Annual Report 2009

Seamless IntegrationAnnual Report 2009

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Annual Report 2009

1

CONTENTSFinancial Highlights 3

Message from Chairman 5

Message from the Chief Executive Officer 8

Board of Directors and Executive Committee 12

Report on Corporate Governance by the Audit Committee 16

Investment Structure of Sansiri Group 19

General Information of the Company and its Subsidiaries 20

Other References 24

Type of Business 25

Revenue Structure 28

Milestone during the Year 30

Type of Products and Services 33

Marketing and Competition 35

Product Procurement 44

Risk Factors 46

Shareholders Structure and Management 52

Details on the Directors and Management 86

Inter- Related Transactions 98

Table of Key Financial Ratios 99

Management Discussion and Analysis 100

Financial Statement 112

Summary of Transactions Specified According to 174 the Form 56-2 in Annual Report 2009

BRILLIANT VISIONS CREATE IMPRESSIONISTIC SERVICES

Annual Report 2009

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FINANCIAL HIGHLIGHTS 2007 2008 2009

Total Revenue THB Million 13,889 15,178 17,497

Net Profit THB Million 708 914 1,608

Total Asset THB Million 21,032 23,492 25,375

Total Shareholdes Equity THB Million 8,346 8,955 10,124

Gross Margin (Core Revenue) % 28.77 30.04 30.29

Net Profit Margin % 5.10 6.02 9.19

Debt to Equity Times 1.43 1.54 1.44

Net Gearing Ratio Times 0.68 0.88 0.70

Earnings per Share Baht 0.48 0.62 1.09

Book Value per Share Baht 5.66 6.08 6.87

Remark: Financial figures are based on the consolidated financial statements.

2007

THB

MILL

ION

2008 2009 2007

THB

MILL

ION

2008 2009 2007

THB

MILL

ION

2008 2009 2007

THB

MILL

ION

2008 2009

TOTAL REVENUE REVENUE FROM PROJECT SALE

NET PROFIT TOTAL ASSET

13,88

9 15,17

8 17,49

7

12,91

0 14,39

5 16,62

9

21,03

2 23,49

2 25,37

5

708

914

1,608

Annual Report 2009

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MESSAGE FROM CHAIRMANThe Thai economy in 2009 slowed down further especially during the first quarter of the year as a result of the global economic downturn. However, the economic outlook in the second half of 2009 turned positive with clearer signals of economic recovery including export growth in December, increase in the consumer confidence index, lower unemployment rate, recovering tourism, and the implementation of the economic stimulus “Strong Thailand Scheme”. Despite these positive indications, Thai economy was still vulnerable to many factors such as political uncertainty, and the suspension of projects in Map Ta Phut Industrial Estate, which raised concerns not only over investment opportunities by foreign investors but also over business operation and expansion among Thai entrepreneurs.

Overall real estate market in 2009 was stable with the sluggish overall demand in the first half of the year that improved in the latter half of the year thanks to recovering consumer confidence, property-related taxes cut by the Government, and low mortgage rate. With commercial banks still prudent on lending to small and medium developers, as well as large developers postponing new launches and scaling down constructions, housing supply in the first six months was limited in response to the softer demandin that period. However, the demand recovered well in the second half resulting in more launches and heavier marketing spending.

Sansiri group has managed to grow its total revenues by 15%, and increase its net profit by 76% leveragingoff its unique fully-integrated business model.

Sansiri not only develops all types of residential properties in every segment, but also provides a full range of property services to customers. Sansiri also improved profitability through cost efficiency and effective inventory management. Nevertheless, Sansiri model continues to stress on customer’s satisfaction through strict controls on quality and cost while uncompromising in its maintenance of high standards of corporate governance and social responsibilities. Overall, Sansiri expects the real estate market in 2010 will continue to improve in line with economic recovery with the condominium demand along the BTS and MRT standing out meeting the need for convenient transportation and changing lifestyle of urban community.

Sansiri Public Company Limited would like to express our sincere appreciation to our shareholders, bond-holders, customers, financial institutions, the media and business partners for their supports, along with every member of the management and staff for their dedication to strengthen Sansiri’s market leadership and be ahead of the competition.

Kovit PoshyanandaChairman

AN ARRAY OF EXPERTISE INTERWOVEN TO ACHIEVE ULTIMATE SUCCESS

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MESSAGE FROM THE CHIEFEXECUTIVEOFFICER

In 2009, despite Thailand’s economic slowdown and political uncertainties, Sansiri has managed to achieve its growth in both the revenues and net profits. Sansiri owes this success to customer’s brand loyalty and to Sansiri products and services, Sansiri’s commitment to deliver quality projects and prudent inventory and cost management. Capitalizing on its fully-integrated business model, Sansiri outpaced competitors with capability to serve consumers’ demand for property projects and services in every segment.

With commercial banks limiting their funding only to large developers and growing consumer preference towards more established brands, Sansiri has strengthened its grip as a leader in a market tended

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to favour the strongest. Furthermore, in cooperation with its business partners, Sansiri continued to build its long term brand loyalty by launching innovative products and services to meet evolving consumer lifestyle.

In 2009, Sansiri reported total revenue of 17,497 millionbaht, a 15% growth over 2008, with net profit of 1,608million baht, representing an earning per share of 1.09 baht. Revenue from property sales of 16,629 million baht contributed 95% of total revenue. Of the total revenue from project sales in 2009, 8,829 million baht (53%) derived from condominium projects, 5,292 million baht (32%) derived from single-detached house projects, and the balance of 2,479 million baht (15%) derived from townhouse projects.

In 2010, the economic situation is anticipated to improve and property market to prosper. With our competitive strengths, and dedicated commitment of management and staff, Sansiri will continue to grow its sales and profitability to remain one of the strongest leaders in Thailand’s property market.

Apichart ChutrakulChief Executive Officer

THE INTEGRAL REPUTATION RISING TOWARDS WORLD RECOGNITION.

FROM A FOUNDATION OF PERFECTION, BUILDING TOWARDS ICONIC OF LIVINGFROM A FOUNDATION OF PERFECTION, BUILDING TOWARDS ICONIC OF LIVING

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BOARD OFDIRECTORS 1. Chairman of the Board (Independent Director) Mr. Kovit Poshyananda

2. Vice-Chairman Chief Executive Officer Mr. Apichart Chutrakul

3. Independent Director Mr. Mana Noppun

4. Independent Director Mr. Jesadavat Priebjrivat

5. Independent Director Mr. Wirat Uanarumit

6. Director / President Mr. Srettha Thavisin

7. Director / Chief Operating Officer Mr. Wanchak Buranasiri

8. Director Mr. Kriengkrai Thiennukul

9. Director Mrs. Nujchanart Panthawangkun

10. Independent Director Mr. Porntat Amatavivadhana

1

4

7

10

2

5

8

3

6

9

13

EXECUTIVECOMMITTEE 1. Chairman of the Executive Committee Mr. Apichart Chutrakul

2. Deputy Chairman of the Executive Committee Mr. Srettha Thavisin

3. Member of the Executive Committee Mr. Wanchak Buranasiri

4. Member of the Executive Committee Mr. Thalin Aeimtitiwat

5. Member of the Executive Committee Mr. Monthian Soisuwan

6. Member of the Executive Committee Mr. Uthai Uthaisangsuk

7. Member of the Executive Committee Mr. Nopporn Boonthanom

8. Member of the Executive Committee Mr. Metha Angwatanapanich

9. Member of the Executive Committee Mr. Somchai Charntanawet

10. Member of the Executive Committee Mr. Manu Trakulwattanakit

11. Member of the Executive Committee and Secretary to the Executive Committee Mrs. Anongluk Rathprasert

1

4

7

10 11

2

5

8

3

6

9

Annual Report 2009

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AUDIT COMMITTEE 1. Chairman of the Audit Committee Mr. Mana Noppun

2. Member of the Audit Committee Mr. Jesadavat Priebjrivat

3. Member of the Audit Committee Mr. Wirat Uanarumit

1

2

3

Annual Report 2009

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REPORT ONCORPORATEGOVERNANCEBY THE AUDITCOMMITTEEFOR 2009The Audit Committee is constituted in such a way as to be independent of the Company’s management. All members of the Audit Committee are qualified individuals and independent directors who possess the qualifications stipulated by the Stock Exchange of Thailand. Presently, the Audit Committee is composed of Mr. Mana Noppun as a Chairman of the Audit Committee with other 2 members, Mr. Jesadavat Priebjrivat and Mr. Wirat Uanarumit. The Audit Committee performs the tasks assigned to it by the Board of Directors. It acts independently, however, and is unconstrained in its access to information and alwaysreceives good co-operation from the Company, in conformity to regulations of the StockExchange of Thailand. In 2008, the present Audit Committee met 4 times, in which the Chairman and all members of Audit Committee have attended all meetings in full. Moreover, the Audit Committee also consulted with the Management and the internal audit officer as deemed appropriate. Meetings with the internal audit officer were free of direction fromthe Management. The findings of the Audit Committee are summarized as follows:1. Review of financial statements : Prior to submission of quarterly and annual financial statements that were reviewed and audited by the independent auditor to the Board of Directors for approval, the Audit Committee had reviewed these statements based on its queries and explanations provided by the management. The review shows that these financial reports were in conformity with generally accepted accounting principles as well as provided sufficient disclosure of accurate and reliable information in the timely manner without any significant adjustment from auditor during or after the reviews.2. Review of internal control system : The Audit Committee, in cooperation with the internal audit officer, has not only regularly reviewed the Company’s internal control system in order to assess the effectiveness and sufficiency of the system, but also has made suggestions on improving effectiveness. The review shows that the Company’s internal

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control system is sufficient, appropriate and being regularly updated to cope with the changing environment and serve the business operations to achieve the objectives while conforming to the pertinent regulations. The Audit Committee did not find any significant constraints or deficiency leading to impediment to business operations. In addition, the Audit Committee has emphasized that the Management must continue improving the internal control system to be highly effective at all times.3. Review of disclosure of connected transactions and potential conflicts of interest : Prior to the approval by the Board of Directors for any connected transactions and potential conflicts of interest, the Audit Committee had reviewed and commented on such transactions to ensure the transparency and conformity to the rules and regulations of the Stock Exchange of Thailand. In this regard, the Audit Committee did not find any significant issues regarding the violation of the regulation of Stock Exchange of Thailand concerning connected transactions or any potential conflicts of interest.4. Compliance with laws and regulations : The Audit Committee had reviewed the processes and procedures to ensure compliance with regulations regarding securities and the Stock Exchange of Thailand, guidelines by the Stock Exchange of Thailand, and other related business acts. The review shows that the Company has always acted in compliance with laws and regulations. In this regard, the Audit Committee did not find any significant issues regarding the violation of regulations, guidelines, and obligations with any externalparties.5. Overseeing and monitoring the internal control matters : The Audit Committee, in cooperation with the internal audit officer, has reviewed the report on internal control matters on quarterly basis. The information technology system was also developed and fully utilized to support the auditing work. The review shows that the internal control was conducted in the independent, sufficient, and effective manners with the sufficiently elaborate information security safeguards. Moreover, the summary of findings and the guidelines to prevent or mitigate any potential risks were sent to the involved parties fortheir further actions.6. Good corporate governance : The Company realizes the importance of good corporate governance and has focused our operations to ensure the efficiency, transparency, and good business ethics, resulting in our integrity known among shareholders, investors, and all parties involved. 7. Selecting, appointing and proposing remunerations for the auditor : The Audit Committee has reviewed the performance, the independency and the appropriation of the remunerations of the auditor, and agreed to continue the appointment of Ernst & Young Office Limited as the Company’s auditor for the accounting period ended 31 December 2010. The appointment of auditor will be proposed for further approval at the Annual General Meeting 2010.Considering the overall operations of the Company, the Audit Committee has performed the tasks assigned to it by the Board of Directors and is convinced that the Company adheres to good business ethics, that its internal control systems and internal audit systems are effective, that its risk management systems are sufficiently protective, that its corporate governance is based on the principles including transparency, integrity,

Annual Report 2009

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accountability, competitiveness, and credibility, and that its financial reports are in conformity with generally accepted accounting principles with sufficient disclosure of accurate and reliable information. The Company has always acted in compliance with all related regulations. The Audit Committee also believes that the Company has shown strong determination to continuously improve its operational processes, leading to the transparent and effective management with good corporate governance. Thus, the Management’s performances could be examined to ensure the best interest of all stakeholders.

On behalf of the Audit Committee,

(Mr. Mana Noppun)Chairman of the Audit Committee2 March 2010

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Annual Report 2009

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SUBSIDIARIES IN WHICH SANSIRI DIRECTLY HOLDS SHARES

CHANACHAI LIMITED Property 90,000,000 baht 100 475 Sri Ayutthaya Road, Thanon Phayathai Development consisting of 90,000 Sub-district, Rajthevi District, Bangkok 10400 ordinary shares with Tel. (662) 201-3905-6 Fax. (662) 201-3904 a par value of 1,000 baht each

Company / Head Office address Type of Paid-up Capital % of Business shareholding

GENERALINFORMATIONOF THE COMPANY AND ITSSUBSIDIARIESSansiri Public Company Limited (the “Company” or “Sansiri”), registration number 0107538000665, with the security symbol “SIRI” on the Stock Exchange of Thailand, was established in 1984 to engage in real estate business. The Company converted to be a public company limited in 1995 and has been listed on the Stock Exchange of Thailand since 1996

As at 22 February 2010, the Company’s registered capital is 15,991,205,802.64 baht consisting of 3,736,263,038 ordinary shares at the par value of 4.28 baht, with issued and paid-upcapital of 6,307,130,801.76 baht.

The Company’s head office is located at 16th Floor, 475 Sri Ayutthaya Road, Thanon Phayathai Sub-district, Rajthevi District, Bangkok 10400, Telephone number : (662) 201-3905 and (662) 201-3906, Fax : (662) 201-3904, Home Page : www.sansiri.com

The Company’s subsidiaries are as follows :

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ROJNARUEMIT LIMITED Property 4,875,000 baht 100 12th Floor, 475 Sri Ayutthaya Road, Development consisting of 780,000 Thanon Phayathai Sub-district, ordinary shares with Rajthevi District, Bangkok 10400 a par value of Tel. (662) 201-3905-6 Fax. (662) 201-3904 6.25 baht each ARNAWAT LIMITED Property 10,000,000 baht 100 12th Floor, 475 Sri Ayutthaya Road, Development consisting of 1,000,000 Thanon Phayathai Sub-district, ordinary shares with Rajthevi District, Bangkok 10400 a par value of Tel. (662) 201-3905-6 Fax. (662) 201-3904 10 baht each

PIWATTANA LIMITED Property 1,000,000 baht 100 12th Floor, 475 Sri Ayutthaya Road, Development consisting of 100,000 Thanon Phayathai Sub-district, ordinary shares with Rajthevi District, Bangkok 10400 a par value of Tel. (662) 201-3905-6 Fax. (662) 201-3904 10 baht each

RED LOTUS PROPERTIES LIMITED 16th Floor, 475 Si Ayutthaya Road, Property 20,000,000 baht 100 Thanon Phayathai Sub-district, Development consisting of 2,000,000 Rajthevi District, Bangkok 10400 ordinary shares with Tel. (662) 201-3905-6 Fax. (662) 201-3904 a par value of 10 baht each

SANSIRI VENTURE CO.,LTD. Property 3,000,000 baht 100 475 Sri Ayutthaya Road, Thanon Phayathai Development consisting of 300,000 Sub-district, Rajthevi District, Bangkok 10400 ordinary shares with Tel. (662) 201-3905-6 Fax. (662) 201-3904 a par value of 10 baht each

PACIFIC CHALLENGE HOLDING CO.,LTD. Property 2,500,000 baht 85 2/2, Bhakdi Building, Wireless Road, Development consisting of 250,000 Lumpini District, Pathumwan Sub-district, ordinary shares with Bangkok 10330 a par value of Tel. (662) 253-1010 Fax. (662) 253-9625 10 baht each

S.U.N. MANAGEMENT CO., LTD. Property 10,000,000 baht 51 16th Floor, 475 Sri Ayutthaya Road, Development consisting of 1,000,000 Thanon Phayathai Sub-district, ordinary shares with Rajthevi District, Bangkok 10400 a par value of Tel. (662) 201-3905-6 Fax. (662) 201-3904 10 baht each


Annual Report 2009

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PAPANAN LIMITED Medical Service, 20,000,000 baht 100 2/2, Bhakdi Building, Wireless Road, Aesthetics, consisting of 2,000,000 Lumpini District, Pathumwan Sub-district, Health Care and ordinary shares with Bangkok 10330 Medical Spa a par value of Tel. (662) 253-1010 Fax. (662) 253-9625 10 baht each

NATIONAL EDUCATION DEVELOPMENT CO., LTD. Educational 40,000,000 baht 100 380 Panya-Indra Road, West Samwa Business named consisting of 400,000 Sub-district, Klong Samwa District, “SATIT Pattana ordinary shares with Bangkok 10510 School”) a par value of Tel. (662) 915-5390-2 Fax. (662) 915-5501 100 baht each

SATIT PATTANA PERSONEL CENTER LIMITED Consultancy 1,000,000 baht 100 380 Panya-Indra Road, West Samwa and Advisory consisting of 100,000 Sub-district, Klong Samwa District, Services ordinary shares with Bangkok 10510 Pertaining to a par value of Tel. (662) 915-5390-2 Fax. (662) 915-5501 Business 10 baht each Administration

PLUS PROPERTY CO., LTD. Property 600,000,000 baht 100 10th Floor, 163 Rajchapark Buliding, Development consisting of 60,000,000 Sukhumvit 21 (Asoke), North Klongtoey District, ordinary shares with Wattana Sub-district, Bangkok 10110 a par value of Tel. (662) 661-7555 Fax. (662) 661-6633 10 baht each

SUBSIDIARIES IN WHICH SANSIRI INDIRECTLY HOLDS SHARES THROUGH PLUS PROPERTY CO., LTD.

SANSIRI LAND LIMITED Property 1,000,000 baht 100 11th Floor, 475 Sri Ayutthaya Road, Development consisting of 100,000 Thanon Phayathai Sub-district, ordinary shares with Rajthevi District, Bangkok 10400 a par value of Tel. (662) 201-3905-6 Fax. (662) 201-3904 10 baht each

TOUCH PROPERTY CO., LTD. Building 5,000,000 baht 100 14th Floor, 163 Rajchapark Buliding, Inspection, consisting of 500,000 Sukhumvit 21 (Asoke), North Klongtoey District, Brokerage, Sale ordinary shares with Wattana Sub-district, Bangkok 10110 Management, a par value of Tel. (662) 661-7555 Fax. (662) 661-6633 Property 10 baht each Management


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PLUS PROPERTY VENTURE CO., LTD. Property 10,000,000 baht 100 16th Floor, 163 Rajchapark Building, Development consisting of 1,000,000 Sukhumvit 21 (Asoke), North Klongtoey District, ordinary shares with Wattana Sub-district , Bangkok 10110 a par value of Tel. (662) 661-7555 Fax. (662) 661-6633 10 baht each PLUS PROPERTY SPACE CO., LTD. Property 10,000,000 baht 100 16th Floor, 163 Rajchapark Building, Development consisting of 1,000,000 Sukhumvit 21 (Asoke), North Klongtoey, ordinary shares with Wattana Sub-district , Bangkok 10110 a par value of Tel. (662) 661-7555 Fax. (662) 661-6633 10 baht each

SUBSIDIARIES IN OVERSEAS COUNTRIES

SANSIRI GLOBAL INVESTMENT PTE LTD Holding 50,000 Singapore 100 (registered in Singapore) Company Dollars consisting of 3 PHILLIP STREET #18-00 COMMERCE POINT 50,000 ordinary shares SINGAPORE (048693)

SUBSIDIARIES IN WHICH SANSIRI INDIRECTLY HOLDS SHARES THROUGH SANSIRI GLOBAL INVESTMENT PTE LTD

SANSIRI GUERNSEY (2009) LIMITED Real Estate 10,000 Pounds 100 (registered in Guernsey) Development consisting of 10,000 La Tonnelle House Les Banques St Sampson for Sale and ordinary shares GUERNSEY GY1 3HS Lease in United Kingdom


Annual Report 2009

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OTHER REFERENCESSECURITIES REGISTRATION Thailand Securities Depository Co.,Ltd Capital Market Academy Building, Stock Exchange of Thailand 2/1 Moo 4 (North park) Vipavadee – Rangsit Road KM. 27 Thungsonghong , Laksi, Bangkok 10210 Telephone : (662) 596-9000 Facsimile : (662) 832-4994- 5

and

Thailand Securities Depository Co.,Ltd 62 Rachadapisek Road , Klongtoey, Klongtoey, Bangkok 10110 Telephone : (662) 229-2800 Facsimile : (662) 359-1259

THE AUDITOR Mr. Sophon Permsirivallop Certified Public Accountant (Thailand) No. 3182 Ernst & Young Office Limited 193/136-137 33rd Floor, Lake Rajada Office Complex Rajadapisek Road, Klongtoey, Klongtoey, Bangkok 10110 Telephone : (662) 264-0777 Facsimile : (662) 264-0790

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TYPE OF BUSINESSOPERATIONAL STRUCTURE OF THE COMPANY AND SUBSIDIARIESSansiri Group is made up of Sansiri Public Company Limited as a parent company with a broad range of eighteen subsidiaries, thirteen of which are directly held by Sansiri PublicCompany Limited while five of which are indirectly held through the subsidiaries. Currently, core business of Sansiri Group could be summarized as follows:

1. Property Development consists of: 1.1 Property Development for Sale includes single detached house, detached house, townhouse, and condominium projects, being operated through:

Property Development for Sale

Company Name Divisions of Operations within the Group

1. Sansiri Public Company Limited Development of single-detached house and condominium projects for middle to high-end consumers

2. Plus Property Company Limited Development of condominium and townhouse projects for middle-end consumers

3. Piwattana Limited Development of single-detached house, detached house condominium and townhouse projects for middle-end, and middle to low-end consumers

4. Red Lotus Properties Limited Development of single-detached house and townhouse projects for foreign consumers

5. Sansiri Venture Company Limited Development of condominium projects for high-end consumers

6. Sansiri Land Limited Development of townhouse projects operated and managed by Plus Property Company Limited

7. Plus Property Venture Company Limited Development of condominium and townhouse projects for middle-end consumers and managed by Plus Property Company Limited

8. Plus Property Space Company Limited Development of condominium and townhouse projects for middle-end consumers and managed by Plus Property Company Limited

9. Chanachai Company Limited Development of single-detached house and condominium projects for middle to high-end consumers

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1.2 Property Development for Rent includes office buildings, apartment and leasehold commercial building

Property Development for Rent


1. Sansiri Public Company Limited Investment in office building and apartment for rent with monthly rental fee in return

2. Pacific Challenge Holding Company Investment in office building with monthly rental fee Limited (PCH) in return, only one investment in Bhakdi Building at present

3. S.U.N. Management Company Limited Development of commercial building for leasehold (SUN) agreement

2. Property Services consist of :


1. Plus Property Company Limited Property and asset management, property brokerage services, property sales management, property development consultancy, and property management

2. Touch Property Company Limited Housing procurement service such as furniture and home appliance under the brand “TouchDirect” and building inspection

3. Sansiri Public Company Limited Hotel business development, generating recurring income to the total revenues

4. Papanan Limited Medical spa services under the brand “S Medical Spa”

5. National Education Development Limited Educational business under the name “Satit Pattana School”

6. Satit Pattana Personnel Center Limited Personnel management for Satit Pattana School

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3. International Investment consists of :


1. Sansiri Global Investment Offshore investment in property development for sales Private Company Limited and/or for lease/rent

2. Sansiri Guernsey (2009) Limited Property development for sale and/or for lease/rent in the United Kingdom

4. Other Investment

Sansiri Public Company Limited not only operates 3 business groups but also invests in other assets as follows:

Investments in available for sales securities – Property Fund

Sansiri Public Company Limited holds a 12.91 percent interest of Baan Sansiri Property Fund (SIRIPF). The investment is recorded under “Long-term investments in available for sales securities-Property Fund (Please see notes to consolidated financial statements no.22)

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REVENUESTRUCTURERevenue structure classified by business groups during 2007 – 2009, is as follows:

1) Property Development

Property for sale

- Condominium SIRI, PLUS, - , 100, 8,829 50 6,641 44 3,606 26 CC, SV 100, 100

- Single-detached house SIRI, PP, - , 100, 5,292 30 5,766 38 6,856 49 RED, CC 100, 100

- Townhouse PLUS, 100, 2,479 14 1,986 13 2,436 18 PPV, CC 100, 100 - Other PLUS, TOUCH 100,100 29 0 2 0 12 0

Property for rent

- Projects for rent SIRI, CC, PCH - , 100, 85 186 1 195 1 217 2

- Leasehold rights written off CC, SUN 100, 51 43 0 43 0 42 0

2) Property Services SIRI, PLUS, - , 100, 491 3 405 3 381 3 TOUCH, PPN, 100, 100, NED,SPC 100, 100

3) Other Revenues 148 1 141 1 339 2 - Interest income 14 0 31 0 48 0 - Revenue from common 48 0 40 0 24 0 property charges - Revenue from forfeiture of 56 0 21 0 45 0 down payment and changed contract fee - Other income 30 0 49 0 59 0 - Gain on sale of investments - - - - 163 1 in related parties Total Revenue 17,497 100 15,178 100 13,889 100 % increase (decrease) in revenue 15 9 21

Products/Services Operated by % Year Ending Year Ending Year Ending Shares held 2009 2008 2007 by Sansiri Million % Million % Million % Baht Baht Baht

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Remark - SIRI means Sansiri Public Company Limited PLUS means Plus Property Company Limted CC means Chanachai Limited SV means Sansiri Venture Company Limited PP means Piwattana Limited RED means Red Lotus Properties Limited PPV means Plus Property Venture Company Limited PCH means Pacific Challenge Holding Company Limited SUN means S.U.N. Management Company Limited TOUCH means Touch Property Company Limited PPN means Papanan Limited NED means National Education Development Limited SPC means Satit Pattana Personnel Center Limited (formerly known as “Club House Property Limited”)

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MILESTONEDURINGTHE YEARMay 2009! "! #$%$&'(&!)*+,'(-! ./0! -1'!2334!/)'0*-$(5! 0'678-6!9*6!,*&'!*-! -1'! rate of 0.30 Baht (Thirty Stang) per share

July 2009!!!! "! :1'!;/*0&!/.!#$0'<-/06!*))0/%'&!-1'!'6-*=8$61,'(-!/.!*!('9!67=6$&$*0+! in Singapore with the registered capital of 50,000 Singapore Dollars. The objective is to expand property development for sale and/or for rent/lease business offshore, and to invest in other businesses potentially benefiting overall performance of Sansiri Group. The structure of the company is follows:

(1) To establish a new subsidiary in Singapore-“Sansiri Global Investment Pte. Ltd.”, wholly owned by Sansiri, planned to oversee offshore investment business.

(2) To set up the wholly-owned subsidiary of “Sansiri Global Investment Pte Ltd.” in Guernsey, named “Sansiri Guernsey (2009) Limited” with the registered capital of 10,000 Pounds, to engage in real estate development for sale and/or for rent/lease business in the United Kingdom.

The Board of Directors approved the acquisition through share purchase of National Education Development Co., Ltd., an educational business operating “Satit Pattana School” in order to earn recurring income from the educational business, and to create an opportunity to expand business and synergy with property development business, as the Satit Pattana School is located near several residential projects of Sansiri Group.

31

August 2009!!!!!!!!!"! #$%!&'(&)*)+,-.!/0'($1'&%!2,13%,4-!5)6)4%*.!7+&!,%8+6%*!41!9:+4)4! Pattana Personnel Center Limited” November 2009! "! #$%! ;<4,+1,*)8+,-! =%%4)8>! 1?! :$+,%$10*%,&! @1A! BCDEEF! $%0*! 18! G! November 2009 passed the significant resolutions as summarized below:

(1) To approve the new allotment of newly issued shares of Sansiri by allocating the 1,473 million ordinary shares (which were approved by the resolution of the Extraordinary Meeting of Shareholders No. 1/2007 held on 18 January 2007) on a Private Placement basis according to the relevant laws and/or rules and/or regulations. The allotment and offer of such new ordinary shares may be made in whole at one time or divided into several parts to be offered and sold from time to time, at the offering price which is not less than 4.28 Baht per share and not less than 90 percent of the Market Price, calculated according to the relating rules and regulations, prior to the offering date by mean of Private Placement, and to approve the Board of Directors or any person assigned by the Board of Directors shall be authorized to allocate such new ordinary shares, locally and/or internationally.

(2) To approve the issuance of the Share Warrants of Sansiri Public Company Limited No. 1 (SIRI-W1) totaling of 736,814,346 units to the Company’s existing shareholders on a pro rata basis (right offering), without a charge, at the ratio of 2 existing ordinary shares to 1 unit of the warrant, at the exercise price of 5.20 Baht per share.

Annual Report 2009

32

February 2010! "! #$%!&'()*!+,)$-./%!(0!#$-12-.3!4&+#5!-667(8%3!'$%!219'1./!(0!9$-7%! warrants of Sansiri Public Company Limited #1 (SIRI-W1) on 3 February 2010. In this regard, the SIRI-W1 totaling of 736,792,026 units has been traded on SET since 3 February 2010.

! "! :!;$-./%!1.!<-=(7!9$-7%$(23%79 Sansiri has been informed by the major shareholder, Trendy Plan Investments Limited, of the transfer of its holding in SIRI in the number of 178,274,400 shares, representing 12.09 percent of Sansiri’s issued and paid-up capital to Majestic Heart Limited who subsequently sold the same to T.S. Star Company Limited at the price of 5.00 baht per share on 2 February 2010.

T.S. Star Company Limited, is the holding company wholly owned by Mr. Srettha Thavisin, who is also the director. Following the sale transaction, Mr. Srettha Thavisin Group (consists of T.S. Star Company Limited and Mr. Srettha Thavisin) became the major shareholder of Sansiri. As of 2 February 2010, Mr. Srettha Thavisin Group held total amount of 215,439,784 shares in Sansiri, representing 14.61 percent of Sansiri’s issued and paid-up capital.

33

TYPE OF PRODUCTS OR SERVICESCore operations of Sansiri Group include two businesses namely 1) Property Development, and 2) Property Services. The detailed descriptions of each product or service category are as follows:

1 PROPERTY DEVELOPMENT 1.1 Property Development for Sale

!"#$%&'()*(+,-.(/" 0123( – Sansiri has developed more projects to serve the middle income consumers focusing on high quality according to Sansiri standards. In 2008, Sansiri launched a new single-detached house brand- “Habitia” with the unit price range between 3.6-4.7 million baht to serve middle income consumers. In 2009, Sansiri launched 5 new single-detached house projects with the project value of approximately 6,000 million baht.

!"*(+,-.(/"0123( – Sansiri has developed the detached house projects through its subsidiary, Piwattana Limited, formerly named Prompt Pattana Property Limited. The first project was launched in 2006 under the brand “Baan Promptpatt Ramindra”. Currently, Sansiri has 3 detached house projects under “Baan Promptpatt” brand.

!"415%.123( – Sansiri has developed townhouse projects focusing on the middle income consumers through Plus Property Company Limited (“Plus”) and its subsidiaries. In 2006, Plus successfully launched the projects under the brands “Plus Citypark” and “Plus Park Avenue” with the unit price between 3.3 – 5.4 million baht. In 2008, Plus launched “Town Plus” brand to extend its coverage of the middle income consumers. In 2009, Sansiri launched a new brand- “Town Plus X”, which are Town Plus X Prachachuen and Town Plus X Ladprao with the average unit price between 3.5-5.0 million baht. Currently, Plus has 10 projects under “Town Plus” brand with total value of approximately 7,400 million baht.

!"61%/17$%$27 – Focusing on the middle and high income consumers, Sansiri chooses to develop its projects in the business districts with close proximity to the sky train and underground train routes, as well as in the prime resort area such as Hua Hin. In 2008, Sansiri launched 3 projects with total project value of approximately 3,500 million baht under the brand “HIVE” locating along sky

Annual Report 2009

34

train routes, and one project in Hua Hin district with project value of approximately 2,000 million baht. Focusing on its strategic locations along the sky train stations, Sansiri launched 3 condominium projects namely “Quattro by Sansiri”, The Vertical Aree”, and “Blocs77” at the total value of approximately 7,000 billion baht in 2009.

1.2 Property Development for Rent Sansiri has recurring income from properties for rent including two office buildings ; Siripinyo Building and Bhakdi Building, an apartment “Siri Apartment” on Wireless Road, and a leasehold commercial building in Silom area named “Sun Square Silom”.

2 PROPERTY SERVICES 2.1 Property Services Property service business suitably complemented to Sansiri’s core business- property development for sale by not only increasing customers’ satisfaction of fully-integrated services and expanding its sources of recurring incomes, but also allowing it to capitalize upon its database to further improve its property development projects corresponding to the market demand. Provided by Plus Property Company Limited (“Plus”) and Touch Property Company Limited, the full range of services include not only the sale, purchase, and lease of properties and property management but also the consulting services of project feasibility studies, market surveys and analysis, financial feasibility analysis, and the rehabilitation plan of derelict properties. Currently, Plus and its subsidiary manages over 200 residential and commercial projects covering the area of 7.4 million square meters (31 December 2009).

2.2 Educational Business Sansiri has operated a school under the name “Satit Pattana School” for recurring income from the educational business, and creating an opportunity to expand business and synergy to several of Sansiri’s property projects for sale located nearby.

2.3 Hotel Business At present, Sansiri operates a 46-key hotel named “Casa del Mare”, locating on the area of 3 Rai 2 Ngan and 51 Square Wah in Hua Hin District of Prachuap Kiri Khan province.

2.4 Medical Spa Business Sansiri has operated medical spa business through its subsidiary, Papanan Limited under the brand “S Medical Spa”, locating at Bhakdi Building on Wireless Road. Furthermore, “S Medical Spa” expands its business opportunity by launching “seaSpa”, a one-stop spa service center at Casa del Mare Hotel, in October 2007. It can be viewed that Sansiri has fully utilized its existing businesses to create synergy and truly add more value to the hospitality business.

35

MARKET ANDCOMPETITION 1.MARKETINGDespite the global economic downturn and political instability at the beginning of 2009, the economic outlook in the second half of 2009 turned positive with clearer signalsof economic recovery including an increase in the consumer confidence index, the implementation of the economic stimulus by the government, low interest rate, and increasing housing demand, especially for housing located along BTS sky train and MRT subway lines. Experienced developers with strong brand recognition and successful track record are likely to gain not only market shares but also pricing power whereas marketing activities will help stimulate housing purchase.

PRODUCT STRATEGIESSansiri has a collection of housing projects for sale; single-detached houses, detached houses, townhouses and condominiums, especially in business area and resort area, for both medium-income and high-income customers, with different product strategy as follows:

!"#$%&'(&)*+,&-./012& Sansiri has successfully launched midsized single houses under three brands, including “Setthasiri” with average selling price per unit of 6 to 10 million baht, “Burasiri” with average selling price per unit of 5 to 8 million baht, and “Saransiri” with average selling price per unit of 3 to 5 million baht. In 2008, Sansiri launched a new brand “Habitia”, using the prefabrication construction technology for housing projectswith average price per unit of 3 to 4 million baht. In 2009 Sansiri launched several midsizedsingle-detached houses projects in high potential areas under various brands including Burasiri Ngamwongwan-Prachachuen, Saransiri Prachauthit-Suksawas, Habitia Bangyai,and Habitia Panyaindra.

Condominium Sansiri has developed high-end and medium-end condominiums locating along the BTS sky train or close to express way in the business districts of Sukhumvit and Aree areas, with average selling price of 80,000 to 160,000 baht per square meter. Key success factors are uniquely modern architecture, high-quality construction materials and good value properties for customers.

In 2009, Sansiri launched three mid-to-high-end condominium projects locating along BTS sky train routes namely “Quattro by Sansiri”, “The Vertical Aree”, and “Blocs 77”. The impressive selling rate of “The Vertical Aree”, which was already sold out, reflected market acceptance for Sansiri’s Project regardless of the economic slowdown.

Annual Report 2009

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!"#$%"&'( In 2006, Sansiri launched the medium-priced townhouse projects under the brand “Plus Citypark” and “Plus Park Avenue”. In 2007, Sansiri successfully launched townhouse projects under the new brand, “TownPlus”, with average selling price per unit of 2.6 to 4.3 million baht, Sansiri successfully launched 10 townhouse projects with total project value of approximately 7,000 million baht (as of 31 December 2009).

Detached House Sansiri has expanded business further by successfully penetrating the new market of detached houses through the launch of new brand, “Baan Promptpatt”, which is developed by the subsidiary named Piwattana Limited, (formerly known as Prompt Pattana Property Limited). Targeting at new family group, Sansiri successfully launched 3 detached house projects under brand “Baan Promptpatt”.

MARKETING ACTIVITIESThe economic slowdown in 2008 and the political instability at the beginning of 2009 resulted in the delays in new property launches and marketing activities. However, Sansiri opted to build brand awareness amid sluggish market situation, while the market supplies were limited with consumers tend to truly realize the importance of brand, reputation and credibility of developers. Sansiri’s marketing strategies in 2009 emphasized on synergies through co-promotion with strategic partners, optimizing accessibility to target clientele through appropriate communication channels, and continuous development of innovative communication; while the efficiency and effectiveness of each marketing activities were closely monitored.

In 1Q2009 Sansiri cooperated with many strategic partners such as Siam Commercial Bank to organize “Living in Style 2009” at Royal Paragon Hall, Siam Paragon, in which various marketing activities and sales promotions were provided to Sansiri customers. Sansiri also launched several projects simultaneously in order to provide customers with variety of products while Sansiri got economies of scales from decreasing marketing cost per project. Projects launched at this event included 3 condominium projects, which are Quattro by Sansiri, The Vertical Aree, and Blocs 77, and 8 townhouse projects under TownPlus brand. The feedback from this event exceeded the expectation with sales amount as high as 2,000 million baht. In order to sustain sales momentum following the Living in Style 2009, Sansiri launched new TV commercial advertisement under the concept of “Share the happiness across the fences”, and other TV commercial advertisements to stimulate sales of some specific projects such as Quattro by Sansiri and Blocs 77.

Capitalizing on the positive feedback from Living in Style 2009, Sansiri organized similar activities at various leading department stores convenient to visit to stimulate housing sales upon the expiring tax privileges as well as to provide the property market update including product and services of Sansiri to customers. The Sansiri Best Buy event, for example, was the four-day event at Siam Paragon, which Sansiri offered ready-to-move-inresidential units at special prices.

37

In 2009, Sansiri cooperated with several strategic partners creating business synergy in terms of innovative marketing activities to increase customer satisfaction. In 1Q2009, Sansiri cooperated with business partners to organize Family, Rhythm & Harmony concertfor our customers and tenants at Impact Arena, Muang Thong Thani, to show our appreciation for their support. The feedback was very positive with over 10,000 audiencesparticipating in this concert. Moreover, Sansiri, in cooperation with Siam Commercial Bank, launched SCB Sansiri Platinum Credit Card under the concept of Privileged Living, providing various benefits and special services for living for the cardholders. The launch of credit card marked a major milestone of the real estate industry with SCB Sansiri Platinum Card as the first credit card for ultimate living.

Sansiri also determines to develop innovative marketing communication not only to increase the accessibility to the consumer, but also to explore alternative cost effective marketing channels. In this regard, Sansiri is the first property developer to launch digital marketing channel, and create social network. In 2009, Sansiri re-launched website and developed Sansiri on Mobile to provide property information to customer through mobile phone services.

Sansiri has arranged several customer relationship management activities for Sansiri customers and tenants, for example One-Sabuy-Sapai-Glong-Tong-Wattanatham activity (1-day trip activity for cultural photography), and Pitsanulok cultural and historical flashback activities. Moreover, Sansiri also conducted corporate social responsibility activities such as “Phee Pa Nong Tiew” activities, in which Sansiri hosted a field trip to outreach kids. Sansiri also supported educational activities, including “Future Living”, a residential design contest co-hosted by Sansiri and King Mongkut’s University of Technology Thonburi, and a contest hosted by Sansiri in cooperation with CasaViva Magazine to promote educational activities.

In 2010, Sansiri plans to conduct research and development in great detail of current and future lifestyles of customer in order to develop products and services to provide the best alternatives for Sansiri customers under “The Iconic Living” concept.

Annual Report 2009

38

2. SUMMARY OF PROPERTY MARKET IN 2009

SITUATION OF LOW RISE RESIDENTIAL UNITSThe recovery of several economic indicators together with the improvement in social stability since 3Q2009 resulted in an improvement in consumer confidence. Government real estatestimulus package such as property tax incentive and reduction in transfer fee directly benefited middle to lower income market segments especially in pre-built detached house and townhouse segments. Ability of developers to control the number of new launched projects, resulting in reduction in the remaining supply, and stable absorption rate. However, the size of housing units could be smaller as developers would like to control the selling price at the affordable level for middle to lower income segments.

!"#$%&'(&)*+,&(-,./!&-0*12&)The number of single-detached house supply in the latter half of 2009 amounted to 17,134 units from 394 projects, decreased by 1 percent or 203 units from that of the first half of the year. Overall single-detached house units available for sales in 2009 compared to that of 2008 dropped due to the reduction in remaining supply and limited number of new launched projects. The contraction of supply occurred in Northeastern, Northern and Eastern Bangkok at the rate of 36 percent, 21 percent and 14 percent respectively. The supply in Southern Bangkok, however, has increased by 16 percent due to the investment in transportation projects such as industrial ring-road, and the Southern outer ring road increasing the convenience to commute to central business district. The area with highest number of single-detached house supply remained in Northern and Western Bangkok, accounted for 27 percent and 26 percent of total single-detached house supply respectively

In the second half of 2009, the number of sold units amounted to 7,060 units, a 14 percent or 865 units increase from that of the first half with a slight improvement in absorptionrate to 41 percent. The number of the remaining units at the end of 2009 was at 10,074units, decreased by 16 percent compared to that of last year, lowering the possibility ofoversupply. The absorption rate of single-detached house was highest at 50 percent inWestern Bangkok area. Total number of unit sold in such area was at 2,251 units, accounted for 32 percent of total single detached house sales in latter half 2009, resultingfrom strong demand for new projects with matching selling prices.

39

Based on housing supply in the latter half of 2009, single-detached house with average price of 3 to 5 million baht per unit dominated the market with total available for sale of 8,202 units representing 48 percent of total units available for sale in the market, followed by house with average price of less than 3 million baht per unit with 3,283 units available for sale or 19 percent market share and houses with average price of 5 to 7 million baht per unit with, 2,717 units available for sale or 16 percent market share. Due to low level of supply and a suitable match between available supply and customers’ demand, the absorption rate of single detached house with average price of 10 to 20 million baht was the highest at 53 percent. However, the single-detached houses in the mid-market segment still dominated the housing supply in the market, similar to that of last year.

!"#$%&'()'*+,-%./"-0'12/&'-3'4"0#5&67&/289&:';-$,&,'"0'<20#=-='20:'>"8"0"/"&,'+?'@%"8&'A&B&5,

Source: Research & Development Department, Plus Property Co., Ltd.


C2+5&'()'*+,-%./"-0'12/&'-3'4"0#5&67&/289&:';-$,&,'"0'<20#=-='20:'>"8"0"/"&,'"0'DEEF'+?'A-82/"-0

10,000

7,500

5,000

2,500

0

60%

45%

30%

5%

0%

Units

Lower than 3 Upper than 207-10 10-203-5 5-7

Units Offered in 2H-2008Units Offered in 1H-2009Units Offered in 2H-2009

% Units Sold in 2H-2008% Units Sold 1H-2009% Units Sold 2H-2009

Unit Price (Million Baht)

42%42%45%45%41%41%

36%36%41%41%

43%43%36%36% 36%36%

42%42%42%42%

53%53%

42%42%

26%26%

5%5%

35%35%

54%54%

35%35%

24%24%

3,932

2,802

3,283

9,385

8,642

8,202

3,952

3,472

2,717

2,178

1,538

2,064

387

760

773

175

175

123

123 95 95

' ' (;6DEEF' (;6DEEF Total Total % Sold Average Total Total % Sold Average Area Units Units Unit Sold Units Units Unit Sold Offered Sold /Month/ Offered Sold /Month/ Project Project

Northern 5,658 1,900 34% 2.6 4,644 1,806 39% 2.7

Northeastern 2,928 800 27% 2.1 2,920 915 31% 2.5

Eastern 2,579 705 27% 0.2 3,040 1,353 45% 3.3

Western 4,553 2,228 49% 3.2 4,491 2,251 50% 3.5

Southern 1,619 562 35% 2.1 2,039 735 36% 2.8

Total 17,337 6,195 36% 2.5 17,134 7,060 41% 3.0

Annual Report 2009

40

TOWNHOUSE MARKETIn the latter half of 2009, the number of townhouse supply amounted to 17,591 units, a 10 percent increase from that of the first half due to the economic recovery in 3Q2009, The highest number of supply was in Northern Bangkok area at 6,070 units or 35 percent of total supply. Major developers have been competing more actively in townhouse market, controlling 55 percent of total available for sale units. In terms of total units available forsale by major developers, Pruksa Real Estate Company Limited held the highest market share of 44 percent with 4,218 units from 49 projects, followed by Sansiri Public Company Limited with 21 percent market share or 2,002 units from 14 projects and Supalai Public Company Limited with 7 percent market share or 639 units from 10 projects.

Sales of townhouse in the second half of 2009 amounted to 8,298 units from the total supply of 17,591 units representing 47 percent absorption rate with an 8 percent increase from that of the first half due to the improvement in consumer confidence. In the second half of 2009, townhouse sales significantly improved from that of the first half with average selling units per month rose to 5.1 units. The highest absorption rate was in Western Bangkok, at 51 percent with average sales per month per project at 5.9 units due to convenient transportation and matching selling price of below 3 million baht per unit.

In terms of housing supply, the middle to lower-end segment still led the market in the second half of 2009 with townhouses in the 1 to 3 million baht segment held the highest market share of 70 percent or 12,308 units, mostly located in the Western Bangkok due to the extension plan of BTS routes in the area. Townhouse with the price range over 5 million baht has the highest absorption rate at 63 percent due to low level of supply and available projects located in right location, followed by 3 to 5 million baht segment with the absorption rate of 50 percent.

!"#$%&'(&)#*+,-./+0&1".%&+2&!+304+5*%&60/.*&/0&7"089+9&"0:&;/</0/./%*&/0&'==>&#?&@+<"./+0*&


& & ABC'==>& ABC'==> Total Total % Sold Average Total Total % Sold Average Area Units Units Unit Sold Units Units Unit Sold Offered Sold /Month/ Offered Sold /Month/ Project Project

Northern 5,870 2,692 46% 6.0 6,070 3,010 50% 6.0

Northeastern 1,630 644 40% 3.3 2,051 853 42% 3.7

Eastern 3,040 1,103 36% 3.9 2,980 1,230 41% 3.9

Western 3,399 1,236 36% 3.3 4,617 2,345 51% 5.9

Southern 2,090 593 28% 3.8 1,873 860 46% 4.9

Total 16,029 6,268 39% 4.3 17,591 8,298 47% 5.1

41

!"#$%&'()''*+,-%./"-0'12/&'-3'4-506-$,&'"0'720#8-8'209':";"0"/"&,'+<'=%";&'>&?&@,

SITUATION OF HIGH RISE RESIDENTIAL UNITSThe sluggish economy and political uncertainties in 2009 only temporarily restrainedoverall residential supply and demand. In the second half of 2009, the signs of economicrecovery were clearly seen from the improvement in consumer confidence index. In2010, real estate sector is expected to recuperate as a result of several supportivefactors for property development and the expansion of mass transportation to suburbanareas such as extension of BTS routes, leading to an increase in new supply in the areas.Housing demand is forecasted to rise at least by 2 to 3 percent resulting in lower than 5months of market absorption rate for the remaining available units for sale in 2009, whilethe average selling price is expected to rise by approximately 10 to 15 percent.

CONDOMINIUM MARKETDespite the recovery signs in the latter half of 2009, the number of condominium units available for sale of total 8 areas in 2009 decreased by 18 percent or by 7,697 units to 35,727 units from that of 2008 due to the delay of new project launches in the first half of 2009. The number of condominium supply in Ratchadapisek area decreased at the highest rate of 34 percent down to 7,814 units, resulting from the reduction in the number of new launches to avoid excess supply, and the low level of the remaining unsold units. The supply in Phayathai area has decreased by 31 percent down to 1,264 units. Only Sukhumvit and central business district areas such as Ploenchit-Chidlom and Silom-Sathorn areas show an increase in number of condominium units available for sale by 13 percent to 5,988 units and 12 percent to 2,662 units respectively.


40%33%26%

2,105

2,105

1,480

1,480

1,422

1,422

10,06

8

11,72

5

12,30

8

2,182

2,182

2,444

2,444

3,534

3,534

326

355

327

47% 50%63%

36%

34%

47%37%

44%

40%

14,00012,00010,0008,0006,0004,0002,000

0

100%

75%

50%

25%

0%

Units

Lower than 1 3-5 More than 51-3

Units Offered in 2H-2008Units Offered in 1H-2009Units Offered in 2H-2009

% Units Sold 2H-2008% Units Sold 1H-2009% Units Sold 2H-2009

Unit Price (Million Baht)

Annual Report 2009

42

10,0009,0008,0007,0006,0005,0004,0003,0002,0001,000

0

Tota

l Uni

ts S

old

2004 2005 2006 2007 2008 2009

6,143 8,620 22,969 27,992 26,652 20,477

CBD1

1 1 11

11

Sukhumvit Rama III Phayathai Phaholyothin Ratchadapisek Thonburi Outer Sukhumvit2

22

2

22

2

3

3

3 3

3

3 3

4

4 4 4

4 4

4

5

5 5

5 5

5 5

6

6

6

6

6

6

7

7 7

7

7

7

7

8

8

8

8 8

Figure 3: Annual Damand of Condominium Units in 2004 to 2009

Total number of condominium units sold in all 8 areas during the second half of the 2009 stood at 15,395 units, 2.03 times higher than that of the first half at 5,082 units. Total number of condominium units sold in 2009 amounted to 20,477 units, a 23 percent decrease from that of 2008. The percentage of number of units sold to supply has decreased by 4 percent from last year to 57 percent mainly due to the economic slowdown.

The area with the highest sales drop compared to that of last year was Ratchadapisek area which decreased by 46 percent down to only 4,597 units due to demand approaching saturation as well as projects in better location has been absorbed during the last few years. The second biggest sales drop area was Thonburi with a 43 percent decrease to 3,850 units. The sales in central business districts area was still strong with a 28 percent increase to 1,484 units because of the location advantages and project concepts, which match affluent consumers, resulting in continuous sales growth. The second highest sales growth area was Sukhumvit area with a 25 percent increase in sales to 3,678 units. Ratchadapisek areastill had the highest sales at 4,579 units, followed by outer Sukhumvit area at 3,888 units.


43

140,000130,000120,000110,000100,00090,00080,00070,00060,00050,00040,00030,00020,000

Price

(Bah

t/Sq.

m.)

2004 2005 2006 2007 2008 2009

CBD Sukhumvit1

1

1

1

1

1

1

76,96887,772

91,198103,557

85,021

100,671

130,313135,522

109,309

95,169

85,01076,33677,445

80,628

86,741

81,66770,625

64,671

83,103

75,280

53,406

54,040

75,28556,000

50,30051,891

72,69454,000

45,933

47,731

Rama III3

3 3 3

33 3

Phayathai4

4 4

44

44

Phaholyothin5

55 5

5

5 5

2

22

22

22

Figure 4: Asking Price of Condominium Units by Area in 2004 to 2009

The average selling price of condominium in 2009 went up by 6 percent compared with that of last year or increased by 5,798 Baht per square meter to 100,214 Bath per square meter. Phayathai area had the highest growth with a 15 percent increase to 95,169 Baht per square meter, due to the high potential of the new launched projects in prime location with high quality materials and innovative designs. Sukhumvit area was the second highestprice increase area with the price raised by 9 percent compared to that of last year to 109,309 Baht per square meter. Average price of condominium units in Phaholyothin area increased by 5 percent to 85,010 Baht per square meter, and that of the Central Business Districts went up by 4 percent to 135,522 Baht per square meter.


Annual Report 2009

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PRODUCTPROCUREMENT1. SELECTION OF LOCATIONS FOR PROJECT DEVELOPMENTSansiri has the dedicated business development division which focuses on selecting the locations for our project developments. To select suitable locations for development, this division works closely with our brokerage network and with Plus Property Company Limitedand also relies upon site surveys compiled by the business development team. The businessdevelopment division, in cooperation with other departments, including government affairs, legal, product development, project development, and marketing, analyzes and studies the feasibility of the project development as well as selects the right product among single-detached houses, condominiums, and townhouses, for each location. Our business development division, together with our legal and government affairs team undertakes feasibility studies regarding matters such as the height of the buildings and set-back areas, while our product development and marketing teams select the product suitable for that particular plot of land and decide on the target customer group for that project. At this stage, the project development team completes a feasibility study on the construction costs. Finally, in order to establish an accurate and realistic sales forecast, the business development team reviews relevant market information in consultation with the sales and marketing teams.

2. PROCUREMENT OF CONSTRUCTION MATERIALSSansiri has transparent and clear procedure of construction material procurement process to optimize purchasing price according to the high standard set forth. Bidding process to procure construction materials allows Sansiri to compare the price versus the quality. Sansiri also gained economies of scale from consolidating volume, and negotiating in bulk with the manufacturers. Construction material price volatility has been mitigated by assigning specific teams to closely monitor key construction material price change.

Sansiri copes with the fluctuation of construction materials for single-detached houses and townhouse projects by purchasing the materials directly from the manufacturers, which accounts for approximately 30-40 percents of the total project construction costs. Sansiri also purchases some materials for condominium projects on a lump sum amount and enjoys the benefits from economies of scale, and mitigates risk of increasing material cost through the turnkey construction contract with contractors.

45

In order to select the qualified suppliers, Sansiri considers not only competitive price and production capacity but also the raw material sourcing capability to ensure the timely delivery of construction materials. Sansiri regularly updates the qualified supplier list by closely monitoring and evaluating the timely delivery of every supplier on a semi-annual basis.

3. SELECTION OF CONTRACTORSThe ability to procure the services of quality and dependable contractors is important to real estate business. Sansiri mitigates the risk of contractor shortage by establishinggood relationship with a group of contractors. In recent periods, Sansiri has not encountered any material difficulty procuring the services of contractors. Followingthe preliminary selection process, Sansiri evaluates the construction capability to ensure timely construction. Having several small contractors for a single project provides more flexibility, Sansiri has been able to manage coordination among contractors through rigorous quality control monitoring. Sansiri also has a list of qualified contractors, includingmore than 50 medium and large contractors, to ensure high-standard housing projects. Since 2008, Sansiri has held the QC Award ceremony to motivate contractors to deliverhigh quality and timely construction.

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RISK FACTORS!"#$%&'(&))*+,#-.+/.0*+*10(Selling condominiums before commencing construction not only reduces the market risk while giving Sansiri more flexibility in developing these products to cope with the changing market conditions, it also provides Sansiri with a working capital. Nonetheless, pre-sales of condominiums bear the risk of unexpected construction costs that cannot be passed on to the buyers, as the sales prices have already been finalized. Therefore, lower gross profit is an inevitable consequence of higher construction costs. Sansiri has mitigated the risk by negotiating turnkey construction contracts with contractors, enabling Sansiri to control construction costs effectively and to protect profits from the uncertainties of rising construction material costs. The construction of condominium projects normally lasts 14 to 26 months. It is the responsibility of Sansiri to ensure the timely construction progress as well as project completion and delivery to customers as scheduled. Since Sansiri hasmany years of considerable skill and experience in condominium construction and always works closely with contractors, problems of this sort can be handled smoothly. Consequently, constructions have always been completed on time.

In addition, pre-selling condominiums bears the market risk of having unsold units upon the construction completion should the condominium projects were not well-received from customers. Sansiri has mitigated the inventory risk by doing in-depth research to develop condominium projects suitable for each customer group, as well as initiating attractive sale promotions prior to the construction completion to stimulate the sales. Generally, down payment and installments for condominium projects are set at 10 to 20% of the selling prices with the balance to be paid upon condominium unit transfer. In this regard, there is a risk that some customers may forfeit their deposits. Sansiri has mitigated the speculative buying risk by requiring high down payment and installments at 25 to 35% of the selling prices together with introducing the “NPV campaign” to stimulate the higher down payment and installments. Customers who join the NPV campaign will get the cash discount should they opt to pay the 100% of selling price all at once or pay all the installments at once instead of paying installments over the construction period. Essentially, the NPV campaign is initiated to discourage speculative buying, and will result in the condominium unit transfer to customers as scheduled. As of 31 December 2009, the number of customers who join the NPV program was high at 24% of total condominiumcustomers.

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2. LAND PROCUREMENTObtaining land plots in prime locations at reasonable prices is the first priority of Sansiri’s land procurement team. We have different strategies depending on the type of product. For condominium projects, we generally choose mid-city locations near key business areas, mainly close to both the BTS Sky Train and MRT subway lines (or in areas where extensions of transit lines have been approved and construction has commenced). The risk of not getting prime locations for condominium projects has been mitigated through the extensive network of brokers as well as the large database of “Plus Agency”, operated by the wholly-owned subsidiary named Plus Property Company Limited (“Plus”). Being Thailand’s leading property management and brokerage firm, “Plus” is the valuable source of property information or “market intelligence” for Sansiri Group. To reduce dependence on condominium market and to provide further opportunities for future growth, Sansiri has expanded the businesses and successfully penetrated the single-detached house and townhouse markets in recent years. Sansiri acquired land along the city’s Outer Ring Road and in suburbs that offer numerous advantages for single home development while locating townhouse projects on routes with easy access to the city center.

3. FLUCTUATION IN CONSTRUCTION MATERIAL PRICESIn 2009, the price index of construction materials decreased by 13.1 percent compared to that of 2008 (Source: Bureau of Trade and Economic Indices, Ministry of Commerce), mainly resulted from the economic slowdown and the decreasing price index of steel and steel products. However, some construction materials price index such as sanitary ware, wood and wooden product, and paint, also rose in 2009 compared to that of 2008. These construction materials are key components for project development, thus the construction material price volatility will directly impact cost of project development.

Sansiri is aware of construction material price volatility risk and has carefully plannedto mitigate the risk by purchasing directly from the manufacturers through the bidding process and pre-agreeing the delivery prices. In this regard, Sansiri has focused on increasing our bargaining power and negotiating deeper discounts on large volume purchases for several projects under construction. Direct procurement of some constructionmaterials for single-detached house and townhouse projects such as pile and roof tiles has been increasing to 40% of total 2009 construction cost. For the condominium project development, direct procurement has been used for several items such as tiles, sanitary ware, and air conditioner. In addition, Sansiri also mitigated the risk of higher material cost of condominium project through the turn-key construction contract with contractors,resulting in better cost and quality control.

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Special units has been established to closely monitor, and to promptly react when the price of major construction material categories changes. These reactions include but not limited to re-negotiate the future contract price with the manufacturers or contractorswhen the construction material price significantly decreases. Sansiri usually gets cooperation from the manufacturers or contractors, resulting from being a valuable business partner, good reputation, and long experience in real estate business.

In order to select qualified suppliers, Sansiri considers not only the competitive price and production capacity but also the sourcing capability to ensure the timely delivery of construction materials. Sansiri regularly updates the qualified supplier lists by closely monitoring and evaluating performance of every supplier on a semi-annual basis.

4. A SHORTAGE OF CONTRACTORSSansiri and subsidiaries have successfully launched housing projects in various locations, leading to several active projects in progress. Sansiri mitigates the risk of contractor shortage by establishing good relationship with a group of contractors to create a valuable database. Following the preliminary selection process, Sansiri evaluates the construction capability to ensure the right and timely construction. Having several small contractors for a single project provides more flexibility but introduces some difficulties in coordination with the associated risk of late or wrong construction delivery. Sansiri mitigates these risks through the closely monitoring and meticulously inspecting by Quality Control Department to ensure the high standard of every housing project. Banking on our efficient operational system and transparent selection process, Sansiri has a list of qualified contractors, including more than 50 medium and large contractors to ensure highstandard housing projects.

Since 2008, Sansiri has held the annual QC Award ceremony to motivate contractors to deliver high quality and timely construction. The award-winning contractor will receive certain privilege, such as the reduction in retention amount.

5. A CHANGE IN INTEREST RATES AND ACCESSIBILITY TO SOURCES OF FUND Interest rate in 2009 remained low with the slight decrease from that of 2008 as a result of both the global and local economic slowdown, whereas commercial banks maintain prudent lending policy, making it difficult for some developers to obtain project-financing loans. Sansiri has established strong relationship with various commercial banks and always negotiates to get the competitive pricing of project financing loans. In any case, all of current projects are secured by project financing loans and other credit facilities made available by domestic financial institutions.

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The low interest rate in 2009 had positive impact on Sansiri’s cost of fund as all of project financing loan are carrying floating interest rate. However, in order to provide alternativesource of fund, and reduce the dependence on long-term project financing loan as well as diversify financing portfolio with the fixed rate credit facilities, Sansiri has issued unsecured debentures in 2009 with cost of fund close to other unsecured financing loans. Successful placement of the debentures provides Sansiri another alternative source of fund for future project development. Moreover, Sansiri might consider entering into financial derivative contracts with commercial banks to mitigate interest rate risk.

6. UNSOLD UNITSCurrently, Sansiri plans construction progress based on sales forecast, which has been regularly updated by sales and marketing team. However, the economic slowdown could lead to decreasing sales and temporary unsold housing stock. Sansiri has mitigated the inventory risk through the efficient inventory management. To enhance the ability to cope with the changing environment, the single-detached house and townhouse projects have been phased with both pre-built houses and semi pre-built houses available for sale. Consequently, Sansiri could adjust the construction plan correspondingly to the softer housing demand as well as to modify the housing projects in the next phase to satisfythe changing consumer preferences and affordability. Currently, Sansiri has 18 single-detached house projects under construction and available for sale with total project value of 22,821 million baht, 13,977 million baht or 61 percent of which were sold. Of the total project value of 9,478 million baht from 13 active townhouse projects under construction and available for sale, 4,793 million baht or 51 percent of total project value were sold. Consequently, Sansiri has finished but unsold housing stock of 459 units worth approximately of 2,261 million baht as of 31 December 2009.

For condominium projects, Sansiri always conducts the in-depth research on consumerbehavior before launching any projects and initiates the attractive sales promotion to stimulate sales transaction. Currently, Sansiri has 11 condominium projects available for sale with total project value of 16,740 million baht, 13,580 million baht or 81 percent of which were sold. As of 31 December 2009, Sansiri has finished but unsold condominium stock of 20 units, worth approximately of 110 million baht.

7. ACCOUNTING PRACTICE CHANGESansiri anticipated that Federation of Accounting Profession (FAP) together with the Securities and Exchange Commission (SEC) might require changing in accounting policy of revenue recognition method for real estate business in order to comply with the International Financial Reporting Standards (IFRS). Currently, revenue recognition of real estate business shall be recognized by 1) The whole amount when property rights are

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transferred or 2) Percentage of completion when certain criteria are met or 3) Installment due when certain criteria are met. Under the new accounting system, real estate revenue of all entities shall be realized only by the whole amount when property rights are transferred, which is expected to be applicable to companies registered in SET50 first, followed by companies registered in SET100. The revision of this accounting rulewill impact financial performance of Sansiri, which currently registered in SET100 andrecognizes the revenue of real estate sales using the percentage of completion method.The significant criteria required to recognize revenues under current method are 1) Sales agreements have been finalized. In the case of condominium projects, sales agreementshave been finalized for a minimum of 40 percent of total area offered for sales, 2) A non-refundable deposit has been finalized of at least 20 percent of the value of sales agreement have been received, and 3) Development progress has completed at a minimum of 10 percent (as measured by construction costs incurred compared with totalbudgeted construction cost)

The accounting policy change in revenue recognition into the method of fully recognition when the property rights are transferred will not have significant impact on revenue realization of single-detached house and townhouse projects, constituting approximately 50 to 60 percent of total revenue of Sansiri. Followed the market practice, single-detached house and townhouse projects require down payment deposit less than 20 percent of the contract price, making it not qualified for revenue recognition as percentage of completion.Consequently, sales of single-detached houses and townhouses are practically realized when the property rights are transferred, which is similar to the new accounting method.Sales of condominium projects, which currently qualify for revenue recognition as percentage of completion, are expected to have greater impact if there is any discrepancyin revenue recognition between the values of transferred property in particular year and the expected revenues applying the percentage of completion method. In other words, Sansiri shall record higher profit when the value of transferred property in particular year is higher than the expected revenues applying the percentage of completion method. On the other hand, Sansiri shall record lower profit when the value of transferred property in particular year is lower than the expected revenues applying the percentage of completion method. The realized profit during the previous years will be adjusted through the item “retained earnings”. Notwithstanding, Sansiri has assessed the impact and set measurement to keep up with the accounting policy change by closely monitoring the construction progress of project development and managing the transfer period of condominium projects to smooth out revenue streams. However, this accounting policychange will not have any impacts on the normal operations of property development.

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The change in accounting practice of revenue recognition method will impact not only on the income before tax from the alteration in revenue, but also on the corporate income tax due to discrepancy between taxable income as defined by accounting policy and by the Revenue Department. In summary, taxable income and corporate income tax payable to the Revenue Department will be based on revenue recognition as percentage of completion whereas revenue recognition as reported on income statements will be based on transfer basis. Thus, if the forecasted revenues applying percentage of completion method (current method) is higher than the value of transferred property in particular year, Sansiri will have higher taxable income, compared to income before tax as appeared on income statement, causing the effective tax rate (referred to corporate income tax as a percentage of income before tax) to be higher than 30 percent. On the other hand, if the forecasted revenues assuming percentage of completion method (current method) is lower than the value of transferred property in particular year, Sansiri will have lower taxable income, compared to income before tax as appeared on income statement, causing the effective tax rate to be lower than 30 percent. Therewith, such discrepancies will become less in the future as new projects will apply new method of revenue realization (at the property right transfer),making revenue realization for tax purpose and for accounting purpose be the same.

8. ENVIRONMENTAL IMPACT ASSESSMENT (EIA) REPORT APPROVALThere are several projects under the development of Sansiri and subsidiaries, which required Sansiri to prepare environment impact assessment report prior to receiving permission from the Environmental Impact Evaluation Bureau, Ministry of Nature Resources and Environment. In this regard, Sansiri has worked closely with professional consultant company, registered with Ministry of Nature Resources and Environment, to prepare EIA report in compliance with rules and regulations under National Environmental Quality Act (NEQA) 1992. The projects which required EIA approvals are condominium projects with more than 79 units; while single-detached house and townhouse projects are not required to get EIA approval.

Sansiri and subsidiaries comply with all EIA rules and regulations for all projects which required approval from the Environmental Impact Evaluation Bureau. In this regard, Sansiri and subsidiaries work closely with contractors to ensure that the construction is carried out pursuant to specifications approved by EIA committee to reduce controversy, claims and litigations, and thus no additional environmental investment is required. Sansiri closelymonitors the progress and expects that all projects would receive approval from the Environmental Impact Evaluation Bureau according to schedule.

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SHAREHOLDERSSTRUCTURE ANDMANAGEMENTSHAREHOLDERS STRUCTURE

1. THE COMPANY’S SECURITIES : ORDINARY SHARESThe Company’s registered capital, as of 22 February 2010, is 15,991,205,802.64 baht, with issued and paid-up capital of 6,307,130,801.76 baht, consisting of 1,473,628,692 ordinary shares at the par value of 4.28 baht per share.

2. OTHER SECURITIES(A) ESOP Warrants offering to the Directors and Employees of the Company and its Subsidiaries (ESOP # 5/2006)The Annual General Meeting of Shareholders # 11/2006 held on 20 April 2006 had approved the Employee Stock Ownership Plan to Issue and Offer the ESOP Warrants to the directorsand employees of Sansiri Public Company Limited and its subsidiaries # 5 (ESOP # 5/2006), summarized as follows:

1. Total number of warrants offered : 52,820,000 units 2. Exercise ratio : 1 unit per 1 ordinary share 3. Exercising price : 5 baht per 1 ordinary share 4. Total number of shares reserved : 52,820,000 shares for exercising right 5. Maturity : 5 years from the closing date of issuance warrants

In this regard, the Company had notified to the SEC of its intention to comply with the new regulation regarding the Permission and the Offer for Sale of Securities pursuant to the Notification of the Capital Market Supervisory Board No. ThorChor 32/2008. The Company already issued and offered the new securities to directors and employees under the ESOP # 5/2006 on 30 June 2009.

!"#$%&'()$*'(('+,-$./01$!%2324*1#$The Extraordinary Meeting of Shareholders No. 1/2009 held on 6 November 2009 passed the resolution to approve the issuance and allocation of the share warrants No. 1 of Sansiri

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Public Company Limited (SIRI-W1), totalling of 736,814,346 units to the Company’s existing shareholders on a pro rata basis (right offering), without a charge, at the ratio of 2 existing ordinary shares to 1 unit of the warrant, at the exercise price of 5.20 Baht per share. The warrants are exercisable on the last business day of every quarter of each calendar year (March, June, September and December) throughout the maturity of the Warrant after the second anniversary of the issuance and offering date of the Warrants has elapsed. The Stock Exchange of Thailand (SET) approved the listing of share warrants of Sansiri Public Company Limited No. 1 (SIRI-W1) on 3 February 2010.

3. SHAREHOLDERSThe ten largest shareholders as of 22 February 2010 which are adjusted according to the registry of shareholders on the latest closing date of the shares register book on 12 October 2009 (the closing date of the shares register book for determining the rights to attend the Extraordinary Meeting of Shareholders No. 1/2009) are as follows:

Proportion of No. Name of Shareholder Number of shares shares holding % of ! ! ! ! "#$%&'"!(#"$)#* 1 MR. SRETTHA THAVISIN GROUP 1 215,439,784 14.62% 2 UOB KAY HIAN PRIVATE LIMITED 129,083,333 8.76% 3 RAFFLES NOMINEES (PTE) LIMITED A/C 1 (Major NVDR Holder) 2 118,033,300 8.01%

4 CHASE NOMINEES LIMITED 42 109,035,200 7.40% 5 VIRIYAH INSURANCE CO., LTD. 95,398,600 6.47% 6 NATURAL PARK PUBLIC COMPANY LIMITED 62,721,231 4.26% 7 FINANSA LIFE ASSURANCE CO., LTD. 53,572,800 3.64% 8 UBS AG SINGAPORE,BRANCH-PB SECURITIES CLIENT CUSTODY 45,182,100 3.07%

9 KASIKORN BANK PUBLIC COMPANY LIMITED 20,661,487 1.40% 10 MRS. JARUNEE CHINWONGWORAKUL 20,000,000 1.36% 10 TRENDY PLAN INVESTMENT LIMITED 20,000,000 1.36%

Total 889,127,835 60.34%

Remark 1 Mr. Srettha Thavisin Group consists of (1) T.S. Star Company Limited (the holding company wholly owned by Mr. Srettha Thavisin who is also the director), holding 178,274,400 shares, equivalent to 12.09% of the Company’s issued and paid-up capital and (2) Mr. Srettha Thavisin who hold 37,165,384 shares, equivalent to 2.52% of the Company’s issued and paid-up capital. 2 Thai NVDR Co., Ltd., a wholly owned subsidiary of the SET, is responsible for executing the purchase or sale of those listed Company shares whose investors wish to trade through NVDRs. This service is offered to all, irrespective of the number of securities held or the holder’s nationality. NVDR holders receive the same full financial benefits as they would receive by investment directly in shares (i.e. dividends, rights, and warrants). However, there are no voting rights for NVDR holders except in motionsinvolving delisting. The investor can find the report of investment in securities of Thai NVDR Co., Ltd. at www.set.or.th/nvdr/, that shown the proportion of investment as at the end of the working day prior to the date on which the investor’s checking.

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4.DIVIDEND PAYMENT POLICYThe Company’s dividend policy is to pay dividend at the rate of approximately 50% of its consolidated net income after deduction of all reserves as required by laws and the Company. However, such dividend payment shall be conformed to the law and the Articles of Association of the Company as well as subject to the Company and its affiliates’ cash flow and investment plans, including justifications and other future considerations as deemed appropriate.

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1. MANAGEMENT STRUCTUREThe Company’s management structure consists of the Board of Directors, the Audit Committee, the Compensation Committee, and the Executive Committee, which are described below:

(A) BOARD OF DIRECTORS, Consists Of 10 Directors, Namely: (as of 22 February, 2010)

Board Members Positions

1. Mr. Kovit Poshyananda Chairman of the Board (Independent Director) 2. Mr. Apichart Chutrakul Vice-Chairman 3. Mr. Mana Noppun Independent Director 4. Mr. Jesadavat Priebjrivat Independent Director 5. Mr. Wirat Uanarumit Independent Director 6. Mr. Srettha Thavisin Director 7. Mr. Wanchak Buranasiri Director 8. Mr. Kriengkrai Thiennukul Director 9. Mrs. Nujchanart Panthawangkun Director 10. Mr. Porntat Amatavivadhana Independent Director

AUTHORIZED DIRECTORSAs of 22 February, 2010, the directors of the Company whose signatures binding the Company shall be Mr. Apichart Chutrakul, Mr. Srettha Thavisin, Mr. Wanchak Buranasiri,two of three directors co-sign with the Company’s seal affixed. SCOPE OF AUTHORITY AND RESPONSIBILITIES OF THE BOARD OF DIRECTORSAccording to corporate regulations, the Board of Directors is authorized to make decisions and ensure that the activities of the Company conform to the objectives and rules of the Company, resolutions of shareholders meetings, and all relevant laws. This decision-making power does not include matters that the law and regulations of the Securities Exchange Commission and the Stock Exchange of Thailand specify must first be approved by a meeting of shareholders. The corporate regulations permit the Board of Directors to appoint an Executive Committee that controls the daily affairs of the Company in accordance with the policies and budget approved by the Board of Directors and any other matters assigned to it by the Board. Included in these activities are operations that fall within the scope of responsibility assigned to the Executive Committee and screening of other matters beyond that scope for the Board of Directors to consider. The corporate regulations, moreover, authorize the Board of Directors to appoint other committees to assist the Board in its managerial responsibilities.

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SELECTION OF INDEPENDENT DIRECTORThe Company specifies the qualifications of its independent director in accordance with the requirements of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand, as follows:

1. Holds shares not exceeding 1% of the total voting shares of the Company, its parent company, subsidiaries, associates, major shareholders, and controlling parties of the Company, provided that the shares held by the related parties of such independent director shall be included.

2. Is not or has never been an executive director, employee, staff, advisor who receives salary, nor controlling parties of the Company, its parent company, subsidiaries, associates, same-level subsidiaries, major shareholders, or controlling parties of the Company.

3. Is not the person who has relationship by means of descent or legal registration under the status of father, mother, spouse, brothers and sisters, and children. The prohibitive persons also include spouses of daughters and sons of management, major shareholders, controlling party or the person who is in the process of nomination to be the management or controlling party of the Company or its subsidiary.

4. Have no or never had business relationship with the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of the Company in respect of controlling which may harm the independent decision-making, including not being or never been the significant shareholder, or controlling parties of any person having business relationship with the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of the Company

5. Is not or has never been the auditor of the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of Company, and is not the significant shareholder, controlling parties, or partner of the auditing firm which employs such auditor of the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of the Company.

6. Is not or has never been the professional service provider, including but not limited to legal service or financial advisor with received the service fee more than 2 million baht per year from the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties, and is not the significant shareholder, controlling parties, or partner of the above mentioned service firms.

7. Is not the director who is nominated to be the representative of directors of the Company, major shareholders, or any other shareholders related to the major shareholders.

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8. Do not operate the same and competitive business with the business of the Company, or its subsidiaries, or is not a significant partner of the partnership, or is not an executive director, employee, staff, advisor who receives salary, nor holds share of more than 1% of the total voting shares of any other company which operates same and competitive business with the business of the Company, or its subsidiaries.

9. Is not any otherwise which is unable to have the independent opinion regarding the business operation of the Company.

After being appointed as the independent director in accordance with the conditions under the article (1) - (9), such independent director may be assigned by the board of directors to make decision in respect of collective decision on business operation of the Company, its parent company, subsidiaries, associates, same-level subsidiaries, major shareholders, or controlling parties of Company.

The definition of independent director of the Company is equal to the minimum requirement of the Securities and Exchange Commission and the Stock Exchange of Thailand.

(B) AUDIT COMMITTEEThe Audit Committee is constituted in such a way as to be independent of the Company’s management. All members of the Audit Committee are qualified individuals and independent directors who possess the qualifications stipulated by the Stock Exchange of Thailand.

Presently, the Audit Committee consists of 3 directors who are not taking part in the management of the Company or majority shareholder of the Company, and 1 secretary, namely:

(as of 22 February, 2010)

Name Positions

1. Mr. Mana Noppun Chairman of the Audit Committee 2. Mr. Jesadavat Priebjrivat Member of the Audit Committee 3. Mr. Wirat Uanarumit Member of the Audit Committee

Remark : Secretary to the Audit Committee is Mr. Thalin Aeimtitiwat

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SCOPE OF AUTHORITY AND RESPONSIBILITIES OF THE AUDIT COMMITTEEThe Audit Committee of the Company has the scope of duties and responsibilities to the Board of Directors on the following matters:

(1) to review the Company’s financial reporting process to ensure that it is accurate and adequate;(2) to review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit;

(3) to review the Company’s compliance with the law on securities and exchange, the Stock Exchange of Thailand’s regulations, and the laws relating to the Company’s business;

(4) to consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year;

(5) to review the Connected Transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Stock Exchange of Thailand’s regulations, and are reasonable and for the highest benefit of the Company;

(6) to prepare, and to disclose in the Company’s annual report, an audit committee’s reportwhich must be signed by the audit committee’s chairman and consist of at least the following information:

(a) an opinion on the accuracy, completeness and creditability of the Company’s financial report, (b) an opinion on the adequacy of the Company’s internal control system, (c) an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to the Company’s business, (d) an opinion on the suitability of an auditor, (e) an opinion on the transactions that may lead to conflicts of interests, (f) the number of the audit committee meetings, and the attendance of such meetings by each committee member, (g) an opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter, and (h) other transactions which, according to the audit committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors; and

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(7) to perform any other act as assigned by the Company’s Board of Directors, with the approval of the Audit Committee.

In its performance of duties as described above, the Audit Committee must be directly responsible to the Company’s Board of Directors, while the Company’s Board of Directors shall remain responsible to third parties for the operations of the Company.

The term of office for the Chairman of the Audit Committee and members of the Audit Committee is 3 years (including the additional appointment to and removal from the Audit Committee). Furthermore, the members of the Audit Committee who retired by the expiration of the term of the appointment may be re-elected for another term, if the board of directors or the shareholders’ meeting deems it appropriate.

In this regard, the Chairman of the Audit Committee and all members have adequate expertise and experience to audit creditability of the Company’s financial reports.

(C) COMPENSATION COMMITTEEPresently, the Compensation Committee consists of 3 non-executive directors and 1 secretary, namely:

(as of 22 February, 2010)

Name Positions

1. Mr. Mana Noppun Chairman of the Compensation Committee 2. Mr. Jesadavat Priebjrivat Member of the Compensation Committee 3. Mr. Porntat Amatavivadhana Member of the Compensation Committee

Remark : Secretary to the Compensation Committee is Mr. Wanchak Buranasiri

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SCOPE OF AUTHORITY AND RESPONSIBILITIES OF COMPENSATION COMMITTEE ARE AS FOLLOWS: 1. To provide recommendation to the Board of Directors with respect to the policy and criteria for determining annual remuneration, in the form of both cash and non-cash reward, to be given to the directors. By considering the justifiable, reasonable and appropriate for the scope of duties and responsibilities of the directors and can be comparable with the remuneration rate of other companies in the same industry level. Provided, however, that such remuneration is submitted for approval in the shareholders meeting.

2. To consider the annual remuneration, annual salary adjustment, change in salary rates, and other remuneration according to the positions, benefits, as well as the terms and conditions of employment, to the Chief Executive Officer and the President.

3. To provide recommendation to the Board of Directors with respect to the policy and criteria for determining annual remuneration and other benefits to be given to the senior executives, according to their positions.

4. To consider and provide opinions in the event that the Company would like to issue and allot warrants to directors and executive employees of the Company and/or its subsidiaries which are more than 5% of the total warrants issued in each lot of allocation, as well as determine the name of directors and executive employees who being entitled to purchase warrants of more than 5% and number of warrants to be issued to each of them, subject to the relevant laws, rules and regulations.

5. To perform any other act as assigned by the Company’s Board of Directors in relation to the determination of significant compensation.

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(D) EXECUTIVE COMMITTEEThe Executive Committee is appointed by the Board of Directors to supervise and control the daily affairs of the Company. Selected from a list of the Company’s Top Management, members of the Executive Committee must not be the directors of the Company (except the member of Executive Committee no. 1-3 in the below list). Therefore, they are not“Director and Management” according to the definition of the Notification of the Office ofSEC.

The Executive Committee, presently consists of:(as of February 22, 2010)

Name Positions

1. Mr. Apichart Chutrakul Chairman of the Executive Committee

2. Mr. Srettha Thavisin Deputy Chairman of the Executive Committee

3. Mr. Wanchak Buranasiri Member of the Executive Committee

4. Mr. Thalin Aeimtitiwat Member of the Executive Committee

5. Mr. Monthian Soisuwan Member of the Executive Committee

6. Mr. Uthai Uthaisangsuk Member of the Executive Committee

7. Mr. Nopporn Boonthanom Member of the Executive Committee

8. Mr. Metha Angwatanapanich Member of the Executive Committee

9. Mr. Manu Trakulwattanakit Member of the Executive Committee

10. Mr. Somchai Charntanawet Member of the Executive Committee

11. Mrs. Anongluk Rathprasert Member of the Executive Committee and Secretary to the Executive Committee

Moreover, in 2009, the changing of the Executive Committee are as follows: The member of Executive Committee who resigned from his office 1. Mr. Piyabutr Lertdumrikarn resigned from a member of the Executive Committee since 2 February 2009. 2. Mr. Mayta Chanchamcharat resigned from a member of the Executive Committee since 9 April 2009. 3. Mr. Wirote Kappiyajanya resigned from a member of the Executive Committee since 15 October 2009.

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SCOPE OF AUTHORITY AND RESPONSIBILITIES OF THE EXECUTIVE COMMITTEE1. Supervising and controlling the daily affairs of the Company so that they conform to the policies and budget approved for them by the Board of Directors. This includes making business plans, directions, strategies, and organizational structures, and managing the Company’s operations. Corporate expenditures must conform to the economic conditions and the competition encountered by the Company, according to the said policies and budget. The Committee must also monitor the results of corporate operations and ensure that they accord with the approved business plan of the Company.

2. Conducting any other affairs assigned to it by the Board of Directors, including authorization of whatever operations fall within the scope of authority assigned to the Committee by the Board of Directors, which authority is subject to periodic review.

3. Screening other matters beyond the Committee’s scope of authority before passing them to the Board of Directors for consideration.

However such authorization assigned by the Board of Directors shall not cause the Executive Committee, President or any proxy to approve the transactions that he or potentially conflicted persons may involve directly or indirectly in advantage/disadvantage.And that involvement cause in conflict of interest to the Company or any related transactionwhich referred by the Articles of Association of the Company and the SEC’s regulations, except the normal business transactions such as buying or selling goods or products of the Company in accordance with the policy, rules and budgeting which assigned by theBoard of Directors.

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(E) THE MANAGEMENT according to the definition under the Notification of the Office ofSEC, presently consist of the person, namely:

(as of 1 March, 2010)

Name Positions

1. Mr. Apichart Chutrakul Chief Executive Officer 2. Mr. Srettha Thavisin President 3. Mr. Wanchak Buranasiri Chief Operating Officer 4. Mr. Thalin Aeimtitiwat Senior Executive Vice President, Accounting Department 5. Mr. Uthai Uthaisangsuk Senior Executive Vice President, Business Development and Project Development Division (High Rise) 6. Mr. Metha Angwatanapanich Senior Executive Vice President, Business Development and Project Development Division (Low Rise) 7. Mr. Somchai Charntanawet Senior Vice President, Finance

Note : Information of the directors and management of the Company are explained in detail under the topic “Details on the Directors and Management”

(F) COMPANY SECRETARYMr. Nopporn Boonthanom was appointed by the Board of Directors, to be the CompanySecretary effective from 13 August 2008 with the preliminary Duty and Scope of Responsibilities as specified by the Securities and Exchange Acts (No.4) B.E. 2551.

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2. SELECTION OF DIRECTORS AND MANAGEMENTSelection of Company directors must receive approval from a general meeting of shareholders, unless a position falls vacant for some other reasons than the normal expiry of a director’s term of office. The Board of Directors may then elect a replacement at its next meeting to fill that position only for the remainder of that term,unless the period remaining is less than two months. Appointment of independent directors and audit committee directors will be made by the Board of Directors from a list of qualified persons generally accepted by the business sector and appropriate academic realm and nominated by the Chief Executive Officer and the President for that purpose, or proposed for appointment at a meeting of shareholders, as is the case with directors of the Board whose names are proposed jointly by the Chief Executive Officer and the President.

Method of Election of Directors at a Meeting of Shareholders

The Company’s regulations differ from the method stipulated by Article 70, Clause 1 of the Public Companies Act of B.E. 2535. The Company’s regulations require that the Board of Directors must be approved by a majority of votes in a meeting of shareholders, with one vote allotted to each share. Election may be of individuals or of groups, as the meeting of shareholders deems appropriate. No shareholder may divide his/her votes among several individuals or groups. At each Annual General Meeting of Shareholders, one third of thepositions on the Board become vacant, and those whose terms have expired may be re-elected for another term of office.

3.MANAGEMENT REMUNERATION

3.1 CASH REMUNERATION(A) Total Cash Remuneration for the directors and members of the Audit Committee in 2009 – ten persons in all – amounted to 7,720,000 baht, which was in the form of meeting allowances, special remuneration to the non-executive directors and salary to the AuditCommittee. The details are as follows:

The remuneration to the Audit Committee paid in form of salary (at the same rate of the previous year), i.e. 50,000 Baht per month for the Chairman and 30,000 Baht per monthfor other members.

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Remuneration for the directors for the year 2009

Special Total Meeting remuneration (baht/ No. Name allowances to the non- year) (baht / year) executive directors (baht / year)

1. Mr. Kovit Poshyananda 180,000 1,000,000 1,180,000 2. Mr. Apichart Chutrakul 180,000 - 180,000 3. Mr. Mana Noppun 180,000 600,000 780,000 4. Mr. Jesadavat Priebjrivat 180,000 600,000 780,000 5. Mr. Wirat Uanarumit 180,000 600,000 780,000 6. Mr. Srettha Thavisin 180,000 - 180,000 7. Mr. Wanchak Buranasiri 180,000 - 180,000 8. Mr. Kriengkrai Thiennukul 180,000 600,000 780,000 9. Mrs. Nujchanart Panthawangkun 180,000 600,000 780,000 10. Mr. Porntat Amatavivadhana 180,000 600,000 780,000

Total 6,400,000

The remuneration to the Audit Committee paid in form of salary (at the same rate of the previous year), i.e. 50,000 Baht per month for the Chairman and 30,000 Baht per month for other members.

No. Name Salary (baht / year)

1. Mr. Mana Noppun 600,000 2. Mr. Jesadavat Priebjrivat 360,000 3. Mr. Wirat Uanarumit 360,000 Total 1,320,000

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(B) Cash Remuneration for the Management member was in the form of salaries, and bonus as follows:Remuneration for the Management

The year 2009 No. of Top Amount (baht) Type of remuneration Managements Total Salary 6 43,500,000 Total bonus 6 134,400,000 Total 177,900,000

Remark : “The Management” in the table above mean the Management according to the definition under the Notification of the Office of SEC (excluding Senior Vice President, Finance), i.e. Mr. Apichart Chutrakul, Mr. Srettha Thavisin, Mr. Wanchak Buranasiri, Mr. Thalin Aeimtitiwat, Mr. Uthai Uthaisangsuk and Mr. Metha Angwatanapanich.

3.2 OTHER REMUNERATION 3.2.1 The Plan to issue and offer the Ordinary Share-Purchase Warrants to the Directors and its subsidiaries i.e. ESOP # 5/2006 Plan

Remark : Please see the details of warrants under ESOP # 5/2006 Plan in the topic “Shareholder Structure” under the heading “2. Other Securities”.

The details of warrants under ESOP Plan which allotted to the directors of the Company are as follows:

Warrants under ESOP# 5/2006 The name of directors (at present) No. of warrants % of the Plan

1. Mr. Kovit Poshyananda 1,000,000 1.89 2. Mr. Apichart Chutrakul 2,600,000 4.92 3. Mr. Srettha Thavisin 2,600,000 4.92 4. Mr. Wanchak Buranasiri 2,600,000 4.92

3.2.2 Contributions to the Pension Fund : In 2009, the Company had not paid any contributions to the pension funds of directors, except for directors and executives who also holding the status as Company employee, to which the Company had contributed to their provident fund as follow:

The year 2009 Type of remuneration No. of person Amount (baht)

Contributions to the Pension Fund 6 5,373,600

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4. CORPORATE GOVERNANCEThe Company regards corporate governance as a system essential to the processes and structures of leadership and control. It facilitates responsibility for one’s position through transparency and enhances corporate competitiveness as a mean to preserving capital and adding value to shareholders’ equity in the long term. Corporate governance is a code of business ethics that protects various interested parties and society as a whole. To this end, the Company has established an Audit Committee, composed of individuals independent of the Company, and free of managerial control. The Audit Committee meets every three months to examine the stewardship of the Company in terms of transparency, integrity, accountability, and competitiveness.

In addition, since some of the Company’s joint venture partners and shareholders are foreigners who need to have prompt and accurate knowledge of the Company, theCompany is aware of the importance of corporate governance as a factor in determining whether an investor will choose to invest in the Company. For this reason, the Company has modernized its information, accounting, and management systems to ensure fast and accurate reports, and established an Investor Relations Office to co-ordinate communication with investors.

The progress made by the Company in implementing all 5 sections contained in the Principles of Good Corporate Governance for Listed Companies laid down by the StockExchange of Thailand is herewith explained as follows:

1. RIGHT OF SHAREHOLDERSTo increase transparency, competitive advantage and the confidence of shareholders, investors and all stakeholders in the Company, the Board of Directors has set the guideline for protection of fundamental rights of the shareholders (such as the right to trade and transfer shares, to receive dividend from profits of the Company, to receive sufficient news and information from the Company, to attend and exercise their votingrights in the shareholders meeting, etc.) including the following principles:

(a) The Company provides the information about the shareholders meeting by sending the notice summoning the meeting along with the agenda for the meeting within sufficient timeframe (14 days prior to the meeting date). The notice summoning the meeting and the agenda for the meeting contained the details of the meeting inclusive of date, time, venue, agenda of the meeting and other necessary information required for decision making process together with the comments from the directors for each agenda, and proxy form for the shareholders who are unable to attend the meeting, etc. Furthermore, the Company also advertised these information in the Company website before sending them to the shareholders.

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(b) Chairman of the meeting allocates sufficient and appropriate time and carries out the meeting according to the agenda. And during the meeting, the Chairman allows the shareholders to freely express their opinion and raise their questions in relation to the Company business.

(c) Chairman of the Board, the Chairman of the sub-committee, and all directors (unless with reasonable cause) are to attend the meeting and answer the questions from the shareholders.

(d) To ensure efficiency, transparency, accountability, and sufficient information disclosure of the business operations for the utmost benefits of the shareholders and stakeholders.

2. EQUITABLE TREATMENT OF SHAREHOLDERS

(1) GENERAL RIGHTS The Company realizes of its duty to protect the rights and benefits of the shareholders and to place importance on fair and equal treatment for all shareholders. It is the Company policy to disclose information in relevant to Company business operation with accuracy and transparency, including the rights in which the shareholders are entitled to, or any issues that could impact the Company business such as shareholders’ participation in the shareholder’s meeting to exercise their voting rights, the right to receive dividend, decrease or increase capital, etc.

(2) SHAREHOLDER’S MEETING The Company has established the policy to hold the shareholder’s meeting in accordance with the applicable laws and regulations of the Stock Exchange of Thailand, including the summoning of the meeting, notification of the agenda, sending of the notice summoning the meeting, recording of minutes of the meeting, and also to facilitate the shareholders in each shareholder’s meeting.

! ! "! #$%&'$!()$!*$$(+,- In 2009, the Company held shareholder’s meeting for 2 times, i.e. a Annual General Meeting of Shareholders on 29 April 2009 and a Extraordinary Meeting of Shareholders on 6 November 2009. The Company sent the notice summoning the meeting along with the agenda of the meeting to the shareholders not less than 14 days prior to the date of the meeting. To provide the opportunity to the shareholders to study the materials for the meeting before receiving the information in forms of documents, the Company also publicized the information in the Company website for approximately 27 days prior to the meeting date and had informed the SET of such broadcasting.

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The Company has provided the shareholders with the following information to help them in decision making process:

- Facts and reason along with the opinion of the Board of Directors for each agenda - Important information such as the biography of the person being appointed as a director (for the agenda to appoint the new director as a replacement the director who retired upon completion of their term), details of remuneration for directors and sub committee, etc. - Proxy of the shareholders in which the Company has provided another alternative for the shareholders to propose at least 1 independent director to be their proxy to attend the meeting and to vote, in case that the shareholder is unable to attend the meeting.

At present the Company has the policy to improve the information in the materials for the shareholder’s meeting to be more detailed. The Company realizes the importance of the shareholder’s right to access the Company information; therefore, will add more details of the important agenda to be considered, reasons for necessity, and the positive and negative impacts of that agenda.

Furthermore, the Company has facilitated the shareholders and their proxy at each shareholders meeting by arranging the barcode registration system and the voting form for each agenda.

! ! "! #$%&'(!)*+!,++)&'( In the shareholder’s meeting held in 2009, the Chairman of the Board of Directors acted as Chairman of the meeting with the Chairman of the sub- committee and the Company and the directors attended the meeting (the names were shown in the minutes of meeting) to report or to answer to any questions from the shareholders. Before proceeded with the agenda of the meeting, the Chairman of the meeting explained to the meeting the procedure of voting for each agenda and informed the meeting of the voting result after completing the consideration of each agenda.

The Company carried out the meeting according to the agenda stated in the notice summoning the meeting, and allowed the shareholders to vote for the new director according to the agenda to appoint the new director. Furthermore, the Company holds on to the principle in which to give the opportunity to the shareholders to study the information before making decision, and the Company will not add any agenda without informing the shareholders in advance.

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During the meeting, the Chairman gave equal opportunity for the shareholders to examine the Company business operations, to ask questions, and to express their opinion and suggestions. All shareholders, minor and major shareholders, received the same and equal information about the Company business operations and financial information, including equal rights to receive dividend.

! ! "! #$%&'!%(&!)&&%*+, The Company has completely and accurately recorded the minutes of meeting, voting of each agenda and the issues or questions and any opinion from the shareholders. The minutes of shareholders meeting held in 2009 had been submitted to the SET within 14 days after the meeting date, and also publicized in the Company website, www.sansiri.com, for information and examination by the shareholders

3. ROLES OF THE STAKEHOLDERSThe Company places importance on all group of its stakeholders regardless if they are internal stakeholders such as employees and management of the Company and its subsidiary companies, or external stakeholders such as shareholders, customers, competitors, and creditors. The Company is fully aware that supports from all these stakeholders will enable the Company to build the competitive advantage and create profits for the Company which will benefit the long term success of the Company.

For such purpose, the Company provides fair, transparent, and timely disclosure of the important information to ensure that all stakeholders are treated equally.

(1) SHAREHOLDERS The Company aims to ensure that the shareholders receive appropriate returns for their investment by ensuring sound business operation results and continued business development. The Company also implements effective and efficient internal control system to ensure that the benefits of the Company and the shareholders are protected.

(2) CUSTOMERS The Company recognizes the importance of the customers and therefore, determines to build customers’ satisfaction appropriately by offering high quality products and services in response to the customers’ needs professionally.

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(3) EMPLOYEES The Company recruits and retains the potential and experienced employees with determination to continuously develop and increase the skills of the employees and to encourage the employees’ success and secure in their profession. The Company treats every employees equally, provides the employees with reasonable welfares and other benefits such as provident fund, health and life insurance, etc.

(4) MANAGEMENT The Company recognizes the importance of the management who is an important factor to the Company business success and therefore, has arranged for the appropriate structure of remuneration for the management.

(5) CREDITORS AND TRADE PARTNERS The Company operates and deals business with its creditors and all groups of its trade partners on the principles of fairness and ethical manners by complying with the laws and regulations and on the agreed terms and conditions.

(6) TRADE COMPETITORS The Company treats its trade competitors fairly and does not seek for any information of the competitors dishonestly.

(7) RESPONSIBILITIES TO THE COMMUNITY, SOCIETY, AND ENVIRONMENT The Company operates its business base on responsibilities, care, and concerns to the overall community, society, and the environment, and also to comply with all relevant laws and regulations.

4. INFORMATION DISCLOSURE AND TRANSPARENCYThe Company places importance on the disclosure of information accurately, completely, transparently and freely both for financial statements and general information, and also other information that would impact the price of the Company property. To ensure that the investors and all other related parties have free access to the information, this information is to be publicized through different media channels such as website of the SET, form 56-1, annual reports, and at the Annual General Shareholders Meeting, etc.

Moreover, the Company information which has been reported to the SET, shareholders and the investors will be publicized in both Thai and English language in the Company website www.sansiri.com. This is another communication channel which is very timelyand enables easy access for the users. The Company has set up the Investor RelationsDepartment to be responsible for the communication and provision of the Companyinformation and activities to the shareholders, analysts and other investors, fairly

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and equally. The role of the Investor Relations also includes to create and to ensure positive image, attitude, and confidence from the analyst and investors. The investors or any interest parties can contact the Investor Relations at the telephone number (662) 201-3905 or at the e-mail address : [email protected].

The important information of the Company consists of financial statements and other non-financial information in accordance with the regulations of SEC and SET, and also other relevant information. The Company financial statement which has been reported to SET, has been checked and examined by the Company auditor and has been approved by the Company Board of Directors. The Board of Directors is responsible for the budget of the Company and its subsidiaries and the financial information that appears in the Annual Report. The financial statements are produced according to accounting principles generally accepted in Thailand and capable of being applied and implemented on a regular basis.The said statements require great care and circumspection, and must disclose all significant information related to them in the Notes to the Financial Statements. Furthermore, the Board of Directors has instituted an effective system of internal controls to ensure the reasonable accuracy, completeness and adequacy for the purpose of maintaining the Company’s assets. They must also identify weak points vulnerable to significant occurrences of fraud and dishonest business practices. For this reason, the Board of Directors has appointed an Audit Committee consisting of non-executive directors to examine the quality of the Company’s financial reports and system of internal controls. Their opinions in this regard are compiled in the Report of the Audit Committee,which appears in the Annual Report and Form 56-1.

5. RESPONSIBILITY OF THE BOARD OF DIRECTORS

(1) STRUCTURE OF BOARD OF DIRECTORS

(1.1) COMPOSITION OF THE BOARD OF DIRECTORS The Company Board of Directors has been elected from the Annual General Meeting of the Shareholders in accordance with the Company Article of Association. At present, the Company has total of 10 directors which is appropriate to the size of business. The Company’s Board of Directors comprises of 3 executive directors, outside directors who are non-executive directors, along with audit committee totaling 7 persons. There are 5 independent directors on the board which is more than one third (1/3) of the total numbers of directors on board.

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However, non-executive directors and audit committee of the Company hold the knowledgeable with high experience in business, professional managers independent of executive influence. Thus the executive management of the Company is guided and supervised impartially by non-executive directors and audit committee, providing sufficient balance in the opinion of the Company.

The Board of Directors clearly determines and distinguishes the duties and responsibilities of the Board itself, its committees, and the management of the Company, as explained in detail under the topic “1. Management Structure” whose subject heading is “Management”. These duties and responsibilities are regularly communicated to the directors, management, and staff of the Company as well.

(1.2) QUALIFICATIONS OF INDEPENDENT DIRECTORS Independent director refers to a director whose qualifications match with the requirements of the Office of the Securities and Exchange Commission and the Stocks Exchange of Thailand, as follows:

1. Holds shares not exceeding 1 percent of the total shares with voting right of the Company, its parent company, subsidiaries, associates, major shareholders, and controlling parties of the Company, provided that the shares held by the related parties of such independent director shall be included.

2. Is not or has never been an executive director, employee, staff, advisor who receives salary, nor controlling parties of the Company, its parent company, subsidiaries, associates, same-level subsidiaries, major shareholders, or controlling parties of the Company.

3. Is not the person who has relationship by means of descent or legal registration under the status of father, mother, spouse, brothers and sisters, and children. The prohibitive persons also include spouses of daughters and sons of management, major shareholders, controlling party or the person who is in the process of nomination to be the management or controlling party of the Company or its subsidiaries.

4. Have no or never had business relationship with the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of the Company in respect of holding the power which may cause the obstacle of the independent decision, including not being or never been the significant shareholder, or controlling parties of any person having

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business relationship with the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of the Company

5. Is not or has never been the auditor of the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of Company, and is not the significant shareholder, controlling parties, or partner of the auditing firm which employs such auditor of the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties of the Company.

6. Is not or has never been the professional service provider, including but not limited to legal service or financial advisor with received the service fee more than 2 million per year from the Company, its parent company, subsidiaries, associates, major shareholders, or controlling parties, and is not the significant shareholder, controlling parties, or partner of the above mentioned service firms.

7. Is not the director who is nominated to be the representative of directors of the Company, major shareholders, or any other shareholder related to the major shareholders.

8. Do not operate the same and competitive business with the business of the Company, or its subsidiaries, or is not a significant partner of the partnership, or is not an executive director, employee, staff, advisor who receives salary, nor holds share for more than 1 percent of the total shares with voting right of any other companies which operate same and competitive business with the business of the Company, or its subsidiaries.

9. Is not any otherwise which is unable to have the independent opinion regarding the business operation of the Company.

After being appointed as the independent director in accordance with the conditions under the article (1) - (9), such independent director may be assigned by the Board of Directors to make decision in respect of collective decision on business operation of the Company, its parent company, subsidiaries, associates, same-level subsidiaries, major shareholders, or controlling parties of Company.

The definition of independent director of the Company is equal to the minimum requirement of the Securities and Exchange Commission and the Stock Exchange of Thailand.

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(1.3) SEPARATION OF POWER FOR CHAIRMAN OF THE BOARD AND MANAGING DIRECTOR From the Company structure, the Board of Directors has elected the independent director who has no relation with the management to be Chairman of the Board. The Company determines that the Chairman of the Board of Directors is not the same person as the Managing Director in order to separate duty of making policy and management of the Company daily business operations.

The Chairman of the Board has leadership and important role in overseeing to ensure that the management manages the Company in accordance with the policy, including to assist, advise, and support the operations of the management. However, the Chairman of the Board of Directors has no participating in the business operations under the responsibilities of the management while the Chief Executive Officer and the President will be responsible for the management of business as appointed and approved by the Board of Directors. Moreover, the Chairman of the Board is also the chairman of the Board of Directors’ meeting and the Shareholders’ meeting, to ensure that the meetings are carried out smoothly and successfully and also encourage all directors to participate in the meeting.

(1.4) COMPANY SECRETARY The Company has the policy to comply with the new amendment of the Securities and Exchange Act and the good corporate governance principles for the listed Company, by providing the company secretary to be in charge of all corporate secretarial and other related tasks with more efficiency and systematic approach. At present, Mr. Nopporn Boonthanom, the General Counsel Legal Office and Secretary to the Board is appointed by the Board as the Company secretary, taking care on the Company secretary area who is in charge of keeping the Board informed of any necessary laws and regulations and also to manage and ensure that the Board of Directors meeting and Shareholders meeting are carried out smoothly and efficiently.

(2) SUB-COMMITTEE The Board of Directors has appointed three committees to assist in corporate administration and supervision. The three committees consist of (1) the Audit Committee (2) the Compensation Committee and (3) the Executive Committee. Details of the roles, responsibilities, and composition of each committee can be found under the topic “(1) Management Structure”, whose heading is “Management”. The Chairman of the Board is neither a chairman nor a member of any committee to ensure independence of the committees.

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3) ROLE, DUTY, AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS The Board of Directors has the obligation and responsibility to perform its duty in accordance with the law, objectives, regulations, code of conducts, and the resolution of the shareholders meeting, including to consider and approve the Company policy and management direction, financial target, and budget. The Board of Directors also oversees and monitors to ensure that the business operations are managed effectively and according to the policy for the utmost benefits of the shareholders under the ethical standards with honestly and carefulness.

(3.1) BUSINESS ETHICS The Board of Directors has clear policies on business ethics, which have been communicated to management and employees on a regular basis.

All concerned individuals are expected to adopt these policies and implement them with integrity, honesty, and fairness in their dealings with the Company, interested parties, the public, and society. Interactions between the individuals concerned and other parties are constantly monitored. The Company has compiled and published a code of professional ethics for staff and determined penalties for violating the said code.

(3.2) CONFLICTS OF INTEREST To avoid conflicts of interest, the Board of Directors is careful to review any item that could be construed as a conflict of interest, and to establish written policies and procedures for the authorization of transactions between related parties. The Article of Association of the Company and its subsidiaries were revised to stipulate that if any transaction is agreed to between various members of the Company and its subsidiaries, or any asset of the Company or its subsidiaries is acquired or relinquished as per the relevant guidelines of the Stock Exchange of Thailand, then the Company and its subsidiaries must comply with the said guidelines. The Company also established policies and procedures by which to prevent the managements and related parties from deriving personal benefit from the Company’s inside information.

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The Board of Directors is aware of each incidence of a potential conflict of interest or related-party transaction and considers the appropriateness of each occurrence. The Company complies with the principles of the stock exchange whereby prices and conditions are negotiated strictly on an arm’s-length basis. The details of each transaction, its value, the parties involved, and the reason or necessity for the transaction are explained in the Annual Report and Form 56-1. In particular, directors, management and employees are not allowed to consider or cast their votes on matters in which they may have a potential conflict of interest.

(3.3) INTERNAL CONTROL AND INTERNAL AUDIT The Company places importance on the effective and appropriate internal control system for the Company business operations, both in the management and operational levels. And therefore, has adjusted the structure of the organization to be in line with the Company objectives, business, duty, and responsibilities of each business line. The Company has also clearly established the written guideline of the obligation, and scope of authority of the staff and management, has the control and monitoring system for the utilization of the Company assets, and has clear separation and segregation of duty and obligation for the operators, the monitoring party and the evaluator. This is to balance the power and authorization and enable appropriate cross examination among all parties involved. Furthermore, the Company also has the financial related internal control by setting the system of reporting line to the respective management in charge.

The Company conducts investigations to determine that its operations and financial activities are proceeding properly and efficiently, and are compliant with all relevant laws and regulations. In order that the internal auditing unit may be independent, capable, and balanced, the Board of Directors has stipulated that its reports be made directly to the Audit Committee and its activities evaluated by the Audit Committee as well.

(3.4) RISK MANAGEMENT The Company attaches considerable importance to risk management. The risk involved in each corporate activity is evaluated and determined, along with measures to prevent and manage risk and its effect on corporate operations. The task of management is to assess the economic, financial, social, and legal risks produced by each change in circumstances, along with their impact on competitiveness in the industry, and to decide on the appropriate solutions.

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(4) MEETINGS OF THE BOARD OF DIRECTORS The normal frequency of meetings of the Board of Directors is every three months. Other special meetings may be held as the need arises. Each meeting has a clear agenda, determined in advance, part of which is a regular review of operational results. The Secretary to the Board issues invitations to each meeting, along with the rules of the meeting and all relevant documents, seven days in advance, so that the directors may have sufficient time to study all pertinent information prior to the meeting. Each meeting normally lasts about two hours. In 2009, the Board of Directors held four regular meetings and five extraordinary meetings, totaling nine meetings. The attendance of each director is as follows:

Details of director and member of each committee attendance records in year 2009

The The Board The Audit Compensation Name of Directors Committee Committee

1. Mr. Kovit Poshyananda 9/9 - - 2. Mr. Apichart Chutrakul 9/9 - - 3. Mr. Mana Noppun 8/9 4/4 1/1 4. Mr. Jesadavat Priebjrivat 9/9 4/4 1/1 5. Mr. Wirat Uanarumit 7/9 4/4 - 6. Mr. Srettha Thavisin 8/9 - - 7. Mr. Wanchak Buranasiri 9/9 - - 8. Mr. Kriengkrai Thiennukul 7/9 - - 9. Mrs. Nujchanart Panthawangkun 9/9 - - 10. Mr. Porntat Amatavivadhana 8/9 - 1/1

The Chairman of the Board of Directors has allocated sufficient time for the proposal of issues for consideration of the directors and to encourage the directors to freely and thoroughly discuss the issue. The secretary to the Board takes minutes of the meeting with all important details of the meeting including the discussion of the meeting and the opinion of the directors. The minutes of the previous meetings which have been approved by the Board of Directors shall be kept and ready for the examination by the directors and other related parties.

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(5) SELF EVALUATION OF THE BOARD OF DIRECTORS The Company acknowledges the information about performance evaluation of the Board of Directors in accordance with the regulation set by SET. The Company evaluates the performance of the Board of Directors from time to time. However, at present, the Company has concept to carefully and appropriately set the guideline for performance evaluation of the Board of Directors, and to use this in formation to improve and develop more performance efficiency of the Board of Directors.

(6) REMUNERATION FOR DIRECTORS AND THE MANAGEMENT The Company’s remuneration policy for directors is straightforward and transparent. Levels of remuneration are equivalent to the industry standards, high enough to attract and retain directors who possess the desired qualifications, and are approved by a meeting of shareholders. Directors who are appointed as audit committee are given increased remuneration appropriate to their greater workload.

The Board of Directors appointed a Compensation Committee composed of audit committee and non-executive directors, so as to give impartial and appropriate consideration to the remuneration due to the Board of directors, and independent directors. Their recommendations must then be approved by a meeting of shareholders. Details of the remuneration given to directors and management is provided under the topic “(3) Management Remuneration”, whose heading is also “Management”.

(7) DEVELOPMENT OF DIRECTORS AND MANAGEMENT

(7.1) DEVELOPMENT OF DIRECTORS The Company recognizes the importance of the directors who are important mechanism for the determination of the Company policy and plan to achieve corporate business goal and to take care of the benefits of all shareholders who has placed their trusts and appoint the directors to set the policy and supervise the business affairs operations of the management. Therefore, the Company has aimed to continuously and consistently develop all directors to be knowledgeable in all matters necessary and related to their works and the Company business. This includes the support in terms of time allocation and any related expenses for the directors, audit committees, management, and the employees in charge of the corporate secretarial tasks, to attend or participate in the trainings and seminars with various institutions such as SET, SEC, Thai Institute of Directors, and Thai Listed Companies Association. The purpose of the trainings and seminars is to improve knowledge, understanding,

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and to inform of any laws, rules, responsibilities, and any useful information which could be utilized and be beneficial for the business in the future.

Moreover, in case of appointment of the new director, the secretary of the Board of Directors as a person in charge of the corporate secretarial tasks of the Company will be preparing the necessary documents and information which could be useful and beneficial for the directors to know and aware of their roles, obligations and responsibilities such as Directors’ Manual for Thai Listed Company issued by SEC and the Rules on obligations and responsibilities to disclose reports to the Office on each person’s securities holding in accordance with section 59, and its penalty in accordance with section 275 of the Securities and Exchange Act B.E. 2535. These are the details of obligations and responsibilities in which the directors must be abided by legally, including the Code of Best Practice which is to be the guideline for business practice to be according to the internationally accepted standards.

(7.2) DEVELOPMENT OF MANAGEMENT AND SUCCESSION PLAN The Company determines to develop the middle-level to top-level management and their business succession plan in both strategic and operational levels of all functions including product development, sales and marketing, financial, and other supporting functions. The Company set up the committees which consist of top level management and the management for each business line to coordinate and set up the plan. There could be several committees as appropriate, for example, the committee to consider new projects to make decision on land purchase and other investments, or the committee to consider the Company financial decision, or the committee for products development and marketing. These committees are comprised of the Chief Executive Officer, President, and Chief Operating Officer as core members, and the management of relevant business lines as members of each committee.

The Company is confident that this method will help develop management capability as they will have opportunities to participate in planning operational process and business strategies. The management will not only have a chance to work closely with the cross-functional management but also have an opportunity to learn from the experiences of the higher level management in actual business operations. This methodology also helps develop high potential management, keeps the continuity of business, and enables the transfer of knowledge and responsibilities among the management vertically and horizontally as this methodology does not rely on an individual, but on teamwork. The coordination of each individual in the team synchronously and

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gradually enabled the succession of works, knowledge and responsibilities altogether.

The Company has continuously developed and prepared succession plans for the middle level management. The top level management of each respective business line will consider and support their high-potential middle management and the staff in their business line to become their successor by proposing them to participate in the SLP (Sansiri Leadership Program) which is a training program to develop high-potential management to be the executives. The employees will learn the procedures and strategies of the modern management, including how to become a good and effective management in the future. Furthermore, this is the building of networks for coordination among different business lines as the employees who participate in the program will attend classes and join the activities together. For lower level employees, the Company has a program to recruit for high-potential employees. The top level management from different but related business lines will select the skilled employees with positive attitude to participate in the on-the-job training program to develop them to grow and become lower and middle management respectively. Apart from the mentioned two programs, the Company also has Management Trainee Project to help the employees to understand the process and procedure of business operations which will help them to work in accordance with the Company objectives and to support the development of management.

Moreover, the Company also supports the seminar projects / excursions both domestically and overseas to help improve skills, knowledge and visions of the employees, for example, Managerial Grid or The 7 Habits of Highly Effective People by Stephen R. Covey. All middle level management will have opportunity to attend these important trainings and seminars to improve and develop their skills to be ready to be leader and management.

5. SUPERVISING THE USE OF INSIDE INFORMATIONThe Board of Directors and corporate management are obliged to report their ownershipof Company securities to the Securities Exchange Commission with every change in the holdings of Company shares. This is one measure to enable the Company to determinewhether any purchase of shares relied on the use of inside information by the above-mentioned persons. The Company has set the policy with regard to the disclosure of significant corporate information by notifying the Board of Directors and the Executives or relevant department who may have significant inside information that would affect the

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security prices, are prohibited to sell or buy the Company’s securities during one month prior to the financial statement or the inside information would be released to the public, as well as reiterate them to share those information to only among those who need to know. Other executives should only come to know of this information at the same time as it is disclosed to the public. By these methods, the Company believes that if inside information is used for personal gain, the scope of an investigation will be effectively limited and the persons responsible quickly identified and penalized.

6. INTERNAL CONTROLSSansiri highly recognizes the importance of internal control system and ensures the suitable monitoring and supervision to bring about higher efficiency. The Board of Directors has assigned the Audit Committee, which works independently, to regularlyoversee and review the internal control system to ensure the appropriateness and effectiveness of the current system. Thus, the internal control system must be efficient enough to protect the assets of Sansiri Group while preventing the misuse of assets by the management. The thorough disclosure is required to ensure transparency and able to be audited, according to Good Corporate Governance practice. This system, therefore, is meant to safeguard the interests of shareholders and provide justice for all groups ofstakeholders.

Sansiri’s internal control system is set to harmonize with corporate operations and management in five areas, namely: (1) the organization and its surroundings; (2) risk management; (3) control of management’s operations; (4) information and communication systems; (5) monitoring systems.

THE ORGANIZATION AND ITS SURROUNDINGSSansiri has set up the organization in such a way that the operations of management can be easily controlled while adjusting the organization chart to enhance flexibility to cope with the changing business environment. The Board of Directors, consisting of five directors from management, along with five outside directors who are either qualified individuals of eminence and Audit Committee. This composition of the Board facilitates checks and balances for fair, effective decision-making. As for the management structure, responsibilities have been clearly divided among three basic areas of internal control, namely authorizing, recording financial data and other information, and asset management. In this regard, Sansiri has set up the Office of Internal Audits, which directly reports to the Audit Committee and helps in monitoring, evaluating, and improving the internal control system.

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RISK MANAGEMENTSansiri’s annual business plan sets forth clear and measurable targets conforming to the corporate vision. The analysis of various types of risks is utilized to draw up this annual plan as well as determine the operational strategies, benchmarks, and monitoring tools. An accounting system measures the costs of each business activity on a separate basis, enabling Sansiri to evaluate the gain or loss in each and judge how competitive each is. During implementation of the plan, the relevant risk factors are regularly monitored and assessed to determine how likely they are to affect operations. If any one factor changes or becomes more prominent than originally anticipated, Sansiri will still be able to adjust strategies or institute measures to prevent or prepare for such a risk in time.

CONTROL OF MANAGEMENT’S OPERATIONSThe Board of Directors has appointed two committees, the Audit Committee and the Remuneration Committee, both of which strictly adhere to the scope of authority, duties,and responsibilities assigned to them.

Sansiri sets the scope of authority and responsibilities for each function properly, in accordance with the decentralization and high efficiency. Sansiri constantly monitors the operations of the subsidiaries, and has put in place means whereby to monitor their operations and ensure that both Sansiri and the subsidiaries are in compliance with the regulations and all relevant legislation. Sansiri has, furthermore, determined a clear visionthat serves as a guideline directing the work of all units within the organization, and propagated it throughout the Company on a consistent basis. Sansiri has, besides this, selected a corporate culture and promoted activities that reinforce this culture, thereby promoting the same, harmonious Company-wide values, procedures, and workplace environment. It is this corporate culture that will strengthen the honesty, responsibility,and integrity of all employees and ensure Sansiri’s future success.

INFORMATION AND COMMUNICATION SYSTEMSIn light of the importance of information and communication systems, Sansiri has upgraded our computerized database management system. This new process will facilitate the gathering and management of data as well as improve the accuracy and efficiency of operational reports. Sansiri now possesses, moreover, an internal computer network that links outside agencies to the Company, thus making overall communications within and outside the Company more rapid and effective. These systems have beenestablished with sufficiently elaborate information security safeguards.

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MONITORING SYSTEMSThe Board of Directors met 9 times in 2009, and the Audit Committee reported on its findings to the Board of Directors every quarter. The management is responsible for examining and monitoring operational results to do an analysis of financial impact on a continual basis. Sansiri holds a meeting of senior management-level personnel from every department to report on progress according to the corporate plan two or three times a year. This is in addition to the regular monitoring of Sansiri’s operational systems andconformity to the plan’s benchmarks at various levels of command within the organization. These meetings facilitate, by other means, the flow of information across departmental boundaries. If any significant defect is found, a report of it is made to the Audit Committee or the Board of Directors for decision and resolution.

During the Board of Directors’ meeting # 2/2010 held on 2 March 2010, at which the Audit Committee was present, the Board of Directors and the Audit Committee both assessed the Sansiri’s internal control system in accordance with the evaluation form provided by the Securities Exchange Commission. After interrogating management concerning the five aspects of the internal control system, namely the organization and its surroundings, risk management, control of management’s operations, information and communication systems, and monitoring systems, both bodies agreed that Sansiri Group has complied with generally accepted standards of accounting, the guidelines by the Securities Exchange Commission, and the regulations of the Stock Exchange of Thailand in making quarterly financial reports, the financial statements for 2008, and the consolidated financial statements of the subsidiaries, correctly and consistently. It was agreed that thepreparation and disclosure of these financial statements were accurate, adequate, and timely, and that Sansiri’s internal control system was sufficient, appropriate, and could be adjusted effectively to changing circumstances. It was agreed, moreover, that by these means Sansiri and subsidiaries would achieve the objectives, and that they were in compliance with all relevant legislation and regulations. Neither body discovered anysignificant problems or deficiencies that would damage Sansiri’s operations.

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Annual Report 2009

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INTER-RELATEDTRANSACTIONDuring the financial year ended on 31 December 2009, the Company and its subsidiaries had no inter-related transaction with major shareholders, directors, and related persons.

99

TABLE OFKEY FINANCIALRATIOS

Audited 2009 2008 2007LIQUIDITY RATIO Current Ratio Times 2.15 2.42 2.16Quick Ratio Times 0.70 0.49 0.49Quick Ratio (Cash Basis) Times 0.20 (0.11) 0.03Receivable Turnover Times 5.97 6.66 6.39Collection Period Days 60 54 56Inventory Turnover Times 0.79 0.70 0.75Inventory Turnover Days 453 515 477Accounts Payable Turnover Times 15.13 14.53 15.13Payment Period Days 24 25 24Cash Cycle Days 489 544 510 PROFITABLE RATIO Gross Profit Margin (of Core Revenue) % 30.29 30.04 28.77Gross Profit Margin (of Revenue from Project Sale) % 30.48 30.11 28.78Net Profit Margin % 9.19 6.02 5.10Return on Equity % 16.85 10.56 8.78 EFFICIENCY RATIO Return on Total Assets % 6.58 4.10 3.62Return on Fixed Assets % 78.98 48.46 74.53Asset Turnover Times 0.71 0.68 0.69 FINANCIAL POLICY RATIO Debt-to-Equity Times 1.44 1.54 1.43Interest Coverage Times 5.78 3.56 2.86Contingency Coverage (Cash Basis) Times 0.28 (0.16) 0.03Payout Ratio % 50 50 50 PER SHARE Book Value per Share Baht 6.87 6.08 5.66Earnings per Share Baht 1.09 0.62 0.48Dividend per Share Baht 0.52 0.30 0.23 GROWTH RATIO Total Assets % 8.01 11.69 16.22Total Liabilities % 4.91 14.59 23.00Revenue from Sales and Services % 15.37 10.98 19.50Selling, Administrative and Other Expenses % (7.00) (5.61) 25.39Net Profit % 75.95 29.05 75.12

Annual Report 2009

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MANAGEMENTDISCUSSIONAND ANALYSIS MAJOR DEVELOPMENT IN Y2009 – FEB 2010ESTABLISHMENT AND ACQUISITION OF SUBSIDIARIESIn July 2009, the Board of Directors approved the establishment of a new subsidiary in Singapore with the registered capital of 50,000 Singapore Dollars. The objective is to expand property development for sale and/or for rent/lease business offshore, and to invest in other businesses potentially benefiting overall performance of Sansiri Group. The structure of the company is as follows:

(1) To establish a new subsidiary in Singapore-“Sansiri Global Investment Pte. Ltd.”, wholly owned by Sansiri, to oversee offshore investment business. (2) To set up the wholly-owned subsidiary of “Sansiri Global Investment Pte Ltd.” in Guernsey, named “Sansiri Guernsey (2009) Limited” with the registered capital of 10,000 Pounds to engage in real estate development for sale and/or for rent/lease business in the United Kingdom.

In July 2009, the Board of Directors approved the acquisition through share purchase of National Education Development Company Limited, an educational business operating “Satit Pattana School” in order to earn recurring income from the educational business, and to create an opportunity to expand business and synergy with property development business, as the Satit Pattana School is located near several residential projects of Sansiri Group.

In February 2010, Sansiri has been informed by the major shareholder, Trendy Plan Investments Limited, of the transfer of its holding in SIRI in the number of 178,274,400 shares, representing 12.09 percent of Sansiri’s issued and paid-up capital to Majestic Heart Limited who subsequently sold the same to T.S. Star Company Limited at the price of 5.00baht per share on 2 February 2010.

T.S. Star Company Limited, is the holding company wholly owned by Mr. Srettha Thavisin,who is also the director. Following the sale transaction, Mr. Srettha Thavisin Group (consistsof T.S. Star Company Limited and Mr. Srettha Thavisin) became the major shareholder of Sansiri. As of 2 February 2010, Mr. Srettha Thavisin Group held total amount of 215,439,784 shares in Sansiri, representing 14.61 percent of Sansiri’s issued and paid-up capital.

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SUMMARY OF MARKET CONDITION FOR THE YEAR 2009Thai economy in 2009 was impacted by the global economic slowdown at the end of 2008.Political uncertainty in 1Q2009 affected on consumers’ confidence and investors towards the economic recovery. However, according to economic indicators released by Fiscal Policy Office, Ministry of Finance, Thai economy began to show signs of recovery in 2Q2009 and 3Q2009 through reduction in unemployment rate to 1.9% and 1.2% respectively. Totalexport declined at the decelerated rate of 17.7% in 3Q2009. The recovery in privateconsumption in 2Q2009 remained vulnerable, as reflecting from continuous contraction in imported consumer goods, as well as the consumer confidence index which remained atlow level of 64.9.

The expanding of government expenditure through fiscal policy played an important role in stimulating the economic revival, especially in 4Q2009. The sign of economic recovery became clearer in 4Q2009, especially from the total export value, which turned positive for the first time at the rate of 11.9%. Consumer confidence index on the overalleconomy in December 2009 was at 70.4., the highest level within the past 16 months.

Impacted by the economic slowdown, demand in residential property has slightlycontracted since 3Q2008 until 1H2009. The demand in housing units remained, althoughnot significantly increasing, and rebounded in 2Q2009 following the improvement in consumer confidence, illustrated by the number of new completed and registeredhousing units in Bangkok and vicinities in 2009 at 90,653 units, compared with that of2008 at 83,065 units. (Source: Real Estate Information Center) The number of housingsupply, however, significantly dropped in 2009 to 57,604 units from 67,791 units in 2008(Source: Agency for Real Estate Affairs), resulted from the strict project finance lendingpolicy of commercial banks provided to medium and small developers. Such stringency,together with the consumer behavior trend of giving precedence to the credibility and the reliability of developers, allowed large developers to benefit from the market consolidationand to grow their market share,without significant growth in demand.

Sansiri and subsidiaries have adjusted the construction plan as well as the project launching plan corresponding to the dynamic economic situation and the housing demand. To manage financial cost, Sansiri has established good relationship with various commercial banks and always negotiates to get the competitive pricing of project financing loans. Currently, all of projects are secured by project financing loans andother credit facilities made available by domestic financial institutions. To mitigatebusiness risks of construction material price volatility and to manage inventory, Sansiri,through its procurement unit, negotiated more actively with the manufacturers and gain economy of scale on its construction material costs, which accounted for 40% of totalconstruction costs. In addition, sale promotions, property services and attractive housingloan have been initiated to stimulate the sale transactions especially to penetrate themid-range income segment.

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FINANCIAL RESULTSTotal revenues in 2009 amounted to 17,497 million baht, a 15% increase from 15,178 million baht in 2008. The key driver was the 16% growth in revenue from project sales in consequence of successful launches of single-detached houses,condominium, andtownhouse projects.

REVENUE FROM PROPERTY DEVELOPEMENT FOR SALEThe breakdown of revenue from property for sales during 2007 – 2009 is as follows: Revenue from 2007 2008 2009 property for sales Million baht % Million baht % Million baht %

Single-detached houses 6,856 53% 5,766 40% 5,292 32% Condominiums 3,606 28% 6,641 46% 8,829 53% Townhouses 2,436 19% 1,986 14% 2,479 15% Others 12 0% 2 0% 29 0% Total 12,910 100% 14,395 100% 16,629 100%

In 2007, the proportion of revenue from property for sale by property type was 28% from condominium projects, 53% from single-detached house projects and 19% from townhouse projects. Revenue from project sales of single-detached houses reflected the successful launches of medium-sized houses. In this regard, the sale of medium-sized houses with price per unit lower than 10 million baht comprised 83% of the total revenue from single-detached houses of 6,856 million baht. Major contributors to revenue from property sales included 1,791 million baht from Setthasiri Prachachuen. In addition, the sale of houses with price per unit above 10 million baht was progressive, resulting in the revenue realized from Narasiri Pattanakarn amounting to 889 million baht. Revenue from condominiumsin 2007 amounted to 3,606 million baht, representing 28% of total revenue from project sales in 2007. In 2007, revenue from the sale of townhouses increased from 16% of total revenue from property sales in 2006 to 19% of total revenue from property sales in 2007 due to an increase in the number of townhouses transferred to our customers in 2007. The key drives of revenue from the sale of townhouse were 510 million baht from Plus Citypark Sanambinnam, 295 million baht from Plus Citypark Ekamai-Ramindra, 252 million baht from Plus Citypark Kaset Ngamwongwan, and 250 million baht from Plus Citypark Ngamwongwan 25. Revenue from the four townhouse projects provided 10% of total revenue from project sales in 2007, reflecting the high potential sale of townhouseprojects.

Revenue from project sales in 2008 of Sansiri amounted to 14,395 million baht, a 12% increase from 12,910 million baht in 2007. To the total revenue from project sales in 2008,

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6,641 million baht revenue from condominium projects contributed 46%, 5,766 million baht revenue from single-detached house projects contributed 40%, with the balance of 1,986million baht from townhouse projects contributed 14%. The proportion of revenue from condominium projects significantly increased from 28% of total revenue from project sales in 2007 to 46% of total revenue from project sales in 2008 as the number of condominium projects generating revenue increased from 16 projects in 2007 to 25 projects in 2008. To the total revenue from project sales, 3,776 million baht revenue from 10 condominium projects under the brand “Sansiri” with the average price per unit of 5.8 to 15.7 million baht, contributed 26% whereas 2,853 million baht revenue from 15 condominium projects under the brands “Condo One” and “My Condo” with the average price per unit of 1.4 to 4.1 million baht, contributed 20%. The proportion of revenue from single-detached house and townhouse projects decreased from 53% and 19% of total revenue from project sales in 2007 to 40% and 14% of total revenue from project sales in 2008 correspondingly due to the economic slowdown. The 3,427-million baht revenue from 5 single-detached houses projects with average price per unit of 4.9 to 9.2 million baht, namely Setthasiri Prachachuen, Setthasiri Wongwaen-Sukapiban 2, Burasiri Sanambinnam, Saransiri Wongwaen-Prachauthit, and Saransiri Ratchapruek, all together contributed 24% to total revenue from project sales. The 1,103-million baht revenue from 2 townhouse projects with average price per unit of 3.1 to 4.1 million baht, namely Plus Citypark Srinagarindra-Suanlaung and Townplus Rama 9, contributed 8% to total revenue from project sales.

In 2009, revenue from project sales of Sansiri and subsidiaries amounted to 16,629 millionbaht, a 16% increase from 14,395 million baht in 2008. To the total revenue from project sales in 2009, 8,829 million baht revenue from condominium projects contributed 53%, 5,292 million baht revenue from single-detached house projects contributed 32%, with thebalance of 2,479 million baht from townhouse projects contributed 15%.

The proportion of revenue from condominium projects kept on growing from 46% of total revenue from project sales in 2008 to 53% of total revenue from project sales in 2009 as the number of condominium projects qualifying for revenue realization increased from 25 projects in 2008 to 30 projects in 2009. The major contributor was revenue from Siri at Sukhumvit, with the average unit price of 6.6 million baht, contributing 1,721 million baht or 10% of total revenue from project sales, followed by Baan Sansuk, a beachfront condominium project located in Hua-Hin with average unit price of 7.1 million baht, contributed 1,331 million baht or 8% of total revenue from project sales. The fifteen condominium projects under the brands “Condo One” and “My Condo” contributed 2,418 million baht or 15% of total revenue from project sales, whereas three condominiumprojects under the brand “Hive” with average unit price between 3.2 and 4.3 million bahtcontributed 1,140 million baht, representing 7% of total revenue from project sales.

Annual Report 2009

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The proportion of revenue from single-detached house projects decreased from 40% of total revenue from project sales in 2008 to 32% of total revenue from project sales in 2009 due to the economic slowdown in 1Q2009. However, revenue from single-detached houses recovered in 2Q2009 thanks to the improving consumer confidence and increasing demand for housing. The 2,208-million baht revenue from three single-detached housing projects with average price per unit of 3.9 to 9.1 million baht, Setthasiri Prachachuen, Burasiri Sanambinnam, and Saransiri Ramindra 2, altogether contributed 13% to total revenue from project sales.

In 2009, revenue from townhouse projects increased from that of 2008 by 25% to 2,479million baht. The 2,105-million baht revenue representing 13% of total revenue from project sales came from ten projects under the brand “Townplus” with average unit price between 2.5 and 5.0 million baht. The biggest contributors to revenue from townhouses in 2009 were Townplus Kaset Navamin with the amount of 572 million baht and TownplusPetchkasem Bangkae with the amount of 453 million baht.

REVENUE FROM PROPERTY DEVELOPEMENT FOR RENT In 2008, revenue from rental business including revenue from leasehold rights written off was 238 million baht, an 8% decrease from 259 million baht in 2007, due to the divesting of rental housing units of Narasiri Pattanakarn-Srinakarindra. Properties for rent included a group of single-detached houses, the office for rent named Siripinyo Building on Sri Ayutthaya Road, and Siri Apartment on wireless road.

In 2009, revenue from rental business (including revenue from leasehold rights written off) was 229 million baht, a 4% decrease from that of the previous year, mainly due to the acquisition of National Education Development Co., Ltd, operating Satit Pattana School.Prior to the acquisition, Sansiri recognized substantial rental revenues, resulting in re-categorization of such item from revenue from property for rent to revenue from educational business following the acquisition. Besides, revenue from rental business was also adversely impacted by the lower occupancy rate corresponding to the global economic downturn in 2008.

REVENUE FROM PROPERTY SERVICESPlus Property Company Limited established Touch Property Company Limited in March 2007 in order to expand customer base outside Sansiri Group, resulting in an increase in revenue from business management to 323 million baht in 2007. Revenue from business management was at 325 million baht in 2008, a slight increase of 1% over that of 2007, due to both the increasing number of projects under management of Plus Property Company Limited and Touch Property Company Limited, from 132 projects as of 31 December 2007

105

to 146 projects as of 31 December 2008 and the 7% increase in business management fee for the new and renewal contracts since 3Q2008. However, such increase was offset by the decreasing number of brokerage transactions.

In 2009, revenue from business management was 377 million baht, a significant increase of 19% over the same period in 2008, due to the increasing number of projects under management of Plus Property Limited and Touch Property Limited, from 146 projects as of 31 December 2008 to 204 projects as of 31 December 2009. The increase in number of projects under management was mainly driven by the strong brand recognition and the reputation for its high quality services.

For the year 2008, revenue from other property services was 79 million baht, a 36% growth over the same period in 2007 at 58 million Baht. Revenue from hotel business from Casa del Mare in Hua Hin in 2008 was 15 million baht, a 26% increase over the same period in 2007 due to an increase in number of hotel rooms to 46 rooms from 36 rooms after the renovation in 2008 leading to more accommodation for more customers. Revenue from medical spa business amounted to 64 million baht, a 39% growth compared to 46 million baht in 2007 due to successful branding activities and sales promotion.

For the year 2009, revenue from other property services was 114 million baht, a 46% growth over the same period in 2008. Revenue from hotel business in 2009 was 15 million baht, a 3% increase from that of 2008 due to higher level of patronage. Revenue from medical spa business amounted to 62 million baht, a 3% decrease from that of last year, preliminary due to the closure of one of our medical spa branches and the implementation of operating hour reduction of other medical spa branches.

COST OF PROJECT SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSESFor the year 2008, cost of project sales was 10,060 million baht, a 9% increase over the same period in 2007 whereas gross profit margin of project sales slightly improved from 29% from that in 2007 to 30% in 2008. Selling expenses in 2008 was 1,153 million baht or 8% of total revenue, significantly improved from 13% of total revenue in 2007 due to better cost management and benefits from tax incentives. In this regard, tax incentives, including the reduction of transfer fee and mortgage fee from 2% to 0.01% and special business tax rate cut from 3.3% to 0.1%, has become effective for two years since 29 March 2008 until 28 March 2010. In addition, administrative expenses including management remuneration were well-controlled at 1,221 million baht or 8% of total revenue, the sameas that of 2007

Annual Report 2009

106

For the year 2009, cost of project sales amounted to 11,560 million baht, a 15% increase over 2008. Gross profit margin of project sales slightly improve from 30.1% in 2008 to 30.5% in 2009. The cost of hotel business in 2009 was at 16 million baht, an 18% increase compared to that of 2008, mainly factored by the increase in depreciation of equipment and the cost related to new staff recruitment. In 2009 selling and administrative expenses has improved partly resulted from the economies of scales with an increase in number of projects launched and business expansion. Selling expenses was at 1,015 million baht or 6% of total revenue, continuously improved from 8% of total revenue in 2008 due to the implementation of efficiency improvement program. In addition, administrative expenses including management remuneration were at 1,409 million baht and remained unchanged at 8% of total revenue in both 2008 and 2009.

In 2008, the Public Works Department ordered Sansiri and its subsidiaries to modify condominiums which differed from plans subjected to approve in accordance with Building Control B.E. 2522. As a result, the subsidiaries reversed sales and cost of project sales previously recognized on the income statement for the year ended 31 December2007 totaling to 50 million baht, and wrote off cost of unused property development totaling to 250 million baht, and recorded provision for the cost of modifying the condominiums and compensation together with interest as a result of termination of contracts that subsidiaries have to pay to customers in the amount of 103 million baht and 26 million baht respectively. The expenses are presented under “Loss from modificationof condominium” of 429 million baht on the income statement.

In 2008, Sansiri and subsidiaries acquired Sansiri Venture Company Limited, Plus Property Venture Company Limited, and Plus Property Space Company Limited, resulting in the100% shareholding in these three subsidiaries. In this regard, Sansiri and subsidiaries recorded the loss on impairment of goodwill of 63 million baht in 2008 and 162 million baht in 2009. As of 31 December 2009 there are 5 housing projects developed by these three subsidiaries with total project value of 4,194 million baht, 93% of which or 3,892 million baht were sold to customers.

In 2007, 2008 and 2009, Sansiri and its subsidiaries recorded loss on diminution in value of property development and impairment loss on land, building and equipment of 71 million baht, 57 million baht and 131 million baht, respectively.

NET PROFIT In 2007, operating profit margin slightly improved to 8%, owing to better cost management and economy of scale, as well as net gain on sale of investment in Siri Phuket Company Limited of 163 million baht. In addition, the discrepancy between the accounting practice and the revenue code on the corporate income tax calculation resulted in the high

107

corporate income tax of 403 million baht, or 38% of earnings before tax. However, the effective tax rate of 38% in 2007 was decreased from 50% of earnings before tax or corporate income tax amount of 401 million baht in 2006. The decrease was due to the revenue realization of the projects that has not been transferred. Therefore, the corporate income tax upon transfer was not recorded. Sansiri adopted the new accounting practice that would make tax calculation by accounting practice and by the revenue code more in line with each other. The new practice has been adopted for properties for sale launched since 1 January 2007.

In 2009, corporate income tax rate was at 37% of earnings before tax, reduced from 44% of earnings before tax in 2008, primarily caused by a decrease in accounting loss in 2009. These accounting losses, including loss on diminution in the value of property developments, and impairment loss on land, buildings and equipment, loss on impairmentof goodwill and loss from modification of condominium, are treated as expenses for accounting purposes only, but not for tax purposes.

For the year 2008, Sansiri and subsidiaries reported net profit of 914 million baht, a 29%increase over the same period in 2007 of 708 million baht with the net profit margin of 6% of total revenue for the year 2008, compared to the net profit margin of 5% for theyear 2007.

For the year 2009, Sansiri and subsidiaries reported net profit of 1,608 million baht, a 76% increase from that of 2008, representing net profit margin of 9% which has improved from 6% in 2008. Operating profit margin in 2009 improved to 16% from 14% oftotal revenue for the year 2008.

ASSETSTotal assets of Sansiri and subsidiaries as of 31 December 2008 amounted to 23,492 million baht, a 2,460-million baht increase from that of 31 December 2007, due to progressive construction. Total non-current assets decreased by 147 million baht corresponding to the decrease of property development for sale and property development for rent and sale by 293 million baht as a result of the divesting of rental housing units, and recordedit as revenue from project sale in income statement. In addition, Sansiri recorded goodwill of 203 million baht in consequence of the board of directors’ resolution No. 2/2008 held on February 27, 2008, to acquire Sansiri Venture Company Limited, PlusProperty Venture Company Limited and Plus Property Space Company Limited.

Annual Report 2009

108

As of 31 December 2009, total assets of Sansiri and subsidiaries amounted to 25,375 million baht, a 1,883-million baht increase from that of 31 December 2008, mainly due to the 1,375-million baht increase in accounts receivable, notes receivable and unbilled completed work. The property development for sale (net) decreased by 1,952 million baht correspondingly to housing sales and the 1,426-million baht increase in cash and cash equivalents. Moreover, land, building and equipment increased by 473 million baht, resulting from the land acquisition during the 4Q2009 and the acquisition of Satit PattanaSchool.

LIABILITIESTotal liabilities of Sansiri Group amounted to 14,537 million baht as of 31 December 2008, a 1,851-million baht increase from as 31 December 2007. Total current liabilities increased by 160 million baht to 8,630 million baht whereas total non-current liabilities increased by 1,682 million baht mainly driven by increasing project financing loans corresponding to an increase in progressive construction of active housing projects. The interest bearing debt also increased from 7,602 million baht as of 31 December 2007 to 9,868 million baht as of 31 December 2008, driven by progressive construction. The debt-to-equity ratio was 1.54 times with the interest-bearing debt-to-equity ratio (Gearing ratio) of 1.10 times.

Total liabilities of Sansiri Group increased 713 million baht from 14,537 million baht as of 31 December 2008 to 15,251 million baht as of 31 December 2009. Total current liabilities increased by 1,414 million baht to 10,044 million baht whereas total non-current liabilities decreased by 701 million baht to 5,207 million baht mainly driven by the issuance of 1,000 million baht three-year unsecured debenture with fixed coupon rate of 6.25% per annum in June 2009 in order to diversify financial portfolio by increasing the portion of fixed interest rate debt, and reducing the dependence on long-term project financing loan as well as increasing the alternative funding to cope with the upwardinterest rate trend.

As of 31 December 2009, the interest bearing debt amounted to 10,532 million baht, increased from 9,868 million baht as of 31 December 2008. The debt-to-equity ratio was 1.44 times with the interest-bearing debt-to-equity ratio (Gearing ratio) of 1.04 times.

109

SHAREHOLDERS’ EQUITYAs of 31 December 2007, Shareholders’ Equity increased from 7,783 million baht as of 31 December 2006, to 8,346 million baht, mainly driven by the 2007 net profits. In 2007, Sansiri paid out dividend of 192 million baht, based on the financial result of 2006.

As of 31 December 2008, Shareholders’ Equity was 8,955 million baht, a 609-million baht increase from 31 December 2007, mainly driven by the 914-million baht net profit for the year 2008, the 37-million baht change of minority interest by acquisition, the 339-million baht dividend payout, and 2-million baht unrealized loss on revaluation in available-for-sale securities (Property fund).

As of 31 December 2009, Shareholders’ Equity was 10,124 million baht, a 1,169-millionbaht increase from 31 December 2008, mainly driven by the 1,608-million baht net profit for the year 2009, the 2-million baht change of minority interest by acquisition, the 442-million baht dividend payout, and the 2-million baht translation adjustment occurredfrom financial statement translation.

LIQUIDITY 1. During the past 3 years, the movement of cash flow has been summarized as follows: Unit: million baht

Y2007 Y2008 Y2009Net cash provided by (used in) operating activities 216 (924) 2,041Net cash provided by (used in) investing activities (454) (345) (358)Net cash provided by (used in) financing activities 671 1,440 (259) Most of Sansiri’s cash flow from operations was generated by property sales as well as proceeds from financial institutions in the form of project financing loans, which repayment due upon transfer of housing units; single-detached houses, condominiums and townhouses. The cash outflow could be summarized as loan repayment as well as land acquisition and project development costs for single-detached houses, condominiums and townhouses, to ensure the sufficient land bank to support the sustainable growth of business.

In 2007, there was net cash inflow from down payment collection in regard to the property sales of 1,421 million baht. Net cash inflow from housing transfer was 307 million baht correspondingly. Long-term loan repayment was 6,173 million baht, while long-term loan from financial institutions regarding the construction progress increasedby 7,051 million baht respectively. The dividend payout in 2007 was 192 million baht correspondingly.

Annual Report 2009

110

For the year 2008, beginning balance of cash was 1,805 million baht with net cash used in operating activities and investing activities of 924 million baht and 345 million baht respectively. In addition, net cash provided by financing activities amounted to 1,440million baht, resulting in the ending cash balance of 1,976 million baht.

In 2007 and 2008, cash outflow as project development costs amounted to 11,104 million baht and 12,173 million baht whereas cash outflow for purchase of equipment were 378 million baht and 118 million baht respectively. In 2008, cash payment for acquisition of three subsidiaries was 232 million baht. Repayment of long-term debt was 6,173 million baht in 2007 and 5,014 million baht in 2008 respectively. The dividend payout in 2008 (based on 2007 financial result) was 339 million baht.

For the year 2009, beginning balance of cash was 1,976 million baht with net cash provided by operating activities of 2,041 million baht and net cash used in investing activities and financing activities of 358 million baht and 259 million baht respectively, resulting in the ending cash balance of 3,402 million baht.In 2009, cash outflow as development costs and “accounts receivable, notes receivable, and unbilled completed work” amounted to 10,529 million baht and 1,370 million baht respectively. Cash payment on purchase of equipment and for acquisition of subsidiaries was 170 million baht and 35 million baht respectively with an increase in loans to related parties of 126 million baht. Long-term debt repayment was 6,479 million baht whereas long-term project financing loans from financial institutions corresponding to construction progress increased by 6,725 million baht in 2009. The dividend payout in 2009 (based on 2008 financial result) was 442 million baht.

2. The liquidity ratio of Sansiri was stable at 2.16 times as of 31 December 2007. Thecurrent assets as of year ended 2007 stood at 18,291 million baht with cash of 1,805 million baht. In this regard, Unbilled completed works increased to 2,295 million baht as of year ended 2007. Property development for sale increased to 13,245 million baht, corresponding to the increase in cumulative property development for sale of 42,655 million baht as of year ended 2007. The housing units have been transferred to customers as scheduled with cumulative value of 29,410 million baht as of year ended 2007. Current assets stood at 18,291 million baht. To the total current liabilities of 8,461 million baht as of year ended 2007, the current portion of long-term loans contributed 3,305 million baht, unearned income contributed 2,655 million baht, accounts payable contributed 645 million baht, and other current liabilities contributed 1,856 million baht.

As of 31 December 2008, liquidity ratio was at 2.42 times, increased from 2.16 times as of 31 December 2007, as a result of the 17% increase of Property development for sale correspondingly to the construction progress. In this regard, the current assets increased by 14% while current liabilities minimally increased by 2%.

111

As of 31 December 2009, liquidity ratio was at 2.15 times, decreased from 2.42 times as of 31 December 2008, mainly caused by the increase in current portion of long-term loans and other payable-property fund of 1,904 million baht. In this regard, the current liabilities increased by 16% while current assets minimally increased by 4%.

CAPITAL EXPENDITUREIn 2007, Sansiri sold the 51% stake in subsidiary named Siri Phuket Company Limited at the price of 235 million baht, including the loan from shareholder with cumulative interest. As of year ended 2007, Sansiri received 57 million baht as a deposit and received the balance of 178 million baht on 15 February 2008.

In 2008, Sansiri and subsidiaries acquired Sansiri Venture Company Limited, Plus Property Venture Company Limited, and Plus Property Space Company Limited, increasing its shareholding in these three subsidiaries to 100% each. The payments for acquisition of these three subsidiaries amounted to 232 million baht and were made on 24 March 2008 and 1 September 2008.

In 2009, Sansiri acquired National Education Development Company Limited, an educationalbusiness operating “Satit Pattana School” in order to earn recurring income from the educational business, and to create an opportunity to expand business and synergy with property development business, as the Satit Pattana School is located near several residential projects of Sansiri Group. The acquisition was made through share purchase with payment of 40 million baht for 400,000 shares of National Education Development Company Limited.

SOURCES OF FUNDSIn 2007, 2008, and 2009, main sources of funds include project financing loans from financial institutions, debenture issuance, and down payment collection from project sales together with the cash inflow upon housing transfer. The uses of funds could be summarized as loan repayment, land acquisitions, and working capital for personnel development and computer system upgrade.

Annual Report 2009

112

FINANCIAL STATEMENTREPORT AND CONSOLIDATED FINANCIAL STATEMENTS31 December 2009 and 2008

REPORT OF INDEPENDENT AUDITOR To the Shareholders of Sansiri Public Company Limited

I have audited the accompanying consolidated balance sheets of Sansiri Public Company Limited and its subsidiaries as at 31 December 2009 and 2008, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the years then ended, and the separate financial statements of Sansiri Public Company Limited for the same periods. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statementsbased on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sansiri Public Company Limited and its subsidiaries and of Sansiri Public Company Limited as at 31 December 2009 and 2008, the results of their operations, and cash flows for the years then ended, in accordance with generally accepted accounting principles.

Sophon PermsirivallopCertified Public Accountant (Thailand) No. 3182Ernst & Young Office LimitedBangkok: 2 March 2010

113

Balance sheets31 December 2009 and 2008

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

(Unit: Baht) Consolidated financial statements Separate financial statements

Note 2009 2008 2009 2008

Assets Current assets Cash and cash equivalents 3,401,989,154 1,975,633,576 1,859,642,992 1,145,493,437Current investments 44,128,030 40,927,410 28,409,555 29,048,083Accounts receivable and unbilled completed work - net 8 3,595,417,122 2,220,220,806 2,809,058,995 1,199,053,197Short-term loans to related parties - net 6 14,700,000 14,700,000 2,715,850,450 3,084,375,515Property development for sale - net 9 13,565,728,242 15,517,690,922 7,497,118,762 7,425,806,401Other current assets Advance payment to contractors 698,778,385 814,549,615 264,434,824 311,646,997 Deposits for land 235,043,930 254,627,569 182,244,366 - Other advance payments 5,633,925 16,123,554 2,546,408 1,761,934 Others 73,661,855 42,447,873 68,363,427 74,076,506Total current assets 21,635,080,643 20,896,921,325 15,427,669,779 13,271,262,070Non-current assets Investments in subsidiaries 10 - - 964,330,009 943,143,509Long-term investments Investments in available-for-sale securities 22 129,711,359 109,410,140 129,711,359 109,410,140 Deposits at financial institutions subject to restrictions 7 42,416,090 23,787,033 6,713,016 3,725,655 Other investments 330,400 330,400 330,400 330,400Property development for rent - net 11 1,348,795,236 1,260,762,268 721,825,332 789,738,255Property development for rent and sale - net 12 - 261,595,851 - -Land held for development - net 13 812,877,405 - 231,937,318 -Land, building and equipment - net 14 1,015,631,309 542,799,171 381,177,607 375,616,440Intangible assets - net 16 28,472,405 29,966,547 16,036,148 11,892,576Other non-current assets Goodwill - net 15 181,797,272 203,023,729 - - Leasehold rights - net 17 80,636,999 62,146,556 80,636,999 62,146,556 Withholding tax deducted at source 25,213,585 39,602,745 - 1,996 Deposits for rental and others 73,692,991 61,698,109 54,324,186 42,110,461Total non-current assets 3,739,575,051 2,595,122,549 2,587,022,374 2,338,115,988Total assets 25,374,655,694 23,492,043,874 18,014,692,153 15,609,378,058

Annual Report 2009

114

Balance sheets (continued)31 December 2009 and 2008


Consolidated financial statements Separate financial statements

Note 2009 2008 2009 2008Liabilities and shareholders’ equity Current liabilities Bills of exchange and promissory notes 18 132,500,000 716,250,088 132,500,000 497,000,000Accounts payable 795,425,285 803,379,596 407,231,208 484,116,901Current portion of long-term loans 19 5,093,138,515 4,038,306,002 2,947,652,237 1,484,423,255Short-term loans from related parties 6 - - 15,300,000 15,300,000Short-term provisions 20 67,304,321 46,640,861 31,186,406 21,440,838Other payable - Property Fund 22 848,742,859 - 848,742,859 -Other current liabilities Advances received from customers 60,575,285 47,464,098 15,482,210 17,203,111 Construction retention 235,258,654 230,937,488 116,687,729 97,868,484 Unearned income 8 1,828,523,933 1,984,688,450 908,226,652 1,019,952,348 Current portion of finance lease payables 21 3,188,765 4,094,594 2,216,270 3,212,381 Other payables 36,502,284 31,835,990 31,726,244 34,960,156 Accrued expenses 295,188,021 197,875,202 223,524,429 143,074,262 Corporate income tax payable 494,400,908 336,262,037 261,193,429 181,466,643 Specific business tax payable 89,093,694 128,134,972 37,644,929 87,785,392 Others 63,900,320 63,877,345 35,855,441 33,152,570Total current liabilities 10,043,742,844 8,629,746,723 6,015,170,043 4,120,956,341Non-current liabilities Deferred leasehold revenue 683,736,674 725,606,890 - -Long term loans - net of current portion 19 3,450,888,135 4,259,084,400 2,404,147,491 2,598,826,222Other payable - Property Fund 22 - 848,742,859 - 848,742,859Unsecured debentures 23 991,359,945 - 991,359,945 -Long-term provisions 20 34,458,055 34,882,171 26,716,759 23,085,455Other non-current liabilities Finance lease payables - net of current portion 21 11,990,500 1,468,445 11,816,250 321,699 Deposits for building rental and others 34,379,593 37,750,153 29,546,448 33,832,222Total non-current liabilities 5,206,812,902 5,907,534,918 3,463,586,893 3,504,808,457Total liabilities 15,250,555,746 14,537,281,641 9,478,756,936 7,625,764,798

(Unit: Baht)

115

Balance sheets (continued)31 December 2009 and 2008



Note 2009 2008 2009 2008Shareholders’ equity Share capital 24 Registered 3,736,263,038 ordinary shares of Baht 4.28 each (2008: 4,494,894,270 ordinary shares of Baht 4.28 each) 15,991,205,803 19,238,147,476 15,991,205,803 19,238,147,476 Issued and paid-up 1,473,628,692 ordinary shares of Baht 4.28 each 6,307,130,802 6,307,130,802 6,307,130,802 6,307,130,802Unrealised loss Revaluation deficit on changes in value of investments (2,232,860) (2,232,860) (2,232,860) (2,232,860)Translation adjustments 1,760,884 - - -Retained earnings Appropriated - statutory reserve 26 279,251,429 198,874,553 279,251,429 198,874,553 Unappropriated 3,544,663,250 2,459,582,043 1,951,785,846 1,479,840,765Equity attributable to company’s shareholders 10,130,573,505 8,963,354,538 8,535,935,217 7,983,613,260Minority interests - equity attributable to minority shareholders of subsidiaries (6,473,557) (8,592,305) - -Total shareholders’ equity 10,124,099,948 8,954,762,233 8,535,935,217 7,983,613,260Total liabilities and shareholders’ equity 25,374,655,694 23,492,043,874 18,014,692,153 15,609,378,058

(Unit: Baht)

Annual Report 2009

116

Income statementsFor the years ended 31 December 2009 and 2008



Note 2009 2008 2009 2008Revenues Revenues from project sales 16,628,836,172 14,395,005,230 8,262,516,377 7,458,060,709Revenues from projects for rent 185,863,496 194,782,814 137,439,988 137,962,023Revenues from business management 376,547,101 325,625,176 122,943,999 25,516,105Revenues from medical spa business 61,975,194 63,677,801 - -Revenues from hotel business 15,332,873 14,911,897 15,394,088 15,096,077Revenues from education business 37,059,774 - - -Revenues from leasehold rights written off 43,334,079 43,365,356 - -Other revenues Interest income 14,152,046 31,240,021 85,504,297 138,708,417 Dividend income 8,144,130 8,211,916 278,144,130 8,211,916 Others 126,046,911 100,866,831 61,842,434 57,037,293Total revenues 17,497,291,776 15,177,687,042 8,963,785,313 7,840,592,540Expenses Cost of project sales 11,560,484,140 10,060,459,766 5,603,316,682 5,295,280,125Cost of projects for rent 22 162,219,673 168,139,228 142,889,839 144,660,427Cost of business management 241,908,254 194,790,631 14,347,575 12,161,807Cost of medical spa business 52,077,399 56,850,915 - -Cost of hotel business 15,573,526 13,223,131 15,856,946 13,223,131Cost of education business 35,853,445 - - -Leasehold and development costs written off 26,669,309 26,871,931 - -Selling expenses 1,015,012,506 1,153,179,764 503,460,929 714,234,636Administrative expenses 1,220,841,102 1,080,844,379 773,534,454 540,827,834Management benefit expenses 188,567,250 139,912,000 181,600,000 130,565,000Other expenses Loss on diminution in value of property development and impairment loss on land, building and equipment 9, 11, 14 130,971,520 56,590,000 45,000,000 8,590,000 Loss on impairment of goodwill, investments and loans to subsidiaries 6.2, 10, 15 162,479,904 63,289,495 169,075,714 168,147,868 Loss from modification of condominium 25 - 428,626,463 - 19,920,205Total expenses 14,812,658,028 13,442,777,703 7,449,082,139 7,047,611,033Income before finance cost and corporate income tax 2,684,633,748 1,734,909,339 1,514,703,174 792,981,507Finance cost (123,671,244) (91,762,560) (51,712,895) (20,938,541)Income before corporate income tax 2,560,962,504 1,643,146,779 1,462,990,279 772,042,966Corporate income tax (951,306,229) (726,407,970) (468,588,878) (394,541,939)Net income for the year 1,609,656,275 916,738,809 994,401,401 377,501,027

(Unit: Baht)

117

Income statements (continued)For the years ended 31 December 2009 and 2008



Note 2009 2008 2009 2008Net income attributable to: Equity holders of the parent 1,607,537,527 913,612,715 994,401,401 377,501,027Minority interests of the subsidiaries 2,118,748 3,126,094 1,609,656,275 916,738,809Basic earnings per share 27 Net income attributable to equity holders of the parent 1.09 0.62 0.67 0.26Weighted average number of shares (Shares) 1,473,628,972 1,473,628,972 1,473,628,972 1,473,628,972

(Unit: Baht)

Annual Report 2009

118

Cash flow statementsFor the years ended 31 December 2009 and 2008



2009 2008 2009 2008Cash flows from operating activities Net income before tax 2,560,962,504 1,643,146,779 1,462,990,279 772,042,966Adjustments to reconcile net income to net cash provided by (paid from) operating activities Decrease in property development for sale from transferring to cost of project sales 11,560,484,140 10,060,459,766 5,603,316,682 5,295,280,125 Interest expense 123,671,244 91,762,560 51,712,895 20,938,541 Depreciation of property development for rent 76,080,464 74,367,914 44,414,898 47,451,084 Depreciation of land, building and equipment 128,609,953 108,433,056 61,648,113 52,980,231 Depreciation of property development for rent and sale - 17,653,425 - - Amortisation of intangible assets 16,419,235 16,473,488 7,792,377 10,825,655 (Gain) loss on sale of equipment 21,485,027 (2,503,674) 21,117,543 (1,990,975) Loss from impairment of goodwill, investments and loan to subsidiaries 162,479,904 63,289,495 169,075,714 168,147,868 Allowance for doubtful accounts (reversal) (5,126,712) 9,592,402 (897,000) (1,732,888) Leasehold revenue amortisation (41,870,216) (41,897,482) - - Loss on diminution in value of property development and impairment loss on land, building and equipment 130,971,520 56,590,000 45,000,000 8,590,000 Loss from modification of condominium - 428,626,463 - 19,920,205Income from operating activities before changes in operating assets and liabilities 14,734,167,063 12,525,994,192 7,466,171,501 6,392,452,812(Increase) decrease in operating assets Current investments (3,200,620) (5,299,003) 638,528 (820,469) Deposits at financial institutions subject to restrictions (18,629,057) (5,072,271) (2,987,361) - Accounts receivable and unbilled completed work (1,369,992,104) 65,669,926 (1,609,108,798) (438,436,123) Property development for sale (10,528,621,890) (12,172,970,052) (5,742,591,191) (6,324,023,173) Deposits for land 19,583,639 (87,030,202) (182,244,366) 99,101,160 Other current assets 95,277,835 (146,079,760) 48,065,064 139,630,039 Other non-current assets 9,510,493 2,674,622 (6,617,374) 1,197,554Increase (decrease) in operating liabilities Accounts payable (18,422,163) 158,783,109 (76,885,693) 158,616,279 Advances received from customers and unearned income (143,053,330) (678,051,064) (113,446,597) (231,747,241) Other current liabilities 50,565,743 38,463,696 51,613,672 46,017,817 Other liabilities 6,727,378 (7,145,446) 14,697,047 (7,849,971)Cash flows from (used in) operating activities 2,833,912,987 (310,062,253) (152,695,568) (165,861,316)Income tax paid (793,167,358) (613,883,645) (388,862,092) (345,839,164)Net cash from (used in) operating activities 2,040,745,629 (923,945,898) (541,557,660) (511,700,480)

(Unit: Baht)

119

Cash flow statements (continued)For the years ended 31 December 2009 and 2008



2009 2008 2009 2008

Cash flows from investing activities

Payment on acquisition of subsidiaries

and minority interest (34,790,730) (232,270,000) (41,186,500) (175,030,000)

(Increase) decrease in loans to related parties (125,611,000) - 223,525,065 (748,762,453)

Increase in property development for rent (626,504) (14,178,812) (586,774) (6,853,245)

Proceeds from sales of equipment 8,381,510 6,758,687 3,938,067 2,042,367

Payment on purchase of equipment (169,978,812) (117,547,812) (82,433,840) (56,637,857)

Increase in available-for-sale securities (20,301,219) - (20,301,219) -

Decrease in property development for rent and sale - 21,333,631 - -

Payment on purchase of intangible assets (14,713,459) (9,506,943) (11,935,949) (4,281,505)

Net cash from (used in) investing activities (357,640,214) (345,411,249) 71,018,850 (989,522,693)

Cash flows from financing activities

Decrease in bills of exchange and promissory notes (583,750,088) (52,052,887) (364,500,000) (3,802,975)

Decrease in short-term loans from related parties - (125,640,000) - -

Proceeds from debentures issuance 989,300,000 - 989,300,000 -

Increase in long-term loans 6,725,299,802 7,462,470,218 3,977,169,203 3,653,270,518

Repayment of long-term loans (6,478,663,554) (5,014,043,147) (2,708,618,952) (1,584,982,969)

Payment of interest expenses (464,107,122) (487,234,274) (262,725,478) (192,270,309)

Dividend paid (442,079,444) (338,922,598) (442,079,444) (338,922,598)

Payment of finance lease payables (4,510,315) (4,656,561) (3,856,964) (3,058,797)

Net cash from (used in) financing activities (258,510,721) 1,439,920,751 1,184,688,365 1,530,232,870

Translation adjustment 1,760,884 - - -

Net increase in cash and cash equivalents 1,426,355,578 170,563,604 714,149,555 29,009,697

Cash and cash equivalents at beginning of the year 1,975,633,576 1,805,069,972 1,145,493,437 1,116,483,740

Cash and cash equivalents at end of the year 3,401,989,154 1,975,633,576 1,859,642,992 1,145,493,437

Supplementary cash flows information

Non-cash item:

Purchase assets under finance lease 14,400,000 - 14,400,000 -

(Unit: Baht)

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NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSFor the years ended 31 December 2009 and 2008

1. CORPORATE INFORMATIONSansiri Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company operates in Thailand and is principally engaged in property development.

The Company’s top 5 major shareholders as at 2 February 2010, which are adjusted from the information according to the registry of shareholders as the lasted closing date of the shares register book on 12 October 2009 (the closing date of the shares register book for determining the rights to attend the Extraordinary Meeting of Shareholders No. 1/2009), are as following:

Percentage of shareholding (base on paid-up capital) 1. Mr. Srettha Thavisin Group 14.26 2. UOB Kay Hian Private Limited 8.76 3. Chase Nominees Limited 42 7.40 4. Viriyah Insurance Company Limited 6.47 5. Natural Park Public Company Limited 4.26

Its registered address is at 475, Siripinyo Building, Sri Ayutthaya Road, Phayathai, Rajthevi, Bangkok.

2. BASIS OF PREPARATION

2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 30 January 2009, issued under the Accounting Act B.E. 2543.

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The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements.

The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of Consolidation a) The consolidated financial statements include the financial statements of Sansiri Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”):

DIRECTLY OWNED Chanachai Ltd. Property Thailand 100 100 7.18 5.27 4.23 0.88 development Plus Property Co., Ltd. Property Thailand 100 100 12.16 21.79 26.13 21.04 development Sansiri Venture Co., Ltd. Property Thailand 100 100 5.16 5.77 5.54 4.85 development S.U.N. Management Co., Ltd. Property Thailand 51 51 0.85 0.93 0.07 0.10 development Arnawat Ltd. Property Thailand 100 100 4.27 4.81 1.66 2.75 development Piwattana Ltd. Property Thailand 100 100 9.13 6.92 4.71 3.78 development Red Lotus Properties Ltd. Property Thailand 100 100 1.00 1.18 0.10 0.52 development Pacific Challenge Holding Co., Ltd. Property Thailand 85 85 0.10 0.18 0.07 0.24 development Papanan Ltd. Provision Thailand 100 100 0.16 0.23 0.37 0.53 of medical service, aesthetics, health care and medical spa National Education Holder of Thailand 100 - 0.31 - 0.34 - Development Co., Ltd. Satit Pattana School’s license

Revenues as a Assets as a percentage to percentage to the the consolidated consolidated total revenues total assets for the years Nature of Country of Percentage of as at ended Company’s name business incorporation shareholding 31 December 31 December 2009 2008 2009 2008 2009 2008 Percent Percent Percent Percent Percent Percent

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Sansiri Global Investment Pte. Ltd. Property Singapore 100 - - - - - development Satit Pattana Personnel Center Ltd. Provision of Thailand 100 100 - - - - (formerly known as administrative “Club House Property Ltd.”) services to Satit Pattana School Rojnaruemit Ltd. Dormant Thailand 100 100 0.02 0.02 - -

INDIRECTLY OWNED Plus Property Venture Co., Ltd. Property Thailand 100 100 0.08 0.30 0.34 2.40 development Sansiri Land Ltd. Property Thailand 100 100 0.09 0.14 0.23 0.23 development Touch Property Co., Ltd. Property Thailand 100 100 0.95 0.35 0.95 0.62 development Plus Property Space Co., Ltd. Property Thailand 100 100 0.63 2.52 6.33 0.02 development Sansiri Guernsey (2009) Limited Property Guernsey 100 - 1.49 - 0.01 - development Satit Pattana School Education Thailand 100 - 0.05 - 0.05 - business

Revenues as a Assets as a percentage to percentage to the the consolidated consolidated total revenues total assets for the years Nature of Country of Percentage of as at ended Company’s name business incorporation shareholding 31 December 31 December 2009 2008 2009 2008 2009 2008 Percent Percent Percent Percent Percent Percent

b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.

c) The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent significant accounting policies.

d) The financial statements of overseas subsidiary companies are translated into Thai Baht at the closing exchange rate as to assets and liabilities, and at monthly average exchange rates as to revenues and expenses. The resultant differences are shown under the caption of “Translation adjustment” in shareholders’ equity.

e) Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements.

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f) Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet.

g) Establishment of new subsidiaries in 2009 On 17 July 2009, the Company’s Board of Directors meeting passed the following resolutions regarding establishment of new subsidiaries in overseas;

1) Approved an establishment of a wholly-owned new subsidiary in Singapore named “Sansiri Global Investment Pte. Ltd.”, with a registered share capital of 50,000 Singapore dollars. The objective of the establishment is to expand the development of real estate for sale or lease business offshore, as well as to invest in other businesses that could benefit to the overall group performance.

2) Approved an establishment of a new subsidiary in Guernsey named, “Sansiri Guernsey (2009) Limited”, with a registered capital of 10,000 pounds, in order to engage in the development of real estate for sale and/or lease in the United Kingdom. Sansiri Global Investment Pte. Ltd. holds 100 percent of the shares in this company.

h) Business combination in 2009 On 17 July 2009, the Company’s Board of Directors meeting passed a resolution to acquire all 400,000 ordinary shares of National Education Development Company Limited at a price of Baht 100 each, or a total of Baht 40 million. This company is engaged in the education business under the name “Satit Pattana School”. The objective of the investment is to generate a continuous income from the education business, as well as to create opportunities to expand business and create joint benefits through synergies with the core business of the Company. The management believes since the school is located in the area of the Group project on approximately 750 rais, the school can attract customers to the project and boost property values. In addition, if the school is operated as planned, it is expected that the investment cost will be recouped within 7 years and it will generate a profit in the future. Based on appraisal report regarding valuation of National Education Development Company Limited prepared by independent appraiser dated 23 November 2009 using income approach, such company was valued at Baht 435 million (discounted cash flow before net of liabilities as at acquisition date approximately Baht 175 million). These reasons supported the management’s assessment of return on investment in this company. The Company made full payment for the ordinary shares on 20 July 2009.

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As the date of acquisition, net assets value of National Education Development Company Limited comprised the following: -

(Unit: Thousand Baht) Assets Cash and deposits at financial institutions 5,209 Current assets 309 Non-current assets 67,958 Total assets 73,476 Liabilities Current liabilities 174,729 Total liabilities 174,729

(Unit: Thousand Baht) Net assets value (101,253) Percentage of investment by the Company 100 Net assets value in the percentage of investment by the Company (101,253) Purchase price 40,000 Goodwill from acquisition of subsidiary 141,253 Purchase price 40,000 Less: Cash and deposits at financial institutions (5,209) Net cash payment for acquisition of subsidiary 34,791

i) Acquisition of minority interest in 2008! ! "! #$%!&'()*+,-.!/'*01!'2!340%56'0.!7%%64+8!9':;<;==>!$%?1!'+!;@!A%B0C*0,!;==>! assed the resolution approving the Company to acquire the additional 120,000 ordinary shares or equivalent to 40 percent of paid-up capital of Sansiri Venture Company Limited at a price of Baht 175.03 million. The transaction was made into 2 installments:

The 1st installment: The Company would buy the 30,000 ordinary shares or equivalent to 10 percent of paid-up capital of Sansiri Venture Company Limited at a price of Baht 43.76 million within March 2008.

The 2nd installment: The Company would buy the 90,000 ordinary shares or equivalent to 30 percent of paid-up capital of Sansiri Venture Company Limited at a price of Baht 131.27 million within September 2008.

As at 24 March 2008 and 1 September 2008, the Company already purchased the 1st installment and the 2nd installment of ordinary shares, respectively, resulting in an increase of its shareholding in Sansiri Venture Company Limited from 60 percent to 70 percent and 100 percent, respectively.

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! ! "! #$%! &'()*! '+! ,-)%./')0! 1%%/-23! '+! 4560! 4)'7%)/8! 9':7(28! ;-:-/%*! <4560=!! No.3/2008 held on 27 February 2008 passed the resolution approving Plus to acquire the additional 490,000 ordinary shares or equivalent to 49 percent of paid-up capital of Plus Property Space Company Limited at a price of Baht 49.70 million. In addition, the Board also approved Plus to acquire the additional 490,000 ordinary shares or equivalent to 49 percent of paid-up capital of Plus Property Venture Company Limited at a price of Baht 7.54 million. Each transactions was made into 2 installments.

Plus Property Space Company Limited The 1st installment: Plus would buy the 190,000 ordinary shares or equivalent to 19 percent of paid-up capital of Plus Property Space Company Limited at a price of Baht 19.27 million within March 2008.

The 2nd installment: Plus would buy the 300,000 ordinary shares or equivalent to 30 percent of paid-up capital of Plus Property Space Company Limited at a price of Baht 30.43 million within September 2008.

Plus Property Venture Company Limited The 1st installment: Plus would buy the 190,000 ordinary shares or equivalent to 19 percent of paid-up capital of Plus Property Venture Company Limited at a price of Baht 2.92 million within March 2008.

The 2nd installment: Plus would buy the 300,000 ordinary shares or equivalent to 30 percent of paid-up capital of Plus Property Venture Company Limited at a price of Baht 4.62 million within September 2008.

As at 24 March 2008 and 1 September 2008, Plus already purchased the 1st in stallment and the 2nd installment of ordinary shares, respectively, resulting in an increase of its shareholding in Plus Property Space Company Limited and Plus Property Venture Company Limited from 51 percent to 70 percent and 100 percent, respectively.

As the date of acquisition, net asset value of Sansiri Venture Company Limited, Plus Property Space Company Limited and Plus Property Venture Company Limited comprised the following: -

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THE 1ST INSTALLMENT (Unit: Thousand Baht)

Sansiri Venture Plus Property Plus Property Total Company Space Company Venture Limited Limited Company Limited

ASSETS Cash and deposits at financial institutions 216,888 29,412 8,483 254,783Current assets 986,135 345,313 363,931 1,695,379Non-current assets 1,333 166 1,233 2,732 Total assets 1,204,356 374,891 373,647 1,952,894 LIABILITIES Current liabilities 640,942 229,954 406,976 1,277,872Non-current liabilities 635,000 176,700 - 811,700 Total liabilities 1,275,942 406,654 406,976 2,089,572Net asset value (71,586) (31,763) (33,329) (136,678)Percentage of investment 10 19 19 Net asset value in the percentage of investment (7,159) (6,035) (6,332) (19,526)Purchase price 43,760 19,270 2,920 65,950Goodwill from acquisition of minority interest 50,919 25,305 9,252 85,476

THE 2ND INSTALLMENT (Unit: Thousand Baht)

Sansiri Venture Plus Property Plus Property Total Company Space Company Venture Limited Limited Company Limited

ASSETS Cash and deposits at financial institutions 151,911 11,156 1,421 164,488Current assets 1,086,296 439,505 318,760 1,844,561Non-current assets 1,802 148 803 2,753 Total assets 1,240,009 450,809 320,984 2,011,802 LIABILITIES Current liabilities 525,037 303,218 155,219 983,474Non-current liabilities 703,318 181,700 191,700 1,076,718 Total liabilities 1,228,355 484,918 346,919 2,060,192Net asset value 11,654 (34,109) (25,935) (48,390)Percentage of investment 30 30 30 Net asset value in the percentage of investment 3,496 (10,233) (7,781) (14,518)Purchase price 131,270 30,430 4,620 166,320Goodwill from acquisition of minority interest 127,774 40,663 12,401 180,838

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The differences between the cost of acquisition and the minority interest of the subsidiaries mentioned above were recorded as goodwill which is stated at cost less accumulated impairment losses.

2.3 The separate financial statements, which present investments in subsidiaries under the cost method, have been prepared solely for the benefit of the public.

3. ADOPTION OF NEW ACCOUNTING STANDARDSIn June 2009, the Federation of Accounting Professions issued Notification No. 12/2552, assigning new numbers to Thai Accounting Standards that match the corresponding International Accounting Standards. The numbers of Thai Accounting Standards as referredto in these financial statements reflect such change.

The Federation of Accounting Professions has issued Notification No. 86/2551 and 16/2552, mandating the use of new accounting standards, financial reporting standard and accounting treatment guidance as follows.

3.1 Accounting standards, financial reporting standard and accounting treatment guidance which are effective for the current year

Framework for the Preparation and Presentation of Financial Statements (revised 2007)TAS 36 (revised 2007) Impairment of Assets TFRS 5 (revised 2007) Non-current Assets Held for Sale and Discontinued Operations Accounting Treatment Guidance for Leasehold RightAccounting Treatment Guidance for Business Combination under Common Control

These accounting standards, financial reporting standard and accounting treatment guidance became effective for the financial statements for fiscal years beginning on or after 1 January 2009. The management has assessed the effect of these standards and believes that TFRS 5 (revised 2007) and Accounting Treatment Guidance for Business Combination under Common Control are not relevant to the business of the Company, while Framework for Preparation and Presentation of Financial Statements (revised 2007), TAS 36 (revised 2007) and Accounting Treatment Guidance for Leasehold Right do not haveany significant impact on the financial statements for the current year.

3.2 Accounting standards which are not effective for the current year

Effective date TAS 20 Accounting for Government Grants and 1 January 2012 Disclosure of Government Assistance TAS 24 (revised 2007) Related Party Disclosures 1 January 2011 TAS 40 Investment Property 1 January 2011

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

The management of the Company has assessed the effect of these standards and believes that TAS 20 is not relevant to the business of the Company, while TAS 24 (revised 2007) and TAS 40 will not have any significant impact on the financial statements for the year in which they are initially applied.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Revenue recognition a) Revenue from property development for sales Revenue from property development for sales is recognised by reference to the stage of completion, beginning when the following significant conditions are met: - sales agreements have been finalised, or in the case of condominium developments sales agreements have been finalised for a minimum of 40 percent of the total area offered for sale; - a non-refundable deposit have been finalised or at least 20 percent of the value of the sales agreement has been received from the customer; - development is a minimum of 10 percent complete (as measured by construction costs incurred compared to total budgeted construction costs).

Stage of completion is measured by reference to the relationship that costs incurred to date (excluded land cost) bears to the estimated total cost of the transactions. No income is recognised from contracts under which more than three consecutive installments are overdue.

b) Rental income Rental income is recognised in the income statement on an accrual basis over the term of the lease. Initial expenses are recorded as a part of total rental as lease agreement.

c) Revenue from hotel business Room revenues are recognised on an accrual basis over the period of the guests stay. Food and beverage revenues are recognised after the food and beverages have been served. Recognised revenue does not include valued added tax and stated net of discounts.

d) Service income Service income is recognised when service rendered by reference to the stage of completion.

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e) Interest income Interest income is recognised as interest accrues based on the effective rate method. f) Dividends Dividends are recognised when the right to receive the dividends is established.

4.2 Cost of property development for sale and cost of project salesProperty development projects for sale are stated at the lower of cost and net realisable value, consisting of the cost of land, design fees, utilities, construction costs, and directlyrelated interest and expenses.

In determining the costs of land and houses and residential condominium units sold, the anticipated total development costs (after recognising the costs incurred to date) are attributed to land and houses on the basis of the salable area, residential condominium units on the basis of sale value and then recognised as costs in the income statement according to the percentage of completion.

The Company and its subsidiaries recognise loss on diminution in value of projects (if any) in the income statements.

4.3 Selling expensesSelling expenses directly associated with projects, such as specific business tax and transfer fees are charged to income in proportion to the percentage of total revenue recognised.

4.4 Cash and cash equivalentsCash and cash equivalents consist of cash in hand, cash at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

4.5 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis ofdebt aging.

4.6 Borrowing costs Borrowing costs directly attributable to the acquisition, construction of the projects that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the costs of the respective assets. Capitalisation ceases when the projects are ready for their intended use or sale, when the physical construction of the projects is complete, or when construction is suspended and until active developmentresumes. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

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To the extent that funds are borrowed specifically for the development of projects, interest costs are presented as the actual borrowing costs less any investment income from the temporary investment of those borrowings. To the extent that funds are borrowed and used for the general purposes, the interest costs are determined by applying a capitalisation rate to the expenditures on that project. The capitalisation rate is the weighted average of the borrowing costs applicable to the borrowings of the entity that are outstanding during the year, other than borrowings made for specific purposes.

4.7 Investments a) Investments in securities held for trading are stated at fair value. Gains or losses arising from changes in the carrying amounts of securities are included in determining income. b) Investments in available-for-sale securities are stated at fair value. Changes in the carrying amounts of securities are recorded as separate items in shareholders equity until the securities are sold, when the changes are then included in determining income. c) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for loss on diminution in value (if any). d) Investments in subsidiaries are accounted for in the separate financial statements using the cost method. f) Investment properties are property development for rent, are stated at cost less accumulated depreciation and impairment losses in accordance with the cost model adopted for the recognition of property, plant and equipment.

The fair value of marketable securities is based on the latest bid price of the last working day of the year as quoted on the Stock Exchange of Thailand. The fair value of unit trusts is determined from their net asset value.

The weighted average method is used for computation of the cost of investments.

In the event the Company reclassifies investments in securities, such investments are adjusted to their fair value as at the reclassification date. Differences between the carryingamount of the investments and their fair value on that date are included in determining income or recorded as surplus (deficit) from changes in the value of investments in shareholders’ equity, depending on the type of investment which is reclassified.

4.8 Land, building and equipment / DepreciationLand is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any).

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Depreciation of building and equipment is calculated by reference to their costs on a straight-line basis over the following estimated useful lives:

Buildings and improvements 20 years Buildings decoration 8 years Improvements and renovation - hotel 5 years Fixtures and equipment 3 - 5 years Operating equipment - hotel 5 years Temporary sales office 2 - 2.5 years Motor vehicles 5 years

Depreciation is included in determining income.

No depreciation is provided for land and construction in progress.

4.9 Leasehold rights and amortisationLeasehold rights are stated at cost less accumulated amortisation. The Company and its subsidiaries amortise leasehold rights on a straight-line basis over the leasehold period.

The amortisation is included in determining income.

4.10 Intangible assets and amortisationIntangible assets are stated at cost less accumulated amortisation and allowance for loss on impairment of assets (if any). Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end.

A summary of the intangible assets with finite useful lives is as follows:

Computer software 3 - 10 years Franchise fee 5 years

The amortisation is included in determining income.

4.11 Land held for developmentLand held for development is stated at cost less allowance for loss on diminution in value of projects. It is consisted of cost of land, land fulfill, public utilities cost, project development cost and borrowing cost which occurred during the developed period in the past.

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4.12 GoodwillGoodwill is initially measured at cost, which is the excess of the cost of the business combination over the Company’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s cash generating units (or group of cash-generating units) that are expected to benefit from the synergies of the combination. The Company estimates the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

4.13 Related party transactionsRelated parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company.

They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors and officers with authority in the planning and direction of the Company’s operations.

4.14 Long-term leases a) Finance leases Leases of property, plant and equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other long-term payables, while the interest element is charged to the income statements over the lease period. The equipment acquired under finance lease is depreciated over the shorter of the useful life of the asset and the lease period. b) Operating leases Leases not transferring a significant portion of the risks and rewards of ownership

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to the lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statements on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, and payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

4.15 Foreign currenciesTransactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the balance sheet date.

Gains and losses on exchange are included in determining income.

4.16 Impairment of assetsAt each reporting date, the Company and its subsidiaries perform impairment reviews in respect of the land, building and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. The Company also carries out annual impairment reviews in respect of goodwill. An impairment lossis recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company and its subsidiaries could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs ofdisposal.

An impairment loss is recognised in the income statement.

4.17 Employee benefitsSalaries, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses when incurred.

4.18 ProvisionsProvisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can bemade of the amount of the obligation.

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4.19 Income taxIncome tax is provided in the accounts based on the taxable profits determined in accordance with tax legislation.

5. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATESThe preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant judgments and estimates are as follows:

Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement.

Allowance for doubtful accountsIn determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.

Impairment of property development for sale, property development for rent and land held for developmentThe Company and its subsidiaries treat property development for sale, property development for rent and land held for development as impaired when the management judges that there has been a significant or prolonged decline in the fair value below their cost. The management determines the devaluation of such properties and land held for development based on net realisable value. The determination of what is “significant” and such devaluation requires the management to exercise judgment.

Project development costs estimationIn calculating cost of land and houses and condominium sold, the Company and its subsidiaries have to estimate all project development costs, comprising land and land improvement costs, design and construction costs, public utility costs, borrowing costs and other related costs. The management estimates these costs based on their business experience and revisits the estimations on a periodical basis or when the actual costs incurred significantly vary from the estimated costs.

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Land, building and equipment/DepreciationIn determining depreciation of building and equipment, the management is required to make estimates of the useful lives and salvage values of the Company and its subsidiaries’ building and equipment and to review estimate useful lives and salvage values when there are any changes.

In addition, the management is required to review land, building and equipment forimpairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review.

Impairment of investmentThe Company treats investment in subsidiaries as impaired when there has been a significant or prolonged decline in their fair value. The determination of what is “significant” or “prolonged” requires the management to exercise judgment. However, the use of different estimates and assumptions could affect the amounts of allowances for impairment of investment in subsidiaries and adjustments to the allowances may therefore be required in the future.

Goodwill and intangible assetsThe initial recognition and measurement of goodwill and other intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discountrate in order to calculate the present value of those cash flows.

Litigation The Company and its subsidiaries have contingent liabilities as a result of litigation. The management has exercised judgment to assess of the results of the litigation and recorded certain contingent liabilities as at the balance sheet date. Compensation for Housing Estate Juristic PersonsThe Company and its subsidiaries estimate the compensation for Housing Estate Juristic Persons using the rate specified by the regulator and the budgeted public utilities costs as a basis for the calculation.

Provision for home care warranteeIn recording provision for home care warrantee, the management estimates the expenses expected to be incurred as a result of providing such warrantee based on past experiences of actual expenses claimed.

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6. RELATED PARTY TRANSACTIONS

6.1 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: Thousand Baht)

Consolidated financial Separate financial statements statements 2009 2008 2009 2008 Pricing policy

REVENUES FROM PROJECT SALES Cost plus certain margin Subsidiary at rates of 25% - 36%Touch Property Co., Ltd. - - 5,725 14,770 Related parties Related persons 23,254 57,663 17,456 43,007

Total 23,254 57,663 23,181 57,777

RENTAL INCOME The same rateSubsidiaries as other customersPlus Property Co., Ltd. - - 87 104 Piwattana Ltd. - - 1,104 880 Sansiri Land Ltd. - - 920 999 Touch Property Co., Ltd. - - 6 11 Related party Based on agreement (Note 12) National Education Development Co., Ltd. - 20,560 - -

Total - 20,560 2,117 1,994

REVENUES FROM BUSINESS MANAGEMENT AND PROJECT MANAGEMENT Subsidiaries Chanachai Ltd. - - 4,965 - Based on agreement (11)Plus Property Co. Ltd. - - 75,845 - Based on agreement (11)Sansiri Venture Co., Ltd. - - 12,800 15,600 Based on agreement (6), (8), (9), (10)S.U.N. Management Co., Ltd. - - 561 - Based on agreement (1)Arnawat Ltd. - - 561 - Based on agreement (11)Piwattana Ltd. - - 2,804 - Based on agreement (11)Touch Property Co., Ltd. - - 2,243 - Based on agreement (11)Plus Property Space Co., Ltd. - - 3,794 - Based on agreement (11)Related party Based on agreement (5)J&W Development Co., Ltd. - 3,058 - 3,058

Total - 3,058 103,573 18,658

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INTEREST INCOME Cost of fund plusSubsidiaries certain percentChanachai Ltd. - - 1,465 404 Plus Property Co., Ltd. - - 27,187 75,218 Arnawat Ltd. - - 36,502 6,608 Piwattana Ltd. - - 4,640 31,336 Red Lotus Properties Ltd. - - 587 931 Papanan Ltd. - - 366 397 Pacific Challenge Holding Co., Ltd. - - 2,095 3,077 National Education Development Co., Ltd. - - 1,689 - Sansiri Global Investment Pte. Ltd. - - 2,032 - Sansiri Guernsey (2009) Limited - - 135 - Satit Pattana School - - 83 -

Total - - 76,781 117,971

COMMISSION INCOME Based on agreement (3)Subsidiaries Chanachai Ltd. - - 3,844 - Plus Property Co., Ltd. - - 18,922 -

Total - - 22,766 -

CONSTRUCTION AND MATERIAL COST Subsidiaries Plus Property Co., Ltd. - - - 1,519 Based on agreement (4)Piwattana Ltd. - - 212 - Based on agreement in normal course of businessTouch Property Co., Ltd. - - 56 24 Based on agreement in normal course of businessRelated parties Based on agreement in Syntech Construction Plc. - 50,086 - 7,059 normal course ofDe’cor Mart Co., Ltd. - 29,289 - 17,373 businessGrand Homemart Co., Ltd. - 201,453 - 119,822 General Engineering Plc. - 87,763 - 14,155

Total - 368,591 268 159,952

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PROJECT MANAGEMENT FEE AND Based on agreement (2) (7) OTHER EXPENSES Subsidiaries Plus Property Co., Ltd. - - 17,943 23,016 Papanan Ltd. - - 35 - Touch Property Co., Ltd. - - 3,765 -

Total - - 21,743 23,016

COMMISSION EXPENSE Based on agreement (3)Subsidiary Plus Property Co., Ltd. - - 45,014 112,636

Total - - 45,014 112,636

INTEREST EXPENSES 1.50 - 9.12 percent Subsidiary per annumS.U.N. Management Co., Ltd. - - 229 230 Related parties J&W Development Co., Ltd. - 829 - - Space Development Co., Ltd. - 2,765 - - Directors of subsidiary - 1,419 - -

Total - 5,013 229 230

Transactions, pricing policies and related contracts are as follows: - (1) Revenue from business services provided for a period of 3 years, following completion of project development which in total amount Baht 5.40 million. Of this, Baht 3.60 million was paid in advance and the remaining amount is pay able at a rate of Baht 0.05 million per month.

(2) Project management fees are charged at rates ranging from Baht 65,000 to Baht 332,254 per month, depended upon the size of the project.

(3) Commission expenses from sales of projects are charged at rates from 1.00 percent to 1.50 percent of selling price per the contract, with payments divided between the time the customer executes the agreement and when the properties are transferred.

(4) A total of Baht 3,025,465 is charged for the right to use the “Plus” and “Condo One” trademark for projects. The Company paid 40 percent of this in advance, on the contract date, and the remaining 60 percent is charged monthly, over 26 months and 27 months. (5) Management fee income for a period of 30 months as from April 2007 is charged

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at Baht 409,000 to Baht 596,000 per month. In case that the order of condominium units reach to 80 percent of project price, the Company will earn certain incentive of Baht 3 million and if earnings before interest expenses and income tax of the project excess specified amounts, the Company will receive profit sharing as agreed rate.

(6) Management fee income starting from August 2007 to completion of project is charged at Baht 267,500 to Baht 400,000 per month. In case that the order of condominium units reach to 80 percent of project price, the Company will earn certain incentive of Baht 7 million. In addition, a total of Baht 2,659,760 is charged for the right to use the “SIRI on 8” trademark.

(7) Management fee for “Saran Sport Club” for 2 years periods, starting from November 2006, is charged at Baht 60,000 per month.

(8) Management fee income starting from October 2007 to completion of project is charged at Baht 300,000 per month. In case that the order of condominium units reach to 80 percent of project price, the Company will earn certain incentive of Baht 10 million. In addition, a total of Baht 6,225,115 is charged for the right to use the “Priv’e By Sansiri” trademark.

(9) Management fee income starting from October 2007 to completion of project is charged at Baht 350,000 per month. In case that the order of condominium units reach to 80 percent of project price, the Company will earn certain incentive of Bath 15 million. In addition, a total of Baht 7,982,812 is charged for the right to use the “39 by Sansiri” trademark.

(10) Management fee income starting from November 2007 to completion of project is charged at Baht 250,000 per month. In case that the order of condominium units reach to 80 percent of project price, the Company will earn certain incentive of Baht 1.5 million. In addition, a total of Baht 1,587,026 is charged for the right to use the “Preen by Sansiri” trademark.

(11) Revenue from business service and project management fees is charged based on costs plus certain margin at a rate of 5 percent. Those charges are allocated to subsidiaries based on revenue and investment costs, respectively.

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Name of related parties Relationship

Syntec Construction Plc.(3) Common shareholder of the Company

Regency One Co., Ltd. Held by Chanachai Ltd.

Univentures Asset Management Co., Ltd. Shareholder of S.U.N. Management Co., Ltd.

Prestige Gift and Premium Co., Ltd. Shareholder of S.U.N. Management Co., Ltd.

Univentures Plc. Shareholder of Univentures Asset Management Co., Ltd. and Forward Systems Co., Ltd.

Forward Systems Co., Ltd. Common shareholder with Univentures Asset Management Co., Ltd.

J & W Development Co., Ltd.(1) Shareholder of Plus Property Venture Co., Ltd.

D’ecor Mart Co., Ltd. (1) One of director is a major shareholder of J&W Development Co., Ltd.

Space Development Co., Ltd. (1) Shareholder of Plus Property Space Co., Ltd. and Sansiri Venture Co., Ltd.

Grand Homemart Co., Ltd. (1) Common director with J&W Development Co., Ltd.

National Education Development Co., Ltd. (1) Common director with J&W Development Co., Ltd.

General Engineering Plc. (2) Common director with the Company

(1) As the Company acquired investment in Sansiri Venture Co., Ltd. and Plus Property Co., Ltd. acquired investments in Plus Property Venture Co., Ltd. and Plus Property Space Co., Ltd. fromJ&W Development Co., Ltd. and Space Development Co., Ltd. resulting in 100 percent shareholding of paid-up capital of those companies since September 2008, J&W Development Co., Ltd. and Space Development Co., Ltd. and their related companies were not related to the Company sincethen.

(2) Since there was a change in the Company’s directors in April 2008, General Engineering Plc. was not related to the Company since then.

(3) As Natural Park Plc. reduced the percentage of shareholding in the Company’s paid up capital to 4.26% (as at 9 April 2008, closed date of share transfer), Natural Park Plc. and Syntec ConstructionPlc. (held by Natural Park Plc.) were not the Company’s related party since then.

The relationships between the Company, subsidiaries and their related parties are summarised below: -

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6.2 The balances of the accounts as at 31 December 2009 and 2008 between the Company and those related companies are as follows: -

(Unit: Million Baht)

Consolidated Separate financial statements financial statements 2009 2008 2009 2008

ACCOUNTS RECEIVABLE AND UNBILLED COMPLETED WORKS ACCOUNTS RECEIVABLESubsidiaries Chanachai Ltd. - - 2,098 71Plus Property Co., Ltd. - - 7,293 205Sansiri Venture Co., Ltd. - - 963 268Papanan Ltd. - - - 2Sansiri Land Ltd. - - 177 85Touch Property Co., Ltd. - - - 1Total - - 10,531 632UNBILLED COMPLETED WORKSubsidiary Touch Property Co., Ltd. - - 9,218 5,861Related parties Related persons 14,626 2,100 9,453 992Total 14,626 2,100 18,671 6,853Total 14,626 2,100 29,202 7,485OTHER RECEIVABLES SubsidiaryPiwattana Ltd. - - 93 24,775Total - - 93 24,775

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Consolidated Separate financial statements financial statements 2009 2008 2009 2008SHORT-TERM LOANS TO RELATED PARTIES Subsidiaries Plus Property Co., Ltd. - - - 1,090,000Arnawat Ltd. - - 906,827 973,878Piwattana Ltd. - - 1,399,400 911,118Red Lotus Properties Ltd. - - 261,500 218,000Pacific Challenge Holding Co., Ltd. - - 30,000 45,000Papanan Ltd. - - 268,326 248,325National Education Development Co., Ltd. - - 155,620 -Sansiri Global Investment Pte. Ltd. - - 235,122 -Satit Pattana School - - 6,000 -Related parties Univentures Asset Management Co., Ltd. 8,850 8,850 - -Prestige Gift & Premium Co., Ltd. 5,850 5,850 - -Regency One Co., Ltd. 5,000 5,000 - -Total 19,700 19,700 3,262,795 3,486,321Less: Allowance for doubtful accounts (5,000) (5,000) (546,945) (401,945)Net 14,700 14,700 2,715,850 3,084,376

During the year 2009, the Company recorded allowance for doubtful accounts of loans to subsidiaries amounting to Baht 145.00 million (2008: Baht 168.15 million).

Consolidated Separate financial statements financial statements 2009 2008 2009 2008Interest receivables Subsidiaries Arnawat Ltd. - - 13,135 13,006Piwattana Ltd. - - 19,156 14,516Red Lotus Properties Ltd. - - 3,505 2,918Pacific Challenge Holding Co., Ltd. - - 274 -Papanan Ltd. - - 4,076 3,710National Education Development Co., Ltd. - - 1,689 -Sansiri Global Investment Pte. Ltd. - - 2,032 -Satit Pattana School - - 83 -Related parties Univentures Asset Management Co., Ltd. 33 33 - -Prestige Gift & Premium Co., Ltd. 22 22 - -Regency One Co., Ltd. 333 333 - -Total 388 388 43,950 34,150Less: Allowance for doubtful accounts (333) (333) (4,076) -Net 55 55 39,874 34,150



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DEPOSITS FOR RENT AND OTHERS Related party Forward Systems Co., Ltd. 269 - - -Total 269 - - -ACCOUNTS PAYABLE- CONSTRUCTION AND MATERIAL COST Related party Forward Systems Co., Ltd. - 21 - 21Total - 21 - 21SHORT-TERM LOANS FROM RELATED PARTIES Subsidiary S.U.N. Management Co., Ltd. - - 15,300 15,300Total - - 15,300 15,300UNEARNED INCOME Related parties Related persons 26 1,373 26 1,373Total 26 1,373 26 1,373ACCRUED INTEREST EXPENSES Subsidiary S.U.N. Management Co., Ltd. - - 975 746Total - - 975 746OTHER PAYABLES Subsidiaries Plus Property Co., Ltd. - - 9,782 6,634Piwattana Ltd. - - 1,947 4,319Papanan Ltd. - - 96 387Sansiri Land Ltd. - - 91 144Touch Property Co., Ltd. - - 497 453Total - - 12,413 11,937DEPOSITS FOR BUILDING RENTAL AND OTHERS Subsidiaries Chanachai Ltd. - - 18 18Plus Property Co., Ltd. - - - 25Piwattana Ltd. - - 441 441Sansiri Land Ltd. - - 285 285Total - - 744 769


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Consolidated financial statements Balance as at During the year Balance as at 1 January 2009 Increase Decrease 31 December 2009

Related parties Univentures Asset Management Co., Ltd. 8.85 - - 8.85Prestige Gift & Premium Co., Ltd. 5.85 - - 5.85Regency One Co., Ltd. 5.00 - - 5.00


Separate financial statements Balance as at During the year Balance as at 1 January 2009 Increase Decrease 31 December 2009Subsidiaries Chanachai Ltd. - 174.79 (174.79) -Plus Property Co., Ltd. 1,090.00 - (1,090.00) -Sansiri Venture Co., Ltd. - 4.00 (4.00) -Arnawat Ltd. 973.88 47.95 (115.00) 906.83Piwattana Ltd. 911.12 488.28 - 1,399.40Red Lotus Properties Ltd. 218.00 43.50 - 261.50Pacific Challenge Holding Co., Ltd. 45.00 - (15.00) 30.00Papanan Ltd. 248.32 20.00 - 268.32National Education Development Co., Ltd. - 155.62 - 155.62Sansiri Global Investment Pte. Ltd. - 235.12 - 235.12Sansiri Guernsey (2009) Limited - 22.59 (22.59) -Satit Pattana School - 6.00 - 6.00

6.3 During the year, movements of short-term loans to related parties were as follow: -

As at 31 December 2009, loans to related parties are clean loans, due for repayment at call, and carried interest at rates of 1.50 - 5.50 percent per annum (2008: 1.50 - 7.25 percent per annum).

As at 31 December 2009 and 2008, the Company and its subsidiaries have ceasedrecognition of interest on principal of loans to related parties amounting to Baht 19.70 million because of default on interest payment for three consecutive installments (Separate financial statement: Baht 2,970.46 million and Baht 2,292.32 million, respectively).

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6.4 During the year, movements of loans from related parties were as follow: -


Separate financial statements Balance as at During the year Balance as at 1 January 2009 Increase Decrease 31 December 2009

Subsidiary S.U.N. Management Co., Ltd. 15.30 - - 15.30

As at 31 December 2009, loans from related parties are clean loans, due at call and carrying interest at rates of 1.50 percent per annum (2008: 1.50 percent per annum).

6.5 Guarantees to related companiesAs at 31 December 2009 and 2008, the Company and its subsidiaries have the following obligations in respect of guarantees provided to financial institutions for loans facilities: -


Guarantor Guarantee 2009 2008

Sansiri Plc. Chanachai Ltd. 2,098 930 Sansiri Venture Co., Ltd. 1,025 1,349 Arnawat Ltd. 1,210 1,380 Piwattana Ltd. 2,793 3,118 Red Lotus Properties Ltd. 93 162 Sansiri Guernsey (2009) Limited 174 -Total 7,393 6,939Plus Property Co., Ltd. Sansiri Land Ltd. - 16 Plus Property Space Co., Ltd. - 528Total - 544Piwattana Ltd. Sansiri Plc. 790 790 Arnawat Ltd. 340 1,300Total 1,130 2,090Satit Pattana Personal Center Ltd. (formerly known as Arnawat Ltd. - 510 “Club House Property Ltd.”) Arnawat Ltd. Piwattana Ltd. 600 600

7. CASH AND CASH EQUIVALENTSAs at 31 December 2009 and 2008, restricted deposits at financial institutions of the Company and its subsidiaries have been pledged as collateral for guarantees facilitiesissued by banks on behalf of the Company and its subsidiaries.

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8. ACCOUNTS RECEIVABLE AND UNBILLED COMPLETED WORKAccounts receivable and unbilled completed work as at 31 December 2009 and 2008 presented as follows: -



Unbilled completed work 3,447.42 2,047.85 2,750.13 1,160.43Notes receivable 37.24 83.42 - -Service receivables 70.08 57.59 23.00 12.51Installment accounts receivable 53.15 49.35 36.53 26.84Total 3,607.89 2,238.21 2,809.66 1,199.78Less: Allowance for doubtful accounts (12.47) (17.99) (0.60) (0.73)Accounts receivable and unbilled completed work - net 3,595.42 2,220.22 2,809.06 1,199.05Sales with signed agreements 54,471.54 58,542.18 29,234.41 33,820.52Total estimated project sales 74,179.39 75,077.38 40,624.26 44,529.27The ratio of sales with signed agreements to total estimated project sales 73.43% 77.97% 71.96% 75.95%

Unbilled completed work and unearned income presented as follows: -(Unit: Million Baht)


Installments due 43,377.84 28,703.29 23,386.12 16,851.11Less: Cash received (43,324.69) (28,653.94) (23,349.59) (16,824.27)Installment accounts receivable 53.15 49.35 36.53 26.84 Installments due 43,377.84 28,703.29 23,386.12 16,851.11Less: Sales recognised to date (44,996.74) (28,766.45) (25,228.02) (16,991.59) (1,618.90) (63.16) (1,841.90) (140.48)The balance consisted of: - Unbilled completed work 3,447.42 2,047.85 2,750.13 1,160.43Unearned income (1,828.52) (1,984.69) (908.23) (1,019.95)Total 1,618.90 63.16 1,841.90 140.48

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Accounts receivable and unbilled completed work as at 31 December 2009 and 2008 classified by the aging of the receivable are as follows: -



Unbilled completed work 3,447.42 2,047.85 2,750.13 1,160.43Trade accounts receivable and notes receivable Not yet due 46.34 94.67 9.10 9.51 Over due 1 - 3 months 84.88 74.16 47.56 26.99 Over due 4 - 6 months 7.82 4.97 1.18 0.88 Over due 7 - 12 months 9.65 4.48 0.32 1.16 Over due over 12 months 11.78 12.08 1.37 0.81Total 3,607.89 2,238.21 2,809.66 1,199.78Less: Allowance for doubtful accounts (12.47) (17.99) (0.60) (0.73)Net 3,595.42 2,220.22 2,809.06 1,199.05

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9. PROPERTY DEVELOPMENT FOR SALE(Unit: Million Baht)


Land 23,340.09 21,018.34 13,812.69 12,027.19Construction cost and others 39,796.46 31,898.82 23,679.46 19,776.63Capitalised financial costs 2,300.60 1,945.33 1,451.49 1,225.83Total 65,437.15 54,862.49 38,943.64 33,029.65Less: Accumulated transfer to cost of project (50,073.88) (38,583.86) (30,598.99) (25,033.25) Accumulated transfer to property development for rent (1,303.94) (1,211.03) (1,211.03) (1,211.03) Accumulated transfer to land held for development (897.26) - (281.94) - Written off (123.35) (123.35) - -Add: Amount reversed to property development for sale 645.44 645.44 645.44 645.44Balance 13,684.16 15,589.69 7,497.12 7,430.81

ALLOWANCE FOR LOSS ON DIMINUTION IN VALUE OF PROJECT Balance - beginning of the year (72.00) (59.00) (5.00) -Add: Increase during the year (130.81) (13.00) (45.00) (5.00)Less: Transfer to land held for development 84.38 - 50.00 -Balance - end of the year (118.43) (72.00) - (5.00)Net 13,565.73 15,517.69 7,497.12 7,425.81

9.1 As at 31 December 2009 and 2008, Most of the land and construction thereon of projectsof the Company and its subsidiaries were pledged as collateral for loans obtained from financial institutions.

9.2 As at 31 December 2009 and 2008, the estimated expense to the Company and its subsidiaries of development and construction for completion of the opened projects (excluding the costs of land and construction already recorded) is Baht 10,152.40 million and Baht 10,241.95 million, respectively (Separate financial statements: Baht 5,880.00 million and Baht 5,545.87 million, respectively).

9.3 During the year 2009 and 2008, the Company and its subsidiaries included borrowing costs in the cost of property development amounting to Baht 355.27 million and Baht 418.24 million, respectively (Separate financial statements: Baht 225.66 million and Baht 171.74 million, respectively).

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9.4 During the year 2009 and 2008, the Company and its subsidiaries recorded allowance for diminution in value of project and land held for development of Baht 130.18 million and Baht 13 million, respectively (Separate financial statement: Baht 45 million and Baht 5 million, respectively. Such transaction is presented in the income statement under “Loss on diminution in value of property development and impairment loss on land, building and equipment” as follows:


Consolidated Separate financial statements financial statements 2009 2008 2009 2008Property development for sale and 130.81 13.00 45.00 5.00 land held for development (Note 9)Property development for rent (Note 11) - 3.59 - 3.59Land, building and equipment (Note 14) 0.16 40.00 - -Total 130.97 56.59 45.00 8.59

10. INVESTMENTS IN SUBSIDIARIESAs at 31 December 2009 and 2008, investments in subsidiaries are as follows: -

Allowance for loss on diminution Percentage of Investment in value of Paid-up capital shareholding at cost investments Net investment Subsidiaries 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 Percent Percent Subsidiaries - Directly owned Chanachai Ltd. 90.00 90.00 100 100 101.52 101.52 - - 101.52 101.52 Plus Property Co., Ltd. 600.00 600.00 100 100 610.52 610.52 - - 610.52 610.52 Sansiri Venture Co., Ltd. 3.00 3.00 100 100 177.42 177.42 - - 177.42 177.42 S.U.N. Management Co., Ltd. 10.00 10.00 51 51 5.10 5.10 - - 5.10 5.10 Arnawat Ltd. 2.50 2.50 100 100 2.50 2.50 - - 2.50 2.50 Piwattana Ltd. 1.00 1.00 100 100 1.00 1.00 - - 1.00 1.00 Red Lotus Properties Ltd. 20.00 20.00 100 100 20.00 20.00 - - 20.00 20.00 Pacific Challenge Holding Co., Ltd. 2.50 2.50 85 85 2.13 2.13 - - 2.13 2.13 Papanan Ltd. 20.00 20.00 100 100 20.00 20.00 (20.00) - - 20.00 Satit Pattana Personnel Center Ltd. (formerly known as “Club House Property Ltd.”) 1.00 1.00 100 100 1.00 1.00 - - 1.00 1.00 Rojnaruemit Ltd. 4.88 4.88 100 100 99.95 99.95 (98.00) (98.00) 1.95 1.95 National Education Development Co., Ltd. 40.00 - 100 - 40.00 - - - 40.00 - Sansiri Global Investment Pte. Ltd. 1.19 - 100 - 1.19 - - - 1.19 - Total investment in subsidiaries 1,082.33 1,041.14 (118.00) (98.00) 964.33 943.14

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During the year 2009, the Company received dividend of Baht 270 million from Plus Property Company Limited (2008: Nil).

During the year 2009, the Company established a new subsidiary, Sansiri Global Investment Pte. Ltd. and acquired investment in National Education Development Co., Ltd. as discussed in Note 2.2 (g) and (h) and recorded allowance for loss on diminution in valueof investments in subsidiary of Baht 20 million.

During the year 2008, the Company acquired 30,000 ordinary shares and 90,000 ordinary shares, respectively, of Sansiri Venture Co., Ltd. from a related company at a price of Baht 43.76 million and Baht 131.27 million, respectively. As a result, the percentage of shareholding in Sansiri Venture Co., Ltd. increased to 70 percent and 100 percent respectively. Details of the shares acquisition is discussed in Note 2.2 (i).

11. PROPERTY DEVELOPMENT FOR RENT (Unit: Million Baht)

Consolidated Separate financial statements financial statements

COST Balance as at 31 December 2008 1,982.97 1,175.33 Purchases / Transfer in 188.20 0.59 Disposal / Transfer out (49.06) (49.06) Balance as at 31 December 2009 2,122.11 1,126.86 ACCUMULATED DEPRECIATION Balance as at 31 December 2008 707.27 370.65 Depreciation for the year 76.08 44.41 Disposal / transfer (24.98) (24.96) Balance as at 31 December 2009 758.37 390.10 ALLOWANCE FOR DIMINUTION Balance as at 31 December 2008 14.94 14.94 Balance as at 31 December 2009 14.94 14.94 NET BOOK VALUE Balance as at 31 December 2008 1,260.76 789.74 Balance as at 31 December 2009 1,348.80 721.82 DEPRECIATION INCLUDED IN COST OF PROJECT FOR RENT IN INCOME STATEMENTS FOR THE YEAR 2008 74.37 47.45 2009 76.08 44.41

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As at 31 December 2009, the Company’s leasehold which the net book value amounted Baht 185 million, were mortgaged to secure loans from financial institutions (2008: Baht 222 million).

During the year 2008, the Company recorded allowance for diminution in the value of property development for rent of Baht 3.59 million, since the expected net realisable value was lower than the carrying amount.

12. PROPERTY DEVELOPMENT FOR RENT AND SALEAs at 31 December 2009 and 2008, property development for rent and sale are as follows: -


Consolidated financial statements 2009 2008

Land - 58.56Construction costs and others - 272.03Total - 330.59Less: Accumulated depreciation - (28.29)Less: Allowance for declining in value of project - (40.71)Net - 261.59Depreciation charged for the year - 17.65

On 17 February 2006, Arnawat Ltd. (as lessor) entered into an agreement (subsequently amended on 15 March 2007) to lease a plot of land of approximately 27 rai and construction thereon to a company. The lessor is to conduct building construction and improvements in accordance with the construction plans stipulated in the agreement with total cost of construction, including value added tax, to be not less than Baht 257 million. The lessor is to transfer the construction within 1 May 2007 and if the actual construction cost exceeds lessor’s construction cost for any reasons, the lessee agrees to absorb any such additional cost. The lease period is for 5 years 8 months from the date the lessor hand over the property. The lessee agrees to pay for rental to the lessor at the following rates:-

- From 1 June 2006, the transfer date for some of the assets, to 31 January 2007, the rental charge is Baht 0.10 million per month, with the lessee to pay full amount of such rental on 1 February 2007.

- From 1 February 2007 to the end of the lease, the lessee agrees to pay rental to taling Baht 151.80 million to the lessor on a quarterly basis, at a rate of Baht 5.31 million as from 1 February 2007 to 30 April 2007 and Baht 7.71 million per quarter, commencing 1 May 2007.

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At the end of the lease, the lessee agrees to buy and the lessor agrees to sell the leased assets, at a price of Baht 14,026 per square wah for the land, and a price equal to the cost of construction paid by the lessor and the lessee for the construction thereon, with the lessor agrees to transfer ownerships of the leased assets to the lessee on the date following the end of the lease or on another date agreed by between the lessor and the lessee.

Subsequently in the third quarter of 2009, the Company acquired investment in National Education Development Co., Ltd. (lessee) for 100 percent interest in such company as discussed in Note 2.2 (h), therefore that property development for rent and sale was then reclassified as land, building and equipment.

13. LAND HELD FOR DEVELOPMENT (Unit: Million Baht)


Land held for development 897.26 - 281.94 -Less: Allowance for loss on diminution in value of project (84.38) - (50.00) -Net 812.88 - 231.94 -

14. LAND, BUILDINGS AND EQUIPMENT (Unit: Million Baht) Consolidated financial statements

Buildings Buildings and Fixtures and Motor Temporary Construction Land decoration improvement equipment vehicle sales office in progress Total

Cost Balance as at 31 December 2008 122.31 134.04 253.61 321.96 38.77 182.55 1.37 1,054.61 Purchases 25.10 - 0.62 34.14 14.40 76.44 26.96 177.66 Transfer in 119.13 0.17 286.26 46.80 - 21.46 35.80 509.62 Increase from business combination - - - 57.05 - - 13.21 70.26 Disposals/Write off (2.45) (6.81) - (9.39) (13.77) (30.24) - (62.66) Transfer out - - - - - - (38.84) (38.84) Balance as at 31 December 2009 264.09 127.40 540.49 450.56 39.40 250.21 38.50 1,710.65

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Consolidated financial statements

Buildings Buildings and Fixtures and Motor Temporary Construction Land decoration improvement equipment vehicle sales office in progress Total

Accumulated depreciation Balance as at 31 December 2008 - 62.45 24.48 204.17 24.51 121.91 - 437.52 Depreciation for the year - 11.41 15.71 48.49 13.66 39.33 - 128.60 Disposals/Write off - (6.80) - (7.41) (13.40) (5.18) - (32.79) Increase from business combination - - - 4.04 - - - 4.04 Transfer in - - 30.39 12.09 - - - 42.48 Balance as at 31 December 2009 - 67.06 70.58 261.38 24.77 156.06 - 579.85 Allowance for impairment loss Balance as at 31 December 2008 26.73 40.00 7.56 - - - - 74.29 Increase for the year 0.16 - - - - - - 0.16 Transfer in - - 40.72 - - - - 40.72 Balance as at 31 December 2009 26.89 40.00 48.28 - - - - 115.17 Net book value Balance as at 31 December 2008 95.58 31.59 221.57 117.79 14.26 60.64 1.37 542.80 Balance as at 31 December 2009 237.20 20.34 421.63 189.18 14.63 94.15 38.50 1,015.63

Depreciation for the year (included in administrative expenses) 108.4 2008 (Baht 5.16 million and Baht 3.25 million included in cost of medical spa and cost of hotel business, respectively, other than that included in administrative expenses)

2009 (Baht 4.14 million and Baht 4.06 million included in cost of 128.60 medical spa and cost of hotel business, respectively, other than that included in administrative expenses)

Separate financial statements

Buildings and Fixtures and Motor Temporary Construction Land improvement equipment vehicle sales office in progress Total

Cost Balance as at 31 December 2008 112.29 253.61 145.54 31.25 100.46 - 643.15 Purchases - 0.62 29.91 14.40 14.96 22.54 82.43 Transfer in 1.89 7.65 0.30 - 18.99 - 28.83 Disposals/Write off - - (5.27) (12.26) (30.22) - (47.75) Transfer out - - - - - (19.00) (19.00) Balance as at 31 December 2009 114.18 261.88 170.48 33.39 104.19 3.54 687.66 Accumulated depreciation Balance as at 31 December 2008 - 24.48 106.65 20.35 81.76 - 233.24 Depreciation for the year - 12.60 21.42 5.61 22.02 - 61.65 Disposals/Write off - - (5.27) (12.25) (5.18) - (22.70) Balance as at 31 December 2009 - 37.08 122.80 13.71 98.60 - 272.19 Allowance for impairment loss Balance as at 31 December 2008 26.73 7.56 - - - - 34.29 Balance as at 31 December 2009 26.73 7.56 - - - - 34.29 Net book value Balance as at 31 December 2008 85.56 221.57 38.89 10.90 18.70 - 375.62 Balance as at 31 December 2009 87.45 217.24 47.68 19.68 5.59 3.54 381.18

Depreciation for the year 2008 (Baht 3.25 million included in cost of hotel business other than that included in administrative expenses) 52.98

2009 (Baht 4.06 million included in cost of hotel business other than that included in administrative expenses) 61.65

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During the year 2008, Papanan Ltd. recorded allowance for impairment loss on buildings decoration amounting Baht 40 million.

As at 31 December 2009 and 2008, certain plant and equipment items of the Company and its subsidiaries have been fully depreciated but are still in use. The original cost of those assets amounted to approximately Baht 172.37 million and Baht 116.25 million, respectively (Separate financial statement: Baht 133.92 million and Baht 84.57 million, respectively).

As at 31 December 2009 and 2008, the Company and its subsidiaries had vehicles and equipment under finance lease agreements with net book values amounting to Baht 15.91 million and Baht 9.74 million, respectively (Separate financial statement: Baht 14.63 million and Baht 7.66 million, respectively).

As at 31 December 2009, the Company’s land and construction thereon which the netbook value amounted Baht 64.19 million, were mortgaged to secure loans from financialinstitutions (2008: Baht 67.25 million).

15. GOODWILL(Unit: Million Baht)


Goodwill 407.56 266.31 - -Less: Accumulated allowance for impairment loss (225.76) (63.29) - -Goodwill - net 181.80 203.02 - -Impairment loss for the year 162.47 63.29 - -

During the year 2008, the Company recorded differences between the cost of acquisition and the minority interest of Sansiri Venture Co., Ltd., Plus Property Venture Co., Ltd. and Plus Property Space Co., Ltd. amounting to Baht 266.31 million as goodwill. In addition allowance for impairment loss amounting to Baht 63.29 million and Baht 162.47 millionwas recorded during the year 2008 and 2009, respectively.

During the year 2009, the Company recorded goodwill from business combination of National Education Development Co., Ltd. amounting Baht 141.25 million, as discussed in Note 2.2 (h).

157

16. INTANGIBLE ASSETS(Unit: Million Baht)

Consolidated Separate financial financial statements statements Computer Computer Franchise fee Software Total Software

Cost 31 December 2008 11.52 85.36 96.88 59.98Purchase 1.95 12.77 14.72 11.94Increase from business combination - 0.38 0.38 -31 December 2009 13.47 98.51 111.98 71.92Accumulated amortisation 31 December 2008 4.63 62.28 66.91 48.09Amortisation for the year 6.27 10.16 16.43 7.79Increase from business combination - 0.17 0.17 -31 December 2009 10.90 72.61 83.51 55.88Net book value 31 December 2008 6.89 23.08 29.97 11.8931 December 2009 2.57 25.90 28.47 16.04Amortisation included in administrative expenses in income statement for the year2008 16.47 10.832009 16.43 7.79

17. LEASEHOLD RIGHTS (Unit: Million Baht)

Consolidated financial statements 2009 2008

Leasehold rights 175.65 126.59Less: Accumulated amortisation (95.01) (64.44)Leasehold rights - net 80.64 62.15Amortisation expenses for the year 5.59 5.37

As at 31 December 2009, the Company’s leasehold rights which the net book value amounted Baht 80.64 million were mortgaged to secure loans from financial institutions(2008: Baht 62.15 million).

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18. BILLS OF EXCHANGE AND PROMISSORY NOTES(Unit: Million Baht)


Bills of exchange and promissory notes Financial institutions 132.50 677.00 132.50 497.00 Companies and persons - 39.25 - -Total 132.50 716.25 132.50 497.00

As at 31 December 2009, interest on bills of exchange and promissory notes, which are not collateralised, carry interest at rates of 4.30 - 5.75 percent per annum (2008: 5.75 - 6.75 percent per annum).

19. LONG-TERM LOANSAs at 31 December 2009 and 2008, long-term loans presented below: -



Loans from financial institutions 8,544.03 8,297.39 5,351.80 4,083.25Less: Current portion of long-term loans (5,093.14) (4,038.31) (2,947.65) (1,484.42)

Net 3,450.89 4,259.08 2,404.15 2,598.83

Movements in the long-term loans account during the year ended 31 December 2009 are summarised below.


Consolidated Separate financial statements financial statements

Balance as at 1 January 2009 8,297.39 4,083.25Add: Additional borrowings 6,725.30 3,977.17Less: Repayment (6,478.66) (2,708.62)Balance as at 31 December 2009 8,544.03 5,351.80

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The details of long-term loans classified by the Company and its subsidiaries arepresented below.

Balance of long-term loans Interest rate Company’s name 2009 2008 per agreement Condition of payment Million Million Percent per annum Baht Baht Sansiri Plc. 5,352 4,083 MLR - 1.5% to Payments of principal are to be made MLR - 1% at a percentage of the value of property transferred to customers and full payment is to be made within 2014 Plus Property Co., Ltd. 983 1,948 MLR - 1.5% Payments of principal are to be made at a percentage of the value of property transferred to customers and full payment is to be made within 2012 Chanachai Ltd. 512 160 MLR - 1.5% to Payments of principal are to be made MLR - 1% at a percentage of the value of property transferred to customers and full payment is to be made within 2013 Sansiri Land Ltd. - 11 MLR - 1% Payments of principal are to be made at a percentage of the value of property transferred to customers and full payment is to be made within 2009 Red Lotus Properties Ltd. 13 25 MLR - 0.75% Payments of principal are to be made at a percentage of the value of property transferred to customers and full payment is to be made within 2010 Arnawat Ltd. 196 207 MLR - 1.75% Payments of principal are to be made at a percentage of the value of property transferred to customers and full payment is to be made within 2014 Piwattana Ltd. 525 578 MLR - 1.75% to Payments of principal are to be made MLR - 0.5% at a percentage of the value of property transferred to customers and full payment is to be made within 2013 Sansiri Venture Co., Ltd. 806 953 MLR - 1.25% to Payments of principal are to be made MLR - 0.5% at a percentage of the value of property transferred to customers and full payment is to be made within 2011 Sansiri Guernsey 141 - Basic rate + 3% Full payment is to be made within (2009) Limited 2012 Plus Property Space - 307 MLR - 1.75% to Payments of principal are to be made Co., Ltd. MLR - 1.5% at a percentage of the value of property transferred to customers and full payment is to be made within 2011 Papanan Ltd. 16 25 MLR + 1% Monthly installment repayment amounting Baht 790,000 and full payment is to be made within 2011 Total 8,544 8,297

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As at 31 December 2009 and 2008, the long-term credit facilities of the Company and its subsidiaries which have not yet been drawn down amounted to Baht 10,931 million and Baht 12,942 million, respectively (Separate financial statement: Baht 6,220 million and Baht 6,343 million, respectively).

Land and constructions of projects of the Company and its subsidiaries, leaseholds and investments in available-for-sale securities of the Company are pledged as collaterals for loans obtained from financial institutions.

Loans agreements contain certain covenants and restrictions, such as dividend payment, capital increase and decrease, loans guarantees, change in directors and maintenance of a debt to equity ratio.

20. PROVISIONSThese comprise the following:



Short-term provisions: Home care warrantee 60.22 33.93 28.24 20.50Loss from modification of condominium - 8.57 - 0.94Law suits 7.08 4.14 2.95 -Total 67.30 46.64 31.19 21.44Long-term provisions: Compensation for Housing Estate Juristic Persons 34.46 34.88 26.72 23.08

21. FINANCE LEASE PAYABLES(Unit: Million Baht)


Finance lease payables 16.74 6.24 15.52 3.97Less : Deferred interest (1.56) (0.68) (1.48) (0.44)Net 15.18 5.56 14.04 3.53Less : Current Portion (3.19) (4.09) (2.22) (3.21)Finance lease payables - net of current portion 11.99 1.47 11.82 0.32

161

The Company has entered into the finance lease agreements with leasing companies for rental of motor vehicles and equipment for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms of the agreements are generally between 3 and 5 years.

As at 31 December 2009, a reconciliation between future minimum lease payments required under the finance lease agreements and present value of future minimum lease payments were as follows:


Consolidated financial statements Less than 1 year 1 - 5 years Total

Future minimum lease payments 3.85 12.89 16.74Deferred interest expenses (0.66) (0.90) (1.56)Present value of future minimum lease payments 3.19 11.99 15.18


Consolidated financial statements Less than 1 year 1 - 5 years Total

Future minimum lease payments 2.81 12.71 15.52Deferred interest expenses (0.59) (0.89) (1.48)Present value of future minimum lease payments 2.22 11.82 14.04

22. INVESTMENTS IN AVAILABLE-FOR-SALES SECURITIES / OTHER PAYABLE - PROPERTY FUNDInvestments in available-for-sales securities



Baan Sansiri Property Fund 111.64 111.64 111.64 111.64Others 20.30 - 20.30 -Total 131.94 111.64 131.94 111.64Less : Unrealised loss on change in value of investments (2.23) (2.23) (2.23) (2.23)Net 129.71 109.41 129.71 109.41

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In September 2005, the Company entered into an agreement with Baan Sansiri Property Fund (“the Property Fund”) to sell the Property Fund its 25-unit Baan Sansiri Project, a project for rent of the Company with booked value of approximately Baht 608 million for a total of Baht 850 million (including VAT). The Company has agreed to manage the project and has guaranteed the Property Fund rental totaling Baht 70 million per year. If rental revenues and property management charges received by the Property Fund from such properties are less than the guaranteed rental revenue, the Company is to compensate to the Property Fund for the shortfall. However, if rental revenue and property management charges total more than the guaranteed rental revenue, the excess amount belongs to the Company.

The Company has granted Baan Sansiri Property Fund put options to sell back which it invested to the Company, either in whole or in part, (in case of a partial sale, the Property Fund has to sell the land in plots, together with buildings/construction and all furniture and fixtures thereon) as the Property Fund deems appropriate, or to sell them to other companies or individuals on the fifth anniversary of the date ownership was transferred (“sell-back-date”).

The Company has recognised the above sales as loan from the Property Fund. As at 31 December 2009, the Company holds a 12.9 percent interest in the Property Fund (2008: 12.90 percent). The fair value of such investment, Baht 109.41 million (2008: Baht 109.41million) is recorded under “Long-term investments in available-for-sales securities”.

During the current year, the Company made net rental payment of Baht 28.10 million to the Property Fund (2008: Baht 21.58 million).

As at 31 December 2009 and 2008, investment in the Property Fund was pledged to secure loans obtained from a financial institution.

23. UNSECURED DEBENTURES(Unit: Million Baht)

Consolidated/Separate financial statements

Debentures, at face value 1,000.00 Less: Transaction costs (8.64) Debentures, net 991.36

On 4 June 2009, the Company issued 3 - year debentures of Baht 1,000 million with 6.25% coupon rate payable quarterly. The debentures consisted of 1,000,000 units at face value of Baht 1,000 each. They are unsecured, issued with a registered certificate, unsubordinated and have debenture holder’s representative.

163

Under rights and responsibilities of debenture issuer, the Company has to comply with certain covenants and restrictions included maintenance of a debt to equity ratio of consolidated financial statements with no excess of 2:1 along with debentures’s period.

24. SHARE CAPITAL 24.1 The reconciliation of registered shared capital of the Company for the years ended 31 December 2009 and 2008 is as follows: -


Date of registration of increase (decrease) in capital with the Par value No. of shares Amount Ministry of (Baht) (Shares) (Baht) Commerce

Registered share capital Balance as at 31 December 2007 4.28 4,494,970,052 19,238,471,823 The Annual General Meeting of the Company’s shareholders on 29 April 2008 Cancel registered shares set aside for the exercise of the Company’s ESOP#2 LOT 3 warrant, which expired on 14 March 2007 4.28 (75,782) (324,347) 12 May 2008Balance as at 31 December 2008 4.28 4,494,894,270 19,238,147,476 The Annual General Meeting of the Company’s shareholders on 29 April 2009 Cancel registered shares set aside for the exercise of the Company’s ESOP#4 warrant, which expired on 14 July 2008 4.28 (22,131,232) (94,721,673) 19 May 2009The Extraordinary Meeting of the Company’s shareholders on 6 November 2009 Decrease registered share capital (736,500,000) (3,152,220,000) 19 November 2009Balance as at 31 December 2009 4.28 3,736,263,038 15,991,205,803

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24.2 The Extraordinary Meeting of the Company’s shareholders No. 1/2009 on 6 November 2009 passed the following significant resolutions:

1. Approved the issue and offer of 1,473,000,000 new ordinary shares (under approval by resolution of the Extraordinary Meeting of Shareholders No. 1/2007, held on 18 January 2007) through a private placement. The shares may be allotted and offered in a single or several tranches at prices not less than Baht 4.28 per share, and not less than 90 percent of the market price of the Company’s share, calculated in accordance with the relevant rules and regulations, prior to the date of the private placement offer.

2. Approved amendments to the issue and offering of warrants to existing shareholders of the Company, which were approved by resolution of the Annual General Meeting of Shareholders No.14/2009 held on 29 April 2009 but have not yet been issued and offered, and related matters, as follows:

2.1 Cancel plans to issue and offer warrants to existing shareholders of the Company, and the allotment of 1,473,314,346 shares to be reserved for the exercise of these warrants. 2.2 Approve a first issue of 736,814,346 ordinary shares warrants (“SIRI-W1”) to the Company’s existing shareholders in proportion to their share holdings, without charge in a ratio of 1 warrant for every 2 existing ordinary shares and with an exercise price of Baht 5.20 per share. In this regard, subscribes to the newly issued shares offered for sale by private placement (in item 1 above) will not be eligible to receive warrants under this scheme. 2.3 Allot 736,814,346 new ordinary shares (approved by resolution of the Extraordinary Meeting of Shareholders No. 1/2007 held on 18 January 2007) to be reserved for the exercise of the SIRI-W1 warrants.

3. Approved a reduction in the registered capital of the Company from Baht 19,143,425,803 to Baht 15,991,205,803, by canceling 736,500,000 registered but unissued shares. After the cancellation of these shares the registered capital of the Company of Baht 15,991,205,803 will comprise 3,736,263,038 shares with a par value of Baht 4.28 per share. The Company registered the change in registered capital on 19 November 2009.

165

25. LOSS FROM MODIFICATION OF CONDOMINIUMDuring the first and the second quarter of 2008, the Public Works Department ordered the Company and its subsidiaries to modify condominiums which differed from plans subjected to approve in accordance with Building Control B.E. 2522. As a result, the subsidiaries reversed sales and cost of project sales previously recognized in the income statement for the year ended 31 December 2007, including the write off of cost of unused property development to expenses. In addition, the Company and subsidiaries recorded provision for the cost of modifying the condominiums and compensation together with interest as a result of termination of contracts that subsidiaries have to pay to customers. The expenses are presented under “Loss from modification of condominium” in the income statement as presented belows:



Reversal of sales and cost of project sales previously recognised - 49.76 - -Write-off cost of unused property development to expenses - 249.93 - 15.92Provision for the cost of modifying the condominiums - 103.04 - 4.00Provision for compensations and interest from termination of contracts - 25.90 - -Total loss from modification of condominium - 428.63 - 19.92

26. STATUTORY RESERVEPursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company isrequired to set aside to a statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of theregistered capital. The statutory reserve is not available for dividend distribution.

27. EARNINGS PER SHAREBasic earnings per share is calculated by dividing the net income for the year by the weighted average number of ordinary shares in issue during the year.

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28. EXPENSES BY NATURESignificant expenses by nature are as follows:



Purchase of land and payments in construction costs 10,219.39 11,788.70 5,688.33 6,274.74Changes in property development for sales 1,905.53 (2,285.43) (66.31) (1,381.26)Salary and wages and other employee benefits 707.87 673.36 586.97 377.39Depreciation 204.68 200.45 106.06 100.43Amortisation of intangible assets 16.42 16.47 7.79 10.83Provision for home care warrantee 70.02 33.89 35.14 16.57Rental expense 41.48 55.30 15.29 13.58Bad debts and doubtful accounts (5.13) 9.59 (0.89) (1.73)

29. PROVIDENT FUNDThe Company, subsidiaries and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The Company, subsidiaries and its employees contributed to the fund monthly at the rate of 5-12 percent of basic salary. The fund, which is managed by Kasikorn Asset Management Company Limited, will be paid to employees upon termination in accordance with the fund rules. During the year 2009 and 2008, the Company and its subsidiaries contributed Baht 35.06 million and Baht 33.55 million, respectively, to the fund (Separate financial statement: Baht 24.58 million and Baht 16.57 million, respectively).

30. DIVIDEND PAIDDividends of the Company which were declared in 2009 and 2008 consist of the following: -

(Unit: Million Baht) Total Dividend Date of Dividends Approved by dividends per share dividend payment

Final dividends on 2007 earnings The Annual General Meeting 338,934,599(1) 0.23 28 May 2008 of the shareholders on 29 April 2008

Final dividends on 2008 earnings The Annual General Meeting 442,088,608(2) 0.30 28 May 2009 of the shareholders on 29 April 2009

167

(1) Actual dividend paid amounted Baht 338,922,598 due to there were some shareholders who did not has right to receive dividends.(2) Actual dividend paid amounted Baht 442,079,444 due to there were some shareholders who did not has right to receive dividends.

31. COMMITMENTS AND CONTINGENT LIABILITIES 31.1 Capital commitments As at 31 December 2009 and 2008, the Company and its subsidiaries have the following capital commitments: - a) The Company and its subsidiaries had commitments of Baht 3,529.48 million and Baht 5,183.70 million, respectively, under project construction agreements, decoration agreements, advisory service agreements and system development agreements (Separate financial statement: Baht 1,460.73 million and Baht 1,810.62 million, respectively).

b) The Company and its subsidiaries has commitments of Baht 972.93 million and Baht 580.93 million, respectively, under land and condominium units purchase agreements (Separate financial statement: Baht 586.65 million and Nil, respectively).

31.2 Operating lease commitments a) The Company has entered into several lease agreements in respect of the lease of office building space, motor vehicles and equipment. The terms of the agreements are generally between 3 and 4 years.

As at 31 December 2009, future minimum lease payments required under non-cancellable operating leases contracts were as follows.


Consolidated financial Separate financial statements statements Within one year 23.33 1.85 1 to 5 years 8.15 1.74 Total 31.48 3.59

b) The Company and subsidiaries had commitments of Baht 23.61 million in relation to advertising and public relations for the projects (Separate financial statement: Baht 14.12 million).

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c) The significant long-term lease agreements are as follow: -! ! "! #$%!&'()*+,!%+-%.%/!0+-'!123,%*.!4'+-.*4-!-'!5%*6%!5*+/!7'.!4'+6-.84-0'+! from an individual, covering the period between 1 January 2000 and 31 December 2014, for a total of Baht 54 million. Payment of rental is made on an annual basis, according to the following details:- - 1st to 5th year Baht 3.0 million per annum - 6th to 10th year Baht 3.6 million per annum - 11th to 15th year Baht 4.2 million per annum

! ! "! &$*+*4$*0! 90(0-%/! %+-%.%/! 0+-'! *! :;3,%*.! 5*+/! .%+-*5! *<.%%(%+-!=0-$! the Royal Palace Office for construction of a condominium for the Baan Sansiri Project, covering the period from 1 November 1993 to 31 October 2023. Total amounts to Baht 117.70 million. On the agreement date, Chanachai Limited made an initial payment of Baht 30 million and the remainder is to be paid over the period of 30 years as stipulated in the agreement.

! ! "! >?@?A?! B*+*<%(%+-! &'()*+,! 90(0-%/! %+-%.%/! 0+-'! *! 5*+/! .%+-*5! agreement with the Crown Property Bureau in order to construct buildings and structures on such land. The agreement is for 30 years, from 16 September 2002, and the total rental payable is approximately Baht 88.04 million. The subsidiary paid this rental in full in July 2004.

! ! "! #$%! &'()*+,! %+-%.%/! 0+-'! *+! *<.%%(%+-! -'! .%+-! C805/0+<! 6)*4%! 7.'(! a related company for use as an office and for sub-lease for a period of 30 years from 1 June 1994 to 31 May 2024. On the agreement date, the Company paid the rental in a single payment of approximately Baht 548.57 million. At the end of the contract, the Company must return the rented space to the lessor and is not entitled to make any demands on the lessor.

31.3 Bank guarantees As at 31 December 2009 and 31 December 2008, there were the outstanding bank guarantees for Baht 1,067.46 million and Baht 540.82 million, respectively, issued by the banks in respect of requirements of the Company and subsidiaries arising in the normal course of business. These included letters of guarantee to guarantee contractual performance regarding preparation and maintenance of public utilities, public services and land improvement and to guarantee electricity use (Separate financial statement: Baht 515.42 million and Baht 294.51 million, respectively).

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31.4 Litigations The Company and its subsidiaries have outstanding litigations regarding of breach of agreements to purchase and to sell and transgression. The total damages are Baht 12.52 million (2008: Baht 18.90 million). However, the Company and subsidiaries are in the process of bringing disputes and be cause such litigations are not yet finalised so that the Company and its subsidiaries do not record such estimated losses to accounts.

32. FINANCIAL INFORMATION BY SEGMENTThe Company and its subsidiaries’ main business is property development with its properties consisting of land and housing projects, residential condominium projects, serviced apartments for rent, and office buildings for rent; the provision of building management service and real estate brokerage; and the other provision of other services (hotel, medical spa and education business). The Company and its subsidiaries operatein the single geographic area of Thailand.

The financial information of the Company and its subsidiaries are divided into three main segments: real estate business, building management and real estate brokerage, and other services (hotel, medical spa and education business). The details presented in the consolidated income statements for the years ended 31 December 2009 and 2008 are as follows:-

(Unit: Million Baht) Building management and real estate Hotel, spa Real estate brokerage and education Eliminated Total Subsidiaries 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Revenues from external customers 16,858.03 14,633.15 376.55 325.62 114.37 78.59 - - 17,348.95 15,037.36 Inter segment revenues 34.86 10.08 227.81 248.95 0.98 2.27 (263.65) (261.30) - - Total revenue 16,892.89 14,643.23 604.36 574.57 115.35 80.86 (263.65) (261.30) 17,348.95 15,037.36 Operating income (loss) 4,458.76 3,655.75 134.64 130.83 (1.79) 8.52 - - 4,591.61 3,795.10 Other income 148.34 140.32 Common expenses (1,761.86) (1,625.00) Income before interest expenses and income tax 2,978.09 2,283.42 Loss on diminution in value of property development and impairment loss on land, building and equipment (130.97) (56.59) Loss on impairment of goodwill, investments and loans to subsidiaries (162.48) (63.29) Loss from modification of condominium - (428.63) Finance costs (123.67) (91.76) Corporate income tax (951.31) (726.41) Net income 1,609.66 916.74

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The financial information in the consolidated balance sheets as at 31 December 2009 and 2008 by real estate business, building management and real estate brokerage business, and other services (hotel, medical spa and education business) is as follows:-


Building management and real estate Hotel, Spa Real estate brokerage and Education Total 2009 2008 2009 2008 2009 2008 2009 2008 Property development for sale - net 13,565.73 15,517.96 - - - 13,565.73 15,517.69 Property development for rent - net 1,348.80 1,260.76 - - - - 1,348.80 1,260.76 Property development for rent and sale - net - 261.60 - - - - - 261.60 Hotel, Spa and Education - net - - - 602.86 135.96 602.86 135.96 Land, building and equipment - net 412.77 406.83 Other assets 9,444.49 5,909.20 Total assets 25,374.65 23,492.04

33. FINANCIAL INSTRUMENTS 33.1 Financial risk management The Company and its subsidiaries’s financial instruments, as defined under Thai Accounting Standard No. 32 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable, loans, investments, short-term and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below.

Credit Risk The Company and its subsidiaries is exposed to credit risk primarily with respect to trade accounts receivable, loans, notes and other receivable. The Company manages the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivable, loans, other receivables and notes receivable as stated in the balance sheet.

Interest rate risk The Company and its subsidiaries’ exposure to interest rate risk relates primarily to its cash at banks, debentures and long-term borrowings. However, since most of the Company and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.

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Separate financial statements Fixed interest rate Effective Within Floating Non- interest interest rate one year 1 - 5 years At call interest rate bearing Total (% p.a.) Financial Assets - Cash and cash equivalent (excluding cash) - - - 1,825.65 28.17 1,853.82 0.10 - 1.25 - Short-term investments 28.41 - - - - 28.41 0.50 - 3.25 - Deposits at financial institutions with restrictions 6.71 - - - - 6.71 0.50 - 3.25 - Short-term loans to related parties - - 3,262.80 - - 3,262.80 5.50 35.12 - 3,262.80 1,825.65 28.17 5,151.74 Financial liabilities - Bills of exchange and promissory notes 30.00 - - 102.50 - 132.50 4.30 - 5.75 - Short-term loans from related parties - - 15.30 - - 15.30 1.50 - Long-term loans - - - 5,351.80 - 5,351.80 Note 19 - Debentures - 991.36 - - - 991.36 6.25 30.00 991.36 15.30 5,454.30 - 6,490.96

Significant financial assets and liabilities as at 31 December 2009 classified by type of interest rates are summarized in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.

Consolidated financial statements Fixed interest rate Effective Within Floating Non- interest interest rate one year 1 - 5 years At call interest rate bearing Total (% p.a.) Financial Assets - Cash and cash equivalent (excluding cash) 0.09 - - 3,243.21 140.36 3,383.66 0.10-1.25 - Short-term investments 44.13 - - - - 44.13 0.50-3.25 - Deposits at financial institutions with restrictions 42.42 - - - - 42.42 0.50-3.25 - Short-term loans to related parties - - 19.70 - - 19.70 5.50 86.64 - 19.70 3,243.21 140.36 3,489.91 Financial liabilities - Bills of exchange and promissory notes 30.00 - - 102.50 - 132.50 4.30-5.75 - Long-term loans - - - 8,544.03 - 8,544.03 Note 19 - Debentures - 991.36 - - - 991.36 6.25 30.00 991.36 - 8,646.53 - 9,667.89



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Foreign currency risk The Company and its subsidiaries’ exposure to foreign currency risk arise mainly from purchase of goods and service that are denominated in foreign currencies. Since liabilities denominated in foreign currencies is immaterial and due in short period, the Company and its subsidiaries do not use any derivatives to manage such risk.

33.2 Fair values of financial instruments Since major financial assets of the Company and its subsidiaries are short-term in nature and, loans carry interest rate approximately to the market rate, the fair value of financial instruments is presented as the amount stated in the balance sheet.

Fair value represents the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction.

The fair value is determined by reference to the market price of the financial instruments or by using an appropriate valuation technique, depending on the nature of the instrument.

34. CAPITAL MANAGEMENTThe primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern.

According to the balance sheet as at 31 December 2009, the Group’s debt-to-equity ratio was 1.51:1 (2008: 1.62:1) and the Company’s was 1.11:1 (2008: 0.96:1).

35. SUBSEQUENT EVENTOn 20 January 2010, the Company issued warrants representing rights to purchase ordinary shares of the Company No.1 (SIRI-W1) which is in name certificated form and transferable and approved by the Extraordinary Meeting of the Company’s shareholdersNo. 1/2009. The details of the Warrants are summarized below.

The number of the Warrants approved to issue : 736,814,346 units

The number of the Warrants allocated : 736,792,026 units

Allocated to : The existing shareholders of the Company at the ratio of 2 existing ordinary shares to 1 unit of warrant.

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Price per unit : Baht 0 per unit

Rights of the Warrants : 1 unit of Warrant per 1 share, at a price of Baht 5.20 per share

Term of the Warrants : 5 years from the issuance date

36. RECLASSIFICATIONSCertain amounts in the financial statements for the year ended 31 December 2008 have been reclassified to conform to the current year’s classification but with no effect to previously reported net income or shareholders’ equity. The reclassifications are as follows:


Consolidated Separate financial statements financial statements As As As As reclassified previously reclassified previously reported reported

Balance sheet Accrued expenses 197.88 232.76 143.07 166.16Long-term provisions 34.88 - 23.09 -Income statement Cost of business management 194.79 134.10 - -Cost of spa business 56.85 38.36 - -Administrative expenses 1,080.84 1,299.93 540.83 671.39Management benefit expenses 139.91 - 130.56 -Dividend income 8.21 - 8.21 -Other income 100.87 109.08 57.04 65.25Cash flow statement Cash flows from operating activities Property development for sale (12,172.97) (12,018.09) - -Cash flows from financing activities Interest paid (487.23) (642.11) - -

37. APPROVAL OF FINANCIAL STATEMENTSThese financial statements were authorised for issue by the Company’s Board of Directors on 2 March 2010.

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SUMMARY OF TRANSACTIONS SPECIFIED ACCORDING TO THE FORM 56 – 2 IN ANNUAL REPORT 2009Message from Chairman 5Message from the Chief Executive officer 8 Report on Corporate Governance by the Audit Committee 161. General Information 1.1 Company 19 1.2 Other Companies in which the Company held over 10% 19 1.3 Other References 242. Summary of the Company’s Financial Information 2.1 Financial Information 3 2.2 Financial Ratios 993. Type of Business 3.1 Overall Business Operation of the Company and its Subsidiaries and Divisions of Operations within the Group 25 3.2 Revenue Structure 28 3.3 Milestone during the Year 30 3.4 Type of Products and Services 33 3.5 Marketing and Competition 35 3.6 Trend of Property Market in the Future 38 3.7 Product Procurement 444. Risk Factors 465. Shareholding Structure and Management 5.1 Shareholders 53 5.2 Management 5.2.1 Management Structure 55 5.2.2 Selection of Directors and Management 65 5.2.3 Management Remuneration 65 5.2.4 Corporate Governance 68 5.2.5 Supervising the Use of Inside Information 72 5.2.6 Internal Controls 83 5.2.7 Detail on the Information of the Directors and Management 80 5.3 Dividend Policy 546. Inter-Related Transaction 987. Management Discussion and Analysis 1008. Financial Statement 112

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Sansiri PLC.16th Floor, Siripinyo BuildingSri Ayutthaya Road, Rajthevi, Bangkok 10400T. (662) 201 3905-6 F. (662) 201 3904

Annual Report 2009

Real Estate

Transcript of Annual Report 2009