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TRANSLATION

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LETTER OF BOARD OF DIRECTORS

Navatanee Course has policy of providing services mainly for members. For this reason, even though the was affected by the political and economic crisis which has not improved as expected, the profit of the golf course is still in satisfactory compared to the same businesses. It is because most of members and members’ guests still use the service as usual. And some of members have increased the frequency of round of golf. However, the number of overall golfers has decreased from the golfers who came from abroad, it makes the golf course revenues in the year 2014 decreased approximately 7% compared to the year 2013. According that, total revenues amounted to 174.92 million Baht, decreased from the past year 10.17 million Baht, with total cost 88.09 million Baht, pre-tax profit 86.83 million Baht, and profit after tax 71.33 million, decreased 7.66 million Baht and profit 3.48 Baht per share.

Board of Directors and Management committed to maintain the reputation of Navatanee Golf Course in international standard. In addition, ten thousands of trees in Navatanee are like a huge source of oxygen of Bangkok. It is a one of policies to maintain the plant and it is a proud of Navatanee Golf Course in which the business can bring the environmental benefit to local communities which is very rare to find nowadays. Board of Directors, chief executives and operational staff members would like to thank all shareholders for putting their trusts in the organization, which also helped contribute to the great achievement of Navatanee Golf Course, adhering to the ethical management in the organization, particularly to maintain benefits for minor shareholders.

(Mr. Sukum Navapan) Chairman

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee of City Sports & Recreation Public Company consists of 4 independent directors, namely; Mr. Chackchai Panichapat, Mr. Nibhond Charanvas, General Paiboon Kanchanapiboon and Mr.Punn Kasemsup, which Mr. Chackchai Panichapat is the person who has adequate expertise and experience to review the reliability of this Company’s financial statements.

The Committee had performed its duties as the Charter of the Audit Committee which approved by the Board of Directors of the Company, summarized as follows:

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 or other unit in charge of an internal audit.

3. To review the Company’s compliance with the law on securities and exchange, the Exchange’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 Exchange’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 report which must be signed by the audit committee’s chairman and consist of the information at least as the Notification of the Stock Exchange of Thailand.

7. To perform any other act as assigned by the Company’s board of directors, with the approval of the audit committee.

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During 2014, the Committee held 5 meetings with the internal auditor, the management and other units of the Company which a meeting was held with the Company’s audit as follows: The Audit Committee Member The number of Meeting Attendance/Total Meeting 1. Mr. Chackchai Panichapat 5/5 2. Mr. Nibhond Charanvas 4/5 3. General Paiboon Kanchanapiboon 5/5 4. Mr. Punn Kasemsup 5/5 The Committee had considered the quarterly and annual financial statements relating to the process of financial statements preparation to obtain that they were accurate, complete, reliable, adequate disclosure and timely with the Company’s auditor, so as to ensure that the Company had prepared the financial statements in accordance with the Generally Accepted Accounting Principles; and reviewed the Connected Transactions or the transactions that may lead to conflicts of interests between the Company with related company, so as to ensure that such transactions were reasonable and for the highest benefit of the Company. In the Committee’s opinion, the Company’s auditor is the independent person who performs the audit properly and the Company’s financial statements are accurate, complete and reliable. In addition, the Committee had reviewed and revised the internal control system with the internal auditor, so as for the Company obtained the adequate internal control system for its business and achieves the objectives of internal control as far as efficiency and effectiveness of operation, utilization of resources which includes due care of assets, prevention or reduce the potential error, damage, leakage, waste or fraud; the reliability of the financial reports; and the compliance with the laws on securities and exchange, the Exchange’s regulations and the laws relating to the Company’s business. The Committee also had oversight the internal audit by reviewed the Company’s risk-based annual internal audit plan and reviewed its monthly result by recommendations given and follow up the Company’s corrections on the significant findings as the internal audit report, so as to bring about the good corporate governance and adequate internal control system. In the Committee’s opinion, the Company has adequate internal control system and compliance with the laws on securities and exchange, the Exchange’s regulations and the laws relating to the Company’s business. The Committee had performed its duties as the Charter of the Audit Committee by exercising independence and applying its collective commercial expertise and experience and emphasizes on the internal control system and risk management, so as for the Company to obtain the good corporate governance which value added it and due care of the interests of the Company’s shareholders and other stakeholders.

(Mr. Chackchai Panichapat) Chairman of the Audit Committee

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1. Policy and Nature of Business

The City Sports and Recreation Public Company Limited was established in 1970 with registered capital of Bt20 million by Mr. Sukum Navapan, Chief Executive Officer of Navatanee Group. The objective was to build Navatanee Golf Course, an 18-hole and 72- golf course on the area of 400 rai. The golf course was designed by one of the world-renowned golf course designers named Robert Trent Jones, Jr. Navatanee Golf Course was renowned for the Thailand’s first world-class private golf course that was designed by a foreign world-class designer. Officially opened in 1973, Navatanee Golf Course was honored by the International Golf Federation to host the 23rd Golf in 1975, which aimed to reflect an ‘exclusive golf course’ image while sustaining its international standards to ensure the highest satisfaction to all clients varying in families, regular members and their clients who mostly were notable people in trading business and high-profile society. For the quality services provided by the golf course, the company had allocated the most convenient time for the golfers to play a complete round of 18 holes within 4 hours regardless of the number of golfers in each game, particularly during the weekends and holidays. Regularly, the company was committed to stringent policies and effective management methods, which not only helped maintain the company’s long- standing reputation but also sustained good corporate governance substantially.

The company had no business subsidiaries and affiliates as well as hidden relationship with any major shareholders. Over the past three years, there was no major change in structural management or shareholder notification.

2. Nature of business: Revenue structure

Navatanee Golf Course’s major business was to provide a quality golf course and other premium facility services consisting of , golf store, caddy, locker room and restaurant. Opening for service from 5.30 am to 6pm (time is changeable due to the weather condition of each season), the golf course was committed to providing quality services in accordance with international standards focusing mainly on families and clients of regular members. After enhancing the service competency in August 2012, the golf course had successfully introduced its new sports club equipped with a wide variety of sports facilities and recreational services including swimming pool, gym, tennis court, sauna and Thai massage. The modern sports club is adjacent to the golf course, where Navatanee was the one who was responsible for all costs of building renovation and sport equipment allocation. Aside from the increasing services, the existence of the modern sports club could also boost greater image and revenue for the company. 6

The company’s major revenue came from golf course service, membership fee, entrance fee and transfer of membership, green fee, golf cart rental, restaurant, sports club, interest and dividend, which could be concluded for over the past three years as follows.

Unit : Thousand baht 2014 2013 2012 Items Revenue % Revenue % Revenue % Revenue from golf course services Green Fee 56,274 32.17 63,413 34.26 56,446 33.30 Membership Due 38,590 22.07 37,865 20.47 37,808 22.31 Revenue from Rental of Golf Cart 23,728 13.57 25,964 14.03 25,568 15.08 Others 4,229 2.42 4,590 2.48 3,902 2.30 Revenue from Golf Course Service 122,821 70.22 131,832 71.23 123,724 72.99 Restaurant Income 25,982 14.85 27,715 14.97 26,008 15.34 Services Sport Club Income 6,675 3.83 4,988 2.70 2,364 1.40 Dividend Income 9,643 5.51 12,313 6.65 13,783 8.13 Interest Income 7,622 4.36 4,751 2.57 2,541 1.50 Others 2,176 1.24 3,490 1.89 1,093 0.64 Total Revenues 174,919 100.00 185,089 100.00 169,513 100.00

2.1 Characteristics of products and services (referring to revenue structure)

The golf course service which is identified by the revenue structure is related to business operation. The weather which will be generally influenced through operation more or less depends on its location. Navatanee golf course is mostly affected in rainy season. Therefore, if during few days deluged rain, the players cannot play golf, it can unfortunately predict the decrease of the green fee package. However, rainy season in Bangkok would not be impacted to our service since it is short raining period and quite good drainage. For the relating revenue structure composed of golf course fee (Green fee), membership fee, golf cart rental, restaurant revenue, Sport club revenue, income from interest and dividend, and other incomes. The result in past 2 years is followed

1. Revenue received from field maintenance fee (green fee). This depended on the number of golfers which could be varied by seasons. The golf course business generally faced a short slump in the rainy season. However, in order to boost sales, the company had issued an introduction letter to its members to recommend services available at the golf course to other clients, in which members were not required to 7

accompany those clients, particularly on weekdays. This marketing strategy provided convenience for members while stimulating sales of green fee. Non-members of the golf course were considered as targeted golfers who were required to pay for green fee (spouse and children of a member aged between 15-21 years old).

2. Revenue received from membership fee. Members would not have to pay for green fee. However, members were required to pay a monthly fee charged by a 6-month term in advance or twice a year which ensured a certain amount of payment.

3. Revenue received from golf cart rental. More than 90% of all golfers preferred to rely on golf cart service.

4. Revenue received from restaurant business. A majority of clients were golfers. Several clients brought their

guests to the restaurant to enjoy a fine dining. Meanwhile, some clients were those who dwelled in the

Navatanee Village.

5. Revenue received from the sports club business. Officially opened in August 2012, the modern sports club

was committed to pursuing similar management policies of Navatanee Golf Course.

6. Revenue received from interest and dividend.

7. Other revenues came from golf membership registrars, transfer of membership and entrance fee.

2.2 Marketing and competition

In 2014, the economic has not improved as expected and the political crisis affected the decreasing of number of golfers, due to some golfers decreased golf activities. Moreover, foreign golfers, especially, Japanese golfers, who were the major clients, were affected by the decreasing of the Japanese yen currency. Consequently, the amount of golfers decreased comparing to the last year. Navatanee Golf Course had focused mainly on sales and marketing via members, families of members and guests of members, who mostly possessed residences in Thailand. In 2014, the course’s targeted clients which are members, families of members and guests of members, both Thai and foreign golfers, consistently played golf as usual, especially, members played more frequent. However, the total number of golfers decreased because of the decreasing of the number of guests of members, significantly, golfers who came from overseas. Thus, golf course policy aim to serve mainly the members so it did not has many effects to the course’s revenue. As a result, the golf course’s revenue 8 decreased 9.01 million Baht or 7% comparing to the last year. The company has had complete confidence in our reputation for a long-lasting golf course among foreign and domestic golfers with the superbly maintained golf courses, the quality of services as well as the golfers’ convenience and comfort will be our confident standpoints of services. In particular, a limitation on the number of golfers can play a round of 18 holes within time limit of 4 hours, while many other golf courses in Bangkok and boundaries may spend about 5- 6 hours, and the convenient location for traveling will make Navatanee Golf Course be the golf course that the golfers feel confident as in the past. For business competition, Navatanee Golf Course had placed a great emphasis on serving its members. Consequently, the same old groups of clients were expected. Clients varied from high-ranking Japanese executives to Thai business entrepreneurs. Apart from the notable corporate image, the golf course was also competitive in its existing locations which were easily accessible. Noticeably, clients had continued to support business operations of the golf course. It was needless to say that Navatanee Golf Course had no certain policy to compete with other business rivals even though a few golf course providers aimed to participate in the business combat, providing golf services and other facilities in a similar way. For the past year, the company was set to continue the implementation of original marketing strategy while maintaining Navatanee Golf Course’s notable corporate image which reflected market dominance as follows.

1. Navatanee Golf Course was renowned for the first-ever golf course in Thailand that was honored by the International Golf Federation to host the 23rd Cup in 1975. In addition, according to the US-based magazine named , June 1999 issue, Navatanee Golf Course was ranked first among 255 golf courses in Thailand for its quality services. By the end of 2004, the golf course was ranked first in Thailand, ranked second in ASEAN and ranked fourteenth in Asia (including Australia and New Zealand) for the best golf course, which was sponsored by Deutsche Bank. The golf course ranking was published in Asia’s Top 50 Golf Courses magazine accordingly.

2. The golf course was designed by Robert Trent Jones, Jr., an American golf course designer with world-

class talents. This helped boost greater image and reputation for Navatanee Golf Course.

3 This was considered as a long-established golf course in Thailand that focused mainly on environmental concerns by promoting the conservation of plants. Navatanee Golf Course was serenely surrounded by a large number of perennial plants. The tropical perennial plants could enhance natural beauty and helped reduce pollution in the location and communities nearby.

4 For the nature of services, Navatanee Golf Course had shifted its clear focus to boosting an image of ‘exclusive golf course’, facilitating all members, with several services offered to their families and guests as 9

well. Meanwhile, clients could be more comfortable to spend a full four-hour period for playing golf up to 18 holes, where some courses might take about 5-6 hours.

5 The beautiful and modern golf course was designed to serve competition challenges while maintaining the international standard quality. The company completely finished the renovation of 18 holes by the end of 1996. The original designer had reiterated his intention to maintain the golf course’s uniqueness of being the host of the 23rd Golf World Cup in 1975 while maximizing convenience and modernization with the use of golf carts. It was agreeable that modern golfers preferred to use golf carts.

6 Navatanee Golf Course was situated in the heart of the city, thanks to the rapid development and expansion of Bangkok. The golf course was easily accessible from several routes including Sukhumvit, Ploenchit, Rama IV and Silom by driving up the Rama IX Bridge, running across Srinakarin Road to the motorway (Bangkok-Chonburi). Reaching the outer ring road, it was required to turn left to Bangpa-in. After passing the Thap Chang toll gate, go straight through Seri Thai Road (next to Ramkhamhaeng Road) about 250 meters, Navatanee Golf Course was located on the right hand side (Seri Thai 59 Road). It took about 30 minutes from the aforementioned locations. The convenient access from the golf course to Suvarnabhumi Airport via Bangna-Trad Road and the motorway required only 20 minutes, which encouraged golfers to visit the golf course more comfortably and conveniently.

7 Navatanee Golf Course was the sole Thai golf course approved to be listed on the Stock Exchange of Thailand.

2.3 Allocation of products and services

The quality of the golf course was the most significant factor that golfers would take into consideration. However, other quality services were also expected to satisfy customers. As Navatanee Golf Course had introduced its business operations for more than 40 years and existing clients remained unchanged, mostly were business entrepreneurs and high-ranking executives, the golf course could maintain customer database to fully understand those targeted clients well. To highly satisfy the customers, the quality service had been divided into two major categories as follows. 1. Golf Course. Responsible staff was categorized in two sections.

1.1 Golf course maintenance. The golf course would always remain in good quality, suitable for playing in accordance with the international standards. The company had provided training programs for responsible staff while being able to employ technical experts to offer particular tips in maintaining the quality of the golf course. The company had completed the renovation of the entire 18 holes since 1996 while sustaining the most unique image of being the host of the 23rd Golf World Cup in 1975. Aside from the beautiful design and the 10 challenging aspect of golf competition, the company had also added the modern use of golf carts into its quality services. This helped increase the revenue for the golf course. 1.2 Quality services for golfers. Quality services included the booking of group practice sessions, the support of golf bag and equipment, the preparation of golf cart and caddy, together with other special cares when golfers were present at the golf course. Agreeably, the most dominant feature of the golf course was to encourage golfers to play up to 18 holes within a 4-hour period.

2. Quality services available at the sports club and restaurant. The company had appointed Dusit Princess Hotel Bangkok, an affiliate of Dusit Hotel Group, to provide effective hospitality management aiming for the highest satisfaction of the clients. In 2014, the company had approved a renovation project for male and female locker rooms, which were built in 1989. The renovation project would be carried out by a multi-disciplined firm of design professionals and consultants 49 Group Limited. The renovation of female locker room is completed while male locker room is under construction. The renovation of male locker room is expected to be completed in mid – year, however, the golf course is providing a normal operation as usual. According that, golfers can use locker room at sport club which is beautiful, modern and located adjacent to the clubhouse.

2.4 Work on progress (none)

3. Risk Factors Navatanee golf course which has being run this business for many years, has the stable financial security. This evidence is to maintain equalized ratio of capital structure. Moreover, the company was registered by Thai major shareholders, no other associated & subsidiary companies, which is convenient for operation and there has been dividend paid to the shareholders since 1998. In conclusion, the risk factors which mainly impact to company business are classified accordingly.

3.1 Possible risks that might cause impact to the company’s revenue Revenues of the golf course business generally depended on several significant circumstances including popularity of golf, time for each group practice session, weather conditions, locations, economic aspects and political situations. In early 2014, the economic condition has not improved and there is a political crisis and the promulgation of the martial law. Consequently, it affected the number of foreign golfers. However, some golfers, who familiar with Thailand including businessman, are still coming to Thailand and find an opportunity to play golf in Thailand. Golf courses in Thailand are interesting to the golfers and the price is not high so golfers can play golf throughout the year and also there are many prices to choose. However, Navatanee Golf Course had placed a great emphasis on serving its members whose mostly stay in Thailand. It is found that members play golf or more frequently play golf than the past year, however, the number of members’ guests is decreasing. According that, the revenue from golf course decreased 6.84%. 11

3.2 Risk factors that may impact the operation. To maintain international standards in the quality of the course, the golf course operation has to order imported fertilizers and chemical supplies, which also get some impact from foreign exchange rates, which may be affected by the foreign currency exchange rate. In addition, there are a small number of dealers in Thailand who set the fertilizer and chemical supply prices by themselves rather than depending on market mechanism. In 2014, the operating costs included: cost of golf course services, 28.40 million Baht; cost of sales in the restaurant, 20.60 million Baht; cost of sports club service 6.24 million Baht, and the cost of sales and administration, 32.83 million Baht. The total costs increased from the previous year by 1.34 million Baht.

3.3 Liquidity management The company had developed effective liquidity management by relying on the financial adequacy while making use of the remaining capital in the bond market, which guaranteed higher returns comparing to other local commercial banks. The company also generated an investment in the open-end fund market which provided returns in the form of dividends. To reduce investment risks, the company had wisely developed its financial planning by monitoring the directions of financial markets.

3.4 Administrative and management risk At 30 December 2014, the group of Mr. Sukum Navapan, the shareholder and the related person pursuant to the section 258 hold 15,344,865 company’s shares or equivalent to 74.85 % of the total shares sold. Mr. Sukum Navapan’s group can control most approvals in the shareholders meeting, for example remuneration of directors or asking for other approvals which need to be voted by majority of the shareholders. Except, the approvals which the laws or the company’s rules fixed to get vote amount of 3 from 4 parts in the shareholders meeting or any others which the group of Mr. Sukum Navapan and the related persons get benefit involved, in compliance with the requirements of the Securities and Exchange Commission and the Stock Exchange of Thailand, they will never have gotten right of any votes.

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4. General Information and others information

4.1 General information

Registered Office The City Sports and Recreation Public Company Limited Address 22 Navatanee Rd., Kannayao, Bangkok,10230. Registration no. 0107536000552 (Previous no. Bor Mor Chor 129) Telephone 0-2376-1818, 0-2376-1034-6 Fax 0-2376-1685 website: www.navatanee.com, E-Mail : [email protected]

Registered share capital 20,500,000 ordinary shares of Baht 10 each, in total amount of Baht 205,000,000 has issued and paid-up share capital

Share Registrar Thailand Securities Depository Co., Ltd. No. 62 The Stock Exchange of Thailand Building, 4th, 6th - 7th Floor, Ratchadapisek Road, Klongtoey,Bangkok 10110 Telephone : 0-2229-2800 Facsimile : 0-2359-1262-3

Certified Public Accountants List of certified public accountant for the year 2014 with audit fee Baht 290,000 and no other payment are as follows. 1. Quarter 1, the S.K. Accountant Service Co., Ltd. subsidiaried Miss Chantra Wongsriudomporn , Certified Public Accountant No. 4996. No.128/150-153 Phayathai Plaza Building, 14th floor, Phayathai road, Thung- Phayathai, Ratchthevee, Bangkok, 10400 Telephone : 0-2214-6465-70 Facsimile : 0-2215-4772 and / or 2. Quarter 2, 3 and year-end, the SP Audit Co., Ltd. subsidiaried Miss Susan Eiamvanicha, Certified Public Accountant No. 4306. No.503/21 K.S.L Tower, 12th floor, Sriayudhaya road, Phayathai, Ratchthevee, Bangkok, 10400 Telephone : 0-2642-6172-4. For the year-end 2014, the auditor was Miss. Sasan Eiamvanicha.

Advisor or manager of management contract - Dusit Princess Srinakarin (Dusit Thani Group) Address at 583 Srinakarin Road, Nongbond, Pravej, Bangkok 10250 Telephone : 0-2721-8400 Facsimile : 0-2721-8432

4.2 Others information -none-

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5. Shareholding and management structure The major shareholders structure on the 3 April 2014 when the register book has stopped signing, the share transfer breaking. Names share held % 1. Mr. Sukum Navapan and related persons 15,344,865 74.85 2. Ms. Prim Guna-Kasem and related persons 824,599 4.02 3. Mr. Phornsake Karnjanajaree 602,000 2.94 4. Miss Siripetch Thaveewong 233,400 1.13 5. Uahwattanasakul Co., Ltd. 199,998 0.98 6. Mr. Chatree Sophonpanich 141,750 0.69 7. Mr. Taweesak Jayananda 121,000 0.59 Mr. Sukum Navapan was the founder of the company and was considered as the largest shareholder since the company had been established. However, the company had no deal in issuing securities or administrative management. With the exception of mutual transactions related to the co-founder, Navatanee Limited was considered as the founder and the major shareholder. The audit committee would consider the approval and submit to the Board of Directors accordingly. (please see connected transactions page 29 )

6. Dividend policy The company has the policy of dividend higher and equivalent to 60% of the net profit. The board of director would consider and propose to the Shareholder Meeting to approve. The dividend of 5 years are as below: Year 2014 2013 2012 2011 2010 Earnings per share 3.48 3.85 3.11 2.03 2.90 Dividend per share 2.09 2.35 2.00 1.40 1.80 Dividend payment ratio (%) 60.06 60.99 64.25 68.88 61.97

7. Management Structure In 2014, management structure consisting of Board of Director, The Audit Committee, The nomination and Remuneration Committee and management team. 7.1 Names of Directors 1. Mr. Sukum Navapan Chairman/CEO 2. H.E. ACM. Kamthon Sindhavananda director 3 Mr. Chackchai Panichapat director 4. Mr. Nibhond Charanvas director 5. Gen. Paiboon Kanchanapiboon director 6. Mrs. Maevadi Navapan director

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7. Mr. Kittidej Charusathiara director 8. Mr. Punn Kasemsup director 9. Mr. Sukuma Jayananda Managing Director Term given to the directors: in every 3 years and they can be re-appointed (details were shown page 35-44) Authorized directors related to the company is Mr. Sukum Navapan who signed and stamped the significant company brand or other two directors co-signed and stamped the significant company brand.

Duties and responsibilities of directors According to the company regulation, the board of directors has authorization and duty to perform the responsibility in with the laws, the objectives, the regulation and the articles as well as the resolutions of the shareholders’ meetings, join the opportunity to propose the agenda of the company business, manage and power the operation side followed through efficiently the meeting agenda. The meeting has arranged in one year term in advance and at least 3 months a time. All of the board of directors usually participated the meeting all the time excluding on their necessary & respective works, and the board of directors joining in this year 2014 meeting as follows: Board member Board meeting Attendance 1. Mr. Sukum Navapan 5/5 2. H.E. ACM. Kamthon Sindhavananda 5/5 3 Mr. Chackchai Panichapat 5/5 4. Mr. Nibhond Charanvas 4/5 5. Gen. Paiboon Kanchanapiboon 5/5 6. Mrs. Maevadi Navapan 5/5 7. Mr. Kittidej Charusathiara 3/5 8. Mr. Punn Kasemsup 5/5 9. Mr. Sukuma Jayananda 5/5

7.2 The executive board of directors 1. Mr. Sukum Navapan CEO 2. Mrs. Maevadi Navapan Executive Director 3. Mr. Sukuma Jayananda Managing Director Duties: to process jobs according to the board of directors’ assignment, for example, planning, operating the business and nominating the management etc… the majority of the budget approved for the operation is for the course maintenance & improvement up to the international quality standard. The annual capital expenditure always has been set by the former year necessary except the urgent items beyond what are mentioned needed to be implement immediately and will be monitored by the managing director. The budget that the managing director can approve and that is a running expense is up to 500,000 baht. And if the budget is not enough and need to spend more, it must seek approval from the Executive Committee. Some cases related and 15 needed to get approval from the shareholders’ meeting, the executive Committee will consider and appropriate to propose to the board of Directors meeting. The audit committee will oversee the duties assigned to be the next step. The executive directors’ meeting has not been planed since the current business operation has directed up to the specific quantitative purposes and the management has arranged the report which always is sent to the Executive Board of Directors. Term of the positions: the position held in the term of the company’s directors.

Management team 1. Mr. Sukuma Jayananda Managing Director 2. Mr. Pracha Boonsomphong Superintendent 3. Mrs. Patcharaporn Jultothai Administrative Manager/Company Secretary 4. Mrs. Chutima Soonthornmonthol Financial Manager

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Organization Chart (as of 31/12/2014)

Board of Directors

Chairman of the

Board

Chief Executive

Officer

Board of Nomination Board of Audit Committee and Remuneration Committee

Managing Director

Manager Manager Manager Manager Superintendent Golf Course Services Administrative Office Accounting- Finance Restaurant Services Company Secretary Personnel Sports Club Services

7.3 The company secretary The board of directors meeting No.1/2008 on the 6th March 2008 has appointed Mrs. Patcharaporn Julothai, Administrative Manager, as a company secretary in order to look after the directors’ activities, coordinate all to follow the board’s policy, to advise the directors regarding the basis of the company rules and regulations, The report on the acquisition and disposition of securities and the report on the stakes of directors and executives were required. The company was also required to arrange board meetings as well as shareholder meetings in accordance with the laws and regulations approved by the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) including the disclosure of 56-1 agenda and annual report and to communicate among the shareholders, minutes taken, follow up the meeting issues. And the Board meeting No. 3/2011 on 28 July 2011 has assigned as the secretary of the board in order to comply with the duties. (additional information page 45) 17

7.4 Director and Management’s remuneration 1. Monetary remuneration The board of directors receive the directors’ remuneration for attending the meeting and the directors’ pension from the shareholders’ approval only, as the following detail: Meeting allowance / directors’ remuneration 1. Director Meeting allowances at 10,000 Baht/meeting 2. Member of audit committee Meeting allowances at 12,000 Baht/meeting 3. Chairman of audit committee Meeting allowances at 15,000 Baht/meeting 4. Chairman Meeting allowances at 20,000 Baht/meeting The directors’ pension The 2014 shareholders meeting approved the directors’ pensions at amount of 480,000 Baht. In 2014, the board of directors received the remuneration and pension as follows Board member Meeting allowance / remuneration 1. Mr. Sukum Navapan 196,000 2. H.E. ACM. Kamthon Sindhavananda 98,000 3. Mr. Chackchai Panichapat 123,000 4. Mr. Nibhond Charanvas 96,000 5. Gen. Paiboon Kanchanapiboon 108,000 6. Mrs. Maevadi Navapan 98,000 7. Mr. Kittidej CHarusathiara 78,000 8. Mr. Punn Kasemsup 108,000 9. Mr. Sukuma Jayananda 98,000 In 2014, the management’s remuneration paid as the salary & bonus at total amount of Baht 7,224,224 Baht and estimate that the year 2015 will be similar amount. 2. Others pension - none -

7.5 Human resources It is the company policy to restrict the staff number being compatible with the job description of each field. For the purpose of efficient operation in 2014, the company has totally 148 staff, 5 fields of work, they are management, course maintenance, golf course services/club house services/restaurant services and sports club, administration and the company secretary, finance and accounting/personnel with the remuneration paid as the salary, bonus, intensive and social security and others such as uniform, food and accommodation allowance as appropriate depending on the job. There is no significant staff movement during 3 years and no critical conflict of labor issue.

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Training As the golf course is the service business, we need the staff who have golf knowledge and experience, including as well as the important service in clubhouse consisting of golf course services/club house services/restaurant services and sports club. According to the policy of maintaining the golf course and service standard, each field of work has to get the related competent manager who looks after the business to achieve in every year target and policy. The company has encouraged all sections to participate in proposing their opinion for business operation and in training about the golf course and the service including ethnics as below 1. Golf course maintenance. The golf course would always remain in good quality, suitable for playing in accordance with the international standards. The company had provided training programs for responsible staff while being able to employ technical experts to offer particular tips in maintaining the quality of the golf course with routine work of our staff. 2. Quality services for golfers. Quality services included golf services/club house services/restaurant services and sports club. The company had appointed Dusit Princess Srinakarin Hotel Bangkok to provide effective hospitality management aiming for the highest satisfaction of the clients.

8. Good Governance 8.1 Good Governance Policy Shareholders: right and equitable treatment In 2014, the company has organized the general shareholders meeting on 24th April 2014 at the company office. 8 from 9 directors of the board of directors joined the meeting and 33 shareholders, which are included proxies, joined the meeting at the amount of 16,911,561 shares or 82.50% increasing 1.03% when was compared to 2013. The company has sent out the invitation letter to all the shareholders including information and documents for each agenda to be considered in advance. Those of documents are specified for information or for approval with the board of directors’ opinion and suggestion. However, this invitation letter including information and documents for each agenda disclosed on the company website www.navatanee.com on 24th March 2014, and was sent to the shareholders at post on 10th April 2014, and was also advertised on the newspapers as public law stated. Besides, the minutes of the shareholders’ annual general meeting has been promptly submitted to the Stock Exchange of Thailand and the Ministry of Commerce, and has been exposed on the company website since on 6th May 2014. On the meeting date, the shareholders and the proxies started to register at 09.30 hrs. in order to check the documents and give opportunities to the shareholders who would like to get more information or to ask for some advice or ask for some questions among each others. Because there were no many shareholders, the communication between the company and the shareholders has run smooth through the entire meeting process. The chairman of the board of directors is the chairman of the meeting, he conducted the meeting completely in all agendas and replied the questions as well as the shareholders satisfied through the end of the 19 meeting. For the election of the directors’ agenda, the company has prepared the ballot form for voting each director individually.

Right and equitable treatment For an option of the shareholders, the company allowed the shareholders either send other persons or choose independent director as a proxy to attend the meeting. In the 2014 shareholders’ meeting, 18 shareholders give proxy to Audit director and managing director or equivalent to 1,729,798 shares or 10.23% of the total attending. In the 2015 shareholders’ annual general meeting, The company gave opportunity to the minor shareholders to propose their requirement for the agenda and nominate the directors. The preparation of the 2014 shareholders’ annual meeting offers opportunity to the minor shareholders to propose their requirement for putting on the list of agenda and to nominate the directors in company with procedure, principle and how to propose it. The shareholders can suggest the requests at [email protected] or facsimile or registered mail to the company as former year. The time to propose from on the 14th January 2015 to 13th February 2015, which the company has informed these following topics and details to the Stock Exchange of Thailand.

Rules of Stakeholders The company has always reviewed the policy of good corporate governance in order to look after the right for the stakeholder groups regarding to the ethnic principles and advised regulations. In 2014, the business was in good operation, stability and the problem didn’t affect to any groups since the golf course has been operated than 40 years and the management operated business according to the policy which always response the interest throughout the stakeholders, separated as follows. • The shareholders: the company has operated according to the board of directors’ policy with open & above-board management, loyal financial & accounting system, the satisfied benefit comparing to the similar businesses and good dividend paid to the shareholder for several years continually. • Employees The Company has focused on the importance of every line staff to have skills and be safe during the use of tools and machinery, and conserve plant species, water conditions, and environmental conditions. Service work provides facilities to customers at various points such as the front desk, locker rooms, and ticket rooms. For the restaurant side, it is given to Dusit Princes to help in the management together with training personnel, organizing catering services on a special occasion etc. The company does not discriminate and segregate in religion, male and female receive reasonable remuneration and welfare according to their position, as well as other possible ethical training to cultivate discipline to act in compliance with regulations as a good employee in order to use as a guideline for both himself and others. • Customers: to maximize the satisfaction by maintaining the highest standards of the golf course to be in line with the international standard, and to remain the leading golf course of the country. Most of the members are business owners and top executives who have financial stability, but also golfers who understand the rules 20 of being a good golfer. This is one of the reasons that makes the golfers both in Thailand and overseas trust and have confidence in Navatanee Golf Course continuously. • Partners The Company has a code of conduct and is operating the business in the framework of laws and rules regularly and rigorously, and does not use any method to be outside the rules because Navatanee Golf Course has been in transparent operation and maintains the image of the golf course all the time. For the selection of partners, the company selects the business partners who have been dealing with the company for a long time because of high quality and reasonable price, with the base from the previous year. However, the company always checks the prices for comparison regularly, and has the internal auditors monitor the process and purchasing procedures. For golf competition, Navatanee Golf Course has no policy to compete with other golf courses because the company’s policy is to service members who are mostly the same group of customers. • Community Society and Environment: The Company has a policy and commitment to the conservation and preservation of plant species before the construction of any golf course. Making Navatanee golf course is full of thousands of plants and trees and is one of the unique of Navatanee Golf Course. In addition, apart from making the areas around the golf course and Navatanee village shady from large and multiple varieties of flowers, it is also a large source of fresh air, which is very rare to find nowadays, and spreads to neighboring communities as well. It also benefits the habitat and the supply chain due to the environmentally friendly operation of the company since the beginning of its business operations. As a result, a lot of animals, aquatic life, and birds are living in the area, looking for food in both the golf course and the lake due to the abundance of life, plus the fact that the company has made it a priority to avoid the use of chemicals, and to use fertilizers made from natural raw materials instead. This commitment to environmental stewardship is the pride of the founder, company committee and employees because the business does not only focus on reputation in the country and overseas in terms of golf courses, but also commits to a management policy which is strongly focused on the environment and will be adhered to such policy at all time. Moreover, the company wants Navatanee golf course to be not only a golf course, but a place of recreation and relaxation for all visitors as well. • Governments and agencies concerned: Strictly comply with all legal requirements, as well as Tax Management and Accounting Management, a support of a golf charity competition, competition among the customers and the promotion of various activities, as appropriate.

Information disclosure and transparency The company has disclosed the information according to all regulations and conditions of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand, i.e. the directors’ approval which impacted to the shareholders, the shareholders meeting’s approval, each quarter of financial statement, and all directors and management are required to report the changes of stock holding to the Office of the Securities and Exchange Commission etc… 21

Leadership and vision The board of directors is composed of the directors who have vision, knowledge, competence and experience on business operation regarding independent decision, internal control, internal audit, and who follow up the operation for the company & the shareholders’ benefit. The management has a duty of the business operation to achieve the policy and to report the operation result to the board of directors

Business ethnics The company’s policy is to maintain the first class Thailand golf course and to concentrate on the stakeholders about the ethnic principles and advised regulations for directors, management staff and owners’ regulation (the persons who hold the company shares at high figure and may affect to the decision of the directors/ management/ staff) in order to be the responsibility direction and frame, and to review usually those mentioned regulation.

Balance of power for the board of directors In 2014, the company has 5 independent directors from total 9 directors. From the remaining of 4 directors, 3 directors are management directors and 1 director are not management directors. This is make it counter balanced and independent in giving an opinion and an efficient performance.

Aggregation or Segregation of Positions The chairman of the board of directors is the chairman of the executive board and the main shareholder. For the chairman of the audit committee is not concerned in the management position and is independent enough to perform according to the duty and responsibility. Conflict of interests In order to avoid the benefit conflict, the board of directors looks carefully after the risky occasions of benefit conflict or the audit committee, who are independent, will always investigate and manage in the relative incidents of the policy setup according the regulation of the Stock Exchange of Thailand.

Board of directors’ self evaluation The board of directors meeting No.1/2015 , the chairman of the audit committee proposed to the meeting about the directors’ self-evaluation to motivate the board of directors increasing their effective performance correspondence with the corporate government.

Audit committees’ opinion The audit committees’ who are the system and internal audit controller, are the approver an audit plan and appraise internal systems appropriated and corresponded with the settled objectives and directions. They are independent auditors and reported to the board of directors meeting, the 1/2015, on the 19th February 2015, that they had a meeting with the Auditor without any management in order to have an information regarding the 22 financial statement for the year 2014. The Auditor conducted with generally accepted auditing standards and present fairly, in all material respects and also the Internal Auditor.

Quality of audited financial statement The company financial statement was considered and approved by the Board of Director on 19th February 2015 and the financial auditors who is certified from the Securities and Exchange Commission and the Stock Exchange of Thailand is the SP Audit Co., Ltd. by Miss. Susan Eiamvanicha, Certified Public Accountant no. 4306 who signs for approval before spreading out to the related organizations. In 2014 the company financial statement has been undoubted, managed and revealed the appropriated and trustful financial information, and enough internal control system. The auditors signed for approval without any notices and the directors, the management or the staff didn’t bring any financial information without faithfulness for their own benefit, their family and relatives or others according to their handbooks, and the internal auditors always follow it up and check it over.

The investor relations In 2014, the company arranged a responsible officer to interested persons for communication with the investors to a certain extent, and also had to regularly disseminate diverse and important information which might affect the company’s stock price to the investors according to the requirement of the Stock Exchange of Thailand, i.e. the financial statement report, resolution of the Board of Directors, resolution of the general meeting of shareholders, etc. In 2015, in order to be more practical and convenient to the shareholders as usual, the company had given an opportunity to shareholders to be able to send their inquiries via company’s website at [email protected].

8.2 Committee 1. Audit committee According to the rules of the Stock Exchange of Thailand, the board of directors has appointed the audit committee in order to take care of finance, internal system and business organization achieving the targets by Mr. Chakchai Panichapat, chairman of the audit committee, having sufficient knowledge and experience to audit the credibility of the budget. In 2014, they were 5 meetings and had a meeting with the auditor without any management in order to have an information regarding the financial statement for the year 2014 and others. The Auditor conducted with generally accepted auditing standards and present fairly, in all material respects. The audit committee meetings were as below.

Board member Rank Meeting Attendance Mr. Chackchai Panichapat Chairman 5/5 Mr. Nibhond Charanvas Audit Committee Member 4/5 Gen. Paiboon Kanchanapiboon Audit Committee Member 5/5 Mr. Punn Kasemsup Audit Committee Member 5/5 23

As the audit committee’s definition is the procedure according to the Notification of The Capital Market Supervisory Board Re: the qualification and the performance of the audit committee B.E. 2008. Term given to the directors: in every 3 years and they can be re-appointed as the following duties effective from 27th February 2014 (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 or any other until in charge of an internal audit; (3) to review the Company's compliance with the law on securities and exchange, the Exchange'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 Exchange'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 report which 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 (i) after the audit committee has acknowledged the case that the auditor found the suspicion of the managing director or person who authorized in the management of the company commit a crime against the Securities and Exchange Act. The audit committee must verify and report the initial result of the inspection to the Securities and Exchange Commission and the auditor within 30 days from the date of notification from the auditor. 24

(7) to perform any other act as assigned by the Company's board of directors, with the approval of the audit committee.

2. Nomination committee and remuneration Due to a flat and uncomplicated administrative structure and the nature of a sports business, the Board of Directors is comprised of representatives of shareholders, and some are from honorary directors who kindly accept the invitation as directors due to trust and confidence in the administration of the golf course business for a very long time. They have brought knowledge, ability, experience and ethical judgment to help the administration of the golf course progress without expecting remuneration. The Board of Directors will have a joint preliminary consideration before presenting in the shareholders’ meeting for consideration. However, when the Nomination and Remuneration Committee is established, the election of directors, therefore, will be proposed names to the Nomination and Remuneration Committee for consideration before proposing to the Board of Directors for consideration and give opinions in the shareholders’ meeting as the next step. In 2014, the Nomination and Remuneration Committee held a meeting to consider the appointment of new directors to replace those who completed their terms by rotation, and proposed opinions to the Committee for presenting in the shareholder’s meeting for approval of the appointment and to consider the remuneration for the company’s directors each year. The Board Nomination and Remuneration Committee consists of three independent directors as follows:

Board member Rank 1. Mr. Nibhond Charanvas Chairman of Nomination committee and remuneration 2. Mr. Chackchai Panichapat Board member 3. Gen. Paiboon Kanchanapiboon Board member Term given to the direct: The position held in the term of the company’s directors.

8.3 Nomination of directors and management Director Referring to the company regulations, the board of directors may have been appointed from the externals who are not the shareholders and that appointment will be approved by the shareholders meeting according to principles and procedures. Composition and election of board directors 1. The board of directors is minimum 5 persons and there are directors not lower than a half amount of total directors in the kingdom of Thailand. For the purpose of business operation, the directors can be appointed from out source who are not our shareholders. 2. The shareholder meeting will vote the directors according to this regulation and methodology (1) Offering one share-one vote (2) Each shareholder has one share per vote on no. (1)and each shareholder use all votes 25

(no split) in appointing one or more person to be a director. (3) The candidates are ranked in descending order from the highest score of votes to the lowest, and are appointed as directors in that order until those positions are filled. Where the votes for candidates are tied, or cause the exceeded number of directors, the Chairman has the casting vote.

Chief Executive Officer: To appoint a chief executive officer, the company would consider work experience and the ability to manage responsible works. If the expected officer in the field was unavailable, the company would agree to consider the outsider candidate, with the emphasis on his/her work experience and expertise to carry out any assigned works. Previously, high-ranking executives included Chief Executive Officers Mr. Sukum Navapan and Mrs. Maevadi Navapan, who were not selected by the nomination and remuneration committee as they were founders of the company and being considered as the Board of Directors before the nomination and remuneration committee was appointed. Meanwhile, an executive could pave the way to becoming an assistant managing director before being promoted to the position of managing director. The Board of Directors would propose to the nomination and remuneration committee to be approved accordingly. Compulsorily, any member of the committee should not commit the crime over the past ten years.

The Nominating of Independent Director In the year 2014, there were five independent directors altogether from 9 directors and one of the independent director held stocks 0.49% and others 3 independent directors have no stocks which were stronger than the definition. (In order to follow the Notification of The Capital Market Supervisory Board B.E. 2008, announced on 20th February 2009) (A) Holding shares not over one percent of the total shares with voting right of the company holding company, subsidiary, affiliation, major shareholder or authorized person of the company , however, it includes shareholding by related persons of the independent director also. (B) Not being or has been a director with management participation employees, consultant with regular salary or authorized person of the company, holding company, subsidiary, affiliation, subsidiary in same level, major shareholder or of authorized person of the company, except relieved from aforesaid characteristic at not less than two years before submitting permission to the Office. However, the prohibited characteristics do not include an independent director who has been a governmental officer or an advisor of a government authority, which is the major shareholder of the company or the authorized person of the company. (C) Not being person by blood related or registration by law in the manner of being father or mother, spouse, brotherhood and offspring including spouse of the offspring of the management, major shareholder, authorized person or person designated to be management or authorized person of the company for license or subsidiary. 26

(D) Do not have or has been in business relation with the applicant, company’s parent, holding company, subsidiary, affiliation, major shareholder or authorized person of the company, in the manner that may obstruct the independent exercise of discretion including in not being or has been a significant shareholder or authorized person of the person with business relation with the company, holding company, subsidiary, affiliation, major shareholder or authorized person of the applicant, except relieved from aforesaid characteristics at not less than two years before the date of submission for permission from the Office. The business relation in paragraph one includes trade transactions in normal business, rent or lease on items related to asset or service or in giving or receiving financial assistance through acceptance or lending, guarantee, granting asset as debt security including similar behavior resulting in the applicant or contract party with debt burden to be settled with another party from 3% of net tangible asset of the applicant or from twenty million baht up, as which amount is lower. However, the debt burden calculation shall be in value calculation on related items as announced by the Securities Exchange Commission on Rules of Related Items, by mutatis mutandis. But the consideration of such debt burden shall include debt burdens incurred at one previous year before the date of business relation with the same person. (E) Not being or has been auditor of the applicant, holding company, subsidiary, affiliation, major shareholder or authorized person of the applicant and shall not be significant shareholder, authorized person or partner of auditing office with the auditor of the applicant, holding company, subsidiary, affiliation, major shareholder or authorized person of the applicant in attachment, except relieved from such characteristic at not less than two years before the date of submission for permission from the Office. (F) Not being or has been any professional provider which includes legal consulting or financial consulting with service fee over two million baht a year from the applicant, holding company, subsidiary, affiliation, major shareholder or authorized person of the applicant, and not being a significant shareholder, authorized person or partner of the professional provider, except relieved from such characteristic at not less than two years before the date of submission for permission from the Office. (G) Not being a director appointed to be agent of the director of the applicant, major shareholder or shareholder with relation with the major shareholder. (H) Not operating similar or significant competitive business to the business of the applicant or subsidiary or not being significant partner in the partnership or directorship with management participation on employees, consultant with regular salary or holding shares over one percent of the total shares with voting right n other company, operating business similar or competing with business of the applicant or subsidiary. (I) Not having other characteristics that will hinder free independent opinion in relation with the operation of the applicant. After the appointment to be independent director with the characteristics as stated in paragraph one (a) to (i), the independent director may be assigned from the committee to make decision on the business operation of the applicant, holding company, subsidiary, affiliation, subsidiary of same level, major shareholder or authorized person of the applicant under the method of collective decision.

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The name list of the Independent Director are: 1. H.E. ACM. Kamthon Sindhavananda 2. Mr. Chackchai Panichapat 3. Mr. Nibhond Charanvas 4. Gen. Paiboon Kanchanapiboon 5. Mr. Punn Kasemsup

8.4 Corporate Governance subsidiary -none-

8.5 Insider Benefit As the preventive measures in dishonestly using internal data for yourself and oneself benefits. The company has prepared the ethnic handbook for directors, management and staff which are reviewed every year before and after the 2014 financial statement through the public. Nothing founded that using the data is for any side’s benefit

8.6 Audit fee In the year 2014, the audit fee is 290,000 Baht as follows. 1. Quarter 1, the S.K. Accountant Service Co., Ltd. subsidiaried Miss Chantra Wongsriudomporn , Certified Public Accountant No. 4996, is the company auditor. 2. Quarter 2, 3 and year end, the SP Audit Co., Ltd. subsidiaried Miss Susan Eiamvanicha, Certified Public Accountant No. 4306. The aforementioned companies had no interests, relations, connections with the company / the management / the major shareholders. (please see audit fee detail on page 46)

8.7 Compliant with principles of good corporate governance and other issues (include in Item 8)

9. Social responsibility With business stability and long-standing reputation as a top legendary golf course of the country, reputed clients and other people involved in the industry had always put their trusts in Navatanee Golf Course. Regarding the golf course’s well-adopted policies and second-to-none management styles, major social responsibilities were mainly taken alongside the business operations which generated positive contributions to the society and the community, with the effective development of organizational management and other related business sectors as follows.

1. Business ethics Admittedly, a majority of Navatanee Golf Course’s members were local business entrepreneurs and senior Japanese executives who operated businesses in Thailand. These people had high loyalty in the golf course’s quality services. With prominent image and competitive location, Navatanee Golf Course had no 28 certain policy to compete with other golf course rivals and would never rely on price adjustment to conquer other competitors in the industry. During weekends and holidays, members would generally bring their guests for a group practice session. Navatanee Golf Course had been building a long-lasting rapport with its members and other clients.

2. Anti-corruption procedures For more than 40 years of business operations in Thailand, Navatanee Golf Course had been committed to providing the highest satisfaction to all clients, in which the business can easily be examined in accordance with the rules and regulations. As most of the employed workforces were assigned to provide quality services, they were not involved in any business or financial transactions. Above all, the company never offered support to any conduct of corruption no matter how it was related to organizational or individual concerns. In order to support the Collective Action Aoalition against Corruption Project, the company announced the intention to join the project on 16th March 2015.

3. Respect for human rights No human right issue had ever been occurred within the company. Also, the company had always pursued the completion of work employment in accordance with the labor law. As there was no discrimination at work, many of the staff had decided to devote the best of their ability to work for the company for a long period of time.

4. Fair treatment for employees Navatanee Golf Course comprised of about 110 employees. As social welfares and other additional benefits were key factors that helped encourage working competency among the employees, most of them decided to work for the company until they reached the retirement age. With respect to the difference in religion, gender or work position, all employees were treated fairly and similarly without discrimination.

5. Responsibility for consumers To maximize the satisfaction by maintaining the highest standards of the golf course to be in line with the international standard, and to remain the leading golf course of the country. Most of the members are business owners and top executives who have financial stability, but also golfers who understand the rules of being a good golfer. This is one of the reasons that makes the golfers both in Thailand and overseas trust and have confidence in Navatanee Golf Course continuously. Navatanee Golf Course developed certain policies to ensure safety and security for all clients varying in rules for safe playing and a restaurant of hygienic menus. The company also launched a policy to maintain the database and privacy of all clients.

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6. Community Society and Environment The Company has a policy and commitment to the conservation and preservation of plant species before the construction of any golf course. Making Navatanee golf course is full of thousands of plants and trees and is one of the unique of Navatanee Golf Course. In addition, apart from making the areas around the golf course and Navatanee village shady from large and multiple varieties of flowers, it is also a large source of fresh air, which is very rare to find nowadays, and spreads to neighboring communities as well. It also benefits the habitat and the supply chain due to the environmentally friendly operation of the company since the beginning of its business operations. As a result, a lot of animals, aquatic life, and birds are living in the area, looking for food in both the golf course and the lake due to the abundance of life, plus the fact that the company has made it a priority to avoid the use of chemicals, and to use fertilizers made from natural raw materials instead. This commitment to environmental stewardship is the pride of the founder, company committee and employees because the business does not only focus on reputation in the country and overseas in terms of golf courses, but also commits to a management policy which is strongly focused on the environment and will be adhered to such policy at all time. Moreover, the company wants Navatanee golf course to be not only a golf course, but a place of recreation and relaxation for all visitors as well as community society.

7. The development of society and community Navatanee Golf Course had fostered the policy to recruit local people as its employees, as part of the intention to stimulate sustainable employment in the community.

8. Innovation and promotion of innovation Navatanee Golf Course basically provided golf course services. Aside from the ordinary maintenance to keep the golf course in good quality according to the international standards, no certain innovation had been evolved. However, the modern golf course was set to rely on the use of non-chemical substances and recycled water, together with the planting of trees to support fertile environment.

10. Internal audit and risk management The appointment of internal audit officer was required to be submitted to the audit committee for approval. This helped guarantee transparency and reliability and it is a great tool for managing the risk because the audit committee can do their duty freely and report the result of the internal audit to the board of director every time. There have been meeting and appoint the audit of the audit committee to Mrs. Pamika Sangsanor as an internal auditor and the secretary of the audit committee in the year 2014.

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Honesty Audit Company Limited Honesty Audit Company Limited was established on March 5, 2014 for the purpose of servicing of internal audit and accounting system. For instance, internal audit, the value placed in the accounting system. These services are under management of Mrs. Pemika Sangsanor and her team total of 4 persons. One of auditors was certified by the Institute of Internal Auditor (IIA), who was experienced in providing internal audit for several businesses including the production and distribution of canned food, seafood processing services, supply and distribution of steel product including the manufacturing and distribution of a tiny diesel engine and the main part for assembling the engine etc. (additional information page 47) 10.1 Comments from Board of Directors towards the adequacy and appropriateness of internal audit system for the company, where the appropriate number of auditors would be provided. - Please refer to the internal audit report on page 2. 10.2 Error: There was no serious error reported in 2014. 10.3 Internal audit controversy: There was no serious audit controversy reported in 2014.

11. Related parties and connected transactions / Inter-transactions The Company constitutes the contract performance with Navatanee Co., Ltd. we both are in the same group and development by the founder Mr. Sukum Navapan, the chairman of Navatanee group, including his close relatives who are stakeholder. For benefit & transaction are formed two versions as follows:

1. The contract dated on December 31, 1980 All members of the City Sports and Recreation Public Co., Ltd. have the right to use assets of Navatanee Co., Ltd., as if City Sports and Recreation Public Co., Ltd. is one of the owners by the following conditions 1.1 The City Sports and Recreation Public Co., Ltd. has only to pay the deposit to insure damage to Navatanee Co., Ltd. for contingent damage at Baht 25 million. There is no other fees will be paid to Navatanee Co., Ltd. 1.2 Refer to repairs and maintenance’s expense, especially swimming pool, having increased. Navatanee Co., Ltd. consents the members of City Sports and Recreation Public Co., Ltd. use club facilities whenever it is open for non-member joined. If it is restrict for members the maintenance expense will be fairly divined and allocated.

1.3 The City Sports and Recreation Public Co., Ltd. consents that Navatanee Co., Ltd. or juristic person or any other persons operates in field of pro-soft, restaurant, and clubhouse without any expenses or other remuneration. The contract period is 30 years from on the 31st December 1980 to 31st December 2010, the contract’s right is able to continue in every 10 years which is not over than 2 times. The partners agreed and/or if the City Sports and Recreation Public Co., Ltd. is the landlord and its buildings. 31

The 1st extension the period of contract The Board of Director Meeting on 15 October 2009 has agreed to extend the period of contract as Navatanee Ltd. has agreed upon to other period of 10 years from 31 December 2010 without any other changes in the contract or any other compensation between both party until 31December 2020.

2. The contract dated on June 1, 1997 The inter-advantage of the contract is to use the land and building as follows: 2.1 The Navatanee Co., Ltd., own the title deed of No. 1555, 1556 and 1436 combining area of 24 Rai 2 Ngan 58.3 Square Wah, is located at Kannayao, Bangkapi District, Bangkok consents the City Sports and Recreation Public Co., Ltd. to capitalize on land and other parts mentioned on the title deed, to operate business in respect of clubhouse, restaurant, sport club and golf activity. Moreover, the City Sports and Recreation Public Co., Ltd. holds the right to improve such area by their own expenses. 2.2 The City Sports and Recreation Public Co., Ltd., own the title deed of No. 1557 (partial), is located at Kannayao, Bangkapi District, Bangkok consents the Navatanee Co., Ltd. to capitalize on land and other parts to develop commercial operation according to the Navatanee Co., Ltd.’s approval on their on expenses too. 2.3 This contract period is 30 years from 1st June 1997 to 30 May 2027. Each partner has right to continue the contract in every 10 years under conditions and regulations by written notice to another partner within 30 days in advance before the current contract terminated. 2.4 In case of one partner requires changing the purpose of land use. That one has to ask for approval from another partner. In order that another one will give suitable reasons for disapproval as well. 2.5 Both partners agree to look after the area as good as their condition, to take case of repair & maintenance expenses occurred from normal operation and to pay taxes regarding to their responsible areas. 2.6 Both partners have not to use the specific land and other parts for rent or making benefit apart from this agreement, except asking for permission and get the written confirmation from another partner 2.7 Both partners agreed to not sell their own property to other persons, except asking for permission and get the written confirmation from another partner 2.8 Every partner can propose for conveyance from another. The selling prices for register have agreed even and lower than 1 million Baht with the official document. The transferred benefit contract is the disclosure list which can refer to buying or selling assets of the Asset Plus Securities Co., Ltd. as the Independent Financial Advisor. They will share opinion of reasonable list and its value for that land benefit. Moreover, the Thai Property Appraisal Co., Ltd. is responsible for rental appraisal for 30 years on the part of the company will get land benefit from the Navatanee Co., Ltd. at total 128,880,000 Baht which has been estimated cost for rent that the Navatanee will get land benefit from the company at total 100,800,000 Baht which also is the specified condition for land benefit for proposal offered further to the independent committee, the independent financial advisor and the independent committee bring forward to the shareholders and both lines have same final decision that the mentioned inter-transactions are reasonable as follows 32

1. The appraisal comparison during 30 years, the getting benefit values over than being bartered. 2. The becoming land right is free of charge from any expense, it doesn’t cause of the company’s responsibility on the land cost and the company can profit and the investment is worth for the contract session over 30 years. 3. The land right can give the profit to the company. The achieved target is partial use for beautiful golf course & decoration and golf games & players’ challenge. Moreover, the mentioned land is also an additional car park (formerly, be short of parking space), the ’ resting area and some part of the land right is connected to the clubhouse which is the company advantage. There are plans of sport center and health center for further additional golf course business and future increasing revenue. The inter-transaction was approved by common consent in the 1st shareholders meeting 1/1997 on 18th April 1997. The shareholders related to gain & loss is no voting right. In 2010, The board of Director has approved the transactions with Navatanee Ltd. which is supporting the normal business with general trading terms as follow: The company has exchanged the rights to the land with Navatanee Ltd. for some related transactions, which have been done since 2540 B.E., because the executives and major shareholders are the same individuals. This exchange of rights is effective for 30 years with 2-time extensions of 10 years each time. The objectives have been to utilize some part of the land to create 6 new holes and to develop the other part to presently accommodate gymnasium, swimming pool and parking lots, which the company considers that this part of the land can be developed to increase revenues for golf courses. In the preliminary consideration, it considers investing in services corresponding to the golf courses such as Sport Complex, Spa, etc. However, the previous economic situations have not been in favor of investment. Moreover, demands of the market have changed. Therefore, the company has to prolong its investment. Also, Navatanee Ltd. currently wishes to have a modern sports club to accommodate the landowners of Navatanee Village because the old sports club has extremely fallen into decay. It hence proposes to be the investor to renovate all of the areas as well as all the facilities to become attractive and modern, which are suitable for serving customers in the same levels as the golf courses. In return, Navatanee Ltd. would like to acquire the membership for the landowners of Navatanee Village at the same rates and conditions as available to the public. Date of the transaction: On July 29, 2010 and the sports club opened from August 2012. Total value of the transactions : Navatanee Ltd. will be the investor in renovating and constructing all the buildings as well as providing equipments of the total approximate value of 90-100 million baht in the condition of transactions supporting the normal business similar to general trading. The value of investment capitals may be adjustable, depending on the suitability and demands for services that are currently in the stage of blue-print improvement, which the company will not be the contract signer with the contractor.

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Description of the connected persons. (Did not vote this time) 1. Mr. Sukum Navapan major shareholder/CEO 2. Mrs. Maevadi Navapan shareholder/director 3. Miss Prim Guna-kasem shareholder/director Opinions of the Independent and Audit Committee: Independent and Audit Committee have determined that the transaction is reasonable because the conditions support normal business with general trading terms, which are compatible with those available to the public. Reasons and necessity of the transactions: The company intends to utilize the areas as a modern sports club to serve golfers and landowners of Navatanee Village, which are deemed as the majority of its clients, as well as the public. In his operation, the contract to exchange rights between City Sports & Recreation Plc. and Navatanee Ltd. will last for only 17 years (excluding the extension of the exchange of rights). When the contract expires, the renovated buildings must be the properties of Navatanee Ltd. Regarding the conditions of the investment proposal that Navatanee Ltd. would grant membership of the sports club to the landowners of Navatanee Village, the company has considered that such investments are in accordance with the objectives and the company need not invest with its capitals. Furthermore, Navatanee Ltd. can also draw a large target group of the sports club’s members. Therefore, it is allowed to grant membership to Navatanee Ltd. in the amount of the actual investment and in accordance with the rate specified by the company. Also, any further charges at the rates and terms available to the public, which can be obviously compared with the actual prizes without transferring of any benefits. In December 2014, Mr. Sukum Navapan is a major shareholder and the chairman of the executive board of directors in both The City Sports and Recreation Public Co., Ltd., and the Navatanee Co., Ltd.

The policy and direction for future inter-transaction None

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12. Financial information

Financial Ratio Unit 2014 2013 2012 Liquidity Ratio Liquidity Ratio time 4 3 2 Quick Liquidity Ratio time 4 3 2 Quick Liquidity Ratio of cash flow time 3 4 3 Receivable Turnover time 590 621 620 Average Collection Period day 1 1 1 Inventory Turnover time 33 34 33 Average Selling Period day 11 11 11 Payable Turnover time 30 31 47 Selling Debt day 12 12 8 Cash cycle day 0 0 4 Profitability Ration Gross Profit Margin % 64.46 65.11 62.21 Operating Profit Margin % 55.85 58.14 52.01 Other Margins % 11.11 11.11 10.27 Ratio of Cash to Profitability % 89.83 89.20 86.98 Quality of Income Ratio % 69.72 70.03 67.83 Net Profit Margin % 40.78 42.67 37.65 Return on Equity % 4.61 5.18 4.39 Efficiency Ratio Rate of Return on Assets % 3.94 4.43 3.65 Return on Fixed Assets % 5.83 6.49 5.26 Asset Turnover time 0.09 0.09 0.09 Financial Policy Ratio Debt to Equity Ratio time 0.17 0.17 0.20 Ratio of the Ability to pay interest Time N.A N.A N.A Dividend Payment % 60.06 61.04 64.31 Earnings Per Share Per share 3.48 3.85 3.11 Dividend Per Share Per share 2.09 2.35 2.00 Book Value Per Share Per share 75.46 74.33 70.89

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13. Analysis and explanation from management: The company’s performance of this year In 2014, the company’s revenue from golf course business decreased Baht 9.01 million or 6.84% compared to the year 2013, due to the decreasing of the number of golfers and others such as revenue from entrance fee and transfer of membership. The revenue of restaurant business decreased Baht 1.73 million according to the decreasing of the number of golfers while revenue from sports club increased Baht 1.69 million from the revenue of last year and the increasing of the renewed membership. According that the company increased revenue to Baht 9.06 million. However, revenue from dividend decreased Baht 2.67 million and other income decreased Baht 1.31 million while interest revenue increased Baht 2.87 million. As a result, the company’s total revenue decreased Baht 10.17 million or 5.49%. The cost of golf course services decreased from the year 2013 for Baht 0.27 million resulted from the sale promotion. The cost of business operation decreased Baht 0.15 million. The cost of restaurant business rose Baht 0.31 million and the cost of sports club rose Baht 0.32 million. Costs of sales and management decreased Baht 0.27 million comparing to 2013. The management expenses decreased Baht 0.15 million, mostly resulted from the decreasing of the maintenance expenses, while the compensation for the director had decreased for Baht 1.23 million from the employee obligation in case of the termination or retirement under the terms of the labor law. For the profit values, the company rising basic profits decreased from the last year for Baht 6.90 million or 6.45% which was resulted from the decreasing of the main revenue, the net profit mostly from the main revenue, dividend income and other income. While the interest income had decreased making the net profit decreased Baht 71.33 million or 9.69%.

Financial status: Asset analysis Navatanee Golf Course increased 1.61 percentage of total assets comparing to the year 2013. - Current assets increased by Baht 27.86 million due to temporary investments of Baht 26.71 million. - Non-current assets increased by Baht 0.89 million due to net assets of Baht 6.95 million and other sections increased of Baht 0.27 million. Meanwhile, long-term investments decreased Baht 6.33 million.

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Additional information of The board of directors as of 31 December 2014

1. MR. SUKUM NAVAPAN

Positions in the Company Chairman, CEO (Mrs.Maevadi Navapan’s spouse) Age 89 years old Nationality Thai Education -Special Lecturer, Thammasat Universety -Member of Executive Board, Wharton School, University of Pennsylvania, USA -National Defense College, 1989 Director training program Director Accreditation Program (DAP) Experience -Chairman, ASEAN Banking Council -Chairman, Thai Bankers Association -Chairman, Ideal Standard (Thailand) Co., Ltd. -Chairman, Siam Ready Food Co., Ltd. -Chairman, Hyatt Rama Hotel -President, Thai Military Band -Managing Director, The General Insurance Co., Ltd. -Managing Director, The United Insurance Co., Ltd. -Board member, Goldenland Plc. -Board member, Bangkok Intercontinental Hotel Co., Ltd. -Board member, Bangna Central Property Co., Ltd. -Board member, Klay and Mineral Co., Ltd. -Board member, Siam Food Plc. -Board member, American Standard Sanitaryware (Thailand) PLC. Positions in other listed Companies None Positions in non-listed companies -Chairman, Navanatee Group of Companies -Board member, Siam Piwat Co., Ltd. -Advisor, Eastern Seaboard Industrial Estate (Rayong) Co., Ltd. No. of years on the board 44 years CSR shareholding 14,536,532 shares or 70.91% Meeting attendance in 2014 Board of Directors Meeting, 5 of 5 Meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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2. ACM. KAMTHON SINDHVANANDA

Positions in the Company Independent Director Age 89 years old Nationality Thai Education -B. Eng-EE, Chulalongkorn University -Honorary Degree, Doctor of Engineering, King Mongkut's Institute of Technology North Bangkok -Honorary Degree, Doctor of Engineering, Kasetsart University -Honorary Degree, Doctor of Engineering, Chulalongkorn University -Honorary Degree, Doctor of Engineering, Prince of Songkha University -Honorary Degree, Doctor of Engineering, Siam University -Honorary Degree, Doctor of Philosophy (Public Administration), The National Institute of Development Administration -Honorary Degree, Doctor of Arts, Southeast Bangkok College -Honorary Degree, Doctor of Engineering, Eastern Asia University Director training program -Chairman 2000 Program, Thai Institute of Directors Association Finance for Non-Finance Directors, Thai Institute of Directors Association -Director Accreditation Program (DAP) Previous Experience -Member of National Legislative Assembly -Founder and Chairman of The Institute of Electrical and Electronics Engineer Inc. Thailand Section -Senator -Governor, Electricity Generating Authority of Thailand -Chairman, The Executive Committee, Suan Luang Rama IX Park Foundation -President, The Engineering Institute of Thailand Under H.M. The King’s Patronage Other Current Positions -Chairman of Advisors to the Board of Directors, Petroleum Institute of Thailand -Vice Chairman, Sai Jai Thai Foundation Under Royal Patronage -Privy Councilor -Chairman, Foundation for Petroleum Institute of Thailand -Vice Chairman, The Royal Project Foundation -Chairman, Suan Luang Rama IX Park Foundation -Chairman and Director, Tapasa Foundation -Chairman, The Royal Scholarship for Thai Prioat Project No. of years on the board 17 years CSR shareholding None Positions in rival companies/ Related companies None Meeting attendance in 2014 Board of Directors Meeting 5 of 5 Meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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3. MR. CHACKCHAI PANICHAPAT

Positions in the Company Chairman of the Audit Committee Member of the Nomination and Remuneration Committee, Independent Director Age 76 years old Nationality Thai Education -B.E. (Electrical Engineering), Chulalongkorn University -M.E. (Electrical Engineering), University of Texas, Austin, U.S.A. -Certificate, National Defense College Director training program - Director Accreditation Program (DAP) 5/2003 - Finance for Non-Finance Director (FND) 19/2005 - Director Certification Program (DCP) 72/2006 - Role of Compensation Committee (RCC) 3/2007 - Audit Committee Program (ACP) 25/2009 Experience Deputy Secretary General of the Board of Investment Positions in other listed Companies - Director and Executive Director, Amata Corporation Pcl. Positions in non-listed companies - Chairman Magnecomp Precision Technology Pcl. - Chairman, Amata Water Co.,Ltd.. - Chairman, D-Jig Co., Ltd. - Vice Chairman, Amata City Co.,Ltd. - Director, San Miguel Beer (Thailand) Co.,Ltd. - Director, San Miguel Marketing (Thailand) Co.,Ltd. - Director, Thai San Miguel Liquor Co.,Ltd. - Director, Amata Asia Ltd No. of years on the board 17 years CSR shareholding None Positions in rival companies/ Related companies None Meeting attendance in 2014 Board of Directors Meeting, 5 of 5 Meeting Audit Committee Meeting 5 of 5 Meeting Nomination and Remuneration Committee Meeting, 1 of 1 Meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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4. MR. NIBHOND CHARANVAS

Positions in the Company Independent Director, Chairman of the Nomination and Remuneration Committee, Member of Audit Committee Age 84 years old Nationality Thai Education Bachelor Degree in Business Administration, Temple University, Philadelphia, USA Director training program Director Accreditation Program (DAP) year 2004 Experience Ratchaprasong Branch Manager – TMB Bank Positions in other listed companies Honorary Chairman, Thai Metal Drum Mfg. Public Co.,Ltd. Positions in non-listed companies President of Pimalai Resort & Spa Co., Ltd. No. of years on the board 24 years CSR shareholding 100,831 shares or 0.49% Positions in rival companies/ Related companies None Meeting attendance in 2014 Board of Directors Meeting 4 of 5 Meeting Audit Committee Meeting 4 of 5 meeting The Nomination and Remuneration Committee 1 of 1 meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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5. GEN. PAIBOON KANCHANAPIBOON

Positions in the Company Independent Director, Member of Audit Committee, Member of The Nomination and Remuneration Committee Age 69 years old Nationality Thai Education MPA, NIDA National Defense College Director training program Director Accreditation Program (DAP) Director Certification Program (DCP) Experience Nida Development Fund Manager (Jan. 2010 to present) Artillery center commander (1995-1999) Former Commanding General, Army Weapon Production Center (1999-2000) Former Special Expert, Royal Thai Army (2000-2005) Senior Advisor Office of the Under-Secretary of Ministry - of Defense (2004) Positions in other listed companies None Positions in non-listed companies None No. of years on the board 17 years CSR shareholding None Positions in rival companies//Related companies None Meeting attendance in 2014 Board of Directors Meeting 5 of 5 Meeting Audit Committee Meeting 5 of 5 Meeting The Nomination and Remuneration Committee Meeting 1 of 1 Meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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6. MRS. MAEVADI NAVAPAN

Positions in the Company Executive Director ( Mr. Sukum Navapan’s spouse, Mr. Kittidej Charusathiara’s ant) Age 71 years old Nationality Thai Education Barrister-at-law, Middle Temple, England, 1964 Barrister-at-law, Thailand, 1976 National Defense College, 1989 Director training program Director Accreditation Program (DAP) Experience -Founder and Chairman of Siew-Matsushita Foundation -Chairman of Savita Foundation -Director of Sukumo Foundation -Director of John F. Kennedy Foundation in Thailand -President of Women Lawyers’ Association of Thailand Under The Royal Patronage of HM The Queen -President of Thailand Amateur Ladies Golf Association -Director of Thai Chamber of Commerce -Member of Law Reform Commission -Member of the National Legislative Assembly -Member of the Compensation Fund Committee -Member of the Kasetsart University Council -Executive Director of the Federation of Thai Industries -Executive Director of the International Federation of Women Lawyers Positions in other listed Companies None Positions in non-listed companies -Founder and Board Chairman of Siew-National Co., Ltd., -Chairman Emeritus of National Thai Co., Ltd., -Chairman of Siew Co., Ltd. No. of years on the board 30 years CSR shareholding 14,536,532 shares or 70.91% Positions in rival companies/Related companies None Meeting attendance in 2014 Board of Directors Meeting, 5 of 5 Meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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7. MR. KITTIDEJ CHARUSATHIARA

Positions in the Company Director (Mrs.Maevadi Navapan’s grandson) Age 40 years old Nationality Thai Education MBA, Leadership Management Lavern University, California, USA Director training program Director Accreditation Program (DAP) Experience The Executive Management of North Star World Ltd. Positions in other listed companies None Positions in non-listed companies Managing Director of North Star World Ltd. Managing Director of Damrongrak Commerce Co.,Ltd. No. of years on the board 8 years CSR shareholding 1,500 shares or 0.00% Positions in rival companies/Related companies None Meeting attendance in 2014 Board of Directors Meeting 3 of 5 Meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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8. MR. PUNN KASEMSUP

Positions in the Company Independent Director, Member of Audit Committee Age 46 years Nationality Thai Education - Master of Law in Comparative and International Laws Southern Methodist University, Dallas, TX, USA - Bachelor of Law, Thammasat University, Bangkok Director training program - Certificates of Director Certification Program (DCP 140/2010) - Financial Statements for Directors (FSD 10/2010) - Certificate of Audit Committee Program (ACP 37/2011) - Monitoring Fraud Risk Management (MFM 6/2011) - Monitoring the Internal Audit Function (MIA 11/2011) - Monitoring the System of Internal Control and Risk Management (MIR 12/2012) - Monitoring the Quality of Financial Reporting (MFR 14/2012) Experience - Partner, Managing Director (Legal) HNP Legal Limited (HNP Taxand) (2002 - present)

- Independent Director ITX Corporation Co.,Ltd. (2015) - Independent Director and Audit Committee Gamed Software Co.,Ltd. (2014 - present) - Independent Director and Audit Committee Copperwired Co., Ltd. (2011 - present) - Independent Director and Audit Committee Wattana Capital Public Company Limited (2011 - present) - Senior Associate, Baker & McKenzie (June 1996 - January 2002) - Visiting Scholar East Asian Legal Study Centre, School of Law, University of Wisconsin (Madison), WI, USA (March - May 1996) - Paralegal Walter, Conston, Alexander & Green P.C., New York, NY, USA (August 1995 – February 1996) - Legal Trainee Federal Court, Northern Texas, Dallas, TX, USA (June–July 1995) - Attorney-at-Law Sitthichoke Sricharoen Law Office (October 1990 - May 1993) Positions in other listed companies None

44

Positions in non-listed companies - Partner, Managing Director (Legal) HNP Legal Limited (HNP Taxand) - Independent Director and Audit Committee Copperwired Co., Ltd. - Independent Director and Audit Committee Gamed Software Co.,Ltd. - Independent Director ITX Corporation Co.,Ltd. Positions in rival companies/Related companies None No. of years on the board 1 year 10 months CSR shareholding None Positions in rival companies//Related companies None Meeting attendance in 2014 Board of Directors Meeting 5 of 5 Meeting (since appointment) Audit Committee Meeting 5 of 5 Meeting (since appointment) Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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9. MR. SUKUMA JAYANANDA

Positions in the Company Managing Director (Mr. Sukum Navapan’s grandson) Age 35 years old Nationality Thai Education - Master of Business Administration, NIDA - Bachelor of Science, Chulalongkorn University - PROFESSIONAL GOLF MANAGEMENT, From PROFESSIONAL GOLFERS CAREER COLLEGE, CA, USA Director training program - Successful Formulation and Execution (SFE) - Role of the Compensation Committee (RCC) - Audit Committee Program (ACP) - Director Accreditation Program (DAP) 10/2010 - Finance Statements for Director (FND) 10/2010 - Director Certification Program (DCP) 140/2011 - Monitoring Fraud Risk Management MFM 6/2011 - Monitoring the internal Audit Function MIA 11/2011 - Monitoring the system of Internal Control and Risk Management MIR 12/2012 - Monitoring of the Quality of Financial Reporting MFR 14/2012 Experience - Executive Director/Acting Managing Director, City Sports & Recreation Plc. (appointed on 29 July 2010) - Director of golf, City Sports & Recreation Plc. (Aug. 2004-28 July 2010) - BEAR CREEK GOLF COURSE, CA, USA (2003-2004) Positions in other listed companies None Positions in non-listed companies Director, Navatanee Ltd. No. of years on the board 4 year 5 months CSR shareholding 144,500 shares or 0.70% Positions in rival companies/Related companies None Meeting attendance in 2014 Board of Directors Meeting, 5 of 5 Meeting Other information No legal dispute over the past 5 years No conflict of interest transaction with the company in 2014

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Additional information of The executive management as of 31st December 2014

1. Mr. Sukum Navapan CEO details has shown on page 35 2. Mrs. Maevadi Navapan Executive Director details has shown on page 40 3. Mr. Sukuma Jayananda Managing Director details has shown on page 44

4. Mr. Pracha Boonsomphong Rank: Superintendent Age: 63 years old Nationality: Thai Education: MS Corp. Science MPS. Community & Rural Development, Central Luzon State University, Philippines Experience: Golf Course Manager/Superintendent, Taimuang Beach Resort No. of years: 16 years CSR shareholding: -none- Position in listed-non listed company -none- Positions in Rival companies/Related company -none-

5. Mrs. Patcharaporn Julothai Rank: Administrative manager/Company secretary Age: 54 years old Nationality: Thai Education: B.A. (Management), The Institute of Technology & Vocational Education IOD training program Company Secretary Program (CSP 4/2003) Experience: Office Secretary No. of years: 30 years CSR shareholding: 11,500 shares or 0.06% Position in listed-non listed company -none Positions in Rival companies/Related company -none

6. Mrs. Chutima Sunthornmonthol Rank: Financial Manager Age: 51 years old Nationality: Thai Education: BA (Accounting), Dhurakijpundit University Experience: Chief accountant No. of years: 22 years CSR shareholding: -none- Position in listed-non listed company -none Positions in Rival companies/Related company -none

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Audit fee certificate

Internal Audit Team of Honesty Audit Company Limited

No. Position Name Education and Related Certificate Work Experience 1 Internal Audit Ms.Pemika Sangsanor • Certified Public Accountant More than 8 years experienced Department 10205 of auditing and internal audit. Manager • Internal Auditing Certificate Program (IACP) • Bachelor of Accountancy, Mahidol University • Master of Business Administration Professional Program, Assumption University 2 Internal Audit Staff Mr.Sittipab Titathampol • Bachelor of Business More than 2 years experienced Administration , of auditing and internal audit. Rajamangala University of Technology Phra Nakhon 3 Internal Audit Staff Mr.Saranyoo Tawhay • Bachelor of Accountancy, More than 1 year experienced of Suan Sunandha Rajabhat auditing and internal audit. University 4 Internal Audit Staff MS.Sakawrat Trairattanapakdee • Bachelor of Accountancy, More than 1 year experienced of Kasetsart University auditing and internal audit.

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of City Sports and Recreation Public Company Limited

I have audited the accompanying financial statements of City Sports and Recreation Public Company Limited, which comprise the statements of financial position as at December 31, 2014, and statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

SP Audit Co; Ltd.

Opinion

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of City Sports and Recreation Public Company Limited as at December 31, 2014, and financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

Other matter

The financial statements as at December 31, 2013 of City Sports and Recreation Public Company Limited, presented herein as comparative information, were also reviewed by another auditor who concluded, under her report dated February 10, 2014.

SP Audit Company Limited

(Miss Susan Eiamvanicha) Certified Public Accountant (Thailand) No. 4306

Bangkok February 19, 2015. 3 CITY SPORTS AND RECREATION PUBLIC COMPANY LIMITED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2014 (Unit : Baht) Notes 2014 2013 ASSETS CURRENT ASSETS Cash and Cash Equivalents 58,339,658.35 57,730,260.78 Current Investment 5 26,708,203.50 - Trade and Other Receivables 4, 6 2,059,808.97 1,500,754.89 Inventories 611,375.25 626,316.42 TOTAL CURRENT ASSETS 87,719,046.07 59,857,332.09 NON–CURRENT ASSETS Other Long–Term Investment 7 464,999,390.55 471,327,308.97 Loans to Employees 811,500.00 805,500.00 Investment Property 8 9,060,000.00 9,060,000.00 Property, Plant and Equipment 9 1,223,123,123.12 1,216,171,307.48 Other Non–Current Assets Security Deposit 4 25,000,000.00 25,000,000.00 Others 1,340,550.00 1,073,550.00 TOTAL NON–CURRENT ASSETS 1,724,334,563.67 1,723,437,666.45 TOTAL ASSETS 1,812,053,609.74 1,783,294,998.54

Notes to financial statements are an integral part of these statement. 4 CITY SPORTS AND RECREATION PUBLIC COMPANY LIMITED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2014 (Unit : Baht) Notes 2014 2013 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Trade and Other Payables 10 13,894,144.51 13,685,862.80 Income Tax Payable 6,897,518.96 6,198,451.84 TOTAL CURRENT LIABILITIES 20,791,663.47 19,884,314.64 NON–CURRENT LIABILITIES Deferred Tax Liabilities 11 235,313,619.33 235,984,786.17 Employee Benefit Obligation 12 8,931,377.01 3,695,127.60 TOTAL NON–CURRENT LIABILITIES 244,244,996.34 239,679,913.77 TOTAL LIABILITIES 265,036,659.81 259,564,228.41 SHAREHOLDERS' EQUITY Share Capital 13 Authorized Share Capital 20,500,000 Ordinary Shares @ Baht 10.00 205,000,000.00 205,000,000.00 Issued and Paid–Up Share Capital 20,500,000 Ordinary Shares @ Baht 10.00 205,000,000.00 205,000,000.00 Share Premiums on Share Ordinary Shares 93,200,000.00 93,200,000.00 Retained Earnings Appropriated Legal Reserve 14 20,500,000.00 20,500,000.00 Unappropriated 279,693,662.49 258,135,523.35 Other Components of Equity 15 948,623,287.44 946,895,246.78 TOTAL SHAREHOLDERS' EQUITY 1,547,016,949.93 1,523,730,770.13 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,812,053,609.74 1,783,294,998.54

Notes to financial statements are an integral part of these statement. 5 CITY SPORTS AND RECREATION PUBLIC COMPANY LIMITED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2014 (Unit : Baht) Notes 2014 2013 Revenues from Golf Course Services 122,821,363.46 131,831,759.90 Revenues from Restaurant 25,981,525.20 27,714,716.04 Revenues from Sport Club 6,674,655.11 4,988,430.54 TOTAL REVENUE 155,477,543.77 164,534,906.48 Costs of the Rendering of Services – Golf Course (28,402,207.09) (31,181,249.56) Costs of Sales of Restaurant (20,604,270.84) (20,296,878.79) Costs of the Rendering of Services – Sport Club (6,244,029.28) (5,924,997.73) TOTAL COST (55,250,507.21) (57,403,126.08) GROSS PROFIT 100,227,036.56 107,131,780.40 Dividend Income 9,643,571.29 12,313,774.15 Interest Income 7,622,316.70 4,750,650.17 Other Income 2,176,438.89 3,490,160.55 Selling Expenses (1,964,642.00) (2,235,236.20) Administrative Expenses (22,946,563.54) (23,101,750.70) Management Benefit Expenses 4 (7,924,574.18) (6,688,846.41) PROFIT BEFORE INCOME TAX EXPENSE 86,833,583.72 95,660,531.96 Income Tax Expense 16 (15,504,418.18) (16,674,614.87) PROFIT FOR THE YEAR 71,329,165.54 78,985,917.09 OTHER COMPREHENSIVE INCOME Net Change in Fair Value of Avaliable-for-Sale Invesments 1,728,040.66 (3,073,135.38) Gain (Loss) on Revaluation of Land - 35,600,983.20 Actuarial Loss (1,596,026.40) - OTHER COMPREHENSIVE INCOME FOR THE YEAR - NET OF INCOME TAX 132,014.26 32,527,847.82 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 71,461,179.80 111,513,764.91

BASIC EARNINGS PER SHARE (BAHT) 17 3.48 3.85

Notes to financial statements are an integral part of these statement. 6 CITY SPORTS AND RECREATION PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 2014 (Unit : Baht) Issued and Share PremiumRetained Earnings Other Components of Equity Total Paid-up Account Appropriated Unappropriated Available-for-Sale Land Revaluation Share Capital Legal Reserve Investments Net Income Tax Notes Net Income Tax Balance as at January 1, 2013 205,000,000.00 93,200,000.00 20,500,000.00 220,149,606.26 608,830.08 913,758,568.88 1,453,217,005.22 Changes in Equity for the Year Dividend Payment 18 - - - (41,000,000.00) - - (41,000,000.00) Total Comprehensive Income for the Year - - - 78,985,917.09 (3,073,135.38) 35,600,983.20 111,513,764.91 Balance as at December 31, 2013 205,000,000.00 93,200,000.00 20,500,000.00 258,135,523.35 (2,464,305.30) 949,359,552.08 1,523,730,770.13 Changes in Equity for the Year Actuarial Loss Net Income Tax - - - (1,596,026.40) - - (1,596,026.40) Dividend Payment 18 - - - (48,175,000.00) - - (48,175,000.00) Total Comprehensive Income for the Year - - - 71,329,165.54 1,728,040.66 - 73,057,206.20 Balance as at December 31, 2014 205,000,000.00 93,200,000.00 20,500,000.00 279,693,662.49 (736,264.64) 949,359,552.08 1,547,016,949.93

Notes to financial statements are an integral part of these statement. 7 CITY SPORTS AND RECREATION PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOW FOR THE YEAR ENDED DECEMBER 31, 2014 (Unit : Baht) 2014 2013 CASH FLOW FROM OPERATION ACTIVITIES Profit before Income Tax Expense 86,833,583.72 95,660,531.96 Adjustment to Profit before Income Tax Expense for Cash Received (Paid) from Operations Depreciation 5,253,899.44 5,327,596.96 Gain from Sales of Long–Term Investment (1,500,444.82) (2,506,965.71) (Gain)Loss from Sales of Assets 105.00 (280,372.83) Dividend Income (9,643,571.29) (12,313,774.15) Interest Income (7,622,316.70) (4,750,650.17) Employee Benefit Obligation 3,328,616.41 640,363.81 Profit from Operation Activities before Changes in Operating Assets and Liabilities 76,649,871.76 81,776,729.87 (Increase) Decrease in Operating Assets Trade and Other Receivables 84,624.72 3,482.71 Inventories 14,941.17 (62,209.67) Loans to Employees (6,000.00) (278,000.00) Other Non–Current Assets (267,000.00) (113,900.00) Increase (Decrease) in Operating Liabilities Trade and Other Payables (339,258.04) 2,012,947.18 Cash Received (Paid) from Operating Activities 76,137,179.61 83,339,050.09 Cash Payment in Employee Benefit Obligation (87,400.00) (494,600.00) Cash Payment in Income Tax Expense (15,509,521.46) (15,850,189.83) Net Cash Provided from (Used in) Operating Activities 60,540,258.15 66,994,260.26

Notes to financial statements are an integral part of these statement 8 CITY SPORTS AND RECREATION PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOW FOR THE YEAR ENDED DECEMBER 31, 2014 (Unit : Baht) 2014 2013 CASH FLOW FROM INVESTING ACTIVITIES Cash Received from Sale of Current Investment - 7,500,000.00 Cash Payment from Purchase of Current Investment (25,000,000.00) - Cash Payment from Purchase of Long–term Investment (369,900,000.00) 59,300,785.60 Cash Received from Sale of Long–term Investment 378,180,210.56 (73,393,240.44) Cash Payment from Purchase of Fixed Assets (12,205,820.08) (8,171,176.81) Cash Received from Sale of Fixed Assets - 280,373.83 (Increase)Decrease in Pledged Deposits Fixed Account - 5,343,080.57 Cash Received from Dividend Income 9,643,571.29 12,313,774.15 Cash Received from Interest Income 6,978,637.90 4,339,725.12 Net Cash Provided from (Used in) Investing Activities (12,303,400.33) 7,513,322.02 CASH FLOW FROM FINANCING ACTIVITIES Dividend Paid (47,627,460.25) (41,000,000.00) Net Cash Provided from (Used in) Financing Activities (47,627,460.25) (41,000,000.00) Net Cash and Cash Equivalents Increase (Decrease) 609,397.57 33,507,582.28 Cash and Cash Equivalents at the Beginning of the Year 57,730,260.78 24,222,678.50 Cash and Cash Equivalents at the Ending of the Year 19 58,339,658.35 57,730,260.78

Notes to financial statements are an integral part of these statement.

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CITY SPORTS AND RECREATION PUBLIC COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS December 31, 2014

1. General information

City Sports and Recreation Public Company Limited (“the Company”) is a public limited company and incorporated in Thailand. The Company is listed on the Stock Exchange of Thailand. The address of the Company’s registered office is 22 Navatanee Road, Ramintra, Khan Na Yao, Bangkok.

The principal activities of the Company involve the rendering golf course, sport club and restaurant services.

2. Basis of preparation of financial statements

The financial statements are presented in Thai language and Thai Baht, and in conformity with Thai generally accepted accounting principles under the Accounting Act B.E. 2543 (or 2000), being those Thai Accounting Standards issued under the Accounting Profession Act B.E. 2547 (or 2004), and the financial reporting required by the Capital Market Supervisory Board under the Securities and Exchange Act B.E. 2535 (or 1992).

The financial statements have been prepared under the historical cost convention except some type of transaction using the basis as per explained in the related accounting policy.

The preparation of financial statements in conformity with Thai Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses in the reported periods. Actual results may differ from those estimates. Although, the management has most well prepared the figures of estimation from the understanding of events and the things that have been done presently.

The financial statements issued for Thai report purposes are prepared in the Thai language. This English translation of the financial statements has been prepared for the convenience of readers not conversant with the Thai language.

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The Federation of Accounting Profession (FAP) has notified to apply the following financial reporting standards to the financial statements having an accounting period beginning on or after January 1, 2014.

TFRS No. 2 Share–based Payment (revised 2012) TFRS No. 3 Business Combinations (revised 2012) TFRS No. 5 Non-current Assets Held for Sale and Discontinued Operations (revised 2012) TFRS No. 8 Operating Segments (revised 2012) TAS No. 1 Presentation of Financial Statements (revised 2012) TAS No. 7 Statement of Cash Flows (revised 2012) TAS No. 12 Income Taxes (revised 2012) TAS No. 17 Leases (revised 2012) TAS No. 18 Revenue (revised 2012) TAS No. 19 Employee Benefits (revised 2012) TAS No. 21 The Effects of Changes in Foreign Exchange Rates (revised 2012) TAS No. 24 Related Party Disclosures (revised 2012) TAS No. 28 Investments in Associates (revised 2012) TAS No. 31 Interests in Joint Ventures (revised 2012) TAS No. 34 Interim Financial Reporting (revised 2012) TAS No. 36 Impairment of Assets (revised 2012) TAS No. 38 Intangible Assets (revised 2012) TFRI No. 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities TFRI No. 4 Determining whether an Arrangement contains a Lease TFRI No. 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds TFRI No. 7 Applying the Restatement Approach under TAS No. 29 Financial Reporting in Hyperinflationary Economies TFRI No. 10 Interim Financial Reporting and Impairment TFRI No. 12 Service Concession Arrangements TFRI No. 13 Customer Loyalty Programmes TFRI No. 17 Distributions of Non-cash Assets to Owners TFRI No. 18 Transfers of Assets from Customers TSI No. 15 Operating Leases-Incentives TSI No. 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease TSI No. 29 Service Concession Arrangements : Disclosures TSI No. 32 Intangible Assets-Web Site Costs

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The Company has adopted such financial reporting standards to the financial statements on the current period. The management believes that they don’t have any significant impact on the financial statements for the current period.

Moreover, the Federation of Accounting Profession has notified to apply the following financial reporting standards to the financial statements in the future periods. Effective date The Conceptual Framework for Financial Reporting (revised 2014) January 1, 2015 TFRS No. 2 Share-based Payment (revised 2014) January 1, 2015 TFRS No. 3 Business Combinations (revised 2014) January 1, 2015 TFRS No. 5 Non-current Assets Held for Sale and Discontinued Operations (revised 2014) January 1, 2015 TFRS No. 6 Exploration for and Evaluation of Mineral Resources (revised 2014) January 1, 2015 TFRS No. 8 Operating Segments (revised 2014) January 1, 2015 TFRS No. 10 Consolidated Financial Statements January 1, 2015 TFRS No. 11 Joint Arrangements January 1, 2015 TFRS No. 12 Disclosure of Interests in Other Entities January 1, 2015 TFRS No. 13 Fair Value Measurement January 1, 2015 TAS No. 1 Presentation of Financial Statements (revised 2014) January 1, 2015 TAS No. 2 Inventories (revised 2014) January 1, 2015 TAS No. 7 Statement of Cash Flows (revised 2014) January 1, 2015 TAS No. 8 Accounting Policies, Changes in Accounting Estimates and Errors (revised 2014) January 1, 2015 TAS No. 10 Events after the Reporting Period (revised 2014) January 1, 2015 TAS No. 11 Construction Contracts (revised 2014) January 1, 2015 TAS No. 12 Income Taxes (revised 2014) January 1, 2015 TAS No. 16 Property, Plant and Equipment (revised 2014) January 1, 2015 TAS No. 17 Leases (revised 2014) January 1, 2015 TAS No. 18 Revenue (revised 2014) January 1, 2015 TAS No. 19 Employee Benefits (revised 2014) January 1, 2015 TAS No. 20 Accounting for Government Grants and Disclosure of Government Assistance January 1, 2015 (revised 2014) TAS No. 21 The Effects of Changes in Foreign Exchange Rates (revised 2014) January 1, 2015 TAS No. 23 Borrowing Costs (revised 2014) January 1, 2015 TAS No. 24 Related Party Disclosures (revised 2014) January 1, 2015 TAS No. 26 Accounting and Reporting by Retirement Benefit Plans (revised 2014) January 1, 2015 TAS No. 27 Separate Financial Statements (revised 2014) January 1, 2015 TAS No. 28 Investments in Associates and Joint Ventures (revised 2014) January 1, 2015 TAS No. 29 Financial Reporting in Hyperinflationary Economies (revised 2014) January 1, 2015 TAS No. 33 Earnings per Share (revised 2014) January 1, 2015

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TAS No. 34 Interim Financial Reporting (revised 2014) January 1, 2015 TAS No. 36 Impairment of Assets (revised 2014) January 1, 2015 TAS No. 37 Provisions, Contingent Liabilities and Contingent Assets (revised 2014) January 1, 2015 TAS No. 38 Intangible Assets (revised 2014) January 1, 2015 TAS No. 40 Investment Property (revised 2014) January 1, 2015 TFRIC No. 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities (revised January 1, 2015 2014) TFRIC No. 4 Determining whether an Arrangement contains a Lease (revised 2014) January 1, 2015 TFRIC No. 5 Rights to Interests arising from Decommissioning, Restoration and Environmental January 1, 2015 Rehabilitation Funds (revised 2014) TFRIC No. 7 Applying the Restatement Approach under TAS 29 (revised 2014) Financial January 1, 2015 Reporting in Hyperinflationary Economies TFRIC No. 10 Interim Financial Reporting and Impairment (revised 2014) January 1, 2015 TFRIC No. 12 Service Concession Arrangements (revised 2014) January 1, 2015 TFRIC No. 13 Customer Loyalty Programmes (revised 2014) January 1, 2015 TFRIC No. 14 TAS 19 (revised 2014) - The Limit on a Defined Benefit Assets, Minimum January 1, 2015 Funding Requirements and their Interaction TFRIC No. 15 Agreements for the Construction of Real Estate (revised 2014) January 1, 2015 TFRIC No. 17 Distributions of Non-cash Assets to Owners (revised 2014) January 1, 2015 TFRIC No. 18 Transfers of Assets from Customers (revised 2014) January 1, 2015 TFRIC No. 20 Stripping Costs in the Production Phase of a Surface Mine January 1, 2015 TSIC No. 10 Government Assistance – No Specific Relation to Operating Activities (revised January 1, 2015 2014) TSIC No. 15 Operating Leases - Incentives (revised 2014) January 1, 2015 TSIC No. 25 Income Taxes – Changes in the Tax Status of an Entity or its Shareholders (revised January 1, 2015 2014) TSIC No. 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease January 1, 2015 (revised 2014) TSIC No. 29 Service Concession Arrangements : Disclosures (revised 2014) January 1, 2015 TSIC No. 31 Revenue – Barter Transactions Involving Advertising Services (revised 2014) January 1, 2015 TSIC No. 32 Intangible Assets – Web Site Costs (revised 2014) January 1, 2015 TFRS No. 4 Insurance Contracts (revised 2014) January 1, 2016

The Company has not early adopted such financial reporting standards having the effective date to the financial statements on the future periods before the effective dates. The management is currently assessing the first-year impact on the financial statements for the period in which they are initially adopted.

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3. Accounting policies

3.1 Cash and Cash Equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits with banks and other short-term highly liquid investments with original maturities of three months or less and free from restrictions.

3.2 Trade and Other Receivables

Trade accounts receivable are carried in the statement of financial position at the amount expected to be collectible. Allowance for doubtful receivables are estimated uncorrectable. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written off during the year in which they are identified.

3.3 Inventories

Inventories are valued at cost price under first-in first-out method or net realizable value whichever is the lower.

3.4 Other Investment

Investments in other debt and equity securities

Debt securities and marketable equity securities held for trading are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss.

Debt securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are stated at amortised cost, less any impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity.

Debt securities and marketable equity securities, other than those securities held for trading or intended to be held to maturity, are classified as available-for-sale investments.

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Available-for-sale investments are, subsequent to initial recognition, stated at fair value, and changes therein, other than impairment losses, are recognised directly in other components of equity. Impairment losses are recognised in profit or loss. When these investments are derecognised, the cumulative gain or loss previously recognised directly in other components of equity is recognised in profit or loss. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in profit or loss.

Equity securities which are not marketable are stated at cost less any impairment losses.

The fair value of financial instruments classified as held-for-trading and available-for-sale is determined as the quoted bid price at the reporting date.

Disposal of investments

On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in other components of equity is recognised in profit or loss.

If the Company disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.

3.5 Investment Property

The Company’s investment property is their owned land without specific purpose of use in the future and/or exploiting for rental income or appreciation of the asset. The Company measures the investment property by the cost value, deducted the allowance for impairment, (if any).

3.6 Property, Plant and Equipment

Land and assets under construction held for use in the production or supply of goods or services, or for administrative purposes, are stated in the statement of financial position at their historical cost less accumulated impairment losses (if any).

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Plant and Equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the statement of financial position at their historical cost less accumulated depreciation and accumulated impairment losses (if any).

The cost of an item of asset comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, and the borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset.

The Company depreciation is calculated on the straight-line method to write off the cost of each asset, except for land and assets under construction, to their residual values over their estimated useful life as follows:

- Road of golf course 10 years - Accessories and golf course improvement 5 – 20 years - Buildings and constructions 10 – 20 years - Building improvements 10 years - Equipment and vehicles 5 years

The residual value, the useful life and the depreciation method of an asset will be reviewed at least at each financial year-end.

The gain or loss arising on the disposal or retirement of an item of land and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

3.7 Accounting for leases

Where the company is the lessee

Long term leases which substantially transferred all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease

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payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance charges, are included in other long-term payables.The interest element of the finance cost is charged in profit or loss over the lease period so as to achieve a constant periodic rate of interest on the remaining balance of the liability for each period.The assets acquired under finance leases while depreciation is carried throughout the useful life of leased asset. However, if there is uncertainty in the right of ownership when the contract is terminated, depreciation is carried according to useful life of leased assets or life of leased contract whichever the period is lower.

Long term leases not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged in profit or loss on a straight-line basis over the period of the lease.

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

3.8 Impairment of assets

The carrying amounts of the Company’s assets and also intangible assets are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount which is the higher of an asset’s net selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows.

The Company will recognize impairment losses in profit or loss, or reduce the revaluation increment in assets in case that those assets are previously revalued. The reversal of impairment losses will be recognized in profit or loss or as a revaluation increment in assets when there is an indication that the impairment losses are no longer exist or decreased.

3.9 Provision of Liabilities

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Company expects a provision to be

17 reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

3.10 Recognition of Revenues and Expenses

Revenue from goft course service and revenue from rental of golf cart and revenues from sport club are recongnized when service have been provided to customer.

Revenue from sales is recognized when are delivered.

Memberships due are recognized in accordance with the period of time.

Interest income is recognized on an accrual basis.

Dividend income for investment is recognized when have right to receive dividend.

Expenses are recognized on an accrual basis.

3.11 Retirement benefit costs

Defined benefit plan

The Company has the employee benefit obligation in case of retirement or termination under the labor law. The Company hires an actuary to calculate on an actuarial technique the said employee benefit obligation. The said employee benefit obligation is discounted using the projected unit credit method by reference to an interest rate of a government bond to determine the present value of the employee benefit obligation, related past service cost and current service cost. All actuarial gains and losses are recognized immediately in profit or loss.

3.12 Income Taxes

The Company recognizes the unpaid current tax for current period as a liability in the statement of financial position. In a case where the amount already paid in respect of current period exceeds the amount due for those period, the excess will be recognized as an asset in the statement of financial position.

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The Company recognizes a deferred tax liability for all taxable temporary difference, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which affects neither accounting profit nor taxable profit at the time of the transaction. The Group recognizes a deferred tax asset for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that affects neither accounting profit nor taxable profit.

The Company measures the current tax assets and liabilities for the current period using the tax rate that have been enacted by the end of the reporting period. And the deferred tax assets and liabilities are measured at the tax rate that is expected to apply to the period when the asset is realized or the liability is settled, based on tax rate that have been enacted or substantively enacted by the end of the reporting period. The Company recognizes the current and deferred tax as an income or an expense and includes it in profit or loss for the period, except the current and deferred tax for items that are recognized in the other comprehensive income or directly in the equity will be recognized in the other comprehensive income or directly in the equity.

3.13 Financial Instruments

Financial assets and liabilities carried on the statement of financial position include cash and cash equivalents, trade and other receivables, trade and other payables, and loan receivables and payables. The accounting policies on recognition and measurement of these items are disclosed in the respective accounting policies found in this Note.

3.14 The important accounting estimation, supposition and judgment application

The estimation, supposition and judgment application have been continuously reviewed and assessed and they are on the background of the history experience and other factors that include the expectation of the event in the future which believe that there are reasons in that situation.

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Property, Plant and Equipment and Investment Property

Management determines the estimated useful lives and residual values for the Company’s Property and Equipment and Investment Property. Management will revise the depreciation charge where useful lives and residual values are different to previously estimated, or its will write off or write down technically obsolete or assets that have been abandoned or sold.

4. Related party transactions

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties.

In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.

Navapan family is a major shareholder, holding 68.23% (December 31, 2013 : 68.23%) of the share capital of the Company. Transactions related to companies in which the Navapan family is the principal shareholders or directors are recognized as related parties to the Company.

The transactions with related parties for the year ended December 31, 2014 and 2013

4.1 Inter-assets and liabilities (Unit: Baht) 2014 2013 Trade receivable Navatanee Co., Ltd. Within Credit Term 8,425.00 7,560.00

Security Deposit Navatanee Co., Ltd. 25,000,000.00 25,000,000.00

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4.2 Inter-revenue and expenses (Unit: Baht) 2014 2013 Revenue from service Navatanee Co., Ltd. 102,697.42 113,860.97

4.3 Management benefit expense (Unit: Baht) 2014 2013 Short-term employee benefits 7,218,592.00 6,673,332.00 Post-employment benefits 705,982.18 15,514.41 7,924,574.18 6,688,846.41

4.4 Pricing policies

Trading transactions Policy of pricing Revenue from sales Prices that comparable with outsiders

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4.5 Nature of relationship

Company Relationship Navatanee Company Limited A related company by major shareholders and common director.

4.6 Commitments

The Company constitutes the contract performance with Navatanee Co., Ltd. amount 2 contracts as follows: 1. Contract to the right exercise to use asset dated December 31, 1980, carried the period of 30 years and hold the right to extend the contract by 2 times each of which is 10 years. On October 15, 2009, the Company has extend the contract period to the right exercise to use asset with Navatanee Co., Ltd. for another ten years commenced from the date that such contract will be matured in the first period on December 31, 2010 to be the date the contract is matured on December 31, 2020 while there is inter-commitment as follows:

City Sports and Recreation Public Co., Ltd. City Sports and Recreation Public Co., Ltd. consents that Navatanee Co., Ltd. or juristic person or any other person operates in field of proshop, restaurant, or creation service without any other remuneration.

City Sports and Recreation Public Co., Ltd. has placed deposit so as to insure damage at Navatanee Co., Ltd. for contingent damage from the use of car parking, swimming pool and locker rooms by Baht 25 million throughout the contract life.

Navatanee Co., Ltd. Navatanee Co., Ltd. consents the members of City Sports and Recreation Public Co., Ltd. (membership of golf and family) use every service which related to sport and swimming pool, car parking, locker rooms as if City Sports and Recreation Public Co., Ltd. is the owner without any remuneration to repay to Navatanee Co., Ltd.

2. The contract to exchange exercise right to use the land and building dated June 1, 1997, carried the period of 30 years commenced from June 1, 1997 to May 30, 2027 and hold the right to renew the contract by another 10 years each while there is inter-commitment as follows:

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City Sports and Recreation Public Co., Ltd. City Sports and Recreation Public Co., Ltd. agrees to consent that Navatanee Co., Ltd., to exploit land in the title deed of No. 1557 (some part) which is located at Kunnayao Subdistrict, Bangkapi District, Bangkok. It constitutes the area of 24 Rais 2 Ngan 58.3 Square Wa and equipped land so as for develop in commercial field in accordance with Navatanee Co., Ltd. consent by expense of Navatanee Co., Ltd. itself.

Navatanee Co., Ltd. Navatanee Co., Ltd. agrees to consent that City Sports and Recreation Public Co., Ltd., to exploits land in the title deed of No. 1555, 1556 and 1436 which is located at Kannayao Subdistrict, Bangkapi District, Bangkok. It constitutes the area of 24 Rais 2 Ngan 58.3 Square Wa and equipped land so as to operate business in respect of club, restaurant, sporting activity and golf yard and consent that City Sports and Recreation Public Co., Ltd. holds the right to improve such area by expense of City Sports and Recreation Public Co., Ltd. itself.

Given such contract, the Company and Navatanee Co., Ltd. do not charge any inter expense which are complied with mutually agreed in accordance with the contract.

Apart from this, the land title deed of No. 1394, in the area of 27-3-36 rais in cost price of Baht 0.70 million which is the entrance and exit of village and that golf yard, the Company consents that the community in the Navatanee Village use as entrance – exit and the pathway of other public utility; however, the Company has used such land of Navatanee Co., Ltd. which is the entrance and exit road of golf yard while the use of such land is not carried any inter-expense.

In accordance with the minute of the board of directors meeting no. 3/2010 dated July 29, 2010, it resolves that according to the Navathanee Co., Ltd., has proposed to develop sport club on the piece of land of the City Sports and Recreation Public Co., Ltd., in accordance with the land and property exploitation right exchange contract dated June 1, 1997 which utilizes investment fund by approximately Baht 90-100 million while the Navathanee Co., Ltd., will receive remuneration fee as sport club membership right for the landowner in the Navathanee Village at the same rates and conditions as available to the public whereas the City Sports and Recreation Public Co., Ltd., will enter management regarding revenue and expense.

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5. Current investment

Consisted of:-

(Unit: Baht) 2014 2013 Cost Fair Value Cost Fair Value

Debt securities current portion 2,000,000.00 2,000,000.00 - - Trading securities– Investment in Mutual Fund 25,000,000.00 24,708,203.50 - - Total 27,000,000.00 26,708,203.50 - - Unrealized loss of investment (291,796.50) - - - Net 26,708,203.50 26,708,203.50 - -

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6. Trade and other receivable

Consisted of :-

(Unit: Baht) 2014 2013 Trade receivables 267,385.33 259,563.84 Prepaid expenses 147,453.50 146,586.26 Accrued interest 1,556,513.61 912,834.81 Other receivables 88,456.53 181,769.98 Total trade and other receivables 2,059,808.97 1,500,754.89

Outstanding trade accounts receivables can be aged as follow:-

(Unit: Baht) 2014 2013 Within credit term 210,824.15 259,563.84 Overdue 1 - 30 days 56,561.18 - Overdue 30 - 60 days - - Overdue 60 - 90 days - - Overdue over 90 days - - Total 267,385.33 259,563.84

7. Other long-term investment

Consisted of:-

(Unit: Baht) 2014 2013 Cost Fair Value Cost Fair Value

Debt securities held to maturity 157,000,000.00 157,000,000.00 97,000,000.00 97,000,000.00 Less Current portion (2,000,000.00) (2,000,000.00) - - Long term - debt securities held to maturity 155,000,000.00 155,000,000.00 97,000,000.00 97,000,000.00 Securities available-for-sale – investment in Mutual Fund 310,919,721.35 309,999,390.55 377,407,690.59 374,327,308.97 Total 465,919,721.35 464,999,390.55 474,407,690.59 471,327,308.97 Unrealized loss of investment (920,330.80) - (3,080,381.62) - Net 464,999,390.55 464,999,390.55 471,327,308.97 471,327,308.97

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For the year ended December 31, 2014 and 2013, the movement of long–term investment was as follows: (Unit: Baht) 2014 2013 Beginning book value 471,327,308.97 458,598,958.46 Add Purchase long-term investment 369,900.000.00 73,393,240.44 Profit from sale investment 1,792,241.32 1,362,837.13 Less Sale of long-term investment (378,180,210.56) (58,156,657.02) Transfer from Long–term Investment to Current Investment (2,000,000.00) - Changes in fair value of investment in securities 2,160,050.82 (3,871,070.04) Ending book value 464,999,390.55 471,327,308.97

As at December 31, 2014 and 2013, the whole debt securities held to maturity in number of 5 securities and 4 securities, respectively, in the amount of Baht 115.00 million and Baht 57.00 million, respectively, are specified name of holder debentures with unsecured and senior bonds. There are debentures’ holders representatives carried on the life of 4-10 years. Interest rates are 4.00-5.75% per annum and the life of 4 years whose interest rates are 4.15-4.50 % per annum, respectively.

As at December 31, 2014 and 2013, the whole debt securities held to maturity in number of 3 securities in the amount of Baht 40.00 million are specified name of holder debentures with unsecured and subordinated. There are debentures’ holders representatives carried on the life of 10-12 years. Interest rates are 4.50-4.70% per annum equal for such both periods.

8. Investment Property

As at December 31, 2014 and 2013, The Company’s investment property is their owned land without specific purpose of use in the future.

The Company did appraise the investment property by an independence appraiser on February 10, 2012, by market comparison approach method which provides the fair value of land of Bath 17.21 million.

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9. Property, plant and equipment

Consist of: (Unit: Baht) Accessories and Buildings and Land Land – Surplus Road of Golf Course Golf Course Construction and Equipment Vehicles Work in Construction Total Improvements Improvements Costs As at January 1, 2014 13,000,000.00 1,186,000,000.01 20,129,853.70 124,322,283.83 48,068,964.18 100,810,740.64 12,478,951.89 285,000.00 1,505,095,794.25 Purchase - - - - - 1,839,244.08 37,383.18 10,329,192.82 12,205,820.08 Disposal - - - - - (1,656,445.62) - - (1,656,445.62) As at December 31, 2014 13,000,000.00 1,186,000,000.01 20,129,853.70 124,322,283.83 48,068,964.18 100,993,539.10 12,516,335.07 10,614,192.82 1,515,645,168.71 Accumulated depreciation : As at January 1, 2014 - - (18,421,760.48) (124,194,725.15) (43,922,458.28) (90,809,328.62) (11,576,214.24) - (288,924,486.77) Depreciation for the year - - (760,308.00) (111,079.05) (497,441.01) (3,624,021.16) (261,050.22) - (5,253,899.44) Disposal - - - - - 1,656,340.62 - - 1,656,340.62 As at December 31, 2014 - - (19,182,068.48) (124,305,804.20) (44,419,899.29) (92,777,009.16) (11,837,264.46) - (292,522,045.59) Book value As at December 31, 2014 13,000,000.00 1,186,000,000.01 947,785.22 16,479.63 3,649,064.89 8,216,529.94 679,070.61 10,614,192.82 1,223,123,123.12

Depreciation in statements of comprehensive income for the year ended December 31, 2014 5,253,899.44

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(Unit: Baht) Accessories and Buildings and Land Land – Surplus Road of Golf Course Golf Course Construction and Equipment Vehicles Work in Construction Total Improvements Improvements Costs As at January 1, 2013 10,000,000.00 1,186,000,000.01 20,129,853.70 124,322,283.83 45,568,964.18 98,139,563.83 16,364,351.89 285,000.00 1,500,810,017.44 Purchase 3,000,000.00 - - - 2,500,000.00 2,671,176.81 - - 8,171,176.81 Disposal ------(3,885,400.00) - (3,885,400.00) As at December 31, 2013 13,000,000.00 1,186,000,000.01 20,129,853.70 124,322,283.83 48,068,964.18 100,810,740.64 12,478,951.89 285,000.00 1,505,095,794.25 Accumulated depreciation : As at January 1, 2013 - - (17,661,452.48) (124,072,037.33) (43,477,899.04) (87,128,821.16) (15,142,078.80) - (287,482,288.81) Depreciation for the year - - (760,308.00) (122,687.82) (445,293.56) (3,679,773.14) (319,534.44) - (5,327,596.96) Disposal ------3,885,399.00 - 3,885,399.00 As at December 31, 2013 - - (18,421,760.48) (124,194,725.15) (43,923,192.60) (90,808,594.30) (11,576,214.24) - (288,924,486.77) Book value As at December 31, 2013 13,000,000.00 1,186,000,000.01 1,708,093.22 127,558.68 4,145,771.58 10,002,146.34 902,737.65 285,000.00 1,216,171,307.48

Depreciation in statements of comprehensive income for the year ended December 31, 2013 5,327,596.96

As at December 31, 2014, certain plant and equipment items of the Company has been fully depreciated but are still in use. The original cost, before deducting accumulated depreciation, of those assets amounted to Baht 271.46 Million (December 31, 2013 : Baht 269.68 million).

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10. Trade and other payables - other companies

Consisted of:-

(Unit: Baht) 2014 2013 Trade payable 1,342,768.87 2,358,836.47 Accrued dividend 3,160,112.06 2,612,572.31 Deferred membership due revenue 2,366,263.83 1,853,474.14 Deferred sports club due revenue 2,297,033.54 2,168,692.15 Deferred green fee and golf car due revenue - 147,327.10 Deferred due revenue 1,048,532.38 883,516.55 Accrued expenses 2,960,133.83 2,945,226.48 Other payables 719,300.00 716,217.60 Total 13,894,144.51 13,685,862.80

11. Deferred tax liabilities

The movements of deferred tax liabilities for year ended December 31, 2014 and 2013 is as follow :-

(Unit: Baht) Recognized in Recognized in other January 1, 2014 profit or loss comprehensive income December 31, 2014 Cash and cash equivalents - 2,432.17 - 2,432.17 Current investment - (58,359.30) - (58,359.30) Long-term investment (616,076.32) - 432,010.16 (184,066.16) Land 237,339,888.02 - - 237,339,888.02 Employee benefits obligation (739,025.53) (648,243.27) (399,006.60) (1,786,275.40) Total 235,984,786.17 (704,170.40) 33,003.56 235,313,619.33

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(Unit: Baht) Recognized in Recognized in other January 1, 2013 profit or loss comprehensive income December 31, 2013 Long-term investment (181,858.34) - (434,217.98) (616,076.32) Land 272,940,871.22 - (35,600,983.20) 237,339,888.02 Employee benefits obligation (816,353.68) 77,328.15 - (739,025.53) Total 271,942,659.20 77,328.15 (36,035,201.18) 235,984,786.17

12. Employee benefit obligation

As at December 31, 2014 and 2013, the Company has the employee benefit obligation in case of retirement or termination under the labor law. The Company hires an actuary to calculate on an actuarial technique the said employee benefit obligation. The said employee benefit obligation is discounted using the projected unit credit method by reference to an interest rate of a government bond to determine the present value of the employee benefit obligation, related past service cost and current service cost.

As at December 31, 2014, the Company recognizes the employee benefit obligation as the liability in amount of Baht 8.93 million (2013 : Baht 3.70 million) in statement of financial position.

Changes in the present value of the employee benefit obligation for the year ended December 31, 2014 and 2013 are as follows:-

(Unit: Baht) 2014 2013 Opening employee benefit obligation balance 3,695,127.60 3,549,363.79 Current service cost 3,178,183.09 464,672.90 Interest cost 150,433.32 175,690.91 Actuarial Loss 1,995,033.00 - Less Paid during the year (87,400.00) (494,600.00) Present value of the obligation as at December 31, 8,931,377.01 3,695,127.60

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The principal assumptions used for the purposes of the actuarial valuation were as follows:

2014 2013 Discount rate 4.25 % 4 % Salary increase rate 5 % 3 % Mortality rate 80 % 60 % Disability rate 5 % 5 % Employee turnover rate 1% - 10% 1% - 5% Retirement age 60 year 60 year

13. Share capital

The movement of share capital for the year ended December 31, 2014 and 2013 is as follows :-

2014 2013

Per Value Number of Amount Number of Amount Baht Ordinary Share Ordinary Share Authorized Share Capital As at January 1, 10.00 20,500,000 205,000,000.00 20,500,000 205,000,000.00 Increment of capital 10.00 - - - - As at December 31, 10.00 20,500,000 205,000,000.00 20,500,000 205,000,000.00

Issued and Paid-up Share Capital As at January 1, 20,500,000 205,000,000.00 20,500,000 205,000,000.00 Increment of capital - - - - As at December 31, 20,500,000 205,000,000.00 20,500,000 205,000,000.00

As at December 31, 2014 the Company’s registered capital is in number of 20.50 million ordinary shares par value of Baht 10 each, the ordinary shares was issued and paid-up in number of 20.50 million shares.

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14. Statutory reserve

Under the provisions of the Public Company Limited Act B.E. 2535, the Company is required to set aside as a legal reserve at least 5% of its net profit after accumulated deficit brought forward (if any) until the reserve is not less than 10% of the registered capital. This reserve is not available for dividend distribution

15. Other Components of Equity

Consisted of:-

(Unit: Baht) 2014 2013 Land Revaluation Net Income Tax 949,359,552.08 949,359,552.08 Available-for-Sale Investments Net Income Tax (736,264.64) (2,464,305.30) Total 948,623,287.44 946,895,246.78

The movement of land revaluation net income tax for the year ended December 31, 2014 and 2013 is as follows :-

(Unit: Baht) 2014 2013 As at January 1, 949,359,552.08 949,359,552.08 Increase (decrease) from revaluation during the year - - As at December 31, 949,359,552.08 949,359,552.08

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The movement of available-for-sale investments net income tax for the year ended December 31, 2014 and 2013 is as follows :-

(Unit: Baht) 2014 2013 As at January 1, (2,464,305.30) 608,830.08 Gain (loss) from revaluation of investments 3,952,292.14 (3,871,446.55) Related income tax (790,458.42) 798,311.17 Transfer to profit or loss from sale of investment during the year (1,792,241.32) - Related income tax – classify to profit or loss 358,448.26 - As at December 31, (736,264.64) (2,464,305.30)

16. Income Tax Expense

Income tax expense is recognized in the Profit (Loss) for the year, consist of:

(Unit: Baht) 2014 2013 Current tax (income) expense 16,208,588.58 16,597,286.72 Deferred tax expenses relating to the origination and reversal of temporary difference (704,170.40) 77,328.15 Total income tax expense recognized in profit or loss 15,504,418.18 16,674,614.87

The difference between expenses tax calculated from accounting profit at the tax rate for the year ended December 31, 2014 and 2013 (Unit: Baht) 2014 2013 Profit 86,833,583.72 95,660,531.96

The tax rate of 20% 20% Expenses (revenue) tax calculated 17,366,716.75 19,132,106.39 Revenues not deductible for income tax (1,786,319.38) (2,464,154.83) Additional expense deductions allowed (75,979.20) (99,817.60) Impact of change in tax rate - 106,480.91 Income tax expense 15,504,418.18 16,674,614.87

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Income tax is recognized in the other comprehensive income, for the year ended December 31, 2014 and 2013 consist of:

(Unit: Baht) 2014 2013 Expense (Revenue) income tax related Gains (loss) on remeasuring available-for-sale investments (432,010.16) 798,311.17 Gains (loss) on land revaluation - (8,900,245.80) Actuarial Gain (Loss) 399,006.60 - Total income tax expense recognized in profit or loss (33,003.56) (8,101,934.63)

Income tax related to each component of other comprehensive income for the year ended December 2014 and 2013 are as follows:-

(Unit: Baht) 2014 2013 Before tax Tax income Net of tax amount Before tax Tax income Net of tax amount (expense) amount (expense) amount Gain (loss) from revaluation of available-for-sale investment Gain (loss) arising during the year 3,952,292.14 (790,458.42) 3,161,833.72 (3,871,446.55) 798,311.17 (3,073,135.38) Less Reclassified to profit or loss from sale during the year (1,792,241.32) 358,448.26 (1433,793.06) - - - Net 2,160,050.82 (432,010.16) 1,728,040.66 (3,871,446.55) 798,311.17 (3,073,135.38) Gain (loss) from revaluation of land - - - 44,501,229.00 (8,900,245.80) 35,600,983.20 Actuarial Gain (Loss) (1,995,033.00) 399,006.60 (1,596,026.40) - - - Other comprehensive income 165,017.82 (33,003.56) 132,014.26 40,629,782.45 (8,101,934.63) 32,527,847.82

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17. Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to shareholders (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year.

18. Dividend Payment

The Annual General Shareholders’ Meeting for year 2014, held on April 24, 2014, resolved to appropriate net profit for the 2013 to dividend payment for shareholders as per share Baht 2.35 in amount of Baht 48.18 million ( 2013 : Baht 41.00 million).

19. Supplemental disclosures of cash flow information

19.1 Cash and cash equivalents consisted of:-

(Unit: Baht) 2014 2013 Cash 928,737.25 2,458,576.87 Cash Deposit – Savings Account 13,786,268.67 13,189,329.68 Cash Deposit – Fixed Account 3 months 42,860,057.55 42,082,354.23 Money Market Fund 764,594.88 - Total 58,339,658.35 57,730,260.78

19.2 Non - cash items:- (Unit: Baht) 2014 2013 Transfer of investments held to maturity to current investments 2,000,000.00 - Increase in accrued dividend payable 547,539.75 -

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20. Expenses by Nature

For the year ended December 31, 2014 and 2013 (Unit: Baht) 2014 2013 Changes in Inventories of Finished Goods (14,941.17) (62,209.67) Raw Materials and Cost of Other Service 29,764,865.60 34,369,549.03 Employee Expenses 34,866,109.56 30,763,918.31 Depreciation 5,253,899.44 5,327,596.96 Management Benefit Expenses 7,924,574.18 6,688,846.41 Other Expenses 10,291,779.32 12,341,258.35 Total 88,086,286.93 89,428,959.39 36

21. Employee Benefit Obligation

21.1 Retirement employee benefit

For the year ended on December 31, 2014 and 2013, the Company recognizes the employee benefit expense in case of retirement or termination under the labor law and other benefit, as follows:- (Unit : Baht) 2014 2013 Current service cost 3,178,183.09 464,672.90 Interest cost 150,433.32 175,690.91 Actuarial Loss 1,995,033.00 - Total 5,323,649.41 640,363.81

An item of the employee benefit expense in case of retirement or termination under the labor law and other benefit for the year ended December 31, 2014 and 2013 are inclusively presented in the line items, as follows:-

(Unit : Baht) 2014 2013 Cost of sale 1,441,752.86 536,807.00 Administrative expenses 1,180,881.37 88,042.40 Management benefit expenses 705,982.18 15,514.41 Total 3,328,616.41 640,363.81

22. Operating segments

The Company identified the operating segments on the basis of internal reports that are regularly reviewed by the Company’s chief operating decision maker in order to allocate resources to the segment and assess its performance.

The Company operates 3 principal activities only within Thailand which consisted of: the golf course business, sport club business and restaurant business.

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Company’s business sectors for the year ended December 31, 2014 and 2013 are as follows:

(Unit: Baht) Golf Course Business Restaurant Business Sports Club Business Total 2014 2013 2014 2013 2014 2013 2014 2013 Revenue from Sales and Service 122,821,363.46 131,831,759.90 25,981,525.20 27,714,716.04 6,674,655.11 4,988,430.54 155,477,543.77 164,534,906.48 Gross profit (loss) 94,419,156.37 100,650,510.34 5,377,254.36 7,417,837.25 430,625.83 (936,567.19) 100,227,036.56 107,131,780.40 Dividend income 9,643,571.29 12,313,774.15 Interest income 7,622,316.70 4,750,650.17 Other income 2,176,438.89 3,490,160.55 Selling expenses (1,964,642.00) (2,235,236.20) Administrative expenses (22,946,563.54) (23,101,750.70) Management benefit expenses (7,924,574.18) (6,688,846.41) Profit before income tax expense 86,833,583.72 95,660,531.96

The reconciliations of each segment total assets to the Company’s assets and other material items. (Unit: Baht) For the Year ended December 31 Golf Course Business Restaurant Business Sports Club Business สวนกลาง Total 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 Total assets 1,222,496,983.51 1,215,369,371.34 274,278.88 351,217.48 351,860.73 450,717.66 588,930,486.62 567,123,692.06 1,812,053,609.74 1,783,294,998.54 Depreciation (4,991,702.91) (5,066,304.29) (148,339.60) (150,734.28) (113,856.93) (110,558.39) - - (5,253,899.44) (5,327,596.96) 38

Information about major customers

For the Year ended December 31, 2014 and 2013 the Company didn’t earn the revenues from sales of goods and rendering of services with each customer to 10% or more of the Company’s revenues.

23. Financial instruments

23.1 Policy on Financial Risk Management

The Company holds risk in respect of the change of interest rates. The Company will consider to apply appropriate financial instrument so as to protect such risk. However, the Company does not have policy to hold or issue financial instrument for speculating or for trading.

23.2 Risk on Interest Rates

The interest rate risk is the risk from the future movements in market interest rates which will be affected the results of the Company operations and their cash flows. The Company had assets which it may have risk on interest rate as follows:

Amount Interest Rate (Unit : Baht) (Unit : Percentage per year) 2014 2013 2014 2013 Cash Deposit - Savings Accounts 14,017,581.89 13,837,256.31 0.125-0.375 0.50-1.75 Cash Deposit - Fixed Accounts 42,860,057.55 42,082,354.23 1.125-1.250 1.75-3.30 Current Investment 2,000,000.00 - 4.00 - Loans to Employees 811,500.00 805,500.00 5.00 5.00 Debt Securities Held to Maturity 155,000,000.00 97,000,000.00 4.00-5.75 4.00-4.70

23.3 Risks on Credit Term

The Company constitutes risk of credit provision related to general trading account receivable. However, since the Company will mainly provide credit facility to accounts receivable who have ability in debt repayment, as a result, the Company does not anticipate to receive damage that is materiality from debt collection from those accounts receivable apart from portion that already set up allowance for doubtful debt.

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23.4 Fair Value

Due to the fact that financial assets and liabilities are mainly short term type. The Company’s management believes that book values of assets and liabilities do not significantly differ from their fair values.

24. Obligation and contingent liabilities

As at December 31, 2014 and 2013 the Company have obligation on construction agreements for renovate golf course in the amount of Baht 7.81 million and Baht 13.60 million, respectively.

25. Reclassification

Some transactions in comprehensive income for year ended December 31, 2013 are newly reclassified so as to comply with reflection in statements of comprehensive income for the year ended December 31, 2014 which can be summarized as follows:

(Unit : Baht) For the year ended December 31, 2013 Transactions which Statement of formerly reflected Reclassified comprehensive income Administrative expenses Management benefit expenses 6,688,846.41

26. Events after the date of the financial statements

The Meeting Company’s board of Directors on February 19, 2015, resolved to appropriate dividend payment for shareholders as per share Baht 2.09 in amount of Baht 42.85 million.

27. Approval of interim financial statements

The financial statements were authorized for issue by the Company’s board of Directors on February 19, 2015.

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