001

Aim for Excellence Focus on customer satisfaction

Uphold integrity Promote creativity and innovation

Strive for continuous learning Succeed through collaboration

Share high entrepreneurial spirit

01. Vision & Mission 02. Message from the Chairman 03. Financial Highlights for the Year 2013 04. Board of Directorsû Report Summary of Performances in 2013 and Future Plans 10. General Information of Company 14. Policy and Business Operations 16. Business Operations ot the Company 19. Risk Factors 21. Major Shareholders 21. Dividend Policy 22. Management Structure 37. Good Corporate Governance 42. Insider Information Controls 43. Corporate Social Responsibilities 48. Internal Control 51. Related Transactions 55. Financial Ratios 57. Management Discussion & Analysis (MD&A) 59. Audit Committee Report 61. Summary Report of Directorsû Responsibilities to Financial Statements 62. Independent Auditorûs Report 63. Financial Statements

We strive to create innovative ideas that inspire the art of living and quality work life

002

Modernform Public Company Limited reported quite a strong financial performance in 2013 although the business had been

affected by several problems notably labor shortage in the industrial sector especially in the real estate business that delayed our

product delivery as well as Thailandûs political havoc towards the year end which not only slowed down business activities but will

definitely make an impact into 2014. However, purchasing orders that we have accumulated so far should help lessen the impact at least

for a short while.

For 2014, we have already put in place risk management plans to handle crisis at various levels. Simultaneously, we plan to

expand our markets, manage production costs and expenses by expanding into regional markets with potential growth especially those

under the Asean Economic Community (AEC) and constantly launch new products. Our business expansion strategy includes our quest

for new business partners here and abroad.

We wish to affirm that we are ready to respond to consumers with eclectic needs and increasing demands in various different

environments. We are confident that 2014 will be another year of our growth and we commit to enhancing our management and

developing new innovative products.

Here at Modernform Public Company Limited, we constantly highlight the importance of social and environmental development

starting from stage one of design to choosing raw materials, manufacturing, delivering and servicing until our products reach consumers

where environmental impacts and social wellbeing is taken into consideration. In addition, our employees are encouraged to engage in

social activities regularly held by us in education, healthcare and community safety areas to increase their social awareness.

On behalf of the Board of Directors and the Management, we wish to extend my sincere appreciation to our colleagues,

customers, suppliers, shareholders and all relevant parties for your unwavering trust and support in us.

Mr. Chareon Usanachitt Mr. Thaksa Busayapoka

Chairman Chief Executive Director

Message from the Chairman

003

2013 2012 2011

TOTAL REVENUES (Baht) 3,555,696,216 3,162,311,062 2,991,778,761

REVENUES FROM SALES RENTAL AND SERVICES (Baht) 3,494,234,296 3,093,928,171 2,871,584,773

COST OF SALES AND SERVICES (Baht) 2,041,042,589 1,820,560,497 1,714,615,176

GROSS PROFIT (Baht) 1,453,191,707 1,273,367,674 1,156,969,597

EARNING BEFORE MINORITY INTEREST(Baht) 426,096,229 422,858,274 384,199,347

NET PROFIT (Baht) 420,490,560 409,230,452 373,541,355

TOTAL ASSETS(Baht) 4,234,117,846 3,577,104,232 3,174,852,589

TOTAL LIABILITIES(Baht) 1,407,138,883 1,029,505,603 822,494,704

MINORITY INTEREST (Baht) 38,240,539 35,137,670 24,443,892

NET WORTH (Baht) 2,788,738,424 2,512,460,959 2,327,913,993

PROFITABILITY:

Gross profit margin (%) 41.6 41.2 40.3

Net profit margin (%) 12.0 13.2 13.0

RETURN ON INVESTMENT :

Return on total assets (%) 10.8 12.1 12.1

Return on total net worth (%) 15.6 16.7 16.0

LIQUIDITY &STABILITY

Current ratio (Times) 2.0 2.1 2.4

Debt / Equity ratio (Times) 0.5 0.4 0.4

PER SHARE DATA

Number of shares(Registered) 809,646,280 859,647,000 892,000,000

(2012 : 859,647,000 ordinary shares of Baht 1 each)

Number of shares (Fully paid) 750,000,000 800,000,720 832,353,720

(2012 : 800,000,720 ordinary shares of Baht 1 each)

Par value (Baht/Share) 1 1 1

Book value (Baht/Share) 3.77 3.18 2.83

Net profit(EPS) (Baht/Share) 0.57 0.57 0.52

Dividends (Baht/Share) * 0.55 0.50 0.45

* Note: The Meeting of the Board of Directors of the Company No.1/2014 held on February 25, 2014 passed to pay dividends for the 2013 operating year to shareholders of the company at a rate of 0.55 Baht per share. Hence the interim dividend has been paid at a rate of Baht 0.25 the remaining value of Baht 0.30 per share will be paid to a shareholders as dividend. The matter will be proposed for approval at the Annual Ordinary General Shareholders Meeting No.1/2014 on April 18, 2014.

Financial Highlights for the Year 2013

004

The Thai economy in 2013 was slowing down in almost all sectors starting from Q1 when compared to its growth a year earlier.

While itûs true that the economy continued to expand in Q1, exports, consumptions and private sector investments however were

dwindling. Productions in industrial and agricultural businesses also went down. The fall was somewhat delayed by spending in the

public sector. Yet, there were other negative factors affecting the Thai economy which included the much-vulnerable global economy,

slow recovery of major economies such as the US and the EU and the strengthening of Thai Baht. Only Thailandûs tourism sectors

recorded better performance compared to the same period a year ago.

Worrying that stronger Thai Baht would diminish the growth of Thai economy during the second half of the year as exports could

fall, Bank of Thailandûs Monetary Policy Committee decided to cut policy interest rate by 0.25 per cent from 2.75 per cent to 2.50 per cent

per annum. In response to half-year economic figures which were much lower than anticipated, the National Economic and Social

Development Board (NESDB) also cut its Gross Domestic Product (GDP) forecast to 3.8-4.3 per cent. Risk factors restricting the Thai

economy during the latter half of the year were slow recovery of the global economic engines, weakening Chinese economy and losing

stream of impacts from the public sectorûs economic stimulus measures. Besides, there were risk factors from delayed public sector

investments both under the Baht 3.5 billion water management project and the Baht 2 trillion investment plan in mega infrastructure projects.

During the second half of 2013, the Thai economy continued to slump compared to a year earlier although the worldûs economic

power such as the US, the Euro Zone and China started to pick up. Thai exports failed to fully benefit from the worldûs better economic

prospect and the weakening Thai Baht as foreign investments especially those in the stock markets started to move their money back as

the US tapered its QE. Meanwhile, household spending fell due to concerns of higher costs of living. Together with higher household

debts, delayed disbursements of government payment, these negatively affected attempts to restore domestic purchasing power.

Towards the year end, a hope to see the Thai economy recover after its staggering condition since earlier of the year was

entirely shattered when political situation intensified in October. The governmentûs attempt to pass the amnesty bill led to massive

protests from the opposition that eventually resulted in the government dissolving the Parliament and calling for the general election on

February 2, 2014.

The Thai Chamber of Commerce announced that its Consumer Confidence Index (CCI) in late 2013 continued to slide for the

ninth consecutive month and was the lowest during the past 24 months. The sharp fall was due to concerns over political unrest and

Bangkok shutdown. Thai politics remained highly unstable although the Parliament was dissolved and a new general election was called.

The NESDB expected the Thai GDP to grow by 3 per cent in 2013 with an average all-year inflation of 2.4 per cent.

As for economic forecast in 2014, Thailandûs central bank has already slashed its anticipated GDP growth to 3 per cent as it

foresees that the private sector spending will still not recover or may recover but at a slower pace than expected. Besides, the most

worrying factor is the much-delayed public sector investment as it will take some time for the new government to settle before public

investment could kick start. The Bank of Thailand expects the Thai economy to remain much in doldrums during the first half of 2014

while exports will have a better chance thanks to brighter global economic conditions which could help sustaining the Thai economy.

During the latter half of the year, the Thai economy should recover after political instability and conflict comes to an end with the new

government in place and the public sector starting investment to a certain degree.

Overall speaking, the local real estate sector continued to expand in 2013 in tandem with the growing economy, increasing

number of population and the governmentûs infrastructure projects worth hundreds of billion Baht. This is the cases especially of property

projects in major provinces such as Chiangmai, Nakhon Ratchasima, Khon Kaen, Songkhla and Phuket which are considered hot spots

for major real estate developers who have developed a large number of residential projects there during the past few years, prompting

residential condominiums in these provinces to grow exponentially. Regarding office building, although affected from economic decline

Report of Board of Directors - Summary of the 2013 Performance

005

and depleting consumer confidence, impact remained restricted as the growth of office space take-up was in a better situation

compared to 2012 while lease agreements of major office space continued to be signed and very few was cancelled. Negative factors

affecting the real estate business were shortage of construction labor, higher wages and higher costs of construction materials, all of

which drove construction costs up and delayed contractorûs delivery schedule. Construction delay of major property projects affected

furniture delivery which inevitably extended the delivery of our products and the booking of our sales even further.

Outlook for the real estate business in 2014 will very much depend on domestic investments. At the time of writing, as political

unrest still continues while several parties still expect the Thai economy and consumer confidence to recover in the latter half of the year,

yet, after the end of the political conflict, we expect to see fewer major projects being launched and more projects being postponed. The

recovery however could be quick thanks to Thailandûs strong economic fundaments and the strength of its private sector.

Product Design and Development

In 2013, we continued to develop our products as we had done during the past years.

The home furniture product group still focused at project customers since this remained the large market that Modernform

continued to win trust and accolades from real estate developers. In other words, thanks to the quality of our products that consumers

deeply believe in, project developers usually highlight our furniture as one of their unique selling points.

The office furniture product group set the all-time high sales record this year. Part of this success came from our Axis furniture

considered a business solution that can create a happier workplace while helping unveil employeeûs potential. Besides, Axis is perceived

to stimulate creativity energy in meeting room while at the same time works efficiently as a storage system really crucial for customerûs

success. Our Axis office furniture, which won Chicagoûs Good Design Award, delivers a touch of difference in the office furniture market

both in terms of function and form and has so far been one of our top sellers. Simultaneously, exclusive project-based office furniture

design was also an overwhelming success as we managed to win rave reviews from project owners and interior decorators in Bangkok

and provinces. This is an area of success that we will keep working on next year.

The WW/P (workplace with personalities) product group was launched to accommodate a new working trend where everyone

tends to be more mobile these days. The WW/P offers both working space and personal corner for workers to fulfill their tasks in a

relaxed and cozy environment which should positively enhance work efficiency in the long run. Modernform started introducing the

product in the market and we expect the WW/P to be able to answer to new plug-and-play workplace demands amid evolving

communications and IT development especially with the upcoming Asean Economic Community (AEC) in 2015 that is likely to increase

demands for innovative commercial designs.

Finally, Modernform has collaborated with L&E, the highly-experienced LED manufacturer and exporter. Thanks to the expertise

of both of us, we were able to launch new products of LED pendant lights, LED desk lamps, LED floor lamps and LED task lighting for

office furniture where L&Eûs LED production technology was combined with Modernformûs design craftsmanship before being translated

into new products launched in the markets of both businesses since December 2013.

Production

Modernform expanded our production capacity to accommodate a bigger business where more manpower was hired and more

efficient tools and machines were introduced. Besides, production and storage areas were increased to accommodate busier activities.

Our production in 2013 was the highest record since our inception especially towards the year-end when several project clients

wanted to deliver their projects to clients as the end of year approached.

As for our production efficiency, Modernform was able to manage our production on the basis of çvalue engineeringé concept

which enabled us to maximize productivity while maintaining product values as required by customers. Our Product Development Team

collaborated with client projects to study the needs of homeowners in order to craft products that meet their desire. Thanks to the

006

concept, we were able to manage our production costs competitively. More importantly, we were capable to maintain our product quality

which continued to win our customerûs heart.

In 2014, Modernform expects to expand our production even further to accommodate our huge commitments. The business has

still a lot of room to grow. The expansion will be based on a concept to develop quality products, enhance production efficiency and

manage production costs competitively to maximum customerûs satisfaction.

We will also step up our collaboration with customers in order to make the capacity of our Production Department more

comprehensive so that we can respond more effectively to diverse wishes.

Marketing, Sales and Distribution

The 2013 economy was slightly down from the previous year. The countryûs GDP continued to decline due largely to overseas

demands which had yet recovered and weakening domestic demands and household expenditures. Demands from the public sector

started to expand during Q3. Yet, in Q4, the countryûs eroding political stability due to ongoing and increasingly violent anti-government

protests finally made an impact to our economy.

As for the property market, high-rise condominium projects both in Bangkok and major provinces especially Chiangmai, Phuket,

Nakhon Ratchasima and Khon Kaen continued to expand. In Q4, major property developers still had a number of large projects in hands

which reflected ample supply in the market, a trend to continue well into 2014.

There remained purchasing demands from middle and high-ended customers in the domestic furniture market thanks largely to

expansions in the housing markets and new office opening by foreign investors in Thailand in preparation for the upcoming AEC in 2015.

As a result, the office furniture market continued to grow quite strongly.

In early 2013, to underline our leadership in furniture and professional service, Modernform launched the çModernform SoulMateé

TV and print commercials and opened doors of our new çM Style Centeré for a team of our designers to offer advice on decoration and

furniture selection. In addition, we unveiled the Leather Sofa Gallery that provides a sofa customization service to customers who may

order a new sofa with their identity printed or embroidered on fabric or beamed with laser on metal plates. The Gallery which offers

ultimately world-class real leather sofa shopping experience showcases Modernformûs production expertise, attention in quality and desire

to respond to customerûs needs. Not long after, we launched the new easy-to-install Speedy kitchen designed under the Ready Set

Cook concept for heavy kitchen use.

The Exclusive Living furniture unveiled in late 2012 finally led to the introduction of Workplace with personality (WW/P),

Modernformûs latest office furniture collection exclusively designed to respond to todayûs mobile work style and the work-life balance

through the offering of diverse pieces that answer to each individualûs unique desire. The WW/P not only adds fresher and bolder

residential-styled outlook to ordinary working space but also perfectly answers to the çanywhere anytimeé work concept with

technologically-enhanced workstation that responds to mobile employees and New Working Solutions that accommodate communications

reflected through, for example, the combination of teleconference technology into meeting room furniture, to truly reflect professionalism.

In addition, Modernform has added new items to its medical furniture portfolio to respond to the booming healthcare and hospital

business through collaboration with Trumpf, the world-class manufacturer of operating equipment; and Linet, the hospital ward and ICU

bed maker for EU markets. We believe that these new products would help filling the existing gap in the Thai healthcare market.

As for marketing communications and corporate image, Modernform intensified its collaboration with Lighting & Equipment Public

Company Limited (L&E), the leader in L&E brand lighting equipment, by launching the çModernform L&Eé collection of lamps and

lighting for office and residence. The collection not only offers a perfect blend of functionality and design easily adaptable to customerûs

needs but also reflects an outcome of a healthy relationship between Modernform and our supplier.

Modernform continued to focus at digital and social network media such as Facebook and YouTube where information, interior

decoration ideas and news of events and activities were constantly updated to promote the Modernform brand awareness to a wider

audience.

007

We successfully launched the online çmomenté magazine to feature our experience and expertise as the leader in the furniture

market through its articles. Columns in the magazine were strongly positioned to present decoration ideas and lifestyles. Readers can

now download the magazine electronically as a PDF file from Modernformûs website and Facebook as this allows us to reach more

readers. Thatûs a reason why the magazine keeps being downloaded.

For sales promotion, aside from the one-time only Annual Sale event regularly held by us and warmly received by customers

each year, in 2013, Modernform organized a few sales promotion events, one of which was the çBest Time Bed Timeé event where

bedrooms of our customers were featured to showcase their different lifestyles. At the same event, Modernform presented bedrooms that

can perfectly work as a perfect storage and bedrooms that exuded strong identity of owners through customized headboards and closet

doors. As the year-end approached, we organized çThe Sparkling Moment, Sparkling Seasoné event where customers had a good time

pulling a sparkling star from a çtreeé to win a gift from us.

We continued to busily cement our relationship with customers through our çModernform Be My Guesté member card which not

only offers a package of Modernform privileges to our customers but also provides other discounts and promotions from partner

businesses whose names were updated to customers each month through our e-newsletter and website. For Modernformûs project

customers, we offered post-sales furniture checking service to promote new experience that could then be spread by word of mouth to

strengthen confidence in our brand which in retrospect helped reinforcing a relationship between us and our customers.

Project customers or developers remained our principal distribution channel through which 80 per cent of our products were sold.

The remaining 20 per cent was distributed through retailing with a main focus at showrooms whose overall display was constantly

refreshed especially at Srinakarin Showroom where presentation styles and space were accentuated. In November, Modernform opened

our latest showroom on Ratchadapisek Road known as çM Space working & livingé to target urbanites living in small high-rise buildings.

Furniture featured at the showroom is designed under the urban living lifestyle concept that emphasizes effective use of small space.

In conclusion, the furniture market stood to benefit from the strong growth of the property market in 2013. It is expected that the

office and home furniture markets will continue to grow in 2014 with concentration in provincial areas and those along the border

adjacent to our neighbors to accommodate increasing trade and investment activities under the upcoming AEC.

Service

In 2013, Modernform managed to provide delivery, installation and project hand-over services throughout the year as anticipated by

our customers especially at the year-end when several projects wanted to wrap up and deliver units to their clients. Yet, several other

projects were delayed and had to postpone installation which inevitably topped up our workload in the following year. Besides, there were

projects whose furniture had already been produced and we were forced to manage our storage to temporarily hold their merchandises.

The expansion of the property market in major provinces at all regions also required us to distribute our manpower to different

locations which caused some hiccups in service management. Thatûs why we came up with a plan to restructure the Service Department

to manage this expansion.

In 2014, with a lot of projects to be fulfilled, we plan to reinforce teamwork and enhance service. So far, we have established a

technical training center to increase the expertise of our craftsmen to help them respond better to business needs and to maximize

customerûs satisfaction.

International Business

2013 was a successful year for Modernformûs International business following our expansion into target markets in the AEC

countries at the beginning of the year. Modernform managed to appoint a sales distributor who owns the largest and most sophisticated

retail outlet in Laos PDR during the first half of the years. As a result, home furniture was able to be retailed there for the first time in

Q3 and office furniture closely followed in Q4 at Modernformûs own showroom in Vientiane. Besides, we are about to appoint a

008

distributor in Myanmar and plans to open a showroom at its capital, Naypyidaw, soon. This is in line with Modernformûs policy to extend

our distributorship into the AEC countries including Cambodia and Vietnam. The next step is to help our distributors in the AEC

countries ready to handle the Own Design Manufacturing (ODM) products where furniture is made-to-order according to customerûs

exclusive design as sales of this ODM have so far increased two-fold. In short, there is ample room for export markets to expand

although they are facing economic instability and domestic problems.

As for import, not only Modernform looked for suppliers who produced quality products with reasonable price and on-time

delivery, we also connected our project customers with a right supplier to produce furniture exclusively designed by project owners to

help reducing costs in certain budget projects. Simultaneously, Modernform was looking for partnership from a supplier who can produce

exclusively-designed merchandises with whom we may open a factory overseas.

Imports and sales of furniture and decoration accessories under the Home Decorative Product Department

The political volatility in late 2013 indeed slowed down the Q4 economy which prompted us to expand our business into the

provinces. Besides, as major border provinces experienced a very strong growth, we actively organized sales promotion activities to

expand market bases into neighboring countries such as Laos PDR and Myanmar.

We added more products and innovations into every group of merchandises. For furniture accessories, we introduced several

new sophisticated models of door handles. For architectural products, we imported magnetic door locks while we offered increasing

choices of patterns for Interface carpet products ideal for residential use. As for VeronaStone and FeelFloor products, new styles and

textures were introduced to the stone and hardwood floor covering products, respectively.

In addition, new floor covering options were added onto our product portfolio for customers to choose from as we had imported

laminate hardwood floor and luxury vinyl tiles from Switzerland.

In terms of service, we set up production and installation services of LG Hi-macs at major provinces to cover regional services.

For example, a service center was established in Phuket to cover our service in the South, Mahasarakham to cover service in the

Northeast, and Chiangmai to cover the service in the North. New production and installation machines were added for faster and more

professional service to cope with demand expansions.

New innovative products were constantly displayed at our three showrooms at Crystal Design Center (CDC), Sukhumvit and

Phuket Premium Outlet especially at the CDC which is positioned as the showroom of innovation. Activities were organized all year long

to provide knowledge to university students in interior decoration and architecture fields.

In 2014, Modernform will continue scouring for new quality innovative products. We expect to offer innovative doors to our

customers, add new distribution and service channels which cover domestic and neighboring markets to accommodate the opening up

of border under the AEC in 2015 and enhance HR capacity to facilitate customerûs product selection.

IT Development

In 2013, Modernform repatriated its OS platform from the old Modernform Operation System to the new MOS 2.0 so that the new

OS can work cohesively with various systems while keeping the operation leaner. Details are as follows.

ë Production Planning System - the production planning system was revamped to meet increasing sales records.

ë Shop Floor Control System - the production system was enhanced to collaborate with the entire operation to save time and

printed paper.

ë Point of Sale (POS) - a new POS program was developed for use on iPad/Tablet computers to respond to new evolving sales

technology and for easier access.

ë Project Management System - the system was constantly updated for use with several more work units and for accurate review

of each projectûs costs.

ë Costing system - the system was enhanced for speedier production cost calculation.

009

Aside from the MOS enhancement, Modernform also went through the development of the following:

ë Application server, database server and report server were replaced to accommodate business expansion.

ë The Oracle database version was updated to handle new database and technology.

ë The disaster recovery plan was formulated for anticipated disaster or damage striking our head office computer systems.

ë The videoconference system was installed to facilitate communications and save traveling times and costs between the head

office and the Production Department.

In 2014, we plan to continue enhancing our IT systems as follows:

ë Developing our Smart Process to reduce costs and make our work processes leaner

ë Introducing new internal IP Phone to reduce communication costs

ë Studying Business Intelligence Report with a purpose to apply Business Intelligence Software in our operation to enhance

reporting efficiency

ë Developing new applications on iPad/tablet computers for internal use

ë Testing our Disaster Recovery Plan as part of a preparation for damage that could strike our HQ computer systems

ë Continuing to manage the IT risk to accommodate new technology platform that meets international standards.

HR Management and Development

Realizing the importance of HR as a major driving force for our sustainability, Modernform came up with a HR management and

development strategy which corresponded to our business strategy and the 2013 corporate theme of çThink Different, Do Different.é

Through our focus of HR capacity enhancement, we recruited quality personnel, planned precise manpower, implemented fair and clear

evaluation tools and carried out fair and performance-based remuneration management. The idea was to retain the best people and

improve living quality of employees to nurture creativity in the company.

Modernform organized training courses for employees of all levels to stimulate their creativity. Some of the courses are Think

different; Do different; Creating marketing strategies; and Mind mapping. Meanwhile, staffûs opinions were warmly welcomed to reflect the

corporate theme of çThink Different, Do Different.é

Other trainings included leadership and management courses which focused at teamwork among different generations and

coursework specially designed for leaders such as Grid Works, Conflict Management, Project Management and Effective Coaching-Gen

to Gen.

To enhance our sales teams, Modernform actively stimulated their sales energy and reinforced their sales attitudes through

training on NLP (Neuro-linguistic Programming) for Success believed to unleash their sales potential. Salespersons were also given

English communication training for better competition under the AEC.

As for craftsmanship skill enhancement which is very important for Modernform as this makes customers deeply impressed with

us and keeps coming back to us, this year, we managed to upgrade skills of standard technicians to a level of craftsmanship

technicians. Besides, their communication skills were also sharpened to maximize customerûs satisfaction.

Modernform also provided alternative welfare that employees can choose from to suit their needs. In addition, we offered more

creative workplace environment, added additional public area for rest and relaxation and set up a Work@Home program which allowed

staff of some departments to work from home to eliminate commuting but increase performance efficiency. We also supported

recreational club activities that enabled employees to work together while creating a sense of corporate ownership among them,

developing their leadership skills, reinforcing their relationships and building their social awareness that could turn the company into a

better corporation.

010

Head Office, Production Units and Branch

Company Name : Modernform Group Public Company Limited

Major Activity : Manufacturer, Importer and Distributor of Knocked-Down Furniture

Registered Capital : 809,646,280 Baht.

Paid-up capital : 750,000,000 Baht.

Par value : Bht. 1

As at : 31st December, 2013

Head Office Location : 699 Srinakarindr Road, Kwang Suanluang, Khet Suanluang, Bangkok 10250

Tel. 0-2708-9600 Fax. 0-2708-9950

www.modernform.com

E-mail : enquiry@modernform.co.th

Production Plants : Production 1

33/2, 33/5 Bangna-trad Highway, Tambon Bangchalong, Amphoe Bangplee, Samutprakarn 10540

Tel. 0-2337-0222 Fax. 0-2337-0839

: Production 2

Plant A

5 Bangkhuntien Road, Kwang Sa-Mae-Dam, Khet Bangkhuntien Bangkok 10150

Tel. 0-2416-9802 Fax. 0-2416-4683

Plant B

622 Bangkhuntien Road, Kwang Ta-Kam, Khet Bangkhuntien, Bangkok 10150

Tel. 0-2897-2201-4 Fax. 0-2897-3739

Home Decorative Products : 1207-1213 Sukhumvit Road, Kwang North Klongton, Khet Wattana, Bangkok 10110

Tel. 0-2391-4051-2 Fax. 0-2381-1726

General Information of Company

011

Modernform Workplace Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road Future Park Rangsit (outlet)

Modernform Furniture Shopping Gallery, Crystal Design Center Modernform Homeworks, South Pattaya

Modernform Furniture Shopping Gallery (Phuket) Premium Outlet Modernform M Working & Living Space, Ratchadapisek Rd.

Central World

Modernform Exclusive Living Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road Modernform Homeworks, South Pattaya

Modernform Furniture Shopping Gallery, Crystal Design Center Modernform M Working & Living Space, Ratchadapisek Rd.

Modernform Furniture Shopping Gallery (Phuket) Premium Outlet

Modernform Kitchen Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road Modernform Homeworks, South Pattaya

Modernform Furniture Shopping Gallery, Crystal Design Center Modernform M Working & Living Space, Ratchadapisek Rd.

Modernform Furniture Shopping Gallery (Phuket) Premium Outlet

çideacousticé Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road Central World

Modernform Furniture Shopping Gallery, Crystal Design Center Future Park Rangsit (outlet)

Modernform Furniture Shopping Gallery (Phuket) Premium Outlet

çLIFEé Household Furniture Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road Modernform Homeworks, South Pattaya

Modernform Furniture Shopping Gallery, Crystal Design Center Modernform M Working & Living Space, Ratchadapisek Rd.

çXteriaé Outdoor Furniture Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road Modernform Furniture Shopping Gallery (Phuket) Premium Outlet

Modernform Furniture Shopping Gallery, Crystal Design Center Modernform Homeworks, South Pattaya

çKruabané Kitchen Furniture Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road

Modernform Furniture Shopping Gallery, Crystal Design Center

çbathiqueé Bathroom Furniture Showrooms

Modernform Furniture Shopping Gallery, Srinakarindr Road

Modernform Furniture Shopping Gallery, Crystal Design Center

Home Decorative Products Showrooms

Showroom Sukhumvit Road

Modernform Furniture Shopping Gallery, Crystal Design Center

Modernform Furniture Shopping Gallery (Phuket) Premium Outlet

Modernformûs Showrooms and Distribution Outlets in Bangkok

012

Chiangmai, Northern Dealer

Chiangmai Modernform Limited Partnership

107/1-8 Chiangmai -Lampang Road, Tambon Patan, Amphoe Muang, Chaingmai 50300

Tel. (053) 212-222 Fax. (053) 872-451

Email : modernform@tananuwat.com

Khonkaen, North-Eastern Dealer

Phum Modern Furniture Limited Partnership

1/69-72 Mitrapap Road, Tambon Nai Muang, Amphoe Muang, Khonkaen 40000

Tel. (043) 243-428-9 Fax. (043) 243-430

Email : phummodern@hotmail.com

Udonthani, North-Eastern Dealer

Nanovation Co., Ltd.

77/20 Phonphisai Rd.Tambon Markkhang, Amphoe Muang, Udonthani 41000

Tel. (042) 212-710-11 Fax. (042) 212-709

Email : moderformudon@gmail.com

Suratthani, Southern Dealer

DFL Co., Ltd.

140/1 M.2 Tambon Makhamtia, Amphoe Muang, Suratthani 84000

Tel. (077) 272-555 Fax. (077) 288-655

Email : dfl.modernform@gmail.com

Modernformûs Dealers in the Regional

013

(A) Share Registrar

Thailand Securities Depository Company Limited

62 The Stock Exchange of Thailand Building Rachadapisek Road, Klongtoey, Bangkok 10110.

Tel. 0-2229-2800 Fax. 0-2359-1259

(B) Debenture holders

None

(C) Auditor

Mr. Sophon Permsirivallop CPA No.3182

Mr. Chayapol Suppasedtanon CPA No.3972

Mrs. Pimjai Manitkajohnkit CPA No.4521

Ernst And Young Office Limited

193/136 - 137 Fl. 23 Lake Rachada Building , Bangkok 10110

Tel. 0-2264-0777 Fax 0-2264-0790

(D) Solicitor

Sahakarn Law Office Co., Ltd.

16 Tesabalnimitr Nua Rd. Soi 6, Ladyao, Jatuchak, Bangkok 10900

Tel. 0-2954-3090-4 Fax. 0-2953-8225

References

014

Modernform Group Public Company Limited (MODERN) operates a comprehensive furniture business which produces office

furniture Modernform Workplace, residential furniture Modernform Exclusive Living and Life by Modernform, Modernform Kitchen and

Kruabaan by Modernform, bathroom furniture bathique by Modernform and outdoor furniture Xteria by Modernform. It domestically

distributes these products through projects sales teams, company showroom network throughout the country, and authorized dealers in

different regions; in addition to exporting them to foreign markets. Furthermore, the Company imports ready-made furniture, furniture

fittings and interior decorative products.

There are 4 subsidiary companies and associated companies under Modernform Group Public Company Limited; they are the

following:

1. Modernform Tower Company Limited (MTC) was founded in 1991 located at 699 Modernform Tower 24th floor by Modernform

Group Public Company Limited who invested 100 percent in the company. Presently, the Modernform Tower Company has a

registered share capital of Baht 220 million, owns the title deed to the property of çModernform Toweré building on Srinakarin

Road. The building is situated on a 3-0-35 rai plot, rises 28 floors, and has a net area of 26,000 square meters. The building

was completed and fully operational on May of 1995 and served not only as the head office of the Modernform Group Public

Company Limited, its subsidiary companies, and affiliated companies, but also a showroom for all lines of products. The

remaining space was to be leased out as office space to non-related persons. Occupancy rate new is at 100%

2. Modernform Health and Care Company Limited (MHC) was founded in 2005 to manufacture, distribute, import, export as well

as provide maintenance services to healthcare products for hospital, rehabilitation center and household uses. Modernform Group

Public Company Limited holds 60 percent of baht 16 million of paid-up capital with a par value of Baht 10 per share.

Modernform Health and Care Co., Ltd. is located at 699 Modernform Tower Srinakarindr Rd. Suan Luang Bangkok and is

growing continuously in hospital and government office projects.

3. Rafa Associated Company Limited (RFA) was founded in 2006 to provides design consulting services and supervises

construction projects and holds shares in limited partnerships, limited companies and public companies (Holdings Company). The

firm is registered with Baht 30 million paid-up capital at Baht 10 par value. Modernform Group Public Company Limited holds 75

percent of its registered capital. The company holds common shares in 2 subsidiary and affiliated companies; namely, Rafa

Design Office Co., Ltd and Rafa Plus Architect Co., Ltd, all of which are involved in architectural design business located at 699

Modernform Tower Srinakarindr rd. Suan Luang, Bangkok. Modernform Plcûs business will continue to grow from private sector

projects. As the main business should allow the Company to work even more closely with architects and interior decorators, this

should help expand growth prospects of the Companyûs other businesses as well.

4. Thai Plaspac Public Company Limitedûs main business is to produce plastic bottles and seals as well as plastic parts in various

shapes and forms as needed by customers in each industry. Most products are disposable. Its main production processes are

injection molding, blow molding and PET (Injection Blow Molding). The Company is currently accredited under ISO 9001:2008 and

GMP quality assurance systems, having its factory located at 68/46 Bangkhunthai-Chai Thalay Road, Kwaeng Tha Kham,

Bangkhunthian District, Bangkok. In 1994, Modernform Plc held 60 per cent of Thai Plaspac Plcûs shares which had a registered

capital of Baht 40 million before the firm increased the capital to the current Baht 100 million while Modernform Plc already

lowered its equity to 48 per cent. Thai Plaspac Plc has been listed in the MAI (Market for Alternative Investment) since 2005.

Meanwhile, associate and subsidiary companies do not hold shares between one another.

MFEC Public Company Limited (MFEC), which advises, develops and designs computerized systems and IT networks, has been

listed in the Stock Exchange of Thailand since 1997. Modernform Plc held 25.81 per cent of MFECûs Baht 281 million registered capital

and therefore was its major shareholder who was able to direct and control MFECûs business policy. Four of Modernform Plcûs directors

Policy and Business Operations

015

were MFECûs authorized directors. In 2011, Modernform shred its equity in MFEC following the change of MFECûs shareholding structure

and the restructuring of its Board of Directors. At present, Modernform Plc holds 16.5 per cent of MFECûs paid-up capital of Baht 440

million and has one director sitting as MFECûs Chairman of the Board.

Interhides Public Company Limited (IHL) - In 2012, Modernform Plc invested in IHL, Thailandûs leader in leather tanning, through

the holding of 4.57 per cent of its paid-up registered capital. The move was to collaborate in the product development to underline its

leather sofa leadership in the furniture industry. Itûs also part of Modernform Plcûs policy to expand into industries relating to its main

business for sustainable and continued growth.

Modernformûs vision çto be the leader in furniture and interior furnishing business and to provide superior working and living

environmenté is underlined by its goals to develop a strong and sustainable business and to be a leader in the furniture industry through

the development of both products of office, home and kitchen furniture and interior furnishing as well as services for happiness and

satisfaction of medium and high-end customers. The Company continues to relentlessly focus at sales and marketing strategies whether

itûs about creating new innovative products such as Ideacoustic, a ground-breaking noise-absorbing device; FeelFloor, an inventive floor

covering; Readydor, a creative ready-made door panel; and Audiometric Booth, an original hearing test cabinet; or about designing with

a specific purpose to penetrate new markets such as education, hospital and condominium. Modernformûs sales are mainly made

through projects for as much as 80 per cent while retailing outlets account for 20 per cent only. Besides, the Company also emphasizes

the importance of sales showrooms classified by types of products. For example, Modernform Furniture Shopping Gallery is positioned to

showcase a comprehensive range of products while Modernform M Space is a showroom featuring urban lifestyles and Modernform

Furniture Outlet is offering budget furniture. Most importantly, Modernform strives to reinforce the Modernform Brand awareness to boost

its uniqueness that reflects quality, value and responsibility to consumers and the society while being a reliable Soul Mate to clients.

Modernform Plc also has a policy to jointly invest in businesses favorable to its main operation. This refers, for example, to

investment in Modernform Health and Care furniture and in the architectural design business as in the case of RAFA Associates Co Ltd.

In addition, it has joined hands with business partners in other businesses such as Pasaya and L&E to develop new creative products.

The Shareholding Structure of the Company Group

- Office Furniture - Residential Furniture - Furniture Fitting

- Healthcare Furniture

60%

100% 75% 48%

99.93%

99.93%

Modernform Group PLC. (MODERN)

Modernform Group

Space rental and services

Architectural Plastic Packaging Furniture Business

Modernform Tower (MTC)

Rafa Associates (RFA)

Thai Plaspac PLC. (TPAC)

(MAI)

Rafa Plus Architect (RFA+)

Rafa Design Office (RFD)

Modernform Health & Care (MHC)

016

Modernform Group Public Company Limited operates a comprehensive furniture business which produces office furniture Modernform Workplace, residential furniture Modernform Exclusive Living and Life by Modernform, Modernform Kitchen and Kruabaan by Modernform, bathroom furniture bathique by Modernform and outdoor furniture xteria by Modernform. It domestically distributes these products through projects sales teams, company showroom network throughout the country, and authorized dealers in different regions; in addition to exporting them to foreign markets. Furthermore, the Company imports furniture fittings and interior decorative products. There are 3 subsidiary companies under Modernform Group Public Company Limited; they are the following: 1. Modernform Tower Company Limited was founded in 1991 by Modernform Group Public Company Limited who invested 100

percent in the company. Presently, the Modernform Tower Company has a registered share capital of Baht 220 million, owns the title deed to the property of çModernform Toweré building on Srinakarin Road. The building is situated on a 3-0-35 rai plot, rises 28 floors, and has a net area of 26,000 square meters. The building was completed and fully operational on May of 1995 and served not only as the head office of the Modernform Group Public Company Limited, its subsidiary companies, and affiliated companies, but also a showroom for all lines of products. The remaining space was to be leased out as office space to non-related persons.

2. Modernform Health and Care Company Limited was founded in 2005 to manufacture, distribute, import, export as well as provide maintenance services to healthcare products for hospital, rehabilitation center and household uses. Modernform Group Public Company Limited holds 60 percent of baht 16 million of paid-up capital with a par value of Baht 10 per share. Modernform Health and Care Co., Ltd. is located at 699 Modernform Tower Srinakarindr Rd. Suan Luang Bangkok.

3. Rafa Associated Company Limited was founded in 2006 to provides design consulting services and supervises construction projects and holds shares in limited partnerships, limited companies and public companies (Holdings Company). The firm is registered with Baht 30 million paid-up capital at Baht 10 par value. Modernform Group Public Company Limited holds 75 percent of its registered capital. The company holds common shares in 2 subsidiary and affiliated companies; namely, Rafa Design Office Co., Ltd and Rafa Plus Architect Co., Ltd, all of which are involved in architectural design business.

The 3 subsidiary companies do not hold shares between or in each other in anyway. Revenue structure of different business groups The revenue structure for the years 2011 to 2013 from the operations of the Company and its 3 subsidiary companies can be divided into 3 business groups. Product Range/ Operated by Shares 2013 2012 2011 Business Group (%) Mil. Baht % Mil. Baht % Mil. Baht % Furniture Business Modernform Group Public Company Limited - - Office furniture and Residential furniture 2,649 51 2,208 48 2,066 49 - Furniture fittings :composite stones, carpet tile and engineering wood 585 11 577 13 533 13 - Health Care furniture Modernform Health & Care Co.,Ltd. 60 143 3 162 4 151 3 Space rental and services Modernform Tower Co., Ltd. 100 75 2 70 2 68 2 Architectural Rafa Associates Co., Ltd. 75 47 1 78 2 52 1 Plastic Packaging Thai Plaspac PLC. 48 1,591 31 1,387 30 1,241 29 Miscellaneous* - - 57 1 67 1 122 3 Total 5,147 100 4,549 100 2,992 100

* Miscellaneous revenues of the Company and subsidiary companies includes gain on sale of investment, service income, gain on sale of asset, sales of raw material scraps and gain on sales of investment in associated company.

Business Operations of the Company

017

Operation of each product division

As for the revenue of the Company and its subsidiaries in 2013, the major revenue of the Company has come from furniture

business. Operations of each product division are stated below.

Furniture business

These are the main products of the Company and are divided in to 6 groups as follows:

Office Furniture Products

- çModernform Workplaceé, products include office desks, shelves, filing cabinets, office chairs, workstation partitions, meeting

tables, reception tables, and reception chairs. A portion of Modernform Workplaceûs consumer group includes architects,

contractors, interior decorators, and developers who play a significant part in specifying and placing substantial amounts of

orders throughout the year, especially at the beginning and end of each year. The government sector, hospitals and educational

institutes are also another large consumer group, possessing a substantial budget in purchasing a significant volume of office

furniture and equipment. Another group of consumers is individual customers or end users or SME company owners who desire

quality products and services. Their orders are usually placed throughout the year, with high volume at the beginning and end of

the year, and directly through showrooms.

- The ideacoustic by Cylence|Modernform is a result of a collaboration between Modernform and Siam Fiberglass, Siam Cement

Group (SCG)ûs subsidiary in its construction material business. The ideacoustic office furniture is able to absorb echo through its

fiber optic while exuding sophisticated design that results in a nice balance between aesthetics and functionality.

Residential Furniture Products

- çModernform Exclusive Livingé is luxury, in-style, modern and premium household furniture with elegant design; products

include bed sets, closets, dressers, showcases, sideboards, sofas, day beds, and dining table set.

- çlife by modernformé under the slogan çThereûs more to lifeé An ideal customer of the çlife by modernformé furniture is the C

to B+ group of consumers. The furniture itself focuses at modern look, vertical space utility and an ability to transform or

readjust itself to suit available space.

Kitchen Furniture Products

- çModernform Kitchené is kitchen set which can be fitted to customersû kitchens according to the available space with classic,

contemporary, modern and varying designs.

- kruabaan by modernform Home Kitchen by Modernform has been designed to accommodate heavy Thai-styled cooking. With

this in mind, the Home Kitchen by Modernform is tough, resistant to flood, mold and termite and can be fully installed in a short

time.

The Exclusive Living and Modernform Kitchen retail customer groups are private and new home, townhouse, and condominium

owners with medium to high income. Other groups of customers include designers, architects, contractors, and developers of service

apartments and condominiums, who place high-value orders for big projects.

018

Bathroom Furniture Products çbathique by Modernformé the products included luxurious and premium modern-designed

bathroom furniture consisting of counter top, washbasin, cabinet, hanging cabinet, and under basin cabinet. High humidity resistance

materials are selected to produce cabinet structures and panels. All doors and drawers are equipped with the soft close system for

opening and closing smoothness.

Outdoor furniture products çxteria by modernform,é outdoor furniture included coffee set picnic, outdoor lounge, Garden

bench, sun beds, swing, umbrella and other kinds of furniture made of cement, fiber, real woods, synthetic woods or synthetic rattan

with contemporary styles to meet customer lifestyles and harmonize with the environment.

Imported furniture fittings and interior decorative products çHome Decorative productsé imports furniture fittings from

Germany, Italy, Denmark, Spain, Austria, United States of America, China, Singapore and Malaysia for its own furniture production and

distribute them throughout the country to other furniture manufacturers and end-users. Furniture fitting include cabinet and door handles

and locks, drawer runners and hinges, sliding door, laminating material, furniture decorative trims and composite stones, as well as,

sinks and faucets, basin, bathtub, composite marble Verona Stone and LG Hi-Macs solid surface, Stanley tools and architectural

products such as door closer, hinge, latch, door handle and door knob for both wooden door and glass door, auto doors and flooring

material products e.g. Interface carpet tiles and çFeel Flooré engineered wood.

019

The company has set up risk management measures, scopes and practices for executives and staff to comply with to minimize

potential business risks. In 2013, the company evaluated possible risks that could occur and may affect our operations as follows.

Risk from Economic Instability

The Company expects the Thai economy to continue growing in 2014 thanks largely to the recovery of the world economy which

will help boosting exports of goods and services. In addition, employment rates remain healthy while the local money market is quite

relaxed due to low interest rates which should increase consumption and private sector investments. At the other front, the public

sectorûs spending in mega infrastructure projects is likely to increase which should slow down the fall of domestic spending by a certain

degree. This however is subject to how long the current political instability will last.

Regarding the income structure, the parent company and subsidiaries are currently generating incomes from a variety of

businesses ranging from office furniture to home and kitchen furniture, furniture accessories, carpet, stone and wooden flooring, rental of

office space, healthcare products and medical appliances as well as architectural and landscape architectural design. Together with

incomes from subsidiaries, we are able to minimize some business cyclical risks as each industry has its own different business cycle. In

addition, we plan to invest or co-invest in other business to reduce over-dependency in our main business.

Competition risk

At present, various businesses that we run witness fierce competitions both in terms of pricing and increasing manufacturers,

distributors or new players. Yet, we are able to develop sophisticated products, select and import unique items that answer to the

desires of our customers, deliver quality services and continued to improve our sales, production and service processes. The result is we

continue to lead in each market we are in and this reduces competition risk that may affect our profitability.

Investment risk in subsidiaries and affiliates

Since we have a policy to invest in our subsidiaries and affiliates, therefore, there is an investment risk involved since itûs

possible that these subsidiaries and affiliates may not generate as much profits as we expect. Modernform minimizes this risk by

appointing its directors to sit as directors of the subsidiaries and affiliates to oversee the shareholdersû interests. So far, Modernform has

enjoyed a good investment return from both its subsidiary and affiliated companies.

Financial risk

Modernform Plc is cautious and thorough when it comes to managing its expenditure budget. The Company continues to

maintain the debt to equity ratio at a low level and keep liquidity ample to accommodate economic volatility and to also foster its own

growth. However, in 2013, the Company reduced its registered and paid-up capital through the Share Repurchase Plan which involved

leftover shares not yet sold thanks largely to its high liquidity and enough cash flow.

Modernformûs financial risk can be categorized into two types as follows.

- Foreign exchange risk

Modernform is exposed to a foreign exchange risk since we have debtors and creditors in foreign currencies, which we minimize

by buying a short-term forward contract of no more than one year. However, to do so, Modernform takes into consideration both the

prevailing situation and opportunities in order to achieve maximum risk benefit from the foreign exchange risk.

Risk Factors

020

- Credit Risks related to credit sales

Modernform is very prudent when extending credit to customers to minimize bad debts where credit sales will be made only

when appropriate. We have no policy to extend credit to small-time customers who are in fact required to pay the entire sum before we

deliver our product. For a project client, we allow payments to be made in two installments where we request that the first payment be

made before Modernform starts producing the product. This has greatly reduced our risk. In addition, to extend a credit to a new

customer, we analyze the clientûs financial standing from its financial statements. For existing customers, the Company has closely

coordinated and monitored the situation to reduce collection risk and to shorten collection period.

Risks on Raw Materials

The Company set a policy on consumption of high proportion of local high-quality raw materials. Their prices are moving along

with the markets. Although the material prices increase sharply, there are a number of manufacturing plants. Therefore, the Company

mitigates risks by comparing prices from several suppliers before ordering. In addition, with high volume of raw materials used, the

Company wields bargaining power in negotiation with the manufacturing plants for the best conditions. It always monitors price

movement.

The fittings and supplies used in furniture production, such as finishing foil, hinges, drawer tracks, locks and other hardware

items are mostly imported. Prices may fluctuate in response to foreign manufacturers or currency exchange rates, however, in recent

periods such problems have not arisen as the Company imports its own fittings and supplies. As such, large order volumes placed

enabled the Company to have high bargaining power and gain discounts from the foreign producers. Furthermore, the Company is aware

of price changes several months in advance, allowing it sufficient time to adjust costs and prices accordingly.

IT risk

Modernform has adopted the Disaster Recovery Plan for use in case of emergency that could prevent our main system from mal

functioning. This back-up system can replace the main one for a short period of time and effectively prevent damage to the business.

The system covers all offices and main production units of Modernform. Besides, a data center room has been developed in which an

automatic fire-fighting device was installed and a new electricity cable system was upgraded to provide internationally-recognized safety

standard. In 2013, the Company replaced the entire server to increase operation efficiency and to accommodate business growth.

Modernform has also updated our IT policy so that the contents cover safety and security issues of the IT system and that

employees may comply with the conditions to reduce the IT System risk while the updated policy corresponds with relevant IT system

laws and regulations.

Natural Disaster Risk

Modernform has secured insurance for its main assets to protect itself from natural disaster risk. We also realize that itûs

important to develop a business continuity plan in case a natural disaster disrupts our normal business operation. This is especially in

the case where business units proven crucial to our continued operation such as production, finance, IT and building and infrastructure

could be heavily affected and thatûs why they have been requested to prepare an emergency plan for use when necessary to reduce

Modernformûs business risk.

021

List of top 10 major shareholders as of October 14, 2013

Name of Shareholders No. of shares % of total shares

1. THE BANK OF NEW YORK MELLON 76,000,000 9.50

2. Mr.Thaksa Busayapoka 46,022,000 5.75

3. Mr.Por Paporn 42,528,935 5.32

4. The Hongkong and Shanghai Banking Corporation 40,174,300 5.02

Limited, Fund Services Department

5. Krungsri Long Term Equity Fund 37,133,600 4.64

6. Mr.Yothin Nerngchamnong 31,788,420 3.97

7. Mrs.Chuleewan Vivaddhanakasem 31,101,840 3.89

8. RBC Investor Services Trust 28,830,000 3.60

9. Mr.Kavivud Nerngchamnong 27,504,000 3.44

10. Mrs.Jintana Thananitaporn 21,543,860 2.69

Note : - No. of shares includes shareholders in accordance with Section 258 as well

- Paid-up capital as of October 14, 2013 total 800,000,720 baht (800,000,720 shares)

- Paid-up capital as of December 20, 2013 total 750,000,000 baht (750,000,000 shares)

Dividend Policy The Company dividends policy is to pay dividend at not less than 60% of its net profits for each fiscal cycle.

As for subsidiary companies, the dividend policy is not determined. It depends on each company performance, investment plan,

liquidity and other factors which may affect the companyûs operation.

Dividends for the years 2013 - 2009

Year Interim dividends Final dividends Total dividends Dividend Payment

Baht/Share Baht/Share Baht/Share % of net profit

2013* 0.25 0.30 0.55 96.5

2012 0.20 0.30 0.50 87.7

2011** 0.20 0.25 0.45 86.5

2010 2.50 2.50 5.00 89.3

2009 1.00 2.00 3.00 80.2

Note : * The Meeting of the Board of Directors of the Company No.1/2014 held on February 25, 2014 passed resolution to pay

dividends for the year 2013 operating year to shareholders of the company at a rate of Baht 0.55 per share. The

Company paid interim dividend on October 22, 2013 at the rate of Baht 0.25 per share hence a remaining value of Baht

0.30 per share will be paid to shareholders as dividend. The matter will be proposed for approval at the Annual Ordinary

General Shareholders Meeting No.1/2014 on April 18, 2014.

** At May 6, 2011 the Company has changed the par value of its share from Baht 10 to Baht 1 per share.

Shareholding & Management Structure

022

Management Structure In 2013, the Executive Director Committee still maintained the operational and management structure of 6 independent business

units and 6 support units for a more efficient, clear-cut, and flexible chain of command.

Otganization Chart

Board of Directors

Office of Executive Directors

Company Secretary

Internal Audit Department

Board of Executive Directors

President

Business Units Support Units

Home Decorative Products Division Executive Vice President, Home Decorative Products

International Operations Division

Kitchen Furniture Division

Home Furniture Division

Office Furniture Division

Audit Committee Shareholders

Executve Vice President, Products & Services

Production & Service Division

Corporate Affair Division

Human Resource Division

IT Division

Finance and Accounting Division

Corporate Marketing Communication Division

Risk Management Committee

Product Development Center

023

Board of Directors as of 31 December 2013

1. Mr. Chareon Usanachitt **** Chairman

2. Mr. Jajjai Dhammarungruang *** Vice Chairman

3. Mr. Thaksa Busayapoka *** Director

4. Mr. Yothin Nerngchamnong *** Director

5. Mr. Somsak Varikarn *** Director

6. Mr. Kavivud Nerngchamnong **** Director

7. Mr. Chaiyot Paporn ** Independent Director

8. Mr. Suchart Thammapitagkul * Independent Director

9. Mr. Supparerk Mallikamarl * Independent Director

10. Mr. Kittichai Lattisophonkul * Independent Director

11. Mr. Patana Usanachitt *** President

Mrs. Somrak Chotibhongs Company Secretary

Remark * Independent Director and Audit Committee

** Independent Director

*** Executive Director

**** Non-Executive Director

In addition to the conditions as stipulated in Section 4 of the Companyûs Articles of Association concerning directors, the Board

of Directors comprising of 4 independent directors, whereas the rest are executive and non-executive directors. Relevant definitions are

provided as follows:

Independent Directors: means outside directors who are not executives independent from major shareholders, executive or other

relevant parties and shall have the following qualifications as prescribed by SEC and SET :

1. Hold not more than 1% shares with voting of the Company, subsidiary or affiliate company or other juristic persons

whose interest may be adversary to the Company. Shares belonging to the related persons are also counted.

2. Is not participate in the management and not or used to be executive director, employee, staff, advisers with regular

monthly salary, or has been a person having the authority to control the Company, subsidiary or affiliate of the Company,

or other juristic persons whose interest may be adversary to the Company, unless a period of not less than 2 years has

lapsed.

3. Is not a person of direct next of kin or by marriage as being parents, spouse, brothers and sisters, or descendants,

including spouse of descendants of the executive, major shareholder, a person having the supervisory authority, or a

person who is being nominated to be an executive, or person having the supervisory authority of the Company or of the

subsidiaries.

4. Has no business relationship with the Company, the Companyûs subsidiary or affiliate or other juristic person whose

interest may be adversary to the Company in a manner that may prejudice independent decision making.

5. Is not a director appointed to represent directors of the Company, major shareholders or shareholders who are related to

the major shareholders.

The Board of Directors

024

6. Non-Executive of any professional to the company.

7. Has no other characteristics which may obstruct him from making independent opinions concerning the operation of the

Companyûs activities.

Executive Directors : means directors who manage the affairs of the Company on a regular basis

Authorized Director : means directors authorized to sign for the Company with the common seal in appliance

Non-Executive Directors: means outside directors who are not executive directors or directors with power to bind upon the

Company, and who are not executive nor regular employees of the Company. The number of non-executive directors may be

determined according to the ratio of investment from each group of shareholders.

The Companyûs Board of Directors will make selection of persons with suitable qualification, and free from such proscribed

characteristics as stipulated in the Public Company Act and Securities and Exchange Commission Act, including having no characters

that will indicate that they could not be trusted to manage a public company whose shares were held by the public according to the

announcements made by the Securities and Exchange Commission and the Stock Exchange of Thailand. by considering their

perspective, skill, experience, and diversity of knowledge which will be beneficial to the Companyûs business. The selection will also

focus on their understanding of the Companyûs business, and are not directors or executive of an enterprise whose interest may be in

conflict with the Company. They should also devote their time adequately to perform their functions, and can make decision

independently for the interest of the Company and the shareholders in general for the purpose of submitting their views to the general

meeting of shareholders. Biography of those directors will be presented by the Company with adequate details so that the meeting may

be able to make decision from the information so provided to appoint directors in accordance with the procedures prescribed by the

Companyûs Articles of Association based on a one share one vote.

The Board shall appoint from one of its members as Chairman of the Board and may appoint one or more directors as vice

chairman. The Board shall also appoint Chairman of the Executive Board, executive directors, president, audit committees, Company

secretary, and other committees as may be necessary.

The Company will also support all directors of the Company to attend the Chairman course or DCP or DCP RE or DAP or

Effective Audit Committee courses administered by the Institute of Directors, in addition to providing them with data from various

sources, such as guidelines for directors of listed companies, audit committee. Directors of the Company will also be given the

opportunity to visit the Companyûs manufacturing sites so that they will have a complete perspective of the Companyûs operation and

lines of business.

Authority and duties of the Companyûs Board of Directors are as follows:

1. To comply with laws, Securities and Exchange Act, the objects and the articles of association of the Company, and the

resolution of the Board of Directors and the shareholder meetings in good faith, with responsibility and are to preserve

the interests of the Company and of the shareholders according to good corporate governance.

2. To determine the policy, direction, goal of the Company.

3. To review and approve annual business plan and capital expenditure plan proposed by the Executive Board.

4. To consistently oversee and follow up the result of the performance of the executives so that the stipulated goal and

policy are effectively and efficiently met in order to increase economic value to the enterprise and result in good return

for the shareholders.

5. To treat information disclosure as significant and essential for decision making in security investment in the Company as

set forth in the SETûs regulations.

025

6. To maintain a reliable and proper accounting system, financial report and auditing to reflect the true position of the

Company according to the generally accepted accounting system.

7. To maintain an adequate internal control, as well as an appraisal system to evaluate the sufficiency of the internal control

and effectiveness of the internal auditing.

8. To maintain an appropriate risk management measure and make a consistent follow up.

9. To appoint various committees consisting of board of executive directors, audit committee, the president, risk

management committee and others as may be necessary to assist in the control and supervision of the Companyûs affairs

under the supervision of the Board of Directors, Executive Directors, or the President or to authorize such person to do

as may be deemed fit by the Board of Directors and at any appropriate time. The Board of Directors may revoke,

terminate or amend such authority any time provided that such authorization shall not extend to the authority of giving

approval of any matter which such person may have any form of conflict of interest with that of the Company or the

Companyûs subsidiary or affiliate. Any such authorization shall be in accordance with the resolution of the Board of

Directors in a meeting where the Companyûs Audit Committee attended.

10. To disclosure the interest of the directors and their related person to the Company.

11. To maintain a guideline for the performance of the Board of Directors and for each director and to evaluate the result of

the performance annually.

However, the above powers do not extend to the execution of any related transactions and the acquisition of or disposal of any

material assets of the Company as set forth by the SECûs and SETûs rules and regulations according to which the Company shall have

to comply. In addition, the above powers do not extend to other matters which according to the Companyûs Articles of Association, an

approval from the shareholders is required.

Authority and duties of Chairman of the Board

1. To call the Board of Directorsû meeting and supervise the delivery of invitation letters to attend the meeting and other

documents to ensure that the Board receives adequate information in a timely fashion

2. To chair the Board of Directorsû meeting

3. To strengthen the Boardûs corporate governance criteria

4. To chair the Shareholdersû meeting and supervise the meeting for the purpose of compliance with the Articles of

Association and meeting agendas

5. To ensure efficient communications between directors and shareholders

6. To perform duties as required by the laws especially those specified to be duties of Chairman of the Board

The Company has formally determined in advance that the Board shall hold meeting at least 4 times a year at quarterly interval,

with the specific agendas, and other extraordinary meeting if any necessary, to consider the outcome of the Companyûs transactions and

activities following the review or auditing of the Companyûs financial reports by the auditor. The Chairman of the Board will send out

notice convening the meeting and informing of the agenda for acknowledgement, for follow up and for consideration, with material

information and data in black and white to enable the directors to understand the transactions and the issues at least 7 or 14 days in

advance, as the case may be. Directors may set agenda where the Chairman of the Board, the Chief Executive Director and the

President will select the appropriate agendas for the Board Of Directors Meeting, Directors may submit any additional matters to the

026

agenda and make comments openly and independently at the meeting, whose opinions will be noted by the Companyûs secretary.

Sufficient time will be allowed for debates and directors with related and/or conflict of interests will not attend or abstain from voting

during the agenda involved. The minutes will hold up to 2-3 hours and will be made ready within 7 days from date of the meeting and

will be kept at the Companyûs head office for examination by the directors and the related parties

In 2013 the Board of Directors held 6 meetings, 4 for standard meetings and 2 extraordinary meetings with 100% attendance of

the total member of directors as the records follow:

Name Number of Attendance Remarks

1. Mr. Chareon Usanachitt 6/6 -

2. Mr. Jajjai Dhammarungruang 6/6 -

3. Mr. Thaksa Busayapoka 6/6 -

4. Mr. Yothin Nerngchamnong 6/6 -

5. Mr. Somsak Varikarn 6/6 -

6. Mr.Kavivud Nerngchamnong 6/6 -

7. Mr. Chaiyot Paporn 6/6 -

8. Mr. Suchart Thamapitagkul 6/6 -

9. Mr.Supparerk Mallikamarl 6/6 -

10. Mr. Kittichai Lattisophonkul 6/6 -

11. Mr. Patana Usanachitt 6/6 -

The Executive Board of Directors

The Executive Board of Directors as of December 31, 2013

1. Mr. Thaksa Busayapoka Chief Executive Director

2. Mr. Jajjai Dhammarungruang Executive Director

3. Mr. Yothin Nerngchamnong Executive Director

4. Mr. Somsak Varikarn Executive Director

5. Mr. Patana Usanachitt President

The Executive Board of Directors are appointed by the Board of Directors to transact such activities as designated so as to

achieve the Companyûs goals or plans as set out by the Board of Directors. The Executive Board of Directors are those directors with

power to bind upon the Company as authorized by the resolution of the shareholdersû meeting. Presently, the Executive Board of

Directors consists of 1 Chief Executive Director, 1 President and the rest and 3 Executive Directors. The executive board holds meetings

at least once a month. Authority and duties of the executive board of directors are as follows:

1. To manage the business in accordance with the objects, goal, guideline, policy, plan and budget of the Company as determined

and assigned by the Board of Directors, as may be authorized by the Board of Directors of the Company.

2. To provide direction, strategies and plans to achieve Companyûs objectives.

3. To organize and provide internal structure and operational procedures of the Company for highest efficiency purpose.

027

4. Periodically review operational outcomes to achieve company goals.

5. To look for new opportunity in business for submission to the Board of Directors for approval.

6. To review and approve operations which are normal business transactions of the Company such as procurement, asset

investment and financial transactions with commercial banks and financial institutions by ensuring compliance with approval

authority regulations and with the laws, terms and conditions, regulations, the Companyûs Articles of Association and practices

and regulations as announced by the Stock Exchange of Thailand and the Securities and Exchange Commission.

7. To approve any transactions prior to submitting same to the Board of Directors

8. To appoint, remove, and terminate high ranking personnels.

9. To approve distribution of bonus and the amount of money for annual salary increase of the staff within the annual budget of the

Company.

10. To see to it that the policy on corporate governance is appropriately carried out.

11. To perform any other duties as may be assigned by the Board of Directors.

The above powers do not extend to approval of any transaction which the directors themselves or other related parties may have

interest in conflict with that of the Company or any subsidiary or affiliate of the Company.

Authority, duties and responsibilities of Chief Executive Director

1. To manage and supervise the business and/or day-to-day activity of the Company

2. To ensure that the management meets objectives, policies, goals, operation plans and budgets approved by the Board and/or

the Executive Board of the Company

3. To be an authorized representative of the Company and manage its business to meet objectives, regulations, policies, rules,

terms, orders, resolutions of the Shareholdersû meeting and/or those of the Board and the Executive Board in all aspects

4. To appoint and manage various work groups for good and transparent management; to appoint a substitute and/or to assign

other parties to do a specific task on the Chief Executive Directorûs behalf where the authorization given to the substitute and/or

the assignment shall be subject to the extent of power authorized under the Power of Attorney and/or to approval authority

regulations previously approved by the Board of Directors

5. To determine missions, objectives, guidelines and policies of the Company as well as to order and supervise overall operation to

maximize corporate management

6. To review and propose investment plans to the Executive Board and the Board of Directors for further approval

7. To monitor and evaluate operation performance on a regular basis; and to report results of such performance, management and

operation progress to the Executive Board, the Audit Committee and the Board of Directors

8. To approve each spending item during the normal course of the Companyûs business operation as stipulated in the approval and

direction regulations previously approved by the Board of Directors

9. To review and approve each execution of legal acts that shall bind the Company during the normal course of business as

stipulated in the approval and direction regulations previously approved by the Board of Directors

10. To consider hiring, appointing, cross-department transferring or terminating employment of Assistant Vice President and higher; to

determine wages, remunerations, salaries and bonuses and welfare of the Companyûs employees under the policy framework

stated by the Executive Board and the Board of Directors

028

11. To issue order, regulation, notice and memorandum to ensure operation compliance with the Companyûs policy and interest and

to maintain regulatory discipline within the organization

12. To perform other duties according to the resolutions of the Shareholdersû meeting, the Board of Directorsû meeting and/or as

entrusted by the Board of Directors or the Executive Board from time to time

The authorization of power, duties and responsibilities for the Chief Executive Director shall not be in the nature that such

authorization or substitution may allow the Chief Executive Director or his authorized representative to approve transactions that he or

the person may have any conflict of interest against (based on a definition of relevant departments), any interest in or any other forms

of conflict of interest with the Company or subsidiaries unless itûs an approval of transaction during the normal course of business that

has been clearly defined.

The Chief Executive Director t may be appointed or removed by the Board of Directors or the Shareholdersû meeting.

The President (Managing Director) :

The President is appointed by the Board of Directors who will hold office as President of the Company only so that he will have

sufficient time to manage the affairs and activities of the Company in accordance with the objectives of the Company and for the best

benefit of the shareholders. The President is under direct command of and report to the Chief of the Executive Board and his

performance will be evaluated by the Executive Board of Directors annually, including fixing his remuneration. Authority and duties of

the President is set forth as follows:

1. To administer, manage, and control operations concerning the general management of the Company.

2. To follow directors policies, plans and budgets approved by the Board of Directors or the Executive Board of Directors or Chief

Executive Director.

3. To hire, appoint, transfer, discharge, and lay off; determine wages, bestow awards, adjust monthly salaries, remunerations, and

bonuses of all employees except executives those requiring approval from Board of Executive Directors.

4. To approve or transfer the power to approve the purchasing of assets and services that are beneficial to the Company, and

financial transactions involved in business operations; all within the budget provided by the Board of Directors or Board of

Executive Directors.

5. To issue orders, regulations announcement and memorandum in order to ensure operations align with Companyûs policies and

follow specific codes of conduct.

6. To represent the Company in business activities and transactions related and beneficial to the Company.

7. To appoint advisors in different fields as deemed necessary in operations.

8. To do any other functions as may be designated by the Board of Directors, or Board of Executive Directors, or Chief Executive

Director.

The powers conferred above do not extend to approval of any transaction which the President himself or other related parties

may have interest in conflict with that of the Company or any subsidiary or affiliate of the Company.

029

The Audit Committee

The Audit Committee as of 31 December 2013

1. Mr. Suchart Thammapitagkul Chairman of Audit Committee

2. Mr. Supparerk Mallikamarl Audit Committee Director

3. Mr. Kittichai Lattisophonkul Audit Committee Director

4. Mrs. Somrak Chotibhongs Secretary to the Audit Committee

The Board of Directors is responsible for the appointment of the Audit Committee which will be composed of independent

directors to improve efficiency and increase value in the operation of the Companyûs business by ensuring that a process of good

corporate governance of the Companyûs business is in existence. The first appointment of Audit Committee was made on 8 November

1999, comprising 3 independent directors with 5 years tenure and at least one director with expertise in accounting or finance. Following the

completion of tenure, audit committee directors are eligible for reappointment. Should a position within the audit committee be vacant for

reasons other than the completion of tenure, a fully qualified candidate should be appointed to the committee within 3 months and serve

the remaining tenure of the absent member. The Audit Committee shall hold a minimum of 4 meetings a year at quarterly intervals.

Authority and duties of the audit committee are as follow:

1. To review and ensure that the Companyûs financial report is proper and with adequate disclosure in accordance with the

generally accepted accounting standard, including the assurance that quarterly and annual financial reports are accurate,

complete, and justifiable before the submission to the Board of Directors for approval.

2. To review and ensure that the Company has an appropriate and efficient internal control system and assessing the results of the

internal control annually.

3. To ensure that the Company has complied with the security laws and regulations of the SET or other laws relating to the

business of the Company.

4. To review and ensure that the disclosure of the Companyûs information is correct and complete as stipulated by related regulations

where there appears to be related transactions or any conflict of interests so that the Companyûs benefit is not prejudiced.

5. To select and recommend to the Board of Directors the appointment of the external auditor and suggest remuneration for

approval in the annual shareholdersû meeting, and to attend meetings with the external auditor without participation of the

management at least once a year.

6. To review and revise the audit committee charter to properly align with the Securities and Exchange Act and SETûs regulations.

7. To review independence of internal audit department reporting directly to the Chairman of the Audit Committee, including giving

consent to the appointment, revocation, transfer or termination of employment of staff in the internal audit department.

8. To consider, review, and approve annual auditing plans of the internal audit department.

9. To direct and ensure that the internal audit department has addressed all essential elements completely, propose solutions and

opinions to the management, and monitor the execution of the proposed solutions within the provided time period.

10. To consider and approve budgets and manpower of the internal audit department.

11. To report performance of the audit committee to the Board of Directors for acknowledgment at least 4 times a year.

12. To ensure the mutual understanding between the Board of Directors, the external auditors, and the Internal Audit Department are

headed in the same direction.

030

13. To be empowered to call for opinions or attendance at the meeting or provision of any related documents, as the audit

committee may deem relevant or necessary, from the management or any related staff.

14. To seek counsel from independent professionals from varying fields when deemed necessary on the expense of the Company.

15. To evaluate and assess the performance of the audit committee annually for possible improvement.

16. To prepare a report of the audit committeeûs activities as may be required by the SETûs regulations as part of the Companyûs

annual report.

17. To do any other functions as may be designated by the Board of Directors with consent of the audit committee.

In 2013, the Audit Committee held 4 standards meeting with 100% attendance of the member of directors as follows:

Name - Surname Number of Attendance Remarks

1. Mr.Suchart Thammapitagkul 4/4 -

2. Mr.Supparerk Mallikamarl 4/4 -

3. Mr.Kittichai Lattisophonkul 4/4 -

Risk Management Committee The Board of Directors has appointed the Risk Management Committee in 2005 to work on risks

of corporate and activity levels covering all important operational functions. The Risk Management Committee which comprises of:

1. Mr.Jajjai Dhammarungruang Advisor

2. Mr.Thaksa Busayapoka Chairman

3. Mr.Patana Usanachitt Director

4. Mr.Kitti Busayapoka Director

5. Mr.Kookiat Orankit Director

Roles and duties of the Risk Management Committee :

1. To review and determine the scope and policies in risk management.

2. To monitor the organizationûs significant risks, while improving the scope and procedures in identifying and assessing

risks.

3. To assess and approve an appropriate risk management plan and ensure its practice throughout the organization.

4. To monitor significant strategic and operational risks.

5. To advise and recommend in the process of risk management.

6. To promote and encourage the adoption of risk management as a corporate culture by instilling in employees the

importance of risk management.

7. To compile and continuously update a risk management handbook which includes information on the procedures in

operation, steps in identifying risks, and guidelines to risk management.

8. To communicate significant risks to the Audit Committee to incorporate in internal control.

9. To report to the Board of Directors on significant risks and risk management measures.

031

Companyûs Secretary

The Companyûs Board of Director appointed Mrs. Somrak Chotibhongs, as the Secretary to the Company. She has appropriate

qualifications and experience as the Companyûs Secretary, and passed a training course on çThe Secretary to the Company,é No. 4/

2003 organized by Thai Institute of Directors with all qualifications in compliance with the requirements of the Securities and Exchange

Act. She oversees for the Board of Directorsû activities with the following duty and responsibilities.

1. To perform duties with responsibility, care and honesty, as well as to comply to the law, objectives, articles of association,

resolution of the Board and resolution of the shareholders.

2. To ensure that the Board of Directors comply with the laws on public company, stock exchange and various regulations

stipulated by the SEC and SET and other related institutions.

3. Duties relating to good corporate governance by reporting information that is needed to be disclosed to the shareholders and

other related parties according to the rules and regulations stipulated by the SEC and SET, and to prepare a policy on good

corporate governance of the Company.

4. The meeting of the Board and of the shareholders by preparing correct and complete agenda and minutes of the Boardûs and

the shareholdersû meetings, within the time frame and have the same kept in good custody for reference and review.

5. Keeping and sending report on conflict of interest of directors, executives and other related persons to the Chairman of the

Board and Chairman of the Audit Committee for their review within 7 days from the date the Companyûs received such report.

6. To take care and keep in custody the Register of the Company, i.e. the Register of major Shareholders, Register of Directors

and to communicate with the Registrar of Companies.

7. To take care and keep in custody of important documents, such as report of interests of directors, executives and minutes of

the Boardûs and shareholdersû meetings as well as the Companyûs common seal.

8. To coordinate with, as well as to provide facilities to, the shareholders of the Company.

9. Other actions taken by the Capital Market Commission declared.

In the event the Companyûs Secretary ceases to hold office as secretary or cannot perform the duty, the Board shall appoint a

new Secretary within 90 days from the date the former Secretary vacated the office or could not perform the duty.

032

Cred

entia

ls o

f Di

rect

ors

and

Exec

utives

Name

Ag

e Ed

ucati

on

%

Relat

ionsh

ip Em

ploym

ent R

ecord

share

s

Perio

d Po

sition

Co

mpan

y

1. Mr

.Cha

reon

Usan

achit

t 62

-

BBA.

Univ

ersity

of C

onne

cticu

t, U.

S.A.

2.3

0 Br

othe

r of N

o.11

2001

- p

resen

t Ch

airma

n Mo

dernf

orm G

roup

Publi

c Co

mpan

y Lim

ited

-

RCP

1/20

00, D

CP 3

2/20

03 a

nd D

CP R

e

& No

.12

1989

- p

resen

t Ex

ecuti

ve D

irecto

r Mo

dernfor

m To

wer C

ompa

ny L

imite

d

2/

2006

Program

of I

OD

1997

- p

resen

t Ch

airma

n MF

EC P

ublic

Com

pany

Lim

ited

2. Mr

.Jajja

i Dha

mmaru

ngruan

g 64

-

Maste

r of M

anag

emen

t 2.2

0 Br

othe

r of N

o.13

1999

- p

resen

t Vic

e Ch

airma

n Mo

dernf

orm G

roup

Publi

c Co

mpan

y Lim

ited

SASIN

Grad

uate

Institu

te of

Busin

ess

1989

- p

resen

t Ex

ecuti

ve D

irecto

r Mo

dernfro

m To

wer C

ompa

ny L

imite

d

Ad

minis

tratio

n, Ch

ulalon

gkorn

Unive

rsity

2005

- p

resen

t Ex

ecuti

ve D

irecto

r Mo

dernfor

m He

alth

and

Care

-

BBA.

Mem

phis

State

Univ

ersity

, U.S

.A.

Comp

any

Limite

d

- DC

P 38

/200

3 Pr

ogram

of I

OD

1994

- p

resen

t Ex

ecuti

ve D

irecto

r Th

ai Pla

spac

Pub

lic C

ompa

ny L

imite

d

2006

- p

resen

t Ch

airma

n/Ex

ecuti

ve D

irecto

r Ra

fa As

socia

tes C

ompa

ny L

imite

d

2007

- p

resen

t Ex

ecuti

ve D

irecto

r Ra

fa De

sign

Comp

any

Limite

d

2007

- p

resen

t Ex

ecuti

ve D

irecto

r Ra

fa Plu

s Ar

chite

ct Co

mpan

y Lim

ited

3. Mr

.Thak

sa B

usay

apok

a 63

-

Maste

r of M

anag

emen

t, Ne

w Te

chno

logy

5.75

Brothe

r of N

o.12

2000

- p

resen

t Ch

ief E

xecu

tive

Direc

tor

Mode

rnform

Grou

p Pu

blic

Comp

any

Limite

d

Ve

nture,

Coll

ege

of Ma

nage

ment

19

89 -

pres

ent

Exec

utive

Dire

ctor

Mode

rnfor

m To

wer C

ompa

ny L

imite

d

Ma

hidol

Unive

rsity

1994

- p

resen

t Ch

airma

n/Ex

ecuti

ve D

irecto

r Th

ai Pla

spac

Pub

lic C

ompa

ny L

imite

d

- Ba

chelo

r of C

omme

rce, C

hulal

ongk

orn

Unive

rsity

2005

- p

resen

t Ch

airma

n/Ex

ecuti

ve D

irecto

r Mo

dernfor

m He

alth

and

Care

-

DCP

32/2

003

Prog

ram o

f IOD

Co

mpan

y Lim

ited

20

06 -

pres

ent

Exec

utive

Dire

ctor

Rafa

Asso

ciates

Com

pany

Lim

ited

20

07 -

pres

ent

Exec

utive

Dire

ctor

Rafa

Desig

n Co

mpan

y Lim

ited

20

07 -

pres

ent

Exec

utive

Dire

ctor

Rafa

Plus

Arch

itect

Comp

any

Limite

d

2013

- p

resen

t Di

rector

Interh

ides

Publi

c Co

mpan

y Lim

ited

4. Mr

.Yothin

Nern

gcha

mnon

g 63

-

Maste

r of P

olitic

al Sc

ience

, 3.9

7 Br

othe

r of N

o.6

1980

- p

resen

t Ex

ecuti

ve D

irecto

r Mo

dernf

orm G

roup

Publi

c Co

mpan

y Lim

ited

Ramk

amha

ng U

nivers

ity

1989

- p

resen

t Ex

ecuti

ve D

irecto

r Mo

dernfor

m To

wer C

ompa

ny L

imite

d

- Ba

chelo

r of P

olitic

al Sc

ience

,

20

08 -

pres

ent

Chief

Exe

cutiv

e Di

rector

Thai

Plasp

ac P

ublic

Com

pany

Lim

ited

Ramk

amha

ng U

nivers

ity

2012

- p

resen

t Di

rector

The

Stoc

k Ex

chan

ge o

f Tha

iland

- DC

P 35

/200

3 Pr

ogram

of I

OD

2012

- p

resen

t Ap

point

ed M

embe

r St

ate E

nterp

rise

Polic

y Bo

ard

-

Capit

al Ma

rket A

cade

my L

eade

rship

Prog

ram

2013

- p

resen

t Di

rector

Dhan

arak

Asse

t Dev

elopm

ent C

ompa

ny

(CMA

#7)

Limite

d

- To

p Ex

ecuti

ve P

rogram

in C

omme

rce a

nd

2013

- p

resen

t Di

rector

Thail

and

Philh

armon

ic orch

estra

Trad

e #4

20

04 -

201

3 Ind

epen

dent

Direc

tor

Natio

n Mu

ltimed

ia Gr

oup

Publi

c Co

mpan

y

- Th

ailan

d En

ergy

Acad

emy

#2

Limite

d

2009

- 2

013

Memb

er of

The

Audit

Na

tion

Multim

edia

Grou

p Pu

blic

Comp

any

Comm

ittee

Lim

ited

033

Na

me

Age

Educ

ation

%

Re

lation

ship

Emplo

ymen

t Rec

ord

share

s

Perio

d Po

sition

Co

mpan

y

5. Mr

.Som

sak

Varik

arn

63

- BB

A. M

emph

is St

ate U

nivers

ity, U

.S.A

. 0.5

1 -

1980

- p

resen

t Ex

ecuti

ve D

irecto

r Mo

dernf

orm G

roup

Publi

c Co

mpan

y Lim

ited

-

DCP

Prog

ram 3

8/20

03 o

f IOD

19

89 -

pres

ent

Chair

man/

Exec

utive

Mo

dernfor

m To

wer C

ompa

ny L

imite

d

Di

rector

6. Mr

.Kav

ivud

Nerngc

hamn

ong

59

- Ma

ster o

f Poli

tical

Scien

ce,

3.44

Brothe

r of N

o.4

2004

- p

resen

t Di

rector

Mode

rnform

Grou

p Pu

blic

Comp

any

Limite

d

Ra

mkam

hang

Univ

ersity

19

87 -

pres

ent

Chair

man

Ocea

n Fe

ed C

o.,Ltd

.

- Ba

chelo

r of P

olitic

al Sc

ience

,

19

86 -

pres

ent

Chair

man

K.B.

S. Im

port-

Expo

rt Co

.,Ltd.

Ramk

amha

ng U

nivers

ity

1987

- p

resen

t Di

rector

Thain

akan

o Co

.,Ltd.

-

Bach

elor o

f eco

nomi

c,

Su

khotha

i Tha

mmath

irat U

nivers

ity.

-

DAP

17/2

004

Prog

ram o

f IOD

7.

Mr.C

haiyo

t Pap

orn

39

- Ba

chelo

r of M

arketi

ng,

1.00

- 20

03 -

pres

ent

Direc

tor

Mode

rnform

Grou

p Pu

blic

Comp

any

Limite

d

Rich

mond

Univ

ersity

, Eng

land

2003

- p

resen

t Ma

nagin

g Di

rector

Papo

rnch

ai Ga

rmen

t Co.,

Ltd.

-

DAP

5/20

03 P

rogram

of I

OD

8. Mr

.Suc

hart

Tham

mapit

agku

l 64

-

Maste

r of L

aw, H

arvard

Law

Sch

ool,

U.S.

A 0.0

0 -

2012

- p

resen

t Ind

epen

dent

Direc

tor &

Mo

dernf

orm G

roup

Publi

c Co

mpan

y Lim

ited

-

Barriste

r-at-

law

Ch

airma

n of

Audit

- Ba

chelo

r of L

aw, C

hulal

ongk

orn

Unive

rsity

Co

mmitte

e

- DC

P 60

/200

5, DA

P 27

/200

4 an

d Effec

tive

1999

- 2

012

Indep

ende

nt Di

rector &

Mo

dernf

orm G

roup

Publi

c Co

mpan

y Lim

ited

Audit

Com

mitte

e Pr

ogram

of I

OD

Au

dit C

ommi

ttee

Direc

tor

20

03 -

201

0 Ind

epen

dent

Direc

tor &

MF

EC P

ublic

Com

pany

Lim

ited

Audit

Com

mitte

e Di

rector

20

11 -

Pres

ent

Indep

ende

nt Di

rector &

MF

EC P

ublic

Com

pany

Lim

ited

Chair

man

of Au

dit

Comm

ittee

20

05 -

pres

ent

Indep

ende

nt Di

rector &

Un

imitr

Engin

eerin

g Pu

blic

Comp

any

Au

dit C

ommi

ttee

Direc

tor

Limite

d

2004

- p

resen

t Ind

epen

dent

Direc

tor &

T.C

.Unio

n Gl

obal

Publi

c Co

mpan

y Lim

ited

Chair

man

of Au

dit

Comm

ittee

20

04 -

pres

ent

Indep

ende

nt Di

rector &

Un

ique

Minin

g Se

rvice

s Pu

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Admi

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tion

Note

: -

No. o

f sha

res in

clude

s sh

areho

lders

in ac

cord

ance

with

Sec

tion

258

as w

ell.

-

No. o

f sha

res a

s on

Octo

ber 1

4, 20

13.

035

Nomination of the Directors and Management

We have not appointed the Recruitment and Nomination Committee because in practice directors will nominate persons

considered appropriate who have right qualifications as required by the Company and who neither possess prohibited characteristics as

stipulated in the laws on public limited company nor any trait that conveys the lack of trust to manage a public company whose shares

are held by the public as required by the Securities and Exchange Commission. The nominee will then be proposed to the Board of

Directors. Simultaneously, shareholders are also entitled to nominate candidates to be elected as director to the Board. As a result, the

Board of Directors is responsible for making selection of directors to replace those retired by rotation or in case any other vacancy,

including independent directors, non-executive directors and directors from each major group of shareholders with general qualifications,

specific qualifications and Independent director qualification in accordance with Pub Company Act, Security Act, SET and SEC

regulations, specifications qualifications, and independent Directors qualifications, by nominating persons with suitable qualifications,

expertise and devotion to be directors of the Company. In order to build up a strong and efficient board of directors, each directors

should not hold directorship in more than 5 companies. The nominated persons will be submitted to the general meeting for approval in

accordance with the Articles of Association of the Company, that is to say, the resolution shall be approved by not less than half of the

shareholdersû who attend the meeting and having the right to vote. The voting is on the one share one vote basis. Each shareholder

shall cast all their votes to select one or more nominated persons as directors, the person receiving highest vote in descending order

shall be appointed as directors equal to the stipulated number of directors of the Company. At each general meeting of shareholders,

one third of directors shall vacate their office. The directors who have been longest in office shall retire. Any retiring director is eligible

for reelection.

In case there is a vacancy among the directors other than a retirement by rotation, the Board shall elect director to fill the

vacancy in the next Board of Directorûs Meeting. The resolution shall consists of votes of not less than three-fourth of the remaining

Directors. To elected director shall be in office only for the rest of the terms of the resigned director.

The Board of Executive Directors will be responsible for the recruitment of qualified and experienced personnel for the

management positions of each business units.

The Directorsû and Management Remunerations

The Company has not appointed a Remunerations Committee, as such the remunerations of the Directors and Audit Committee

will be proposed by the Board of Executive Directors to the Companyûs Board of Directors for determination which takes into

consideration the responsibility of each Director, Companyûs financial position, and the market rate. The rate is compatible with the

current rate paid by listed companies in the same industry information of which was provided by the SET. The remunerations will be

submitted by the Companyûs Board of Directors for approval in the Shareholderûs Meeting. Remuneration of the Executive Board and the

management the annual assessment of the management will be determined taking into consideration the remuneration paid by

companies in the same industry will be based on the Companyûs performance as well as on each individual performance.

The Companyûs Board of Directors comprises of 11 members including 3 members of the Audit Committee. The quarterly

remunerations is baht 58,000 for each director and Baht 77,000 for Chairman, and additional car allowance Baht 22,000 per month is paid

for each Audit committee, and Baht 25,000 for Chairman of Audit committee.

036

Remunerations in Monetary Form Modernform Group PCL. Subsidiaries

Amount (Baht) As of December 31, 2013 Amount (Baht) As of December 31, 2013

Directors 11 persons quarterly remunerations in 2013 2,628,000 120,000

Transportation monthly allowance 828,000 -

(3 Audit Committee Directors)

Total 3,456,000 120,000

Executive Directors and Management remunerations are in the form of salaries, bonuses, and transportation allowances as

follows:

Board of Executive Directors and Executives As of December 31, 2013

Remuneration (Baht) 53,923,000

Persons 10

Other Remunerations

- Employee provident fund The Company has contributed to the employee provident funds of executives as follows:

As of December 31, 2013

Sum Contributed (Baht) 1,852,200

Persons 10

037

Corporate Governance

Our governance policies

The Companyûs Board of Directors realize the importance of good corporate governance and believe that good corporate

governance is a foundation upon which a good management and efficient operation system can be built to reflect transparency and

reliability, subject to good and reliable ethical framework, with ability to improve value and competitiveness, leading to long term

sustainable growth and eventually trust and confidence from shareholders, investors, and other stakeholders. As a result the Companyûs

Board of Directors has adopted the principles of good corporate governance in writing and with consistent review. At present the

company is using the Corporate Governance Book III which was revised and updated in 2008 according to the Security Exchange law (no.

IV) B.E 2551 and distributed these printed policies to all staff to ensure that they have a written guideline handy for their daily operations.

We also had them posted on our website www.modernform.com for easy access. We instill the concept and awareness of our stand on

good corporate governance to each and everyone of our staff with constant internal audits as a follow-up action. The audit team

conducts field audits within 5 aspects of our good corporate governance and periodically reports the findings to the audit committee and

the board of directors. In addition, we have been regularly auditing to comply with all SET requirements as a publicly listed company.

The Companyûs Board of Directors evaluated its performance according to the good governance practices in 2013, at 94%

covering the following five (5) main principle.

1. Rights of Shareholders

2. Equal Treatment of Shareholders

3. Roles of Stakeholders

4. Disclosure of Information and Transparency

5. Boardûs Responsibilities

1. Rights of Shareholders

The Company has the policy and guidelines of good governance providing equal treatment to the shareholders. The

Company provides its shareholders with fundamental rights determined by laws. In addition, the Company provides the disclosure

of up-to-date important information, newsletters, access of the shareholders into the Companyûs information and the

shareholdersû eligibility for attendance of shareholdersû meetings. Some examples are as the followings. The record date is

scheduled on a date that is no more than two (2) months prior to a shareholdersû meeting. A shareholder is allowed to propose

a meeting agenda according to the Companyûs principles and guidelines. A shareholder is eligible to submit any questions to the

Board of Directors through the Companyûs website prior to the meeting date. An invitation letter is distributed to the shareholders

at least 28 days prior to the meeting in order to provide an opportunity for them to study the meeting attachment before the

meeting date. The shareholdersû meeting date, time and place are determined with consideration to the shareholdersû

convenience. In the meeting, the shareholders are allowed to provide comments independently and jointly decide on the

Companyûs important agenda.

In 2013, the company allowed shareholders to propose meeting agendas based on the criteria and guidelines set by the

company. Shareholders were invited to submit questions and opinions to the Board via our website since November 22, 2013

which were subsequently gathered by our company secretary before they were submitted to the Board of Directors in order to

completely answer shareholdersû questions on the meeting date. We also posted an invitation to attend the shareholdersû meeting

including other supporting information 32 days in advance on our website before the shareholderûs meeting date scheduled on

March 8, 2013 before sending the documents to shareholders to allow them enough time to study the information before making

a decision prior to the meeting date.

038

The Company organized an Ordinary Shareholdersû Meeting at the Companyûs main Conference Room on April 9th,

2013 10:00 am. Thailand Securities Depository Company Limited, the Companyûs securities registrar, delivered the invitation letter

with all necessary agenda documents on April 18th, 2013, 22 days prior to the meeting date. The necessary agenda documents

comprised of a copy of the minute of the previous meeting, an annual report, financial statements, a report of the auditors, a

report on the Companyûs performance on the previous year, a dividend payment policy with 5 year comparison, brief profiles of

the directors and independent directors nominated, information on compensation to the directors, information on the Companyûs

auditors and compensation, the Articles of Association regarding the shareholdersû meeting, Proxy Form - Form A and B that

assign an independent director to be a proxy for a shareholders in a case that the shareholder is not able to attend a meeting.

Each agenda consisted of the Board of Directorsû comments, facts and reasons for consideration. The shareholders are able to

make registration one (1) hour prior to the meeting. A total of 10 members of the Board of Directors attended the meeting. They

included the Chairman of the Audit Committee, members of the Audit Committee, Vice President - Finance, the Companyûs

auditors, and the Companyûs Internal Audit Manager who performed the inspectorûs task on the voting for transparency and

compliance with laws and the Companyûs Articles of Association. The meeting proceeded in accordance with the agenda order

without any addition of other agenda. The ballot was performed with the shareholders casting their vote on each agenda in a

respective order. The Chairman of the Board of Directors, who acted as the Chairman for the meeting, informed the shareholders

the procedures of casting a vote and ballot collection prior to the voting. Simultaneously, the Chairman declared the number of

the shareholders present in the meeting and the shareholders ineligible for voting as they might have a stake in an agenda. The

shareholders were allowed to have equal rights to examine, review and comment the Companyûs performance, and send

questions and suggestions. The relevant committees answered the questions and comments as noted in the minutes of meeting

accurately and completely. The minutes of meeting was complete within 14 days from the meeting date. The shareholders were

able to have the minutes on the Companyûs website for viewing and reference on April 24th, 2013.

2. Equal treatments of shareholders

The Company establishes the policy and guidelines on the good governance for its shareholders with fair treatment. In

matters other than that of the right of attending the general meeting, the right to vote, access to companyûs information; financial

statement, the business results, proposing additional meeting agenda, the right to nominate independent director as proxy and

director nomination, we have specified other shareholderûs treatment guidelines to ensure fairness and equality amongst all of our

shareholders. Avoiding conflicts of interests is one practice that we pay particularly close attention to. We set steps and

processes to take care of businesses or transactions that may possibly have conflicts of interest present such as transactions

between our companies or related companies with major shareholders or executives. In order to equally protect our customersû

benefits, we always treat transactions between related companies and associates at armûs length basis. We ensure transparency

between receivables or financing transactions between our own group companies and strictly adhere to guidelines set out by the

SET and GAAP. Therefore, these details on related company transactions may be found in the notes to financial statement.

Furthermore, the company has a specific policy on preventing executives and staff from abusive self-dealing by

prohibiting disclosure of information to the public and has established a black-out period preventing executive and staff dealing

with company shares 1 month before the release of the companyûs financial statement. Director and executives must also report

changes in ownership of company stocks to the stock exchange committee in compliance of rule 59 on Security Trading

Commission Act 2535 A.D. In addition, directors, executives and related parties reporting rules and procedures of interests of

directors, executives and connected persons in August 2009 were required to report to the company their interests and those of

related persons. During the past year, directors and executives strictly.

039

3. Role of stakeholders

The Company establishes the policy and guidelines on the good governance to appropriately treat stakeholding groups

with and honesty. In recognizing the rights of all groups of stakeholders and in support of good cooperation between the

Company and various stakeholder groups, whether they are inside the Company, such as the management and staff of the

Company or outside such as suppliers, competitors, creditors or other related enterprises, or the community, for the betterment

of the Companyûs position in the long run, the Board of Directors has stipulated in writing the business ethics, the Managementûs

Etiquettes and the Personnelûs Etiquettes, and later to be recently updated in 2008, and communicated to all levels of executives

and employees to comply with in order to ensure proper protection and treatment of all stakeholdersû basic rights.

A. The Managementûs Etiquettes: This is designated for the management to respond to the shareholders, customers,

employees, suppliers and creditors, competitors and the society in general as follows:

To shareholders

1. To perform their duties with honesty, transparency, fairness, to ensure that in making any decision or taking any

action, due regard to the interests of shareholders has been taken.

2. To perform their duties in a professional manner, with knowledge, skill, ambition and care and to apply

management knowledge and expertise in the operation of the Companyûs business.

3. To report the situation of the enterprise consistently completely and truthfully.

4. Sharing profits on a fair and regular basis.

5. Not to acquire any benefits for themselves or other persons by using the inside information of the Company

which has not yet been disclosed to the public.

6. Not to disclose any confidential information to any third party, especially the competitors.

7. Not to do anything which may cause any conflict of interest against the Company.

To employees

1. To pay fair remuneration to employees considering qualification, ability, and performance of employees.

2. Give priority to development of knowledge and ability of the employees by offering them all the opportunity regularly.

3. Avoiding any unfair action that could threaten or put pressure on employeeûs psychological conditions or that may

affect their job security; promoting quality of life of employees.

4. To supervise and preserve the working environment to ensure safety to life and property of the staff at all times.

5. Comply with laws and regulations related to employees.

To customers

1. Producing quality goods and services at a fair and reasonable price; maintaining standardized quality all the time.

2. To disclose the information relating to the goods and services fully, correctly and truthfully.

3. To give product and service warranty under reasonable condition and timeframe.

4. No to knowingly deliver defective goods and services which may cause damage or loss to customers.

5. Managing customers before and after sales by designating an agency to provide recommendations and resolve

problems for customers; enabling them to file complaints in relation to goods and services; striving for the best to

quickly respond to customers for their maximum satisfaction.

6. To keep the customersû secret, including not to use such secret for themselves or others unlawfully.

7. Keep all promises strictly. In case of failure, must inform customers and consult for solutions.

To suppliers and/or creditors

1. Exercising integrity when making purchase or procurement from suppliers

2. Follow conditions agreed and contract with suppliers and creditors. In case of failure, inform and consult for remedy.

3. Being honest and disclosing accurate, complete and true information

4. Not to demand nor to accept or pay any benefits, in bad faith, in dealing with suppliers or creditors.

040

To competitors

1. To operate the business within the good competition rule with integrity and fairness without violating the laws.

2. Refrain from defaming or accusing the competitors or products of the competitors in bad faith and without

provable fact.

3. Not to infringe or make access to the competitorûs confidential information in a bad faith or improper manner.

To community

1. Providing support to activities proven beneficial to communities and society at large such as education and

vocational skill enhancement for the less privileged and health-promoting activities

2. To return profits of the company regularly to any activity that helps contribute to the well-being of the community.

3. Preserving natural resources and environment in and outside the business for sustainability; avoiding actions that

could damage natural resources and environment; adopting a policy to eradicate production-based pollution with

zero effect to the society.

4. Cultivate sense of responsibility towards community and society among employees at all levels

5. To comply or cause to comply strictly with the laws and regulations of the regulatory body.

B. The Personnelsû Etiquettes. Instill in the employeesû minds:

1. To perform their duties honestly, arduously and punctually.

2. To earnestly attend to all kinds of activities which will improve life quality and efficiency as well as help develop

the Company to excellence according to Companyûs vision.

3. Avoid seeking interest by unscrupulously using own position or title for own interest or for others; committing to

counter bribery and corruption.

4. To keep confidential the customerûs, suppliersû and the Companyûs secrets.

5. To respect the rights of other employees in the Company.

6. Not to accuse the management or other employees without any proven fact.

7. To maintain and create unity among the staff. To work as a team and solve problems together.

8. To care for and assist in taking any action to preserve the working environment to make it clean, safe and

enjoyable place to work.

9. Not to support or conceal any action of the staff or of the Company which is unlawful.

10. Refrain from any act which any cause damage to the companyûs image and reputation.

4. Information disclosure and transparency

The Board considered disclosing material information very critical to the decision-making process of shareholders,

investors, stakeholders and related parties and this has been set as the companyûs corporate governance policy to ensure that

the information disclosure is being done correctly, with transparency and reliability and in a timely fashion both in Thai and

English languages via reliable and easy-to-access channels so that shareholders and investors would receive it extensively. The

information was sent via postal mail, through the SETûs channel, our website at www.modernform.com and in an annual report.

Financial performances, financial statements, consolidated financial statements of the company and its subsidiaries with accurate

information based on the generally-accepted accounting principles were disclosed there. In addition, other important information

such as connected transactions between the company and related persons (if any) was adequately and transparently disclosed in

the notes to financial statements for the benefit of shareholders and investors. Preparing the Management Discussion and

Analysis (MD&A) on a quarterly basis; summarizing performance evaluation of the Board of Directors and the Audit Committee

annually. The Audit Committee was also assigned to review and maintain the quality of our financial statements before they were

submitted to the Board of Directors for approval. A report of the Boardûs accountability towards its financial statements was

already published in the annual report.

041

5. Responsibility of the Board of Directors

The Company is aware of duty and responsibility of the Board of Directors who plays an important role in supervision of

the corporate performance for the Companyûs optimal benefits. Therefore, the policy and guidelines on the good governance

were established to build up confidence that the Board performs its duty and responsibility with carefulness and integrity,

according to the laws, corporate objectives, the Companyûs Articles of Association and resolutions of shareholdersû meeting.

At present, the Board of Directors consists of 11 members, which is suitable for the size and operation of the Companyûs

business. Of this, four are independent directors based on the Stock Exchange of Thailandûs definition (SET). Of the four

independent directors, three are members of the Audit Committee. Five are executive directors and two are non-independent,

non-executive directors. Chairman of the Board, Chief Executive Officer and President are not the same person for the check-

and-balance purpose. Meanwhile, roles and responsibilities of the Board, Chairman of the Board, the Executive Board, Chairman

of the Executive Board and President are clearly defined. They have been selected through a nomination and appointment

process as stated under the topic of Nomination of Directors. The Board of Directors has qualifications as determined by the

laws and the Company. Its members have visions, knowledge, skills and experiences in a variety of businesses and in the

Companyûs main business. They are not directors or executives in businesses which could pose a conflict of interest to the

Company and they are directors in no more than five listed companies. In addition, they take part in formulating the Companyûs

direction, policy, goals, action plans and budget under the utmost in good corporate governance which has been set out by our

company to accomplish and propose plans that will maximize overall value for our shareholders and all other stakeholders. To

ensure highest standards of governance, the company has initiated an internal control, internal audit, risk management, company

secretary and appointed sub-committees for audits and appropriate risk management functions according to events and

occasions that deem necessary. The sub-committees act as a filtering agent to enhance the effectiveness of our control and to

ensure that the design of roles, powers and responsibilities in executive and management positions are separate from that of

auditing roles. These key controls and business figures will be frequently assessed every quarter and will be reported in the

board meeting, after the external auditor reviews our financial statements and such information has passed through the audit

committee. The details of the board meeting and auditorûs opinions for 2012, are available in this annual report under the

management section. The company also set out guidelines for directors to conduct annual self-evaluations in compliance with

Securities Exchanges Commission guidelines.

For directorsû and managementûs remuneration, the company has developed a policy to ensure that our compensation is

in line with the industry, and to appropriately compensate them for their skills and knowledge. The board of directors has the

responsibility to set out basic compensation for the directors and such remuneration schemes were proposed in the general

shareholderûs meeting. As of executive directorsû and managementûs remuneration, they will be considered from each executive

memberûs performance and the overall company operating results. Full details for directorsû compensation and remuneration may

be found in the management section.

Furthermore, the board of directors has orchestrated good corporate governance and assigned the Audit Committee the

responsibility to ensure an efficient and complete internal control covering its finance, operations, laws compliance, risk

management and etc. to protect best interests of investors against fraud or other material breaches of control. The internal

control department is assigned the responsibility of auditing and reviewing the efficiency of all operational systems ensuring

absence of fraud and material misconduct. There have been regular evaluations under the 5 principles of internal control every

year. For 2013, the board of directors and audit committee have evaluated our internal control and found that we have sufficient

basis to believe that we have sufficient control necessary in place details are disclosed under the internal control section.

042

The Company has stipulated policies on corporate governance and Companyûs ethics to prevent Directors and executives or

related persons to use internal information for personal gain. Management and employees who have access to insider information are

forbidden from disclosing such information to outside parties, or other persons who have no relevant business which will effect to the

stock price of the Company, and not to use the insider information or abuse own power in buying or selling company stock. It is also

forbidden to trade the Companyûs securities 1 month before the Companyûs disclosure of its financial statements to the public. A penalty

clause has been clearly stipulated in the Companyûs ethics and good governance for those who violate the insider code. Beside, the

Directors, Executives, and Chief of Finance are required to disclose securities holdings on the Companyû annual report and report any

changes in securities holdings to the Security Exchange Commission and the Stock Exchange of Thailand in compliance with Section 59

of the Securities and Exchange Act of B.E. 2535.

In Addition, the Audit Committee is further obliged to hold its meeting the day following the Companyûs auditors auditing and

certififying of the annual financial statements, or reviewing of the quarterly statements. This is to present any opinions to the Board of

Directors within the same day as the Meeting of the Audit Committee, together with submission of the financial statements to the Stocks

Exchange of Thailand on the same date, or the following day at the latest.

Insider Information Controls

043

While we have applied our vision of çto be the leader in furniture and interior furnishing business and to provide superior working

and living environmenté in our corporate management, the same vision is also used to enhance living quality and wellbeing of our

clients, staff and all stakeholders as we realize that being responsible to our society also means our long-term sustainability.

Modernform has opened up various channels for stakeholders to express their opinions and submit recommendations.

Stakeholders may directly send their views to directors via email: co.secretary@modernform.co.th, call center 0-2708-9999 or Client

Relations Department email : enquiry@modernform.co.th is designated to collect information relating to quality of our goods and services,

installation and other complaints resulted from direct interactions with customers. Finally, we survey employeeûs satisfaction at all levels

of which the results are implemented to enhance our organization in different aspects.

This report of corporate social responsibility, which is limited to activities of Modernform Group Public Company Limited only, is

prepared on the basis of the CSR guidelines issued by the Stock Exchange of Thailand. Details can be broken down in eight areas as

follows.

Fair Business

Modernform has issued the Code of Conduct for Executives to govern their practices with stakeholders under the corporate

governance principles as well as the Code of Conduct for employees since 2002. Our employees have been informed and encouraged to

apply the Code of Conduct in a manner that complies with our business ethics for fair and efficient performance.

We have also released a written policy and practice of non-infringement of intellectual property rights or copyright covering both

our products and trademarks and those of the third party licensed to us. The non-infringement practice also extends to software and IT

system where a regulation on computer use was issued in 2008 to be in compliance with the Act on the Use of Computers, B.E 2550

(2007). In addition, Modernform has issued a policy and practice to protect our intellectual property and copyright from infringement,

inducing us to constantly register our design patents which in 2009 led Department of Intellectual Property, Commerce Ministry, to

bestow us the IP Champion Award.

Anti-Corruption

Modernform has an anti-corruption policy at corporate level. By this, we mean the Board of Directors allows stakeholders to

anonymously submit recommendations and expose illegal or alleged misconduct activity of executives or employees and fraudulent

financial statements or defected internal control system through our email: co.secretary@modernform.co.th. The Board will immediately

examine the issues and disclose result of its investigation if the case is proven material to the stakeholders. Internally, the Internal Audit

Department which reports to the Audit Committee regularly examines our operations under the internal control system and directly

reports its auditing to the Audit Committee as this enables internal auditors to perform their tasks and file reports independently and

honestly. Corruption or suspicion of corruption, legal violation or any other unusual act that could significantly jeopardize Modernformûs

reputation and financial position, if found, will be immediately reported to the Audit Committee for remedy within a reasonable timeframe.

The management is required to report remedy progress to the Audit Committee and the Board of Directors.

At the employee level, Modernform has spelt out rules to prevent bribery and corruption in Chapter 5 of our Work Regulations

regarding disciplinary regulations and actions under Topic 4 re: çBehavioré and Topic 5 re: çIntegrity and Honesty.é The contents extend

to cover legal compliance, refusal to take money or any other benefits from stakeholders and refraining from exercising power and duty

for oneûs interest, all of which are governed by clear disciplinary actions.

Report on Corporate Social Responsibility

044

Respect for Human Rights

Modernformûs policy is to comply with the laws, rules and regulations and the universal principles of basic human rights. We do

not support businesses and suppliers engaging in human rights violation.

In practice, our recruitment policy strives to hire personnel on the basis of their knowledge, ability and experience while giving

them fair treatment and job security and supporting and encouraging qualified personnel to advance along their career path without

discrimination. We hire foreign workers and the disabled with whom we have applied the labor structure under the Thai labor laws to

provide the same welfare, vocational skills and other fringe benefits they are entitled to. In addition, representatives of foreign workers

also collaborate with the Human Resources Department to promote proper understanding, fair treatment and legal compliance. So far,

we have received no grievance on human rights violation.

Fair Treatment of Employees

For us, employee is a vital resource that will lead us to success. Thatûs why Modernformûs human resource management policy

covers issues such as fair treatment, wages and remunerations, welfare and benefits, health and safety protection, workplace

environment and capacity building for the wellbeing of our employees. Details of our practice are:

Wages and remunerations

Modernform regularly revamps our salary structure to meet with competitive environment and evolving wage situations. Research

is carried out with the third-party agency with the purpose to offer fair and competitive remunerations.

At the other front, we conduct a constructive performance evaluation twice a year. Evaluation criteria are directly communicated

with supervisors of all levels for their accurate understanding while evaluation results are used as a basis to award employees to reflect

fair and transparent treatment.

Welfare

The Welfare Committee has been set up to take part in recommending extra welfare that answers to employeeûs needs and that

enhances their living quality. Some of this welfare includes providing life insurance and lunch, selling discounted consumables to

employees to lessen their financial burden, organizing recreational and touring activities and showing featured films.

In addition, we allow sport lovers or those interested in similar activities to set up sports and recreational club to which

Modernform partially provides financial support as this will enable them to enjoy free time together which will foster their relationship,

happiness and better living. So far, we have clubs for badminton, cycling, golf, walking/running, exercising, music and photography.

Occupational Health, Safety and Environment

We have put in place the Occupational health, safety and environment (OHSE) policy and the OHSE Committee whose duties are to:

- examine and control level of noise within an acceptable standard

- provide hearing protection devices; train workers how to use them and ensure proper action

- provide hearing tests and protection for workers in risk

- measure airborne particle concentration and tighten control measures; strictly supervise workers to wear personal

protective equipment (PPE) while on duty

- form a joint team with unit supervisors within the Production Department to observe if safety operation meets the

standard or could pose danger or other health effects in order to provide protective devices or improve work

environment.

- train new staff on the issue of safety based on the OHSEûs plan

045

Responsibility for Consumers

Modernform commits to produce and provide quality goods and services at reasonable prices. We also strive to maintain our

standards; offer complete, accurate and non-distorted information about our goods and services and provide product and service

guarantee as well as product liability to our customers subject however to conditions. We also set up a channel to allow customers to

express dissatisfaction about our products and services and we will do our best to respond promptly to customers.

We have done the following in relation to our responsibility for consumers policy:

ë A product test lab that meets national testing standards has been built to test quality of both our products and imported items

on the basis of our criteria to ensure customer confidence

ë Technical data sheet giving approximate glass shelf weight is given to customers to inform them permissible load in order to

avoid danger.

ë Various models of furniture are designed for better living quality of our customers. They are

- Axis - designed with an idea of efficient use of space in mind, Axis occupies at least 10 per cent less space than that

normally demanded by traditional home furniture but responds even better to users thanks to its attractive style and

layout that answers to their true needs.

- House kitchen - this is a heavy duty kitchen which can be completely installed within half the time required by a normal

cement kitchen. The House Kitchen is lightweight and is less likely to make an annexed area where this type of kitchen

is usually installed subside while the furniture itself is resistant to tropical weather and flood.

- WW/P - The workplaces with personality (WW/P) is new office furniture designed to respond to todayûs plug-and-play

lifestyles strongly reflected through various smart devices that allow users to work out of the office as comfortably as in

their workplace.

- Transform living - Ultimate furnishing for urbanites to maximize living in small space as the furniture is able to virtually

offer a usable area of 50 square meters out of the actual tiny living space of 30 square meters. Customers can save

budget but are accessible to efficient, creative and fun furniture.

ë Modernform has already established the Client Relations Department to directly receive complaints from customers who can also

express their dissatisfactions through our website.

Environment Conservation

Realizing the importance of environment, Modernform strives to not involving in business that makes environmental impacts and

is ready to support activities that promote environmental and natural resource conservation.

The Company starts from a design stage where product is originated by maximizing the use of resources, focusing at resource

management and choosing environmental-friendly materials such as E1 engineered wood product that uses less formaldehyde as flooring

adhesive. It also reduces the use of raw materials with adverse environmental impact such as replacing genuine hardwood with

engineered wood products. Other activities include reducing production processes to save energy, managing material waste

systematically to minimize trash, reducing storage space and using less energy by introducing logistics to manage furniture delivery trips.

Here are some of the examples the Company has pursued.

Resource management

- The Value Engineering (VE) project was initiated to study the value of a product in order to maximize the use of resource

in the entire system while maintaining its fundamental value. This resulted in maximum use of resources, reduction of

waste incurred from design and reduction of energy used in various activities which allowed Modernform to effectively use

046

resources in a more environmentally-friendly manner. For example, a structural design of furniture was readjusted to

reduce redundant parts while maintaining the furnitureûs strength and utility as in the case of bed designed for the Casa

Ville Project; side board cabinet and dining table designed for the Rhythm Rachada Project and the Mezzo and Neat

kitchen cabinets. The result was that furniture delivery trips were down by 15 per cent while storage space fell by 30 per

cent. The reduction of fittings also led to fewer assembly steps which allowed technicians to install the furniture faster. In

certain products such as Forum K and NW, TW models of back rest frame, less energy was used in the installation.

- The structure of the Audiometric hearing test booth and its assembly was readjusted to reduce its weight by 100

kilograms. This enabled parts of the booth to be stacked on top of each other and therefore resulted in less delivery

volume per trip. With fewer trips to make, lesser fuel was used to transport furniture.

- Thinner-based paint was replaced with water-based paint to improve air quality and employeeûs health.

ISO 50001 energy management

This is an attempt to set up systematic criteria for energy management. All employees had a role in energy use within the

organization. They were expected to find measures to improve energy-efficiency behavior; for example, introducing energy-saving light

bulbs, setting operation times of large machines and reducing air pressure in the production line. Activities were organized to create

sustainable energy saving awareness within the company i.e. employees were encouraged to turn lighting and air conditioners off when

not in use; a contest for energy-saving measures implemented by different departments was organized and employees were encouraged

to offer energy advice through the çKaisené activity.

Waste management and recycling

- Paint residue from the production process was eliminated according to the pollution reduction criteria where General

Environmental Conservation Plc was designated to oversee the matter.

- Waste from production such as particle board and fabric was transformed into tables, chairs and cushions before being

donated to school libraries in Bangkok and the provinces.

Supporting environmental projects organized by the third party

- Modernform together with Kasetsart University organized the çEco Libraryé project to solicit materials for making

bookshelves to promote the learning of students at all levels.

- The çUse Me Againé project from pantip.com

- Modernform joined hands with the Environmental Conservation Foundation to organize the garbage collecting project at

Bangsaen Beach.

- Modernform joined the Car Free Day organized by Bangkok Metropolitan Administration (BMA) to reduce energy use by

cars.

Community and Social Development

The Company continues to support community and social development activities while promoting social awareness among

employees as we know that business, society and community are closely connected and one has to support another for everyone to

remain sustainable.

Modernform has continued to pursue the following projects:

- 30 scholarships were given to needy undergraduates studying in fields related to the Companyûs business

- The M Design Awards contest was organized to allow design students nationwide to expand their design horizons to respond to

industrial needs.

047

- The Company actively supports the study of design and related techniques by recruiting design students nationwide as trainees.

This allows them to enjoy real experiences and helps them prepared before graduation. We also provide training related to design

and innovation knowledge to education institutes nationwide.

- The çSharing Dream, Sharing Loveé project through which Modernform donated books and learning materials to libraries and

kindergarten classes of 28 schools in Bangkok and provinces.

- The çModernform From Heart to Hearté project through which Modernform collaborated with the Education Fund Project of the

Office of Secretariat of Privy Council to provide learning materials for classroom and library and to exhibit information relating to

the Agricultural Museum to honor HM the King for Ban Nong Yai School, Sanam Chai Khet District, Chachoengsao Province.

- We value social awareness among employees by encouraging them to repair desks and dining tables and to renovate

playgrounds for neighboring schools; the Company also donated school materials to Klong Ladkrabang School, Samut Prakan

Province.

Innovation and Promotion of Innovation through CSR

Thanks to Modernformûs mission to develop innovation that will enhance quality of workplace and home living, we are driven to

create innovation that makes our products and services better. The Company actively conducts researches to pick innovative products

that subsequently become our new businesses while simultaneously improving existing innovative lines to respond to changing lifestyles

and environment.

Development of new product lines

- Ideacoustic - an innovation that combines noise-absorbing technology with design to create a new product that can cut

down surrounding noise for a better living.

- ReadyDor - innovative ready-made door designed to go with any indoor furniture where a variety of covering materials

can be easily applied to a door pane regardless of height and width, adding with application of hardware.

- Feelfloor - an innovative floor covering made of engineered wood product that perfectly gives a natural touch of genuine

hardwood while remains elegant, strong and durable.

Continued development of existing lines

- The Axis office furniture and the Transform Living home furniture have been designed to increase usable area and

respond to todayûs smaller living space.

- The WW/P has been designed with collaboration in mind so the furniture can truly work with todayûs IT smart items to

respond to mobile workers who want to work anywhere any time.

- The Home Kitchen series highlights light-weight materials to avoid land subsidization in area where kitchen is installed; is

resistant to all weather conditions, flood, termite and moles and can be installed in no time.

- Currently a must-have for all hospitals and hearing test agencies, the Audiometric booth for hearing test has been

developed from Modernformûs Ideacoustic which allows the clients to depend less on imports.

048

The Board of Directors entrusted the Audit Committee to guide the management in the setting up of an effective internal control system which has been regularly enhanced to ensure a sound and adequate internal control as a means to protect our investments and assets. The system covers five internal control components as advised by the Stock Exchange of Thailand (SET), having our Internal Control Department auditing and reviewing various operation systems to ensure that they are equipped with effective internal control mechanisms and that each system be regularly assessed on the basis of the internal control criteria each year. In 2013, the Board of Directors expressed opinions regarding the adequacy and soundness of the Companyûs internal control system at its Meeting No. 1/2557 dated February 25, 2014 that Modernform and its subsidiaries did possess adequately efficient internal control systems at 92% considered appropriate to their business nature; and that the system had no major defect that may materially affect their reliability. This can be further elaborated on the basis of the five internal control components containing 17 principles as follows. 1. Control the Environment

1.1 Demonstrate commitment to integrity and ethical values Modernform Public Company Limited has formulated a written policy, rules and regulations concerning integrity

and corporate governance in a form of business Code of Conduct consisting mainly of the Code of Conduct to be abided by the management and that of employees. The fundamental underlying this is that we will perform our duty with integrity, transparency and fairness. We will never request, receive or transfer unscrupulous business profits with suppliers, debtors or creditors. We will do nothing to create a conflict of interest to the Company. The Code of Conduct has been communicated to all executives and employees for their adherence. Besides, integrity and the Code of Conduct have become part of our Core Values and are one of the employeeûs annual performance evaluation tools. Furthermore, a disciplinary action has been clearly provided in case of violation.

1.2 Exercise oversight responsibility The Board of Directors, being independent in its management, has overseen the Company to set up clear and

measurable business goals as a guideline for executives and employees to achieve. A clear annual strategic plan and goals have been formulated after taking into consideration desires and expectations of all stakeholders in the strategic planning. Meanwhile, only reasonable and achievable goals and action plans are made.

1.3 Establish structure, authority and responsibility Modernform Public Company Limited has defined our organization structure on the basis of management

procedures where business units and support units are separated to allow efficient, precise, flexible and clear operation. Meanwhile, the management structure can be quickly revised as soon as business environment evolves to ensure corporate efficiency. Roles and responsibilities are divided with authority being neutralized to allow appropriate check and balance which is the fundamental for a good internal control of the Company and to prevent potential fraudulence while the internal Audit Department regularly performs auditing functions.

1.4 Demonstrate commitment to competency Modernform Public Company Limited has set up the HR Committee to formulate a policy, development plans and

means to retain qualified employees and executives with us where remunerations are reasonably offered on the basis of roles and responsibilities. We conduct an annual staffûs satisfaction survey of which the results are implemented to improve salary structures, fringe benefits and welfares, HR capacity-building as well as workplace environment to promote a better work atmosphere, all of which are executed under the HR Department.

In addition, Modernform Public Company Limited has also written up its succession plan where top managers of each department are requested to identify critical functions in their departments in order to plan succession. A potential successor will be identified and the Individual Development Plan (IDP) will be drafted so that employees learn their potential career path leading to executive positions. This will be linked with the performance evaluation system and the remuneration system so that Modernform can effectively retain quality managers and employees with us.

Internal Control

049

1.5 Enforce accountability The Board of Directors and the management have already put in place a mechanism to ensure that employees

are clearly responsible for their duty and performances. This starts with recruiting personnel that meets job requirements, creating job profile and job value of each position, putting the right man on the right job, evaluating performance constructively twice a year, building employeeûs capacity through internal and external trainings to enhance their skills and capability and offering attractive remunerations that match performances.

2. Risk assessment

2.1 Specify suitable objectives Modernform Public Company Limited has designed our risk management process that is in sync with our business

objectives. The Board of Directors has appointed the Risk Management Sub-committee since 2004 with clear roles and responsibilities to systematically manage our risk. The Committeeûs tasks include overseeing critical operation systems deemed vital to the Company, issuing measures to control and manage corporate-level and activity-level risks, raising risk management awareness among personnel at all departments and making sure that they adhere to it; and letting everyone take care of the Company through the risk management process that they share the same and accurate understanding. All of this is to ensure that the risk management will allow Modernform to achieve our business objectives and goals.

2.2 Identify and analyze risk Modernform Public Company Limited has reviewed and analyzed internal and external risk factors of all

departments that could materially affect our operation, an action which results in appropriate risk management, supervision and control. Operation measures have also been issued to reduce such risk and at the same time are regularly reviewed to respond to changing circumstances. More details can be read under the topic of risk factors.

2.3 Assess fraud risk Our Internal Audit Department has conducted a fraud risk assessment to evaluate Modernformûs risk exposure to

fraud which extends to every operation system that has significant implication. In addition, a preventive internal control mechanism has been introduced to get rid of fraudulent opportunity where the internal control is calibrated to suit prevailing risks. At the same time, a control self assessment has actively been promoted to all departments. Modernform also has a clear policy and practice that could be activated in case of fraud or any incident that could lead to a systematic fraud.

3. Control activities

3.1 We have a set of written policies and practices regarding financial transactions, procurement, sales and general administration with financial ceiling being set to keep approval authority of personnel at each department level in control. Financial approval duties are clearly separated from duties to book records and key data in the information systems to correspond to the best internal control practice and to increase flexibility while these are constantly subject to regular review so that they remain in line with Modernformûs management structure.

3.2 Modernform has also put in place measures to avoid conflict of interest where policies and practices regarding transactions with major shareholders, directors, executives or anyone relating to them are written down to make sure that approval will be made for the best interest of the firm while such transaction, if occurred, will be considered executed on an armûs length basis. If the transaction is a connected transaction, it must first be approved by the Audit Committee who will then submit the case for the Boardûs approval during which the person having an interest in the concerned transaction must not be present at the session nor cast his vote. This shall also be in line with the criteria determined by the Stock Exchange of Thailand while a review and monitoring is also conducted to ensure compliance on the basis of agreed conditions throughout the period such an agreement binds the Company.

3.3 Director representing the Company has also been appointed to sit as director of subsidiary and associated companies to determine policies, make approvals, express opinions and monitor operations of such relevant companies.

050

3.4 The Company Secretary, the Legal Department and the Internal Audit Department are required to monitor the Companyûs operation that it corresponds with Modernformûs Articles of Association, relevant laws and rules of the Stock Exchange of Thailand and the Securities and Exchange Commission to reduce Modernformûs business risk and to safeguard our reputation.

3.5 A security system has been put in place for the Companyûs computerized system to be in compliance with the Offenses Relating to Computer Act, B.E 2550 (2007). At the other end, Modernform has appointed the Computerized Information Security Committee as well as issued a regulation on çhow to safely use corporate computers and LAN.é The mechanism covers our operation system, access to our IT system, data back-up system, the disaster recovery plan (DRP), an annual drill and review based on the Information Technology Infrastructure Library (ITIL) criteria and a contingency plan in case of disaster that could materially disrupt Modernformûs operation.

4. Information & Communication

4.1 Use relevant information One of Modernformûs priorities is to strengthen our IT system and data communication as we believe that any

decision should be made on accurate and adequate information. Thatûs why we require critical and enough information to be available both at the Board of Directorsû meeting and the meeting of the Audit Committee and shareholders by following the principles of corporate governances regarding how to organize a meeting in which practices such as sending an invitation letter to attend the meeting in advance, supporting information during the meeting and minutes of the meeting are clearly stipulated.

In addition, the Board of Directors, being aware of its responsibility towards financial statements prepared according to the generally-accepted accounting principles (GAAP), has implemented appropriate accounting policies and duly complied with the best practices. Accounting information has been comprehensively and categorically presented with issues raised by both external and internal auditors duly investigated and monitored. The Internal Control Department under the Audit Committeeûs supervision is entrusted to follow up with such raised issues until they are duly resolved.

4.2 Internal and external communications Modernform has set up both internal and external communications systems to smooth our internal control practice

where an operation manual, rules and regulations and announcements have constantly been updated to facilitate operation and management of shareholders, directors, executives and employees while allowing all stakeholders to send in advice and complaints or to report illegal, fraudulent or corrupted practices in the Company. In addition, Modernform has set up a call center to receive operation problems and difficulties for further improvement.

5. Monitoring activities The Executive Board of Directors has been entrusted to monitor the managementûs performance to make sure that

everyone is heading towards the same goal. The management meeting of internal units of each department is held four times a month to compare operation results with operation goals and plans to keep evaluating operation efficiency and revise it, if needed, in a timely fashion. The Internal Control Department under the Audit Committee is entrusted to regularly assess operation performances based on the internal control mechanisms previously set before reporting what it has found to the Audit Committee. This way, internal auditors can independently and honestly report performances on the basis of the International Standard for the Professional of Internal Auditing (IIA). If any material defect such as fraud or suspicion of fraud, legal violation, breach of the Code of Conduct, action that could lead to a conflict of interest against the Company or any other unusual action that could materially affect our reputation and financial position is found, they must immediately be reported to the Audit Committee for possible solutions or for tightening up the control system to meet business goals or other evolving external factors. The management meanwhile is required to keep reporting progress of their handling of such events to the Audit Committee and the Board of Director until everything is successfully resolved.

051

In 2

013

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eiva

ble

0.6

-

0.33

% o

f the

reg

istered

of I

HL

Relate

d Tr

ansa

ctions

MODE

RN a

nd M

HC rec

orde

d inter-

related

trans

actio

ns d

ue

to t

heir

busin

esse

s releva

nt t

o furnitu

re.

The

prices

were

reas

onab

le with

M

ODER

Nûs cl

ear

pric

ing

polic

y as

men

tione

d ab

ove.

MODE

RN a

nd T

PAC

reco

rded

int

er-r

elated

trans

actio

ns

due

to t

heir

busin

esse

s releva

nt t

o furnitu

re.

The

prices

were

reas

onab

le w

ith M

ODE

RNûs c

lear p

ricing

polic

y as

men

tione

d ab

ove.

MFE

C pu

rcha

sed

furnitu

re from M

ODE

RN for o

ffice

ass

ets.

The

prices

were

reas

onab

le w

ith t

he following

MODE

RNûs

clea

r pr

icing

polic

y co

ndition

2.

MDE

RN b

ough

t tann

ed l

eather f

or f

urniture-m

aking

from

IHL. T

he t

rans

actio

n pr

ice

was

fou

nd a

ppro

priate a

nd i

t was

also

a m

arke

t pr

ice

offered

to IHL

ûs m

ajor o

f long

-tim

e cu

stom

ers.

052

Re

late

d Pe

rson

/Ent

ity

Relatio

n Ty

pe o

f Tr

ansa

ction

Amou

nt (million

Baht

) Au

dit Co

mmitt

ee C

ommen

ts

31 D

ec 1

3 31

Dec

12

MTC

MODE

RN h

olds

100

% o

f the

paid

up c

apita

l of M

TC

Rent a

nd s

ervic

e ex

pens

es

46.1

45.6

an

d co

mmon

dire

ctors, M

r.Cha

reon

Usa

nach

itt,

Depo

sit (rent a

nd s

ervic

es)

11.3

11.2

Mr.J

ajjai D

hammarun

grua

ng, Mr.T

haks

a Bu

saya

poka

,

Other trade

acc

ounts

paya

ble

0.8

0.9

Mr.Y

othin

Nerngc

hamno

ng a

nd M

r.Som

sak

Varik

arn.

RFA

MODE

RN h

olds

75%

of t

he p

aid

up c

apita

l of R

FA

Service

Fee

0.3

0.3

an

d co

mmon

dire

ctors, M

r.Tha

ksa

Busa

yapo

ka a

nd

Mr.J

ajjai D

hammarun

grua

ng w

ith M

s.Su

thee

ra

Bu

saya

poka

dau

ghter of M

r.Tha

ksa

Busa

yapo

ka

ac

ting

as d

irector o

f RFA

and

holds

1%

of t

he

registered

and

of R

FA

MHC

MODE

RN h

olds

60%

of t

he p

aid

up c

apita

l of M

HC

Service

Fee

0.5

0.7

an

d co

mmon

dire

ctors, M

r.Tha

ksa

Busa

yapo

ka,

Rental in

come

0.8

0.8

Mr.J

ajjai D

hammarun

grua

ng, an

d Mr.P

atan

a Us

anac

hitt

with

Mr.N

ithi N

erng

cham

nong

son

of M

r.Yothin

Nerngc

hamno

ng a

cting

as M

D of M

HC a

nd h

olds

20%

of t

he reg

istered

of M

HC

TPAC

MODE

RN h

olds

48%

of p

aid

up c

apita

l of T

PAC

and

Service

Fee

1.5

1.4

co

mmon

dire

ctors

Mr.T

haks

a Bu

saya

poka

, Mr.

Jajja

i

Dham

marun

grua

ng, an

d Mr.Y

othin

Nerngc

hamno

ng,

with

Mr.T

heeraw

it Bu

saya

poka

, br

othe

r of M

r. Th

aksa

Busa

yapo

ka, ac

ting

as M

D of T

PAC

and

holds

7.99

%

of the

reg

istered

and

paid

up c

apita

l of T

PAC.

MODE

RN r

ente

d MTC

ûs b

uilding

spac

e at a

ppro

priate

rental fee

and

servic

e fee, c

lose

to

thos

e MTC

cha

rged

for

gene

ral c

ustomers.

Fina

ncial c

onsu

ltanc

y se

rvices

MODE

RN a

llowed

MHC

to r

ent

MODE

RNûs s

howro

om

spac

e, p

rovide

d fin

ancial c

onsu

ltanc

y se

rvices

, an

d attend

ed t

he w

areh

ouse

for M

HC.

The

rental a

nd s

ervic

e fees

were

appr

opria

te, clos

e to the

marke

tûs a

nd the

fee

s ch

arge

d to M

ODE

RN b

y MTC

. Th

e co

nsultanc

y fees

for s

ervic

es relev

ant to le

gal,

finan

ce

and

acco

untin

g, an

d co

mpu

ter

syst

em wer

e at

th

e ap

prop

riate rates

whe

n co

mpa

red

to tho

se in

the

marke

t.

2.

Rent

al T

rans

actio

ns/S

ervice

s or

Ren

tal S

ervice

s/Pr

oper

ty S

ervice

s

053

Re

late

d Pe

rson

/Ent

ity

Relatio

n Ty

pe o

f Tr

ansa

ction

Amou

nt (million

Baht

) Au

dit Co

mmitt

ee C

ommen

ts

31 D

ec 1

3 31

Dec

12

IHL

MODE

RN h

olds

4.57

of the

paid

up c

apita

l of I

HL

Purcha

se S

tock

s -

129.2

with

Ms.Ch

utim

a Bu

saya

poka

sist

er o

f Mr.T

haks

a

Bu

saya

poka

acting

as d

irector o

f IHL

and

holds

0.33

% o

f the

reg

istered

of I

HL

Marke

t pr

ice

3.

Acqu

isition

and

Liquida

tion

of A

sset

s (S

tock

s).

Re

late

d Pe

rson

/Ent

ity

Relatio

n Ty

pe o

f Tr

ansa

ction

Amou

nt (million

Baht

) Au

dit Co

mmitt

ee C

ommen

ts

31 D

ec 1

3 31

Dec

12

MTC

MODE

RN h

olds

100

% o

f the

paid

up c

apita

l of M

TC

Interest In

come

6.8

4.6

an

d co

mmon

dire

ctors, M

r.Cha

reon

Usa

nach

itt,

Long

-term lo

ans

and

55.3

120.8

Mr.J

ajjai D

hammarun

grua

ng, Mr.T

haks

a Bu

saya

poka

,

ac

crue

d interest

Mr.Y

othin

Nerngc

hamno

ng a

nd M

r.Som

sak

Varik

arn.

MHC

MODE

RN h

olds

60%

of t

he p

aid

up c

apita

l of M

HC

Other c

urrent liab

ilities

- -

an

d co

mmon

dire

ctors, M

r.Tha

ksa

Busa

yapo

ka,

Bank

Gua

rantee

-

41.4

Mr.J

ajjai D

hammarun

grua

ng, an

d Mr.P

atan

a Us

anac

hitt

Interest In

come

- 0.3

with

Mr.N

ithi N

erng

cham

nong

son

of M

r.Yothin

Lo

ng-term lo

ans

and

- 9.6

Ne

rngc

hamno

ng a

cting

as M

D of M

HC a

nd h

olds

ac

crue

d interest

20

% o

f the

reg

istered

of M

HC

MODE

RN e

xten

ded

cred

it to M

TC for c

onstruction

of t

he

MTC

building

at t

he m

inim

um l

ending

rate

(MLR

) plus

0.5%

per a

nnum

. Th

is rate w

as the

normal rate

commercial

bank

s ch

arge

d their pr

ime

custom

ers.

MODE

RN p

rovid

ed c

ollaterals

for MHC

with

the

amou

nt o

f co

llaterals

in a

ratio o

f the

form

erûs s

hareho

lding.

MODE

RN e

xten

ded

cred

it to M

HC a

t the

fix rate

3 m. plus

2.0%

per a

nnum

4.

Fina

ncial A

ssista

nce

Note

MOD

ERN

= Mod

ernform G

roup

Pub

lic C

ompa

ny L

imite

d Man

ufac

turin

g an

d dis

tribu

ting

furnitu

re

MTC

=

Mod

ernform T

ower C

ompa

ny L

imite

d Of

fice

rental

RF

A =

Rafa

Asso

ciates

Compa

ny L

imite

d pr

ovide

s de

sign

cons

ulting

servic

es a

nd s

upervis

es c

onstr

uctio

n pr

ojects

and

holds

sha

res

in lim

ited

partn

ersh

ips,

limite

d co

mpa

nies

and

publi

c co

mpa

nies

(Hold

ings

Compa

ny)

MHC

=

Mod

ernform H

ealth

and

Care

Compa

ny L

imite

d Man

ufac

turin

g, im

porting

and

dist

ributing

furnitu

re a

nd p

rodu

cts

of H

ealth

TPAC

=

Thai

Plas

pac

Publi

c Co

mpa

ny L

imite

d Pr

oduc

es p

acka

ging

material

, ind

ustrial

plasti

c, a

nd fu

rnitu

re fi

xings

MFE

C =

MFE

C Pu

blic

Compa

ny L

imite

d Co

mpu

ter s

ystem a

nd in

form

ation

tech

nolog

y co

nsult

ancy

servic

es

IH

L =

Interhid

es P

ublic

Com

pany

Lim

ited

Prod

uce

and

sale

leathers

054

Procedure for approving connected transactions

The Companyûs Board of Directors established the measures to prevent any conflict of interests. It outlined clear transaction

procedures for its major shareholders, directors, executives or any persons relevant to the above-mentioned persons for reviewing any

transactions that may have any conflict of interests arise to consider all transactions that may involve conflicts of interest, including

related or connected transactions to ensure that they are in compliance with sound business ethics and meet the scrutiny of the Audit

Committee for defined items. As well, the Board supervises all transactions to see that they meet the criteria of the stock Exchange

Commission (SEC). Information disclosure on potential conflicts must be considered by the Board to ensure accurate and adequate

disclosure. In additional, for any transactions in which directors, employees or related persons could derive personal benefit from entering

into transactions with the company, the Board and employees are not permitted to participate in the approval of such transactions, and

the price must be properly defined in a manner consistent with that offered on armûs length basis.

Comments of the Audit Committee

The Audit Committee reviewed the above-mentioned inter-related and related transactions that took place with account posting

in 2013. It stated that the transactions complied with the requirements of the Stock Exchange of Thailand and the Securities and

Exchange Commission with disclosure of accurate and complete information. The normal business transactions were those with fair and

appropriate pricing and conditions according to the market prices. This was similar to pricing for any unrelated persons or other business

operations without any benefits among the Company, its subsidiaries, its associate companies, its joint ventures, its related companies

and its shareholders. The transactions were approved by the Management or the Board of Directors prior to occurrence of the

transactions.

As for the transactions of financial assistance, the Company extended credit and collaterals for its subsidiaries and associated

companies at the minimum lending rate (MLR) plus 0.5% per annum and rate fix 3 months plus 2% per annum. The interest rate was

that the commercial banks charged their prime customers. The Company provided loan collateral for its subsidiaries in a proportion of its

shareholding. This financial assistance allowed its subsidiaries to have borrowings at the rate and conditions according to the market or

better when compared to the case without any collaterals or direct borrowing from other financial institutions.

Future connected transactions

All future connected transactions will be conducted as part of the normal course of business with neither special favors nor

transfers of benefits between company and its subsidiaries or any connected person. The company will strictly comply with the

regulations of SET and other regulatory authorities related to connected transactions, based on reasonableness, appropriateness and

fairness, and for the utmost benefit of all shareholders and stakeholders, which is consistent with good corporate governance policies of

the company.

055

Industry Overview

Continuous Growth in Furniture Business

Furniture, furniture fittings and architectural hardware businesses still grow continuously during 2013 due to market demands

supported by the economic growth - with buoyant thanks to new condominium and detached housing projects, including the rapid

growth of housing in major cities in upcountry. However, the growth in 2013 creates high competition and particularly the political turmoil

during the fourth quarter has somehow affected the overall sales. With high backlog of orders, we believe we can still achieve good

result in 2014 provided that the political chaos would end soon.

Business Overview

Both sales volume and profit grew consecutively

MODERN continues to implement following strategies

1. Manage to strengthen gross profit. The gross profit in 2013 was slightly increased compared to that of 2012. The political turmoil

has not yet affected MODERNûs profit. MODERN still maintain the satisfied margin rate as MODERN has always been known as

the leader of introducing new products to the market. MODERN continues to implement çSoulmateé campaign to emphasize the

long term partnership with the consumers. Moreover MODERN continues to implement çValue Engineeringé to reduce and

maintain effective costing amidst the competitive environment.

2. Product development to focus on new innovation to create valuable uniqueness and to maintain our status as a design leader.

Moreover, the company keeps improving its own IT system to facilitate the workforce to be more effective and the workplace

more pleasant.

3. Continue the business alliance strategy for both domestic and overseas market to support companyûs growth and strength.

Recently MODERN has collaborated with Lighting and Equipment Plc.(L&E), a leading company in LED lighting system, to jointly

design a new collection of exclusive Lighting series for Modernform under the concept of çHarmony of Light & Livingé.

4. çBe Creative, Be Aggressiveé is the Corporate Theme to strongly promote innovation inside the company workforce and the

company always supports employeesû participations in work improvement through brainstorming, implementation and evaluation.

With the mentioned strategies, MODERN and subsidiaries registered continuing growth in both sales volume and profits.

MODERN maintains its financial strength with positive retained earnings, also has adequate credit facilities - ready to support growth

and further investments in new businesses.

Financial Performance in 2013

Sale volume increased by 12.9 percent to Baht 3,327.3 million with gross profit margin of 41.2 percent, an increase of 0.8 percent

In 2013, MODERN and subsidiaries recorded Baht 3,327.3 million sales volumes, representing12.9 percent increase of Baht 381.5

million from 2012 because of higher sales in current year including the deliveries of housing projects, condominiums and office furniture

from backlog of orders in 2012.The gross profit margin was at 41.2 percent increasing by 0.8 percent. Gross profit margin remained

healthy thanks to MODERNûs success to introduce now innovative products and services to the market. MODERN continuously

implement çValue Engineeringé for effective cost of goods sold.

Net profit equaled Baht 420.5 million, a 2.8 percent increase

Net profit of MODERN and subsidiaries in 2013 amounted to Baht 420.5 million, a slight increase of only 2.8 percent from 2012

due to higher operation cost.

In 2013, MODERN received shares of incomes from investment in associate and subsidiary companies total Baht 105.1 million, a

5.9 percent decreased from 2012 as some subsidiary companies generated lower sales target due to delay in deliveries to some projects.

Management Discussion & Analysis of a one-year performance as of end of December 31, 2013

056

Business units and subsidiaries performance

Office and residential furniture business

Sales increased by 20.0 percent to Baht 2,649.2 million

In 2013, sales of office and residential furniture increased by 20.0 percent from 2012 to Baht 2,649.2 million by continuous

demand from both private and public sectors resulted from economic growth, product innovations and the revenue recognition from

projects in 2012.

Furniture fittings, solid surface, carpet tile and wooden flooring business

Sales increased by 1.3 percent to Baht 584.6 million

In 2013, sales of furniture fittings, solid surface, carpet tile and wooden flooring is increased by 1.3 percent from 2012 to Baht

584.6 million, however the business has continued to expand through new channel with new products, such as architectural products

sold through Modern Trade stores.

Office rental business

Rental income at Baht 74.5 million, an increase7.0 percent

In 2013, the business generated Baht 74.5 million rental income, or 7.0 percent higher than the same period in 2012. The

occupation rate is 100 percent. However the area currently designated for special events is now under negotiation for permanent rent

then the rental income may be increased in the near future.

Healthcare product and medical equipment business

Revenues of Baht 142.8 million, a decrease of 12.0 percent

In 2013, the business recorded revenues of Baht 142.8 million, a decrease of 12.0 percent from the 2012 due to postponement of

deliveries from the customers. However its business prospect remains positive.

Architectural design business

Revenues of Baht 47.4 million, a decrease 39.1 percent

In 2013, the architectural design business recorded Baht 47.4 million revenue, or 39.1 percent decrease from 2012 due to the

delay on deliveries of works in process. However, the architectural design business is still growing with strong demand. The business

allows MODERN to cross-selling products and services to architects and interior designers.

Financial status of MODERN and subsidiaries

Cash, cash equivalents and short-term investments increased

As at December 31, 2013, MODERN and subsidiaries recorded Baht 322.5 million cash, cash equivalents and short-term

investments, increased by Baht 211.8 million from the end of 2012 due to cash deposits received from contracted works. Consolidated

shareholdersû equity accounted for Baht 2,827.0 million, increased by Baht 279.4million from the end of 2012 due to treasury stocks

premium and higher retained earnings.

Baht 11.1 million of financial institution debts

MODERN and subsidiaries registered Baht 11.1 million of financial institution debts, decreased by Baht 55.1 million, compared to

Baht 66.2 million at the end of 2012 due to a better liquidity management and continuous growth in retained earnings.

MODERN and subsidiaries still commit to best manage its capital for the highest efficiency and is also ready to invest in any

potential businesses for sustainable return to shareholders.

057

2013 2012 2011

LIQUIDITY RATIO

Current ratio (Times) 2.1 2.3 2.5

Quick ratio (Times) 1.0 0.8 1.0

Cash from operating ratio (Times) 0.4 0.2 0.6

Receivable turnover ratio (Times) 4.3 4.8 4.3

Collection days (Days) 83 75 84

Inventory turnover (Times) 2.2 2.4 2.7

Average number of days sales (Days) 161 149 134

Account payable turnover (Times) 6.4 6.0 5.9

Payment days (Days) 56 60 61

Cash Cycle (Days) 188 164 157

PROFITABILITY RATIO

Gross profit margin (%) 41.0 40.3 39.2

Return on total income (%) 9.9 15.6 9.4

Return on equity (%) 13.9 22.0 12.8

EFFICIENCY RATIO

Return on total assets (%) 9.5 15.8 9.6

Return on fixed assets (%) 118.3 160.1 101.1

Assets turnover (Times) 1.0 1.0 1.0

FINANCIAL POLICY RATIO

Debt to Equity ratio (Times) 0.5 0.4 0.4

Interest payment ratio (Times) 471.7 370.1 671.5

Dividend Payment (%) 125.0 75.8 125.0

Financial Ratios (The Company Only)

058

2013 2012 2011

LIQUIDITY RATIO

Current ratio (Times) 2.0 2.1 2.4

Quick ratio (Times) 1.0 0.8 1.0

Cash from operating ratio (Times) 0.4 0.3 0.7

Receivable turnover ratio (Times) 4.2 4.7 4.3

Collection days (Days) 85 77 84

Inventory turnover (Times) 2.2 2.4 2.7

Average number of days sales (Days) 167 149 134

Account payable turnover (Times) 6.1 5.9 5.9

Payment days (Days) 59 61 61

Cash Cycle (Days) 193 165 157

PROFITABILITY RATIO

Gross profit margin (%) 41.6 41.2 40.3

Operating profit (%) 11.4 13.4 11.2

Quality of earnings (%) 112.8 61.5 148.7

Return on total income (%) 11.6 12.7 12.2

Return on equity (%) 15.6 16.7 16.0

EFFICIENCY RATIO

Return on total assets (%) 10.8 12.1 12.1

Return on fixed assets (%) 69.0 64.8 60.0

Assets turnover (Times) 0.9 1.0 1.0

FINANCIAL POLICY RATIO

Debt to Equity ratio (Times) 0.5 0.4 0.4

Interest payment ratio (Times) 474.8 261.9 417.9

Cash coverage (Times) 0.9 0.6 1.1

Dividend Payment (%) 96.5 87.7 86.5

Financial Ratios (Consolidation)

059

The Audit Committee consisting of three independent directors appointed by the Board of Directors has performed its duties as

entrusted by the Board and in accordance with the Audit Committeeûs Charter No. 2. In 2013, the Audit Committee convened four times.

Results of its performances and opinions can be summarized as follows.

1. Reviewing quarterly financial statements and the 2013 financial statements - The Audit Committee reviewed quarterly financial

statements and the 2013 financial statements as well as approved the statements on every occasion before submitting them for

the Boardûs approval. The Audit Committee also met with the Companyûs auditors and director of the Accounting and Finance

Department to discuss important issues raised by auditors. Having reviewed the accuracy of the financial statements and the

adequacy of material information being disclosed; and having acknowledged observations, asked questions and listened to

clarifications, advices and possible solutions, the Audit Committee agrees with the auditor that Modernformûs financial statements

present fairly all material aspects of financial statements in general, are transparent and reliable; and the Company has selected

an appropriate accounting policy which corresponds to the Generally-Accepted Accounting Principles (GAAP) and the

International Financial Reporting Standards (IFRS) as well as accounting standards and financial statement reporting criteria taking

effect for fiscal periods starting at or after January 1, 2013. All financial statements have already been audited, reviewed and

given an unconditionally qualified opinion by an independent certified public accountant (CPA).

2. Reviewing connected transactions or transactions that could pose conflict of interest - The Audit Committee examined connected

transactions or transactions that could pose a conflict of interest to ensure compliance with relevant rules, regulations and

legislations. This was carried out to assure that the Management had executed such transactions with transparency, soundness

and for the best interest of Modernform and its shareholders and that all transactions were reviewed by the Audit Committee. In

2013, there were connected transactions through which financial assistance and operation support had been offered to subsidiary

companies conducting business with commercial banks. The transactions did not cause any conflict of interest and Modernform duly

complied with the policy and already disclosed information as required by the Stock Exchange of Thailandûs rules and regulations.

3. Reviewing internal control system to evaluate its soundness, adequacy and efficiency - The Audit Committee reviewed the

internal control system to evaluate its soundness, adequacy and efficiency. The review covers every aspect from finance to

accounting and operation. Meanwhile, effective and adequate auditing and check & balance mechanisms are regularly put in

place to protect and oversee shareholdersû funds and Modernformûs assets. Every department is constantly reminded to conduct

the control self assessment to reduce potential risk and to achieve respective operation targets.

The Audit Committee also assessed the adequacy of Modernformûs own internal control process based on the COSO-

ERMûs criteria (The Committee of Sponsoring Organization of the Treadway Commission - Enterprise Risk Management) which

consists of five components embedded with 17 principles as elaborated in the newly-revised evaluation form updated by the

Securities and Exchange Commission (SEC) in 2013. The Audit Committee is of the view that generally speaking, Modernform

does have adequate, sound and effective internal control system. No material weakness or defect that could affect the

Companyûs business has been found so far. More details can be read under the topic of çinternal controlé in this Annual Report.

4. Reviewing the corporate governance practice - The Audit Committee reviewed the corporate governance practice in which the

corporate governance policy was constantly examined and enhanced to suit corporate environment. So far, the 3rd manual of

corporate governance principles has already been issued. The Management and the Internal Audit Department under the

supervision of the Audit Committee have been entrusted to oversee the strengthening of effective corporate governance practice

while the Company undergoes an annual corporate governance policy compliance assessment each year. In 2013, the Board

evaluated such compliance using the latest evaluation form of corporate governance compliance for listed companies of 2013, the

results of which are elaborated under the topic of çcorporate governance complianceé also in this Annual Report.

Report of the Audit Committee

060

5. Reviewing legal and other regulatory compliance - The Audit Committee, having reviewed legal compliance and other

compliance with rules, regulations and obligations relating to Modernformûs business, is of the opinion that the Company has

duly complied therewith.

6. Appointing and setting the auditorûs 2013 remunerations - The Audit Committee has appointed and determined the auditorûs

2013 remunerations before proposing this to the Board who will seek approval from the 2013 Annual General Meeting of

Shareholders. The Audit Committee, having reviewed the auditorûs past performance and assessing his independence and quality,

is of the opinion that itûs appropriate to appoint Mr. Sopon Lertsiriwallop, CPA License No. 3182; or Mr. Chayapol Supasettanon,

CPA License No. 3972; or Ms Pimjai Manitkajornkit, CPA, License No. 4521, of Ernst & Young Co Ltd to be the auditor in 2013

where the auditorûs 2013 fee is set at Baht 1.55 million divided into the quarterly auditing fee of Baht 150,000 per quarter for a

total of three quarters and the year-end auditing fee of Baht 1.1 million. The three auditors are not shareholders of the Company

or its subsidiaries. They have no relationship or interest with executives, major shareholders or those relating to subsidiary,

associated and connected companies, either.

7. Internal audit supervision - The Audit Committee reviewed all quarterly performances on the basis of the internal audit report

prepared by the Internal Audit Department. It also provided advice and monitors actions to correct situations as advised by the

audit report in material issues. In addition, the Committee helped strengthening the independency of the Internal Audit

Department by enabling it to express opinions relating to the internal audit performances honestly and efficiently. The Committee

also monitored performance progress following the annual internal audit action plan written each year by the Audit Department and

submitted to the Audit Committee for approval. It approved appropriate manpower and annual training budgets of internal auditors

to enhance their capacity-building as a means to push Modernformûs internal auditing practice to meet international criteria.

8. Improving communications among the Board of Directors, external auditors and the Internal Audit Department - The Audit

Committee plays a critical role to improve communications among the Board of Directors, external auditors and the Internal Audit

Department where it has required external auditors to meet with the Committee, executives from the Internal Audit Department

and the Finance and Accounting Department more frequently on a quarterly basis in order to review and ensure that the

Companyûs financial practice is in compliance with related new accounting standards. In addition, the Committee requires that

auditing results be reported on a quarterly basis while independence of both external and internal auditors is underlined to allow

them to express their opinions directly, to report auditing results as they have found and to remedy issues as advised since all

of this should enhance the efficiency of the operation.

9. In 2013, the Audit Committee duly performed its roles and responsibilities as specified in the Audit Committeeûs Charter and as

entrusted by the Board by exercising its competency and prudence while having enough independence and being able to

honestly express opinions to the Board and relevant parties for the best interest of all stakeholders with no restriction when it

comes to accessing information from executives, employees and other related parties. Based on the review and supervision, it

can be concluded that in general, internal control and corporate governance is adequately transparent and efficient. Material

information and transactions required to be presented by relevant laws and regulations have been disclosed in strict compliance

with procedures and mechanisms that the Company has to abide by and all are auditable. The operation system has been

constantly adjusted for a better quality and to suit evolving business environment.

In addition, the Audit Committee has also assessed its performance on an annual basis using an evaluation form of the Stock

Exchange of Thailand, the result of which shows that the entire Audit Committee efficiently and effectively performed all activities in 2013

at a very excellent level.

Mr. Suchart Thammapitagkul

(Chairman of Audit Committee)

061

As directors of Modernform Group Public Company Limited, we fully acknowledged our duties and responsibilities as being

directors of a listed company in the Stock Exchange of Thailand to ensure that both the company-only financial statement and the

consolidated financial statement of Modernform Group Public Company Limited as well as all financial information are accurately

presented and reflect fair standing of the companyûs annual report. Financial statements are prepared according to Thai Generally

Accepted Accounting Principles (GAAP) in application of correct accounting policies with precision and care. We have ensured that all

applicable financial and accounting methods necessary for public and investors to estimate financial standing of the company are being

disclosed transparently.

Further to this point, the Board of Directors has appointed the Audit Committee who are all independent directors responsible for

all quality assurance aspects of financial reporting and internal control in addition to establishing reasonable confidence in fairness and

accuracy of financial accounting of the company as a whole. The Audit Committee takes ownership in ensuring that all ledger recordings

are accurate and truly reflect value of companyûs assets, to learn from exceptions found and to prevent fraud or other misconducts that

would jeopardize the companyûs standing altogether. The Audit Committee comments are also presented in this annual report.

The Board finds that internal control system of the company is satisfactory and provide reasonable confidence in fairness and

accuracy of both the company-only financial statement and the consolidated financial statement of the Modernform Group Plc and its

subsidiaries for the financial year-end 31 December 2013. The statements were also independently reviewed and audited by external

independent auditors to ensure that it was prepared according to Thai Generally Accepted Accounting Principles (GAAP). External

auditor comments are also presented here.

Mr.Chareon Usanachitt Mr.Thaksa Busayapoka

Chairman Chief Executive Director

Summary Report of Directorsû Responsibilities to Financial Statements

062

Independent Auditorûs Report

To the Shareholders of Modernform Group Public Company Limited I have audited the accompanying consolidated financial statements of Modernform Group Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2013, and the related consolidated statements of income, comprehensive income, changes in shareholdersû equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Modernform Group Public Company Limited for the same period. Managementûs 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. Auditorûs 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 auditorûs 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 entityûs 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 entityûs 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. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Modernform Group Public Company Limited and its subsidiaries and of Modernform Group Public Company Limited as at 31 December 2013, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards. Emphasis of matter I draw attention to Note 4 to the financial statements regarding the change in accounting policy due to the adoption of Thai Accounting Standard 12 Income Taxes. The Company has restated the consolidated and separate financial statements for the year ended 31 December 2012, presented herein as comparative information, to reflect the adjustments resulting from such change. The Company has also presented the consolidated and separate statements of financial position as at 1 January 2012 as comparative information, using the newly adopted accounting policy for income taxes. My opinion is not qualified in respect of this matter.

Pimjai Manitkajohnkit Certified Public Accountant (Thailand) No. 4521 Ernst & Young Office Limited

Bangkok: 25 February 2014

Independent Auditorûs Report

063

Statements of financial position Modernform Group Public Company Limited and its subsidiaries

As at 31 December 2013

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

(Unit: Baht) Consolidated financial statements Separate financial statements Note 31 December 31 December 1 January 31 December 31 December 1 January 2013 2012 2012 2013 2012 2012 (Restated) (Restated)

Assets

Current assets

Cash and cash equivalents 8 312,519,904 101,144,140 145,163,147 282,590,136 70,744,518 125,365,587

Current investments 10,030,000 9,596,000 89,318,000 - - 80,000,000

Trade and other receivables 7, 9 977,031,157 691,691,262 584,519,146 897,791,335 615,730,037 534,044,086

Current portion of long-term loan and accrued

interest receivable from subsidiaries 7 - - - 55,352,620 65,779,262 -

Inventories 10 1,210,357,800 1,093,412,975 877,954,005 1,157,224,012 1,032,094,478 844,222,999

Other current assets

Prepaid expenses 16,546,379 14,457,786 24,916,427 15,405,989 13,197,166 23,143,498

Others 42,958,658 33,730,019 24,563,918 40,146,682 29,727,512 22,778,308

Total other current assets 59,505,037 48,187,805 49,480,345 55,552,671 42,924,678 45,921,806

Total current assets 2,569,443,898 1,944,032,182 1,746,434,643 2,448,510,774 1,827,272,973 1,629,554,478

Non-current assets

Available-for-sale investments 11 575,564,001 578,665,011 351,273,572 575,564,001 578,665,011 351,273,572

Investments in associate 12 326,645,535 271,251,226 241,438,170 118,172,074 118,172,074 118,172,074

Investments in subsidiaries 13 - - - 249,299,059 249,299,059 249,299,059

Long-term loans and accrued interest receivable

from subsidiaries - net of current portion 7 - - - - 65,031,339 41,459,542

Investment properties 14 246,910,300 264,559,068 282,052,935 - - -

Property, plant and equipment 15 481,290,556 483,796,996 499,317,917 326,164,766 318,978,256 323,345,240

Goodwill 16 10,167,312 10,167,312 10,167,312 - - -

Other intangible assets 17 3,878,948 4,011,681 4,155,391 3,529,277 3,565,958 3,889,971

Leasehold rights 18 6,223,796 9,098,244 11,195,573 6,223,796 9,098,244 11,195,573

Deferred tax assets 4, 28 - - 14,256,852 - - 12,273,610

Other non-current assets 7, 19 13,993,500 11,522,512 14,560,224 24,620,959 22,138,989 25,872,352

Total non-current assets 1,664,673,948 1,633,072,050 1,428,417,946 1,303,573,932 1,364,948,930 1,136,780,993

Total assets 4,234,117,846 3,577,104,232 3,174,852,589 3,752,084,706 3,192,221,903 2,766,335,471

064

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

(Unit: Baht) Consolidated financial statements Separate financial statements Note 31 December 31 December 1 January 31 December 31 December 1 January 2013 2012 2012 2013 2012 2012 (Restated) (Restated)

Liabilities and shareholdersû equity

Current liabilities

Bank overdrafts and short-term loans from

financial institutions 20 11,089,044 66,199,185 2,245,050 2,709,744 64,995,896 33,609

Trade and other payables 7, 21 444,720,227 418,726,812 336,958,864 379,325,050 354,027,827 308,885,623

Customer deposits 7 741,226,544 334,037,135 302,543,605 719,750,673 314,966,465 279,693,805

Short-term loans and accrued interest payable

to related person 7 - - 400,468 - - -

Income tax payable 55,155,125 58,897,011 57,729,452 52,578,577 50,475,981 46,232,315

Other current liabilities 29,956,642 32,420,776 22,503,750 26,636,032 25,484,165 16,947,426

Total current liabilities 1,282,147,582 910,280,919 722,381,189 1,181,000,076 809,950,334 651,792,778

Non-current liabilities

Provision for long-term employee benefits 22 122,462,336 107,780,226 100,113,515 111,417,383 97,838,622 90,937,091

Deferred tax liabilities 4, 28 2,528,965 11,444,458 - 4,906,982 13,729,902 -

Total non-current liabilities 124,991,301 119,224,684 100,113,515 116,324,365 111,568,524 90,937,091

Total liabilities 1,407,138,883 1,029,505,603 822,494,704 1,297,324,441 921,518,858 742,729,869

Statements of financial position (continued) Modernform Group Public Company Limited and its subsidiaries

As at 31 December 2013

065

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

(Unit: Baht) Consolidated financial statements Separate financial statements Note 31 December 31 December 1 January 31 December 31 December 1 January 2013 2012 2012 2013 2012 2012 (Restated) (Restated)

Shareholdersû equity

Share capital 23

Registered

809,646,280 ordinary shares of Baht 1 each

(31 December 2012: 859,647,000 ordinary shares

of Baht 1 each) 809,646,280 859,647,000 892,000,000 809,646,280 859,647,000 892,000,000

Issued and paid-up

750,000,000 ordinary shares of Baht 1 each

(31 December 2012: 800,000,720 ordinary shares

of Baht 1 each) 750,000,000 800,000,720 832,353,720 750,000,000 800,000,720 832,353,720

Share premium 733,566,600 733,566,600 733,566,600 733,566,600 733,566,600 733,566,600

Treasury stocks premium 24 145,956,164 - - 145,956,164 - -

Treasury stocks 24 - (332,690,843) (425,326,425) - (332,690,843) (425,326,425)

Retained earnings

Appropriated

Statutory reserve - the Company 25 90,000,000 90,000,000 90,000,000 90,000,000 90,000,000 90,000,000

- the subsidiary 22,835,500 22,413,813 - - - -

Others 24 - 332,690,843 425,326,425 - 332,690,843 425,326,425

Unappropriated 875,815,548 693,434,405 598,258,066 490,965,326 400,382,741 220,242,112

Other components of shareholdersû equity 170,564,612 173,045,421 73,735,607 244,272,175 246,752,984 147,443,170

Equity attributable to the owners of the Company 2,788,738,424 2,512,460,959 2,327,913,993 2,454,760,265 2,270,703,045 2,023,605,602

Non-controlling interests of the subsidiaries 38,240,539 35,137,670 24,443,892 - - -

Total shareholdersû equity 2,826,978,963 2,547,598,629 2,352,357,885 2,454,760,265 2,270,703,045 2,023,605,602

Total liabilities and shareholdersû equity 4,234,117,846 3,577,104,232 3,174,852,589 3,752,084,706 3,192,221,903 2,766,335,471

Statements of financial position (continued) Modernform Group Public Company Limited and its subsidiaries

As at 31 December 2013

066

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

(Unit: Baht) Consolidated financial statements Separate financial statements Note 2013 2012 2013 2012 (Restated) (Restated)

Revenues Sales 7 3,327,295,887 2,945,836,153 3,233,796,488 2,784,953,083 Other income Rental income 7 74,544,318 69,693,712 315,000 315,000 Architectural design service income 92,394,091 78,398,306 - - Dividend received 7, 12.2, 13 27,981,096 26,141,279 40,061,180 199,834,803 Others 7 33,480,824 42,241,612 41,172,876 44,364,764 228,400,329 216,474,909 81,549,056 244,514,567 Total revenues 3,555,696,216 3,162,311,062 3,315,345,544 3,029,467,650 Expenses Cost of sales 7 1,956,043,371 1,754,582,213 1,906,884,639 1,662,672,758 Cost of rental 24,989,371 24,748,530 - Cost of services 60,009,847 41,229,754 - - Selling expenses 7 768,329,270 616,636,867 777,358,434 614,343,054 Administrative expenses 7 261,719,682 225,400,340 206,172,834 183,944,292 Other expenses 7 26,452,485 16,717,926 19,083,758 11,345,149 Total expenses 3,097,544,026 2,679,315,630 2,909,499,665 2,472,305,253 Profit before share of profit from investments in associate, financial cost and income tax expenses 458,152,190 482,995,432 405,845,879 557,162,397 Share of profit from investments in associated company 12.2 60,727,643 49,013,055 - - Profit before finance cost and income tax expenses 518,879,833 532,008,487 405,845,879 557,162,397 Finance cost (5,409,764) (4,933,364) (4,574,894) (3,620,227) Profit before income tax expenses 513,470,069 527,075,123 401,270,985 553,542,170 Income tax expenses 28 (87,373,840) (104,216,849) (73,000,670) (81,761,241) Profit for the year 426,096,229 422,858,274 328,270,315 471,780,929 Profit attributable to: Equity holders of the Company 420,490,560 409,230,452 328,270,315 471,780,929 Non-controlling interests of the subsidiaries 5,605,669 13,627,822 426,096,229 422,858,274 Earnings per share 29 Basic earnings per share Profit attributable to equity holders of the Company 0.57 0.57 0.44 0.66 Weighted averase number of ordinary shares (shares) 744,082,192 720,000,000 744,082,192 720,000,000

Income statement Modernform Group Public Company Limited and its subsidiaries

For the year ended 31 December 2013

067

Profit for the year 426,096,229 422,858,274 328,270,315 471,780,929

Other comprehensive income:

Gain (loss) on change in value of available-for-sale investments (3,101,011) 124,253,901 (3,101,011) 124,253,901

Income tax effect 4, 28 620,202 (24,944,087) 620,202 (24,944,087)

Other comprehensive income for the year (2,480,809) 99,309,814 (2,480,809) 99,309,814

Total comprehensive income for the year 423,615,420 522,168,088 325,789,506 571,090,743

Total comprehensive income attributable to:

Equity holders of the Company 418,009,751 508,540,266 325,789,506 571,090,743

Non-controlling interests of the subsidiaries 5,605,669 13,627,822

423,615,420 522,168,088

Statement of comprehensive income Modernform Group Public Company Limited and its subsidiaries

For the year ended 31 December 2013

(Unit: Baht) Consolidated financial statements Separate financial statements Note 2013 2012 2013 2012 (Restated) (Restated)

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

068

(U

nit: B

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Balan

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31 D

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832,3

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425,3

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832,3

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409,2

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2,8

26,97

8,963

The

acco

mpa

nying

notes

are a

n int

egral p

art o

f the

fina

ncial

statemen

ts.

Stat

emen

ts o

f ch

ange

s in s

hare

holder

û equ

ity

Mod

ernform G

roup

Pub

lic C

ompa

ny L

imite

d an

d its

sub

sidiarie

s

For the

years

ende

d 31

Dec

embe

r 20

13

069

(U

nit: B

aht)

Se

para

te fin

ancia

l stat

emen

ts

Othe

r com

pone

nts

of s

hare

holde

rsû e

quity

Othe

r com

preh

ensiv

e

incom

e

Reva

luatio

n su

rplus

Re

taine

d ea

rning

s

(defi

cit) o

n ch

ange

s

Total

oth

er

Issue

d an

d

A

ppro

priat

ed

in va

lue o

f

comp

onen

ts of

pa

id-up

Sh

are

Trea

sury

St

atuto

ry

avail

able-

for-

sale

Othe

r sh

areh

older

sû

Note

shar

e ca

pital

prem

ium

stock

s re

serve

Ot

hers

Una

ppro

priat

ed

inve

stmen

ts su

rplus

eq

utiy

Total

Balan

ce a

s at

31 D

ecem

ber 2

011

- as

pre

vious

ly re

porte

d

832,3

53,72

0 73

3,566

,600

(425,3

26,42

5) 90

,000,0

00

425,3

26,42

5

171,2

24,34

3 (32

3,849

) 18

4,511

,178

184,1

87,32

9 2,0

11,33

1,992

Cumu

lative

effe

ct of

chan

ge in

acc

ounti

ng p

olicy

for i

ncom

e tax

4

- -

- -

- 49

,017,7

69

158,0

77

(36,90

2,236

) (36

,744,1

59)

12,27

3,610

Balan

ce a

s at

31 D

ecem

ber 2

011-

as

resta

ted

83

2,353

,720

733,5

66,60

0 (42

5,326

,425)

90,00

0,000

42

5,326

,425

220,2

42,11

2 (16

5,772

) 14

7,608

,942

147,4

43,17

0 2,0

23,60

5,602

Total

com

prehe

nsive

inco

me fo

r the

yea

r (res

tated

)

- -

- -

- 47

1,780

,929

99,30

9,814

-

99,30

9,814

57

1,090

,743

Divide

nd p

aid

32

- -

- -

- (32

3,993

,300)

- -

- (32

3,993

,300)

Redu

ce p

aid-u

p sh

are c

apita

l by

writin

g off

trea

sury

stock

s 23

(32

,353,0

00)

- 92

,635,5

82

- -

(60,28

2,582

) -

- -

-

Reve

rsal o

f app

ropria

ted re

taine

d ea

rning

s for

trea

ury s

tocks

24

-

- -

- (92

,635,5

82)

92,63

5,582

-

- -

-

Balan

ce a

s a

t31 D

ecem

ber2

012

- as

resta

ted

80

0,000

,720

733,5

66,60

0 (33

2,690

,843)

90,00

0,000

33

2,690

,843

400,3

82,74

1 99

,144,0

42

147,6

08,94

2 24

6,752

,984

2,270

,703,0

45

Balan

ce a

s at

31 D

ecem

ber 2

012

- as

pre

vious

ly re

porte

d

800,0

00,72

0 73

3,566

,600

(332,6

90,84

3) 90

,000,0

00

332,6

90,84

3 35

2,424

,397

123,9

30,05

2 18

4,511

,178

308,4

41,23

0 2,2

84,43

2,947

Cumu

lative

effe

ct of

chan

ge in

acc

ounti

ng p

olicy

for i

ncom

e tax

4

- -

- -

- 47

,958,3

44

(24,78

6,010

) (36

,902,2

36)

(61,68

8,246

) (13

,729,9

02)

Balan

ce a

s at

31 D

ecem

ber 2

012

- as

resta

ted

80

0,000

,720

733,5

66,60

0 (33

2,690

,843)

90,00

0,000

33

2,690

,843

400,3

82,74

1 99

,144,0

42

147,6

08,94

2 24

6,752

,984

2,270

,703,0

45

Total

com

prehe

nsive

inco

me fo

r the

yea

r

- -

- -

- 32

8,270

,315

(2,48

0,809

) -

(2,48

0,809

) 32

5,789

,506

Divide

nd p

aid

32

- -

- -

- (41

2,488

,450)

- -

- (41

2,488

,450)

Treas

ury s

tocks

sold

duri

ng th

e ye

ar 24

-

145,9

56,16

4 12

4,800

,000

- -

- -

- -

270,7

56,16

4

Redu

ce p

aid-u

p sh

are c

apita

l by

writin

g off

trea

sury

stock

s 23

(50

,000,7

20)

- 20

7,890

,843

- -

(157,8

90,12

3) -

- -

-

Reve

rsal o

f app

ropria

ted re

taine

d ea

rning

s for

trea

ury s

tocks

24

-

- -

- (33

2,690

,843)

332,6

90,84

3 -

- -

-

Balan

ce a

s at

31 D

ecem

ber 2

013

75

0,000

,000

879,5

22,76

4 -

90,00

0,000

-

490,9

65,32

6 96

,663,2

33

147,6

08,94

2 24

4,272

,175

2,454

,760,2

65

The

acco

mpa

nying

notes

are a

n int

egral p

art o

f the

fina

ncial

statemen

ts.

Stat

emen

t of

cha

nges

in s

hare

holder

sû e

quity

(co

ntinue

d)

Mod

ernform G

roup

Pub

lic C

ompa

ny L

imite

d an

d its

sub

sidiarie

s

For the

years

ende

d 31

Dec

embe

r 20

13

070

(Unit: Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Statements of cash flows Modernform Group Public Company Limited and its subsidiaries

For the year ended 31 December 2013

Cash flows from operating activities:

Profit before tax 513,470,069 527,075,123 401,270,985 553,542,170

Adjustments to reconcile profit before tax to net cash

provided by (paid from) operating activities:

Depreciation and amortisation 97,157,946 95,408,564 66,709,711 65,076,124

Written-off property, plant and equipment 4,990,563 440,497 4,890,178 345,547

Written-off leasehold rights 982,647 - 982,647 -

Written-off investment property - 36,012 - -

Allowance for doubtful accounts (reversal) 10,369,759 (10,413,946) 10,094,760 (10,090,868)

Reduction of inventory to net realisable value 17,518,985 935,676 17,340,071 353,527

Share of profit from investments in associated company (60,727,643) (49,013,055) - -

Gain on sales of land, building and equipment and investment property (1,731,628) (961,722) (1,452,827) (863,151)

(Gain) loss on revaluation of investments 2,942,562 (1,478,100) - -

(Gain) loss on sales of investments in equity securities (444,850) (320,450) - 1,726,011

Provision for long-term employee benefits 15,511,014 14,038,179 14,407,664 13,059,214

Actuarial gain for post-employment benefit plan - (4,890,133) - (4,796,483)

Interest income (5,359,332) (4,095,932) (11,999,060) (8,832,349)

Dividend received (27,981,096) (26,141,279) (40,061,180) (199,834,803)

Interest expenses 1,156,560 1,367,722 928,809 676,424

Profit from operating activities before changes

in operating assets and liabilities 567,855,556 541,987,156 463,111,758 410,361,363

(Increase) decrease in operating assets

Trade and other receivables (295,709,654) (96,758,170) (292,156,058) (71,595,083)

Inventories (134,463,810) (216,394,646) (142,469,605) (188,225,006)

Other current assets (10,252,144) 866,892 (12,633,902) 2,987,248

Other non-current assets (2,470,988) 3,037,712 (2,481,970) 3,733,363

Increase (decrease) in operating liabilities

Trade and other payables 20,441,284 87,133,352 19,745,093 50,487,492

Other current liabilities 404,725,275 39,847,598 405,936,075 43,809,397

Provision for long-term employee benefit plan (828,903) (1,481,335) (828,903) (1,361,200)

Cash flows from operating activities 549,296,616 358,238,559 438,222,488 250,197,574

Cash paid for interest expenses (1,150,654) (1,357,842) (922,903) (666,544)

Cash paid for corporate income tax (100,482,016) (102,001,277) (79,100,792) (76,458,150)

Net cash flows from operating activities 447,663,946 254,879,440 358,198,793 173,072,880

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

071

Cash flows from investing activities:

Decrease in current investments - 80,000,000 - 80,000,000

Increase in short-term loan to related party - - - (400,000)

Cash received from long-term loan to related parties - - 75,000,000 61,199,524

Purchase of investments in equity securities (8,864,907) (157,673,568) - (149,160,095)

Cash receipt from share capital reduction of equity security 16,380 - - -

Proceeds from sales of investments in equity securities 5,916,815 56,056,580 - 44,296,546

Dividend received from investments in associates and subsidiaries 5,333,333 19,200,000 12,833,332 24,900,000

Dividend received from investments in available-for-sale 27,981,096 26,141,279 27,227,848 25,335,279

Increase in cash and cash equivalents from sales of

investment in a company held by a subsidiary - 643,165 - -

Cash payment for purchase of land building equipment and investment properties (74,228,450) (66,425,782) (70,908,281) (64,309,517)

Purchase of computer software (1,346,756) (1,272,787) (1,291,650) (943,600)

Proceeds from disposal of land, building and equipment and investment properties 2,890,202 2,290,375 2,346,973 2,137,637

Interest received 5,359,332 4,095,932 12,457,041 8,281,290

Net cash flows from (used in) investing activities (36,942,955) (36,944,806) 57,665,263 31,337,064

Cash flows from financing activities

Increase (decrease) in bank overdrafts and short-term

loans from financial institutions (55,110,141) 63,954,135 (62,286,152) 64,962,287

Cash receipt from sales of treasury stocks 270,756,164 - 270,756,164 -

Dividend paid to non-controlling interests of the subsidiaries (2,502,800) (1,914,476) - -

Dividend paid (412,488,450) (323,993,300) (412,488,450) (323,993,300)

Net cash flows used in financing activities (199,345,227) (261,953,641) (204,018,438) (259,031,013)

Net increase (decrease) in cash and cash equivalents 211,375,764 (44,019,007) 211,845,618 (54,621,069)

Cash and cash equivalents at beginning of year 101,144,140 145,163,147 70,744,518 125,365,587

Cash and cash equivalents at end of year (Note 8) 312,519,904 101,144,140 282,590,136 70,744,518

Supplement cash flows information

Non-cash items consist of:

Unrealised gain on change in the value of investments (3,101,010) 124,253,901 (3,101,010) 124,253,901

Dividend received by lending long-term loan - - - 149,599,524

Decrease in payables from purchase of assets 5,552,131 (5,365,404) 5,552,131 (5,345,288)

Adjustment of provision for long-ter employee benefits

due to sales of investment in a company held by a subsidiary - 120,135 - -

(Unit: Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

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

Statement of cash flows (continued) Modernform Group Public Company Limited and its subsidiaries

For the year ended 31 December 2013

072

1. General information

Modernform Group Public Company Limited (çthe Companyé) is a public company incorporated and domiciled in Thailand.

The Company is principally engaged in the manufacture and distribution of home and office furniture and its registered address is

699 Srinakarindr Road, Suan Luang, Bangkok. The Company has a total of 5 branches located in Bangkok and other provinces.

2. Basis of preparation

2.1 The financial statements have been prepared in accordance with Thai Financial Reporting standards enunciated under the

Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the

Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financial statements of the Company. The

financial statements in English language have been translated from the Thai language financial statements.

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

accounting policies.

2.2 Basis of consolidation

a) The consolidated financial statements include the financial statements of Modernform Group Public Company

Limited (çthe Companyé) and the following subsidiary companies (çthe subsidiariesé): Country of Percentage of Companyûs name Nature of business incorporation shareholding

2013 2012 Percent Percent Held by the Company Modernform Tower Company Limited Rental office space Thailand 100 100 Modernform Health & Care Company Limited Health & Care product manufacturing Thailand 60 60 Rafa Associates Company Limited Manufacturing furniture and interior design Thailand 75 75

Country of Percentage of indirect Companyûs name Nature of business incorporation shareholding

2013 2012 Percent Percent Held by Rafa Associates Company Limited Rafa Plus Architect Company Limited Architectural engineering design Thailand 75 75 Rafa Design Office Company Limited Landscape architecture design Thailand 75 75

On 5 March 2012, Rafa Associated Company (a subsidiary in which the Company has 75% shareholding)

sold all of the shares it held in a subsidiary (Rafa Plus Management Company Limited) to a third party. As a

result, the statement of financial position as at 31 December 2012 excluded the financial position of Rafa Plus

Management Company Limited because the Company no longer has a control in the subsidiary since the disposal

date. The operating results of Rafa Plus Management Company Limited were included in the consolidated income

statement only for operations from 1 January 2012 to 5 March 2012, which was the disposal date.

b) Subsidiaries are fully consolidated being the date on which the Company obtains control, and continue to be

consolidated until the date when such control ceases.

c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company.

Notes to consolidated financial statements Modernform Group Public Company Limited and its subsidiaries

For the year ended 31 December 2013

073

d) Material balances and transactions between the Company and its subsidiary companies, intercompany transactions,

investment balance in the Companyûs books and share capital of the subsidiary companies and profit included in

the end of year balance of inventories, have been eliminated from the consolidated financial statements.

e) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held

by the Company and are presented separately in the consolidated income statement and within equity in the

consolidated statement of financial position.

2.3 The separate financial statements, which present investments in subsidiaries and associates under the cost method, have

been prepared solely for the benefit of the public.

3. New accounting standards

Below is a summary of accounting standards that became effective in the current accounting year and those that will

become effective in the future.

(a) Accounting standards that became effective in the current accounting year

Accounting standards:

TAS 12 Income Taxes

TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance

TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates

Financial Reporting Standard:

TFRS 8 Operating Segments

Accounting Standard Interpretations:

TSIC 10 Government Assistance - No Specific Relation to Operating Activities

TSIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets

TSIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

Accounting Treatment Guidance for Transfers of Financial Assets

These accounting standards, financial reporting standard, accounting standard interpretations and accounting treatment

guidance do not have any significant impact on the financial statements, except for the following accounting standard.

TAS 12 Income Taxes

This accounting standard requires an entity to identify temporary differences between the carrying amount of an asset or

liability in the statement of financial position and its tax base and recognise the tax effects as deferred tax assets or liabilities

subjecting to certain recognition criteria. The Company and its subsidiaries have changed this accounting policy in this current

year and restated the prior yearûs financial statements, presented as comparative information, as though the Company and its

subsidiaries had initially recognised the tax effects as deferred tax assets or liabilities. The cumulative effect of this change in

accounting policy has been presented in Note 4.

(b) Accounting standards that will become effective in the future

Effective date

Accounting Standards:

TAS 1 (revised 2012) Presentation of Financial Statements 1 January 2014

TAS 7 (revised 2012) Statement of Cash Flows 1 January 2014

TAS 12 (revised 2012) Income Taxes 1 January 2014

TAS 17 (revised 2012) Leases 1 January 2014

TAS 18 (revised 2012) Revenue 1 January 2014

TAS 19 (revised 2012) Employee Benefits 1 January 2014

074

TAS 21 (revised 2012) The Effects of Changes in Foreign Exchange Rates 1 January 2014

TAS 24 (revised 2012) Related Party Disclosures 1 January 2014

TAS 28 (revised 2012) Investments in Associates 1 January 2014

TAS 31 (revised 2012) Interests in Joint Ventures 1 January 2014

TAS 34 (revised 2012) Interim Financial Reporting 1 January 2014

TAS 36 (revised 2012) Impairment of Assets 1 January 2014

TAS 38 (revised 2012) Intangible Assets 1 January 2014

Financial Reporting Standards:

TFRS 2 (revised 2012) Share-based Payment 1 January 2014

TFRS 3 (revised 2012) Business Combinations 1 January 2014

TFRS 4 Insurance Contracts 1 January 2016

TFRS 5 (revised 2012) Non-current Assets Held for Sale and Discontinued Operations 1 January 2014

TFRS 8 (revised 2012) Operating Segments 1 January 2014

Accounting Standard Interpretations:

TSIC 15 Operating Leases - Incentives 1 January 2014

TSIC 27 Evaluating the Substance of Transactions Involving the Legal 1 January 2014

Form of a Lease

TSIC 29 Service Concession Arrangements: Disclosures 1 January 2014

TSIC 32 Intangible Assets - Web Site Costs 1 January 2014

Financial Reporting Standard Interpretations:

TFRIC 1 Changes in Existing Decommissioning, Restoration and 1 January 2014

Similar Liabilities

TFRIC 4 Determining whether an Arrangement contains a Lease 1 January 2014

TFRIC 5 Rights to Interests arising from Decommissioning, Restoration 1 January 2014

and Environmental Rehabilitation Funds

TFRIC 7 Applying the Restatement Approach under TAS 29 Financial 1 January 2014

Reporting in Hyperinflationary Economies

TFRIC 10 Interim Financial Reporting and Impairment 1 January 2014

TFRIC 12 Service Concession Arrangements 1 January 2014

TFRIC 13 Customer Loyalty Programmes 1 January 2014

TFRIC 17 Distributions of Non-cash Assets to Owners 1 January 2014

TFRIC 18 Transfers of Assets from Customers 1 January 2014

The Companyûs management believes that these accounting standards, financial reporting standard, accounting standard

interpretations and financial reporting standards interpretations will not have any significant impact on the financial statements for

the year when they are initially applied.

4. Cumulative effect of changes in accounting policies due to the adoption of new accounting standard

During the current year, the Company and its subsidiaries made the changes described in Note 3, as a result of the

adoption of Thai Accounting Standard 12 Income Taxes. The cumulative effect of the changes in the accounting policies has

been separately presented in the statements of changes in shareholdersû equity.

The amounts of adjustments affecting the statement of financial position, income statement and the statement of

comprehensive income are summarised below.

075

(Unit: Thousand Baht) As at 31 December 2013 As at 31 December 2012 As at 1 January 2012 Consolidated Separate Consolidated Separate Consolidated Separate financial financial financial financial financial financial statements statements statements statements statements statements Statements of financial position

Increase in investment in associate 1,317 - 1,318 - 1,291 -

Increase in deferred tax assets 58,539 56,161 50,244 47,958 51,001 49,018

Increase in deferred tax liabilities 61,068 61,068 61,688 61,688 36,744 36,744

Increase in unappropriated retained earnings 40,474 56,161 32,184 47,958 32,978 49,018

Decrease in other components of shareholdersû equity (41,928) (61,068) (42,548) (61,688) (17,604) (36,744)

Increase in non-controlling interest of the subsidiaries 242 - 238 - 174 -

(Unit: Thousand Baht) For the year ended For the year ended 31 December 2013 31 December 2012 Consolidated Separate Consolidated Separate financial financial financial financial statements statements statements statements

Statements of income:

Increase (decrease) share of profit from investment in associate (1) - 27 -

Increase (decrease) in income tax expenses (8,295) (8,203) 757 1,059

Increase (decrease) in profit attributable to equity holders of the Company 8,290 8,203 (795) (1,059)

Increase in profit attributable to non-controlling interest of the subsidiaries 4 - 65 -

Increase (decrease) in basis earnings per share (Baht) 0.0111 (0.0111) (0.0011) (0.0015)

Statement of comprehensive income:

Increase (decrease) in profit for the year 8,294 8,203 (730) (1,059)

Increase (decrease) in gain on change in value of available-for-sale investments 620 620 (24,944) (24,944)

Increase (decrease) in total comprehensive income for the year 8,914 8,823 (25,674) (26,003)

5. Significant accounting policies

5.1 Revenue recognition

Sales of goods

Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to

the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and

allowances.

Rendering of rental and services

Rental and related services income of units in office building are recognised when services have been rendered

on an accrual basis.

Rendering of architectural design services

Architectural design services income are recognised when services have been rendered taking into account the

stage of completion of the contract.

Interest income

Interest income is recognised on an accrual basis based on the effective interest rate.

076

Dividends

Dividends are recognised when the right to receive the dividends is established.

5.2 Cash and cash equivalents

Cash and cash equivalents consist of cash in hand and at bank, and all highly liquid investments with an original

maturity of three months or less and not subject to withdrawal restrictions.

5.3 Trade and other receivables

Trade and other receivables are stated at the net realisable value. Allowance for doubtful accounts is provided for

the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection

experiences and analysis of debt aging.

5.4 Inventories

Finished goods and work in process are valued at the lower of standard cost (which approximates actual cost)

and net realisable value. Standard cost includes all production costs and attributable factory overheads.

Trade finished goods are valued at the lower of average cost and net realisable value.

Raw materials are valued at the lower of average cost and net realisable value and are charged to production costs

whenever consumed.

5.5 Investments

a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are

recorded in profit or loss.

b) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities

are recorded in comprehensive income, and will be recorded as gains or losses in the income statements when

the securities are sold.

c) Investments in associates are accounted for in the consolidated financial statements using the equity method.

d) Investments in subsidiaries and associate are accounted for in the separate financial statements at cost less

provision for impairment of investments (if any).

The fair value of marketable securities is based on the latest bid price of the last working day of the year. The

fair value of unit trusts is determined from their net asset value.

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

In the event the Company reclassifies investments from one type to another, such investments will be readjusted

to their fair value as at the reclassification date. The difference between the carrying amount of the investments and the

fair value on the date of reclassification are recorded in profit or loss or recorded as other components of shareholdersû

equity, depending on the type of investment that is reclassified.

On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the

investment is recognised in the income statement.

5.6 Investment properties

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,

investment properties are stated at cost less accumulated depreciation and allowance for loss on impairment (if any).

Depreciation of investment properties is calculated by reference to their costs on the straight-line basis over

estimated useful lives of 15 and 30 years. Depreciation of the investment properties is included in determining income.

On disposal of investment properties, the difference between the net disposal proceeds and the carrying amount

of the asset is recognised in the income statement in the period when the asset is derecognised.

5.7 Property, plant and equipment / Depreciation

Land is stated at cost. Building and equipment are stated at cost less accumulated depreciation and allowance

for loss on impairment of assets (if any).

077

Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the

following estimated useful lives:

Useful lives

Land improvement 15 - 20 years

Buildings 20 years

Building improvement 5 - 20 years

Leasehold improvement 5 years

Machinery 5 - 11 years

Furniture and equipment 5 - 10 years

Vehicles 5 years

Other equipment 3 - 20 years

Depreciation is included in determining income.

No depreciation is provided on land and construction in progress.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are

expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in the income statement

when the asset is derecognised.

5.8 Intangible assets

Intangible assets acquired through business combination are initially recognised at their fair value on the date of

business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initial

recognition, the intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment

losses (if any).

Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for

impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the

amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense

is charged to profit or loss.

A summary of the intangible asset with finite useful lives is as follow:

Useful lives

Computer software 5 - 10 years

5.9 Goodwill

Goodwill is initially recorded at cost, which equals to the excess of cost of business combination over the fair

value of the net assets acquired. If the fair value of the net assets acquired exceeds the cost of business combination,

the excess is immediately recognised as gain in the income statement.

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually

and when circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the

Company and subsidiariesû cash generating units (or group of cash-generating units) that are expected to benefit from

the synergies of the combination. The Company and its subsidiaries estimate the recoverable amount of each cash-

generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the

cash-generating unit is less than the carrying amount, an impairment loss is recognised in the income statements.

Impairment losses relating to goodwill cannot be reversed in future periods.

078

5.10 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether

directly or indirectly, or which are under common control with the Company.

They also include associated companies and individuals which directly or indirectly own a voting interest in the

Company that gives them significant influence over the Company, key management personnel, directors and officers with

authority in the planning and direction of the Companyûs operations.

5.11 Operating lease

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 recognised

as an expense in the income statements on a straight-line basis over the lease term.

When an operating lease is terminated before the lease period has expired, any payment required to be made to

the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

5.12 Foreign currencies

The consolidated and separate financial statements are presented in Baht, which is also the Companyûs functional

currency.

Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the

transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate

ruling at the end of reporting period.

Gains and losses on exchange are included in determining income.

5.13 Impairment of assets

At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of

the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that

an asset may be impaired. The Company and its subsidiaries also carries out annual impairment reviews in respect of

goodwill. The Company and its subsidiaries also carried out annual impairment reviews in respect of goodwill. An

impairment loss is recognised when the recoverable amount of an asset, which is the higher of the assetûs fair value less

costs to sell and its value in use, is less than the carrying amount.

An impairment loss is recognised in the income statement.

In the assessment of asset impairment if there is any indication that previously recognised impairment losses may

no longer exist or may have decreased, the Company and its subsidiaries estimate the assetûs recoverable amount. A

previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine

the assetûs recoverable amount since the last impairment loss was recognised. The increased carrying amount of the

asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been

determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the

income statement.

5.14 Treasury stock

Treasury stock is stated at cost and presented as a deduction from shareholdersû equity. Gains on disposal of

treasury stock are determined by reference to its carrying amount and are taken to premium on treasury stock, losses on

disposal of treasury stock are determined by reference to its carrying amount and are taken to premium on treasury stock

and retained earnings, consecutively.

The weighted average method is used for computation of the unit cost of treasury stock.

079

5.15 Employee benefits

Short-term employee benefits

Salary, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred.

Post-employment benefits

Defined contribution plans

The Company and its subsidiaries and their employees have jointly established a provident fund. The fund is

monthly contributed by employees and by the Company and its subsidiaries. The fundûs assets are held in a separate

trust fund and the Company and its subsidiariesû contributions are recognised as expenses when incurred.

Defined benefit plans

The Company and its subsidiaries has obligations in respect of the severance payments it must make to

employees upon retirement under labor law. The Company and its subsidiaries treat these severance payment obligations

as a defined benefit plan.

The obligation under the defined benefit plan is determined by a professionally qualified independent actuary

based on actuarial techniques, using the projected unit credit method.

Actuarial gains and losses arising from post-employment benefits are recognised immediately in the income statements.

5.16 Provisions

Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past

event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation,

and a reliable estimate can be made of the amount of the obligation.

5.17 Income tax

Income tax expense represents the sum of corporate income tax currently payable and deferred tax.

Current tax

Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities,

based on taxable profits determined in accordance with tax legislation.

Deferred tax

Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their

carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period.

The Company and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they

recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it

is probable that future taxable profit will be available against which such deductible temporary differences and tax losses

carried forward can be utilised.

At each reporting date, the Company and its subsidiaries review and reduce the carrying amount of deferred tax

assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the

deferred tax asset to be utilised.

The Company and its subsidiaries record deferred tax directly to shareholdersû equity if the tax relates to items

that are recorded directly to shareholdersû equity.

5.18 Derivatives

Forward exchange contracts

Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of exchange

ruling at the end of reporting period. Unrecognised gains and losses from the translation are included in determining income.

Premiums or discounts on forward exchange contracts are amortized on a straight-line basis over the contract periods.

080

6. Significant accounting judgments and estimates

The preparation of financial statements in conformity with financial reporting standards at times requires management to

make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect

reported amounts and disclosures; and actual results could differ from these estimates. Significant judgments and estimates are

as follows:

Leases

In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to

use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into

consideration terms and conditions of the arrangement.

Allowance for doubtful accounts

In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon,

among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.

Allowance for diminution in value of inventory

In determining an allowance for diminution in value of inventory, the management needs to exercise judgment in making

estimates based upon the condition of goods and the duration such goods have remained in stock.

Fair value of financial instruments

In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are

not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these

models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial

instruments.

Property plant and equipment and investment property/Depreciation

In determining depreciation of plant and equipment and investment property, the management is required to make

estimates of the useful lives and residual values of the Company and subsidiariesû plant and equipment and investment property,

and to review estimate useful lives and residual values when there are any changes.

In addition, the management is required to review property, plant and equipment and investment property for impairment

on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower

than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets

subject to the review.

Goodwill and intangible assets

The initial recognition and measurement of goodwill and other intangible assets, and subsequent impairment testing,

require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a

suitable discount rate in order to calculate the present value of those cash flows.

Deferred tax assets

Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is

probable that taxable profit will be available against which the temporary differences and losses can be utilised. Significant

management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely

timing and level of estimate future taxable profits.

Post-employment benefits under defined benefit plans

The obligation under the defined benefit plan is determined based on actuarial techniques. Such determining is made

based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate.

081

7. Related party transactions

Details of relationships of the Company and subsidiaries to related parties are as follows.

Name of entities Nature of relationships

Modernform Health & Care Company Limited Subsidiary, 60% shareholding

Modernform Tower Company Limited Subsidiary, 100% shareholding

Rafa Associates Company Limited Subsidiary, 75% shareholding

Thai Plaspac Public Company Limited Associate, 48% shareholding

MFEC Public Company Limited Related by common shareholder and director

Interhides Public Company Limited Shareholder and director is related to the Companyûs management

Related person Director, executive officer and related person with director

and executive officer

During the years, the Company and its subsidiaries had significant business transactions with related parties. Such

transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and

bases agreed upon between the Company, its subsidiaries and those related parties. The transactions are summarised below.

(Unit: Million Baht) Consolidated Separate financial statements financial statements Transfer pricing policy

2013 2012 2013 2012 Transactions with subsidiaries

(Eliminated from the consolidated financial statements)

Sales of goods - - 4 1 Close to market price

Services income - - 2 1 Contract price

Dividend income - - 8 155 As declared

Rental income - - 1 - Contract price

Interest income - - 7 5 MLR plus 0.50% per annum (2012: MLR plus 0.5%

per annum and 3-month fixed deposit rate plus 2.0%

per annum)

Rental expenses and related service fees - - 46 46 Baht 400 per square meter per month for showroom

and Baht 300 per square meter per month for

office unit.

Transactions with associate

Service income 1 1 1 1 Contract price

Dividend income - - 5 19 As declared

Purchases of goods 2 1 2 1 Close to market price

Transactions with related companies

Rental income and related 5 5 - - Baht 300 to Baht 345 per square meter per office unit

(2012: Baht 325 to Baht 380 per square meter per

office unit)

Dividend income 27 24 27 24 As declared

Purchase of investment - 129 - 129 Market price

Purchase of goods 8 7 8 7 Close to market price

082

As at 31 December 2013 and 2012, the balances of the accounts between the Company and those related parties are as follows:

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2013 2013 2012

Trade accounts receivable (Note 9)

Subsidiary:

Modernform Health & Care Company Limited - - 35 76

Associate:

Thai Plaspac Public Company Limited 25 - 25 -

Related companies:

Interhides Public Company Limited 578 39 578 39

MFEC Public Company Limited 2 - 2 -

Total 605 39 640 115

Other receivables (Note 9)

Subsidiaries:

Modernform Health & Care Company Limited - - 47 31

Modernform Tower Company Limited - - 42 23

Related company:

MFEC Public Company Limited 134 152 - -

Total 134 152 89 54

Long-term loans and accrued interest receivable from related parties

Subsidiaries:

Modernform Health & Care Company Limited - - - 10,031

Modernform Tower Company Limited - - 55,353 120,779

Total - - 55,353 130,810

Less: Current portion - - (55,353) (65,779)

Net - - - 65,031

Other non-current assets - deposits

Subsidiary:

Modernform Tower Company Limited - - 11,306 11,202

Trade and other payables (Note 21)

Subsidiaries:

Modernform Tower Company Limited - - 768 900

Modernform Health & Care Company Limited - - 112 24

Rafa Associates Company Limited - - - 47

Associate:

Thai Plaspac Public Company Limited 225 226 225 226

Related company:

Interhides Public Company Limited 2,779 2,000 2,779 2,000

Total 3,004 2,226 3,884 3,197

Customer deposits

Related company:

MFEC Public Company Limited 1,517 1,541 - -

083

During the current year, movements of long-term loans and accrued interest receivable from related parties are as follows:

(Unit: Thousand Baht) Balance Balance as at as at 1 January During the year 31 December Interest charging Repayment 2013 Increase Decrease 2013 policy schedule Long-term loans and accrued interest receivable from related parties Subsidiaries: Modernform Tower Company Limited 120,779 6,812 (72,238) 55,353 MLR plus 0.50% Due in 2017 per annum Modernform Health & Care Company Limited 10,031 52 (10,083) - 3-month fixed Due in 2013 deposit plus 2.00% per annum Total 130,810 6,864 (82,321) 55,353

As at 31 December 2013, the credit facilities of Modenform Tower Company Limited and Modernfrom Health & Care Company

Limited which had not been drawn down amounted to Baht 126.5 and 10.0 million, respectively (2012: Baht 50.4 million and fully drawn

down, respectively).

Directors and managementûs remuneration

During the years ended 31 December 2013 and 2012, the Company and its subsidiaries had employee benefit expenses of their

directors and management as below.

(Unit: Million Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Short-term employee benefits 79 75 58 54

Post-employment benefits 5 5 3 4

Total 84 80 61 58

8. Cash and cash equivalents

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Cash 639 574 545 501

Bank deposits 311,881 100,570 282,045 70,244

Total 312,520 101,144 282,590 70,745

As at 31 December 2013, bank deposits carried interests between 0.45% to 3.05% per annum (2012: between 0.63% to 0.88% per

annum).

084

9. Trade and other receivables

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Trade accounts receivable - related parties

Age on the basis of due dates

Not yet due and past due

Up to 3 months 603 39 638 115

Past due

3 - 6 months 2 - 2 -

Total trade accounts receivable - related parties 605 39 604 115

Trade accounts receivable - unrelated parties

Age on the basis of due dates

Not yet due and past due

Up to 3 months 773,662 474,399 716,431 424,251

Past due

3 - 6 months 78,279 95,916 76,226 88,156

6 - 12 months 54,446 63,083 48,152 50,163

Over 12 months 50,575 46,983 39,927 46,636

Total 956,962 680,381 880,736 609,206

Less: Allowance for doubtful accounts (34,120) (23,750) (33,845) (23,750)

Total trade accounts receivable - unrelated parties, net 922,842 656,631 846,891 585,456

Other receivables

Advances 50,422 30,465 49,718 29,423

Accrued income - related parties 134 152 - -

Accrued income - unrelated parties 2,690 2,544 313 23

Other receivables - related parties - - 89 54

Other receivables - unrelated parties 338 1,860 140 659

Total 53,584 35,021 50,260 30,159

Trade and other receivables, net 977,031 691,691 897,791 615,730

085

10. Inventories

(Unit: Thousand Baht) Consolidated financial statements

Reduce cost to net

Cost realisable value Inventory - net

2013 2012 2013 2012 2013 2012

Finished goods 930,580 786,025 (63,800) (48,682) 866,780 737,343

Work in process 102,054 96,212 (10,157) (13,180) 91,897 83,032

Raw materials 206,159 207,326 (37,571) (32,147) 168,588 175,179

Goods for showroom 48,651 46,112 - - 48,651 46,112

Goods in transit 24,924 44,964 - - 24,924 44,964

Other supplies 9,518 6,783 - - 9,518 6,783

Total 1,321,886 1,187,422 (111,528) (94,009) 1,210,358 1,093,413

(Unit: Thousand Baht) Separate financial statements

Reduce cost to net

Cost realisable value Inventory - net

2013 2012 2013 2012 2013 2012

Finished goods 881,194 734,961 (62,136) (47,197) 819,058 687,764

Work in process 102,054 96,212 (10,157) (13,180) 91,897 83,032

Raw materials 206,159 207,326 (37,571) (32,147) 168,588 175,179

Goods for showroom 46,998 44,470 - - 46,998 44,470

Goods in transit 21,400 35,039 - - 21,400 35,039

Other supplies 9,283 6,610 - - 9,283 6,610

Total 1,267,088 1,124,618 (109,864) (92,524) 1,157,224 1,032,094

11. Available-for-sale investments

(Unit: Thousand Baht) Consolidated and Separate financial statements 2013 2012

Cost 454,735 454,735

Gain on changes in value of investments 120,829 123,930

Total 575,564 578,665

During the year 2012, the Company sold available-for-sale securities with book values totaling Baht 23 million and

recognised loss on the sales amounting to Baht 2 million in income statements. This amount included loss transferred from gain

on change in valuation of available-for-sale investments in other comprehensive income, amounting to Baht 3 million.

086

12. Investments in associates

12.1 Details of associates:

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements Nature of Country of Shareholding Cost Carrying amounts Carrying amounts Companyûs name business incorporation percentage based on equity method based on cost method 2013 2012 2013 2012 2013 2012 2013 2012 % % (Restated)

Thai Plaspac Public Packaging Thailand 48 48 118,172 118,172 326,646 271,251 118,172 118,172

Company Limited manufacturing

Total 118,172 118,172 326,646 271,251 118,172 118,172

12.2 Share of profit and dividend received from investments in associate

During the years, the Company has recognised its share of profit and dividend received from investment in

associate in the financial statements are as follows:

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements Share of profit from investments Dividend received Companyûs name in associates during the year during the year 2013 2012 2013 2012 (Restated)

Thai Plaspac Public Company Limited 60,728 49,013 5,333 19,200

Total 60,728 49,013 5,333 19,200

12.3 Fair value of investments in listed associate

In respect of investments in associate that are listed companies on the Stock Exchange of Thailand, its fair value

is as follows:

(Unit: Million Baht)

Companyûs name Fair values as at 31 December

2013 2012

Thai Plaspac Public Company Limited

Shares 614 499

Warrants 42 -

Total 656 499

087

12.4 Summarised financial information of associate

Financial information of the associated company is summarised below:

(Unit: Million Baht) Total revenues Companyûs name Paid-up capital Total assets Total liabilities for the years Profit for the years as at 31 December as at 31 December as at 31 December ended 31 December ended 31 December 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 (Restated) (Restated)

Thai Plaspac Public 200 100 1,161 1,053 510 528 1,591 1,375 123 100

Company Limited

12.5 Significant events of investments in associates

On 23 April 2013, the Annual General Meeting of shareholders of Thai Plaspac Public Company Limited passed the

following resolutions.

1) Dividend payment

Approved the payment of a cash dividend for the year 2012 of Baht 0.11 per share to its shareholders, or

a total of Baht 11 million. This dividend will be paid on 22 May 2013.

2) Stock dividend

Approved the issue of stock dividend to shareholders, with a number of not exceed 100 million ordinary

shares, with par value of Baht 1 each, at a ratio of 1 existing ordinary shares to receive stock dividend of 1

share. On 10 May 2013, it closed the shareholdersû list to receive stock dividend totaling 100 million shares. This

stock dividend will be paid on 22 May 2013.

3) The issuance and offering of the warrant to purchase ordinary share distributed to its shareholders

Approved the issuance and offering of the warrant to purchase ordinary share distributed to its

shareholders for 50 million units with maturity of 3 years at the offering ratio of 2 existing shares to 1 unit of

warrant. The warrant has no offering price. The exercise ratio is 1 unit of warrant to 1 new ordinary share at the

exercise price of Baht 5 per share. The period of exercise is twice a year, on 31 March and 30 September of

each year until the maturity date.

4) The issuance and offering of the warrant to purchase ordinary share distributed to directors and /or employees

Approved the issuance and offering of the warrant to purchase ordinary share distributed to directors and

/or employees for 5 million units with maturity of 3 years without offering price. The exercise ratio is 1 unit of

warrant to 1 new ordinary share at the exercise price of Baht 4 per share. The initiate date of exercise is 30

September 2013 and the period of exercise is twice a year, on 31 March and 30 September of each year until the

maturity date.

5) Increase in its registered share capital

Approved a Baht 155 million increase in its registered share capital to support the issue of stock dividend,

warrant to purchase ordinary share distributed to its shareholders and warrant to purchase ordinary share

distributed to directors and /or employees.

Approved the amendment of the Memorandum of Association to state a registered capital of Baht 255

million. Thai Plaspac Public Company Limited registered the increase in its registered share capital to be the Baht

255 million with the Ministry of Commerce on 10 May 2013.

088

13. Investments in subsidiaries

Details of investments in subsidiaries as presented in separate financial statements are as follows: Shareholding Companyûs name Paid-up capital percentage Cost Dividend income 2013 2012 2013 2012 2013 2012 2013 2012 Million Million % % Thousand Thousand Thousand Thousand Baht Baht Baht Baht Baht Baht Modernform Tower Company Limited 220 220 100 100 219,899 219,899 - 149,600

Modernform Health & Care Company Limited 16 16 60 60 9,600 9,600 - -

Rafa Associates Company Limited 30 30 75 75 19,800 19,800 7,500 5,700

Total 249,299 249,299 7,500 155,300

14. Investment properties

The net book value of investment properties as at 31 December 2013 and 2012 is presented below.

(Unit: Thousand Baht) Consolidated financial statements

Office building and building Land and land improvement improvement for rent Total

31 December 2013

Cost 53,412 544,855 598,267

Less: Accumulated depreciation (1,799) (349,558) 351,357

Net book value 51,613 195,297 246,910

31 December 2012

Cost 53,633 544,861 598,494

Less: Accumulated depreciation (1,679) (332,256) (333,935)

Net book value 51,954 212,605 264,559

A reconciliation of the net book value of investment properties for the years 2013 and 2012 is presented below.

(Unit: Thousand Baht)

Consolidated financial statements

2013 2012

Net book value at beginning of year 264,559 282,053

Acquisition of assets - 86

Disposal - net book value (38) -

Write-off - net book value - (36)

Depreciation charged (17,611) (17,544)

Net book value at end of year 246,910 264,559

089

The fair value of the investment properties as at 31 December 2013 and 2012 stated below:

(Unit: Thousand Baht)

Consolidated financial statements

2013 2012

Land 71,154 71,154

Office building and building improvement for rent 258,823 258,823

The fair value of the land was determined by an independent valuer based on market price and the fair value of the office

building for rent was determined by using replacement cost since the independent valuer viewed that has been no market comparative

data that can directly be applied to the subsidiaryûs office building for rent that has unique characteristics.

A subsidiary company has mortgaged total investment properties thereon with a bank with a mortgage value as at 31

December 2013 and 2012 of Baht 12 million to secure bank overdrafts and credit facilities granted to the Company and such subsidiary

company.

15. Property, plant and equipment

(Unit: Thousand Baht) Consolidated financial statements Land and Building and Furniture land leasehold and Construction improvement Buildings improvement Machinery equipment Vehicles in progress Others Total

Cost:

1 January 2012 141,142 502,853 240,418 368,547 157,977 72,706 172 70,706 1,554,521

Additions 7,517 - 7,748 3,386 10,550 2,592 13,358 15,824 60,975

Transfer-in (transfer-out) 4,134 - 7,841 2,949 1,478 - (13,447) (2,955) -

Disposals (288) (901) (709) (8,406) (4,312) (2,074) - (594) (17,284)

Written-off - - (730) - (6,496) - (47) (87) (7,360)

Adjustments - - (282) - (244) - - - (526)

31 December 2012 152,505 501,952 254,286 366,476 158,953 73,224 36 82,894 1,590,326

Additions 1,764 - 20,967 5,639 18,639 9,892 3,988 18,891 79,780

Transfer-in (transfer-out) - - 3,672 14,234 (3,509) 487 (3,871) (11,013) -

Disposals (3,503) (3,953) (2,006) (16,258) (4,101) (1,011) - (464) (31,296)

Write-off (4,799) (99) (293) - (411) - - (17) (5,619)

31 December 2013 145,967 497,900 276,626 370,091 169,571 82,592 153 90,291 1,633,191

090

(Unit: Thousand Baht) Consolidated financial statements Land and Building and Furniture land leasehold and Construction improvement Buildings improvement Machinery equipment Vehicles in progress Others Total

Accumulated depreciation:

1 January 2012 10,837 339,092 157,200 303,344 131,370 56,619 - 56,741 1,055,203

Depreciation for the year 2,796 15,315 22,260 12,250 11,132 5,561 - 5,055 74,369

Depreciation for transfer-in (transfer-out) - - - 88 - - - (88) -

Depreciation on disposals - (443) (453) (8,406) (4,172) (2,010) - (472) (15,956)

Depreciation on written-off - - (534) - (6,360) - - (26) (6,920)

Adjustment - - (77) - (90) - - - (167)

31 December 2012 13,633 353,964 178,396 307,276 131,880 60,170 - 61,210 1,106,529

Depreciation for the year 3,240 14,931 22,802 12,890 10,932 6,045 - 5,335 76,175

Depreciation for transfer-in

(transfer-out) - - - - (21) - - 21 -

Depreciation on disposals (3,316) (3,953) (1,909) (15,712) (3,831) (1,012) - (443) (30,176)

Depreciation on written-off - (99) (292) - (237) - - - (628)

31 December 2013 13,557 364,843 198,997 304,454 138,723 65,203 - 66,123 1,151,900

Net book value:

1 January 2012 130,305 163,761 83,218 65,203 26,607 16,087 172 13,965 499,318

31 December 2012 138,872 147,988 75,890 59,200 27,073 13,054 36 21,684 483,797

31 December 2013 132,410 133,057 77,629 65,637 30,848 17,389 153 24,168 481,291

Depreciation for the year

2012 (Baht 35 million included in manufacturing cost, and the balance in selling and administrative expenses) 74,369

2013 (Baht 35 million included in manufacturing cost, and the balance in selling and administrative expenses) 76,175

091

(Unit: Thousand Baht) Separate financial statements Land and Building and Furniture land leasehold and Construction improvement Buildings improvement Machinery equipment Vehicles in progress Others Total

Cost:

1 January 2012 107,406 200,438 204,070 368,547 146,150 71,183 173 70,153 1,168,120

Additions 7,517 - 6,997 3,386 9,305 2,593 13,357 15,809 58,964

Transfer-in (transfer-out) 4,134 - 7,840 2,949 1,478 - (13,447) (2,954) -

Disposals (288) (901) (708) (8,406) (3,551) (1,613) - (596) (16,063)

Written-off - - (319) - (6,473) - (48) (85) (6,925)

31 December 2012 118,769 199,537 217,880 366,476 146,909 72,163 35 82,327 1,204,096

Additions 1,764 - 20,876 5,639 13,949 9,892 3,988 20,352 76,460

Transfer-in (transfer-out) - - 3,672 14,234 199 487 (3,871) (14,721) -

Disposals (3,364) (3,953) (2,008) (16,258) (3,745) (1,011) - (463) (30,802)

Write-off (4,799) (99) (291) - (273) - - (17) (5,479)

31 December 2013 112,370 195,485 240,129 370,091 157,039 81,531 152 87,478 1,244,275

Accumulated depreciation:

1 January 2012 9,927 168,112 128,649 303,344 122,699 55,644 - 56,400 844,775

Depreciation for the year 2,649 5,521 20,998 12,250 9,930 5,369 - 4,994 61,711

Depreciation on disposals - (443) (453) (8,406) (3,424) (1,591) - (471) (14,788)

Depreciation for transfer-In (transfer-out) - - - 88 - - - (88) -

Depreciation on written-off - - (194) - (6,359) - - (27) (6,580)

31 December 2012 12,576 173,190 149,000 307,276 122,846 59,422 - 60,808 885,118

Depreciation for the year 3,165 5,135 21,536 12,890 9,768 5,928 - 5,068 63,490

Depreciation on disposals (3,316) (3,953) (1,909) (15,712) (3,564) (1,011) - (443) (29,908)

Depreciation for transfer-in

(transfer-out) - (99) (292) - (199) - - - (590)

31 December 2013 12,425 174,273 168,335 304,454 128,851 64,339 - 65,433 918,110

Net book value:

1 January 2012 97,479 32,326 75,421 65,203 23,451 15,539 173 13,753 323,345

31 December 2012 106,193 26,347 68,880 59,200 24,063 12,741 35 21,519 318,978

31 December 2013 99,945 21,212 71,794 65,637 28,188 17,192 152 22,045 326,165

Depreciation for the year

2012 (Baht 34 million included in manufacturing cost, and the balance in selling and administrative expenses) 61,711

2013 (Baht 35 million included in manufacturing cost, and the balance in selling and administrative expenses) 63,490

As at 31 December 2013, certain plant and equipment items have been fully depreciated but are still in use. The gross carrying

amount (before deducting accumulated depreciation) of those assets amounted to approximately Baht 747 million (2012: Baht 714 million)

(The Company only: Baht 676 million, 2012: Baht 643 million).

092

The Company has mortgaged land with structures thereon with a bank with a total net book value as at 31 December 2013 of

Baht 16 million (2012: Baht 17 million) to secure against the indebtedness of the Company to this bank. In addition, a subsidiary

company has mortgaged land with structures thereon with a bank with a total net book value as at 31 December 2013 and 2012 of Baht

7 million, to secure bank overdrafts and credit facilities granted to the Company and such subsidiary company.

16. Goodwill

(Unit: Thousand Baht)

Consolidated financial statements

2013 2012 Rafa Associates Company Limited 2,151 2,151

Rafa Design Office Company Limited (100% shareholding by Rafa Associates Company Limited) 6,458 6,458

Rafa Plus Architect Limited (100% shareholding by Rafa Associates Company Limited) 1,558 1,558

Total 10,167 10,167

17. Other intangible assets

Details of intangible assets which are computer software are as follows:

(Unit: Thousand Baht) Consolidated financial Separate financial statements statements Cost

1 January 2012 24,898 24,410

Additions 1,273 944

Adjustment (25) -

31 December 2012 26,146 25,354

Additions 1,347 1,292

31 December 2013 27,493 26,646

Accumulated amortisation

1 January 2012 20,743 20,520

Amortisation for the year 1,399 1,268

Adjustment (8) -

31 December 2012 22,134 21,788

Amortisation for the year 1,480 1,329

31 December 2013 23,614 23,117

Net book value

1 January 2012 4,155 3,890

31 December 2012 4,012 3,566

31 December 2013 3,879 3,529

Amortisation expenses included in the income statement for the year

2012 1,399 1,268

2013 1,480 1,329

093

18. Leasehold rights

(Unit: Thousand Baht) Consolidated and Separate financial statements Cost

1 January 2012 38,875

31 December 2012 38,875

Disposals (10,097)

31 December 2013 28,778

Accumulated amortisation

1 January 2012 27,680

Amortisation for the year 2,097

31 December 2012 29,777

Amortisation for the year 1,891

Amortisation on disposals (9,114)

31 December 2013 22,554

Net book value

1 January 2012 11,195

31 December 2012 9,098

31 December 2013 6,224

Amortisation expenses included in the income statement for the year

2012 2,097

2013 1,891

19. Other non-current assets

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Other receivables 25,679 25,679 25,679 25,679

Less: Allowance for doubtful accounts (25,679) (25,679) (25,679) (25,679)

Other receivables, net - - - -

Other assets 54 - 54 -

Deposits 13,940 11,523 24,567 22,139

Total 13,994 11,523 24,621 22,139

20. Bank overdrafts and short-term loans from financial institutions

(Unit: Thousand Baht) Interest rate Consolidated Separate (percent per financial statements financial statements annum) 2013 2012 2013 2012

Bank overdrafts 7.38 - 7.43 2,926 2,199 1,047 996

Liabilities under trust receipts 7.25 1,663 - 1,663 -

Short-term loans from financial institutions 3.50 6,500 64,000 - 64,000

Total 11,089 66,199 2,710 64,996

094

Bank overdrafts and certain loans are secured by the mortgage of land with structures thereon of the Company and its

subsidiary company, as discussed in Notes 14 and 15.

21. Trade and other payables

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Trade accounts payables - related parties 3,004 2,226 3,004 2,297

Trade accounts payables - unrelated parties 314,300 325,195 295,810 291,752

Other payables - related parties - - 112 -

Other payables - unrelated parties 74,911 57,576 70,008 52,635

Accrued expenses - related parties - - 768 900

Accrued expenses - unrelated parties 52,505 33,730 9,623 6,444

Total trade and other payables 444,720 418,727 379,325 354,028

22. Provision for long-term employee benefits

Provision for long-term employee benefits, which is compensations on employeesû retirement, was as follows:

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Defined benefit obligation at beginning of year 107,780 100,114 97,839 90,937

Current service cost 11,430 10,426 10,693 9,777

Interest cost 4,081 3,612 3,714 3,282

Benefits paid during the year (829) (1,361) (829) (1,361)

Actuarial gain - (4,890) - (4,796)

Adjustment of provision for long-term employee benefits due to sales of

investment in a company held by a subsidiary - (121) - -

Provisions for long-term employee benefits at end of year 122,462 107,780 111,417 97,839

Long-term employee benefit expenses included in the income statements was as follows:

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Current service cost 11,430 10,426 10,693 9,777

Interest cost 4,081 3,612 3,714 3,282

Actuarial gain recognised during the year - (4,890) - (4,796)

Total expense recognized in income statements 15,511 9,148 14,407 8,263

Line items under which such expenses are included in income statements

Cost of sales 5,793 5,040 5,653 5,038

Selling and administrative expenses 9,718 4,108 8,754 3,225

095

Principal actuarial assumptions at the valuation date were as follows: Consolidated financial statements Separate financial statements 2013 2012 2013 2012 (% per annum) (% per annum) (% per annum) (% per annum) Discount rate 3.6 - 4.3 3.6 - 4.3 3.8 3.8

Future salary increase rate 4.3 4.3 4.3 4.3

Staff turnover rate (depending on age) 0 - 49 0 - 49 0 - 49 0 - 49

Amounts of defined benefit obligation are as follows:

(Unit: Thousand Baht) Experience adjustments Defined benefit obligation on the obligation Consolidated Separate Consolidated Separate financial financial financial financial statements statements statements statements Year 2013 122,462 111,417 - -

Year 2012 107,780 97,839 4,070 3,493

Year 2011 100,114 90,937 - -

Year 2010 91,117 83,077 - -

23. Share capital

On 1 June 2012, the Board of Directors of the Company passed a resolution to reduce the registered and paid up capital

by 32,353,000 shares from the Share Repurchase Program No. 2 that reached its deadline on 24 May 2012. Consequently, the

registered share capital of the Company decreased from Baht 892,000,000 (892,000,000 ordinary shares of Baht 1 each) to Baht

859,647,000 (859,647,000 ordinary shares of Baht 1 each), and the paid up capital decreased from Baht 832,353,720 (832,353,720

ordinary shares of Baht 1 each) to Baht 800,000,720 (800,000,720 ordinary shares of Baht 1 each). The Company registered the

reduction in its capital with the Ministry of Commerce on 13 June 2012.

On 11 December 2013, the Board of Directors of the Company passed a resolution to reduce the registered and paid up

capital by 50,000,720 shares from the Share Repurchase Program No. 3 that reached its deadline on 30 November 2013

Consequently, the registered share capital of the Company decreased from Baht 859,647,700 (859,647,700 ordinary shares of Baht

1 each) to Baht 809,646,280 (809,646,280 ordinary shares of Baht 1 each), and the paid up capital decreased from Baht

800,000,720 (800,000,720 ordinary shares of Baht 1 each) to Baht 750,000,000 (750,000,000 ordinary shares of Baht 1 each). The

Company registered the reduction in its capital with the Ministry of Commerce on 20 December 2013

24. Treasury stocks

Consolidated and

Separate financial statements

2013 2012 Number of shares (shares) (1) - 80,000,720

Average price per share (Baht) - 4.16 (1) Treasury stocks consist of the share repurchase No. 3

096

As at 31 December 2012, the Companyûs treasury stocks amounting to Baht 333 million, was presented as a deduction

item in shareholdersû equity. This amount is presented under the cost method. The market price of the treasury stocks which is

based on the closing price quoted on the Stock Exchange of Thailand on the last day of period, was approximately Baht 616

million.

During the current year, the Company sold 30,000,000 units of treasury stocks, totalling Baht 271 million with share

premium of Baht 146 million. Consequently, the Company reduced its paid-up share capital by 50,000,720 units of treasury stocks

following the Share Repurchase Program No. 3 that reached its deadline on 30 November 2013.

According to letter No. Gor Lor Tor. Chor Sor. (Vor) 2/2548 of the Office of the Securities and Exchange Commission,

dated 14 February 2005, concerning the acquisition of treasury stocks, a public limited company may purchase back treasury

stocks in an amount not exceeding the amount of its retained earnings and is to appropriate an equal amount of retained

earnings to a reserve for treasury stocks, which must be maintained until the Company either sells the treasury stocks or reduces

its paid-up share capital by an amount equal to the value of the treasury stocks that it cannot sell. As at 1 January 2012, the

Company appropriated the full required amount of retained earnings to a reserve for the treasury stocks amounting to Baht 425

million, with the Company recording the reserve as çAppropriated retained earnings - othersé in the statements of financial

position. Subsequently, during the year 2012, the Company reversed the appropriated retained earnings for treasury stocks,

amounting to Baht 93 million after decreasing paid-up share capital as described in Note 23, by writing off 32,353,000 units of

the treasury stocks. In additional to that, during the current year, the Company reversed the appropriated retained earnings for

treasury stocks, amounting to Baht 332 million after selling 30,000,000 units of treasury stocks and decreasing paid-up share

capital by writing off 50,000,720 units of the treasury stocks as described above.

24.1 The Share Repurchase Program No. 3 for the purpose of financial management

On 14 May 2010, a meeting of the Board of Directors of the Company approved the Share Repurchase Program

No. 3 for the purpose of financial management. The details are as follow:

a) The maximum amount for repurchasing the shares is Baht 300 million.

b) A total of 83,235,370 shares are available for repurchase with par value of Baht 1 per share, equivalent to 10% of

the total paid-up capital.

c) These shares are to be repurchased on the Stock Exchange of Thailand by offering to general shareholders. The

repurchase price must not exceed 115% of the weighted average over the latest 5 trading days.

d) The repurchase period is from 1 June 2010 to 30 November 2010.

e) Any shares bought back are to be resold on the Stock Exchange of Thailand by offering to general public, during

the period from 1 June 2011 to 30 November 2013 (after 6 months but not more than 3 years after the completion

date of the share repurchase scheme). Resale of shares, cancellations of the repurchased shares and reductions

of share capital are to conform to the 2001 Ministerial Regulations on the principle and procedures for the

repurchase and resale of shares. The determination of the resale price will not be lower than 85% of the weighted

average closing price over the latest 5 trading days.

f) The treasury stocks carry no rights to receive dividend.

On 11 August 2010, a meeting of the Board of Directors of the Company passed resolution to approve of new

maximum limit of Baht 350 million from the existing limit of Baht 300 million for the stock buyback under the Share

Repurchase Program No. 3 of the Company.

097

25. Statutory reserve

The Company

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a statutory

reserve at least 5% of its net income after deducting accumulated deficit brought forward (if any), until the reserve reaches 10%

of the registered capital. The statutory reserve is not available for dividend distribution.

Subsidiaries

According to the Thai Civil and Commercial Code, the Company is required to set aside to a statutory reserve an amount

equal to at least 5% of its net profit each time the Company pays out a dividend, until such reserve reaches 10% of its

registered share capital. The statutory reserve cannot be used for dividend payment.

26. Other surplus

(Unit: Million Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012 (Restated) (Restated) The value of the Companyûs investment under equity method increased due to raised

additional share capital by MFEC Public Company limited by means of the sale of

shares through a public offering on the SET 33 33 - -

The value of the Companyûs investment under equity method increased due to raised

additional share capital by Thai Plaspac Public Company Limited by means of a

public offering of shares on the MAI 3 3 - -

The value of the Companyûs investment under equity method decreased resulted from

the warrant holders of MFEC Public Company Limited exercised their right to

convert warrant to ordinary shares (3) (3) - -

Gain on reclassification of investment from investment in associate company to

available-for-sale investments 59 59 185 185

Income tax effect (18) (18) (37) (37)

Total 74 74 148 148

27. Expenses by nature

Significant expenses by nature are as follows:

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Salary and wages and other employee benefits 896,597 772,413 846,906 725,817

Depreciation 93,787 91,912 63,490 61,711

Amortisation expenses 3,371 3,496 3,220 3,365

Rental expenses from operating lease agreements 27,201 20,928 46,165 39,831

Raw materials and consumables used 1,216,098 758,569 784,805 758,325

Changes in inventories of finished goods and work in process (150,396) (223,562) (152,074) (201,398)

098

28. Income tax

Income tax expenses for the years ended 31 December 2013 and 2012 are made up as follows:

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012 (Restated) (Restated)

Current income tax:

Current income tax charge 95,669 103,460 81,204 80,702

Deferred tax:

Relating to origination and reversal of temporary differences (8,295) 757 (8,203) 1,059

Income tax expense reported in income statements 87,374 104,217 73,001 81,761

The amounts of income tax relating to each component of statements of comprehensive income for the years ended 31

December 2013 and 2012 are as follows:

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012 (Restated) (Restated)

Deferred tax (assets)/liabilities relating to gain

on change in value of available-for-sale investments (620) 24,944 (620) 24,944

(620) 24,944 (620) 24,944

Reconciliation between income tax expenses and the product of accounting profit multiplied by the applicable tax rates

for the years ended 31 December 2013 and 2012.

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2013 2012 2013 2012 (Restated) (Restated)

Accounting profit before tax 513,470 527,075 401,271 553,542

Applicable tax rate 18% - 20% 20% - 23% 20% 23%

Accounting profit before tax multiplied by applicable tax rate 103,021 120,977 80,254 127,315

Effects of:

Non-deductible expenses 3,612 1,444 2,606 1,217

Share of profit from investments in associate (12,146) (11,273) - -

Dividend income (5,518) (5,827) (8,012) (45,962)

Additional expense deductions allowed (1,871) (1,325) (1,847) (1,192)

Others 276 221 - 383

Total (15,647) (16,760) (7,253) (45,554)

Income tax expenses reported in the income statement 87,374 104,217 73,001 81,761

099

The components of deferred tax assets and deferred tax liabilities are as follows:

(Unit: Thousand Baht) Statements of financial position Consolidated financial statements Separate financial statements As at As at As at As at As at As at 31 December 31 December 1 January 31 December 31 December 1 January 2013 2012 2012 2013 2012 2012 (Restated) (Restated)

Deferred tax assets

Allowance for doubtful accounts 11,904 9,886 12,339 11,905 9,885 12,339

Allowance for diminution in value of inventories 22,306 18,802 18,595 21,973 18,505 18,423

Provision for long-term employee benefits 24,329 21,556 20,067 22,283 19,568 18,256

Total 58,539 50,244 51,001 56,161 47,958 49,018

Deferred tax liabilities

Gain on re-measuring available-for-sale investments 61,068 61,688 36,744 61,068 61,688 36,744

Total 61,068 61,688 36,744 61,068 61,688 36,744

In October 2011, the cabinet passed a resolution to reduce the corporate income tax rate from 30% to 23% in 2012, and

then to 20% from 2013. In addition, in order to comply with the resolution of the cabinet, in December 2011, the decreases in tax

rates for 2012 - 2014 were enacted through a royal decree. The Company has reflected the changes in the income tax rates in

its deferred tax calculation, as presented above.

As at 31 December 2013 the Company and its subsidiaries have no deductible temporary differences and unused tax

losses which deferred tax assets have not been recognized.

29. Earnings per share

Basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the company

(excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year net from

treasury stocks held by the Company, as discussed in Note 24.

The following table sets forth the computation of basic earnings per share: Consolidated financial statements Weighted average number Profit for the year of ordinary shares Earnings per share 2013 2012 2013 2012 2013 2012 (Thousand (Thousand (Thousand (Thousand (Baht) (Baht) Baht) Baht) shares) shares) (Restated) (Restated)

Basic earnings per share

Profit attributable to equity holders of the Company 420,491 409,230 744,082 720,000 0.57 0.57

0100

Separate financial statements Weighted average number Profit for the year of ordinary shares Earnings per share 2013 2012 2013 2012 2013 2012 (Thousand (Thousand (Thousand (Thousand (Baht) (Baht) Baht) Baht) shares) shares) (Restated) (Restated) Basic earnings per share

Profit attributable to equity holders of the Company 328,270 471,781 744,082 720,000 0.44 0.66

30. Segment information

Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by

the chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its

performance. The chief operating decision maker has been identified as Board of Directors of the Company.

For management purposes, the Company and its subsidiaries are organised into business units based on its products and

services and have four reportable segments which are (1) office and resident furniture business, (2) furniture fittings and other

materials business, (3) office rental business and (4) architectural design business.

No operating segments have been aggregated to form the above reportable operating segments.

The chief operating decision maker monitors the operating results of the business units separately for the purpose of

making decisions about resource allocation and assessing performance. Segment performance is measured based on operating

profit or loss and total assets and on a basis consistent with that used to measure operating profit or loss and total assets in

the financial statements.

The basis of accounting for any transactions between reportable segments is consistent with that for third party

transactions.

The following tables present revenue, profit and total assets information regarding the Company and its subsidiariesû

operating segments for the years ended 31 December 2013 and 2012, respectively.

0101

(Unit

: Million

Bah

t)

For th

e ye

ars

ende

d 31

Dec

embe

r

Furn

iture

fitti

ng a

nd

othe

r mat

erial

s Re

ntal

and

serv

ice

Arch

itect

ural

desig

n To

tal r

epor

table

Elim

inat

ion

of

Fu

rnitu

re b

usines

s bu

sines

s bu

sines

s bu

sines

s se

gmen

ts

inte

r-se

gmen

t Co

nsolidat

ion

20

13

2012

20

13

2012

20

13

2012

20

13

2012

20

13

2012

20

13

2012

20

13

2012

(R

esta

ted)

(Res

tate

d)

(R

esta

ted)

(Res

tate

d)

(R

esta

ted)

(Res

tate

d)

(R

esta

ted)

Re

venu

e fro

m e

xternal

custo

mers

2,743

2,3

69

585

577

73

69

92

78

3,493

3,0

93

- -

3,493

3,0

93

Interse

gmen

t rev

enue

s 4

1 -

- 48

48

-

- 52

49

(52)

(49)

- -

Interes

t inc

ome

10

8 2

1 -

- -

- 12

9

(7)

(5)

5 4

Othe

r inc

ome

67

226

3 10

-

- -

4 70

24

0 (15)

(177

) 55

63

Finan

cial c

ost

(5)

(5)

- -

(7)

(5)

- -

(12)

(10)

7 5

(5)

(5)

Depr

eciat

ion a

nd a

mortis

ation

(61)

(59)

(6)

(7)

(29)

(29)

(1)

(1)

(97)

(96)

- 1

(97)

(95)

Allow

ance

for d

oubtful a

ccou

nts

(11)

(1)

1 11

-

- -

- (10)

10

- -

(10)

10

Redu

ction

of i

nven

tory

to n

et re

alisa

ble v

alue

(18)

1 -

- -

- -

- (18)

1 -

- (18)

1

Disp

osal

of la

nd, b

uildin

g an

d eq

uipmen

ts 1

1 -

- -

- -

- 1

1 -

- 1

1

Sales

of i

nves

tmen

t -

(2)

- -

- -

- 2

- -

- -

- -

Share

of p

rofit

from in

vestm

ent i

n as

socia

ted

co

mpa

ny o

n eq

uity

metho

d -

- -

- -

- -

- -

- 61

49

61

49

Incom

e tax

expe

nse

(77)

(88)

- -

(9)

(11)

(1)

(5)

(87)

(104

) -

- (87)

(104

)

Segm

ent p

rofit

28

5 42

2 46

70

36

35

12

21

37

9 54

8 47

(1

25)

426

423

Segm

ent t

otal

asse

ts

3,46

9 3,03

1 40

6 27

4 41

0 43

8 64

81

4,34

9 3,82

4 (1

15)

(247

) 4,23

4 3,57

7

Inves

tmen

t in

asso

ciate

lease

on

equit

y me

thod

11

8 11

8 -

- -

- -

- 11

8 11

8 20

8 15

3 32

6 27

1

Chan

ge in

non

-current a

ssets

which

not

inc

lude

finan

cial ins

trumen

t and

defe

rred

tax

asse

t 17

(6)

(7)

(4)

(29)

(28)

(1)

(1)

(20)

(39)

(1)

(1)

(21)

(40)

0102

Geographic information

The Company and its subsidiaries are operated in Thailand only. As a result, all of the revenues and assets as reflected

in these financial statements pertain to the aforementioned geographical reportable.

Major customers

For the year 2013 and 2012, the Company and its subsidiaries have no major customer with revenue of 10% or more of

an entityûs revenues.

31. Provident fund

The Company, subsidiaries and their employees have jointly established a provident fund in accordance with the

Provident Fund Act B.E. 2530. Both employees and the Company and its subsidiaries contributed to the fund monthly at the rate

of 5% of basic salary. The fund, which is managed by TISCO Asset Management Company Limited, will be paid to employees

upon termination in accordance with the fund rules. During the year 2013, the Company and its subsidiaries contributed Baht 16

million (2012: Baht 16 million) to the fund.

32. Dividends

Dividends Approved by Total dividends Dividend Number

per share of shares

(Thousand Baht) (Baht per share) (Thousand shares)

Final dividends for 2011 Annual General Meeting of the shareholders on 25 April 2012 180,000 0.25 720,000

Interim dividends for 2012 Board of Directorsû meeting on 25 September 2012 144,000 0.20 720,000

Total dividends for 2012 324,000

Final dividends for 2012 Annual General Meeting of the shareholders on 9 April 2013 225,000 0.30 750,000

Interim dividends for 2013 Board of Directorsû meeting on 26 September 2013 187,500 0.25 750,000

Total dividends for 2013 412,500

The dividends are to be paid to shareholders after deduction of the shares of treasury stocks which have no right to

received dividend.

33. Commitment and contingent liabilities

33.1 Capital commitments

As at 31 December 2013, the Company had capital commitments of approximately Baht 20 million (2012: Baht 1

million), relating to building construction and purchasing machinery for production.

33.2 Purchasing of goods for sale

The Company had commitments of approximately Baht 22 million as at 31 December 2013, relating to purchasing

of goods for sale (2012: Baht 20 million).

0103

33.3 Operating lease and other service commitments

The Company and its subsidiaries have entered into several agreements in respect of leases of offices and

showrooms and other services. The terms of the agreements are generally between 1 to 30 years. Future minimum rentals

and service charges payables were as follows:

(Unit: Million Baht)

As at 31 December

2013 2012 Payable within:

Less than 1 year 94 81

1 to 5 years 47 41

More than 5 years - 1

This amount includes commitments of Baht 44 million (2012: Baht 43 million) under rental agreements which the

Company has entered into with a subsidiary company.

33.4 Guarantees

As at 31 December 2013 and 2012, there were outstanding bank guarantees of approximately Baht 386 million and

Baht 254 million, respectively issued by banks on behalf of the Company in respect of certain performance bonds as

required in the normal course of business. These included letters of guarantee amounting to Baht 377 million and Baht

245 million, respectively, to guarantee contractual performance and Baht 9 million and Baht 9 million, respectively, to

guarantee electricity use, among others.

33.5 Letter of credit

As at 31 December 2013, the Company and its subsidiaries had unused letters of credit amounting to Baht 1,018

million (2012: Baht 638 million).

34. Financial instruments

34.1 Financial risk management

The Companyûs financial instruments, as defined under Thai Accounting Standard No. 107 çFinancial Instruments:

Disclosure and Presentationsé, principally comprise cash and cash equivalents, trade accounts receivable, loans,

investments, and short-term loans. The financial risks associated with these financial instruments and how they are

managed is described below.

Credit risk

The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable,

loans and other receivable. The Company and its subsidiaries manage the risk by adopting appropriate credit control

policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its

subsidiaries do not have high concentration of credit risk since it has a large customer base. The maximum exposure to

credit risk is limited to the carrying amounts of receivables, loans and other receivable as stated in the statement of

financial position.

0104

Interest rate risk

The Company and its subsidiaries are exposed to interest rate risk relates primarily to their cash at banks, loans,

bank overdrafts and short-term borrowings. Most of the financial assets and liabilities bear floating interest rates or fixed

interest rates which are close to the market rate.

Significant financial assets and liabilities as at classified by type of interest rates are summarised in the table

below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date,

or the repricing date if this occurs before the maturity date. Consolidated financial statements

As at 31 December 2013

Fixed interest Floating

rates within interest Non-interest Average

1 year rate bearing Total interest rate

(Thousand Baht) (Percent per

annum) Financial assets Cash and cash equivalents 50,000 261,881 639 312,520 0.45 - 3.05 Trading securities - - 10,030 10,030 - Available for sale securities - - 575,564 575,564 - Trade and other receivables - - 977,031 977,031 - 50,000 261,881 1,563,264 1,875,145 Financial liabilities Bank overdrafts and short-term loans from financial institutions 8,379 2,710 - 11,089 3.50 - 7.43 Trade and other payables - - 444,720 444,720 - Customer deposits - - 741,227 741,227 - 8,379 2,710 1,185,947 1,197,036

Consolidated financial statements

As at 31 December 2012

Fixed interest Floating

rates within interest Non-interest Average

1 year rate bearing Total interest rate

(Thousand Baht) (Percent per

annum) Financial assets Cash and cash equivalents - 100,570 574 101,144 0.63 - 0.88 Trading securities - - 9,596 9,596 - Available for sale securities - - 578,665 578,665 - Trade and other receivables - - 691,691 691,691 - - 100,570 1,280,526 1,381,096 Financial liabilities Bank overdrafts and short-term loans from financial institutions - 66,199 - 66,199 3.60 - 7.43 Trade and other payables - - 418,727 418,727 - Customer deposits - - 334,037 334,037 - - 66,199 752,764 818,963

0105

Separate financial statements

As at 31 December 2013

Fixed interest Floating

rates within interest Non-interest Average

1 year rate bearing Total interest rate

(Thousand Baht) (Percent per

annum) Financial assets

Cash and cash equivalents 50,000 232,045 545 282,590 0.45 - 3.05

Trade and other receivables - - 897,791 897,791 -

Available for sale securities - - 575,564 575,564 -

Long-term loans and accrued interest receivable from related parties - - 55,352 55,352 -

50,000 232,045 1,529,252 1,811,297

Financial liabilities

Bank overdrafts and short-term loans from financial institutions - 2,710 - 2,710 7.25 - 7.43

Trade and other payables - - 379,325 379,325 -

Customer deposit - - 719,751 719,751 -

- 2,710 1,099,076 1,101,786

Separate financial statements

As at 31 December 2012

Fixed interest Floating

rates within interest Non-interest Average

1 year rate bearing Total interest rate

(Thousand Baht) (Percent per

annum) Financial assets

Cash and cash equivalents - 70,244 501 70,745 0.63 - 0.88

Trade and other receivables - - 615,730 615,730 -

Available for sale securities - - 578,665 578,665 -

Long-term loans and accrued interest receivable from related parties - 130,810 - 130,810 3.70 - 7.50

- 201,054 1,194,896 1,395,950

Financial liabilities

Bank overdrafts and short-term loans from financial institutions - 64,996 - 64,996 3.60 - 7.43

Trade and other payables - - 354,028 354,028 -

Customer deposit - - 314,966 314,966 -

- 64,996 668,994 733,990

Foreign currency risk

The Company and its subsidiaries are exposure to foreign currency risk arises mainly from trading transactions

that are denominated in foreign currencies. The Company and its subsidiaries seek to reduce this risk by entering into

forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within one year.

106

The balance of financial assets and liabilities denominated in foreign currencies are summarized below. Financial Financial

Foreign currency assets as at liabilities as at Average exchange rate

31 December 31 December As at 31 December

2013 2012 2013 2012 2013 2012 (Thousand) (Thousand) (Baht per 1 foreign currency unit) US dollar 191 207 437 808 32.7 - 32.9 30.5 - 30.8 Euro - - 460 1,167 44.7 - 45.3 40.3 - 40.9 Danish Krone - - 240 111 6.0 - 6.1 5.4 - 5.5 CHF - - 31 92 36.4 - 37.0 33.3 - 33.9 Singapore dollar - - 7 122 25.6 - 26.1 24.8 - 25.3 Yen - - 35 - 0.3 0.4

Foreign exchange contracts outstanding of the Company and subsidiary are summarised below.

As at 31 December 2013

Foreign currency Bought amount Contractual exchange rate Contractual maturity date (Thousand) (Baht per 1 foreign currency unit)

USD 21 31.5 10 January 2014

As at 31 December 2012

Foreign currency Bought amount Contractual exchange rate Contractual maturity date (Thousand) (Baht per 1 foreign currency unit)

Euro 111 39.9 4 March 2013

34.2 Fair values of financial instruments Since the majority of the financial instruments are short-term in nature or bear floating interest rates, their fair

value is not expected to be materially different from the amounts presented in the statements of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable,

willing parties in an armûs length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

35. Capital management The primary objective of the Companyûs capital management is to ensure that it has an appropriate capital structure in

order to support its business and maximise shareholder rate. As at 31 December 2013, the Groupûs debt-to-equity ratio was 0.50:1 (2012: 0.40:1) and the Companyûs was 0.53:1 (2012: 0.41:1).

36. Subsequent event On 25 February 2014, a meeting of the Companyûs Board of Directors passed a resolution to approve the proposal of a

dividend of Baht 0.55 per share, totaling of Baht 412.5 million, in respect of the 2013 earnings. The Company paid an interim dividend of Baht 0.25 per share in October 2013. The Company will propose the resolutions of the above meeting of the Board of Directors for approval by the Annual General Meeting of the shareholders.

37. Approval of financial statements These financial statements were authorised for issue by the Companyûs Board of Directors on 25 February 2014.