-----------------------------------------------------------------------
  4. Business Operation

  -----------------------------------------------------------------------

Property Development Business

4.1 Business operations of the Company and its subsidiaries

KTP and its subsidiary companies have a main business in property
development for sale and/or lease including office building, commercial
building, and detached housing projects. Details of products and
services are as follows:

4.1.1 Property Development

-   Srinakarin Project

  The Company is developing a 2-storey detached housing project in
  Srinakarin area under the name of “Villa Arcadia Srinakarin”
  comprising 367 units. Total project area is 99-3-97.8 rai, located at
  Moo 16, Soi Pattanachumchon 1, Srinakarin Road, Bangkaew Sub-District,
  Bangplee District. Samutprakarn Province. The project targeted at the
  upper middle market. At present, phase 2 is in the plan to be
  developed as detached housing upon the completion of phase 1.

-   Watcharapol Project

  The Company is developing a 2-storey detached housing project in
  Watcharapol area under the name of “Villa Arcadia Watcharapol”
  comprising 270 units. Total project area is 78-0-46 rai, located at
  Soi Watcharapol, Tharang Sub-District, Bangkhen District, Bangkok. The
  project targeted at the upper middle market. At present, stage 2 is in
  the plan to be developed as detached housing upon the completion of
  stage 1.

4.1.2 Other Operations and Assets

-   Jewellery Centre Building

  A 34-storey commercial building covering a total area of 42,833.78
  sq.m., located at 138 Nares Road, Si Phraya Sub-District, Bangrak
  District, Bangkok. The retained interest under the Company’s name for
  sale and lease as of 31 December 2009 is a total area of 12,145.64
  sq.m. or 28.36% of the total gross floor area.

-   Sukhapiban 3 Mansion

  A 19-storey residential condominium with 1,024 total units, located at
  22/1 Sukhapiban 3 Road, Huamark Sub-District, Bangkapi District,
  Bangkok. The retained interest under the Company’s name for sale and
  lease as of 31 December 2009 is 2 units with a total area of 119.21
  sq.m.

-   The Trio Chiang Mai (formerly known as Chaing Mai VIP Tower)

  A 4-storey commercial building, located at 188/1-2 and 188/5-6 Moo 1,
  Huay Kaew Road, Changpueak Sub-District, Muang District, Chaing Mai
  Province. The retained interest under the Company’s name for sale and
  lease as of 31 December 2009 is 4 units with a total area of 890.88
  sq.m.

-   Land and Factory (Granite Factory)

  The Company has land and factory under the Company’s name, located at
  1 Moo 5, Phaholyothin (TorLor. 1) Road, Mai Ngam Sub-District, Muang
  District, Tak Province. The factory has ceased operation since 2000
  and the machineries have been divested in early 2002. The land and
  factory are earmarked for sale.

Remark: 1 rai = 400 sq.w.

1 ngan = 100 sq.w.

4.2 Marketing and Competitiveness

Property market review

The Bangkok property market saw a moderate slowdown over 2009 in line
with the general economic condition. The government has sought to
continue with its stimulus measures for the real estate market by
extending tax incentives – a reduction in transfer fees and special
business taxes for property transactions for another year, expiring in
March 2010. Meanwhile, the market has focused on inventory clearance in
2009, with a chance of recovery in 2010 in line with economic revival.

Landed Housing

The estimated number of new registered residential units in the Bangkok
Metropolitan Region (BMR) for 2009 was 69,645 units, a 8.1% drop from
the 75,763 units registered in 2008. Self-built, developer-built
housing, apartments and condominiums represent 28%, 28% and 44%,
respectively.

[]

Source: Bank of Thailand

The future supply of detached houses is likely to increase as the number
of detached house land allocation permits for 2009 rose by 10% compared
to 2008, while permits for townhouses and semi-detached houses remained
flat at -4% and 2%, respectively. The majority of land allocation
permits were located in the northern and eastern zones of Bangkok due
mainly to the completion of the Airport Rail Link, which is scheduled to
be fully operational by April 2010.

The sales rate continued to improve in many areas, for both detached
house and townhouse projects due to a combination of government
incentives and promotional packages from developers. Large developers
have tried to clear existing stock by extending incentives and
promotionals, while smaller developers have resorted to dropping prices.

Condominium

The estimated total supply of downtown freehold condominiums increased
from 54,163 units in 2008 to 63,812 units in 2009, representing a 18%
increase or 9,649 completed units. Sukhumvit remained the most popular
area for condominiums, representing 33% of total freehold supply. This
was followed by the Silom/Sathorn area (20%), Rama III (17%), Riverside
(14%), Pathumwan (9%), and Central Lumpini (7%).

[]

Source: CBRE

Average prices of high-end freehold condominiums in the primary market
were Baht 122,076 (S$5,080) psm as of 2009, down 5% quarter-on-quarter,
22% year-on-year. Central Lumpini had the highest asking price at Baht
166,722 (S$6,940) psm, followed by Silom/Sathorn at Baht 144,500
(S$6,020) psm. Pathumwan and Riverside/Rama III were the most affordable
areas, where average prices ranged between Baht 52,900-65,000 (S$
2,200-S$ 2,700) psm.

Due to the completion of the Airport Rail Link, which is scheduled to be
fully operational by early 2010, the area around the Airport Rail Link
between Makkasan and Suvarnabhumi airport is emerging as a focal
destination for new residential developments.

During second half of 2009, the condominium market continued to be the
most active sector with the majority of new projects launched in
downtown locations. Most of these new projects have been from larger
well capitalized companies; while smaller developers continued to face
problems in securing finance. The middle segment of the market has been
robust sales, particularly from Thai buyers who are looking for premium
quality units either for their own occupation or for investment for
rental returns. The growing numbers of Thai buyers, particularly in the
middle segments, is reflective of the growing maturity of the
condominium market.