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The company s audit committee has already reviewed the transaction and opined that this transaction is justified and based upon fair prices. 1.2 GLOBAL purchased ready mixed concrete from Inter Concrete. Size of connected transaction: 2007: 0.20 million Baht 2008: 1.46 million Baht 1Q/2009: 0.24 million Baht Necessity / Rationale: This transaction involves purchases of goods under normal wholesale conditions that GLOBAL also receives from other non- related companies and the charging price is the same as the market price. The purchased products are then utilized in renovation, expansion and improvement of the company s building. The company s audit committee has already examined the transaction and concluded that this transaction is reasonable and based on fair prices. 2. Conflicted party: Siam Global Engineering Co., Ltd. ( Global Engineering ) Business description: Provide engineering services relating to transmutation, steel structure installation and building construction Relationship: There are three GLOBAL s directors who are directors and shareholders of Global Engineering, namely Witoon Suriyawanakul, Anawat Suriyawanakul, and Tepakul Poonlarp. Witoon Suriyawanakul is one of authorized directors of Global Engineering. There are another three shareholders of GLOBAL who are also Global Engineering shareholders, namely Warunee Suriyawanakul, Nipapan Suriyawanakul and Wiroonsak Poonlarp. GLOBAL s shareholders have in total 96.69% shares in Global Engineering. Description of connected transactions: 2.1 GLOBAL sold steel and hardware tools for construction and factory operation to Global Engineering. Size of connected transaction: 2007: 70.22 million Baht 2008: 5.76 million Baht 1Q/2009: 0.02 million Baht As at 31 March 2009, accounts receivable were equivalent to 18.70 million Baht. Necessity / Rationale: This transaction is related to sales of goods which conditions are comparable to when GLOBAL sells products to other non-related companies. This is relatively similar to when retail stores (i.e. mom and pop stores) purchase and then resell goods to end users. By incorporating purchase orders from both GLOBAL and Global Engineering, mass purchases lead to higher discounts from suppliers. Both companies therefore benefit in terms of better gross profit margin. The company s audit committee has already reviewed the transaction and opined that this transaction is justified and based on fair prices. However, Global Engineering has planned to directly purchase goods from suppliers. Thus, there may be no connected transaction occurred in the future. With regards to accounts receivable amounted 18.70 million Baht, Global Engineering has already paid back on 12 June 2009. 2.2 GLOBAL purchased some goods and equipment from Global Engineering. Size of connected transaction: 2008: 19.54 million Baht 1Q/2009: 9.02 million Baht Necessity / Rationale: This transaction involves hiring Global Engineering for producing cranes and some shop shelves for GLOBAL s Chonburi Branch, which Global Engineering has expertise in manufacturing of this kind of products. The company also employs Global Engineering to build a billboard for Nakorn Pathom Branch, and crane as well as shelves that had been damaged for Chiang Mai Brach. The contract price is comparable to other non-related companies and based on the market price. The company s audit committee has already reviewed the transaction and opined that this transaction is justified and based upon fair prices. As at 31 March 2009, there was no accrued expense regarding this kind of transaction. 2.3 GLOBAL lent short-term loans to Global Engineering for enhancing flexibility in its operation. Size of connected transaction: 2007: 18.12 million Baht 2008: no transaction occurred GLOBAL received interest income from Global Engineering equivalent to 2.67 million Baht in 2007 and 0.20 million Baht in 2008. Necessity / Rationale: GLOBAL lent loans to Global Engineering for enhancing its operational efficiency, which in fact Global Engineering has not been granted any credit line from banks. GLOBAL charges interest rate equivalent to MLR plus 1%, whereas the company has current obligated interest rate at MLR from its financial institutions. On 27 June 2008, Global Engineering eventually repaid the entire debt to GLOBAL. It is anticipated that there will be no similar transaction in the future as Global Engineering has already processed through financial restructuring and directly requested for credit loans from banks. Accordingly Global Engineering will not demand for GLOBAL s financial supports in the future. 2.4 GLOBAL signed an agreement as a guarantor of Global Engineering for its financial obligation with a commercial bank. Size of connected transaction: totaling 273.00 million Baht Necessity / Rationale: GLOBAL has already been received the guarantee termination notification from the commercial bank, which was amounted 273.00 million Baht and acceded on 31 March 2008. The company s audit committee has already reviewed the transaction and concluded that this transaction is reasonable. 2.5 GLOBAL has extended the repayment period of Global Engineering from 30 days to 90 days. The company had a resolution in the audit committee meeting (2/2008) and the board of directors meeting (3/2008) on 27 May 2008 by acknowledging and unanimously approving the extension of debt repayment period for Global Engineering. As Global Engineering operates as a contractor, it normally has a long collection period dependent on installment and/or percentage of completion. GLOBAL s management has reviewed and opined that Global Engineering is an on-the-track customer. Therefore, the management approved the repayment period extension to 90 days. 3. Conflicted party: House and Home Co., Ltd. ( House & Home ) Business description: Operate as a retailer of construction material and household decorative products in Phuket Relationship: In the past, there was one GLOBAL s director who was also the director and shareholder of House & Home, namely Witoon Suriyawanakul, representing 20% shares of House & Home s capital. He was one of authorized directors of House & Home. (Nevertheless, Witoon has already resigned from the director position and sold his entire stake in House & Home to other existing shareholders.) Description of connected transactions: 3.1 GLOBAL sold products relating to sanitary ware, aluminum, and hardware and household tools and equipment to House & Home. Size of connected transaction: 2007: 2.36 million Baht 2008: 0.63 million Baht 1Q/2009: no transaction occurred Necessity / Rationale: This transaction is related to sales of goods which conditions are the same as terms when dealing with non-related companies, which is quite similar to operations of retail shops that purchase and resell products to end users. The company s audit committee has already reviewed the transaction and concluded that this transaction is reasonable and based on fair prices. 3.2 GLOBAL bought pine doors, teak doors, PVC doors, double sinks, single sinks and doorknobs from House & Home. Size of connected transaction: 2007: 1.06 million Baht 2008: no transaction occurred Necessity / Rationale: This transaction is related to sales of goods under wholesale terms and conditions which are comparable to other non-related companies as well as determined according to the market price. The company s audit committee has already reviewed the transaction and concluded that this transaction is reasonable and based on fair prices. 4. Conflicted party: A body of persons Petch Num Nueng by Warunee Suriyawanakul Relationship: A body of persons Petch Num Nueng is controlled by the group of Warunee Suriyawanakul who is the shareholder, director and management of GLOBAL. Description of connected transactions: GLOBAL has rented land with title deed no. 23237 and area of 0- 2-96 rai, locating on Sai 3 Putthamonthon Road, Taweewattana, Talingchun, Bangkok. The company utilizes this land for daily goods transferring and distribution with monthly rental fee of 20,000 Baht. Size of connected transaction: 2007: 0.12 million Baht 2008: 0.24 million Baht 1Q/2009: 0.06 million Baht Necessity / Rationale: This transaction involves renting vacant land which GLOBAL has to improve the landscape before renting and utilizing the land. The company uses this land as a site for transferring goods from suppliers to its various stores on daily basis. The rental fee is based on similar ones in nearby area. The company s audit committee has already reviewed the transaction and concluded that this transaction is reasonable and based on fair prices, compared to renting vacant land in nearby area. 5. Conflicted parties: Mr. Witoon Suriyawanakul, Mrs. Warunee Suriyawanakul, Mr. Anawat Suriyawanakul, Mr. Tepakul Poonlarp, and Mr. Wiroonsak Poonlarp Relationship: Mr. Witoon Suriyawanakul, Mrs. Warunee Suriyawanakul, Mr. Anawat Suriyawanakul, Mr. Tepakul Poonlarp, and Mr. Wiroonsak Poonlarp are GLOBAL s directors Description of connected transactions: The aforementioned directors have placed personal guarantee for the company s credit line in business operations. Major credit lines cover long-term credit, OD credit line, short-term credit line, and L/C T/R credit line with financial institutions. The guarantee has been conducted according to financial institutions demand. Nevertheless, GLOBAL paid no charge for such guarantee to the directors. In fact, after the company has completed its listing process on SET, these directors plan to terminate their personal guarantee obligation with such financial institutions. Size of connected transaction: As at 31 March 2009: total highest credit line 2,560.85 million Baht Necessity / Rationale: GLOBAL has borrowed money from financial institutions for its business operation. The company s audit committee has already reviewed the transaction and opined that the transaction made is necessary with regards to borrowing funds from financial institutions, contributing to benefits of the company s operation. 6. Conflicted parties: Mr. Witoon Suriyawanakul Relationship: Mr. Witoon Suriyawanakul is the director and major shareholder of GLOBAL Description of connected transactions: GLOBAL borrowed short-term loan from Mr. Witoon to partially finance the purchase of one land plot Size of connected transaction: 1Q/2009: 5.30 million Baht Necessity / Rationale: This transaction is based on the benefits of GLOBAL s operations in order to acquire one new land plot. On 20 April 2009, the company repaid the entire amount of debt to Mr. Witoon. 7. Conflicted parties: Mr. Witoon Suriyawanakul, Mrs. Warunee Suriyawanakul and Mr. Anawat Suriyawanakul Relationship: Mr. Witoon Suriyawanakul, Mrs. Warunee Suriyawanakul and Mr. Anawat Suriyawanakul are directors and management of GLOBAL Description of connected transactions: These three directors have used their personal assets as pledge for GLOBAL at a financial institution, for examples, deeds with building attached which are their individual demesne. The directors do not charge any fee or expense to GLOBAL. Size of connected transaction: As at 31 March 2009: mortgage value 132.00 million Baht Necessity / Rationale: The transaction is conducted for the benefits of GLOBAL in operating its business. The company s audit committee has already reviewed the transaction and concluded that the transaction made is justified and contributes to benefits of the company s operation. 8. Conflicted party: Global Concrete Co., Ltd. ( Global Concrete ) Business description: Manufacture and distribute concrete block. However, the company has already ceded its operation. Relationship: Anawat Suriyawanakul, GLOBAL s director, is the director and shareholder of Global Concrete. Furthermore, there are another five persons who are also shareholders of Global Concrete, namely Witoon Suriyawanakul, Warunee Suriyawanakul, Tepakul Poonlarp, Wiroonsak Poonlarp, and Nipapan Suriyawanakul. GLOBAL s shareholders totally account for 45% stake in Global Concrete s capital. Description of connected transactions: Global Concrete has used its corporate assets as pledge for supporting GLOBAL s operation with a financial institution, for instances, title deed no. 111405-6 totaling two plots at Khon Kaen, which are the corporate individual demesne. Global Concrete does not charge any fee or expense to GLOBAL. Size of connected transaction: As at 31 March 2009: mortgage value 6.00 million Baht Necessity / Rationale: The transaction is conducted for the benefits of GLOBAL in its business operation. The company s audit committee has already reviewed the transaction and concluded that the transaction made is reasonable and benefits the company s operation. Contingencies and Obligations : As at 31 March 2009, GLOBAL had obligations according to letter (more)