Risk Factors

1.  The Company operates in a highly competitive business

    At present, the competition among real estate developers, whether
    with large, medium or small scale developments, listed or non-listed
    real estate development companies, is still relatively high,
    especially in Bangkok and its peripheral areas. Development of
    condominium projects near to railway mass transit stations, both
    completed and under construction, and of landed housing projects
    near to Suvarnabhumi Airport are mainly carried out by large-scale
    developers who are listed on the SET and have advantages in relation
    to financial status, financial costs and have various alternatives
    to raise funds as compared to the Company.

The Company believes that after funds are raised through the IPO and its
listing on the SET, the Company will be on par with competitors who are
listed on the SET in respect of minimizing financial costs and
fund-raising alternatives.

The Company believes that the condominium and landed housing projects
which it owns or manages respond to the needs of customers in respect of
location, price and design, and that this is recognized by its
customers. Along with the experience of the Company’s key management who
has been working in the area of real estate development for more than 10
years, the Company believes that it can compete with other operators in
the same business.

2.  The procurement of land for future development projects

The Company does not have a policy to acquire empty land except for the
purposes of development of condominium projects in the near term,
development of each project being expected to require approximately 2 to
3 years. The Company, when considering each location to address its
target customers, will first conduct a feasibility study. As a result,
the Company currently does not hold empty land which is not ready for
development. This strategy may generate risks to the Company as it may
not be able to procure land near railway mass transit stations to be
developed for condominium projects due to significant interest in the
same plots of land and correspondingly, high prices thereon. As a
result, the Company may have to acquire land at a higher price or
acquire the land which is further away from railway mass transit
stations. This may impact the Company’s return of investment or future
performance. The Company has the ability to buy land at a reasonable
price and is able to successfully develop landed housing projects and
condominiums like it always has been as well as the ability to procure
more land upon which to develop additional future projects after having
raised sufficient funds from the IPO.

3.  Costs of construction tend to increase

The Company faces risks in relation to increasing costs of construction.
The price of the average mass index of construction materials each year,
from 2007 to 2011, was Baht 108.8, Baht 127.4, Baht 110.8, Baht 113.2
and Baht 120.4 respectively and the price of the average mass index of
construction materials during January to September 2012 was Baht 124.8,
which can be calculated in terms of Compound Annual Growth Rate (“CAGR”)
from 2007 to September 2012 at the rate of 2.9% (Source: Ministry of
Commerce). The increase of construction costs is a risk that may affect
all developers. In addition, a recently implemented government policy
which has increased minimum daily wages to Baht 300 may also affect
labor costs and future construction costs.

The Company regularly monitors and evaluates the price of construction
materials in order to determine suitable fees to be paid to contractors
for each project. After the fees have been agreed with the contractors,
the Company will execute an agreement to engage such contractor and
specify this fixed fee accordingly. In addition, the Company aims to
engage reliable contractors who can efficiently control construction
costs so that such costs will not exceed the Company’s estimates. With
regard to the increase of minimum wages, the Company estimates that the
increased daily wages will increase total construction costs by
approximately 5%. If construction costs materially increase, the Company
may consider increasing the sale price of its projects in order to
maintain its profit margin.

4.  The progress of the development of the railway mass transit system
    is inconsistent with the schedule laid out by the government

As the Company’s strategy is to develop condominium projects near to
railway mass transit stations, the Company’s growth is mainly dependent
on the government’s policy in developing the railway mass transit
system. According to CB Richard Ellis (Thailand) Co., Ltd. (“CBRE”), the
government previously announced plans to expand the existing mass
transit network to 100 stations by 2016 and 245 stations by 2022. If the
government changes its policy or the schedule of construction, such
circumstances may affect the growth of the Company’s business.

Although the railway mass transit system is prioritized by the
government as it is substantially beneficial to the residents of Bangkok
and its peripheral areas, development is costly and is subject to
several operational procedures. As such, is possible that development
may not be completed as scheduled by the government. This is an external
factor over which the Company has no control.

The Company is continually monitoring the operation of the railway mass
transit system project and adapting its real estate development plans in
accordance with the progress of the railway mass transit system project.

5.  Financial Risks
    Risks relating to the increase in interest rates

The risks relating to the increase of interest rates arise in two ways:

• Risks relating to the increase of interest rates may cause inflation
and may influence customers’ decisions to acquire residential property.

  If loan interest rates increase, inflation may occur, thereby reducing
  the monetary value or the purchasing power of the Thai Baht. For
  customers who rely on housing loans, loan interest rates and repayment
  conditions are significant factors which may influence their decision
  to acquire residential property. If interest rates increase, credit
  facilities granted by financial institutions may decrease in
  proportion to the borrowers’ income and the borrower may not be
  capable of acquiring residential property at the sale price. Moreover,
  an increase in interest rates may result in higher monthly repayment
  obligations. This in turn may delay customers’ decisions to acquire
  residential property or result in customers becoming unable to acquire
  residential property at the sale price.

  Although the increase in interest rates is a factor beyond the
  Company’s control, the Company has developed a good understanding on
  the needs of its target group of customers based on its continuous
  study and experience in dealing with them. Unlike other developers,
  the Company offers sale promotion schemes which emphasize financial
  offers in response to the needs of its target group of customers and
  are consistent with their relative purchasing power.

• Risks relating to the increase in interest rates which may affect the
Company’s financial costs

  In connection with the acquisition of AD2 and the Company’s plan to
  acquire ADO, the Company has obtained loans from financial
  institutions with floating interest rates. As a result, if interest
  rates increase, the Company’s financial costs in relation to the
  interest on its loans will correspondingly increase. A portion of such
  interest expenses is recorded as financial costs in the statements of
  comprehensive income, while other interest expenses are recorded as
  real estate development costs.