat ements (Unit: Thousand Baht)

2011 2012

Liabilities under hire-purchase and finance lease agreements 20,757 23,717 Less: Deferred interest expenses (1,853) (1,736) Total 18,904 21,981 Less: Portion due within one year (5,441) (8,232) Liabilities under hire-purchase and finance lease agreements - net of current portion 13,463 13,749

Liabilities under hire-purchase agreements Hire-purchase payable consists of amounts payable under various vehicle hire-purchase

agreements, with payments to be made in 36-60 monthly installments. Liabilities under finance lease agreement A subsidiary entered into agreement to sell and lease back kitchen equipment, which is

regarded as finance lease agreement. The liability of the subsidiary are payable in monthly installments from December 2011 to November 2013, with interest charged at a rate of 7.1 percent per annum. As at December 31, 2011, and 2012, Future minimum lease payments required under the hire-purchase and finance lease agreements were as follows:

Consolidated financia l statements as of December 31,2012 (Unit: Thousand Baht)

Less than 1 year 1-5 years Total

Future minimum lease payments 9,177 14,540 23,717 Deferred interest expenses (945) (791) (1,736) Present value of future minimum lease 8,232 13,749 21,981

Attachment No. 6

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Consolidated financial statements as of December 31,2011 (Unit: Thousand Baht)

Less than 1 year 1-4 years Total

Future minimum lease payments 6,367 14,390 20,757 Deferred interest expenses (926) (927) (1,853) Present value of future minimum lease 5,441 13,463 18,904

(2.2) Long-term loans:

As at December 31, 2011 and 2012, the balances of the long-term loans are as follows: Consolidated financial statments (Unit: Thousand Baht)

2011 2012

The Company: Charn Issara Development Public Company Limited 220,265 194,754 Subsidiaries: Charn Issara Residence Co., Ltd. 829,885 773,654 Charn Issara Viphapol Co., Ltd. 42,144 21,926 C.I.N. Estate Co., Ltd. 604,839 148,750 Issara United Co., Ltd. 140,000 153,150 Long-term loans 1,837,133 1,292,234 Less: Current portion (897,009) (555,040) Long-term loans - net of current portion 940,124 737,194

The Company As at December 31, 2012, the Company’s long-term loans from bank comprise credit facilities

from a local bank totaling Baht 333 million (2011: Baht 383 million) under numerous agreements. Most of these loans carried interest at MLR plus certain rate, as stipulated in the agreements. The loans principle and their interest are to be paid in monthly and quarterly basis. Full settlement of these loans is to be made within December 2013 to December 2014 (2011: December 2013 to July 2014).

Subsidiaries As at December 31, 2012, the subsidiaries’ long-term loans from banks comprise credit

facilities from local banks totaling Baht 3,510 million (2011: Baht 3,394 million) under numerous agreements. Most of these loans carried interest at MLR and MLR plus/minus certain rate, as stipulated in the agreements. The loans principle and their interest are to be paid in monthly and quarterly basis or when the release of mortgage security to the customers who purchased the land and resident units in the project of its subsidiaries. Full settlement of these loans is to be made within December 2013 to September 2021 (2011: May 2012 to September 2021).

Long term loans are secured by the Company’s office condominium units, fund unit certificates held by the Company, land and construction thereon in the Company and its subsidiaries’ project, and guarantees provided by the Company’s director, while the Company itself also guarantees the loans of its subsidiaries. The terms of long-term loan agreements stipulate certain covenants such as the reduction of capital, the maintenance of certain financial ratios, etc.

As at December 31, 2012, the long-term credit facilities of the Company and its subsidiaries which have not yet been drawn down amounting to Baht 848 million (2011: Baht 868 million)

(3) Total other liabilities and overdraft including collateral

(Unit: Thousand Baht) No. Liabilities Outstanding

amount As of December

31, 2012

Interest Rate (%)

Collateral

1 Bank overdrafts 29,558 MOR, 8.0 Land and construction thereon in the subsidiaries’ projects 2 Short-term loans from financial

institutions 50,000 MLR, 6.0

3 Trade payables - unrelated parties 139,971 -None- -None- 4 Other payables - unrelated parties 13,277 -None- -None- 5 Other payables - related parties 10,790 -None- -None- 6 Accrued interest expenses to related

parties 592 -None- -None-

7 Accrued expenses 40,012 -None- -None- Total 284,200

(4) Commitments and contingent liabilities as of De cember 31, 2012

The Company and its subsidiaries have commitments and contingent liabilities as follow: (4.1) Capital commitments

Attachment No. 6

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As at December 31, 2012, the Company and its subsidiaries had outstanding commitments totaling approximately Baht 741 million in respect of survey, design and construction agreements in relation of the Company and its subsidiaries’ projects (2011: Baht 120 million).

As at December 31,2012, the Company and its subsidiaries had outstanding commitments amounting to Baht 2,968 million in respect of its obligations to develop to completion land and houses and residential condominium units for which contracts have been executed (2010: Baht 1,305 million).

(4.2) Operating lease commitments The Company and its subsidiaries have entered into several operating lease agreements in

respect of the lease of office building and services. The terms of the agreements are generally between 1 and 9 years. Operating lease agreements are non-cancelable.

As at December 31, 2011 and 2012, future minimum lease payments of the Company and its subsidiaries required under these non-cancellable operating leases contracts were as follows.

(Unit: Baht million ) As at December 31, 2011 2012

Payable within: Less than 1 year 3 7 1 to 3 years 4 7 Over 3 years 1 1

As at December 31, 2011 and 2012, future minimum lease payments of the Company and its subsidiaries expected to be received under non-cancellable operating leases were as follows.

(Unit: Baht million ) As at December 31, 2011 2012

Payable within: Less than 1 year 13 21 1 to 4 years 10 13

(4.3) Service commitments As at December 31, 2012, the Company and its subsidiaries has outstanding commitments

amounting to Baht 34 million (2010: Baht 27 million) in respect of service agreements related to commission, management fee, security services and advertising expenses.

Future minimum service payments required under these service agreements of the Company and its subsidiaries were as follows:

(Unit: Baht mi llion ) As at 31 December 2011 2012

Payable within: Less than 1 year 21 28 1 to 4 years 6 6

(4.4) Bank guarantees (a) The Company has guaranteed bank credit facilities of its subsidiary amounting to Baht 640

million. (2011: Baht 640 million) (b) As at December 31,2012, there were outstanding bank guarantees of approximately Baht

12 million (2011: Baht 14 million) issued by banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of business. These included letters of guarantee amounting to Baht 12 million to guarantee electricity (2011: Baht 12 million) 7. General Information of Charn Issara Development Public Company Limited

(1) Business Outlines (1.1) Background Charn Issara Development Public Company Limited (the “Company” or “CI”) was founded on

December 22, 1989 with a registered capital of Baht 20 million. The Company is principally engaged in real estate development and the sales or leases of office condominiums in the name of “Charn Issara Tower 2” on New Petchaburi Road under C.I. Development Co., Ltd. which has C.I. Property Co., Ltd. as the largest shareholder.

C.I. Development Co., Ltd. has changed its name to C.I.M. Development Co., Ltd. and raised a registered capital to Baht 50 million as at March 30, 1990. At that time the Company has one foreign investor, namely Marubene Corporation Co., Ltd., investing 40% in the Company shares.This investor comes from Japan and operates its business as a conglomerate. After that the Company has raised its capital again to Baht 500 million on September 28, 1994 and to Baht 800 million on April 24, 2000. In June 2002, the Company has converted from a limited company to a public company limited and registered its shares to the Stock Exchange of Thailand on December 16, 2002. Currently, the

Attachment No. 6

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Company has a registerd, issued and fully paid share capital of Baht 600 million at par value of Baht 5.00 per share.

(1.2) Nature of Business The Company’s core business is developing property for sale, leasing office space and a

shopping plaza, hotel business, and managing property assets for associated companies.The Company focuses on these businesses.

(1) Land and house, and residential condominium development for sale (2) Office building and retails space for rent (3) Hotel operation (4) Project management for office building and real estate project.

(1.3) Investment in the subsidiares and associated companies

The structure of the Company and its subsidiaries is as follows


Property Development for sale

80.043% Charn Issara Residence Co., Ltd.


Bangkok Commercial Property Fund

Property Fund

33.30%

C.I.N. Estate Co., Ltd.

Property Development for sales

60.00%

49.995% Charn Issara Vipaphol Co., Ltd.

Property Development for sale 15.989% International Resources Development Co., Ltd

Property Development for sale 20.00%

80.00%

C.I.V. Development Co., Ltd


Issara United Co., Ltd


49.999%

Attachment No. 6

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The Company has investment in the following subsidiares and associated companies:

Company Name Nature of Business Registered Country

Tolal registered capital

(Baht million)

Shareholding Percentage

(%) Charn Issara Residence Co., Ltd. Property

Development for sale Thailand 140.00 80.043

C.I.N. Estate Co., Ltd. Property Development for sale

Thailand 250.00 60.000

Bangkok Commercial Property Fund Property Development for sale

Thailand 1,000.00 33.300

International Resources Development Co., Ltd.1/ Property Development for sale

Thailand 1,757.95 15.989

Charn Issara Vipaphol Co., Ltd. Property Development for sale

Thailand 6.00 49.993

C.I.V. Development Co., Ltd. (held 80% by the Company, and 20% by Charn Issara Vipaphol Co., Ltd.)

Investment in Capital Securities


Issara United Co., Ltd. (help 50% by C.I.V. Development Co., Ltd.)1/


Thailand 80.00 49.999

Source 1/ Business Online Public Company Limited (www.bol.co.th)

(1.4) Revenue Structure Revenues of the Company and its subsidiaries categorized by types are as follows:

Consolidated Financial Statements 20101/

(adjusted) 20111/

(reclassified) 20122/

Baht million % Baht million % Baht million % Revenue from real estate sale 678.55 69.97 712.32 64.56 1,665.70 78.12 Rental and service income 82.59 8.52 85.29 7.73 91.46 4.29 Revenue from hotel operation 154.03 15.88 240.53 21.80 303.67 14.24 Other income 54.52 5.63 65.26 5.91 71.47 3.35

�� 969.69 100.00 1,103.40 100.0 2,132.30 100.00 Source: 1/ Form 56-1 and audited consolidated financial statements of the Company. 2/ Audited consolidated financial statements of the Company.

(2) List of Shareholders As of May 9, 2012, the latest book closing date the Company has registered, issued and fully

paid 120,000,000 ordinary shares of Baht 5 each. Top 10 major shareholders of the Company as of May 9, 2012 are as follows:

Name of Shareholders No. of shares (shares) % Shareholding

1. Issara Group Mr. Songkran Issara 35,200,280 29.33 Mr. Vorasit Issara 3,187,934 2.66 Mr. Ditawat Issara 2,213,157 1.84 Mrs. Wilai Issara 20,500 0.02 Ms. Pornchada Issara 2,100 0.00 Mr. Charn Issara 400 0.00 Mr. Olan Issara 280 0.00 Total Issara Group 40,624,651 33.85

2. C.I. Property Co., Ltd./2. 15,138,600 12.62 3. Lertnantapanya Group Mr. Jedsada Lertnantapanya 11,947,200 9.96 Mr. Preecha Lertnantapanya 559,200 0.47 Mrs. Thanyaluck Lertnantapanya 1,500 0.00 Total Lertnantapanya Group 12,507,900 10.42

4. Thai N.V.D.R. Co., Ltd. 7,033,100 5.86 5. Mr.Suvit Laohapolwattana 3,201,700 2.67 6. Shangkiet Group Mr. Satit Shangkiet 1,600,000 1.33 Mr. Wonlop Shangkiet 1,386,000 1.16 Total Shangkiet Group 2,986,000 2.49

7. Kuncharoensook Group Mr. Sutat Kuncharoensook 1,516,000 1.26 Mr. Parinya Kuncharoensook 1,023,100 0.85 Total Kuncharoensook Group 2,539,100 2.11

8. Piriyothaisakool Group Mr. Sinchok Piriyothaisakool 2,470,500 2.06 Mrs. Geewat Piriyothaisakool 100 0.00

Attachment No. 6

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Total Piriyothaisakool Group 2,470,600 2.06 9. Boonmeechoti Group Mr. RitthirongBoonmeechoti 2,000,000 1.67 Ms. RoongtiwaBoonmeechoti 240,000 0.20 Mr. WattanaBoonmeechoti 1,000 0.00 Total Boonmeechoti Group 2,241,000 1.87

10. Mr. Prasit Pruksapornpong 2,000,000 1.67 Total Top 10 Major Shareholders 90,742,651 75.62 Others 29,257,349 24.38 Grand Total 120,000,000 100.00

Source: Thailand Securities Depository Co., Ltd. and SETSMART Remark: 1/ Each group of shareholders is based upon the last name which is not relating to classification of connected

person under the Section 258 of the Securities and Exchange Act or the concert party. 2/ List of shareholders of C.I. Property Co., Ltd. as at April 26, 2012 which is its Annual General Meeting of

shareholders, are as follows:


1. Issara Group Mr.Olan Issara 6,116,000 20.39 Mr.Songkran Issara 5,816,000 19.38 Ms.Pornchada Issara 3,920,000 13.07 Mrs.Srivara Issara 300,000 1.00 Total Issara Group 16,152,000 53.84

2. Limtrakool Group Mrs.Janya Limtrakool 4,616,000 15.39 Ms.Piyada Limtrakool 1,616,000 5.38 Total Limtrakool Group 6,232,000 20.77

3. Jindara Group Mrs.Praparatn Jindara 4,316,000 14.39 Mr.Damgeng Jindara 300,000 1.00 Total Jindara Group 4,616,000 15.39

4. Fitch and Associate Co., Ltd. 3,000,000 10.00 Total 30,000,000 100.00

Source: Business Online Public Company Limited (www.bol.co.th)

(3) Board of Directors Board of directors as of December 30, 2012 are as follows:

Names Position 1. Mrs. Srivara Issara Chairperson 2. Mr. Songkran Issara* Managing Director 3. Mr.Pravesvudhi Raiva Director 4. Mrs.Linda Prasertsom Director 5. Mr. Niti Osathanugrah Director 6. Mrs.Teeraporn Srijaroenwong Director 7. Mr.Phisud Dejakaisaya Chairman of Audit Committee/ Independent Director 8. Mr. Witit Rachatatanun Audit Committee/Independent Director 9. Mr.Pinit Puapan Audit Committee/Independent Director

Source: Company affidavit and SETSMART Remark: * The authorized director of the Company is Mr. Songkran Issara sign with Company’s seal affixed.

(4) Summary of Financial Highlights and Analysis of Operational Performanceand Financial Status of the Company and its subsidiarie s � Statements of financial position as at December 31, 2010, 2011, and 2012 of the

Company and its subsidiaries are shown below: Consolidated financial statements (Unit: Baht million)

2010 (adjusted)

2011 2012

Assets Current assets Cash and cash equivalents 70.96 89.55 102.64 Current investments in bills of exchange 89.04 121.24 94.32 Trade and other receivables 35.71 25.66 32.08 Costs of property development projects for sales 1,810.44 2,189.48 1,767.94 Inventories 8.53 10.79 12.91 Short-term loans to subsidiary companies 0.41 - - Other current assets 14.52 14.13 15.56

Total current assets 2,029.61 2,450.85 2,025.45 Non-current assets Restricted bank deposits 3.99 4.19 3.86

Attachment No. 6

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Consolidated financial statements (Unit: Baht million)

2010 (adjusted)

2011 2012

Long-term loans to related companies 4.70 - - Investment in associated company 382.59 384.89 385.40 Investment in related company 160.83 148.97 148.97 Investment properties 121.15 214.71 233.79 Property, plant and equipment 967.66 924.93 879.93 Other non-current assets 24.71 12.99 16.14

Total non-current assets 1,665.63 1,690.68 1,668.09 Total assets 3,695.24 4,141.53 3,693.54

Liabilities Current liabilities Bank overdraft and short-term loans from financial institutions 83.36 85.07 79.56 Trade and other payables 451.04 318.73 204.64 Land payable - related parties - - 168.29 Current portion of liabilities under hire-purchase and finance lease

agreements 3.62 5.44 8.23 Current portion of long-term loans 766.35 897.01 555.04 Short-term loans from related parties 46.00 126.70 50.70 Short-term loan from other company 9.00 9.00 9.00 Deposits and advances received from real estate sales 366.88 355.41 270.54 Retention payable 81.92 97.70 131.32 Income tax payable 0.04 28.87 20.88 Other current liabilities 25.77 30.25 37.86

Total current liabilities 1,833.98 1,954.18 1,536.06 Non-current liabilities Liabilities under hire-purchase and finance lease agreements - net of

current portion 5.84 13.46

13.75 Long-term loans - net of current portion 658.38 940.12 737.19 Long-term loans from related companies 84.00 - 20.00 Provision for long-term employee benefits - 45.13 52.08 Other non-current liabilities 16.20 15.30 14.94 Total non-current liabilities 764.42 1,014.01 837.96

Total liabilities 2,598.40 2,968.19 2,374.02 Shareholders' equity Share capital Registered, issued and fully paid 120,000,000 ordinary shares of

Baht 5 each 600.00 600.00 600.00 Share premium 23.78 23.78 23.78 Retained earnings

Appropriated - statutory reserve 20.51 20.90 24.53 Unappropriated 251.72 273.61 384.13

Other components of shareholders' equity 39.37 39.37 39.37 Equity attributable to owners of the Company 935.38 957.66 1,071.81 Non-controlling interests of the subsidiaries 161.46 215.68 247.71

Total shareholders' equity 1,096.84 1,173.34 1,319.52 Total liabilities and shareholders' equity 3,695.24 4,141.53 3,693.54

Source: Audited consolidated financial statements as at December 31, 2010, 2011 and 2012

� Statements of comprehensive income for the years ended December 31, 2010, 2011, and 2012 of the Company and its subsidiaries are shown below:


2010 (Adjusted )

2011 (Reclassified)

2012

Revenue from real estate sale 678.55 712.32 1,665.70 Rental and services income 82.59 85.29 91.46 Revenue from hotel operations 154.03 240.53 303.67 Other income

Services and utilities income from real estate project 20.10 20.00 22.84 Unrealised gains from investments properties - 5.74 19.07 Management fee income 7.94 9.40 7.62 Gain from share capital reduction of related company - 10.52 - Interest income 3.36 3.64 3.16 Others 23.12 15.96 18.78

Total revenues 969.69 1,103.40 2,132.30 Cost of real estate sales 432.99 464.56 1,061.65 Cost of rental and services 44.54 45.09 48.92 Cost of hotel operations 142.19 162.28 195.17 Selling expenses 82.76 89.29 184.96 Administrative expenses 218.14 236.59 276.37 Total expenses 920.62 997.81 1,767.07 Profit before share of profit from investment in associated company, 49.07 105.59

Attachment No. 6

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2010 (Adjusted )

2011 (Reclassified)

2012

finance cost and income tax expenses 365.23 Share of profit from investment in associated company 24.98 22.01 23.16 Profit before finance cost and income tax 74.05 127.60 388.39 Finance cost (72.01) (90.12) (113.84) Profit before corporate income tax 2.04 37.48 274.55 Corporate income tax (12.81) (45.02) (61.17) Profit (loss) for the year (10.77) (7.54) 213.38 Profit (loss) attributable to: Equity holders of the Company (6.78) (19.69) 121.35 Non-controlling interests of the subsidiaries (3.99) 12.15 92.03 (10.77) (7.54) 213.38 Basic earnings per share Profit (loss) attributable to equity holders of the Company (0.06) (0.16) 1.01

Source: Audited consolidated financial statements for the year ended December 31, 2010, 2011 and 2012

� Cash flow statements for the year ended December 31, 2010, 2011, and 2012 Consolidated financial statements (Unit: Baht million)

2010 (adjusted )

2011 2012

Cash flows from (used for) operating activities (43.46) (428.55) 657.71 Cash flows from (used for) investing activities (112.72) 6.54 36.91 Cash flows from (used for) financing activities 47.25 440.60 (681.53) Net increase (decrease) in cash and cash equivalents (108.93) 18.59 13.09 Cash and cash equivalents at beginning of year 179.89 70.96 89.55 Cash and cash equivalents at end of year 70.96 89.55 102.64


� Financial Ratio

Unit 2010 2011 2012

Gross profit margin from real estate sales (%) 36.19 34.78 36.26 Gross profit from rental and service income (%) 46.07 47.13 46.51 Gross profit from hotel operations (%) 7.68 32.53 35.73 Net Profit (Loss) Margin (%) (1.11) (0.68) 10.01 Return on equity (ROE)

(Profit (loss) for the year/total shareholders’ equity) (%) (0.98) (0.64) 16.17 Return of assets (ROA)

(Profit (loss) for the year/total assets) (%) (0.29) (0.18) 5.78 Interest payment coverage (EBITDA / Interest Expense) (times) 2.08 2.16 4.01 Liquidity ratio (times) 1.11 1.25 1.32 Debt per equity ratio (Total liabilities/total shareholders) (times) 2.37 2.53 1.80

Financial and operating results analysis of the Com pany and its subsidiaries Operating results

� Revenue In the year 2011, the Federation of Accounting Professions has effected the adoption of an

improved Accounting Standard and the new Accounting Standard particularly the Accounting Standard Volume 18 (edited BE 2552) in relation to income realization. The content of which requires business entity to realize revenue from goods sold including revenue deriving from property for sale when the entity has transferred risk and significant return to the buyer as oppose to the former practice of income realization from the sales of condominium units base on percentage of works completed. The Company and its subsidiaries have accordingly changed their accounting policy in the year 2011 and have amended their balance sheet of the fiscal year 2010 in comparison to the presentation as if the Company and its subsidiaries have all along realized income from the sale of residential condominium units when risks and return had been transferred to customers.

During the years 2010 to 2012, the Company and its subsidiaries have booked a total of Baht 969.71 million, 1,103.40 million, and 2,132.30 million, respectively according to such accounting standard. The main sources of revenue are from real estate sales, rental and services income, and hotel operations. The proportion of revenue and other income have been presented in topic 2.4.

The Company and its subsidiaries have booked a total of Baht 1,103.40 million of an aggregated revenue from operation in the fiscal year 2011 which represent an increase of Baht 133.69 million from the fiscal year 2010 or equivalent to 13.79% increase. Such increase was attributed to Baht 33.76 million increases from property sales deriving from Baht 678.55 million in the fiscal year 2010 to Baht 712.32 million in the fiscal year 2011 representing 4.98% increase. Revenue from rental and services fees has increased by Baht 2.7 million or 3.27% increase and revenue from

Attachment No. 6

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the hotel operations at Sripanwa Hotel, Phuket has increased from Baht 154.03 million in 2010 to Baht 240.53 million in 2011 representing an increase of 56.16%. For the fiscal year 2012, the Company and its subsidiaries have booked a total of Baht 2,132.30 million, which represent an increase of Baht 1,028.90 million from that of the fiscal year 2011 or equivalent to 93.25% increase. Such increase was attributed to Baht 953.38 million increases from property sales deriving from Baht 712.32 million in the fiscal year 2011 to Baht 1,665.70 million in the fiscal year 2012 representing 133.84% increase. Such increase was the result of Baht 1,454 million increases in revenue from the Issara Ladprao which can be transferred the ownership to customers in the year 2012. Revenue from rental and services fees has increased by Baht 6.17 million or 7.32% increase and revenue from the hotel operations at Sripanwa Hotel, Phuket has increased from Baht 240.53 million in 2011 to Baht 303.67 million in the fiscal year 2012 representing an increase of 26.25% because the hotel has an increase in occupancy rate and average room rate.

For the fiscal year 2011, the Company and its subsidiaries have other income Baht 65.26 million which represent an increase of 10.74 million from the fiscal year 2010 or equivalent to 19.70%. Such increase was attributed to Baht 19.70 million profit from capital reduction in International Resources Development Co., Ltd. in which the Company hold shares at cost which is half of the par value resulting in a profit of Baht 10.52 million in the capital reduction and subsequent paid back at par value.

For the fiscal year 2012, the Company and its subsidiaries have other income amounting to Baht 71.47 million which represents an increase of Baht 6.21 million from the fiscal year 2011 or equivalent to 9.51%. Such increase was attributed to Baht 13.33 million unrealized gain from real estate investment and Baht 2.84 million from services income.

� Gross profit and percentage of gross profit from main sources of revenue can be shown as follow:

Gross profit 2010 2011 2012 Baht million % Baht million % Baht million %

From real estate sales 245.56 36.19 247.76 34.78 604.05 36.26 From rental and services 38.05 46.07 40.20 47.13 42.54 46.51 From hotel operations 11.84 7.68 78.25 32.53 108.50 35.73

The Company and its subsidiaries have gross profit from property sale in the fiscal year 2011

of total Baht 247.76 million, an increase of Baht 2.20 million from that of the fiscal year 2010. Although the revenue from property sale in the fiscal year 2011 was Baht 2.20 million higher than that of the fiscal year 2010 but the gross profit of 36.19% in the fiscal year 2010 is higher than that of the following year. This is the result of an increase in cost of real estate sales The gross profit of Baht 78.25 million from hotel operation in the fiscal year 2011 representing an increase of Baht 66.41 comparing to Baht 11.84 million in the fiscal year 2010 which was a mere 7.68%. For revenue from rental and services fees, gross profit has increased from 46.07% to 47.13% in the year 2011 or an increase of Baht 2.15 million.

The Company and its subsidiaries have gross profit from property sale in the fiscal year 2012 of total Baht 604.05 million, an increase of Baht 356.29 million or equivalent to 143.80% increase from that of the fiscal year 2011. Such an increase was attributed Baht 953.38 million increase in revenue from real estate sales. The gross profit of Baht 108.50 million from hotel operation in the fiscal year 2012 representing 35.73% is higher than that of the fiscal year 2011 which represents gross profit of 32.53%. Such increase was attributed to the increase in room rate. Although gross profit from rental and services fees of the year 2012 has increased Baht 2.34 million from that of the year 2011, percentage of gross profit has decreased from 47.13% to 46.51% in the year 2012.

� Expenses In the fiscal year 2011 the Company and its subsidiaries have an increase of Baht 6.53 million

in sale associated expenses from Baht 82.76 million in the year 2010 to Baht 89.29 million in the year 2011 (an increase of 7.89%).The increase was attributed to the fact that the Company had paid an increased transfer fees including specific business tax deriving from an increased property sale. In addition, those measures related to tax reduction in property sector which the Government had supported towards the end of the first quarter in the fiscal year 2010 which resulted in a reduced specific business tax had come to an end in March 2010 while the Company continued to advertise and actively engaged in public relation activities for those projects under sale from the fiscal year 2010. The administration expenses for the fiscal year 2011 had increased by Baht 18.45 million or equivalent to 8.46%.

In the fiscal year 2012 the Company and its subsidiaries have sale associated expenses of Baht 184.96 million representing an increase of Baht 95.67 million or an increase of 107.15% from that of the fiscal year 2011. The increase was attributed to the fact that the Company had paid an

Attachment No. 6

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increased transfer fees including specific business tax deriving from an increased property sale of Baht 953.38 million in the year 2012. Such transfer fees and business tax have increased by approximately Baht 41 million from that of the fiscal year 2011. In addition,the Company and its subsidiaries have launched 3 new projects which are Baan Si Tawan, Baan Tiew Talay, and Baan Tiew Talay 2 with the project value of Baht 800 million, Baht 2,000 million, and Baht 1,800 million, respectively. While the Company and its subsidiaries will be able to recognize the income of Baht 1,845 million from sales of such 3 projects during the year 2013-2015, they have to recognize the advertising and public relation expense right away in the year 2012 of approximately Baht 45 million. The administration expenses for the fiscal year 2012 had increased by Baht 39.78 million or equivalent to 16.81% due to the salary and wage adjustment of minimum wage of Baht 300 announced in the year 2012.

Financial expenses or interest expenses in the fiscal year 2011 has increased by approximately Baht 18.11 million. This increase of interest expenses was a result of accounting interest expenses which derived from term loan for Sripanwa Hotel Project as an expenses following the completion of hotel and villas for sale and in the process of transfer to customer as oppose to capitalize the same while the project was under construction. However, since the project has been completed, those financial expenses will be subsided after the property is eventually sold and related term loan is repaid

Financial expenses or interest expenses in the fiscal year 2012 are approximately Baht 113.84 million, an increase of approximately Baht 23.72 million from that of the fiscal year 2011. This increase of interest expenses was a result of the completion of The Issara Ladprae Condominium for sale and in the process of transfer to customers. In the accounting practice, these interest expenses of the loan for such project amounting to Baht 34 million have to be recognized in a profit and loss statement of the year 2012, while previously recognized as costs of the project. For Issara@Sukumwit 42, Baan Chan Talay, and Issara Village which are already transferred to customers, their finance expenses have decreased by approximately Baht 10 million. Although there is a fluctuation in interest expenses recognition, the Company has already accounted for such expenses in the costs of projects, therefore there is no significant effect to the Company’s net profit.

The Company and its subsidiaries have a tax burden on its corporate income tax for the fiscal year 2011 by approximately Baht 45.02 million, an increase of Baht 32.21 million from that of the fiscal year 2010. Such increase of corporate income tax was caused by a subsidiary company on a condominium project where revenue realization has been treated on a percentage of completion for tax purpose although the accounting policy has been changed to realize income upon transfer thereby creating an income tax liability prior to the transfer to customer. For the year 2012, the Company and its subsidiaries have a tax burden of its corporate income tax of approximately Baht 61.17 million, representing 22% of profit before tax. For the tax calculation purpose, the Company still have to use the percentage of completion concept for condominium sales, which resulted in an advance payment for tax expenses eventhough the Company and its subsidiaries have to wait until the transfer process is completed before recognize revenue.

� Net Profit/ (Loss) The Company and its subsidiaries have a net loss of Baht 19.69 million in the fiscal year

2011, an increase from that of the fiscal year 2010 by Baht 12.91 million following the increase in financial expenses and increased corporate income tax. Although the profit before financial expenses and corporate income tax was Baht 53.55 million higher than that of previous year net profit per share was Baht (0.16), a decrease from that of the fiscal year 2010 by Baht 0.10 per share.

The Company and its subsidiaries have a net profit, contributed to the Company’s shareholders of Baht 121.35 million in the fiscal year 2012, an increase from that of the fiscal year 2011 by Baht 19.69 million following the increase in revenue from real estate sale and revenue from hotel operation as specified in Revenue and Gross Profit Topics. This increase reflects in an increase of net profit. Net profit per share was Baht 1.01, an increase from that of the fiscal year 2011 by Baht 1.17 per share Financial status

� Assets As of December 31, 2011 the Company and its subsidiaries have total assets of Baht

4,141.53 million, an increase of approximately Baht 446.29 million from that of the fiscal year 2010, or equivalent to an increase of 12.08%. The majority of those assets and which has changed significantly was the property for sale under development of Baht 2,189.48 million equivalents to 52.87% of total assets, an increase of Baht 379.04 million from that of the fiscal year 2010. This reflects the fact that the Company has a total of 6 projects, some of those constructions had been

Attachment No. 6

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completed and some were still under construction, an increase of 2 projects from the fiscal year 2010. Those two new projects are Issara Village, a townhouse project and Baan Tiew Talay Condominium; both are on Cha am beach Petchburi province. One project which has been under construction since 2010 namely Phase 4 of Sripanwa Hotel Project. For those properties for investment in the fiscal year 2011, a fair market value of Baht 214.7 million was appraised by an independent appraiser on an income approach. That newly appraised value was an increase from Baht 93.56 million in the fiscal year 2010 which was shown as an acquisition cost less depreciation. The increase has been adjusted in the retain earnings early in the year by Baht 88 million and Baht 6 million has been adjusted in the net profit of the fiscal year while other assets have not been changed significantly.

As of December 31, 2012 the Company and its subsidiaries have total assets of Baht 3,693.54 million, a decrease of approximately Baht 447.99 million, or equivalent to a decrease of 10.82% from that of the fiscal year 2011. The majority of those assets and which has changed significantly was the property for sale under development of Baht 1,767.94 million equivalents to 47.87% of total assets, a decrease of Baht 421.54 million from that of the fiscal year 2011. This reflects the fact that the Company has a total of 4 projects of residential condominium and townhouse units going through transfer stage. Such projects have a decrease of Baht 1,062 million in cost of land and construction. At the same time, the Company and its subsidiaries have developed another 3 new projects which are Baan Tiew Talay Condominium Phase 2, Baan Si Tawan, and IISI Condomenium.The cost of land and construction of these new projects are approximately Baht 641 million.

� Liabilities As of December 31, 2011 the Company and its subsidiaries have total liabilities of Baht

2,968.19 million, an increase of Baht 369.79 million from that of the fiscal year 2010. Liability which has been changed significantly was trade liability of Baht 318.73 million, equivalent to 10.74% of total liability. Such trade liability was lower than that of the fiscal year 2010 by Baht 132.31 million following debt repayment to construction contractors who has completed their works and effected a hand over. Long term loan with a maturity within one year of Baht 897.01 million equivalents to 30.22% of total liabilities was an increase of Baht 130.66 million from that of the fiscal year 2010. The Company expects to be able to make a loan repayment of at least Baht 600 million when residential condominium units in The Issara Ladprao project are going through transfer stage within 2012 while the rest are loan repayment in other projects. Long term loan of Baht 940.12 million representing 31.67% of total liabilities has increased by Baht 281.74 million from that of the fiscal year 2010. The majority of those loans are from commercial bank for the purpose of the hotel operation and construction of Sri Panwa project. A total liabilities of Baht 2,968.19 million is equivalent to 71.67% of total assets.

As of December 31, 2012 the Company and its subsidiaries has total liabilities of Baht 2,374.02 million, a decrease of Baht 594.17 million from that of the fiscal year 2011. Liability which has been changed significantly was trade liability of Baht 204.64 million equivalent to 8.62% of total liability. Such trade liability was lower than that of the fiscal year 2011 by Baht 114.09 million because the Company and its subsidiaries have made a payment to its contractors for the completed construction. Long term loan with a maturity within one year of Baht 555.04 million equivalents to 23.38% of total liabilities was an increase of Baht 341.97 million from that of the fiscal year 2011 because the Company and its subsidiaries have made a loan repayment to the bank in the proportion of cashflow received from the clients whose residential condominium and townhouse units are completely going through transfer stage during the year. Additionally, there is an increase in payable for lands-associated companies of Baht 168.29 million, or equivalent to 7.09% of total liabilities. The remainings are loans for other projects. Long-term loan of Baht 737.19 million representing 31.05 of total liabilities has decreased by Bash 202.93 million from that of the fiscal year 2011. As at the end of the fiscal year 2012, the Company and its subsidiaries have a total liabilities of Baht 2,374.02 million, or equivalent to 64.27% of total assets.

� Shareholders’ equity Shareholders’ equity of Baht 1,173.34 million in the fiscal year 2011 includes Baht 957.66

million attributable to the Company’s shareholders, an increase of Baht 22.28 million from that of the fiscal year 2010. Even though the Company and its subsidiaries have net loss but some items posed an increased retained earnings such as those arising out of the change of property appraisal approach for invested properties to income approach. Shareholders’ equity of Baht 1,319.52 million in the fiscal year 2012 includes Baht 1,071.81 million attributable to the Company’s shareholders, an increase of Baht 114,15 million from that of the fical year 2011. Increase in net profit is the main reason for the increase in retained earning of Baht 110.52 million.

Attachment No. 6

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Liquidity

� Cash Flow For the year 2010 and 2011, the Company and its subsidiaries have cashflow used for

operating activities of Baht 43.46 million and Baht 428.56 million, respectively and had cash flow from such activities amounting to Baht 657.71 million in the year 2012. The reasons the Company and its subsidiaries have cash outflow from operation in the year 2012 were the construction period of The Issara Lardprae and the transfer of property was less than target. For the year 2012, the Company and its subsidiaries have cash flow from operating activities because the increase of Baht 953.38 million from ownership transfers.

For the year 2010, the Company and its subsidiaries had net cash flow used for investing activities of Baht 112.72 million but for the year 2011 and 2012, the Company and its subsidiaries had net cashflow from investing activities of Baht 6.54 million and Baht 36.91 million, respectively, mostly from the bill of exchange which was due.

For the year 2010 and the year 2011, the Company had net cashflow from financing activities of Baht 47.25 million, and Baht 440.60 million, respectively. The main reasons were from loans from banks. In the year 2011, the Company and its subsidiaries received long-term loan from bank of Baht 1,200.56 million and paid back of Baht 788.16 million during the year. In the year 2011, there was a loan from associated company amounting to Baht 24 million. For the year 2011, there was net cashflow from financing activities of approximately Baht 681.53 million. The main reasons were Baht 1,167.44 repayment to the bank for the long-term loan and Baht 116 million repayment to associated company. Additionally, the Company and its subsidiaries received money from long-term loan amounting to Baht 622.54 million for support two new projects of the Company and its subsidiaries. 8. Significant material legal disputes or claims

-None- 9. Related party transactions

During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties

(Unit: Million) Consolidated Company only Transfer prcing policy 2012 2011 2012 2011

Transactions with subsidiaries (Eliminated from the consolidated financial statements) - - 21 17 Contract price

Management fee income - - 18 19 Contract price Transactions with associated company

Management fee income 2 3 2 3 Contract price Rental and service expenses 4 4 3 3 Contract price

Transactions with related companies, directors and shareholders

A land sale-and-purchase agreement 402 192 41 - Contract price Purchase construction supplies 10 - - - Contract price Revenue from real estate sales 10 6 - - Contract price Management fee expenses 6 9 4 4 Contract price Interest expenses 12 16 - - Contract price

During the years, one director of the Company and its associated company entered into a

residence-sale-and-purchase agreement in the project of Issara United Co., Ltd. (the subsidiary of C.I.V. Development Co., Ltd.) with the contract price at Baht 175 million or equivalent to 5% of total project value. As at December 31, 2012, the balance of deferred revenue is Baht 6 million.

As at December 31, 2011 and 2010, the balances of the accounts between the Company and those related parties are as follows:

Attachment No. 6

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(Unit:Thousand Baht)

Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Trade and other receivables - related parties

Directors 81 1,339 - - Subsidiaries - - 33,154 20,149 Associated company 853 948 853 948 Related companies (related by co-director) 112 - 112 -

Total trade and other receivables - related parties 1,046 2,287 34,119 21,097 Trade and other payables - related parties

Directors 76 900 40 738 Subsidiaries - - 412 563 Associated company 76 68 - - Related companies (related by co-director) 11,230 8,390 283 175

Total and other payables - related parties 11,382 9,358 735 1,476

During the years, the Company and its subsidiaries entered into a land sale-and-purchase

agreement with associated company, director, and related parties. The land ownership was transferred to the Company and its subsidiaries in the current year; however, the Company and its subsidiaries have not yet paid for the land. The outstanding liability as at December 31, 2012 under this agreement is presented as land payable-related company in the consolidated and separated financial statements.

(Unit:Baht million)

Company Contract Price Already Paid Payable with associated

companies Consolidated

financial statement

Separate financial

statements

Consolidated financial

statement

Separate financial

statements

Consolidated financial

statement

Separate financial

statements Director and related parties 226 41 198 13 28 28 Ruam Prayod Co., Ltd. 176 - 36 - 140 - Total land payables - related parties 402 41 234 13 168 28

Loans to related companies and loan from related parties As at December 31, 2012 and 2011, the balance of loans between the Company and those related parties and the movement are as follows:

(Unit:Thousand Baht) Separate financial statements

Interest rate (Annual%)

Balance Balance as at Receive Increase as at

Jan 1, 2012 During the

year During the

year Dec 31, 2012 Short-term loans to related companies Charn Issara Residence Co., Ltd. MLR+2.0 72,000 - 61,500 133,500 Charn Issara Viphapol Co., Ltd. MLR 9,000 - - 9,000 C.I.N. Estate Co., Ltd. 6.0 72,000 (72,000) 60,000 60,000 C.I.V. Development Co., Ltd. MLR,

MLR+2.0 28,400 - 16,000 44,400

Total short-term loans to related companies 181,400 (72,000) 137,500 246,900

Attachment No. 6

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(Unit:Thousand Baht) Consolidated financial statements Separate financial statements Balance Balance Balance Balance Related by Interest rate as at Receive Increase as at as at Receive as at (% p.a.) January 1,

2012 During the year During the year December 31,

2012 December 31,

2011 During the year December 31,

2012 Short-term loans from related parties Viphapol Sombat Co., Ltd. Subsidiary’s

shareholder MLR 29,000 (20,000) - 9,000 - - -

Nawarat Patanakarn Public Company Limited

Subsidiary’s shareholder

6.0 48,000 (48,000) 40,000 40,000 - - -

Director Director of the Company and

director of subsidiary

MLR 49,700 (48,000) - 1,700 4,700 (3,000) 1,700

Total short-term loans from related parties 126,700 (116,000) 40,000 50,700 4,700 (3,000) 1,700

Long-term loans from related parties I.C.C International Public Company Limited


MLR - - 10,000 10,000 - - -

Saha Pathanapibul Public Company Limited


MLR - - 10,000 10,000 - - -

Total long-term loans from related parties - - 20,000 20,000 - - -

Attachment No. 6

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Outstanding balances of long-term loan as at December 31, 2012 and 2011 are as follows: (Unit:Thousand Baht)

Consolidated financial statements

Separated financial statements

2012 2011 2012 2011 The Company: Charn Issara Development Public Company Limited 194,754 220,265 194,753 220,265 Subsidiaries: Charn Issara Residence Co., Ltd. 773,654 829,885 - - Charn Issara Vipaphol Co., Ltd. 21,926 42,144 - - C.I.N. Estate Co., Ltd. 148,750 604,839 - - Issara United Co., Ltd. 153,150 140,000 - -

Total long-term loan 1,292,234 1,837,133 194,753 220,265 Less: Current portion (555,040) (897,009) (75,143) (42,496)

Long-term loans - net of current portion 737,194 940,124 119,610 177,769

As at December 31, 2012, the subsidiaries’ long-term loans from banks comprise credit

facilities from local banks totaling Baht 3,510 million (2011: Baht 3,394 million) under numerous agreements. Most of these loans carried interest at MLR and MLR plus/minus certain rate, as stipulated in the agreements. The loans principle and their interest are to be paid in monthly and quarterly basis or when the release of mortgage security to the customers who purchased the land and resident units in the project of its subsidiaries. Full settlement of these loans is to be made within December 2013 to September 2021 (2011: May 2012 to September 2021).

Long term loans are secured by the Company’s office condominium units, fund unit certificates held by the Company, land and construction thereon in the Company and its subsidiaries’ project, and guarantees provided by the Company’s director, while the Company itself also guarantees the loans of its subsidiaries. The terms of long-term loan agreements stipulate certain covenants such as the reduction of capital, the maintenance of certain financial ratios, etc.

As at December 31, 2012, the long-term credit facilities of the Company and its subsidiaries which have not yet been drawn down amounting to Baht 848 million (2011: Baht 868 million for consolidated financial statement and Baht 10 million for separated financial statement) The service agreement extention of Mrs. Srivara Issara as a project consultant of the Company and its subsidiaries and associated companies

The Board of Directors Meeting No. 1/2013 of Charn Issara Development Public Company Limited (the “Company” or “CI”), held on February 26, 2013, has passed the resolutions to extend the special contract with Mrs. Srivara Issara to be a project consultant for the Company and its subsidiaries and associated companies. Such a special service agreement is considered the related transaction which has information memorandum as follows:

Contract to appoint Mrs. Srivara Issara (1) Date of the Transaction : January 1, 2013 (2) Parties Involved and their relationships with the Company:

The employer: Charn Issara Development Public Company Limited The consultant: Mrs. Srivara Issara

(3) General characteristics and size of the transactions It is a service agreement as a project consultant for the Company, its subsidiaries, and associated companies. Transaction size: 0.52% of net tangible assets which is less than 3% of net tangible assets

(4) Total value of consideration, and duration of the contract The consulting fee is Baht 450,000 per month or approximately Baht 5,400,000 per year. The payment is made monthly. The effective date of the contract is from January 1, 2013 until December 31, 2013. The termination of the contract is in effect on the date as specified in the contract or once the service is completed before the end of the contract or no neccessariry to hire consultant. The Company has the right to cancel the contract before the termination without any consent.

(5) The name of the individual related to the Company, title, and shares holding Mrs. Srivara Issara is a president of the Company but has no common share in the Company.

(6) Directors who is a related individual to the Company Mrs. Srivara Issara and Mr. Songkran Issara were at the meeting but had no voting right in this agenda.

(7) The opinion of the Board of Directors

Attachment No. 6

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The Board of Directors has approved this related transaction since Mrs. Srivara Issara; the president of the Company has long experience in real estate development. She has management experience for various projects of Issara Group more than 30 years. This can be a representative that she possesses technical knowledge, capability, vision, and experience than will tremendously benefit the Company as a whole.

10. The summary of important contracts during the p ast 2 years of the Company and its

subsidiaries

Contract n ame A land sale-and-purchase agreement Contract party: Purchaser: Charn Issara Development Public Company Limited and Seller: Ms. Thorsri Sawadichuto Contract date: February 1, 2012 Duration of the contract: Approximately 10 months Important agreements: The purpose of this loan is for Sitawan Project at Pakchong district, Nakonrachasima. The

payment is divided to 3 installments.

Contract name Loan agreement Contract party: Borrower: Charn Issara Development Public Company Limited and Lender: Krung Thai Bank Public Company Limited Contract date: December 12, 2012 Duration of the contract: 48 months Important agreements: The purpose of this loan is for Sitawan Project at Pakchong district, Nakonrachasima

Contract name Loan agreement Contract party: Borrower: Charn Issara Residence Co., Ltd. and Lender: Islamic Bank of Thailand Contract date: November 2, 2011 Duration of the contract: 10 years Important agreements: The purpose of this loan is for Sripanwa Hotel Project which comprises of hotel operation and

development residence for sale

11. The opinion of the Board of Directors concernin g the adequacy of working capital The Board of Directors is of the opinion that the acquisition of assets according to transaction 2.1 will have no affect to its working capital due to the Company will have the proceeds from the disposition of assets based on transaction 1. The source of fund for the acquisition of assets transaction 2.2 will come from current working capital and/or the proceeds from house and land sales of the project. The source of fund for transaction 2.3 is from the hotel operation of Sripanwa Hotel and from management fee of sold units. At the end of the year 2012, the Company has its working capital of Baht 197 million and expects to receive some cash from land and house sales which are already completed but waiting for ownership transfer. In addition, if the Company needs additional working capital for future project development, the Company will consider borrowing from financial institutions and/or issuing bonds, and/or raising its capital. The appropriate fund raising methods will be considered in the future. In this regard, there is no Audit Committee member having an opinion different from the Board of Directors’. 12. The name list of shareholders who have conflict of interest and are ineligble to vote in the

Annual General Meeting of Shareholders No. 1/2013 According to the list of shareholders as of May 9, 2012 which is the latest book closing date

prepared by Thailand Securities Depository Co., Ltd. (TSD), there are three CI’s shareholders who have conflict of interest and are ineligible to vote on a part of Agenda 10 in AGM regarding to the shortfall rental payment agreement that the Company has to guarantee the rent payment of CIR to the Property Fund. These shareholders are as follows:

No. of Shares in CIR as of Jun 22, 2012

Percenta ge of Shares

No. of Shares in CI as of May 9, 2012

Percentage of Shares

1. Mr. Wonlop Shangkiet 83,200 5.94% 1,386,000 1.16% 2. Ms. Duangporn Limtrakool 4,000 0.29% 100,000 0.08% 3. Ms. Piyada Limtrakool 4,000 0.29% 354,101 0.30%

Attachment No. 6

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13. The name lists of a member of the Audit Committ ee being nominated as Shareholders'

Proxy to vote on their behalf The lists are comprised of Mr. Phisud Dejakaisaya, Mr. Witit Rachatatanum, and Mr. Pinit

Puapan. All mentioned directors having no conflict of interest with respect to the agenda proposed in the Annual General Meeting of Shareholders No. 1/2013. 14. Proxy Form

Please see Attachment No. 9 (Attachment of AGM Notice).

The Company certifies that information disclosed in this Information Memorandum is accurate and complete.

Please be informed accordingly. Yours Sincerely, (Mr. Songkran Issara) Managing Diractor

Capital Advantage Co., Ltd. 6 6 / 2 2 L a d p r a o 8 0 , W a n g t h o n g l a n g , B a n g k o k 1 0 3 1 0 , T h a i l a n d T e l : + 6 6 8 6 5 6 5 9 9 0 0 F a x : + 6 6 2 5 3 0 5 9 2 7 w w w . c a p i t a l a d v a n t a g e . c o . t h

-TRANSLATION-

The English Translation of the Independent Financial Advisor’s Opinion has been prepared solely for the convenience of foreign shareholders of Charn Issara Development Public Company Limited and should not be relied upon as the definitive and official document. The Thai language version of the Independent Financial Advisor’s Opinion is the definitive and official document and shall prevail in all aspects in the event of any inconsistency with this English Translation.

No. 017/2013 Date: March 29, 2013 Subject: Opinion of the Independent Financial Advisor Concerning the Asset Acquisition and

Disposition of Charn Issara Development Public Company Limited To: Audit Committee and Shareholders

Charn Issara Development Public Company Limited Attachment: 1) Business overview and operating results of Charn Issara Development Public

Company Limited 2) Business overview and operating results of Charn Issara Residence Co., Ltd. 3) Information of Sripanwa Hotel, Sripanwa Boutique Resort & Spa Hotel, and

Serviced Apartment Business Re: 1) The resolution of the Board of Directors’ Meeting of Charn Issara Development

Public Company Limited No. 2/2013, held on March 14, 2013. 2) Information Memorandum Concerning the Asset Acquisition and Disposition of

Charn Issara Development Public Company Limited, dated March 14, 2013, and its amendment dated March 15, 2013.

3) Form 56-1 of Charn Issara Development Public Company Limited for the year ended on December 31, 2011 and 2012.

4) Audited financial statements of Charn Issara Development Public Company Limited for the 12-month period ending December 31, 2010 - 2012.

5) Audited financial statements of Charn Issara Residence Co., Ltd. for the 12-month period ending December 31, 2010 - 2011 and internal financial statement of Charn Issara Residence Co., Ltd. for the 12-month period ending December 31, 2012, audited by the Company’s auditor.

6) Report and Financial Information only for Business of Sripanwa Hotel Project, which is operated under Charn Issara Residence Co., Ltd., for the 12-month period ending December 31, 2010 – 2012, prepared by Ernst & Young Office Limited, dated March 1, 2013.

7) The Article of Association, Affidavit, information and other documents, as well as the interviews with the management of Charn Issara Development Public Company Limited, Charn Issara Residence Co., Ltd., and any relevant personnel.

8) Appraisal report No. VL/mk/R0518/2012, dated March 15, 2013, on Charn Issara Residence Co., Ltd.’s assets, prepared by Knight Frank Chartered (Thailand) Co., Ltd.

9) Appraisal report No. CIT_V_F 2012-0102-T, dated March 15, 2013, on Charn Issara Residence Co., Ltd.’s assets, prepared by C.I.T. Appraisal Co., Ltd.

Disclaimers: 1) Results of the study by Capital Advantage Co., Ltd. (“CapAd” or “Independent

Financial Advisor”) in this report were based on information and assumptions provided by the management of Charn Issara Development Public Company Limited and the information of the Company disclosed to the public on the websites of the Securities and Exchange Commission (www.sec.or.th) and the Stock Exchange of Thailand (www.set.or.th).

2) The Independent Financial Advisor shall not be responsible for the profits or losses, or any impacts resulting from this transaction.

3) The Independent Financial Advisor conducted the study with knowledge, skills, and carefulness and on the basis of the professional ethics.

Opinion of the Independent Financial Advisor -TRANSLATION- Charn Issara Development Plc.

Capital Advantage Company Limited Page 2/66

4) The Independent Financial Advisor considers and provides opinion based on the situation and information at the present time. If such situation and information have been changed significantly, the study results in this report may be affected.

The Board of Directors’ meeting of Charn Issara Development Public Company Limited (the

"Company" or "CI") No. 2/2013, held on March 14, 2013 passed a resolution to propose the following agendas to the Annual General Meeting of Shareholders No. 1/2013 (“AGM”) of the Company, to be held on April 25, 2013: (1) To consider and approve the disposition of assets by allowing Charn Issara Residence Co., Ltd.

(“CIR”), a subsidiary whose 80.04% shares are held by the Company, to dispose of the assets (immovable and movable assets) used in the operation of Sripanwa Hotel and Sripanwa Boutique Resort & Spa Hotel and Serviced Apartments (“Sripanwa Hotel Project”), and owned by CIR to a property fund to be established (the “Property Fund”) at an approximate price of Baht 1,978.43 million1. The assets of Sripanwa Hotel Project Phase 1 – 3 consist of 38 units and 7 units of serviced apartments2, as well as the buildings, systems, utilities, furniture, fixtures and fittings, equipments, and various facilities in connection therewith. (Agenda No. 8 of AGM)

(2) To consider and approve the following acquisition of assets of the Company: (2.1) To consider and approve the Company and CIR to invest in the Property Fund by holding

approximately 60,000,000 units in the Property Fund at a par value of Baht 10 per unit, amounting to approximately Baht 600 million. The holding is accounted for 30% of total investment units of the Property Fund. In this regard, the Company will invest in 15% of the Property Fund and CIR will invest the remaining 15% of the Property Fund. (Agenda No. 9.1 of AGM)

(2.2) To consider and approve CIR to establish a special purpose vehicle (“SPV”) to operate Sripanwa Hotel Project. CIR will hold not less than 99.99% of the total registered capital of SPV, initially amounting to Baht 30 million. (Agenda No. 9.2 of AGM)

(2.3) To consider and approve SPV, whose not less than 99.99% of registered shares are held by CIR, to lease the Property Fund’s assets (immovable and movable assets), after the Property Fund invested in Sripanwa Hotel Project, for an initial term of 15 years. The fee for the first 5 years is fixed at Baht 151 million per year and will increase at a rate of 10% for every three years from the 6th year onwards. Furthermore, the fee from the 11th to 15th year will be calculated according to the formula set forth in the drafted lease agreement. (Agenda No. 9.3 of AGM)

(3) To consider and approve CIR to guarantee the SPV’s performance according to the lease agreement to be made with the Property Fund, and to allow the Company to guarantee and indemnify the Property Fund against any CIR’s shortfall of rental payment. (Agenda No. 10 of AGM)

(4) To consider and approve the authorization of the board of directors, and/or the managing director, and/or an authorized signatory, to negotiate, sign, and make decision to enter into contracts and documents related to the establishment of the Property Fund and to take any action to ensure that the undertakings of CIR and SPV achieves its objectives. (Agenda No. 11 of AGM)

Transaction (1) is considered a disposition of assets in accordance with the Notification of the

Capital Market Supervisory Board No. Thor Jor 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposition of Assets and the Notification of the Board of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, 2004 (“Notification of Acquisition or Disposition of Assets”). Since the highest transaction size is 53.56% of total consolidated assets of the Company and subsidiaries as of December 31, 2012 as calculated on total value of consideration basis, it is classified as Transaction Type 1 under the Notification of Acquisition or Disposition of Assets: the transaction between a listed company or its subsidiary and a non-listed company with the transaction size of at least 50% or higher but less than 100%.

1 Derived from the size of the Property Fund to be established of approximately Baht 2,001.84 million, deducted by (1) land

transfer fee, (2) lease agreement registration fee (2/3 of the total amount), (3) any other application fees (including VAT), and (4) VAT of immovable assets to be sold to the Fund, resulting in the asset purchase price of Baht 1,978.43 million.

The size of the Property Fund to be established is an initial estimation by the Company. The actual size of the Property Fund depends on several factors such as book building process, demand from investors, and condition of the market at the offering period. 2 Total of 45 units were developed in 3 phases. Phase 1 and 2 comprise 8 units of Pool Villas and 7 units of Family Suites,

respectively, while Phase 3 comprise 23 units of Luxury Villas and 7 units of Serviced Apartments.



Transaction (2.1), (2.2), and (2.3) are deemed as the acquisition of assets under the Notification of Acquisition or Disposition of Assets with the highest transaction size of 88.63% of total consolidated assets of the Company and subsidiaries as of December 31, 2012, calculated on total value of consideration basis. Consequently, they are classified as Transaction Type 1 under the Notification of Acquisition or Disposition of Assets: the transaction between a listed company or its subsidiary and a non-listed company with the transaction size of at least 50% or higher but less than 100%. Transaction (3) is a financial support transaction for the mentioned acquisition and disposition of assets. Transaction (1) – (4) are related to each other. Therefore if the shareholders’ meeting disapproves any transaction, it will affect the successful of these acquisition and disposition of assets.

Therefore, the Company is required to disclose the information of these transactions to the Stock Exchange of Thailand (“SET”), appoint an independent financial advisor to render the opinion, and arrange a shareholders’ meeting for approval of these transactions with no less than three-fourths of total votes from shareholders who attend the meeting and are eligible to vote, excluding those with conflict of interest. The Company has appointed Capital Advantage Co., Ltd. (“CapAd” or “Independent Financial Advisor” or “IFA”) to be an independent financial advisor to render the opinion on reasonableness of the transaction and fairness of the prices and conditions of this acquisition and disposition of assets to the shareholders.

CapAd derives its opinion after studying the Information Memorandum Concerning the Asset Acquisition and Disposition of the Company, dated March 14, 2013, its amendment dated March 15, 2013 and the information obtained from the interviews with executives and management of the Company and CIR, as well as documents received from the Company and CIR, such as financial statement, business plan, property appraisal reports, drafted agreements relating to these transactions, the publicly-disclosed information such as Form 56-1, the publicly-disclosed information on the websites of the SET (www.set.or.th) and the Securities and Exchange Commission (www.sec.or.th), and financial information from various websites, and etc. CapAd cannot assure or warranty any correctness or completeness of the information provided to Independent Financial Advisor by the Company and CIR and/or executives and/or management of the Company and CIR. CapAd provides the opinion herein based mainly on the assumptions that all above-mentioned information and documents are correct and completed. The opinion is given according to the circumstances and information currently acknowledgeable on the reporting date hereof. If there are any changes or any other events, they may materially affect the business operation and financial forecast of Sripanwa Hotel Project and/or SPV, as well as the decision making of shareholders against the acquisition and disposition of the assets, accordingly.

In expressing its opinion in this report, CapAd has considered the appropriateness of the Asset Acquisition and Disposition Transactions. In addition, it also considers other related factors thoroughly and rationally in accordance with the professional standard.

The attachments to this report are deemed to be a part of this IFA opinion report and are the information that the audited committee and the shareholders should consider jointly with this report.

CapAd has studied the information pertaining to the Asset Acquisition and Disposition

Transactions, which can be summarized as follows.



Abbreviations

“Company” or “CI” Charn Issara Development Public Company Limited “CIR” Charn Issara Residence Co., Ltd. “Sripanwa Hotel Project Business of Sripanwa Hotel, Sripanwa Boutique Resort & Spa

Hotel and Serviced Apartment “Property Fund” Property Fund to be established “SPV” Special Purpose Vehicle (SPV) for carrying on business of

Sripanwa Hotel Project “AGM” Annual General Meeting of Shareholders No. 1/2013, which will

be held on April 25, 2013 “CapAd” or “Independent Financial Advisor” or “IFA”

Capital Advantage Co., Ltd.

“SEC” The Securities and Exchange Commission “SET” The Stock Exchange of Thailand “Notification on Acquisition or Disposition of Assets”

The Notification of the Capital Market Supervisory Board No. Tor Chor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposition of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets BE 2547 (2004) and its amendments

“NTA” Net Tangible Assets “Carve Out Financial Statement” Report and Financial Information of Sripanwa Hotel, which is

operated under Charn Issara Residence Co., Ltd., for the 12-month period ending December 31, 2010 – 2012, prepared by Ernst & Young Office Limited, dated March 1, 2013

“Independent Property Appraiser 1” or “Knight Frank”

Knight Frank Chartered (Thailand) Co., Ltd.

“Independent Property Appraiser 2” or “Colliers”

C.I.T. Appraisal Co., Ltd.

“BG” Bank guarantee from a commercial bank “REIT” Real Estate Investment Trust “NAV” Net Asset Value of the Property Fund or investment unit of the

Property Fund “WACC” Weighted Average Cost of Capital “SCB” Siam Commercial Bank Public Company Limited “IBANK” Islamic Bank of Thailand “EY” Ernst & Young Office Limited



Executive Summary

Charn Issara Development Public Company Limited (the “Company” or “CI”) plans to enter into the following transactions: Transaction 1: Disposition of Assets Charn Issara Residence Co., Ltd. (“CIR”) will dispose the assets (immovable and movable assets) used in the operation of Sripanwa Hotel Project to a property fund to be established (the “Property Fund”) at an approximate price of Baht 1,978.43 million3. Transaction 2: Acquisition of Assets consist of: Transaction 2.1: The Company and CIR will invest in the Property Fund by totally holding 30% of total investment units of the Property Fund. The Company will invest in 15% of the Property Fund and CIR will invest in the remaining 15% of the Property Fund. Transaction 2.2: CIR will establish a special purpose vehicle (“SPV”) to operate Sripanwa Hotel Project. CIR will hold not less than 99.99% of the total registered capital of SPV, initially amounting to Baht 30 million. Transaction 2.3: SPV will lease the assets (immovable and movable assets) from the Property Fund, after the Property Fund invested in Sripanwa Hotel Project, for an initial term of 15 years, with the right to renew the lease for additional 15 years/time.

These transactions are considered the acquisition and disposition of assets according to the Notification of the Acquisition or Disposition of Assets with the transaction size higher than threshold specified by such Notification. Therefore, the Company is required to disclose the information of transactions to the SET and arrange the board of directors’ meeting and shareholders’ meeting to approve these transactions. In this regard, the Company has to appoint an independent financial advisor to render the opinion to the shareholders. These transactions of acquisition and disposition of assets will benefit the Company according to the consolidated financial statement as follows: (1) The Company will make approximately Baht 1,073.43 million4 profit from sale of the assets, or

accounting profit after deducting 2 reserve items of approximately Baht 893.43 million5. The Company will record 70% of profit from sale of assets, or approximately Baht 625.40 million (according to the consolidated financial statement) in the year 2013. The balance of 30%, or Baht 268.03 million, will be recorded in the year the Company and CIR sell their investment units in the Property Fund (See additional detail in Part 2, Section 2.1, Clause 1), on Page 30 - 31).

(2) The Company (according to the consolidated financial statement) will immediately obtain cash which can be used to repay loan used for Sripanwa Hotel Project to the financial institutions. This will reduce interest expenses and debt to equity ratio as well as strengthen the Company’s financial status. In addition, it provides the Company with capability for future borrowing.

(3) The Company (according to the consolidated financial statement) will have cash surplus for investment in other property development projects of CIR without capital increase. In addition, the Company has an opportunity to increase its revenues and profit from new projects.

(4) The Company (according to the consolidated financial statement) still operates Sripanwa Hotel Project throughout the lease term and continues to recognize income from Sripanwa Hotel Project throughout the lease term.

(5) The Company (according to the consolidated financial statement) will receive the return on investment from the investment in the Property Fund. If the Property Fund is established before or on January 1, 2014, the Company will be fully exempted from income tax on dividend payable by the Property Fund and CIR will be 50% exempted from income tax on the dividend payable by the Property Fund in accordance to tax benefit of the Property Fund. Furthermore, it will be additional fund raising channel via the Property Fund and/or Real Estate Investment Trust (“REIT”).

3 Please see Footnote 1.

4 Derived from the selling price of the assets of approximately Baht 1,978.43 million, deducting by the book value of Baht 905

million as of December 31, 2012 as specified in the Notes to the Carve Out Financial Statement. (1,978.43 – 905 = Profit from sale of assets of Baht 1,073.43 million) 5 Derived from Baht 1,073.43 million profit from sale of assets in Footnote 4, deducting by (1) reserve for estimated shortfall of

SPV’s lease payment of approximately Baht 100 million (4 years of fixed payment period), and (2) reserve in the form of deposit for BG of approximately Baht 80 million. Total amount of reserve (1) + (2) is Baht 180 million, which may be added back in the future (reversal of provision) after the guarantee period expires, and SPV performs its duties according to the Property Fund’s conditions without using such reserves.



(6) Opportunity to increase profit (potential upside gain) from the management of the leased assets by SPV throughout the lease term and to obtain capital gain from selling of investment units of Property Fund in the future (potential capital gain).

Although the Company (according to the consolidated financial statement) is obligated to

make rental payment to the Property Fund throughout the lease term; to have encumbrance in guarantee of SPV’s rental payment during the first 5 years of the lease agreement in favor of the Property Fund; to have burden of tax and expenses in connection with these transactions in 2013, but the net proceeds received by the Company (according to the consolidated financial statement) is approximately Baht 244.89 million after deduction of taxes, expenses, and provisions. This cash will be available for future property development projects of CIR. For risk in hotel business within Phuket (Industry & Operational Risks), it remains the same regardless of these transactions. After considering objectives and necessity in carrying out these transactions, including advantages, disadvantage, benefit, and risks incurred, the IFA opines that these acquisition and disposition of assets are reasonable.

In respect of the pricing and condition of these transactions, the IFA considered only Transaction 1, 2.1, and 2.3. Then, the IFA considered overall benefits from these 3 transactions, less taxes and expenses incurred from entering these 3 transactions as follows:

Transaction Amount

(Baht million)

1 Transaction 1 Profit from disposition of the assets (movable and immovable properties) used for the operation of Sripanwa Hotel Project1/

1,073.43

Estimated costs from setting up of the Property Fund2/ (51.29) Estimated special business tax (SBT) from transferring of the immovable property3/ (63.81) Estimated bank guarantee fee (1st year) (1.60) Estimated corporate income taxes on profit from disposition of the assets (movable and

immovable properties)4/ (142.44)

Estimated expenses from registration of the leasehold right of the SPV (1/3) (9.85)

Net profit from disposition of the assets after taxes and expenses 804.44 2 Transaction 2.1

Return form investment in the Property Fund to the Company and CIR5/

3.98 3 Transaction 2.3

Losses from entering in to the lease agreement with the Property Fund6/

(54.79) Total benefits from entering into these Transactions 753.63 Remark: 1/ This is an estimated profit from disposition of assets. The actual profit shall include in the calculation of corporate income

tax of CIR at the end of the year (and the Company in the consolidated financial statements). Please see calculation of profit from the disposition of assets and the accounting profit in Part 2, Section 2.1, Clause 1), on Page 30 - 31.

2/ The estimated expenses from setting up of the Property Fund consist of legal counsel fee, property appraisal fee, audit fee for carve out financial statement, underwriting fee and other expenses.

3/ Special business tax at 3.3% of the value of the immovable properties. 4/ Profit from the selling price higher than the book value of the assets, net from fund setting up expense, special business tax

and bank guarantee fee (1st year), and adjusted for estimated tax loss carried forward at the end of 2012 of Baht 244.53 million. The corporate income tax rate is of 20% of net income before tax.

5/ Please see detail of the valuation in Part 3.2 of this report. 6/ Please see detail of the valuation in Part 3.3 of this report. The actual profit incurred from these transactions will depend on the final selling price of assets that will be determined by value of the Property Fund (Fund Size) to be established; rate of return to the investor (Fund Yield) that is subject to market condition during offering period of the Property Fund; book value of asset as at the transaction date; and expenses and tax actually incurred.

Although the price and conditions of Transaction 2.3 is inappropriate, these 3 transactions cannot be considered separately because they all are related to the establishment of the Property Fund. After considering total benefits to be received from these 3 transactions, less estimated expenses and taxes incurred, of approximately Baht 753.63 million, the IFA is of the opinion that the prices and conditions of these transactions are reasonable.

Therefore, when considering reasonableness and requirements of these transactions together with the appropriate prices and conditions of the transactions, the IFA has an opinion that shareholders should approve these acquisition and disposition of assets.

Each transaction of acquisition and disposition of assets is related to each other. Therefore, if the shareholders’ meeting disapproves any transaction, it will affect the successful of these acquisition and disposition of assets. Then shareholders should consider overview of these



transactions before making any decision in Agenda No. 8, 9.1, 9.2, 9.3, 10 and 11 in the Annual General Meeting of Shareholders No. 1/2013.

The shareholders should consider the information in the notice to the shareholders’ meeting and its attachments before making the decision. However, the final decision for the approval the Asset Acquisition and Disposition shall be at own discretionary of the shareholders.

Details of the IFA’s opinion are described as follows:



Part 1: Details of the Transactions

1.1 Background and Objectives of the Transaction

The Board of Directors meeting of Charn Issara Development Public Company Limited (the "Company" or "CI") No. 2/2013 held on March 14, 2013 passed a resolution to approve the transactions of acquisition and disposition of assets in connection with the business of Sripanwa Hotel and Sripanwa Boutique Resort & Spa Hotel and Serviced Apartment (“Sripanwa Hotel Project”) with the details as follows: Transaction 1: Disposition of Assets by allowing Charn Issara Residence Co., Ltd. (“CIR”), to sell the assets (immovable and movable assets) used in the operation of Sripanwa Hotel Project to the property fund to be established (the “Property Fund”) at the price of Baht 1,978.43 million6. (Agenda 8 in the AGM) Transaction 2: Acquisition of Assets consist of Transaction 2.1 Approved the Company and CIR to invest in the Property Fund by purchasing 60,000,000 investment units in the Property Fund at par value of Baht 10 per unit, amounting to the total of approximately Baht 600 million which is accounted for 30% of the total investment units of the Property Fund. In this regard, the Company will invest by holding 15% and CIR will invest by holding the rest 15%. (Agenda 9.1 in the AGM)

Transaction 2.2 Approved CIR to establish a special purpose vehicle (“SPV”) to operate Sripanwa Hotel Project. CIR will hold no less than 99.99% of the total registered capital of SPV which initially amounts to Baht 30 million. (Agenda 9.2 in the AGM)

Transaction 2.3 Approved SPV to lease assets (immovable and movable assets) invested by the Property Fund in Sripanwa Hotel Project from the Property Fund. The lease term will start at 15 years with fixed rental rate of Baht 151 million per year during the 1st - 5th years. The rental rate will be increased from the 6th year onward at the rate of 10% every three years. The variable portion which is calculated and be effective from the 11th year to the 15th year according to the formula set out in the drafted lease agreement. (Agenda 9.3 in the AGM)

In any case, the resolution is passed to authorize the Board of Directors and/or the Managing Director, and/or the authorized director(s) to have authority in negotiation, signing and execution of document and agreement in relevance to the establishment of the Property Fund as well as the authority to carry on any action for establishment of the Property Fund until completion and as proposed. (Agenda 11 in the AGM) Additionally, to encourage investors to invest in the Property Fund, the Company then allows CIR to guarantee SPV for performance under the lease agreement between SPV and the Property Fund and caused the Company to assure the Property Fund for CIR’s shortfall rental payment. (Agenda 10 in the AGM) 1.2 Date of Transaction

The Company will enter into the transactions after the Company has received an approval from the Annual General Meeting of Shareholders No. 1/2013 (“AGM”), to be held on April 25, 2013, and CIR will be approved by the Annual General Meeting of Shareholders No. 1/2013 to be held on April 25, 2013 as well. In this regard, the Company expects to carry out various items to be completed by the end of June 2013. Currently, the Company is in the process of preparation for Detailed Project Fund and it expects to submit an application for the establishment of the Property Fund and details of the Project Fund to the Office of the Securities and Exchange Commission (“SEC”) by the end of March 2013. Preliminary the Company estimates that the Property Fund will be established successfully within July 2013.

The sequence of transactions to be entered into is as follows:

6 Please see Footnote 1.



1.2.1 The disposition of assets: Transaction 1 Transaction 1 After the Property Fund obtains an approval for registration of its establishment

from SEC, the transfer of the assets and the registration of the transfer of ownership are expected to be completed within June 2013, or no later than July 2013. In this regard, the Company has to seek an approval from shareholders’ meeting with no less than three-fourths of the votes from shareholders attending the meeting and eligible for casting votes, excluding the shareholders with conflict of interest.

1.2.2 The acquisition of assets: Transaction 2.1, 2.2, and 2.3

Transaction 2.1 After the Property Fund obtains an approval for registration of its establishment from SEC, and the transfer of the assets and the registration of the transfer of ownership are expected to be completed within June 2013, or no later than July 2013.

Transaction 2.2 Expected to be completed before commencement of the investment of the Property Fund.

Transaction 2.3 After the Property Fund to be established has registered the transfer of ownership and leasehold right, it is expected to be completed within June 2013, or no later than July 2013.

1.3 Parties Involved and their relationships

1.3.1 The disposition of assets Transaction 1 : CIR disposes assets used in Sripanwa Hotel Project to the Property Fund Seller : Charn Issara Residence Co., Ltd. (“CIR”) Buyer : Property Fund to be established (the “Property Fund”) Relationship with CI

: CIR is a subsidiary of the Company, in which the Company holds 80.04%. After SEC has approved the establishment of the Property Fund, the Company and CIR plan to invest therein by holding the investment units in the Property Fund totaling at 30% of total investment units of the Property Fund.

1.3.2 The acquisition of assets

Transaction 2.1 : The Company and CIR invest totaling 30% of the Property Fund Investor : Charn Issara Development Public Company Limited and

Charn Issara Residence Co., Ltd. (“CIR”) Property Fund : Property Fund to be established (the “Property Fund”) Relationship with CI

: After SEC has approved the establishment of the Property Fund, the Company and CIR plan to invest therein by holding the investment units in the Property Fund at 30% of total distributed investment units of the Property Fund. In this regard, the Company will invest 15% and CIR will invest the rest 15%.

Transaction 2.2 : CIR establishes a special purpose vehicle (“SPV”) and invests 99.99% of the

total registered capital of SPV. Shareholder : Charn Issara Residence Co., Ltd. (“CIR”) Company : SPV to be established Relationship with CI

: CIR is a subsidiary of the Company, in which the Company holds 80.04%. CIR will hold not less than 99.99% of the total shares of SPV.

Transaction 2.3 : SPV takes a long term lease of assets from the Property Fund. Lessee : SPV to be established Lessor : Property Fund to be established Relationship with CI

: CIR which is a subsidiary of the Company will hold not less than 99.99% of the total shares of SPV. After SEC has approved the establishment of the Property Fund, the Company and CIR plan to invest therein by holding the investment units in the Property Fund totaling at 30% of total issued and distributed investment units of the Property Fund. In this regard, the Company will invest 15% and CIR will invest the rest 15%.

1.4 General characteristics of the transaction, category and size of the transactions

1.4.1 The disposition of assets (Transaction1)



The Company approved for CIR, a subsidiary of the Company (80.04% held by the Company), to sell the assets (immovable and movable assets) used in operation of Sripanwa Hotel Project by transferring ownership in the lands, buildings, and any other properties used in business operation of Sripanwa Hotel Project, including 38 units of Pool Villas, Family Suites, and Luxury Villas, and 7 units of serviced apartments, together with buildings, systems, utilities, facilities, furniture, fixtures and fittings, and equipments in relation to Sripanwa Hotel Project situated on the land around 21 rai 2 ngarn 55 square wah7 at the selling price of Baht 1,978.43 million8, inclusive of transfer fee and related taxes nearly amounting to Baht 63.81 million, to the Property Fund.

Calculation Criteria Calculation Formula Transaction Size 1. Net Tangible Assets (NTA) Not applicable as it is not a disposition of securities 2. Net Profit Not applicable due to no net profit in operation of the disposed assets in 2012 3. Total Value of Consideration Baht 1,978.43 million / Baht 3,693.54 million 53.56% 4. Value of Securities Issued Not applicable as there is no securities issued

The transaction is considered as the disposition of assets according to the Notification of the Capital Market Supervisory Board No. Tor Chor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposition of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets BE 2547 (2004) (“Notification of Acquisition or Disposition of Assets”). The size of the transaction is equal to 53.56% of the Company’s consolidated total assets as of 31 December 31, 2012, which is considered a type 1 transaction according to the Notification on acquisition or disposal of asset between a listed company and another listed company or its subsidiary with a transaction size of 50% or higher but lower than 100%. The Company is required to disclose information to the SET, appoint an independent financial advisor to render an opinion for its shareholders, and arrange shareholders’ meeting to approve this transaction.

1.4.2 The acquisition of assets Transaction 2.1 The Company and CIR, invest in the Property Fund by holding the investment units in the Property Fund approximately 60,000,000 units at par value of Baht 10 per unit, amounting to the total of approximately Baht 600 million which is accounted for 30% of the total investment units of the Property Fund. In this regard, the Company will invest 15% and CIR will invest the rest 15%. Transaction 2.2 The Company approve for CIR, to establish a special purpose vehicle (“SPV”) to operate Sripanwa Hotel Project and to support the asset management of the Property Fund. In this regard, CIR will transfer any license, employees, and all contracts signed with other companies, relevant to the hotel operation to SPV. CIR will maintain shareholding in SPV not less than 99.99% of the registered shares of SPV which initially amounts to Baht 30 million. Transaction 2.3 SPV will lease assets (immovable and movable assets) which the Property Fund has invested in Sripanwa Hotel Project from the Property Fund. The leased assets included 21-2-55 Rais lands, buildings, 38 units of Pool Villas, Family Suites, and Luxury Villas and 7 units of serviced apartments, together with any facilities in relation to Sripanwa Hotel Project, systems, utilities, furniture, fixtures and fittings, and equipments. Firstly, SPV will lease for 15-year term9 at fixed rental

7 The Sripanwa Hotel Project is a part of CIR’s Sripanwa Project, consisting of (a) Sripanwa Hotel Project and (b) residential

units (Pool Villas, Family Suites, and Luxury Villas) for sale. Total area of the Sripanwa Project is 76 rai, 2 ngarn, and 93.1 square wah, dividing into different categories as follows.

(1) Lands used as roads (to be registered as servitude to buyers of residential units of the Sripanwa Project and to the Property Fund), totaling 10 rai, 3 ngarn, and 13.90 square wah.

(2) Lands already sold, totaling 18 rai, 1 ngarn, and 61.8 square wah. (3) Residential houses/units already sold and under CIR’s management, totaling 8 rai, and 94.8 square wah. (4) Land to be purchase by the Property Fund in this transaction (“Sripanwa Hotel Project”), totaling 21 rai, 2 ngarn, and

55 square wah. (5) Land belong to CIR for sale and awaiting transfer of freehold rights, totaling 3 rai, 1 ngarn, and 87.4 square wah. (6) Land for future development, totaling 14 rai, and 80.2 square wah.

8 Pease see Footnote 1.

9 SPV will lease the assets from the Property Fund for a period of 15 years. After the expiration of the lease agreement, the

asset manager of the Property Fund will select a new manager of the assets under condition as follows: “Each party of the agreement has an option to extend the agreement, for a period of 15 (fifteen) years each time, by informing the other party in writing at least 12 (twelve) months prior to the expiry of the agreement. Furthermore, each party can exercise the right to have the other party extend the lease agreement under the conditions set forth in the agreement.”. Rental fee for a new lease agreement may be changed from the drafted lease agreement. (Please see additional details in the drafted lease agreement in



rate of Baht 151 million per year to be payable on monthly basis. Since the 6th year onward the rental fee will be increased at 10% every 3 years. The variable rental fee will be effective from the 11th year until the 15th year of the lease term according to the formula set out in the drafted lease agreement.

Calculation Criteria Transaction 2.1 Transaction.2.2 Transaction 2.3 Total

1. Net Tangible Assets (NTA)

[30% * Baht 2,001.84 million1/] / Baht 1,071.81 million= Baht 600.55 million /Baht 1,071.81 million = 56.03%



58.83%




-





88.63%






Calculation Criteria Transaction 2.1 Transaction.2.2 Transaction 2.3 Total

1. Net Tangible Assets (NTA)

[30% * Baht 2,001.84 million1/] / Baht 1,071.81 million= Baht 600.55 million /Baht 1,071.81 million = 56.03%



58.83%




-





88.63%






Transactions 2.1, 2.2, and 2.3 which are considered as the acquisition of assets according to

the Notification of Acquisition or Disposition of Assets. The total maximum transaction size is equal to 88.63% of the Company’s consolidated total assets as of December 31, 2012 (which are the sum of the maximum value of each acquisition transaction according to Notification on Acquisition or Disposition of Assets). It is therefore considered a type 1 transaction according to the Notification on acquisition or disposal of asset between a listed company and another listed company or its subsidiary with a transaction size of 50% or higher but lower than 100%. The Company is required to disclose information to the SET, appoint an independent financial advisor to render an opinion for its shareholders, and arrange shareholders’ meeting to approve this transaction.

The Company has the duty to prepare a report for disclosure of information for these transactions to the SET and arrange a shareholders’ meeting to approve the entering of these transactions with the votes of not less than 3/4 of the total votes of the shareholders present at the meeting and are eligible to vote, excluding the shareholders with a conflict of interest. The Company shall prepare the Notice to the shareholders’ meeting, together with an opinion of the independent

the Information Memorandum Concerning Asset Acquisition and Disposition of the Company, Section (5.3), which is enclosed with the Notice to the Annual General Meeting of Shareholders No. 1/2013.)



financial advisor to be sent to the shareholders at least 14 days prior to the shareholders’ meeting on April 25, 2013. 1.5 Details of assets to be disposed and acquired

1.5.1 Details of Assets Disposed 1.5.1.1 Sripanwa Hotel Project

The Sripanwa Hotel Project is located on Cape Panwa, Phuket Province. Sripanwa Hotel Project comprises of Sripanwa Hotel and Sripanwa Boutique Resort and Spa. Sripanwa Hotel is situated at 88/11 – 88/16, 88/20 – 88/21, 88/31, 88/36 and 88/56 - 88/60 Moo 8, Wichid District, Amphur Muang, Phuket. Sripanwa Boutique Resort and Spa is situated at 88/71 – 88/93 Moo 8, Wichid District, Amphur Muang, Phuket Province. The major assets of Sirpanwa Project to be disposed to the Property Fund are lands, hotel buildings, utilities relating to the hotel business and furniture, fixtures and equipment. According to CIR’s financial statements as of December 31, 2012, the net book value of assets to be disposed is in the amount of Baht 906.48 million10. Details of the assets are explained below.

1.5.1.2 Land The lands composing of 16 Nor Sor. 3 Kor located around Phase 1 - 3 of the Project at Wichid

District, Amphur Muang, Phuket Province. These 16 land plots with the area of approximately 21 rai, 2 ngarn, and 55 square wah (8,655 square wah) are owned by CIR (In this regard, CIR will register 14 Nor Sor. 3 Kor (approximately 10 rai, 3 ngarn, and 13.90 square wah) which are belonging to CIR as servient properties for the use of walkway, the use of road and the use for underground infrastructure system to assets disposed to the Property Fund and units sold.) The details of appraised lands (8,655 square wah) are as follows: Phase Item Nor

Sor. 3 Kor No.

Lot No.

Area (rai-ngarn-

sq wah)

Building Address No. of Units

(1) Hotel Villas and Serviced Apartments 1 1 1725 27 0-2-19.9 Pool Villas (PV 01, PV02) 88/11, 88/12 2

2 1726 28 0-2-24.8 Pool Villas (PV 03, PV04) 88/13, 88/14 2 3 1727 29 0-2-31.4 Pool Villas (PV 05, PV06) 88/15, 88/16 2 4 1731 33 0-3-25.2 Pool Villas (PV 10, PV11) 88/20, 88/21 2

2 5 1771 14 0-1-62 Family Suite (FS 20) 88/60 1 6 1773 16 0-1-60 Family Suites (FS19/1, FS19/2)1/ 88/58, 88/59 2 7 1827 43 0-1-18 Family Suite (FS 05) 88/36 1 8 1828 44 0-1-45 Family Suite (FS 13) 88/57 1 9 1829 45 0-1-25 Family Suite (FS 12) 88/56 1

10 1915 39 0-0-52 Family Suite (FS 01/1) 88/31 1 3 11 321 2 10-3-64.7 Luxury Villas Type A - B 88/71-81, 88/83-

86, 88/88-91 19

Serviced apartments2/ and Pool Club building

7

12 1864 28 1-3-11.3 Luxury Villas Type B 88/82, 88/87, 88/92, 88/93

4

Sub total (1) 17-0-39.3 Total Hotel Units 45 (2) Facilities and common areas 3 13 350 4 1-3-97.1 Sport center building, tennis courts, and staff houses

14 1858 48 0-2-41.8 Spa 15 1860 20 1-0-49.8 Spa 16 1888 54 0-3-27 Reception building and Baba restaurant

Sub total (2) 4-2-15.7 Grand total (1) and (2) 21-2-55 (8,655.00 sq. wah)

Source: Appraisal Report of C.I.T. Appraisal Co., Ltd., dated March 15, 2013, Clause 3.1. Remark: Land item 11 and 12 are pledged as collateral with the Siam Commercial Bank Public Company Limited (“SCB”) and land item 1-10 and 13-16 are pledged as collateral with the Islamic Bank of Thailand (“IBANK”). The pledged lands will be released from both banks before transferring to the Property Fund under conditions in the drafted sale and purchase agreement of immovable properties. 1/ Family Suite No. FS19/1 and FS19/2 are in the same building. (1 building has 2 hotel units.) 2/ 7 units of serviced apartments (or Pool Suites) are on the lower floor of Pool Club building. (1 large building has

restaurants, activities rooms, and 7 serviced apartment units.)

10

This figure is from CIR’s internal financial statements for the year 2012, which were audited by the Company’s auditor. It is different from this figure in the Report and financial information only for business of the Sripanwa Hotel Project, which is operated under CIR, prepared by Ernst & Young Office Limited (“EY”), dated March 1, 2013, (“Carve Out Financial Statement”) which is equal to Baht 905 million due to decimal rounding of each item of assets by EY.



1.5.1.3 Hotel Buildings and Facilities Hotel buildings and any fixtures located on the lands to be disposed which are the location of

Sripanwa Hotel Project (including Pool Villas, facilities buildings, reception buildings, restaurants, spa, sport center, tennis courts, M&E building and staff house). In this regard, any system, common facilities and other immovable properties which are owned by CIR and under Sripanwa Hotel Project are also considered as properties to be disposed. The details of mentioned hotel buildings and utilities are as follows:

Hotel Buildings and construction Phase Number of buildings

Space (sq. m)

Villa Hotel Building and Villa Serviced Apartments 38 1. One bedroom Pool Villa (PV 01-03) 1 3 711.12 2. Two bedroom Pool Villa (PV 04-06, 10-11) 1 5 1,450.35 3. One bedroom Family Suite (FS 01/1) 2 1 177.06 4. Two bedroom Family Suite (FS 05,12, 20) 2 3 1,146.00 5. Two bedroom Family Suite (FS 13) 2 1 394.92 6. Two bedroom Family Suites (FS 19/1, FS 19/2) 2 1 372.87 7. One bedroom Luxury Pool Villa Type A - (LV 01-04, 06-11) 3 10 2,757.50 8. One bedroom Luxury Pool Villa Type A – slope (LV 05) 3 1 286.89 9. One bedroom Luxury Pool Villa Type B - (LV 12, 17-18, 22-24) 3 6 1,640.70 10. Two bedroom Luxury Pool Villa Type B - (LV 14-16, 19-21) 3 6 2,000.70 Facilities as common areas include 6 1. A 4-storey reception building and restaurants with underground 3 1 1,245.65 2. A 3-storey spa building with underground 3 1 2,109.70 3. A 4-storey Pool Club building and 7 one-bedroom suites as serviced

apartments 3 1

4,849.85 4. A 2-storey building of staff houses 3 1 584.26 5. A 2-storey building of M&E building and staff rooms 3 1 961.20 6. Tennis courts 3 1 1,940.40 Total 43 22,629.17

Source: Appraisal Report of C.I.T. Appraisal Co., Ltd., dated March 15, 2013, Clause 1.4. (No. of buildings in some categories are different from the appraisal report of Knight Frank Chartered (Thailand) Co., Ltd., which is the other property appaiser.) Remark: The Sripanwa Hotel Project has 43 buildings, but has 45 hotel units (38 units of Villas and 7 units of serviced apartments as described in Clause 1.5.1.2)

1.5.1.4 Main Building Systems and Main Facilities Details of Assets

1 Electrical System includes electrical generator sets, electrical transformer, main distribution board and lightening protection and grounding system etc.

2 Communication System includes telephone system, internet service system, fire alarm system, MATV System, sound system and security system

3 Sanitary System includes main cold water system, waste water treatment system, recycle water system and swimming pool treatment system.

4 Fire Protection System 5 Air Conditioning and Ventilation System 6 Elevator System

1.5.1.5 Furniture, Fixtures, Equipment and Inventories

Details of Assets 1 Furniture, fixtures, decoration or any action done with the building, including any equipment and inventories used in the

hotel operation



Chart 1: Location of Sripanwa Hotel Project, Phuket Province

Source: Appraisal Report of Knight Frank Chartered (Thailand) Co., Ltd.

Location of Appraised Assets



Chart 2: Location of Sripanwa Hotel Project at Cape Panwa, Phuket Province

Source: Appraisal Report of C.I.T. Appraisal Co., Ltd.

Location of Appraised Assets



Picture 3: Project Plan of Sripanwa Hotel Project (only in red color)



Picture 4: Land Title Deeds of Sripanwa Hotel Project (only in grey color)

Source of Chart 3-4: Charn Issara Residence Co., Ltd.



Chart 5: Lay Out Plan of the Hotel Units and Buildings of Sripanwa Hotel Project (only in blue color)

Source: Appraisal Report of C.I.T. Appraisal Co., Ltd.



Picture 1-9: Internal Area of Hotel Units of Sripanwa Hotel Project







Picture 10-12: Reception Building and Breakfast Lounge



Picture 13-17: Baba Pool Club Building, Restaurants, 7 Serviced Apartment Units



Picture 18-20: Spa and Swimming Pool



Picture 21-23: Views from the Sripanwa Hotel Project



Source of Picture 1-23: http://www.sripanwa.com and brochure of the hotel. The additional details of Sripanwa Hotel Project are shown in the Attachment 3 of this report. There are 2 drafted agreements relevant to the disposition of assets (Please see the summary of the relevant drafted agreements in the Information Memorandum Concerning the Asset Acquisition and Disposition, Clause (4.2.1) and (4.2.2), which is enclosed with the Notice to the AGM)

(a) Drafted Sale and Purchase Agreement of Immovable Properties (b) Drafted Sale and Purchase Agreement of Movable Properties

1.5.2 Acquisition of Assets including: Transaction 2.1 The Company and CIR will invest in the investment units of the Property

Fund totally at 30% of total investment units, the details are as follows: Buyer The Company and CIR Seller Property Fund to be established according to the Securities and Exchange Act B.E. 2535 Asset management company SCB Asset Management Co., Ltd. Investment units Approximately 60,000,000 units Par value per unit Baht 10 Value invested by CI Approximated Baht 300.28 million Value invested by CIR Approximately Baht 300.28 million Total value invested Approximately Baht 600.55 million Proportion of investment 30% of total investment units of the Property Fund



Transaction 2.2 CIR established a special purpose vehicle (SPV) to operate Sripanwa Hotel Project. CIR holds no less than 99.99% of total registered capital of SPV, the details of which are as follows: Specific purpose vehicle SPV Initial capital investment Baht 30 million Value invested by CIR Baht 30 million % shareholding by CIR Not less than 99.99% of total registered capital of SPV

Transaction 2.3 SPV, held by CIR not less than 99.99% of its total shares, leases the assets

(immovable and movable assets) used for the operation of Sripanwa Hotel Project which are invested by the Property Fund.

There are 4 drafted agreements relevant to these asset acquisition transactions. (Please see the summary of the relevant drafted agreements in the Information Memorandum Concerning the Asset Acquisition and Disposition, Clause (5.3), (5.4), (5.5), and (5.6), which enclosed with the Notice to AGM).

(a) Drafted Lease Agreement (b) Drafted Share Pledge Agreement (c) Drafted Undertaking Agreement (d) Drafted Shortfall Rental Payment Agreement

1.6 Total value of consideration, value of assets acquired or disposed of, the basis used to

determine the value of consideration and the conditions of the payment. Value of Disposed Assets

Transaction 1 : CIR to sell moveable and immoveable assets used for the operation of Sripanwa

Hotel Project to the Property Fund. Value of property to be sold*:

Value of immovable assets Baht 1,933.57 million Value of movable assets Baht 44.86 million

Total Baht 1,978.43 million Conditions of the payment

Immovable assets : As of the date of title registration, the Property Fund will pay the price of the property to CIR amounting to Baht 1,933.57 million; right after the said registration is carried out completely.

Moveable assets : On the date of title registration, the Property Fund will pay the price of the movable assets to be purchased to CIR amounting to Baht 44.86 million (including VAT and other costs occurring due to the transfer of such movable assets), right after the said registration and the transfer of immovable assets are carried out completely.


: Based on an appraisal value which is calculated by two independent appraisers approved by the Thai Values Association (TVA), the Valuers Association of Thailand (VAT) and the Office of the SEC. In this regard, appraisal value does not include cost of asset transfer. Two independent appraisers as mentioned are: 1) C.I.T. Appraiseal Co., Ltd. 2) Knight Frank Chartered (Thailand) Co., Ltd.

Remark: * The final settlement price shall be determined by the value of newly set up Property Fund and the rate of return which investors receive shall depend on the market condition as of the offering period of the Property Fund units. The basis used to determine the value of consideration:

Appraisers Basis Market value based on the current conditions of use

C.I.T. Appraiseal Co., Ltd. Income Approach Baht 1,818,000,000 Knight Frank Chartered (Thailand) Co., Ltd.

Income Method by using Discounted Cash Flow Technique

Baht 1,793,000,000

Value of the Acquired Assets: Transaction 2.1, 2.2, and 2.3

Transaction No. 2.1 : The Company and CIR invest in the Property Fund 30% of the total outstanding units of the

Property fund. The value of asset acquired

: Approximately Baht 600.55 million

Payment condition : Expected the payment to be made in full, at once, during the subscription period of the investment units of the property fund to be established.


: The investment value in the Property Fund is determined by the value of 30% of the total issued and offered for sale investment units of the Property Fund.



Transaction No. 2.2 : CIR establishes SPV and invests in SPV not less than 99.99% The value of asset acquired

: Not more than Baht 30 million

Payment condition : Expected the payment to be made in full, at once, on the day of registration of establishment of SPV


: The value of the shares of not less than 99.99% of the total shares of SPV which is equivalent to the value of not more than Baht 30 million.

Transaction No. 2.3 : SPV leases moveable and immovable assets from the Property Fund for the operation of Sripanwa Hotel Project.


: Approximately Baht 2,643 million

Payment condition : The total rent approximately Baht 2,643 million for the lease term of 15 years. The rental fee comprises of a fixed and a variable portion. The fixed rental fee per year is Baht 151 million for year 1 to year 5 and will be increased in year 6 onward at the rate of 10% every three years. The variable portion which is calculated according to the formular in the lease agreement will be effective from year 11 to year 15. The contract assigns the payment portion of each month.


: The value of rental fee of the assets used in the operation of Sripanwa Hotel Project, determined by comparing with the rental fees of assets used in the operation of hotel business of other property funds, with the total rental fee throughout the lease term of approximately Baht 2,643 million, while the calculation of the rental fee will be calculated according to the method as the parties may agree.

Remark: 1/ Estimated initial fund raising of the Property Fund by the Company. However, the actual size of the Property Fund shall

depend on variable factors such as Book Building, investor demands, market condition at the offering time, etc. 2/ Refer to the fixed rental fee over 15 leased years as specified in the drafted lease agreement and total estimated variable

rental fee for the year 11 - 15 based on the appraisal report of C.I.T. Appraisal Co., Ltd., which is higher than the estimated variable rental fee by Knight Frank Chartered (Thailand) Co., Ltd. The actual rental fee shall depend on various factors such as Book Building, investors demand, and the market condition at the offering period of the offering time, etc.

1.7 Plan to use the proceeds from disposal of assets and the source of fund for purchasing

of the assets The Company has a plan to use the proceeds from disposal of assets and has source of fund for purchasing of the assets as follows:

Transaction Approx. (Bt million) Transaction 1 Proceeds from the sale of Sripanwa Hotel Project 1,978.43 Use of proceeds from the sale of the assets Transaction 2.1 Invest in 30% of the Property Fund 600.55 Repay CIR’s long-term loan borrowed from financial institutions (SCB and

IBANK), which are full repayment of debt for the Sripanwa Hotel Project, and partial repayment for other CIR’s projects.

684.00

Fee for legal advisor, asset appraiser, auditor for carve out financial statement, underwriting fee, and other expenses to establish the Property Fund

51.29

Fee for registration of lease agreement (SPV portion, 1/3) and special business tax

73.66

Estimated corporate income tax from sale of the assets (including withholding tax)

142.44

Fee for issuance of “BG” for the first year 1.60 Reserve in the form of deposit to guarantee BG 80.00 Reserve for shortfall of SPV’s fixed rental fee (4 years) that may arise 100.00 Investment in new CIR’s projects 244.89 Total use of proceeds 1,978.43 Transaction 2.2 The Company plans to use cash from operations to pay for shares of SPV 30.00

Source: Information Memorandum of the Acquisition and Disposition of the Company’s Assets 1.8 Condition for the Transactions

The acquisition and disposition of assets are under the following conditions. 1) The Annual General Meeting of Shareholders No. 1/2013, to be held on April 25, 2013,

approves the acquisition and disposition of the assets and other related transactions. If in any case, the shareholders do not approve one of the above agendas, these acquisition and disposition of assets will not occur.

2) The Securities and Exchange Commission has approved the registration of the Property Fund's assets so that the Company and CIR can invest in the units of Property Funds in the total amount not exceeding 30% of total investment units of the Property Fund.



1.9 Other Information As of the date of this report of opinion of the Independent Financial Advisor, there is a

progress of operation as follows: - SCB Asset Management Co., Ltd. (SCBAM) is in process of preparation for Detailed Property

Fund and expects to file with SEC within March 2013. - In the case that the Property Fund could not be established for any circumstance, the

Company and CIR will not enter into these transactions set out in agenda 8 – 11 in the AGM, and will carry on with their businesses as usual (according to the condition to enter into the transaction, Clause 1.8, Sub-Clause 2) mentioned earlier).

2. Information of Charn Issara Residence Co., Ltd. which is an owner of the assets to be

disposed, the details of which are shown the Attachment 2 of this report. 3. Information of Sripanwa Hotel and Sripanwa Boutique Resort & Spa Hotel and Serviced

Apartment (Sripanwa Hotel Project) which are the assets to be disposed to the Property Fund and leased by SPV from the Property Fund, which are shown in the Attachment 3 of this report.



1. Objectives and Necessities of Transactions

The entering into transactions of acquisition and disposition of assets is to manage assets, liabilities and liquidity of the Company and CIR, by establishing a property fund and transferring all assets used in Sripanwa Hotel Project to the property fund. Details of the transactions are shown in Part 1 of this report. The objectives and necessities of the transactions are as follows: 1) The Company has quite high debt/equity ratio of 1.80, and financial costs of Baht 113.84 million,

or 29.31% of net profit before interest and income tax, or 53.35% of the net profit of the Company according to the financial statement for the year 2012 ending on December 31, 2012.

2) After completion of these transactions of the acquisition and disposition of assets, CIR will obtain the sale proceeds to make debt repayment at the approximate amount of Baht 684 million11 to the financial institution lending for Sripanwa Hotel Project in full, as well as debt for other CIR’s projects. As a result, assets to be sold to the Property Fund is clean and free from any obligation, and the debt/equity ratio of CIR (and of the Company according to the consolidated financial statement) will be significantly reduced. In addition, interest liability of CIR (and of the Company according to the consolidated financial statement) will also be reduced immediately. This will strengthen of CIR’s capital structure (and of the Company according to the consolidated financial statement) and increase the borrowing capacity for new real estate development projects.

3) After completion of these transactions of the acquisition and disposition of assets, CIR will receive cash from sale of the assets to the Property Fund for using in new real estate development projects without having to borrow in full amount. However, CIR may have to pay interim dividend to the Company, as well as repay loans borrowed from the Company so that the Company could use the cash received to invest in the Property Fund.

4) The sale of assets to a property fund and then arranging to manage those assets for the property fund is a fund raising process generally adopted by many listed and non-listed companies. At present, there have been more than 40 established property funds for the main purpose of reducing companies’ liabilities and debt/equity ratio without raising new equity. However, those companies still have the rights to manage the property for the remaining period of the lease agreement. The Company will receive cash from sale of assets to the property fund and use it to invest in other projects. The sale of assets to the Property Fund may occur many times in the future. So this is a cycle of the management of assets, liabilities and liquidity of the Company. Additionally, the sale of assets to a property fund and retaining the rights to manage those assets generally help the Company to increase income and profit without increasing its equity.

5) Moreover the Company must establish a Property Fund (Type 1) within 2013 because this type of Property Fund (Type 1) can be established only until January 1, 2014. Thereafter only the Real Estate Investment Trust (“REIT”) under the regulation of SEC is allowed to be established. Therefore, the Company would like to get tax benefits from the Property Fund (Type 1), including asset transfer fee at the maximum of Baht 100,000 and exemption from all the Company’s income tax levied on dividend of the Property Fund (as the listed company) and the reduction of CIR’s 50% income tax for dividend received from the Property Fund (as a limited company).

2. Comparison between the advantages and disadvantages of the transaction

2.1 Advantages and benefits of the transactions 1) The Company (according to the consolidated financial statement) can immediately

recognize 70% of the profit from sale of assets As the book value of the assets to be disposed under the financial statement of the CIR as of December 31, 2012 is Baht 905 million (with reference to the footnotes of Carve Out Financial Statement), if CIR is able to sell the assets at an approximate price of Baht 1,978.43 million, CIR will get a profit of about Baht 1,073.43 million12, or accounting profit after deducting 2 reserve items of

11

To repay financial institutions (SCB and IBANK) in full for all CIR’s long-term loans of Sripanwa Hotel Project, and in part for loans of other CIR’s projects. Consequently, all assets to be sold to the Property Fund will be clean of all obligations. 12

Please see Footnote 4. The actual profit from this sale of asset depends on the final selling price and book value of the assets as of the selling date.

Part 2: Independent Financial Advisor’s Opinion on the reasonableness of the acquisition and disposition of assets



Baht 893.43 million13. The Company (according to the consolidated financial statement) will record Baht 625.40 million of profit from this sale in 2013 (70% of Baht 893.43 million). The balance of Baht 268.03 million (30% of Baht 893.43 million) will be recorded in the year the Company and CIR sell the investment units in the Property Fund.

Recognition of profit from the sale of assets in the Company’s consolidated financial statements

(Accounting Profit)

Profit attributable to the Company’s shareholders

(80.04%)

Profit attributable to minority shareholders

(19.96%)

Total

(100%) Selling price of the assets 1/ 1,978.43 Book value of the assets as of December 31, 2012 2/ 905.00 Estimated tax profit from sale of the assets (in comparison with the book value as of the end of 2012)3/

1,073.43

Less: reserve for shortfall of SPV’s fixed rental fee (4 years) that may arise

100.00

Less: reserve in the form of deposit for BG 80.00 Accounting profit from sale of the assets, after deducting 2 reserve items 5/

715.10 178.33 893.43

Recognition of profit from sale of the assets in 2013 473.82 (53.034%6/ * 893.43)

151.58 (16.966%7/ * 893.43)

625.40 (70%5/ * 893.43)

Recognition of profit from sale of the assets when CI and CIR sell all 30% of investment units in the Property Fund (15% each)

241.28 (27.006%6/ * 893.43)

26.75 (2.994%7/ * 893.43)

268.03 (30%5/ * 893.43)

May recognize additional profit from the reversion of the 2 aforementioned reserve items (Baht 100 + Baht 80 = Baht 180 million), if they are not used after the guarantee period lapses.

144.07 (80.04% * 180.00)

35.93 (19.96% * 180.00)

180.00

Remark: 1/ Final selling price is determined by the size of the Property Fund to be established, and the yield of the Property Fund

depends on the market conditions during which the investment unit of the Property Fund is on sale. 2/ From book value of assets as of December 31, 2012, specified in the notes to Carve Out financial statements. 3/ Profit from sale of the assets will depend on the final selling price and the book value of the assets on the transaction date. 4/ Only accounting profit. For income tax purpose, CIR has to calculate income tax based on the profit of Baht 1,073.43

million. Actual profit from sale of the assets has to be included in calculating CIR’s corporate income tax at the end of the year, of which related expenses are tax-deductible.

5/ According to the opinion of the auditor, the Company can recognize profit from sale of the assets (in the consolidated financial statements) in 2013 for only 70% since it has to be deducted by the combined 30% investment in the Property Fund. The balance of the profit will be recognized when CI and CIR sell their 30% holding (15% each) in the Property Fund.

6/ 27.006% = proportion of CI’s investment in the Property Fund (15%) + [ proportion of CIR’s investment in the Property Fund (15%) * proportion of CI’s holding in CIR (80.04%) ]

53.034% = 80.04% - 27.006% 7/ 2.994% = [ proportion of CIR’s investment in the Property Fund (15%) * proportion of minority’s holding in CIR (19.96%) ] 16.966% = 19.96% - 2.994%

CIR is obligated to pay corporate income tax from this transaction at a rate of 20% of the profit gained. However, at the end of 2012, CIR had accumulated loss of Baht 244.53, all of which could be used to reduce income tax obligation. Therefore, CIR’s income tax burden from this transaction is approximately Baht 142.44 million (after deduction of estimated expenses and tax).

Calculation of tax profit and estimation of CIR’s corporate income tax (according to CIR’s financial statements)

Amount (Baht million)

Assets to be sold to the Property Fund (Book value as of December 31, 2012) Land and land improvement

209

Building, building improvement, and main facilities system of the building 667 Furniture, fixtures, vehicles, and other equipment 29 Total 1/ 905 Net selling price 2/ 1,978.43 Estimated taxable profit from the sale of assets (in comparison to the book value as of the end of 2012)3/

1,071.43

Less: estimated tax accumulated loss at the end of 2012: 244.53 million 244.53 Less: estimated expenses expected to be incurred from these transactions 4/ 116.70

Estimated profit from the sale of assets computable for corporate income tax 712.20 Estimated corporate income tax of CIR 142.44

Remark: 1/ Reference to the book value of assets as of December 31, 2013, which is stated in the Notes to the Carve Out Financial

Statement. 2/ The final selling price will be determined on value of Property Fund (Fund Size) to be established and a rate of return to the

investor (Fund Yield) that is subject to market condition during offering period of the Property Fund to be established. Actual profit from sale of the assets depends on the final price and book value of the assets on the transaction date.

13

Please see Footnote 5. This amount is the accounting profit. The full profit of Baht 1,073.43 million is used to calculate income tax after deducting expenses.



3/ The figure is derived from the selling price of about Baht 1,978.43 million, less net book value of the assets to be sold as of December 31, 2013, which is stated in the Notes to the Carve Out Financial Statement: Baht 905 million.

4/ The expenses actually incurred depends on the final selling price, size of the Property Fund to be established, underwriting fee of the Property Fund, tax as calculated by the Department of Land, and any other relevant taxes and expenses actually incurred. (Expense to register leasehold right is responsible by SPV, the lessee. CIR may recognize this expense in its consolidated financial statements as SPV is a subsidiary of CIR.

2) The Company and CIR will obtain cash immediately, resulting in higher liquidity, and

lower debt/equity ratio After disposition of assets, CIR will obtain cash from the Property Fund immediately after entering into the disposition of assets. It is expected that the cash flow will be increased about Baht 244.89 million (which is net cash after deduction for investment amount in the Property Fund, CIR’s debt repayment to financial institution, relevant tax and fee, provisions and any other relevant expenses approximately.). CIR then is able to use the said money in another real estate development project according to the Company’s investment plan at once and reduce the borrowing in the future, resulting in lower project development/financial costs. (CIR may pay interim dividend to the Company, as well as repay loan borrowed from the Company, so that the Company will be able to use such money to invest in the Property Fund.) CIR will use part of cash received to repay its loans from financial institution creditors (SCB and IBANK), which is the repayment of whole debt of the Sripanwa Hote Project and part of debt of other projects, totaling about Baht 684 million. As a result, CIR (and the Company, on a consolidated basis) will have lower debt/equity ratio in comparison to the latest financial statement as of December 31, 2012 as follows:

(Unit: Times) Consolidated Financial Statement Financial Statement of CIR Before debt

repayment After debt repayment

Before debt repayment

After debt repayment

Total Debt to Equity Ratio 1.80 1.28 7.03 3.15 Loans from financial institutions to Equity Ratio 1.04 0.52 4.73 0.85

3) Increase the capacity for the future loan

As CIR has loan liabilities with commercial bank and quite high financial expenses: short term loan and long term loan from commercial bank at the amount of Baht 844 million, approximately at the end of the year 2012 and financial liabilities in 2012 at the amount of Baht 74 million, CIR then will use the money received from these transactions in long-term debt repayment to the financial institution creditors at the amount of Baht 684 million. The debt, financial expenses and debt/equity ratio of CIR (and of the Company according to the consolidated financial statement) will be reduced. CIR (and the Company according to the consolidated financial statement) will become more financial strength. Moreover, the debt/equity ratio of CIR will be reduced and CIR will have better capacity to obtain additional loan to be used in the extension of Sripanwa Hotel Project and any other potential projects, accordingly.

4) Property Fund as a channel for the future fund raising of the Company and CIR As the investment in development of real estate project need quite large fund which has 2 main sources: increase of registered capital and/or loan. Then the disposition of assets of Sripanwa Hotel Project to the Property Fund will cause CIR (and the Company according to the consolidated financial statement) have cash remained and available for investment in another CIR’s real estate development project and the loan become less without necessity for increase of its capital. Additionally, the Company will establish new Property Fund or REIT in the future for additional fund raising or sale of another project as well as the extension part of Sripanwa Hotel Project in the future to the Property Fund to be established at this time or to REIT newly established in the future. The Company may submit an application for adjustment of the Property Fund (Type 1) to be established at this time to become REIT in the future for increasing of investment in real estate project.

5) The Company still recognizes income from Sripanwa Hotel Project as the same throughout the 15-year lease term

As SPV enters into the lease agreement with the Property Fund for a long term, the Company will recognize the income from Sripanwa Hotel Project as the same. Then the Company’s operating income in the consolidated financial statement and CIR’s financial statement will also include the income from Sripanwa Hotel Project throughout the lease term as the same.



Moreover, the Company and CIR will have 30% combined investment fund in the Property Fund to be established. The Company and CIR will retain directly or indirectly operating income from Sripanwa Hotel Project as the same (through the investment in the Property Fund) while there is opportunity to recognize additional income from the investment in new real estate development project as well.

6) The Company and CIR continue being the management of Sripanwa Hotel Project throughout the lease term

CIR still is the management of Sripanwa Hotel Project as the same throughout the lease term through SPV which will enter into a long lease term agreement with the Property Fund. The Company and CIR retain the management authority at Sripanwa Hotel Project as the same throughout the lease term. (However SPV will have liability to make rental payment to the Property Fund according to the lease agreement.) In any case, Sripanwa Hotel Project is considered as the first luxury resort of the Company and CIR that can enhance a reputation to the Company and CIR and open the door to tourists either in the territory or abroad. The location of Sripanwa Hotel Project is in the province which is an important tourist attraction of Thailand with highly potential growth. The Company and CIR has experienced in administration and management of Sripanwa Hotel Project well accepted by the tourists either in the territory or abroad.

7) Both of the Company and CIR investing totally 30% of the Property Fund will obtain return on investment

After completion of the establishment of the Property Fund and approval from SEC, the Company and CIR will hold investment units in the Property Fund at 15% each. So that the Company and CIR can keep ownership in the disposed assets totally 30% and have an opportunity to get return on investment by dividend payment and from price deviation (Capital Gain) from selling the investment units in the future at the price higher than initial investment fund, but in accordance with the regulations of SEC the Property fund is required to pay dividend to investor at least 90% of investment amount. Moreover the Company will be exempted from income tax on dividend received from the investment units at all (as a listed company) and CIR will be exempted from 50% of income tax on dividend received (as a limited company) In accordance that while preparing this Opinion of Independent Financial Advisor, the Property Fund has not been established, it is unable to know real return on investment. However, the Independent Financial Advisor estimates the return on investment in the Property Fund as dividend yield based on the assumption set out in Part 3.2 of this report of the Independent Financial Advisor, expectedly as much as 7% per annum. In comparison with the dividend of another property funds in the field of hotel business that are listed in the SET, including MFC Amazing A-la Andaman Property Fund (“M-AAA”), Mercure Samui Property Fund (“MSPF”), Centara Hotel & Resorts Leasehold Property Fund (“CTARAF”), Dusit Thani Freehold and Leasehold Fund (“DTCPF”), and Quality Hospitality Leasehold Property Fund (“QHOP”) (source from www.setsmart.com as of February 23, 2013)14, it is about 5.57%-8.85% per annum.

8) Have opportunity to increase profit (potential upside gain) from the management of the assets leased by SPV throughout the lease term and to get profit from deviation of the price (potential capital gain) from investment in the Property Fund

In accordance that SPV’s rental payment to the Property Fund are mostly fixed rate throughout the lease term and the variable rate is added only in the 11th – 15th years of the lease term, SPV still has a chance to get more profit (potential upside gain) from management of the assets rented by SPV throughout the lease term if it fails to manage Sripanwa Hotel Project to have income higher than the rental payment and operating expenses. Regardless of the return on investment in proportion to investment fund, the Company and CIR have an opportunity to obtain profit from price deviation (potential capital gain) because of the

14

Total return from investment in the Property Fund comes from 2 parts, namely (a) dividend yield, and (b) capital gain. The Independent Financial Advisor is unable to assess the expected total return from the investment in the Property Fund because it doesn’t know the future land price appreciation. It estimates future NAV by using Terminal Value Method instead, which may not yield the same value as the future NAV from future land price appreciation. In addition, the comparison of returns from various property funds cannot be made by using total return as the indicator because capital gain for each property fund varies widely, as a result of the difference in market prices. Therefore, the Independent Financial Advisor decides to compare the Property Fund with other funds based only on dividend yield.



increase in net asset value (“NAV”) of investment units in the future. Especially, the property fund which own the title of invested assets (freehold) in comparison with the property fund which own the leasehold right of the invested assets (leasehold) because asset value will reduce as per the remained duration of lease term and will be Baht 0 at the termination of lease agreement.

2.2 Disadvantages and Risks from Entering into the Transactions

1) SPV is obliged to rent the assets of Sripanwa Hotel Project and pay rental at least as much as the fixed rental rate payable to the Property Fund throughout 15-year lease term

For the restriction in asset management of the Property Fund, the Property Fund is unable to manage the assets by itself. Therefore, CIR establishes SPV for the main purpose of renting and managing assets of the Property Fund for a period of 15 years. The Lessee agrees to pay rental to the Property Fund in consideration of the use of the leased property. The rental will be fixed for the 1st -15th years at Baht 151-221 million. The variable rental will be effective for the 11th -15th years at 30% of income less fixed rental rate and expenses. SPV has the right to renew the lease term for further 15 year at each time. Therefore, the expenses of SPV (and of the Company and CIR according to the consolidated financial statement) will be increased at least as much as the fixed rental payment made to the Property Fund. However, although SPV (and the Company and CIR according to the consolidated financial statement) will have more burden on rental payment, but the expenses will be reduced for depreciation of assets and reduction of financial expenses, that are about Baht 60 million per year and Baht 50-55 million per year, respectively. (Reference to numerical basis in 2012). SPV will obtain more income from dividend to be payable for investment unit holding of the Property Fund. Additionally, the Company takes a risk from uncertainty in renewal of the lease agreement after the 15th year.

2) The Company and CIR have burden to guarantee SPV’s performance under the lease agreement made with the Property Fund during the first 5 years.

Subject to the Undertaking Agreement between CIL and the Property Fund, in order to assure the rental payment to the Property Fund, CIR agree to provide the Property Fund with a security valuing at any time Baht 80 million in cash and/or commercial bank guarantee all along the first 5 years. After termination of secured period, if the Property Fund considers that the operation of SPV may not be affordable for SPV’s liability in rental payment under the lease agreement, the Property Fund may ask CIR and/or person and/or any juristic person as approved by the Property Fund to place additional security valuing at any time as much as the difference between the operation results of SPV and the capacity for rental payment of that year. But when SPV has better operation results in any year only from the assets invested by the Property Fund as much as or over the rental to be payable in that year, the security will be expired at once. All along the secured period, if SPV and CIR cannot make rental payment to the Property Fund according to the lease agreement, the Company will be obliged to indemnify the Property Fund against any shortfall of the rental payment. However, the Company and CIR have the right to allocate some of the assets sale proceeds as a provision for performance guarantee under the lease agreement between SPV and the Property Fund, if it will not affect operating cash flow of the Company and CIR.

3) The Company and CIR are obliged to invest in units of the Property Fund Entering into these transactions, the Company and CIR must invest in units of the Property Fund at total ratio of 30% nearly amounting to Baht 600.55 million on the registration date of the Property Fund. The Company and CIR have to maintain unit holding ratio in the Property Fund for a period of 7 years. The Company and CIR are restricted from using the said sum in another real estate development project that may be better than the investment in Property Fund.

4) CIR will immediately have tax burden and expenses in relevance to these transactions and tax burden from profit gained from the sale of assets in 2013

CIR (and the Company according to the consolidated financial statement) will have burden on tax and expenses relevant to the transaction, as well as the tax on profit from the sale of assets in 2013 financial statement. The essential expenses in relevance to the transaction will be inclusive of the ownership transfer registration fee in case of immovable assets, lease registration fee, special business tax and auditor fee for Carve Out Statement, financial advisor fee, underwriting fee, legal advisory fee, appraisal fee for 2 independent appraisers and any other expenses relevant to the



transaction. The following is a separation between the burden of the Company, Subsidiary and the Property Fund.

Type of Tax and Expenses Description Tax and expenses payable by CIR (and the Company according to the consolidated financial statement) Specific Business Tax Calculated at 3.3% of value of the assets sold (exclusive of movable asset value) Juristic Person Income Tax Calculated at Baht20% of net profit and payable as per fiscal year

Withholding tax at the rate of 1.00% of the value of immovable assets sold will be deductible on the ownership transfer date.

Leasehold Right Registration Fee1/ One-third of fee for registration of leasehold right although SPV is the one who pay full registration fee to the Department of Land

Other expenses Consulting fee for establishment of the Property Fund, Financial advisory fee and another expenses for establishment of the Property Fund

Expenses payable by the Property Fund2/ Ownership transfer registration for immovable assets

Calculated at 0.01% of the appraisal value of the Department of Land at the maximum of Baht 100,000

Leasehold Right Registration Fee1/ Two-thirds of fee for registration of leasehold right although SPV is the one who pay full registration fee to the Department of Land

Permission Fee Permission fee of SEC and SET Value added tax and application fee Calculated at 7.00% of the permission fee Value added tax for movable assets transferred

Calculated at 7.00% of movable assets sold to the Property Fund

Remarks: 1/ Fee for registration of leasehold right will be calculated at 1.10% of total amount of rental payable throughout the lease term. CIR and the Property Fund agree to share in these expenses 1:3, respectively according to the draft agreement relevant thereto.

2/ The selling price about Baht 1,978.43 million is from the value of the Property Fund (Fund Size) to be established that is estimated by the Company as much as Baht 2,001.84 million – Ownership transfer registration fee for immovable assets – leasehold right registration fee (two-thirds) – permission fee – value added tax on permission fee – value added tax on selling price of movable assets to be sold to the Property Fund.

In any case, the final selling price is determined by value of the Property Fund (Fund Size) to be established and rate of return to the investor (Fund Yield) that is subject to market condition during offering period of the Property Fund to be established

5) Cash which CIR can use for new real estate development project will only amount to Baht

244.89 million CIR will have only Baht 244.89 million of cash available for investment in new real estate development project because the Company and Subsidiary need to use the proceeds received therefrom for establishment of the Property Fund, relevant taxes and expenses as well as provisions for performance security under the connected agreements at the approximate amount of Baht 448.99 million. Therefore, CIR will have money available for new development projects about Baht 244.89 million only. The details of estimation are as follows:

Cash items Amount (Baht:million) Proceeds received from the sale of assets 1,978.43 Less (1) Legal advisory fee, asset appraisal fee, auditor fee for Carve Out Statement

Underwriting Fee and other expenses for establishment of the Property Fund 51.29

(2) Leasehold Right Registration Fee for SPV (one-third) and special business tax 73.66 (3) Estimated income tax on the profit from the sale of assets (withholding tax included) 142.44 (4) Bank guarantee fee (“BG”) only for the first year 1.60 (5) Provision as deposit for security of BG 80.00 (6) Provision for Shortfall of SPV’s fixed rental payment (4 years), if incurred 100.00 (7) Investment in the Property Fund at ratio of 30% 600.55 (6) Debt repayment to financial institution creditors (SCB and IBANK): full repayment of

debt for the Sripanwa Hotel Project, and partial repayment of debt for other CIR’s projects

684.00

Estimated cash available for further investment in another real estate development project

244.89

Remark: Item (1) – (6) are estimated amount that may be changed according to various factors such as Book Building, requirement of investors, market condition during offering period of the Property Fund, business condition as actually become in the future, and tax as calculated by the Department of Land, etc. Value Added Tax of the selling price of movable assets is about Baht 3.14 million. It is not an expense of CIR and exclusive from the remained cash set out in this table because the Property Fund will pay CIR in cash about Baht 1,981.57 million, inclusive of value added tax of the movable assets (Baht 1,981.57 million – Baht 1,978.43 million = Baht 3.14 million).

6) SPV still has industry and operational risk as the same SPV take long term lease of Sripanwa Hotel Project for management. The Company and Subsidiary still retain operational risk as the same throughout its management period. The hotel



business in Phuket is quite high competitive. In the past the negative events in the territory make an impact on hotel business because it affected the confidence and inbound rate of foreign travelers. Therefore, the Company and Subsidiary should closely follow up the circumstances that may affect their business and adjust the strategy and marketing pan continuously so that they can take risk management appropriately, reduce any adverse impact to its operation.

7) Risk from uncertainty in establishment and offering of the Property Fund As on the preparation date of this Opinion of the Independent Financial Advisor, the Company has not finished its preparation for Detailed Property Fund specifications. It is expected that the filing for establishment of Property Fund with the SEC will be in March 2013 and in the offering will be completed in July 2013. Therefore, it is still risk in establishment and offering of the Property Fund. However, the fact that the Company and CIR, the developers of Sripanwa Hotel Project, invest totally 30% of investment units and take a lease on assets of Sripanwa Hotel Project for further management may cause a level of confidence to investors and encourage success in offering of the investment units.

8) Risk from uncertainty in the usage of cash remained from the sale of assets scheme As the Company and CIR have not disclosed clearly how to use the cash remained (from the sale of assets after deduction of all taxes and expenses) in another real estate development project that would be submitted to the Board of Directors and/or CIR for approval again. The shareholders then do not know information about such another real estate development project of CIR, return on such investment and payback period. 3. Comparison between the advantages and disadvantages if not entering into the

transactions

3.1 Advantage and benefit if not entering into the transactions 1) CIR, still being an owner of the immovable and movable assets of Sripanwa Hotel project,

freely manages its own assets. 2) CIR has absolute power in management and use of assets in Sripanwa Hotel Project

without regarding to the conditions of property fund 3) CIR has no additional cost for entering into transactions such as leasehold right

registration fee in respect of SPV, special business tax amounting to Baht 73.66 million, income tax from the sale of assets nearly amounting to Baht 142.14 million, legal advisory fee, appraiser and auditor fees, underwriting fee and any other expenses for establishment of a property fund approximately Baht 51.29 million, etc.

4) Fixed assets in the consolidated financial statement of CI and CIR remain the same. The value of assets is reduced by virtue of depreciation only (in case its price is not changed.). Moreover, the Company is able to evaluate new value of assets (revaluation), especially value of the land and building subject to the Accounting Standard No. 16 because the appraisal value of the land and construction by the independent appraisers are higher than their book value.

5) The Company and CIR are able to extend business to neighboring area of old Sripanwa Hotel and carry on Sripanwa Hotel Project Phase 2 and 3 (present project is Phase 1) (there are all 1-3 phases.) which the Company and CIR plan to make investment in the future without necessity to give the right in Property Fund in exchange of purchasing assets nor notify the Property Fund of the matter.

3.2 Disadvantages and Risk if not entering into the Transactions

1) Loss an opportunity to offer assets in Sripanwa Hotel Project for sale at the price which is more than appraisal price of the independent appraisers and miss an opportunity to get tax benefit from transfer of assets to the Property Fund and exemption from income tax on dividend on investment unit of the Property Fund, the details of which have already described. The establishment of the Property Fund (Type 1) is allowable until January 1, 2014.

2) CIR will lose a chance to get over cash flow from entering into transactions for further development of another project of CIR.

3) The Company or CIR must raise fund in other channels to get money for extension of the project as scheduled.



4) CIR still has liabilities and interest payable as the same that will affect the capacity to grant project finance for another real estate development project of CIR in the future.

5) Loss an opportunity to encourage for material growth of management results and shareholders’ return on equity from new real estate development project of CIR without increasing the capital and the Company and CIR will be unable to grow up as planned.

3.3 Impact to the consolidated financial statement of the Company from performing

these transactions of acquisition and disposition of assets Entering into the transaction of acquisition and disposition of assets of CIR by selling

Sripanwa Hotel Project to a property fund to be established, the Company and CIR will invest in the investment units of the Property Fund totally 30%. Subsequently, the Company will establish SPV to have CIR hold its 99.99% of all distributed shares of SPV. Finally, SPV will take a lease on the assets sold to the Property Fund and will continue operating the business. This will affect the consolidated financial statement of the Company as follows: 1) In respect of assets, it is estimated that the value of fixed assets in categories of land, building

and equipment will be reduced as much as the book value of Sripanwa Hotel Project: Baht 905 million, but the value of the following assets will be increased: - Investment in investment unit at the amount of Baht 600.55 million; - Deposit account with guarantee undertaking (provision for bank guarantee and provision for

fixed rental payment shortfall (4 years) at the amount of Baht 180.00 million; - Cash/banking deposit around Baht 244.89 million (which is adjustable as per actual expenses

incurred) 2) In respect of liabilities, it is expected that the long-term loan from financial statements will be

settled about Baht 684.00 million. Then the liabilities will be reduced, accordingly. 3) In respect of shareholder equity, as the selling price of assets is quite higher than book value of

assets as of transaction date. Therefore, the Company will obtain a total profit from this asset sale of Baht 1,073.43 million15, or an accounting profit from sale of the assets after deducting 2 reserve items of Baht 893.43 million16.

The Company (in the consolidated financial statements) will record Baht 625.40 million (70% of Baht 893.43 million) profit from sale of the assets in 2013, and the balance of Baht 268.03 million (30% of Baht 893.43 million) will be recorded when the Company and CIR sell the investment in the Property Fund (Please see more details in Part 2, Section 2.1, Clause 1), on Page 30 – 31).

4) From overview this will likely not much affect the transaction. The transaction that may be changed is as follows: - In respect of income, the Company will have additional income from dividend payable on

investment unit and remain another income as the same. - For expenses increased from rental payment that consist of the fixed rate for the 1st – 15th

years approximately Baht 151-221 million per year and the variable rate for the 11th -15th years

- The expenses are reduced from (a) less financial expenses about Baht 50-55 million and (b) depreciation value of the sold assets about Baht 60 million per year (Reference to numerical base in 2012

15

Please see Footnote 4. 16

Please see Footnote 5.



4. Conclusion of the Independent Financial Advisor’s Opinion on reasonableness of these acquisition and disposition of assets

Entering into these transactions of acquisition and disposition will be benefit to the Company

according to the consolidated financial statement as follows: (1) Profit from sale of the assets of about Baht 1,073.43 million, or accounting profit after deducting 2

reserve items of about Baht 893.43 million. The Company (in the consolidated financial statements) will record Baht 625.40 million (70% of Baht 893.43 million) profit from sale of the assets in 2013, and the balance of Baht 268.03 million (30% of Baht 893.43 million) will be recorded when the Company and CIR sell the investment in the Property Fund (see more detail in Part 2, Section 2.1, Clause 1), Page 30 – 31). (2) The Company (according to the consolidated financial statement) will immediately obtain cash

and be able to make debt repayment to the financial institution creditors providing loan for Sripanwa Hotel Project. This will reduce financial expenses and debt/equity ratio, but increase strength to the Company for financial structure and capacity to have additional loan in the future.

(3) The Company (according to the consolidated financial statement) retains cash in hand to be usable in another potential real estate development project without requirement for capital increase. Moreover, the Company has an opportunity to have income and profit increased as a result of such new project of CIR.

(4) The Company (according to the consolidated financial statement) still (according to the consolidated financial statement) continues being the management of Sripanwa Hotel Project throughout the lease term and realizing operating income from Sripanwa Hotel Project as the same throughout the lease term.

(5) The Company (according to the consolidated financial statement) will obtain the return on investment in investment unit of the Property Fund. Provided the property Fund is established by January 1, 2014, the Company will be exempted from income tax on dividend payable on investment unit of the Property Fund and CIR will be exempted from 50% of income tax on dividend as tax benefit of the Property Fund. Additionally, this is a new channel of fund raising in the future through the Property Fund and/or REIT.

(6) To have an opportunity to obtain more profit (Potential Upside Gain) from management of the rented assets of SPV throughout the lease term and profit from price deviation (Potential Capital Gain) from investment in the Property Fund.

Although the Company (according to the consolidated financial statement) still has obligation

to make rental payment for Sripanwa Hotel Project to the Property Fund throughout the lease term; to guarantee SPV’s performance under the lease agreement between SPV and the Property Fund during the first 5 years and burden on tax and expenses in relevance to these transactions in 2013, but the return on transactions will cause the Company (according to the consolidated financial statement) have cash left after tax payment and relevant expenses and provisions approximately Baht 244.89 million that will be available for investment in another real estate development project of CIR. In respect of operating risk in hotel business in Phuket (Industry & Operational Risks), it is the same which the Company and CIR have, regardless of these transactions. After considering objectives and necessity in entering into these transactions together with the advantages, disadvantages, benefits and risks incurred, the Independent Financial Advisor if of the opinion that these transactions of acquisition and disposition are reasonable.



Part 3: The Independent Financial Advisor’s Opinion concerning the reasonableness of prices and conditions

Part 3.1: The Independent Financial Advisor’s Opinion regarding the appropriateness of the selling price of the disposing assets of Charn Issara Residence Co., Ltd.

The Board of Directors Meeting No. 2/2013, held on March 14, 2013, has passed a resolution

to propose for approval to the Annual General Meeting of the Shareholders No. 1/2013, tol be held on April 25, 2013, concerning the disposition of assets of Charn Issara Residence Co., Ltd. (“CIR”), in which the Company owns 80.04 %. The disposing assets (immovable and movable assets) are using for the operation of Sripanwa Hotel and Sripanwa Boutique Resort and Spa Hotel and Serviced Apartments (“Sripanwa Hotel Project”) where the ownership of the disposing assets will be transferred to the Property Fund to be established (the “Property Fund), and

CapAd evaluated the appropriateness of the value of the disposing assets of CIR, which are movable and immovable property used for the operation of Sripanwa Hotel Project (collectively called “the disposing assets” or “Sripanwa Hotel Project”) by using information obtained from the Company and CIR, interviews with managements of the Company and CIR, and other publicly-disclosed information, such as Form 56-1, audited and reviewed financial statements, the Carve-out Financial Statements of Sripanwa Hotel Project operating under CIR as of December 31, 2012, audited by Ernst & Young Office Limited dated March 1, 2013, property appraisal reports, financial information from various websites, and information from the SEC’s website (www.sec.or.th), and the SET’s website (www.set.or.th).

However, CapAd renders its opinion based mainly on the truth and completeness of those information and documents at present. Therefore, any change of such information may significantly affect business operations of Sripanwa Hotel Project as well as the shareholders’ decision.

In consideration the appropriateness of the selling price, CapAd has considered the selling price of Baht 1,978.43 million basing on the estimation of the Company. However, the final selling price shall be determined by the fund size and the target return of the Property Fund of which influenced by the prevailing market condition at the launching of the Property Fund.

CapAd applied 6 approaches in evaluating the fair value of Sripanwa Hotel Project, namely: (1) Book Value Approach (BV) (2) Adjusted Book Value Approach (ABV) (3) Market Value Approach (4) Price to Book Value Ratio Approach: P/BV Ratio (5) Price to Earnings Ratio Approach: P/E Ratio, and (6) Discounted Cash Flow Approach (DCF) CapAd evaluated the fair value of Sripanwa Hotel Project by applying various approaches

above mentioned. However, CapAd has not applied (a) Market Value Approach to evaluate the fair value of Sripanwa Project since CIR, who is the owner of Sripanwa Hotel Project, is not a listed company in any exchanges and there shall be no reference market value; and (b) Price to Book Value Ratio Approach because CIR will dispose only moveable and immovable property used for the operation of Sripanwa Hotel Project, and CIR has not prepared Balance Sheet of Sripanwa Hotel Project only. Notes to financial statements in Crave-out Financial Statements as of December 31, 2012 which was audited by an auditor approved by the SEC, have shown only the book value of disposed assets, and the IFA could not reasonably determine the equity value of Sripanwa Hotel Project only. Therefore, CapAd could not compare the equity value of Sripanwa Hotel Project to the P/BV Ratio of comparable SET-listed companies with similar business with Sripanwa Hotel Project. Thus, the fair value of Sripanwa Hotel Project could be evaluated by applying the remaining approaches as summarized below: 1. Book Value Approach

This approach determines the value of moveable and immovable property used for the operation of Sripanwa Hotel Project at a certain period. In this case, the calculation based on the net book value of the disposed assets as shown in the notes to financial statements of the Carve-out Financial Statements of Sripanwa Hotel Project in which operated under CIR as of December 31, 2012, audited by an auditor approved by the SEC, and was a latest financial statement. The summary of fair value of Sripanwa Hotel Project is as follows:



(Unit: Baht million) Land 209 Building 665 Building improvement 2 Furniture, fixtures and office equipments 16 Vehicles 13 Total 905

Source: Financial report and information only for the operation of Sripanwa Hotel Project under CIR was prepared by Ernst & Young Office Limited (EY), dated March 1, 2013. (“Carve Out Financial Statement”)

Remark: * All figures in the above table may slightly differ from those in internal financial statements of CIR, which was audited by the Company’s auditor (EY) because of rounding. The fair value of the disposed assets used for the operation of Sripanwa Hotel Project based

on this approach is equal to Baht 905 million, which is Baht 1,073.43 million lower than the selling price or 54.26% below the selling price 2. Adjusted Book Value Approach

By this approach, CapAd has considered the value of the disposed assets based on the net book value of the disposed assts as shown in the notes to financial statements of the Carve-out Financial Statement of Sripanwa Hotel Project operating under CIR as of December 31, 2012, audited by an auditor approved by the SEC, and adjusted by the items that may reflect the actual value of assets such as unrealized gain or loss from assets revaluation. Details are as follows;

Assets Appraisal The Company appointed 2 independent property appraisers to appraise the value of land,

buildings and constructions of Sripanwa Hotel Project, namely, Knight Frank Charter (Thailand) Co., Ltd. (“the Independent Property Appraiser No. 1” or “Knight Frank”) and C.I.T. Appraisal Co., Ltd. (“the Independent Property Appraiser No. 2” or “Colliers”). Evaluation results of those 2 appraisers could be summarized as follows;

2.1 Knight Frank Chartered (Thailand) Co., Ltd. According to the appraisal report of “Sripanwa Hotel Project”, dated March 15, 2013, prepared

by Knight Frank Chartered (Thailand) Co., Ltd., an independent property appraiser approved by the SEC, the objective of these appraisal reports was to provide the opinion on the market value for the existing use of the appraised assets for public purpose.

Scopes of this appraisal report include land and building and constructions of Sripanwa Hotel located at 88/11-16, 20-21, 31, 37, 56-60 and 71-93 Moo 8 in Sripanwa Phuket Project, next to road in Sripanwa Phuket Project and next to Aow Makham – Cape Panwa Road (highway No. 4129) km. 3+300, Vichit, Muang, Phuket. Details of the valuation are as follows;

2.1.1 Land Knight Frank evaluated the plots of land where Sripanwa Hotel Project situates and belongs

to CIR, consisted of Nor Sor 3 Kor for 16 plots with the total area of 21 rai 2 ngarn 55 square wah located at Vichit, Muang, Phuket. Details of the land are as follows; No. Nor Sor

3 Kor No.

Lot No.

Book/ Page

Area Usage under current conditions

Rai Ngarn Sq. Wah

Hotel buildings, villas and service apartments

11/ 321 2 4Kor/21 10 3 65.00 Luxury Villa Type A –B and Pool Club Building (Serviced apartment 7 rooms) No. 88/71-91

21/ 1725 27 18Kor/25 0 2 20.00 Pool Villa Type PV 01-02 No. 88/11-12

31/ 1726 28 18Kor /26 0 2 25.00 Pool Villa Type PV 03-04 No. 88/13-14



61/ 1771 14 18Khor/21 0 1 62.00 Family Suite Type FS 20 No. 88/60

71/ 1773 16 18Khor/23 0 1 60.00 Family Suite Type FG 19/1 and 19/2 No. 88/58-59

81/ 1915 44 20Kor /15 0 0 52.00 Family Suite Type FS 01/1 No. 88/31

91/ 1827 43 19Kor /27 0 1 18.00 Family Suite Type FS 05 No. 88/36-37

101/ 1828 44 19Kor /28 0 1 45.00 Family Suite Type FS 12 No. 88/57

111/ 1829 45 19Kor /29 0 1 25.00 Family Suite Type FG 13 No. 88/56

121/ 1864 28 19Khor/14 1 3 11.00 Luxury Villa Type A –B No. 88/82,88/87and 88/92-93

Total area of hotel buildings, villas and service apartments

17 0 39.00



No. Nor Sor 3 Kor No.

Lot No.

Book/ Page

Area Usage under current conditions

Rai Ngarn Sq. Wah

Services and facilities

131/, 2/ 350 4 4Kor/50 1 3 97.00 Sport Center and Staff Houses

141/ 1858 48 19Kor/8 0 2 42.00 Spa Building

151/ 1860 20 19Khor/10 1 0 50.00 Spa Building

161/ 1888 54 19Khor/38 0 3 27.00 Reception / Baba

Total area of services and facilities 4 2 16.00

Total areas 21 2 55.00

Remark: 1/ Land No. 1- 16 are mortgaged to financial institutions. 2/ Knight Frank found that some parts of the property (Nor Sor 3 Kor. No. 4) is under registered servitudes in term

of the right of way for enter-exit and infrastructures for adjoining land.

2.1.2 Building and Construction No. Building No. of

Bldg. Area per unit

(sq.m.) Total Area

(sq.m.) 1 1 Bedroom Pool Villa (Phase 1) 3 237.040 711.120

2 2 Bedrooms Pool Villa (Phase 1) 5 290.070 1,450.350

3 1 Bedroom Family Suite (Phase 2) 1 177.060 177.060

4 2 Bedrooms Family Suite (Phase 2) 2 186.435 372.870

5 2 Bedrooms Family Suite (Phase 2) 3 382.000 1,146.000


7 Luxury Villa Type A - 1 Bedroom (Phase 3) 10 275.750 2,757.500

8 Luxury Villa Type A Slope - 1 Bedroom (Phase 3) 1 348.570 348.570

9 Luxury Villa Type B - 2 Bedrooms (Phase 3) 6 273.450 1,640.700


11 Reception and Baba (Dining Area) 1 887.950 887.950

12 Spa Building 1 2,109.700 2,109.700

13 Pool Club 1 2,521.180 2,521.180

14 Staff House 1 334.300 334.300

15 M&E Building and Staff House 1 1,129.900 1,129.900

16 Tennis Court 1 1,940.400 1,940.400

Total 44 - 19,923.22

2.1.3 Appraisal Methodology Knight Frank applied the Income Method by using Discounted Cash Flow Technique to

indicate the market value for existing use of the appraised assets of Sripanwa Hotel Project as the assets are considered income-producing property. Knight Frank also assumed that the assets shall be continuously used in its current usage conditions. In addition, Knight Frank applied Cost Method as a check method.

2.1.3.1 Income Approach – Discounted Cash Flow Method This appraisal approach considered only the investment property by taking into account the

ability of the assets to generate incomes. Knight Frank estimated operating income and deducted by operating expenses. To derive the appraised value of the assets, Knight Frank discounted the net income of each year to present value and combined with terminal value, derived from the net income of the terminal year multiplied by market yield.

Assumptions for the valuation are as follows; Items Amount

1 No. of rooms - Pool Villa (Phase 1, 2 and 3) - Pool Suite

45 rooms 38 rooms 7 rooms

2 Room revenue - Average Room Rate for Pool Villa Phase

1, 2 and 3

Year 1: Baht 21,500 per room per night Year 2 – 7: Increased 5% p.a. Year 8 – 9: Increased 0% p.a. Year 10: Increased 7% p.a. Year 11: Increased 5% p.a.

- Occupancy Rate for Pool Villa Phase 1, 2 and 3

Year 1: 50% Year 2 onwards: 60%

- Average Room Rate for Pool Suite Year 1: Baht 21,500 per room per night Year 2 – 7: Increased 5% p.a. Year 8 – 9: Increased 0% p.a.



Items Amount Year 10: Increased 7% p.a. Year 11: Increased 5% p.a.

- Occupancy Rate for Pool Suite Year 1: 60% Year 2: 65% Year 3: 70% Year 4 onwards: 75%

3 Food and beverage revenue Year 1: Baht 8,000 per room per night (consisted of food revenue of Baht 4,500 per room per night, beverage revenue of Baht 2,500 per room per night, and other incomes of Baht 1,000 per room per night) Year 2 onwards: increased 4% p.a.

4 Telephone income Year 1: Baht 50 per room per night Year 2 onwards: increased 1% p.a.

5 Other incomes Year 1: Baht 4,300 per room per night Year 2 onwards: increased 4% p.a.

6 Cost of sale – Room - Payroll - Other costs

Baht 1,800 per room per night, and increased 3% p.a. Baht 1,000 per room per night, and increased 3% p.a.

7 Cost of sale – Food and beverage - Direct costs of food - Direct cost of beverage - Payroll - Other costs

30% of food income 25% of beverage income 15% of food and beverage revenue 12% of food and beverage revenue

8 Cost of sale – Telephone 40% of telephone income 9 Cost of sale – Other incomes

- Direct costs - Payroll

30% of other incomes 10% of other incomes

10 Operating expenses - Administrative and general department

1) Payroll 2) Other expenses

- Marketing and advertisement expenses 1) Payroll 2) Other expenses

- Energy costs - Repair and maintenance expenses

1) Payroll 2) Other expenses

Baht 900 per room per night, and increased 3% p.a. Baht 800 per room per night, and increased 2% p.a. Baht 800 per room per night, and increased 3% p.a. Baht 450 per room per night, and increased 2% p.a. Baht 1,200 per room per night, and increased 2% p.a. Baht 500 per room per night, and increased 3% p.a Baht 450 per room per night, and increased 2% p.a

11 Basic management fee 2% of total revenue 12 Insurance premium 0.12% of the value of building of Baht 674 million 13 Taxes and fee 12.50% at 15% of room revenue 14 Incentive from services 6% of operating income net of management fee 15 Reserve for repair and maintenance 3.50% of total revenue 17 Terminal Value Property will be sold at the end of year 10 at the return of 8.5% by

calculating the net cash flow of year 11 when using the return for terminal value at 8,5%

18 Discounted Rate 10% 19 Net Present Value Baht 1,793 million

The total appraised value of the assets by Knight Frank under Income Approach is of Baht

1,793 million.

2.1.3.2 Cost Method of Valuation Knight Frank applied the Comparative Method to indicate value of lands and applied the

Depreciated Replacement Cost Approach to indicate value of buildings and other constructions. (1) Land – Comparative Method The Independent Property Appraiser No. 1 appraised the contiguous land plots and found that

the vacant land next to Sakdidej Road (highway No. 4023), Makham Bay – Cape Panwa Road (highway No. 4129), and any lane adjacented to such main roads mentioned above with seaview, have the selling prices in the range of Baht 9.2 – 25.0 million per rai depended on location, size and potential of land use. Details are as follows; Details and primary adjustments

Details Comparable data No. Subjected Property 1 5 6

Location 5.6425 Land Area (Rai) 5.6425 26.000 17.9875 21.6375 Shape Irregular Irregular Irregular Irregular Frontage (m) 50 80 10 15



Details Comparable data No. Subjected Property 1 5 6

Land Level Hill .00 Hill .00 Appropriated to use Residential use Residential use Residential use Residential use Asking Price (Baht/Rai) 25,000,000 15,000,000 - Estimate Selling Price (Baht/Rai)

24,000,000 14,000,000 -

Transaction Price (Baht/Rai) - - 10,284,000 Date December 2012 December 2012 July 2009 Time Adjustment (Baht/Rai) - - 3,085,200 Cut&Fill Earth Adjustment (Baht/Rai)

- - -

Total Primary Adjustment (Baht/Rai)

24,000,000 14,000,000 13,369,200

Factor Analysis

Factor Comparable Data No. % 1 % 5 % 6Location (30)% (7,200,000) 30% 4,200,000 35% 4,679,220 Surrounding 25% 6,000,000 25$ 3,500,000 30% 4,010,760 Land Area % % % Shape % % % Land Width % % % Utilities 35% 8,400,000 35% 4,900,000 35% 4,679,220 Road Frontage (10)% (2,400,000) 25% 3,500,000 25% 3,342,300 Potential of Land Use % % % Regulations and Development Constraints

% % %

View 5% 1,200,000 % % Total 25% 6,000,000 115% 16,100,000 125% 16,711,500 Price from Adjustment 30,000,000 30,100,000 30,080,700 Final Adjustment

Comp. Data No.

Final Adj. Price Absolute Adj.

Proportion (1)

Inverse Proportion (2)

Weighted Price

1 30,000,000 25,200,000 0.4344 2.3020 0.2455 7,265,287 5 30,100,000 16,100,000 0.2775 3.6032 0.3843 11,566,703 6 30,080,700 16,711,500 0.2881 2.4714 0.3702 11,136,314

Total 90,180,700 58,011,500 1.0000 9.3766 1.0000 30,068,304Or (Baht/Rai) 30,000,000

Knight Frank revaluated land of Spripanwa Hotel Project (estimated land areas of 21 rai 2

ngarn 55 square wah or 21.6375 rai) by using comparative method, and the value of disposing land is equal to Baht 649.125 million or approximate of Baht 649 million.

(2) Buildings and Other Constructions – Depreciated Replacement Cost The independent property appraiser applied the Depreciated Replacement Cost as New

Approach to indicate value of buildings and other constructions. Details are as follows; Description Net Replacement

Cost (Baht million)

Hotel rooms 1. Pool Villa 114.71 2. Luxury Villa 166.54 Total Replacement Cost of Hotel Rooms 281.25

Services and Facilities

1. Reception Hall and Restaurant 30.00 2. Spa 33.56 3. Pool Club 86.56 4. Staff House 3.29 5. M&E and Staff House 15.05 6. Tennis Court 10.46 7. Other Constructions 9.46 Total Replacement Cost of Services and Facilities 188.38

Total Value of Building and Construction 469.63 Main Building and Facilities System 137.16 Furniture, Fixtures and Equipment (FFE) 38.14 Total Value of Building, Constructions, Main Building Facilities System and FF&E 644.93 Total Value of Building, Constructions, Main Building Facilities System and FF&E (rounding) 645.00



Knight Frank revaluated the value of Sripanwa Hotel Project’s land by using comparative method and the building and construction of Sripanwa Hotel Project by using depreciated replacement cost, the value of the assets is of Baht 645.00 million and Baht 649.00 million, respectively. Conclusively, the appraised value of the disposing assets by Knight Frank under the Cost Method of Valuation in order to recheck the value is equal to Baht 1,294.00 million.

2.2 C.I.T. Appraisal Co., Ltd. According to the appraisal report of “Sripanwa Hotel Project”, dated March 15, 2013, prepared

by C.I.T. Appraisal Co., Ltd., an independent property appraiser approved by the SEC, the objective of these appraisal reports was to provide the opinion on the market value of the appraised assets for public purpose in relation to the setting up of the Property Fund. Details of the valuation are as follows;

2.2.1 Land Knight Frank evaluated the plots of land where Sripanwa Project situates and belongs to CIR,

consisted of Nor Sor 3 Kor in 16 plots with the total area of 21 rais 2 ngarn 55 square wah (8,655.00 square wah) located at 88 Moo 8, Makham Bay – Cape Panwa Road, Vichit, Muang, Phuket. Details of the land are as follows; No. Nor Sor 3

Kor No. Lot No.

Book/ Page

Area Owner Rai Ngarn Sq. Wah

1 321 2 4Kor/21 10 3 64.70 Charn Issara Residence Co., Ltd. 2 350 4 4Kor /50 1 3 97.10 Charn Issara Residence Co., Ltd. 3 1725 27 18Kor /25 0 2 19.90 Charn Issara Residence Co., Ltd. 4 1726 28 18Kor /26 0 2 24.80 Charn Issara Residence Co., Ltd. 5 1727 29 18Kor /27 0 2 31.40 Charn Issara Residence Co., Ltd. 6 1731 33 18Kor /31 0 3 25.20 Charn Issara Residence Co., Ltd. 7 1771 14 18Khor /21 0 1 62.00 Charn Issara Residence Co., Ltd. 8 1773 16 18Khor /23 0 1 60.00 Charn Issara Residence Co., Ltd. 9 1915 44 20Kor/15 0 52.00 Charn Issara Residence Co., Ltd.

10 1827 43 19Kor /27 0 1 18.00 Charn Issara Residence Co., Ltd. 11 1828 44 19Kor /28 0 1 45.00 Charn Issara Residence Co., Ltd. 12 1829 45 19Kor /29 0 1 25.00 Charn Issara Residence Co., Ltd. 13 1858 48 19Kor /8 0 2 41.80 Charn Issara Residence Co., Ltd. 14 1860 20 19Khor /10 1 0 49.80 Charn Issara Residence Co., Ltd. 15 1864 28 19Khor /14 1 3 11.30 Charn Issara Residence Co., Ltd. 16 1888 54 19Khor /38 0 3 27.00 Charn Issara Residence Co., Ltd.

Total Area 21 2 55.00

2.2.2 Building and Construction

No. Building

No. Phase Descriptions Total usable

areas (sq.m.) Located on

Land Nor Sor 3 Kor No.

1 88/11 1 1 Bedroom Pool Villa (PV 01) 237.04 1725



4 88/14 1 2 Bedrooms Pool Villa (PV 04) 290.07 1726





9 88/31 2 1 Bedroom Family Suite (FS 01/1) 177.06 1915 10 88/36-37 2 2 Bedrooms Family Suite (FS 05) 382.00 1827 11 88/57 2 2 Bedrooms Family Suite (FS 12) 382.00 1829 12 88/56 2 2 Bedrooms Family Suite (FS 13) 394.92 1828 13 88/58-59 2 2 Bedrooms Family Suite (FS 19/1-2) 372.87 1773 14 88/60 2 2 Bedrooms Family Suite (FS 20) 382.00 1771 15 88/71 3 Luxury Villa Type A - 1 Bedroom (LV 01) 275.75 321 16 88/72 3 Luxury Villa Type A - 1 Bedroom (LV 02) 275.75 321 17 88/73 3 Luxury Villa Type A - 1 Bedroom (LV 03) 275.75 321 18 88/74 3 Luxury Villa Type A - 1 Bedroom (LV 04) 275.75 321 19 88/75 3 Luxury Villa Type A Slope - 1 Bedroom (LV 05) 286.89 321 20 88/76 3 Luxury Villa Type A - 1 Bedroom (LV 06) 275.75 321 21 88/77 3 Luxury Villa Type A - 1 Bedroom (LV 07) 275.75 321 22 88/78 3 Luxury Villa Type A - 1 Bedroom (LV 08) 275.75 321 23 88/79 3 Luxury Villa Type A - 1 Bedroom (LV 09) 275.75 321 24 88/80 3 Luxury Villa Type A - 1 Bedroom (LV 10) 275.75 321



No. Building No.

Phase Descriptions Total usable areas (sq.m.)

Located on Land Nor Sor 3

Kor No. 25 88/81 3 Luxury Villa Type A - 1 Bedroom (LV 11) 275.75 321 26 88/82 3 Luxury Villa Type B - 1 Bedroom (LV 12) 273.45 321 27 88/83 3 Luxury Villa Type B - 2 Bedrooms (LV 14) 333.45 321 28 88/84 3 Luxury Villa Type B - 2 Bedrooms (LV 15) 333.45 321 29 88/85 3 Luxury Villa Type B - 2 Bedrooms (LV 16) 333.45 321 30 88/86 3 Luxury Villa Type B - 1 Bedroom (LV 17) 273.45 321 31 88/87 3 Luxury Villa Type B - 1 Bedroom (LV 18) 273.45 321 32 88/88 3 Luxury Villa Type B - 2 Bedrooms (LV 19) 333.45 321 33 88/89 3 Luxury Villa Type B - 2 Bedrooms (LV 20) 333.45 321 34 88/90 3 Luxury Villa Type B - 2 Bedrooms (LV 21) 333.45 321 35 88/91 3 Luxury Villa Type B - 1 Bedroom (LV 22) 273.45 321 36 88/92 3 Luxury Villa Type B - 1 Bedroom (LV 23) 273.45 321 37 88/93 3 Luxury Villa Type B - 1 Bedroom (LV 24) 273.45 321 38 - 1 Reception & BABA 1,245.65 342 39 - 2 Spa Building 2,109.70 349 and 350 40 - 3 Pool Club 4,849.85 321 41 - 2 Staff House 584.26 350 42 - 2 M&E Building and Staff House 961.20 350 43 - 2 Tennis Court 1,940.40 350

Total Area 22,629.17 Sq.m.

2.2.3 Appraisal Methodology

Colliers applied the Income Approach to indicate the market value of the appraised assets under its existing conditions. In addition, Colliers applied Cost Approach as a check method.

2.2.3.1 Income Approach – Discounted Cash Flow Method This appraisal approach took in to account the ability of the assets to generate incomes by

estimating the operating income generated and deducted by operating expenses. To derive the appraised value of the assets, Colliers discounted the net income of each year to present value and combined with terminal value, derived from the net income of the terminal year multiplied by market yield.

Summary of assumptions are as follows; Items Amount

1 No. of rooms - Pool Villa - Pool Suite

45 rooms 38 rooms 7 rooms

2 Room revenue Pool Villa - Average Room Rate for phase 1, 2 and 3 Year 1: Baht 21,000 per room per night

Year 2 – 10: Increased 4% p.a. - Occupancy Rate Year 1: 52%

Year 2: 56% Year 3: 60% Year 4-10: 64%

Pool Suite - Average Room Rate Year 1: Baht 11,500 per room per night

Year 2 – 10: Increased 4% p.a. - Occupancy Rate Year 1: 61%

Year 2: 65% Year 3: 69% Year 4-10: 73%

3 Food and beverage revenue 42% of room revenue 4 Spa revenue 10% of room revenue 5 Other incomes 13% of room income 6 Cost of Sale

- Room - Food and beverage - Spa - Others incomes

15% of room revenue 45% of food and beverage revenue 12.5% of spa revenue 35% of other incomes

7 Administrative expenses - General operating expenses - Payroll - Human resources department - Sellinge and marketing expenses - Repair and maintenance - Utility and energy costs

8% of total revenue Referred to Baht 53.48 million in 2012 and increased 4.5% p.a. 0.5% of total revenue 5% of total revenue 1% of total revenue 5% of total revenue

8 Fixed expenses (Insurance premium, Property tax and Baht 0.98 million



Items Amount Provincial Tax)

9 Reserve for FF&E 1% of total revenue 10 Terminal Value Capitalization Rate at 7% 11 Discounted Rate) 11% 12 Present Value of Cash Flow Baht 1,818 million

The total appraised value of the assets by Colliers under Income Approach is of Baht 1,818

million.

2.2.3.2 Cost Method of Valuation In this approach, the value of land is based on recent sales and listing of comparable

property, and the value of building and other constructions is based on the estimation of all costs to reconstruct the property to its original condition and adjusted for depreciated replacement cost.

The Independent Property Appraiser No. 2 appraised the contiguous land plots and found that the vacant land next to Sakdidej Road (highway No. 4023), Makham Bay – Cape Panwa Road (highway No. 4129), and any lane adjacent to such main roads mentioned above with seaview, have the selling prices in the range of Baht 9.2 – 25.0 million per rai depended on location, size and potential of land use. Details are as follows;

Description Cost Method (Baht million)

Plots of land in total of 21 rai 2 ngarn 55.00 sq.wah (8,655.00 sq.wah) 636.30

Building and other constructions (43 buildings)

1-3 1 Bedroom Pool Villa(PV 01-03) - 3 rooms 16.42 4-8 2 Bedrooms Pool Villa (PV 04-06, 10-11) - 5 rooms 38.46 9 1 Bedroom Family Suite (FS 01/1) - 1 unit 4.98 10-11,14 2 Bedrooms Family Suite (FS 05, 12, 19,20) - 3 rooms 41.84 12 2 Bedrooms Family Suite (FS 13) - 1 room 11.24 13 1 Bedroom Family Suite (FS 19/1-2) – 2 rooms 10.89 15-18, 20-25 Luxury Villa Type A – 1 bedroom (LV 01-04, 06-11) - 10 rooms 70.70 19 Luxury Villa Type A Slope – 1 bedroom (LV 05) - 1 room 7.26 26, 30-31, 35-37 Luxury Villa Type B – 1 bedroom (LV 12, 17-18, 22-24) 6 rooms 42.02 27-29, 32-34 Luxury Villa Type B – 2 bedrooms (LV 14-16, 19-21) - 6 rooms 52.51 38 Reception Hall and Restaurant 36.96 39 Spa Building 29.37 40 Pool Club 103.63 41 Staff House 4.00 42 M&E Building and Staff House 13.44 43 Tennis Court 8.85 Total value of lands and buildings 1,128.87 Net 1,128,87

Colliers has revaluated the value of Sripanwa Hotel Project’s property by using the Cost

Method of Valuation in order to recheck the value is equal to Baht 1,128.87 million. Summary of appraised value from such 2 independent property appraisers are as follows;

(Unit: Baht million) Knight Frank Colliers Income Approach 1,793.00 1,818.00 Cost Approach 1,294.00 1,128.87 Selected Valuation Methodology Income Approach Income Approach Appraised Value 1,793.00 1,818.00

CapAd has considered the appraisal reports prepared by Knight Frank and Colliers and

agreed with Independent Asset Appraisers that the appropriated approach for revaluation of the appraised property of Sripanwa Hotel Project is Income Method. The appraised value by the Independent Asset Appraisers is in the range of Baht 1,793 -1,818 million. Thus, CapAd has adjusted the book value of the disposed assets by using the appraised value derived from the appraisal reports as follows;

(Unit: Baht million) Book Value as of

December 31, 2012 Appraised Value

Appraised value higher (lower) than the book value

9051/ 1,793 – 1,818 2/ 888 – 913 Remark:



1/ The net book value of the disposed assets as shown in the notes to financial statements of the Carve-out Financial Statements of Sripanwa Hotel Project in which operated under CIR as of December 31, 2012, audited by an auditor approved by the SEC

2/ Appraised value of land, building and other constructions of Sripanwa Hotel Project is based on Income Method by Knight Frank and Colliers.

After taking into account the assets revaluation adjustment based on the assets appraisal

reports, the value of the disposing assets based on this approach is equal to Baht 1,793.00 – 1,818.00 million, which is Baht 185.43 – 160.43 million lower than the selling price or 9.37 – 8.11% below the selling price. 3. Price to Earnings Ratio Approach: P/E Ratio

In this approach, CapAd evaluated earnings generated by using Earnings before Interest and Taxes (EBITDA) generated by Sripanwa Hotel Project, based on information of the Carve-out Financial Statements of Sripanwa Hotel Project in which operated under CIR as of December 31, 2012, audited by an auditor approved by the SEC, which was equal to Baht 81.99 million and adjusted for depreciation expenses and financial costs. As the result, the net earnings of Sripanwa Hotel Project for 2012 of Baht (29.33) million and multiplied the by the median of P/E Ratios of 3 selected comparable SET-listed companies in hotel business under Tourism & Leisure sector and having positive earnings and be able to calculate P/E ratios, namely Asia Hotel Plc. (ASIA), Central Plaza Hotel Plc. (CENTEL) and OHTL Plc. (OHTL), for the period up to February 22, 2013. The details are summarized below:

Historical P/E Ratio (time) 7 days 15

days 30

days 60

days 90

days 120 days

180 days

360 days

Asia Hotel Plc. 51.96 47.29 42.49 38.44 37.27 36.34 33.76 24.69 Central Plaza Hotel Plc. 51.39 50.72 46.78 43.05 39.89 36.89 33.37 30.71 OHTL Plc. 46.83 45.51 45.13 44.60 46.00 47.00 47.33 44.28 Dusit Thani Plc.* N.A. N.A. N.A. N.A. N.A. N.A. N.A. 31.57 The Erawan Group Plc.* N.A. N.A. N.A. N.A. N.A. N.A. 11.44 11.37 Grande Asset Hotels and Property Plc.* N.A. N.A. N.A. N.A. 8.08 7.66 7.53 5.76 Laguna Resorts & Hotels Plc.* N.A. N.A. N.A. N.A. N.A. N.A. N.A. 4.17 Mandarin Hotel Plc.* N.A. N.A. N.A. N.A. N.A. N.A. N.A. 3.28 Royal Orchid Hotel (Thailand) Plc.* N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. Shangri-La Hotel Plc.* N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A.

Median of 3 companies 51.39 47.29 45.13 43.05 39.89 36.89 33.76 30.71 Value of Sripanwa Project (Baht

million) N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A.

Source: SETSMART Remark: * Such companies operated at losses, therefore their P/E ratios are invalid.

Due to some comparable listed companies have operated at losses and resulting in invalid

P/E ratios in some considerable periods, CapAd selected only 3 remaining comparable companies, namely Asia Hotel Plc., Central Plaza Hotel Plc., and OHTL Plc. to be used for a comparison. In addition, CapAd found that the ranges of calculated median of P/E ratios were relatively wide due to there were many changes in the past 360 days.

However, for the last 12 months period, the Sripanwa Hotel Project operated at net loss. Therefore, the value of the disposing assets by using P/E Ratio could not be calculated

4. Discounted Cash Flow Approach

This valuation approach takes into account Sripanwa Hotel Project’s future operating performance by deriving present value of future cash flow stream using an appropriate discount rate. The independent financial advisor calculated the Weighted Average Cost of Capital (WACC) to be used as the discount rate and constructed a 10-year forecast of Sripanwa Hotel Project’s cash flow (2013 - 2022), based on an assumption that all disposing assets owned and managed by CIR are free from all encumbrances without any transactions related to the Property Fund, and Sripanwan Hotel Project’s operation is on an on-going basis without any significant changes under the current economic conditions and circumstances.

CapAd constructed a financial forecast for Sripanwa Hotel Project based on information and assumptions received from the Company and CIR and interviews with the managements and relevant officers. The sole objective of the financial forecast is to evaluate the fair value of the disposed assets in order to compare with the selling price. If there is any change in overall economic outlook and other



internal and external factors that materially affect Sripanwa Hotel Project’s business operation or assumptions used herein, the fair value derived from the financial projection may also change accordingly.

The assumptions for Sripanwa Hotel Project’s financial forecast can be summarized as follows; Revenue from Hotel Services

Revenues are consisted of room revenue, food and beverage revenue, spa revenue and other incomes. Details are as follows; Room Revenue

Sripanwa Hotel Project is operating 45 rooms consisted of Pool Villa of 38 rooms and Pool Suite of 7 rooms, as follows; No. Building No. of

units Area per unit

(sq.m.) Total Area

(sq.m.)

1 1 Bedroom Pool Villa (Phase 1) 3 237.040 711.120

2 2 Bedrooms Pool Villa (Phase 1) 5 290.070 1,450.350

3 1 Bedroom Family Suite (Phase 2) 1 177.060 177.060


5 2 Bedrooms Family Suite (Phase 2) 3 382.000 1,146.000


7 Luxury Villa Type A - 1 Bedroom (Phase 3) 10 275.750 2,757.500

8 Luxury Villa Type A Slope - 1 Bedroom (Phase 3) 1 348.570 348.570



11 Pool Suite in Pool Club 7 65.000 455.000

Total 45 - 11,454.79

Summary of assumptions of room revenue is as follows; 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

No. of room - Pool Villa - Pool Suite

room room

38 7

38 7

38 7

38 7

38 7

38 7

38 7

38 7

38 7

38 7

No. of days days 365 365 365 365 365 365 365 365 365 365 Occupancy rate

- Pool Villa - Pool Suite

% %

50 60

55 65

60 70

60 75

60 75

60 75

60 75

60 75

60 75

60 75

Average room rate - Pool Villa - Pool Suite

Baht/night Baht/night

21,263 11,985

22,326 12,584

23,442 13,213

24,615 13,874

25,845 14,567

27,138 15,296

28,494 16,061

29,349 16,542

30,230 17,039

31,137 17,550

Growth in average room rate

- Pool Villa - Pool Suite

% %

5 5

5 5

5 5

5 5

5 5

5 5

5 5

3 3

3 3

3 3

Room occupied - Pool Villa - Pool Suite

room room

6,934 1,533

7,6281,661

8,321 1,789

8,321 1,916

8,321 1,916

8,321 1,916

8,321 1,916

8,321 1,916

8,321 1,916

8,321 1,916

Room revenue - Pool Villa - Pool Suite

Baht million Baht million

147.45 18.37

170.30 20.90

195.08 23.63

204.83 26.59

215.0727.92

225.83 29.31

237.12 30.78

244.23 31.70

251.56 32.65

259.10 33.63

Total room revenue Baht

million 165.82 191.20 218.71 231.42 242.99 255.14 267.89 275.93 284.21 292.73

- Occupancy Rate Occupancy rate of Pool Villa in 2010 – 2012 was of 29.42%, 43.17% and 47.48%,

respectively, or increased 13.74% and 4.31% from prior year. The average occupancy rate of Pool Villa in 2010 was relatively low due to 23 rooms from Phase 3 were gradually opened in 2010. Thus, CapAd assumed the occupancy rate of 2013 to increase 2.52% from the prior year, increase 5% per annum in 2014 – 2015, and no growth in 2016 onwards.

Occupancy rate of Pool Suite in 2010 – 2012 was of 12.56%, 52.45% and 56.36%, respectively, or increased 39.88% and 3.92% from prior year. The average occupancy rate of Pool Suite in 2010 was relatively low due to 7 rooms from Phase 3 were gradually opened in 2010. Thus, CapAd assumed the occupancy rate of 2013 to increase 3.64% from the prior year, which was closed to the increase in occupancy rate in 2012, increase 5% per annum in 2014 – 2016, and no growth in



2017 onwards. The occupancy rate of Pool Suite was higher than that of Pool Villa due to Pool Suite was service apartment whereas number days per a stay were relatively longer than that of Pool Villa.

- Average Room Rate Average room rate for Pool Villa in 2010 – 2012 was of Baht 18,264 Baht 19,185 and Baht

20,250, respectively, or increased 5.04% and 5.55% from prior year. The average room rate was assumed to increase 5% per annum in the first 7-year period (2013 – 2019), closing to the growth in average room rate in 2011 and 2012. In addition, CapAd assumed the average room rate to increase 3% per annum (based on target inflation rate) in 2020 onwards.

Average room rate for Pool Suite in 2010 – 2012 was of Baht 11,250 Baht 10,673 and Baht 11,414, respectively, or decreased 5.13% and increased 6.95% from prior year. The average room rate dropped in 2010 since Pool Suit rooms just opened in 2010, and sale promotion was offered in the following year. Currently, the average room rate is approximately Baht 12,000 per room. Therefore, the average room rate to increase 5% per annum in the first 7-year period (2013 – 2019) should be achievable due to there are only 7 rooms and effects to the price from increasing the room rate to 5% is limited (only Baht 500 – 700 per room per night). For 2020 onwards, the average room rate is to increase 3% per annum (based on target inflation rate). Food and Beverage Revenue

In 2010 – 2012, food and beverage revenue was of Baht 32.44 million, Baht 44.12 million and Baht 64.08 million, or 41.51%, 34.16% and 42.66% of room revenue, respectively. CapAd assumed food and beverage revenue at 42.66% of room revenue throughout the projection period, which was equivalent to the proportion of food and beverage revenue to room revenue in 2012 of which should reflect the current revenue structure of Sripanwa Hotel Project.

(Unit: Baht million) Food and Beverage 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Food and beverage revenue

70.74 81.57 93.31 98.73 103.66 108.85 114.29 117.72 121.25 124.89

Food and beverage revenue / Room revenue (%)

42.66 42.66 42.66 42.66 42.66 42.66 42.66 42.66 42.66 42.66

Spa Revenue

(Unit: Baht million) Spa 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Spa revenue 16.98 19.57 22.39 23.69 24.88 26.12 27.43 28.25 29.10 29.97 Spa revenue / Room revenue (%)

10.24 10.24 10.24 10.24 10.24 10.24 10.24 10.24 10.24 10.24

In 2010 – 2012, spa revenue was of Baht 7.91 million, Baht 13.60 million and Baht 15.38 million, or 10.12%, 10.53% and 10.24% of room revenue, respectively.

CapAd assumed spa revenue at 10.24% of room revenue throughout the projection period, which was equivalent to the proportion of spa revenue to room revenue in 2012 of which should reflect the current revenue structure of Sripanwa Hotel Project. Other Incomes and Rental

Other revenues comprise of cleaning services, telephone revenues, transportations, guest activities, sale of souvenir, laundry services and rental income, etc. In 2010 – 2012, other incomes and rental was of Baht 12.60 million, Baht 19.02 million and Baht 19.48 million, or 16.12%, 14.73% and 12.97% of room revenue, respectively. CapAd assumed other incomes and rental revenue at 12.97% of room revenue throughout the projection period, which was equivalent to the proportion of other incomes to room revenue in 2012 of which should reflect the current revenue structure of Sripanwa Hotel Project.

(Unit: Baht million) Other Incomes 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Other incomes and rental

21.51 24.80 28.37 30.02 31.52 33.09 34.75 35.79 36.86 37.97

Other incomes / Room revenue (%)

12.97 12.97 12.97 12.97 12.97 12.97 12.97 12.97 12.97 12.97

Cost of Sale and Services



Cost of Room Revenue Cost of room revenue consisted of payroll and related expenses, utility expenses and other expenses such as laundry, cleaning expenses, guest supplies expenses, etc.

1) Payroll and related expenses was of Baht 10.36 million, Baht 12.06 million and Baht 11.63 million in 2010 – 2012, respectively. CapAd assumed the payroll and related expenses to increase 3% per annum throughout the projection period.

(Unit: Baht million) Room / Hotel 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Payroll and related expenses

11.98 12.34 12.71 13.09 13.48 13.89 14.31 14,74 15.18 15.63

Other expenses 29.89 34.47 39.43 41.72 43.80 45.99 48.29 49.74 51.23 52.77 Cost of room revenue/ Room revenue (%)

25.25 24.48 23.84 23.68 23.58 23.47 23.37 23.37 23.37 23.37

2) In 2010 – 2012, other expenses of room revenue was of Baht 16.08 million, Baht 23.46

million and Baht 27.08 million, or 20.58%, 18.16% and 18.03% of room revenue, respectively. CapAd assumed other expense of room revenue to 18.03% of room revenue throughout the projection period, which was equivalent to the percentage of other expenses of room revenue to room revenue in 2012 of which should reflect the current cost structure of Sripanwa Hotel Project.

Cost of Food and Beverage Revenue Cost of food and beverage revenue consisted of direct cost of food and beverage, payroll and related expenses, utility expenses and other expenses as follows;

1) In 2010 – 2012, direct cost of spa was of Baht 9.68 million, Baht 13.86 million and Baht 17.75 million, or 29.83%, 31.42% and 27.69% of food and beverage revenue, respectively. CapAd assumed the direct cost of food and beverage at 27.69% of food and beverage revenue throughout the projection period, which was equivalent to the percentage of direct cost of food and beverage to food and beverage revenue in 2012 of which should reflect the current cost structure of Sripanwa Hotel Project.


3) In 2010 – 2012, other expenses of food and beverage was of Baht 5.27 million, Baht 8.84 million and Baht 11.76 million, or 16.23%, 20.03% and 18.36% of food and beverage revenue, respectively. CapAd assumed other expense of food and beverage at 18.36% of food and beverage revenue throughout the projection period, which was equivalent to the percentage of other expenses of food and beverage to food and beverage revenue in 2012 of which should reflect the current cost structure of Sripanwa Hotel Project.

(Unit: Baht million) Food and Beverage 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Direct cost of F&B 19.59 22.59 25.84 27.34 30.64 32.17 33.78 34.79 35.84 36.91 Payroll and related expenses

14.15 14.57 15.01 15.46 15.92 16.40 16.89 17.40 17.92 18.46

Other expenses 12.99 14.98 17.13 18.12 19.03 19.98 20.98 21.61 22.26 22.93 Cost of F&B / F&B revenue (%)

66.05 63.91 62.13 61.71 63.27 62.98 62.69 62.69 62.69 62.69

Cost of Spa Revenue Cost of spa revenue consisted of direct cost of spa, payroll and related expenses and other expenses as follows;

1) In 2010 – 2012, direct cost of spa was of Baht 0.33 million, Baht 0.46 million and Baht 0.44 million, or 4.16%, 3.34% and 2.83% of spa revenue, respectively. CapAd assumed the direct cost of spa at 2.83% of spa revenue throughout the projection period, which was equivalent to the percentage of direct cost of spa to spa revenue in 2012 of which should reflect the current cost structure of Sripanwa Hotel Project.




3) In 2010 – 2012, other expenses of spa was of Baht 1.52 million, Baht 2.14 million and Baht 2.18 million, or 19.28%, 15.73% and 14.19% of spa revenue, respectively. CapAd assumed other expense of spa at 14.19% of spa revenue throughout the projection period, which was equivalent to the percentage of other expenses of spa to spa revenue in 2012 of which should reflect the current cost structure of Sripanwa Hotel Project.

(Unit: Baht million) Spa Business 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Direct cost of Spa 0.48 0.55 0.63 0.67 0.70 0.74 0.78 0.80 0.82 0.85 Payroll and related expenses

4.68 4.82 4.97 5.12 5.27 5.43 5.59 5.76 5.93 6.11

Other expenses 2.41 2.78 3.18 3.36 3.53 3.71 3.89 4.01 4.13 4.25 Cost of Spa / Spa Revenue (%)

44.61 41.67 39.21 38.62 38.21 37.81 37.41 37.41 37.41 37.41

Cost of Other Incomes Cost of other income consisted of direct cost, payroll and related expenses and other expenses as follows;

1) In 2010 – 2012, direct cost was of Baht 3.59 million Baht 5.44 million and Baht 4.82 million, or 28.52%, 28.59% and 24.74% of other incomes, respectively. CapAd assumed the direct cost of other income at 26.66% of other incomes throughout the projection period, which was equivalent to the average direct cost of other incomes to other incomes in 2011 – 2012.


3) In 2010 – 2012, other expenses was of Baht 1.18 million, Baht 3.26 million and Baht 5.27 million, 9.34%, 17.15% and 27.06% of other incomes, respectively. CapAd assumed other expenses to 22.10% of other incomes throughout the projection period, which was equivalent to the average direct cost of other incomes to other incomes in 2011 – 2012.

(Unit: Baht million) Other incomes 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Direct cost 5.74 6.61 7.56 8.00 7.80 8.19 8.60 8.86 9.12 9.39 Payroll and related expenses

4.36 4.49 4.63 4.77 4.91 5.06 5.21 5.36 5.52 5.69

Other expenses 4.75 5.48 6.27 6.63 6.97 7.31 7.68 7.91 8.15 8.39 Cost of other incomes/ Other incomes (%)

69.04 66.88 65.07 64.64 62.42 62.12 61.83 61.83 61.83 61.83

Undistributed Operating Expenses and Non-operating Other Expenses

- Undistributed Operating Expenses Undistributed operating expenses consisted of payroll and related expenses, other operating

expenses of general and administrative department, accounting department, human resource department and marketing department. In 2010 – 2012, undistributed operating expenses were of Baht 54.62 million, Baht 62.15 million and Baht 62.03 million, or 41.67%, 30.18% and 24.90% of total revenues, respectively. CapAd assumed that payroll and related expenses of general and administrative department, accounting department and human resource department to increased 3% per annum, payroll and related expenses of marketing department was estimated at 1.62% of total revenues, and other operating expense increased 3% per annum.

- Non-operating Other Expenses (Unit: Baht million)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Undistributed operating expenses

64.19 66.67 69.25 71.50 73.76 76.11 7853 80.88 83.31 85.81

Non-operating other expenses

4.03 4.57 5.16 5.45 5.70 5.98 6.26 6.45 6.64 6.84

Undistributed operating expenses / Total revenues (%)

23.34 21.02 19.09 18.63 18.30 17.98 17.67 17.67 17.67 17.67

Non-operating other expenses / Total revenues (%)

1.46 1.44 1.42 1.42 1.42 1.41 1.41 1.41 1.41 1.41



Non-operating other expenses consisted of consulting fees, insurance premium, property tax and etc. Based on CIR’s estimation, consulting fees were assumed at 0.22 – 0.27% of total revenues, insurance premium was estimated at 1% of total revenues, and property tax was estimated at 0.195% of total revenues. Financial Costs

Financial costs of Sripanwa Hotel Project consisted of interest expenses on short-term borrowings and long-term loans from financial institutions. As of December 31, 2012, total outstanding of short-term borrowings and long-term loans was of Baht 675.37 million. The interest expenses are assumed at 7.25% - 7.75% p.a. throughout the projection period with schedule repayments based on the existing loan agreements with the financial institutions. Corporate Income Tax

CIR has tax losses carried forward which can be deductable to future corporate income taxes within 5 years. Tax losses carried forward was of Baht 193.53 million at the end of year 2011 and adjusted with the estimated tax losses carried forward for the year 2012 of Baht 51 million. Therefore, at the end of year 2012, CIR assumed to have tax losses carried forward totaling of Baht 244.53 million in which shall be gradually expired by 2017. In this financial forecast, CapAd assumed that CIR has managed and owned Sripanwa Hotel Project such that the tax losses carried forward shall be gradually used in 2014 – 2017. Consequently, Sripanwa Hotel Project shall start to pay partial corporate income tax in 2017 at the corporate income tax rate of 20%. Capital Expenditure Reserve for furniture, fixture and equipment expenses and capital expenditure is estimated at 2% of total revenue in the year 2013 – 2018, and 4% of total revenue in the year 2019 – 2022. We viewed that the assets of Sripanwa Hotel Project are relatively new and in good conditions due to Phase 1 and Phase 2 were launched since 2005 whereas Phase 3 was opened in 2010. Therefore, the estimation of reserves for FF&E and capital expenditure of 2 – 4% of total revenues should be sufficient as per the estimation of CIR. Assets and Liabilities Turnover Based on Sripanwa Hotel Project’s historical data of 2011 – 2012 of which should close to its current conditions and considered the suitability of the ratios, throughout the projection period as follows:

Account receivables 16 days on average Inventories* 57 days on average Account and note payables 155 days on average

Remark: * Inventories are such as beverage for restaurant, souvenirs, room supplies, uniforms and cleaning equipments, etc.

Summary of financial projection of 2013 - 2022 is as follows;

(Unit: Baht million) 2013 2014 2015 2016 2017

Total revenues 275.05 317.15 362.77 383.85 403.05Cost of sale and services 111.02 123.69 137.35 144.29 152.06Gross operating profit 164.03 193.47 225.42 239.57 250.99EBITDA 95.81 122.23 151.01 162.63 171.52EBIT 35.91 73.92 103.05 114.64 124.25Net income (10.15) 36.51 74.61 94.41 89.53


Total revenues 423.20 444.36 457.69 471.42 485.56Cost of sale and services 158.87 166,00 170.98 176.11 181.39Gross operating profit 264.33 278.36 286.71 295.31 304.17EBITDA 182.25 193.57 199.38 205.36 211.52EBIT 133.37 144.10 147.62 151.39 155.32Net income 96.70 107.52 112.57 117.82 122.27



Terminal Value Free cash flow growth after the forecasting period is estimated at 0% p.a. under conservative

basis. Discount Rate

The discount rate applied to the calculation of the present value of free cash flow is the Weighted Average Cost of Capital (WACC), which derived from the weighted average of Cost of Debt (Kd) and Cost of Equity (Ke) based on the following formula; WACC = Ke*E/(D+E) + Kd*(1-T)*D/(D+E)

Ke = Cost of equity or shareholders’ required rate of return (Re) Kd = Cost of debt or loan interest rate T = Corporate income tax rate E = Total shareholders’ equity D = Interest-bearing debt Cost of equity (Ke) or the required rate of return for Sripanwa Hotel Project, CapAd

considered to use the require rate of return for shareholders (Re) of CIR since Sripanwa Hotel Project is a business unit under CIR, which is derived from the Capital Asset Pricing Model (CAPM) as follows; Ke (or Re ) = Rf + β (Rm - Rf) Whereby Risk Free Rate (Rf) = 4.33% per annum based on 30-year government bond yield (information as

of February 22, 2013), which is currently the longest government bond that is regularly issued or offered for sale by the Government, therefore, aligned with the assumption that Sripanwa Hotel Project’s operations are on going concern basis.

Beta (β) = 1.50 times based on average unlevered beta of 10 comparable SET-listed companies in hotel business under Tourism & Leisure sector (1-year historical data until February 22, 2013), and adjusted with the current interest bearing debt to equity ratio of CIR.

Market Risk (Rm) = 20.18% per annum, which is the 28-year average rate of return from the investment in market portfolio of the Stock Exchange of Thailand (1985 – 2012). However, CapAd did not take into account the market returns during 1975 – 1984 because they were returns during the establishment of the Stock Exchange when few companies were listed and trading volume was still limited. Therefore, they may not reflect the actual market return.

Kd = 7.50% per annum based on average current borrowing rates of CIR D/E Ratio = Estimated D/E ratio at 5.60 times, equivalent to D/E ratio of CIR at the end of

year 2012 T = Estimated corporate income tax rate 20% per annum

Therefore, the discount rate or WACC is equal to 9.35% p.a. By using above information and assumptions, calculation of Sripanwa Hotel Project’s future

cash flow and value are as follows;

(Unit: Baht million) 2013 2014 2015 2016 2017 Free Cash Flow to the Firm 92.61 117.13 145.11 155.58 144.94 Present Value of Free Cash Flow

86.60 100.17 113.49 111.27 94.80


Free Cash Flow to the Firm 150.22 149.56 153.34 157.47 161.97 Present Value of Free Cash Flow

89.86 81.81 76.71 72.04 67.76

(Unit: Baht million)

PV of Terminal Value 724.75 Net present value of cash flow as of March 31, 2013 1,619.26



Therefore, by using this approach the value of Sripanwa Hotel Project is equal to Baht 1,619.26 million.

In addition, CapAd has conducted a sensitivity analysis based on adjusting the discount rate or WACC increased (decreased) by 10% of the calculated discount rate mentioned above, to consider the impact to the value of Sripanwa Hotel Project is as follows;

(Baht million) Discount Rate or WACC

8.41% 9.35% 10.28% Value of Sripanwa Hotel Project 1,808.73 1,619.26 1,464.65

As shown in the table above, the value of Sripanwa Hotel Project is in the range of Baht

1,464.65 – 1,808.73 million, which is Baht 513.78 – 169.70 million lower than the selling price or 25.97% – 8.58% below the selling price.

Please note that the valuation is based on assumptions provided by the Company and CIR , and under the current economic conditions and circumstances. If there is any change in the business plan, policy, economic condition and/or unusual events such as a airport seizure, riot, earthquake and tsunami, that will materially affect the assumptions and variables used herein, the future operating results of Sripanwa Hotel Project might not be as projected and the value of the disposing assets evaluated by this approach may also change accordingly. 5. Comparison of key assumptions applied in Discounted Cash Flow Approach

The IFA has compared key assumptions for the valuation of the disposing assets applied in the Discounted Cash Flow Approach by Knight Frank, Colliers and CapAd. This comparison is as information for shareholders only.

Description Knight Frank Colliers CapAd

1 No. of rooms 45 rooms 45 rooms 45 rooms - Pool Villa 38 rooms 38 rooms 38 rooms - Pool Suite 7 rooms 7 rooms 7 rooms 2 Room Revenue

Pool Villa

- Average Room Rate Year 1: Baht 21,500

/room/night Year1 : Baht 21,000 /room/night Year 1 – 7: growth 5% p.a.

Year 2 – 7: growth 5% p.a. Year 2 – 10: growth 4% p.a. Year 8 onwards: growth 3% p.a. Year 8 – 9: growth 0% p.a. Year 10: growth 7% p.a. Year 11: growth 5% p.a. - Occupancy Rate Year 1: 50% Year 1: 52% Year 1: 50%

Year 2 onwards: 60% Year 2: 56% Year 2: 55% Year 3: 60% Year 3 onwards: 60% Year 4 onwards: 64% Pool Suite - Average Room Rate Year 1: Baht 12,000

/room/night Year1 : Baht 11,500 /room/night Year 1 – 7: growth 5% p.a.

Year 2 – 7: growth 5 % p.a. Year 2 – 10: growth 4% p.a. Year 8 onwards: growth 3% p.a. Year 8 – 9: growth 0% p.a. Year 10: growth 7% p.a. Year 11: growth 5% p.a.

- Occupancy Rate Year 1: 60% Year 1: 61% Year 1: 60% Year 2: 65% Year 2: 65% Year 2: 65% Year 3: 70% Year 3: 69% Year 3: 70% Year 4 onwards: 75% Year 4 onwards: 73% Year 4 onwards: 75%

3 Food and Beverage Revenue Year 1: Baht 8,000 / room/night (consisted of Food revenue of Baht 4,500, Beverage revenue of Baht 2,500 and other revenues of Baht 1,000)

42% of room revenue 42.66% of room revenue

Year 2 onwards: growth 4%

p.a.

4 Spa Revenue - 10% of room revenue 10.24% of room revenue 5 Other Incomes Year 1: Baht 4,300 /room/night 13% of room revenue 12.97% of room revenue Year 2 onwards: growth 4%

p.a.

6 Telephone Income Year 1: Baht 50 /room/night - - Year 2 onwards: growth 1% p.a.

7 Cost of Sale – Room 15% of room revenue - Payroll and related expenses 1,800 /room/night, and growth Baht 11.98 million in Year 1,



Description Knight Frank Colliers CapAd 3% p.a. and growth 3% p.a.

- Other expenses 1,000 /room/night, and growth 3% p.a.

18.03% of room revenue

8 Cost of Sale – F&B 45% of food and beverage revenue

- Direct cost - Food 30% of food revenueร 27.69% of food and beverage

revenue - Direct cost – Beverage 25% of beverage revenue - Payroll and related expenses 15% of food and beverage

revenue Baht 14.15 million in Year 1, and growth 3% p.a.

- Other expenses 12% of food and beverage revenue

9 Cost of Sale – Spa - 12.5% of spa revenue - Direct cost 2.83% of spa revenue - Payroll and related expenses Baht 4.68 million in Year 1,

and growth 3% p.a. - Other expenses 14.19% of spa revenue

10 Cost of Sale – Other Incomes 35% of other incomes - Direct cost 30% of other incomes 26.66% of other incomes

- Payroll and related expenses 10% of other incomes Baht 4.36 million in Year 1,

and growth 3% p.a. - Other expenses 22.10% of other incomes

11 Cost of Sale – Telephone 40% of telephone income - - 12 Administrative Expenses - Admin./General/HR

1) Payroll and related

expenses Baht 900 /room/night, and growth 3% p.a.

Referred to 2012 figure of Baht 53.48 million, and growth 4.5% p.a.

Baht 17.65 million in Year 1, and growth 3% p.a.

2) Other expenses Baht 800 /room/night, and

growth 2% p.a. 8.5% of total revenues Baht 28.65 million in Year 1,

and growth 3% p.a. - Marketing Expenses



1.62% of total revenues


growth 2% p.a. 0.5% of total revenues Baht 13.45 million in Year 1,

and growth 3% p.a.

- Energy Cost Baht 1,200 /room/night, and

growth 2% p.a. 5% of total revenues -

- Repair and Maintenance Expenses

1% of total revenues



-


growth 2% p.a -

13 Basic Management Fee 2% of total revenue - - 14 Consultant Fee - - 0.22% - 0.27% of total

revenues 15 Property Insurance Premium 0.12% of the value of building

of Baht 674 million Baht 0.43 million 1% of total revenues

16 Taxes and Fees 12.50% at 15% of room revenue

Property tax at Baht 0.50 million/ Provincial tax at Baht 0.05 million

0.195% of total revenues

17 Incentive from services 6% of operating income net of management fee

- -

18 Reserve FF&E and Capex 3.50% of total revenues 1% of total revenues Year 1 – 6: 2% of total revenues Year 7-10: 4% of total revenues

19 Corporate Income Tax Rate Not take in to account Not take in to account 20% 20 Projection Period Year 1 – 10 and sell all assets

at the end of year 10 Year 1 – 10 and on-going Year 1 – 10 and on-going

21 Discounted Rate 10% 11% 8.41% - 10.28% 22 Terminal Value Baht 2,310.95 million1/ Baht 2,716.82 million Baht 1,574.90 – 1,924.87

million 23 Present Value of Free Cash

Flow Baht 1,793 million Baht 1,818 million Baht 1,464.65 – 1,808.73

million Remark : 1/ Net from expenses for sale of the assets amounting Baht 83.82 million Knight Frank assumed that the assets would be disposed at the end of year 10, whereas Colliers and CapAd assumed that the assets would be continuously used under the management and ownership of CIR. Besides, in the financial forecast, CapAd took in to account corporate income tax from normal business operation when both independent property appraisers have not considered such factor. However, from the financial forecasts of Knight Frank, Colliers and CapAd, the present value of free cash flow from Sripanwa Hotel Project is in the range of Baht 1,464.65 – 1,818.00 million.



6. Summary of the Independent Financial Advisor’s Opinion on the appropriateness of the selling price of the disposing assets of CIR (Sripanwa Hotel Project)

The value of the disposing assets (or Sripanwa Hotel Project) derived from various valuation approaches can be summarized in the table below;

(Unit: Baht million) Valuation Approach Value of the

Disposed Assets Selling Price

Higher (Lower) than

Selling Price

% Higher (Lower) Than

Selling Price Book Value Approach 905 1,978.43 1,073.43 54.26 Adjusted Book Value Approach 1,793 – 1,818 1,978.43 185.43 – 160.43 9.37 – 8.11 Discounted Cash Flow Approach 1,464.65 – 1,808.73 1,978.43 513.78 – 169.70 25.97 – 8.58

From the summary table above, the value of Sripanwa Hotel Project is in the range of Baht

905 – 1,818 million. The Book Value Approach is the method that reflects the value of disposing assets at any given period of time. However, this approach does not taking into accounts its real asset value and future profitability as well as the overall economic and industry outlook.

The Price to Earnings Ratio Approach estimates the value of the Sripanwa Hotel Project from using past financial figures (net profit) of the Sripanwa Hotel Project to compare with the selected industrial average of the comparable SET-listed companies in hotel business under Tourism & Leisure sector and having positive earnings and be able to calculate P/E ratios, namely Asia Hotel Plc. (ASIA), Central Plaza Hotel Plc. (CENTEL) and OHTL Plc. (OHTL). However, CapAd found that the ranges of calculated median of P/E ratios are relatively wide and for the last 12 months period, the Sripanwa Hotel Project operated at net loss. Therefore, the value of the disposing assets by using P/E Ratio could not be calculated. Conclusively, the Price to Earnings Ratio Approaches is not appropriate to reflect the value of Sripanwa Hotel Project.

CapAd is of the opinion that the most appropriate approaches to value the disposing assets are the Adjusted Book Value Approach and the Discounted Cash Flow Approach since these approaches reflect the fundamental value of the disposing assets and the profit (loss) by using the historical performance and the future growth prospects of Sripanwa Hotel Project.

However, the assets valuations by the Adjusted Book Value Approach and the Discounted Cash Flow Approach is determined based on assumptions provided by the Company and CIR , and under the current economic conditions and circumstances. If there is any change in the business plan, policy, economic condition and/or unusual events that will materially affect the assumptions and variables used herein, the future operating results of Sripanwa Hotel Project might not be as projected and the value of the disposing assets evaluated by this approach may also change accordingly

In conclusion, the value of the disposing assets is Baht 1,464.65 – 1,818.00 million, which is Baht 513.78 – 160.43 million lower than the selling price or 25.97% – 8.11 % below the selling price. Therefore, CapAd is of the opinion that the selling price of Baht 1,978.43 million is appropriate.



Part 3.2: The Independent Financial Advisor’s Opinion regarding the appropriateness of the term and condition of the investment in the Property Fund Based on the draft Undertaking Agreement, during 7 years from the date that the Property Fund has been established, CIR and the Company agree to maintain their investment in the Property Fund as follows:

- During the first five years, CIR and the Company shall maintain their investment not less than 30% of the total investment units that the Property Fund has issued and offered for sale on the registration date, and

- During the following two years (year 6 and 7), CIR and the Company shall maintain their investment not less than 25% of the total investment units that the Property Fund has issued and offered for sale on the registration date.

Except for (a) the case that the Property Fund has raised its capital or (b) the case that the Property Fund will benefit from the change. In this regard, CIR shall have a written consent from the Property Fund. In consideration of the appropriateness of the term and conditions of the investment in the Property Fund mentioned above, CapAd compared the estimated return from investment in the investment units of the Property Fund with the Weight Average Cost of Capital (WACC) of the Company and CIR. Summary of assumptions are as follows;

1. Assumptions on the financial forecast of the Property Fund Our assumptions on the financial forecast of the Property Fund were based on the forecast of the Company and CIR. Key assumptions are as follows;

- The Property Fund shall own the assets of Sripanwa Hotel Project, which are freehold assets, with the initial fund size of Baht 2,001.84 million. The initial fund size is derived from the net cash flow available for dividend payment of the Property Fund in the first year and the target dividend yield in the first year.

- The Property Fund is able to source a lessee for the Sripanwa Hotel Project (on-going basis).

- Revenues of the Property Fund derive from a fixed rent and a variable rent. Fixed Rent

Year Fixed Rent (Baht) Year Fixed Rent (Baht)

1 [151,000,000] 16 [221,079,100] 2 [151,000,000] 17 [221,079,100] 3 [151,000,000] 18 [243,187,010] 4 [151,000,000] 19 [243,187,010] 5 [151,000,000] 20 [243,187,010] 6 [166,100,000] 21 [267,505,711] 7 [166,100,000] 22 [267,505,711] 8 [166,100,000] 23 [267,505,711] 9 [182.710,000] 24 [294,256,282] 10 [182.710,000] 25 [294,256,282] 11 [182.710,000] 26 [294,256,282] 12 [200,981,000] 27 [323,681,910] 13 [200,981,000] 28 [323,681,910] 14 [200,981,000] 29 [323,681,910] 15 [221,079,100] 30 [356,050,101]

Remark: Reference to the fixed annual rent for 15-year period in the draft Lease Agreement, however, the final fixed annual rent agreed between SPV and the Property Fund in the final Lease Agreement might be different from the fixed annual rent mentioned in this draft Lease Agreement. The final annual rent shall depended on the final selling price of the disposing assets and target return to unit holders which are based on the prevailing market conditions at the launching of the Property Fund.

Variable Rent Lessee (SPV) agrees to pay a variable rental fee starting from year 11 – 15 of the Rent

Period, in which SPV shall make a payment within 45 days from the end of each year. The calculation can be shown as follows;

Variable Rental Fee = [ [30%] x (a – b – c) ]



Whereby a = Total revenue from the operation of Sripanwa Hotel Project and other revenues from

managing the area from the beginning of the calendar year (room revenue, service revenue, revenue sharing and other operating incomes excluding interest income), and/or insurance claims from business interruption receiving in the calendar year as shown in the financial statement of the lessee

b = Costs and expenses from the operation of Sripanwa Hotel Project and managing of the areas from the beginning of the calendar year, excluding interest expenses as shown in the financial statements of the lessee. Details are as follows; (1) Total costs from the operation of Sripanwa Hotel Project and managing of the

areas (such as security, cleaning and other operating expenses) (2) Selling and administrative expenses from operating the Sripanwa Hotel Project

and managing the area (such as selling expenses, marketing expenses and management fee)

(3) Other operating expenses from the operating the Sripanwa Hotel Project and managing the area (such as property taxes, insurance premium, audit fee and internal control fee (by discretion of the lessee). However, repair and maintenance and replacement expenses are for Sripanwa Hotel Project only.

c = Fixed rental fee as specified in the Lease Agreement based on accrual basis However, both parties have an option to renew the Lease Agreement for another 15-year

period per each lease term by providing a written notification to another party at least 12 months prior to the ending of the lease period. A party has a right to request for another party to renew the Lease Agreement.

Other assumptions; - Interest income is of approximately Baht 0.2 million per annum - Fund management fees are consisted of fund management fee, trustee fee and registrar fee.

Total fee is estimated at 0.45% of Net Asset Value (NAV) - Other expenses of the Property Fund, such as audit fee, property appraisal fee and other

expenses, are assumed at Baht 0.75 million per annum and increased 3% per annum. - VAT is 7% of fund management fee and other expense of the Property Fund. - Corporate income tax is exempted. - Dividend payout ratio is of not less than 90% of net income. - Discount rate of the Property Fund is at 10.31% per annum based on the estimated IRR of

the projected cash flow of the Property Fund.

2. Assumptions on the investment in the Property Fund by CI and CIR - CI and CIR shall invest in the Property Fund totaling 30% of number of units, which are

offering for sale at the setting up date of the Property Fund. CI and CIR shall hold 15% each. - CI and CIR shall invest in the Property Fund for 7 years and sell out all the units in the

Property Fund at NAV price as of the end of year 7. - The discount rate or WACC of CI is equal to 8.38% p.a. based on the following assumptions;

Risk Free Rate (Rf) : 4.33% per annumBeta (β) : 0.48 times on the Beta of CI (1-year historical data until February 22, 2013). Market Risk (Rm) : 20.18% per annumKd : 7.25% per annum based on average current borrowing rates of CIR D/E Ratio : Estimated D/E ratio at 1.37 times, equivalent to D/E ratio of CI at the end of 2012T : Estimated corporate income tax rate 20% per annum

- WACC of CIR is equal to 9.35% p.a. (Please see assumptions and calculation on Page 53)

Summary of financial projection of the Property Fund for 7 years, the period that CI and CIR

have to maintain their investment in the Property Fund, is as follows; (Unit: Baht million) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Total annual rent 151.00 151.00 151.00 151.00 151.00 166.10 166.10 Total revenues* 151.18 151.19 151.19 151.19 151.19 166.31 166.30

Fund management expenses and other expenses related to property fund

(9.89) (9.68) (9.98) (10.30) (10.66) (11.01) (11.37)



(Unit: Baht million) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 VAT (0.69) (0.68) (0.70) (0.72) (0.75) (0.77) (0.80) Net income 140.60 140.83 140.51 140.17 139.79 154.52 154.13 Dividend distribution 140.04 140.83 140.51 140.17 139.79 154.52 154.13 Dividend payout ratio (%) 99.60 100.00 100.00 100.00 100.00 100.00 100.00 NAV (Estimated) 2,035.46 2,095.90 2,162.63 2,236.30 2,317.63 2,392.30 2,474.73 Remark: * Total revenues consist of total rental fees + interest incomes derived from deposit of available cash for

dividend payment after deducted for fund expenses. In consideration of the appropriateness of the term and conditions of the investment in the Property Fund, CapAd assumed that the Company and CIR shall maintain their investment in the Property Fund not less than 30% of total investment units in which the Property Fund has issued and offered for sale on the registration date, for 7 years. The Company and CIR shall equally hold the investment in the Property Fund, and dispose the investment units at the end of year 7. Thus, the financial forecast from the investment in the Property Fund by the Company and CIR is as follows;

Returns from 15% of investment in the Property Fund for the Company (Unit: Baht million)

The Company Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Investment in the Property Fund (300.28) Dividend received 21.01 21.12 21.08 21.02 20.97 23.18 23.12 Re-sale of investment in property fund at the end of year 71/

374.98

Net cash flow from investment in the Property Fund

(300.28) 21.01 21.12 21.08 21.02 20.97 23.18 398.10

Discount Rate (%)2/ 8.38 Present value of cash flow 23.85 IRR (%) 9.80

Present value of cash flow – net of taxes3/

15.35

IRR (%) – after adjustment for tax liabilities3/

9.31

Remark: 1/ CapAd assumed that the Company and CIR could dispose its investment in the Property Fund at the end of year 7 at NAV price

2/ Discount rate or WACC of the Company 3/ The Company, a SET-listed company, pays no tax on dividend distributed by the Property Fund, is

subjected capital gain tax at its corporate income tax rate which is 20% for the Company.

Returns from 15% of investment in the Property Fund for CIR (Unit: Baht million)

CIR Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Investment in the Property Fund (300.28) Dividend received 21.01 21.12 21.08 21.02 20.97 23.18 23.12 Re-sale of investment in property fund at the end of year 71/

374.98

Net cash flow from investment in the Property Fund

(300.28) 21.01 21.12 21.08 21.02 20.97 23.18 398.10

Discount Rate (%)2/ 9.35 Present value of cash flow 7.33 IRR (%) 9.80

Present value of cash flow – net of taxes3/

(11.36)

IRR (%) – after adjustment for tax liabilities3/

8.64

Remark: 1/ CapAd assumed that the Company and CIR could dispose its investment in the Property Fund at the end of year 7 at NAV price

2/ Discount rate or WACC of CIR 3/ CIR, non SET-listed company, is subject to tax on dividend distributed by the Property Fund at half

its usual tax rate and capital gain tax at its corporate income tax rate which is 20% for CIR;. From above tables, the present value of cash flow – net from taxes to the Company and CIR is of Baht 15.35 million and Baht (11.36) million, respectively, or the total return from in the investment in the Property Fund is of Baht 3.98 million, and internal rate of return (IRR) is of 8.97% per annum.



In addition, CapAd compared return from the investment in the Property Fund with returns from investment in other property funds that invest in the property using for hotel business. Summary of key terms and conditions is as follows;

CTARAF DTCPF LUXF M-AAA MSPF QHHR QHOP Fund Name Centara

Hotels & Resorts

Leasehold Property Fund

Dusit Thani Freehold & Leasehold

Property Fund

Luxury Real Estate

Investment Fund

MFC Amazing A-la Andaman Property Fund

Mercure Samui

Property Fund

Quality Houses Hotel

And Residence

Freehold and Leasehold

Property Fund

Quality Hospitality Leasehold

Property Fund

Type of invested property

Leasehold Freehold and Leasehold

Freehold Freehold Freehold Freehold Leasehold

Business type The fund has invested in the leasehold right on the property of Centara Grand Beach Resort Samui

The Fund has invested by obtaining ownership of assets of the Dusit Thani Laguna Phuket Hotel and the Dusit D2 Chiang Mai Hotel. Additionally, the Fund has invested by leasing in assets of the Dusit Thani Hua Hin Hotel for leasing and subleasing.

The Fund has invested in land, property and other assets from Pakoh Hotel Co., Ltd.. The Land is located on Six Senses Yao Noi Project, Koh Yao District, Phang Nga Province.

The Fund has invested in land and buildings of Phi Phi Island Village Beach Resort and Spa Hotel which located on Phi Phi Don Island, Krabi.

The Fund has invested by purchasing the Mercure Samui Buri Resort Hotel Project.

The Fund has invested in Centre Point Hotel and Residence Petchburi Project, Centre Point Hotel and Residence Sukhumvit Project and Centre Point Hotel and Residence Langsuan Project.

The Fund has invested in leasehold right of land and building in Amari Boulevard Hotel Project and purchasing furniture and fixtures necessary for the hotel project.

Dividend payment policy

Not more than 4 times per year(1) If CTARAF has recorded the net profit in any accounting period, the Management Company shall pay dividend to the investment unit holders

Not less than 90% of the net profit not including the unrealized profits from the appraisal or verification of the appraisal of the immovable properties (with additional conditions)

No more than 2 dividends per annum, Net profit earned each year will be distributed as dividends at a payout ratio of at least 90% of the year's net profit (with additional conditions)

Not over 4 times a year at the minimum rate of 90% of its annual net profit or will pay the dividend from the retained earning. However, dividend payment from retained earning must not cause the Fund to have retained loss

Not less than 90% of the net profit not including the unrealized profits from the Appraisal or Review of Appraisal of the immovable properties or the right to lease out the immovable properties of that accounting period (with additional conditions)

Not less than 90% of the net profit, not including the profits not yet realized from the appraisal or review of appraisal of the properties and leasehold rights for such relevant fiscal year (with additional conditions)

Not less than 90% of the net profit not including unrealized profit from appraisal or reviewed appraisal of real estate or leasehold rights to real estate for the said accounting period (with additional conditions)

Establish date 20/08/2551 21/12/2553 20/05/2551 28/10/2554 25/05/2553 02/07/2555 14/03/2551 Latest price (22/2/13)

10.6 12.7 7 10.9 9.7 10.9 10.1

Dividend yield (Year 2012) (%)

8.85 6.88 9.62 5.57 7.07 N/A 8.29

Source : www.setsmart.com, as of February 23, 2013. Dividend yield from investment in comparable property funds that invest in hotel property (excluding LUXF who had a legal dispute between the asset management company and the lessee of the property, and QHHR who was established in July 2012) was in the range of 5.57% - 8.85% per annum. Comparing the estimated dividend yield of the Property Fund that will be established (or “CIRPF” shown in a Chart below) at 7% per annum with the 2012 dividend yield the comparable property funds, the estimated dividend yield of the Property Fund is comparable to those of the comparable property funds as shown in a Chart below.



Chart 6: Comparison of dividend yields from investment in comparable property funds

From evaluation of total return (dividend yield and capital gain) from investment in the

Property Fund to the Company and CIR at 30% for 7 years, and comparing to the dividend yields from investment in other comparable property funds, the IFA is of the opinion that the acquisition of 30% of investment units of the Property Fund is appropriate since the estimated total return from investment in the Property Fund is higher than WACC of the Company and CIR, and the estimated dividend yield of the Property Fund is comparable to those of other comparable property funds.

However, the IFA’s opinion is based on assumptions provided by the Company and CIR, and under the current economic conditions and circumstances. If there is any change in the business plan, policy, economic condition and/or unusual events such as a airport seizure, riot, earthquake and tsunami, that will materially affect the assumptions and variables used herein, the future operating results of Sripanwa Hotel Project might not be as projected and the value of the disposing assets evaluated by this approach may also change accordingly.

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

CTARAF DTCPF M‐AAA MSPF QHOP CIRPF



Part 3.3: The Independent Financial Advisor’s Opinion on the appropriateness of the term and condition of the Lease Agreement

Regarding to the drafted Lease Agreement between the Property Fund and SPV, the Property Fund (“Lessor”) agrees to lease and SPV (“Lessee”) agrees to accept the lease of the assets to operate Sripanwa Hotel Project with the lease term of 15 years (“Rent Period”) and for any other activities in relation to Sripanwa Hotel Project. The Lessee (SPV) agrees to pay an annual rental fee to the Property Fund as a compensation for use of the rental assets. The annual rental fee shall comprise of a fixed rent and a variable rent under the flowing terms and conditions:

1. Fixed Rent Lessee (SPV) agrees to pay a fixed rental fee starting from the effective date of this lease

agreement by paying a monthly rental fee to the Lessor in proportion to the annual rental free. Year Fixed Rent (Baht)

1 [151,000,000] 2 [151,000,000] 3 [151,000,000] 4 [151,000,000] 5 [151,000,000] 6 [166,100,000] 7 [166,100,000] 8 [166,100,000] 9 [182,710,000] 10 [182,710,000] 11 [182,710,000] 12 [200,981,000] 13 [200,981,000] 14 [200,981,000] 15 [221,079,100]

Remark: Reference to the fixed rent for 15-year period in the draft Lease Agreement, however, the final fixed rent agreed between SPV and the Property Fund in the final Lease Agreement might be different from the fixed rent mentioned in this draft Lease Agreement. The final rental fee depends on the final selling price of the disposing assets and target return to unit holders, which is based on the prevailing market conditions at the launching of the Property Fund.

2. Variable Rent Lessee (SPV) agrees to pay a variable rental fee starting from year 11 – 15 of the Rent Period

by paying the variable rent within [45] days after the end of each calendar year. Please see the formula for the calculation of the variable rent in Part 3.2 Section 1.

CapAd has considered the appropriateness of term and condition of the acquiring asset that is the Lease Agreement by comparing returns or rental fees (cash outflow), which SPV shall pay to the Property Fund as a return for using the leased assets (Sripanwa Hotel Project) to the Property, with cash inflow received from operating and managing the Sripanwa Hotel Project. The IFA estimated SPV’s future cash flow generating from (1) room revenue of 45 rooms only, (2) food and beverage revenue, (3) spa revenue and (4) other incomes for 15-year period (2013 – 2027). Our assumptions on revenues, costs and expenses were similar to those mentioned in the valuation of the disposing assets (Sripanwa Hotel Project) by the Discounted Cash Flow Approach (Please see details of the financial projection in Part 3.1, Section 4, on Page 48 - 52). In addition, based on the draft Undertaking Agreement, to guarantee the payment of the annual rent, CIR shall oblige to provide a guarantee to the Property Fund amounting to Baht 80 million in form of cash and/or a bank guarantee throughout the first 5-year period.

The additional assumptions for SPV’s financial forecast from operating and managing of Sripanwa Hotel Project can be summarized as follows;

(1) CIR shall provide a bank guarantee throughout the first 5-year of the guarantee period.

The estimated bank guarantee fee is of 2% per annum. The first payment of the bank guarantee fee will deduct from the proceeds receiving from the disposition of the assets, and the bank guarantee fees is adjusted by the corporate income tax of 20%.



(2) Reserve for maintenance capital expenditure, renovation capital expenditure and replacement of furniture and fixtures is estimated at 2% of total revenues derived from the use of the lease property in 2013 – 2018, 4% of total revenues in 2019 – 2022, 4.5% of total revenues in 2023 – 2025, and 5.5% of total revenue in 2026 – 2027. The IFA viewed that the Sripanwa Hotel Project is relatively in good conditions as Phase 1 and Phase 2 have opened since 2005 whereas Phase 3 has just launched in 2010. Thus, the reserve for maintenance capital expenditure, renovation capital expenditure and replacement of furniture and fixtures at 2% - 4% in early stages and higher in later stages should be sufficient.

(3) SPV shall pay corporate income tax at 20% of net profit before tax due to the tax loss carried forward belongs to CIR of which unable to transfer to SPV.

(4) Terminal value is of zero based on the assumption that SPV is unable to renew the Lease Agreement after year 15.

Summary of financial projection for 15 years (2013 – 2027) is as follows;

(Unit: Baht million) 2013 2014 2015 2016 2017 2018 2019 2020 Total revenues from the rent assets

275.05 317.15 362.77 383.85 403.05 423.20 444.36 457.69

EBITDA – before annual rent

95.81 122.23 151.01 162.63 171.52 182.25 193.57 199.38

Annual rent 151.00 151.00 151.00 151.00 151.00 166.10 166.10 166.10 - Fixed rent 151.00 151.00 151.00 151.00 151.00 166.10 166.10 166.10 - Variable rent - - - - - - - - EBITDA – after annual rent

(55.19) (28.78) 0.01 11.63 20.52 16.15 27.47 33.28

Reserve for FF&E and capex

(5.50) (6.34) (7.26) (7.68) (8.06) (8.46) (17.77) (18.31)

EBITDA – net (60.69) (35.12) (7.25) 3.95 12.46 7.68 9.70 14.97 Net income from Sripanwa Hotel Project (rent assets)

(60.69) (35.12) (7.25) 3.95 12.46 7.68 9.70 13.43

Bank guarantee fee paid by CIR

(1.28) (1.28) (1.28) (1.28) (1.28)

Net income of Sripanwa Hotel Project after adjust for B/G fee

(61.97) (36.43) (8.53) 2.67 11.18 7.68 9.70 13.43

(Unit: Baht million) 2021 2022 2023 2024 2025 2026 2027

Total revenues from the rent assets

471.42 485.56 500.13 515.13 530.59 546.50 562.90

EBITDA – before annual rent

205.36 211.52 217.87 224.40 231.14 238.07 245.21

Annual rent 182.71 182.71 193.26 208.01 210.03 212.11 228.32 - Fixed rent 182.71 182.71 182.71 200.98 200.98 200.98 221.08 - Variable rent - - 3.80 0.07 1.88 2.11 - EBITDA – after annual rent 22.65 28.81 31.36 23.35 28.27 34.98 24.13 Reserve for FF&E and capex

(18.86) (19.42) (22.51) (23.18) (23.88) (30.06) (30.96)

EBITDA – net 3.79 9.39 8.86 0.17 4.39 4.92 (6.83) Net income from Sripanwa Hotel Project (rent assets)

3.04 7.51 7.09 0.14 3.52 3.94 (6.83)

Bank guarantee fee paid by CIR

Net income of Sripanwa Hotel Project after adjust for B/G fee

3.04 7.51 7.09 0.14 3.52 3.94 (6.83)

Based on information and assumptions mentioned in Part 3.1 Section 4 and additional

assumptions mentioned above, CapAd estimated financial forecast of SPV generating from the operation of Sripanwa Hotel Project (the rent assets), and adjusted for bank guarantee fee in which CIR will provide to the Property Fund as a guarantee for the payment of rental fee.



(Unit: Baht million) 2013 2014 2015 2016 2017 2018 2019 2020 Free Cash Flow to the Firm (59.67) (35.15) (7.17) 3.30 12.10 8.30 10.34 13.84 Present Value of Free Cash Flow

(55.80) (30.06) (5.61) 2.36 7.92 4.96 5.66 6.92

(Unit: Baht million) 2021 2022 2023 2024 2025 2026 2027

Free Cash Flow to the Firm 3.46 7.94 7.53 0.59 3.99 4.42 (6.33) Present Value of Free Cash Flow

1.58 3.32 2.88 0.21 1.28 1.29 (1.69)

(Unit: Baht million)

PV of Terminal Value 0 Net Present Value of Cash Flow to SPV as of March 31, 2013 (54.79)

From the valuation of free cash flow to SPV after adjustment for bank guarantee fee mentioned above, the net present value of free cash flow from operating of Spripanwa Hotel Project (the rent assets) to SPV is equal to Baht (54.79) million. Conclusively, the CapAd is of the opinion that the term and conditions of the Lease Agreement is inappropriate since the cash inflow generating from the operation and managing the rent assets is lower than the rental fees and relating expenses.



Part 3.4: Summary of the independent financial advisor’s Opinion concerning the appropriateness of the prices of the disposing assets and the acquiring assets

Reference to the disposition of the property of Sripanwa Hotel Project to the Property Fund (Transaction 1) and the acquisition of assets as follows;

(1) The Company and CIR shall invest in the investment units of the Property Fund amounting to 60,000,000 units at the par value of Baht 10 per unit, or approximately Baht 600 million and in equivalent to 30% of total investment units of the Property Fund, 15% of which shall be invested by the Company and the remaining 15% of which shall be invested by CIR. (Transaction 2.1)

(2) CIR shall establish SPV in order to operate the Sripanwa Hotel Project, and hold at least 99.99% of the total registration capital of SPV. SPV shall have initial registration capital of Baht 30 million (Transaction 2.2) (The IFA has not considered the appropriateness of the term and conditions of Transaction 2.2 in this report due to this transaction is an establishment of a subsidiary.)

(3) SPV in which CIR holds not less than 99.99% of the total registration capital, shall lease the assets (immovable and movable assets) of Sripanwa Hotel Project from the Property Fund for a lease period of 15 years (Transaction 2.3).

From our consideration of the appropriateness of the prices of the disposing assets and acquiring assets as mentioned in Part 3.1, Part 3.2 and Part 3.3, the prices of Transaction 1 and Transaction 2.1 above are appropriate whereas those of Transaction 2.3 is inappropriate. However, those 3 transactions cannot be considered separately due to all transactions are required in relation to the establishment of the Property Fund. Total gain from entering in to such 3 transactions net deducted for expenses and related taxes can be summarized as follows;

Transaction Amount

(Baht million)

1 Transaction 1 Profit from disposition of the assets (movable and immovable properties) used for the operation of Sripanwa Hotel Project1/

1,073.43

Estimated costs from setting up of the Property Fund2/ (51.29) Estimated special business tax (SBT) from transferring of the immovable properties3/ (63.81) Estimated bank guarantee fee (1st year) (1.60) Estimated corporate income taxes on profit from disposition of the assets (movable and

immovable properties)4/ (142.44)

Estimated expenses from registration of the leasehold right of the SPV (1/3) (9.85)

Net profit from disposition of the assets after taxes and expenses 804.44 2 Transaction 2.1

Return form investment in the Property Fund to the Company and CIR5/

3.98 3 Transaction 2.3

Losses from entering in to the lease agreement with the Property Fund6/

(54.79) Total benefits from entering into these Transactions 753.63 Remark: 1/ This is an estimated profit from disposition of assets. The actual profit shall include in the calculation of corporate income

tax of CIR at the end of the year (and the Company in the consolidated financial statements). Please see calculation of profit from the disposition of assets and the accounting profit in Part 2, Section 2.1, Clause 1), on Page 30 –31.

2/ The estimated expenses from setting up of the Property Fund consist of legal counsel fee, property appraisal fee, audit fee for carve out financial statement, underwriting fee and other expenses.

3/ Special business tax at 3.3% of the value of the immovable properties. 4/ Profit from the selling price higher than the book value of the assets, net from fund setting up expense, special business tax

and bank guarantee fee (1st year), and adjusted for estimated tax loss carried forward at the end of 2012 of Baht 244.53 million. The corporate income tax rate is of 20% of net income before tax.

5/ Please see detail of the valuation in Part 3.2 of this report. 6/ Please see detail of the valuation in Part 3.3 of this report. The actual profit incurred from these transactions will depend on the final selling price of assets that will be determined by value of the Property Fund (Fund Size) to be established; rate of return to the investor (Fund Yield) that is subject to market condition during offering period of the Property Fund; book value of asset as at the transaction date; and expenses and tax actually incurred.

The actual gains from these transactions depend on the final selling price determined by the fund size and target return to unit holders of which base on the prevailing market conditions at the launching of the Property Fund, the book value of the disposing assets as of the execution date, and actual relating expenses and taxes to the transactions. Based on above information, total gain from these transactions net from expense and taxes is of Baht 753.63 million. Therefore, CapAd is of the opinion that the prices of these transactions are appropriate.



Part 4: Conclusion of the Independent Financial Advisor’s Opinion

Please see the conclusion of the IFA opinion in Executive Summary on Page 5.

However, the final decision shall be at own discretionary of the shareholders. The shareholders should consider the information in the notice to the shareholders’ meeting and its attachments before making the decision.

CapAd as the independent financial advisor hereby certifies that the opinions have prudently been provided in compliance with the professional standards and principles, with due regard to the shareholders’ benefits. Yours sincerely, Capital Advantage Company Limited -Patchara Netsuwan- (Mr. Patchara Netsuwan) Managing Director

Attachment – Opinion of the IFA -TRANSLATION- Charn Issara Development Plc.

Attachment 1 Page 1

Attachment 1 Overview of Business Operation and Operating Results

Charn Issara Development Public Co., Ltd. 1. General Information Company Name : Charn Issara Development Public Co., Ltd. Main Business : Property development for sale, office building and retails space for rent,

hotel business, and project management Website : http://www.charnissara.co.th Head Office : 2922/200 10th Floor, Charn Issara Tower II, New Petchburi Road,

Bangkapi, HuayKwang, Bangkok 10320, Thailand Telephone : 66-2308-2020 Fax : 66-2308-2990 Registered Capital : Baht 600,000,000.00 Divided into 120,000,000 ordinary shares at par value of Baht 5.00/share Paid-up Capital : Baht 600,000,000.00 Divided into 120,000,000 ordinary shares at par value of Baht 5.00/share 2. Business Outlines 2.1 Background

Charn Issara Development Public Company Limited (the “Company” or “CI”) was founded on December 22, 1989 with a registered capital of Baht 20 million. The Company is principally engaged in real estate development and the sales or leases of office condominiums in the name of “Charn Issara Tower 2” on New Petchaburi Road under C.I. Development Co., Ltd. which has C.I. Property Co., Ltd. as the largest shareholder.

C.I. Development Co., Ltd. has changed its name to C.I.M. Development Co., Ltd. and raised a registered capital to Baht 50 million as at March 30, 1990. At that time the Company has one foreign investor, namely Marubene Corporation Co., Ltd., investing 40% in the Company shares.This investor comes from Japan and operates its business as a conglomerate. After that the Company has raised its capital again to Baht 500 million on September 28, 1994 and to Baht 800 million on April 24, 2000. In June 2002, the Company has converted from a limited company to a public company limited and registered its shares to the Stock Exchange of Thailand on December 16, 2002. Currently, the Company has a registerd, issued and fully paid share capital of Baht 600 million at par value of Baht 5 per share. 2.2 Nature of Business

The Company’s core business is developing property for sale, leasing office space and a shopping plaza, hotel business, and managing property assets for associated companies.The Company focuses on these businesses.


2.3 Investment in the subsidiares and associated companies

The Company has investment in the following subsidiares and associated companies Company Name Nature of Business Registered

Country Tolal registered

Capital (Baht million) Shareholding

Percentage (%) Charn Issara Residence Co., Ltd. Property Development for sale Thailand 140.00 80.043 C.I.N. Estate Co., Ltd. Property Development for sale Thailand 250.00 60.000 Bangkok Commercial Property Fund Property Development for sale Thailand 1,000.00 33.300 International Resources Development Co., Ltd.1/

Property Development for sale Thailand 1,757.95 15.989

Charn Issara Vipaphol Co., Ltd. Property Development for sale Thailand 6.00 49.993 C.I.V. Development Co., Ltd. (held 80% by the Company, and 20% by Charn Issara Vipaphol Co., Ltd.)



Issara United Co., Ltd. (help 50% by C.I.V. Development Co., Ltd)1/

Property Development for sale Thailand 80.00 49.999



Attachment 1 Page 2







Property Fund

33.30%



60.00%

49.995%Charn Issara Vipaphol Co., Ltd.

Property Development for sale 15.989%International Resources

Development Co., Ltd


80.00%





49.999%


Attachment 1 Page 3

2.4 Revenue Structure Revenues of the Company and its subsidiaries categorized by types are as follows:


(adjusted) 20111/


Baht Millon % Baht Millon % Baht Millon % Revenue from real estate sale 678.55 69.97 712.32 64.56 1,665.70 78.12 Rental and service income 82.59 8.52 85.29 7.73 91.46 4.29 Revenue from hotel operations 154.03 15.88 240.53 21.80 303.67 14.24 Other income 54.52 5.63 65.26 5.91 71.47 3.35

Total 969.69 100.00 1,103.40 100.0 2,132.30 100.00 Source: 1/ Form 56-1 and audited consolidated financial statements 2/ Audited Consolidated financial statements 3. List of Shareholders

As of May 9, 2012 (the latest closing book date), the Company has registered, issued and fully paid 120,000,000 ordinary shares of Baht 5 each. Top 10 major shareholders of the Company as of May 9, 2012 are as follows:

Name of Shareholders No. of shares

(shares) % Shareholding


2. C.I. Property Co., Ltd./2 15,138,600 12.62 3. Lertnantapanya Group Mr. Jedsada Lertnantapanya 11,947,200 9.96 Mr. Preecha Lertnantapanya 559,200 0.47 Mrs. Thanyaluck Lertnantapanya 1,500 0.00 Total Lertnantapanya Group 12,507,900 10.42



8. Piriyothaisakool Group Mr. Sinchok Piriyothaisakool 2,470,500 2.06 Mrs. Geewat Piriyothaisakool 100 0.00 Total Piriyothaisakool Group 2,470,600 2.06

9. Boonmeechoti Group Mr. RitthirongBoonmeechoti 2,000,000 1.67 Ms. RoongtiwaBoonmeechoti 240,000 0.20 Mr. WattanaBoonmeechoti 1,000 0.00 Total Boonmeechoti Group 2,241,000 1.87


Source: Thailand Securities Depository Co., Ltd. and SETSMART Remark: 1/ Each group of shareholders is based upon the last name which is not relating to classification of connected person under

the Section 258 of the Securities and Exchange Act or the concert party. 2/ List of shareholders of C.I. Property Co., Ltd. as at April 26, 2012, which is on its Annual General Meeting of shareholders,

are as follows:



1. Issara Group Mr. Olan Issara 6,116,000 20.39 Mr. Songkran Issara 5,816,000 19.38 Ms. Pornchada Issara 3,920,000 13.07 Mrs. Srivara Issara 300,000 1.00 Total Issara Group 16,152,000 53.84


Attachment 1 Page 4



2. Limtrakool Group Mrs. Janya Limtrakool 4,616,000 15.39 Ms. Piyada Limtrakool 1,616,000 5.38 Total Limtrakool Group 6,232,000 20.77

3. Jindara Group Mrs. Praparatn Jindara 4,316,000 14.39 Mr. Damgeng Jindara 300,000 1.00 Total Jindara Group 4,616,000 15.39


Source: Business Online Public Company Limited (www.bol.co.th) 4. Board of Directors

Board of directors as of December 30, 2012 is as follows: Names Position

1. Mrs. Srivara Issara Chairperson 2. Mr. Songkran Issara* Managing Director 3. Mr. Pravesvudhi Raiva Director 4. Mrs. Linda Prasertsom Director 5. Mr. Nitti Osathanugrah Director 6. Mrs. Teeraporn Srijaroenwong Director 7. Mr. Phisud Dejakaisaya Chairman of Audit Committee / Independent Director 8. Mr. Witit Rachatatanun Audit Committee / Independent Director 9. Mr. Pinit Puapan Audit Committee / Independent Director


5. Summary of Financial Highlights and Analysis of Operational Performance and Financial Status of the Company and its subsidiaries Statements of financial position as at December 31, 2010, 2011, and 2012 of the


2010 (adjusted)

2011 2012

Assets Current assets Cash and cash equivalents 70.96 89.55 102.64 Current investments in bills of exchange 89.04 121.24 94.32 Trade and other receivables 35.71 25.66 32.08 Costs of property development projects for sale 1,810.44 2,189.48 1,767.94 Inventories 8.53 10.79 12.91 Short-term loans to subsidiary companies 0.41 - - Other current assets 14.52 14.13 15.56

Total current assets 2,029.61 2,450.85 2,025.45 Non-current assets Restricted bank deposits 3.99 4.19 3.86 Long-term loans to related companies 4.70 - - Investment in associated company 382.59 384.89 385.40 Investment in related company 160.83 148.97 148.97 Investment properties 121.15 214.71 233.79 Property, plant and equipment 967.66 924.93 879.93 Other non-current assets 24.71 12.99 16.14




Total current liabilities 1,833.98 1,954.18 1,536.06 Non-current liabilities


Attachment 1 Page 5


2010 (adjusted)

2011 2012

Liabilities under hire-purchase and finance lease agreements - net of current portion 5.84 13.46

13.75

Long-term loans - net of current portion 658.38 940.12 737.19 Long-term loans from related companies 84.00 - 20.00 Provision for long-term employee benefits - 45.13 52.08 Other non-current liabilities 16.20 15.30 14.94 Total non-current liabilities 764.42 1,014.01 837.96







Statements of comprehensive income for the years ended December 31, 2010, 2011, and 2012 of the Company and its subsidiaries are shown below:


2010 (adjusted)

2011 (reclassified)

2012



Total revenues 969.69 1,103.40 2,132.30 Cost of real estate sales 432.99 464.56 1,061.65 Cost of rental and services 44.54 45.09 48.92 Cost of hotel operations 142.19 162.28 195.17 Selling expenses 82.76 89.29 184.96 Administrative expenses 218.14 236.59 276.37 Total expenses 920.62 997.81 1,767.07 Profit before share of profit from investment in associated company,

finance cost and income tax expenses 49.07 105.59

365.23 Share of profit from investment in associated company 24.98 22.01 23.16 Profit before finance cost and income tax 74.05 127.60 388.39 Finance cost (72.01) (90.12) (113.84) Profit before corporate income tax 2.04 37.48 274.55 Corporate income tax (12.81) (45.02) (61.17) Profit (loss) for the year (10.77) (7.54) 213.38 Profit (loss) attributable to: Equity holders of the Company (6.78) (19.69) 121.35 Non-controlling interests of the subsidiaries (3.99) 12.15 92.03 (10.77) (7.54) 213.38 Basic earnings per share Profit (loss) attributable to equity holders of the Company (0.06) (0.16) 1.01


Cash flow statements for the year ended December 31, 2010, 2011, and 2012 Consolidated financial statements (Unit: million Baht)

2010 (adjusted)

2011 2012



Attachment 1 Page 6

Source: Audied consolidated financial statements for the year ended December 31, 2010, 2011 and 2012

Financial Ratio Unit 2010 2011 2012

Gross profit margin from real estate sales (%) 36.19 34.78 36.26 Gross profit from rental and service income (%) 46.07 47.13 46.51 Gross profit from hotel operations (%) 7.68 32.53 35.73 Net profit (loss) Margin (%) (1.11) (0.68) 10.01 Return on equity (ROE)


(Profit (loss) for the year/total assets) (%) (0.29) (0.18) 5.78 Interest payment coverage (EBITDA / interest expense) (times) 2.08 2.16 4.01 Liquidity ratio (times) 1.11 1.25 1.32 Debt per equity ratio

(Total liabilities/total shareholders’ equity) (times) 2.37 2.53 1.80

Financial and operating results analysis of the Company and its subsidiaries Operating results

Revenue In the year 2011, the Federation of Accounting Professions has effected the adoption of an


During the years 2010 to 2012, the Company and its subsidiaries have booked a total of Baht 969.71 million, 1,103.40 million, and 2,132.30 million, respectively according to such accounting standard. The main sources of revenue are from real estate sales, rental and services income, and hotel operations. The proportion of revenue and other income have been presented in Clause 2.4 of Attachment 1 Page 3.

The Company and its subsidiaries have booked a total of Baht 1,103.40 million of an aggregated revenue from operation in the fiscal year 2011 which represent an increase of Baht 133.69 million from the fiscal year 2010 or equivalent to 13.79% increase. Such increase was attributed to Baht 33.76 million increases from property sales deriving from Baht 678.55 million in the fiscal year 2010 to Baht 712.32 million in the fiscal year 2011 representing 4.98% increase. Revenue from rental and services fees has increased by Baht 2.7 million or 3.27% increase and revenue from the hotel operations at Sripanwa Hotel, Phuket has increased from Baht 154.03 million in 2010 to Baht 240.53 million in 2011 representing an increase of 56.16%. For the fiscal year 2012, the Company and its subsidiaries have booked a total of Baht 2,132.30 million, which represent an increase of Baht 1,028.90 million from that of the fiscal year 2011 or equivalent to 93.25% increase. Such increase was attributed to Baht 953.38 million increases from property sales deriving from Baht 712.32 million in the fiscal year 2011 to Baht 1,665.70 million in the fiscal year 2012 representing 133.84% increase. Such increase was the result of Baht 1,454 million increases in revenue from the Issara Ladprao which can be transferred the ownership to customers in the year 2012. Revenue from rental and services fees has increased by Baht 6.17 million or 7.32% increase and revenue from the hotel operations at Sripanwa Hotel, Phuket has increased from Baht 240.53 million in 2011 to Baht 303.67 million in the fiscal year 2012 representing an increase of 26.25% because the hotel has an increase in occupancy rate and average room rate.




Attachment 1 Page 7

Gross Profit and percentage of gross profit from main sources of revenue can be shown as follows:

2010 2011 2012 Baht million % Baht million % Baht million %


The Company and its subsidiaries have gross profit from property sales in the fiscal year

2011 of total Baht 247.76 million, an increase of Baht 2.20 million from that of the fiscal year 2010. Although the revenue from property sales in the fiscal year 2011 was Baht 2.20 million higher than that of the fiscal year 2010 but the gross profit of 36.19% in the fiscal year 2010 is higher than that of the following year. This is the result of an increase in cost of real estate sales The gross profit of Baht 78.25 million from hotel operations in the fiscal year 2011 representing an increase of Baht 66.41 comparing to Baht 11.84 million in the fiscal year 2010 which was a mere 7.68%. For revenue from rental and services fees, gross profit has increased from 46.07% to 47.13% in the year 2011 or an increase of Baht 2.15 million.

The Company and its subsidiaries have gross profit from property sales in the fiscal year 2012 of total Baht 604.05 million, an increase of Baht 356.29 million or equivalent to 143.80% increase from that of the fiscal year 2011. Such an increase was attributed to Baht 953.38 million increase in revenue from real estate sales. The gross profit of Baht 108.50 million from hotel operations in the fiscal year 2012 representing 35.73% is higher than that of the fiscal year 2011 which represents gross profit of 32.53%. Such increase was attributed to the increase in average room rate. Although gross profit from rental and services fees of the year 2012 has increased Baht 2.34 million from that of the year 2011, percentage of gross profit has decreased from 47.13% to 46.51% in the year 2012.

Expenses In the fiscal year 2011 the Company and its subsidiaries have an increase of Baht 6.53 million


In the fiscal year 2012 the Company and its subsidiaries have sale associated expenses of Baht 184.96 million representing an increase of Baht 95.67 million or an increase of 107.15% from that of the fiscal year 2011. The increase was attributed to the fact that the Company had paid an increased transfer fees including specific business tax deriving from an increased property sale of Baht 953.38 million in the year 2012. Such transfer fees and business tax have increased by approximately Baht 41 million from that of the fiscal year 2011. In addition,the Company and its subsidiaries have launched 3 new projects which are Baan Si Tawan, Baan Tiew Talay, and Baan Tiew Talay 2 with the project value of Baht 800 million, Baht 2,000 million, and Baht 1,800 million, respectively. While the Company and its subsidiaries will be able to recognize the income of Baht 1,845 million from sales of such 3 projects during the year 2013-2015, they have to recognize the advertising and public relation expense right away in the year 2012 of approximately Baht 45 million. The administration expenses for the fiscal year 2012 had increased by Baht 39.78 million or equivalent to 16.81% due to the salary and wage adjustment of minimum wage of Baht 300 announced in the year 2012.

Financial expenses or interest expenses in the fiscal year 2011 has increased by approximately Baht 18.11 million. This increase of interest expenses was a result of accounting interest expenses which derived from term loan for Sripanwa Hotel Project as an expenses following the completion of hotel and villas for sale and in the process of transfer to customer as oppose to capitalize the same while the project was under construction. However, since the project has been completed, those financial expenses will be subsided after the property is eventually sold and related term loan is repaid.

Financial expenses or interest expenses in the fiscal year 2012 are approximately Baht 113.84 million, an increase of approximately Baht 23.72 million from that of the fiscal year 2011. This increase of interest expenses was a result of the completion of The Issara Ladprao Condominium for


Attachment 1 Page 8

sale and in the process of transfer to customers. In the accounting practice, these interest expenses of the loan for such project amounting to Baht 34 million have to be recognized in a profit and loss statement of the year 2012, while previously recognized as costs of the project. For Issara@Sukumwit 42, Baan Chan Talay, and Issara Village which are already transferred to customers, their finance expenses have decreased by approximately Baht 10 million. Although there is a fluctuation in interest expenses recognition, the Company has already accounted for such expenses in the costs of projects, therefore there is no significant effect to the Company’s net profit.


Net Profit / (Loss) The Company and its subsidiaries have a net loss of Baht 19.69 million in the fiscal year


The Company and its subsidiaries have a net profit, contributed to the Company’s shareholders of Baht 121.35 million in the fiscal year 2012, an increase from that of the fiscal year 2011 by Baht 19.69 million following the increase in revenue from real estate sales and revenue from hotel operations as specified in Revenue and Gross Profit Topics. This increase reflects in an increase of net profit. Net profit per share was Baht 1.01, an increase from that of the fiscal year 2011 by Baht 1.17 per share. Financial Status

Assets As of December 31, 2011 the Company and its subsidiaries have total assets of Baht

4,141.53 million, an increase of approximately Baht 446.29 million from that of the fiscal year 2010, or equivalent to an increase of 12.08%. The majority of those assets and which has changed significantly was the property for sale under development of Baht 2,189.48 million equivalents to 52.87% of total assets, an increase of Baht 379.04 million from that of the fiscal year 2010. This reflects the fact that the Company has a total of 6 projects, some of those constructions had been completed and some were still under construction, an increase of 2 projects from the fiscal year 2010. Those two new projects are Issara Village, a townhouse project and Baan Tiew Talay Condominium; both are on Cha am beach Petchburi province. One project which has been under construction since 2010 namely Phase 4 of Sripanwa Project. For those properties for investment in the fiscal year 2011, a fair market value of Baht 214.7 million was appraised by an independent appraiser on an income approach. That newly appraised value was an increase from Baht 93.56 million in the fiscal year 2010 which was shown as an acquisition cost less depreciation. The increase has been adjusted in the retain earnings early in the year by Baht 88 million and Baht 6 million has been adjusted in the net profit of the fiscal year while other assets have not been changed significantly.



Attachment 1 Page 9

Liabilities As of December 31, 2011 the Company and its subsidiaries have total liabilities of Baht


As of December 31, 2012 the Company and its subsidiaries have total liabilities of Baht 2,374.02 million, a decrease of Baht 594.17 million from that of the fiscal year 2011. Liability which has been changed significantly was trade liability of Baht 204.64 million, equivalent to 8.62% of total liability. Such trade liability was lower than that of the fiscal year 2011 by Baht 114.09 million because the Company and its subsidiaries have made a payment to its contractors for the completed construction and effected a hand-over. Long term loan with a maturity within one year of Baht 555.04 million equivalents to 23.38% of total liabilities was a decrease of Baht 341.97 million from that of the fiscal year 2011 because the Company and its subsidiaries have made a loan repayment to the bank in the proportion of cash flow received from the customers whose residential condominium and townhouse units are completely going through transfer stage during the year. Additionally, there is an increase in payable for lands-associated companies of Baht 168.29 million, or equivalent to 7.09% of total liabilities. The remainings are loans for other projects. Long-term loan of Baht 737.19 million representing 31.05 of total liabilities has decreased by Bash 202.93 million from that of the fiscal year 2011. As at the end of the fiscal year 2012, the Company and its subsidiaries have total liabilities of Baht 2,374.02 million, or equivalent to 64.27% of total assets.

Shareholders’ Equity Shareholders’ equity of Baht 1,173.34 million in the fiscal year 2011 includes Baht 957.66


Liquidity

Cash Flow For the year 2010 and 2011, the Company and its subsidiaries have cashflow used for



For the year 2010 and the year 2011, the Company had net cashflow from financing activities of Baht 47.25 million, and Baht 440.60 million, respectively. The main reasons were from loans from banks. In the year 2011, the Company and its subsidiaries received long-term loan from bank of Baht 1,200.56 million and paid back of Baht 788.16 million during the year. In the year 2011, there was a loan from associated company amounting to Baht 24 million. For the year 2011, there was net cashflow from financing activities of approximately Baht 681.53 million. The main reasons were Baht 1,167.44 repayment to the bank for the long-term loan and Baht 116 million repayment to associated


Attachment 1 Page 10

company. Additionally, the Company and its subsidiaries received money from long-term loan amounting to Baht 622.54 million for support two new projects of the Company and its subsidiaries. 6. Industry Outlook: Real Estate Industry

Since early 2012 the real estate market in Bangkok and its vicinity are exposed to various factors affecting the growth of the market, such as the flooding in 2011, the last of which is still in effect as to the activity of trading in some residents in the area that had been heavily flooded.because people who want to buy house in town have delayed the decision to wait out the housing situation this year. In addition, the economic environment is not conducive to the housing; although the government has taken steps to help people buy houses. However, Thailand's economy started to recover from the flood and be exposed to the European debt crisis continued and prolonged impact on the overall economy of Thailand, in particular, the export slowdown. While the trend in the curve of the property market in 2012 is expected to be back to pick up, the issue of flood risk was back to the real estate market again.

Of the factors mentioned above. Kasikorn Research Center has revised Thailand's residence trading activities in Bangkok and its vicinity. They expect full year 2012, the transfer of ownership of housing in the Bangkok metropolitan area is approximately 145,000 to 148,000, shrinking 1.0 to 3.5 when compared with the shrinkage percentage of 18.3 in the year 2011. For the whole year 2012, the transfer of ownership of real estate residential condominium project will remain growth due in part to the fact that the rest of the year, the project is expected to launch to the market. Condeminum project is still benefiting from the flood that has an effect on people’s behavior of house choosing, especially in buying second homes. The rise of the flat-housing market is still shrinking.

The issue of flooding is still likely to be a factor influencing the decision to buy the house of consumers. In addition to the need for businesses to adapt themselves to reduce the impact of flooding, Government and related agencies would have turned to the importance of planning for a flood protection system, especially in areas that are vulnerable to flooding every year.

Source: Kasikorn Research Center http://www.kasikornresearch.com/th/K-EconAnalysis/Pages/ViewSummary.aspx?docid=29567


Attachment 2 Page 1


Charn Issara Residence Co., Ltd. 1. General Information Company Name : Charn Issara Residence Co., Ltd. Main Business : Property development for sale Head Office : 2922/200 New Petchburi Road, Bangkapi, HuayKwang, Bangkok 10320,

Thailand Telephone : 66-2308-2020 Fax : 66-2308-2990 Registered Capital : Baht 140,000,000.00 Divided into 1,400,000 of ordinary shares at par value of Baht 100 Paid-up Capital : Baht 140,000,000.00 Divided into1,400,000 of ordinary shares at par value of Baht 100 2. Nature of Business

Charn Issara Residence Co., Ltd (“CIR”) is a limited company whose 80.04% shares held by Charn Issara Development Public Company Limited, as its parent company. CIR develops property for sale. It is currently developing a Baht 1,600 million on 60 rais as Sripanwa Hotel Phase 1 and 2 and developing villa project known as “Sripanwa” Phase 3 and 4 for Baht 1,500 and 1,400 million, respectively, on approximately 15 rais of land at Cape Panwa in Phuket. The construction of the hotel phase 3 has now been completed while the construction of 7 residence villas is underway. The site has a view of the ocean and surrounding islands. The project’s target customers are Thais and foreigners who enjoy the lifestyle of Phuket, a world renowned resort. Source: http://ci-th.listedcompany.com/company_business.html Remark: Currently, Phase 1-3 are already completed (only residential units for sale in Phase 3 is under construction). Only Sripanwa Hotel is the assets to be disposed to the Property Fund. 3. Summary of Financial Position and Operation

Important numbers that show financial position as at December 31, 2010, 2011, and 2012 and show operating results for the year ended December 31, 2010, 2011, and 2012 can be shown below:

(Unit: Thousand Baht) 2010/1 (audited)

2011/1 (audited)

2012/2 (audited)

Total assets 1,419,272 1,449,673 1,410,777 Total liabilities 1,110,779 1,215,776 1,234,497 Total shareholder equity 308,493 233,897 176,280

(Unit: Thousand Baht) 2010

(audited) 2011

(audited) 2012

(audited) Revenue from real estate sales 13,793 - - Revenue from hotel operations 157,098 247,640 303,674 Services and utilities income from real estate project 20,096 20,002 28,020 Total revenue 194,631 272,801 331,694 Gross profit from real estate sales 5,950 - - Gross profit from hotel operations 14,902 85,362 108,500 Selling and administrative expenses 93,478 116,102 120,147 Finance cost 44,224 66,345 73,990 Net profit (loss) (94,110) (71,924) (57,618)

Source: 1/ Audited financial statements of CIR. 2/ Internal financial statements of CIR which were audited by the Company’s auditor. Remark: Revenue from hotel operations of CIR as shown in the above table comprises of (a) Direct revenue from hotel operations and (b) Management fee charged from units already sold. Therefore, revenue from hotel operations of CIR for the year 2012 of Baht 303.67 million is greater than those of Sripanwa Hotel Project which is Baht 291.48 million (in Attachment 3 Page 1). Such revenue of Sripanwa Hotel Project represents only part (a), not included part (b). 4. Board of Directors

As of March 12, 2013, CIR has 4 directors as follows:


Attachment 2 Page 2

Names Position 1. Mr. Songkran Issara* Director 2. Mr. Dittawat Issara Director 3. Mr. Worasit Issara Director 4. Mrs. Wilai Intakul Director

Source: CIR’s affidavit Remark: * The authorized director of the Company is Mr. Songkran Issara sign with Company’s seal affixed. 5. Capital structure

As of May 23, 2012, CIR has registered, issued and fully paid Baht 140 million capital, comprising of 1,400,000 ordinary shares with par value of Baht 100 per share. Shareholders list of CIR as of May 23, 2012 are as follows:

Name Nationality

Number of shares

Percentage holding

1 Charn Issara Development Public Company Limited Thai 1,120,600 80.04 2 Mr. Wonlop Sangkiet Thai 83,200 5.94 3 Mrs. Peerapan Kasemsan na Ayuthaya Thai 74,400 5.31 4 Mr. Pravetwut Raiwa Thai 72,800 5.20 5 Mr. Hirochinge Seki Japanese 21,000 1.50 6 Mr. Viet Aungdo Vietnamese 20,000 1.43 7 Ms. Duangporn Limtrakul Thai 4,000 0.28 8 Mrs. Piyatida Limtrakul Thai 4,000 0.28 Total 1,400,000 100.00

Source: Lists of shareholders (Bor.Or.Jor 5) of CIR Remark: Shareholders No. 2) – 8) as shown above are not related parties with the Company, however, have relationship as disclosed in Clause 12 of the Information Memorandum Concerning Assets Acquisition and Disposition of the Company.

7. Industry Outlook: Hotel Industry in Phuket Hotel business in Phuket during the year 2012-2013 has continued to grow. The number of

tourists in Phuket is rising each year, especially foreign tourists, such as Chinese, Russian, Australian, Middle Eastian and East Asian. Statistics from the Tourism Authority of Thailand found that the number of tourist arrivals in Phuket for the year 2012 amounted to 6,810,176, and estimates for the year 2012 was 9,300,000, represented the increase by 36.56%. The reason for such an increase is the improvement of Thailand’s political situation and of flooding crisis of the year 2011. In additionally, the statistic numbers show the increase.in direct flights to Phuket especially during the peak tourist season. All of these factors convinced that the future remains bright for the hotel business in Phuket.

The survey of hotels in Phuket found that.in the second half of the year 2012 demand of hotel is at 65.5%, up from 64.6% in the first half of the year 2012.

For the supply side of hotels in Phuket, the number has increased steadily in the last 2-3 years, especially four-star hotels in Patong which has increased continually. Accordingly the expected future market competition in Phuket will be high particularly in Patong Beach since it is the main attraction of foreigners. Statistics from Knight Frank Chartered (Thailand) Co., Ltd. found that the second half of the year 2012, the supply of 4-5 star hotels in Phuket increased to a total of 16,726 rooms compared to only 8,244 rooms in the year 2007. However, the overall number of new room supply in the future is expected to be less likely due to the limited space available in Phuket.

In the second half of the year 2012, the average rental of 4-5 stars hotel in Phuket (excluding villa) is about Baht 4,084 per night, up from Baht 3,899 per night during the first half of 2012, or equivalent to an increase of approximately 4.75% From the projection, the future average rate per night is likely to rise because the rates have not been adjusted for the past 2-3 years in some hotels. Source: (1) Tourism Authority of Thailand (2) Hotel overview for the year 2012 produced by Knight Frank Chartered (Thailand) Limited


Attachment 3 Page 1

Attachment 3 Information of Sripanwa Hotel Project under

Charn Issara Residence Co., Ltd. 1. General Information Project Name : Sripanwa Hotel Project, included Sripanwa Hotel and Sripanwa Boutique Resort

and Spa and Serviced Apartments (“Sripanwa Hotel Project”) Owner : Charn Issara Residence Co., Ltd. (“CIR”) Business : Hotel Head Office : Sripanwa Project, 88 Moo 8 Sakdidej Road, Wichid District, Amphur Muang,

Phuket 83000 Telephone : 66-7637-1000 Fax : 66-7637-1004 Website : http://www.sripanwa.com 1. History

Sripanwa Hotel Project is operated under Charn Issara Residence Co., Ltd. (“CIR”). The project covers hotel operations, restaurants, and other management activities related to hotel operations. The project uses assets of CIR to operate such businesses. The assets under Sripanwa Hotel Project can be summarized below:

a) Lands and all buildings on the lands used to operate the Sripanwa Hotel Project. This includes common roads, 38 units of pool villas, 7 units of serviced apartments, swimming pool, tennis court, sport center, fitness building, reception building, restaurant, spa building, M&E building, and staff house.

b) Main Facilities used for hotel operation such as Electrical System Communication System, Sanitary System, Fire Protection System, Air Conditioning, and Ventilation System.

c) Furniture, fixtures, and equipment used in the operation of Sripanwa Hotel Project. The details of assets under Sripanwa Hotel Project disposed to the Property Fund are described in Section 1, Clause 1.5.1, of this report. 2. Summary of operating results

Operating results of Sripanwa Hotel Project for the year ended December 31, 2010, 2011, and 2012 are as follows:

(Unit: Thousand Baht) 2010 2011 2012 Revenues from hotel operations 156,808 236,462 291,483 Cost of hotel operations 67,484 95,012 110,867 Gross profit 89,324 141,450 180,616 Selling expenses 20,131 22,276 20,837 Administrative expenses 42,626 48,575 51,293 Profit before finance cost, corporate income tax, depreciation, and amortization 26,567 70,599 108,486

Source: Report and financial information only for business of Sripanwa Hotel Project, which is operated under Charn Issara Residence Co., Ltd., prepared by Ernst & Young Office Limited, dated March 1, 2013 (“Carve Out Financial Statement”).

As at December 31, 2012, the net book value of assets used for the operation of Sripanwa

Hotel Project can be shown as follows:

(Unit: Baht million) December 31, 2012 Land 209 Building 665 Building Improvement 2 Furniture and Office equipment 16 Motor vehicles 13

Total 905 Source: Report and financial information only for business of Sripanwa Hotel Project, which is operated under Charn Issara Residence Co., Ltd., prepared by Ernst & Young Office Limited (“EY”), dated March 1, 2013 Remark: * Figures in above table are slightly different from these figures in CIR’s internal financial statements for the year 2012, which were audited by the Company’s auditor due to decimal rounding of each item of assets by EY.


Attachment 1 Page 1


Charn Issara Development Public Co., Ltd. 1. General Information Company Name : Charn Issara Development Public Co., Ltd. Main Business : Property development for sale, office building and retails space for rent,

hotel business, and project management Website : http://www.charnissara.co.th Head Office : 2922/200 10th Floor, Charn Issara Tower II, New Petchburi Road,

Bangkapi, HuayKwang, Bangkok 10320, Thailand Telephone : 66-2308-2020 Fax : 66-2308-2990 Registered Capital : Baht 600,000,000.00 Divided into 120,000,000 ordinary shares at par value of Baht 5.00/share Paid-up Capital : Baht 600,000,000.00 Divided into 120,000,000 ordinary shares at par value of Baht 5.00/share 2. Business Outlines 2.1 Background

Charn Issara Development Public Company Limited (the “Company” or “CI”) was founded on December 22, 1989 with a registered capital of Baht 20 million. The Company is principally engaged in real estate development and the sales or leases of office condominiums in the name of “Charn Issara Tower 2” on New Petchaburi Road under C.I. Development Co., Ltd. which has C.I. Property Co., Ltd. as the largest shareholder.

C.I. Development Co., Ltd. has changed its name to C.I.M. Development Co., Ltd. and raised a registered capital to Baht 50 million as at March 30, 1990. At that time the Company has one foreign investor, namely Marubene Corporation Co., Ltd., investing 40% in the Company shares.This investor comes from Japan and operates its business as a conglomerate. After that the Company has raised its capital again to Baht 500 million on September 28, 1994 and to Baht 800 million on April 24, 2000. In June 2002, the Company has converted from a limited company to a public company limited and registered its shares to the Stock Exchange of Thailand on December 16, 2002. Currently, the Company has a registerd, issued and fully paid share capital of Baht 600 million at par value of Baht 5 per share. 2.2 Nature of Business

The Company’s core business is developing property for sale, leasing office space and a shopping plaza, hotel business, and managing property assets for associated companies.The Company focuses on these businesses.


2.3 Investment in the subsidiares and associated companies

The Company has investment in the following subsidiares and associated companies Company Name Nature of Business Registered

Country Tolal registered

Capital (Baht million) Shareholding

Percentage (%) Charn Issara Residence Co., Ltd. Property Development for sale Thailand 140.00 80.043 C.I.N. Estate Co., Ltd. Property Development for sale Thailand 250.00 60.000 Bangkok Commercial Property Fund Property Development for sale Thailand 1,000.00 33.300 International Resources Development Co., Ltd.1/

Property Development for sale Thailand 1,757.95 15.989

Charn Issara Vipaphol Co., Ltd. Property Development for sale Thailand 6.00 49.993 C.I.V. Development Co., Ltd. (held 80% by the Company, and 20% by Charn Issara Vipaphol Co., Ltd.)



Issara United Co., Ltd. (help 50% by C.I.V. Development Co., Ltd)1/

Property Development for sale Thailand 80.00 49.999



Attachment 1 Page 2







Property Fund

33.30%



60.00%

49.995%Charn Issara Vipaphol Co., Ltd.

Property Development for sale 15.989%International Resources

Development Co., Ltd


80.00%





49.999%


Attachment 1 Page 3

2.4 Revenue Structure Revenues of the Company and its subsidiaries categorized by types are as follows:


(adjusted) 20111/


Baht Millon % Baht Millon % Baht Millon % Revenue from real estate sale 678.55 69.97 712.32 64.56 1,665.70 78.12 Rental and service income 82.59 8.52 85.29 7.73 91.46 4.29 Revenue from hotel operations 154.03 15.88 240.53 21.80 303.67 14.24 Other income 54.52 5.63 65.26 5.91 71.47 3.35

Total 969.69 100.00 1,103.40 100.0 2,132.30 100.00 Source: 1/ Form 56-1 and audited consolidated financial statements 2/ Audited Consolidated financial statements 3. List of Shareholders

As of May 9, 2012 (the latest closing book date), the Company has registered, issued and fully paid 120,000,000 ordinary shares of Baht 5 each. Top 10 major shareholders of the Company as of May 9, 2012 are as follows:




2. C.I. Property Co., Ltd./2 15,138,600 12.62 3. Lertnantapanya Group Mr. Jedsada Lertnantapanya 11,947,200 9.96 Mr. Preecha Lertnantapanya 559,200 0.47 Mrs. Thanyaluck Lertnantapanya 1,500 0.00 Total Lertnantapanya Group 12,507,900 10.42



8. Piriyothaisakool Group Mr. Sinchok Piriyothaisakool 2,470,500 2.06 Mrs. Geewat Piriyothaisakool 100 0.00 Total Piriyothaisakool Group 2,470,600 2.06

9. Boonmeechoti Group Mr. RitthirongBoonmeechoti 2,000,000 1.67 Ms. RoongtiwaBoonmeechoti 240,000 0.20 Mr. WattanaBoonmeechoti 1,000 0.00 Total Boonmeechoti Group 2,241,000 1.87


Source: Thailand Securities Depository Co., Ltd. and SETSMART Remark: 1/ Each group of shareholders is based upon the last name which is not relating to classification of connected person under

the Section 258 of the Securities and Exchange Act or the concert party. 2/ List of shareholders of C.I. Property Co., Ltd. as at April 26, 2012, which is on its Annual General Meeting of shareholders,

are as follows:



1. Issara Group Mr. Olan Issara 6,116,000 20.39 Mr. Songkran Issara 5,816,000 19.38 Ms. Pornchada Issara 3,920,000 13.07 Mrs. Srivara Issara 300,000 1.00 Total Issara Group 16,152,000 53.84


Attachment 1 Page 4



2. Limtrakool Group Mrs. Janya Limtrakool 4,616,000 15.39 Ms. Piyada Limtrakool 1,616,000 5.38 Total Limtrakool Group 6,232,000 20.77

3. Jindara Group Mrs. Praparatn Jindara 4,316,000 14.39 Mr. Damgeng Jindara 300,000 1.00 Total Jindara Group 4,616,000 15.39


Source: Business Online Public Company Limited (www.bol.co.th) 4. Board of Directors

Board of directors as of December 30, 2012 is as follows: Names Position

1. Mrs. Srivara Issara Chairperson 2. Mr. Songkran Issara* Managing Director 3. Mr. Pravesvudhi Raiva Director 4. Mrs. Linda Prasertsom Director 5. Mr. Nitti Osathanugrah Director 6. Mrs. Teeraporn Srijaroenwong Director 7. Mr. Phisud Dejakaisaya Chairman of Audit Committee / Independent Director 8. Mr. Witit Rachatatanun Audit Committee / Independent Director 9. Mr. Pinit Puapan Audit Committee / Independent Director


5. Summary of Financial Highlights and Analysis of Operational Performance and Financial Status of the Company and its subsidiaries Statements of financial position as at December 31, 2010, 2011, and 2012 of the


2010 (adjusted)

2011 2012

Assets Current assets Cash and cash equivalents 70.96 89.55 102.64 Current investments in bills of exchange 89.04 121.24 94.32 Trade and other receivables 35.71 25.66 32.08 Costs of property development projects for sale 1,810.44 2,189.48 1,767.94 Inventories 8.53 10.79 12.91 Short-term loans to subsidiary companies 0.41 - - Other current assets 14.52 14.13 15.56

Total current assets 2,029.61 2,450.85 2,025.45 Non-current assets Restricted bank deposits 3.99 4.19 3.86 Long-term loans to related companies 4.70 - - Investment in associated company 382.59 384.89 385.40 Investment in related company 160.83 148.97 148.97 Investment properties 121.15 214.71 233.79 Property, plant and equipment 967.66 924.93 879.93 Other non-current assets 24.71 12.99 16.14




Total current liabilities 1,833.98 1,954.18 1,536.06 Non-current liabilities


Attachment 1 Page 5


2010 (adjusted)

2011 2012

Liabilities under hire-purchase and finance lease agreements - net of current portion 5.84 13.46

13.75

Long-term loans - net of current portion 658.38 940.12 737.19 Long-term loans from related companies 84.00 - 20.00 Provision for long-term employee benefits - 45.13 52.08 Other non-current liabilities 16.20 15.30 14.94 Total non-current liabilities 764.42 1,014.01 837.96







Statements of comprehensive income for the years ended December 31, 2010, 2011, and 2012 of the Company and its subsidiaries are shown below:


2010 (adjusted)

2011 (reclassified)

2012



Total revenues 969.69 1,103.40 2,132.30 Cost of real estate sales 432.99 464.56 1,061.65 Cost of rental and services 44.54 45.09 48.92 Cost of hotel operations 142.19 162.28 195.17 Selling expenses 82.76 89.29 184.96 Administrative expenses 218.14 236.59 276.37 Total expenses 920.62 997.81 1,767.07 Profit before share of profit from investment in associated company,

finance cost and income tax expenses 49.07 105.59

365.23 Share of profit from investment in associated company 24.98 22.01 23.16 Profit before finance cost and income tax 74.05 127.60 388.39 Finance cost (72.01) (90.12) (113.84) Profit before corporate income tax 2.04 37.48 274.55 Corporate income tax (12.81) (45.02) (61.17) Profit (loss) for the year (10.77) (7.54) 213.38 Profit (loss) attributable to: Equity holders of the Company (6.78) (19.69) 121.35 Non-controlling interests of the subsidiaries (3.99) 12.15 92.03 (10.77) (7.54) 213.38 Basic earnings per share Profit (loss) attributable to equity holders of the Company (0.06) (0.16) 1.01


Cash flow statements for the year ended December 31, 2010, 2011, and 2012 Consolidated financial statements (Unit: million Baht)

2010 (adjusted)

2011 2012



Attachment 1 Page 6

Source: Audied consolidated financial statements for the year ended December 31, 2010, 2011 and 2012

Financial Ratio Unit 2010 2011 2012

Gross profit margin from real estate sales (%) 36.19 34.78 36.26 Gross profit from rental and service income (%) 46.07 47.13 46.51 Gross profit from hotel operations (%) 7.68 32.53 35.73 Net profit (loss) Margin (%) (1.11) (0.68) 10.01 Return on equity (ROE)


(Profit (loss) for the year/total assets) (%) (0.29) (0.18) 5.78 Interest payment coverage (EBITDA / interest expense) (times) 2.08 2.16 4.01 Liquidity ratio (times) 1.11 1.25 1.32 Debt per equity ratio

(Total liabilities/total shareholders’ equity) (times) 2.37 2.53 1.80

Financial and operating results analysis of the Company and its subsidiaries Operating results

Revenue In the year 2011, the Federation of Accounting Professions has effected the adoption of an


During the years 2010 to 2012, the Company and its subsidiaries have booked a total of Baht 969.71 million, 1,103.40 million, and 2,132.30 million, respectively according to such accounting standard. The main sources of revenue are from real estate sales, rental and services income, and hotel operations. The proportion of revenue and other income have been presented in Clause 2.4 of Attachment 1 Page 3.

The Company and its subsidiaries have booked a total of Baht 1,103.40 million of an aggregated revenue from operation in the fiscal year 2011 which represent an increase of Baht 133.69 million from the fiscal year 2010 or equivalent to 13.79% increase. Such increase was attributed to Baht 33.76 million increases from property sales deriving from Baht 678.55 million in the fiscal year 2010 to Baht 712.32 million in the fiscal year 2011 representing 4.98% increase. Revenue from rental and services fees has increased by Baht 2.7 million or 3.27% increase and revenue from the hotel operations at Sripanwa Hotel, Phuket has increased from Baht 154.03 million in 2010 to Baht 240.53 million in 2011 representing an increase of 56.16%. For the fiscal year 2012, the Company and its subsidiaries have booked a total of Baht 2,132.30 million, which represent an increase of Baht 1,028.90 million from that of the fiscal year 2011 or equivalent to 93.25% increase. Such increase was attributed to Baht 953.38 million increases from property sales deriving from Baht 712.32 million in the fiscal year 2011 to Baht 1,665.70 million in the fiscal year 2012 representing 133.84% increase. Such increase was the result of Baht 1,454 million increases in revenue from the Issara Ladprao which can be transferred the ownership to customers in the year 2012. Revenue from rental and services fees has increased by Baht 6.17 million or 7.32% increase and revenue from the hotel operations at Sripanwa Hotel, Phuket has increased from Baht 240.53 million in 2011 to Baht 303.67 million in the fiscal year 2012 representing an increase of 26.25% because the hotel has an increase in occupancy rate and average room rate.




Attachment 1 Page 7

Gross Profit and percentage of gross profit from main sources of revenue can be shown as follows:

2010 2011 2012 Baht million % Baht million % Baht million %


The Company and its subsidiaries have gross profit from property sales in the fiscal year

2011 of total Baht 247.76 million, an increase of Baht 2.20 million from that of the fiscal year 2010. Although the revenue from property sales in the fiscal year 2011 was Baht 2.20 million higher than that of the fiscal year 2010 but the gross profit of 36.19% in the fiscal year 2010 is higher than that of the following year. This is the result of an increase in cost of real estate sales The gross profit of Baht 78.25 million from hotel operations in the fiscal year 2011 representing an increase of Baht 66.41 comparing to Baht 11.84 million in the fiscal year 2010 which was a mere 7.68%. For revenue from rental and services fees, gross profit has increased from 46.07% to 47.13% in the year 2011 or an increase of Baht 2.15 million.

The Company and its subsidiaries have gross profit from property sales in the fiscal year 2012 of total Baht 604.05 million, an increase of Baht 356.29 million or equivalent to 143.80% increase from that of the fiscal year 2011. Such an increase was attributed to Baht 953.38 million increase in revenue from real estate sales. The gross profit of Baht 108.50 million from hotel operations in the fiscal year 2012 representing 35.73% is higher than that of the fiscal year 2011 which represents gross profit of 32.53%. Such increase was attributed to the increase in average room rate. Although gross profit from rental and services fees of the year 2012 has increased Baht 2.34 million from that of the year 2011, percentage of gross profit has decreased from 47.13% to 46.51% in the year 2012.

Expenses In the fiscal year 2011 the Company and its subsidiaries have an increase of Baht 6.53 million


In the fiscal year 2012 the Company and its subsidiaries have sale associated expenses of Baht 184.96 million representing an increase of Baht 95.67 million or an increase of 107.15% from that of the fiscal year 2011. The increase was attributed to the fact that the Company had paid an increased transfer fees including specific business tax deriving from an increased property sale of Baht 953.38 million in the year 2012. Such transfer fees and business tax have increased by approximately Baht 41 million from that of the fiscal year 2011. In addition,the Company and its subsidiaries have launched 3 new projects which are Baan Si Tawan, Baan Tiew Talay, and Baan Tiew Talay 2 with the project value of Baht 800 million, Baht 2,000 million, and Baht 1,800 million, respectively. While the Company and its subsidiaries will be able to recognize the income of Baht 1,845 million from sales of such 3 projects during the year 2013-2015, they have to recognize the advertising and public relation expense right away in the year 2012 of approximately Baht 45 million. The administration expenses for the fiscal year 2012 had increased by Baht 39.78 million or equivalent to 16.81% due to the salary and wage adjustment of minimum wage of Baht 300 announced in the year 2012.

Financial expenses or interest expenses in the fiscal year 2011 has increased by approximately Baht 18.11 million. This increase of interest expenses was a result of accounting interest expenses which derived from term loan for Sripanwa Hotel Project as an expenses following the completion of hotel and villas for sale and in the process of transfer to customer as oppose to capitalize the same while the project was under construction. However, since the project has been completed, those financial expenses will be subsided after the property is eventually sold and related term loan is repaid.

Financial expenses or interest expenses in the fiscal year 2012 are approximately Baht 113.84 million, an increase of approximately Baht 23.72 million from that of the fiscal year 2011. This increase of interest expenses was a result of the completion of The Issara Ladprao Condominium for


Attachment 1 Page 8

sale and in the process of transfer to customers. In the accounting practice, these interest expenses of the loan for such project amounting to Baht 34 million have to be recognized in a profit and loss statement of the year 2012, while previously recognized as costs of the project. For Issara@Sukumwit 42, Baan Chan Talay, and Issara Village which are already transferred to customers, their finance expenses have decreased by approximately Baht 10 million. Although there is a fluctuation in interest expenses recognition, the Company has already accounted for such expenses in the costs of projects, therefore there is no significant effect to the Company’s net profit.


Net Profit / (Loss) The Company and its subsidiaries have a net loss of Baht 19.69 million in the fiscal year


The Company and its subsidiaries have a net profit, contributed to the Company’s shareholders of Baht 121.35 million in the fiscal year 2012, an increase from that of the fiscal year 2011 by Baht 19.69 million following the increase in revenue from real estate sales and revenue from hotel operations as specified in Revenue and Gross Profit Topics. This increase reflects in an increase of net profit. Net profit per share was Baht 1.01, an increase from that of the fiscal year 2011 by Baht 1.17 per share. Financial Status

Assets As of December 31, 2011 the Company and its subsidiaries have total assets of Baht

4,141.53 million, an increase of approximately Baht 446.29 million from that of the fiscal year 2010, or equivalent to an increase of 12.08%. The majority of those assets and which has changed significantly was the property for sale under development of Baht 2,189.48 million equivalents to 52.87% of total assets, an increase of Baht 379.04 million from that of the fiscal year 2010. This reflects the fact that the Company has a total of 6 projects, some of those constructions had been completed and some were still under construction, an increase of 2 projects from the fiscal year 2010. Those two new projects are Issara Village, a townhouse project and Baan Tiew Talay Condominium; both are on Cha am beach Petchburi province. One project which has been under construction since 2010 namely Phase 4 of Sripanwa Project. For those properties for investment in the fiscal year 2011, a fair market value of Baht 214.7 million was appraised by an independent appraiser on an income approach. That newly appraised value was an increase from Baht 93.56 million in the fiscal year 2010 which was shown as an acquisition cost less depreciation. The increase has been adjusted in the retain earnings early in the year by Baht 88 million and Baht 6 million has been adjusted in the net profit of the fiscal year while other assets have not been changed significantly.



Attachment 1 Page 9

Liabilities As of December 31, 2011 the Company and its subsidiaries have total liabilities of Baht


As of December 31, 2012 the Company and its subsidiaries have total liabilities of Baht 2,374.02 million, a decrease of Baht 594.17 million from that of the fiscal year 2011. Liability which has been changed significantly was trade liability of Baht 204.64 million, equivalent to 8.62% of total liability. Such trade liability was lower than that of the fiscal year 2011 by Baht 114.09 million because the Company and its subsidiaries have made a payment to its contractors for the completed construction and effected a hand-over. Long term loan with a maturity within one year of Baht 555.04 million equivalents to 23.38% of total liabilities was a decrease of Baht 341.97 million from that of the fiscal year 2011 because the Company and its subsidiaries have made a loan repayment to the bank in the proportion of cash flow received from the customers whose residential condominium and townhouse units are completely going through transfer stage during the year. Additionally, there is an increase in payable for lands-associated companies of Baht 168.29 million, or equivalent to 7.09% of total liabilities. The remainings are loans for other projects. Long-term loan of Baht 737.19 million representing 31.05 of total liabilities has decreased by Bash 202.93 million from that of the fiscal year 2011. As at the end of the fiscal year 2012, the Company and its subsidiaries have total liabilities of Baht 2,374.02 million, or equivalent to 64.27% of total assets.

Shareholders’ Equity Shareholders’ equity of Baht 1,173.34 million in the fiscal year 2011 includes Baht 957.66


Liquidity

Cash Flow For the year 2010 and 2011, the Company and its subsidiaries have cashflow used for



For the year 2010 and the year 2011, the Company had net cashflow from financing activities of Baht 47.25 million, and Baht 440.60 million, respectively. The main reasons were from loans from banks. In the year 2011, the Company and its subsidiaries received long-term loan from bank of Baht 1,200.56 million and paid back of Baht 788.16 million during the year. In the year 2011, there was a loan from associated company amounting to Baht 24 million. For the year 2011, there was net cashflow from financing activities of approximately Baht 681.53 million. The main reasons were Baht 1,167.44 repayment to the bank for the long-term loan and Baht 116 million repayment to associated


Attachment 1 Page 10

company. Additionally, the Company and its subsidiaries received money from long-term loan amounting to Baht 622.54 million for support two new projects of the Company and its subsidiaries. 6. Industry Outlook: Real Estate Industry

Since early 2012 the real estate market in Bangkok and its vicinity are exposed to various factors affecting the growth of the market, such as the flooding in 2011, the last of which is still in effect as to the activity of trading in some residents in the area that had been heavily flooded.because people who want to buy house in town have delayed the decision to wait out the housing situation this year. In addition, the economic environment is not conducive to the housing; although the government has taken steps to help people buy houses. However, Thailand's economy started to recover from the flood and be exposed to the European debt crisis continued and prolonged impact on the overall economy of Thailand, in particular, the export slowdown. While the trend in the curve of the property market in 2012 is expected to be back to pick up, the issue of flood risk was back to the real estate market again.

Of the factors mentioned above. Kasikorn Research Center has revised Thailand's residence trading activities in Bangkok and its vicinity. They expect full year 2012, the transfer of ownership of housing in the Bangkok metropolitan area is approximately 145,000 to 148,000, shrinking 1.0 to 3.5 when compared with the shrinkage percentage of 18.3 in the year 2011. For the whole year 2012, the transfer of ownership of real estate residential condominium project will remain growth due in part to the fact that the rest of the year, the project is expected to launch to the market. Condeminum project is still benefiting from the flood that has an effect on people’s behavior of house choosing, especially in buying second homes. The rise of the flat-housing market is still shrinking.

The issue of flooding is still likely to be a factor influencing the decision to buy the house of consumers. In addition to the need for businesses to adapt themselves to reduce the impact of flooding, Government and related agencies would have turned to the importance of planning for a flood protection system, especially in areas that are vulnerable to flooding every year.

Source: Kasikorn Research Center http://www.kasikornresearch.com/th/K-EconAnalysis/Pages/ViewSummary.aspx?docid=29567


Attachment 2 Page 1


Charn Issara Residence Co., Ltd. 1. General Information Company Name : Charn Issara Residence Co., Ltd. Main Business : Property development for sale Head Office : 2922/200 New Petchburi Road, Bangkapi, HuayKwang, Bangkok 10320,

Thailand Telephone : 66-2308-2020 Fax : 66-2308-2990 Registered Capital : Baht 140,000,000.00 Divided into 1,400,000 of ordinary shares at par value of Baht 100 Paid-up Capital : Baht 140,000,000.00 Divided into1,400,000 of ordinary shares at par value of Baht 100 2. Nature of Business

Charn Issara Residence Co., Ltd (“CIR”) is a limited company whose 80.04% shares held by Charn Issara Development Public Company Limited, as its parent company. CIR develops property for sale. It is currently developing a Baht 1,600 million on 60 rais as Sripanwa Hotel Phase 1 and 2 and developing villa project known as “Sripanwa” Phase 3 and 4 for Baht 1,500 and 1,400 million, respectively, on approximately 15 rais of land at Cape Panwa in Phuket. The construction of the hotel phase 3 has now been completed while the construction of 7 residence villas is underway. The site has a view of the ocean and surrounding islands. The project’s target customers are Thais and foreigners who enjoy the lifestyle of Phuket, a world renowned resort. Source: http://ci-th.listedcompany.com/company_business.html Remark: Currently, Phase 1-3 are already completed (only residential units for sale in Phase 3 is under construction). Only Sripanwa Hotel is the assets to be disposed to the Property Fund. 3. Summary of Financial Position and Operation

Important numbers that show financial position as at December 31, 2010, 2011, and 2012 and show operating results for the year ended December 31, 2010, 2011, and 2012 can be shown below:

(Unit: Thousand Baht) 2010/1 (audited)

2011/1 (audited)

2012/2 (audited)

Total assets 1,419,272 1,449,673 1,410,777 Total liabilities 1,110,779 1,215,776 1,234,497 Total shareholder equity 308,493 233,897 176,280

(Unit: Thousand Baht) 2010

(audited) 2011

(audited) 2012

(audited) Revenue from real estate sales 13,793 - - Revenue from hotel operations 157,098 247,640 303,674 Services and utilities income from real estate project 20,096 20,002 28,020 Total revenue 194,631 272,801 331,694 Gross profit from real estate sales 5,950 - - Gross profit from hotel operations 14,902 85,362 108,500 Selling and administrative expenses 93,478 116,102 120,147 Finance cost 44,224 66,345 73,990 Net profit (loss) (94,110) (71,924) (57,618)

Source: 1/ Audited financial statements of CIR. 2/ Internal financial statements of CIR which were audited by the Company’s auditor. Remark: Revenue from hotel operations of CIR as shown in the above table comprises of (a) Direct revenue from hotel operations and (b) Management fee charged from units already sold. Therefore, revenue from hotel operations of CIR for the year 2012 of Baht 303.67 million is greater than those of Sripanwa Hotel Project which is Baht 291.48 million (in Attachment 3 Page 1). Such revenue of Sripanwa Hotel Project represents only part (a), not included part (b). 4. Board of Directors

As of March 12, 2013, CIR has 4 directors as follows:


Attachment 2 Page 2

Names Position 1. Mr. Songkran Issara* Director 2. Mr. Dittawat Issara Director 3. Mr. Worasit Issara Director 4. Mrs. Wilai Intakul Director

Source: CIR’s affidavit Remark: * The authorized director of the Company is Mr. Songkran Issara sign with Company’s seal affixed. 5. Capital structure

As of May 23, 2012, CIR has registered, issued and fully paid Baht 140 million capital, comprising of 1,400,000 ordinary shares with par value of Baht 100 per share. Shareholders list of CIR as of May 23, 2012 are as follows:

Name Nationality

Number of shares

Percentage holding

1 Charn Issara Development Public Company Limited Thai 1,120,600 80.04 2 Mr. Wonlop Sangkiet Thai 83,200 5.94 3 Mrs. Peerapan Kasemsan na Ayuthaya Thai 74,400 5.31 4 Mr. Pravetwut Raiwa Thai 72,800 5.20 5 Mr. Hirochinge Seki Japanese 21,000 1.50 6 Mr. Viet Aungdo Vietnamese 20,000 1.43 7 Ms. Duangporn Limtrakul Thai 4,000 0.28 8 Mrs. Piyatida Limtrakul Thai 4,000 0.28 Total 1,400,000 100.00

Source: Lists of shareholders (Bor.Or.Jor 5) of CIR Remark: Shareholders No. 2) – 8) as shown above are not related parties with the Company, however, have relationship as disclosed in Clause 12 of the Information Memorandum Concerning Assets Acquisition and Disposition of the Company.

7. Industry Outlook: Hotel Industry in Phuket Hotel business in Phuket during the year 2012-2013 has continued to grow. The number of

tourists in Phuket is rising each year, especially foreign tourists, such as Chinese, Russian, Australian, Middle Eastian and East Asian. Statistics from the Tourism Authority of Thailand found that the number of tourist arrivals in Phuket for the year 2012 amounted to 6,810,176, and estimates for the year 2012 was 9,300,000, represented the increase by 36.56%. The reason for such an increase is the improvement of Thailand’s political situation and of flooding crisis of the year 2011. In additionally, the statistic numbers show the increase.in direct flights to Phuket especially during the peak tourist season. All of these factors convinced that the future remains bright for the hotel business in Phuket.

The survey of hotels in Phuket found that.in the second half of the year 2012 demand of hotel is at 65.5%, up from 64.6% in the first half of the year 2012.

For the supply side of hotels in Phuket, the number has increased steadily in the last 2-3 years, especially four-star hotels in Patong which has increased continually. Accordingly the expected future market competition in Phuket will be high particularly in Patong Beach since it is the main attraction of foreigners. Statistics from Knight Frank Chartered (Thailand) Co., Ltd. found that the second half of the year 2012, the supply of 4-5 star hotels in Phuket increased to a total of 16,726 rooms compared to only 8,244 rooms in the year 2007. However, the overall number of new room supply in the future is expected to be less likely due to the limited space available in Phuket.

In the second half of the year 2012, the average rental of 4-5 stars hotel in Phuket (excluding villa) is about Baht 4,084 per night, up from Baht 3,899 per night during the first half of 2012, or equivalent to an increase of approximately 4.75% From the projection, the future average rate per night is likely to rise because the rates have not been adjusted for the past 2-3 years in some hotels. Source: (1) Tourism Authority of Thailand (2) Hotel overview for the year 2012 produced by Knight Frank Chartered (Thailand) Limited


Attachment 3 Page 1

Attachment 3 Information of Sripanwa Hotel Project under

Charn Issara Residence Co., Ltd. 1. General Information Project Name : Sripanwa Hotel Project, included Sripanwa Hotel and Sripanwa Boutique Resort

and Spa and Serviced Apartments (“Sripanwa Hotel Project”) Owner : Charn Issara Residence Co., Ltd. (“CIR”) Business : Hotel Head Office : Sripanwa Project, 88 Moo 8 Sakdidej Road, Wichid District, Amphur Muang,

Phuket 83000 Telephone : 66-7637-1000 Fax : 66-7637-1004 Website : http://www.sripanwa.com 1. History

Sripanwa Hotel Project is operated under Charn Issara Residence Co., Ltd. (“CIR”). The project covers hotel operations, restaurants, and other management activities related to hotel operations. The project uses assets of CIR to operate such businesses. The assets under Sripanwa Hotel Project can be summarized below:

a) Lands and all buildings on the lands used to operate the Sripanwa Hotel Project. This includes common roads, 38 units of pool villas, 7 units of serviced apartments, swimming pool, tennis court, sport center, fitness building, reception building, restaurant, spa building, M&E building, and staff house.

b) Main Facilities used for hotel operation such as Electrical System Communication System, Sanitary System, Fire Protection System, Air Conditioning, and Ventilation System.

c) Furniture, fixtures, and equipment used in the operation of Sripanwa Hotel Project. The details of assets under Sripanwa Hotel Project disposed to the Property Fund are described in Section 1, Clause 1.5.1, of this report. 2. Summary of operating results

Operating results of Sripanwa Hotel Project for the year ended December 31, 2010, 2011, and 2012 are as follows:

(Unit: Thousand Baht) 2010 2011 2012 Revenues from hotel operations 156,808 236,462 291,483 Cost of hotel operations 67,484 95,012 110,867 Gross profit 89,324 141,450 180,616 Selling expenses 20,131 22,276 20,837 Administrative expenses 42,626 48,575 51,293 Profit before finance cost, corporate income tax, depreciation, and amortization 26,567 70,599 108,486

Source: Report and financial information only for business of Sripanwa Hotel Project, which is operated under Charn Issara Residence Co., Ltd., prepared by Ernst & Young Office Limited, dated March 1, 2013 (“Carve Out Financial Statement”).

As at December 31, 2012, the net book value of assets used for the operation of Sripanwa

Hotel Project can be shown as follows:

(Unit: Baht million) December 31, 2012 Land 209 Building 665 Building Improvement 2 Furniture and Office equipment 16 Motor vehicles 13

Total 905 Source: Report and financial information only for business of Sripanwa Hotel Project, which is operated under Charn Issara Residence Co., Ltd., prepared by Ernst & Young Office Limited (“EY”), dated March 1, 2013 Remark: * Figures in above table are slightly different from these figures in CIR’s internal financial statements for the year 2012, which were audited by the Company’s auditor due to decimal rounding of each item of assets by EY.

(Encls.No. 8)

Audit Committee’s profile for Shareholders choose to give proxy for attend the meeting and vote

MR.PHISUD DEJAKAISAYA Age : 57 years

Chairman of Audit Committee and Independent Director

Shareholding : 0.026


• LL.B Thammasat University, Thailand, 1982

M.C.L, Southern Methodist University, USA, 1984

• Diploma in Comparative Law, Southwestern Legal Foundation,

• Academy of International and Comparative Law, 1984

• Director Accreditation Program (DAP), Thai Institute of Director (IOD)

Professional career for the past five years

1990 to present Executive Partner Siam Premier International Law Office Limited

1997 to present Director Krungthai AXA Life Insurance Co., Ltd.

2005 to present Chairman of the Charn Issara Development Public Company

Audit Committee Limited

2010 to present Audit Committee Health Network Public Company Limited

2010 to present Audit Committee Paolo Medic Co., Ltd.

2009 to Present Sub Committee Evaluation of the Legal Development of the

Government

April 2009 – July 2009 Sub Committee The Guideline for the Establishment of Investor

Services under the Supervisor of the Prime Minister

2008 to 2010 Advisor Thailand Post Co., Ltd.

20008 to 2009 Board of Director Office of Small and Medium Enterprise Promotion

– SOMEP

2008 to 2009 Advisor Software Industry promotion Agency Organization

1984-1990 Senior Lawyer Baker& McKenzie Ltd.


1. No criminal record related to assets wrongfully acquired, 2. No record of related transaction which cause conflict of interest to the Company in

past year, 3. No interest in all agenda proposed in this Shareholders’ meeting


1. Attend 7/7 meetings of the Board of Directors, 2. Attend 7/7 meeting of the Audit Committee, 3. Attend 1/1 meeting of the Remuneration Committee 4. Attend 1/1 meeting of the Annual General Meeting of Shareholders in 2012

MR.WITIT RATCHATATANUN Age : 58 years


Shareholding : 0.23


• Doctoral Degree in Education , Harvard University, U.S.A.

• M.A. University of Essex U.K.,

• B.Sc. (Econ) London School of Economics U.K.

Professional career

Present Director, Panyaprateep School, Pak Chong, Nakhon

Ratchasima Province

Board Member, Mitr Phol Sugarcane research Center Co. Ltd.

Advisor Thawsi School

2002-Present Audit Committee and Charn Issara Development Public Co., Ltd.

Independent Director,

2004 Director, Community Economic Development and Income

Distribution Office, NESDB

1999-2003 Assistant Secretary General of NESDB

2001-2002 Director, International Policy Office

Director, Macro Social Policy Office

1997-2003 Director, Thai-German Institute, Ministry of Industry

2000-2004 Director, Liquor Distillery Organization, Ministry of Finance

1996-1999 Director, Office of the Joint Public/Private Consultative

Committee

1993-1996 Director, Government and Private Cooperation Division






MR. PINIT PUAPAN Age : 45 years


Shareholding : 0.15


• Advance Management Program, Harvard Business School (2006)

• Master Degree in Economics, The London School of Economic and Political Science (1990)

• BA, Economics & Political Science, Tufts University (1989)

• Director Accreditation Program (DAP), Thai Institute of Directors (IOD)

• Leader Program, Capital Market Academy (CMA11) Professional career for the past five years 2002 - Present Audit Committee and Charn Issara Development Public Co.,Ltd.

Independent Director

2009 – Present Director Seamico Asset Management Company Limited

2009 – Present Director Thanh Cong Securities Company (Vietnam)

2008-Present Authorized Director KT ZMICO Securities Company Limited

Managing Director

2008-Present Director Ideas 1606 Co., Ltd.

2007 – Present Authorized Director Seamico Securities Public Company Limited

2002-Present Board of Directors Thai Dairy Industry Company Limited

1999-2000 Director CapMaxx Company Limited


1. No criminal record related to assets wrongfully acquired,

2. No record of related transaction which cause conflict of interest to the Company in past year,

3. No interest in all agenda proposed in this Shareholders’ meeting Meeting attendance record in past year


(affix Baht 20 Duty Stamp)

Proxy Form B

Specific Proxy

Written at…………………

Date…Month……Year…..

(1) I/We…………………………………………… Nationality………………… Residing at No……. Street …………… Tambol/Kwang…………………… Amphur/Kate………… Province ……………. Post Code…………………..

(2) Being a shareholder of Charn Issara Development PLC by holding a total number of …….shares and is entitled to …….. votes as follows:-

Ordinary shares …………….. shares, entitled to ………. votes

Preference shares ………….. shares, entitled to ………. votes

(3) Hereby appoint

(1) ……………………………………………….age ……………… years Residing at house number …… Road ……….. Tambol/Kwang………

Amphur/Kate……………. Province …………..... Postcode …………

(2) Mr. Phisud Dejakaisaya (Independent Director and Chairman of the Audit Committee) age 57 years Residing at house number 2922/200 Road New Petchburi Tambol/Kwang Bangkapi Amphur/Kate Huaykwang Province Bangkok Metropolis Postcode 10320

(3) Mr. Witit Ratchatanun (Independent Director and Audit Committee) age 58 years Residing at house number 2922/200 Road New Petchburi Tambol/Kwang

Bangkapi Amphur/Kate Huaykwang Province Bangkok Metropolis Postcode 10320

(4) Mr. Pinit Puapan (Independent Director and Audit Committee) Age 45 years Residing at house number 2922/200 Road New Petchburi Tambol/Kwang Bangkapi Amphur/Kate Huaykwang Province Bangkok Metropolis Postcode 10320

One of those as my/our proxy to attend and vote on my/our behalf in the Annual General Meeting of Shareholders No. 1/2013 to be held on April 25, 2013 Time 14.00 at 21th floor Charn Issara Tower II, No. 2922/200 New Petchburi road, Kwang Bangkapi, Kate Huaykwang, Bangkok Metropolis or such other date, time and place as the meeting may be adjourned.

(4) In this meeting, I hereby give my proxy to vote on my behalf as follows:-

Agenda No. 1 Chairman’s Announcement (if any)

Agenda No. 2 To certify the minutes of Annual General Meeting of

Shareholders No. 1/2013 held on April 25, 2013

(1) The proxy is granted to vote on my behalf as it deems appropriate in all respects.

(2) The proxy is granted to vote at my desire as follows:-

Approve Disapprove Abstain

Agenda No. 3 To consider for acknowledgement the company’s operation for

the fiscal year 2012

(1) The proxy is granted to vote on my behalf as it deems appropriate in all respects.



Agenda No. 4 To consider for approval the audited balance sheets and income

statements for the year ended December 31, 2012

(1) The proxy is granted to vote on my behalf as it deems appropriate in all

respects.



Agenda No. 5 To consider for approval the dividend payment for the operating

results of fiscal year ending December 31, 2012


respects.



Agenda No. 6 To consider for appointment of new Directors who replace

those that are due to retire by rotation and fix the Director’s

remuneration for the fiscal year 2013


respects.


Appointment of certain Directors

Mr.Phisud Dejakaisaya position: Independent Director, Chairman of Audit Committee and Remuneration Committee


Mr.Witit Rachatatanun position: Independent Director and Audit Committee


Mr.Pinit Puapan position: Independent Director and Audit Committee


Agenda No. 7 To consider for appointment of an auditor and fix its

remuneration for the fiscal year 2013


respects.



Agenda No. 8 To consider and approve the disposition of assets (immovable and

movable assets) used for the operation of Sri panwa Hotel Resort and Spa Phuket and Service Apartment which belong to Charn Issara Residence Co., Ltd. or the subsidiary of the Company in which the Company holds 80.4% of the shares (the “Subsidiary”) to the Fund.


respects.



Agenda No. 9 To consider and approve the acquisition of assets of the Company,

Subsidiary and Special Purpose Vehicle (SPV) by dividing the agendas for approval of the transactions as follows:

9.1 To consider and approve for the Company and Subsidiary to invest in the

Fund by purchasing approximately 60,000,000 units in the Fund with a par value of Baht 10 (ten), with a total value of approximately Baht 600 Million or 30% of the total units in the Fund.


respects.



9.2 To consider and approve for the Subsidiary to set up an SPV within

reasonable time and hold the shares of not less than 99.99% of the total

shares in the SPV with the initial registered capital in the amount of 30

Million Baht


respects.



9.3 To consider and approve for the SPV in which the Subsidiary holds not less

than 99.99% of the registered capital of the SPV, to lease the assets

(immovable and movable) that the Property Fund has invested in Sri panwa

Hotel Resort and Spa Phuket and Service Apartment from the Property Fund

and the rental amount.


respects.



Agenda No. 10 To consider and approve for the Subsidiary to guarantee the

performance in the Lease Agreement between SPV and the Fund to the Fund and for the Company to guarantee the shortfall of the rental paid by the SPV to the Fund.


respects.



Agenda No. 11 To consider and approve to authorise the Board of Directors and/or

Managing Director and/or Authorised Directors to negotiate, execute and enter into any document and agreement in relation to the setting up of the Fund, as well as, to do any act which will result in helping the action done by the Company, Subsidiary and SPV concerning the setting up of the Fund to become successful and in line with the objective.


respects.



Agenda No.12 To consider other matters (if any).

(1)The proxy is granted to vote on my behalf as it deems appropriate in all

respects.



(5)In the event that any vote by proxy is found to be different from direction

specified in this specific proxy form that vote shall be regarded as misrepresenting

and not my vote as a shareholder.

(6)In the event that I do not specify my voting direction on any agenda or my

direction is unclear or in the event that the Meeting considers or passes any

resolutions in any matters other than those specified herein including the case

where there is an amendment or an addition of any fact whatsoever then the proxy

is allowed to consider and vote on my behalf as it deems appropriate.

Any act performed by the proxy in the Meeting, except for those vote(s) that are not in accordance with this specific proxy form, it shall be deem as such acts had been done by myself in all respects.

Signed_______________________ Grantor

( )

Signed_______________________ Proxy

( )

Signed_______________________ Proxy

( )

Signed_______________________ Proxy

( )

Remarks

1. The shareholder appointing proxy must authorize only one proxy to attend and vote in the Meeting and may not split the number of shares to many proxies for splitting votes.

2. The agenda of electing Directors, a whole Board or any specific Director(s) may be elected.