Information Concerning the Related-Parties Transaction

Disclosure of Information Concerning the Related-Parties Transaction 1. Transaction Date: 13th March 2009 (Buying and Selling agreement date) 2. The Parties involved & Relationships: 2.1. Parties involved (A) Seller of shares : STP&I (B) Buyer of shares : The Company 2.2. Relationships STP&I is a party related to the Company. Therefore, the transaction for purchasing of securities from STP&I falls under the definition of "related-parties transaction" by the following reasons: 2.2.1 Major shareholders of the Company and STP&I are members of the Charnvirakul family, with the following persons as shareholders: Name Relationship Company STP&I with Mr. Anutin No. of shares % No. of shares % 1. Mr. Anutin Charnvirakul 50,000,000 4.22 25,360,600 10.14 Younger 2. Mr. Masthawin Charnvirakul 19,800,000 1.67 - - Brother 3. The Minister Fund - Father - - 8,407,900 3.36 Mr. Chavarat Charnvirakul 4. Mrs. Sanongnuch Charnvirakul Spouse 189,845,280 16.00 - - Younger 5. Mrs. Anilrat Nitisaroj 19,800,000 1.67 10,000,200 4.01 Sister Total 279,445,280 23.56 43,407,800 17.51 Remarks: Data is per the closing date of the share register book on April 4, 2008 (for the Company) and on November 4, 2008 (for STP&I). 2.2.2 Related persons in both companies are the following directors in the Company and in STP&I: Name Position in the Company Position in STP&I (1) Mr. Anutin Charnvirakul - Chairman of the Board (2) Mr. Masthawin Charnvirakul Director Managing Director (3) Mrs. Sanongnuch Charnvirakul Director - 2.2.3 Directors of the Company who also hold directorship in STP&I: Name Position in the Company Position in STP&I Police Lieutenant General (1) Audit Committee Audit Committee Jate Mongkolhutti Director and Audit (2) Mr. Chamni Janchai Chairman of Audit Committee Committee 3. Characteristics of the Transaction: The Company has been well known as the first class contractor for the past few years.The Company has been trusted from both public and private sectors to be a main contractorof lots of mega projects. The Executive Board of the Company noticed that lots of achievement projects meet the international standards could cause a great business expansion of theCompany for another construction projects in other foreign countries. STP&I who holds 46% shareholding of IIMC, the juristic person where located in Singapore offers this tender to the Company. The Executive Board of the Company considered that the Company might expand their construction market to Singapore where there have been many investment projects from both public and private sectors. After the Company finished its feasibility study, the Company agreed to purchase 46% shareholding of IIMC from STP&I and start to study the Due Diligence process for its final consideration. 4. Asset details 4.1 The Type of Asset Ordinary shares of Inter IMC Pte Ltd amounting to 46% shareholding of STP&I 4.2 The Type of Business Inter IMC Pte Ltd is a private company that had been established in accordance with Rules and Regulations of Singapore. The core business of IIMC is construction including the annual maintenance of industrial plant in Singapore. Inter IMC Pte Ltd operates its business by making the bidding document in the status of both main contractor and sub contractor, which depends on the volume of such projects. Petro - Chemicals are our main clients. 4.3 Shareholders of IIMC At present IIMC share structure comprises 50,000 common shares at par value of SGD 10 each; total registered capital is SGD 500,000. There are two shareholders as followed: 1) Best Quality Skills Co., Ltd. - holding 27,000 shares or 54% 2) STP&I Public Company Limited - holding 23,000 shares or 46% 4.4 Summary financial status and performance of Inter IMC Pte Ltd SGD THB SGD THB (From audited balance sheet) 31 Dec 08 31 Dec 08 31 Dec 07 31 Dec 07 Current Assets 2,436,169 59,005,581 4,528,312 105,584,160 Non-current Assets 51,369 1,244,187 94,808 2,210,586 Total Assets 2,487,538 60,249,768 4,623,120 107,794,746 Current Liabilities 1,094,786 26,516,426 2,567,852 59,873,193 Other Liabilities 4,000 96,883 4,000 93,266 Total Liabilities 1,098,786 26,613,309 2,571,852 59,966,459 Common Stock 500,000 12,206,000 500,000 11,658,225 Retained Earnings 888,752 21,430,459 1,551,268 36,170,062 Total Shareholders' Equity 1,388,752 33,636,459 2,051,268 47,828,287 Total Liabilities and Shareholders' Equity 2,487,538 60,249,768 4,623,120 107,794,746 SGD THB SGD THB (From audited income 1 Jan - 1 Jan - 1 Jan - 1 Jan - statements) 31 Dec 08 31 Dec 08 31 Dec 07 31 Dec 07 Revenue from Construction 8,563,843 203,074,269 7,257,567 166,797,687 Other Revenue 175,836 4,169,598 37,413 859,848 Total Revenue 8,739,679 207,243,867 7,294,980 167,657,535 Cost of Construction 7,472,935 177,205,565 6,543,957 150,397,081 Selling & Administrative Expenses 630,683 14,959,068 550,514 12,652,238 Other Expenses 13,840 328,269 6,422 147,594 Total Cost and Expenses 8,117,458 192,492,902 7,100,893 163,196,913 Profit before Tax 622,221 14,750,965 194,087 4,460,622 Corporate Income Tax (84,737) (2,009,378) (42,892) (985,769) Net Profit for the period 537,484 12,741,587 151,195 3,474,853 5. Criteria for determination of value of remuneration and payment method Since IIMC is a private company without stock trading in any Stock Exchange, the Company's Board of Directors then agreed to determine the value of remuneration by using the Net Tangible Assets value as of 31 December 2008 as a basis for pricing negotiation with potential seller. After the Seller's due diligence was completed, the final negotiated price was agreed at Baht 13,650,058 (Thirteen Million Six Hundred Fifty Thousand and Fifty Eight Baht Only), which is appropriate. Therefore, under the guideline of the SET, the value of remuneration for calculation of related-parties transaction will be the Net Tangible Assets value as of 31 December 2008. Refer to the payment method, the Company agreed to pay the cost of IIMC shares to the Company by cheque within 15 days from the date that STP&I submission proof of registration for shares transferring at Singaporean registration office is completed. 6. Related-parties transaction size calculation: The value of remuneration for the sales of 46% shares in IIMC is Baht 15,472,771. This is equivalent to 0.35% of Net Tangible Assets of the Company which is Baht 4,441 million as at 31 December 2008. Moreover, during the past 6 months since August 2008, the Company had no related-parties transaction with STP&I that need to be included in this transaction size calculation. Therefore, the Company only needs to get approval from the Board of Directors and disclose this related-parties transaction details to the SET only. 7. Benefit The Company has its plans to expand its construction market to Singapore where there have been many investment projects such as mega projects from both public and private section besides the construction projects in Thailand. This investment shall cause efficiency business and the Company shall have a great opportunity in mega projects in the future. 8. Source of Fund Working Capital of the Company 9. Opinion of the Board of Directors The Board of Directors Meeting No. 1/2009 held on March 12, 2009 approved the sales of investment in IIMC. The Board considered and opined that: 9.1 The purchasing of the ordinary shares of IIMC would enable the Company's business to focus their attention on proper execution of mega projects in Singapore that launched by public and private sectors which will enhance the competitiveness and reputation of the Company in the international market for future projects. 9.2 The Board of Directors advised that the Company follow relevant law and the SET regulations strictly for the execution of this related-party transaction. The following director who is related person did not attend nor vote on this agenda at this Board of Directors Meeting. 1. Mr. Masthawin Charnvirakul 10. Opinion of the Company's Audit Committee and/or directors which are different from the opinions of the Board of Directors under clause 9 Refer to the Audit Committee Meeting No. 2/2009 on March 4, 2009 and The Board of Directors Meeting No. 1/2009 held on March 12, 2009, there was no director giving the different opinion other than that reported in Clause 9 above.