Quality Houses Public Company Limited : Connected transaction of taking employment in managing "Mandarin Hotel"

(Translation)

Ref No. Bor.Chor.Ngor. 0441/2013
September 24, 2013
Subject: Connected transaction of taking employment in managing "Mandarin Hotel"
Attn: The President
The Stock Exchange of Thailand.
Enclosure: Information on connected transaction of Quality Houses Public Company Limited
The resolution of the Board of Directors Meeting No. 6/2013 of Quality Houses Public Company Limited ("the Company"), held on September 24, 2013, 4.00 p.m., at the conference room, 7th floor of Q.House Lumpini Building, 1 South Sathorn Road, Tungmahamaek, Sathorn, Bangkok, has resolved to approve the Company and/or its subsidiary company to take employment in managing "Mandarin Hotel" for Mandarin Hotel Public Company Limited. The Company or Subsidiary shall take employment in managing hotel for 2-year contract with option to renew 2-year contract in each renewal or other period specified by the parties. The Company or Subsidiary shall receive remunerations from Annual Management Fee, Incentive Management Fee depending on total revenues and net operating profit in the total amount of Baht 20 Million throughout 2-year contract. The Board of Directors have appointed the Chief Executive Officer or the Senior Executive Vice President to be authorized person to negotiate, accept and sign in agreement(s) and other related document(s) and to negotiate for determinate remuneration in managing the Project and other related details as appropriated.
This transaction is classified as connected transaction, details as follows;
1) MS. Piengchai Harnpanich and the connected persons are the major shareholders of the Mandarin Hotel Public Company Limited in 49.78%, and MS. Piengchai Harnpanich is the President of Board of Directors, the President of Executives and the Managing Director of the Mandarin Hotel Public Company Limited,
2) MS. Piengchai Harnpanich is a mother of Mr. Anant Asavabhokhin, who is a director of Quality Houses
Public Company Limited.
The connected transaction is an ordinary and usual of business transaction without a reference market price, pursuant to the announcement of the Stock Exchange of Thailand regarding Disclosure of Information and Procedures of Listed Companies on Connected Transaction B.E. 2546(2003). The calculated size of this transaction would represent a value of 0.12% of net tangible assets of the Company as of June, 30 2013. It is greater than 0.03 % but lower than 3% of the Company's net tangible assets as of June 30, 2013. Therefore, the approval from the Board of Directors of the Company is required and the arrangement of report and disclosure of this transaction to the Stock Exchange of Thailand have to be done.
The Director of the Company, who does not attend the Meeting and has no voting rights regarding this agenda, is
Mr.Anant Asavabhokhin.
Please be informed accordingly, Yours faithfully,

Mrs.Suwanna Buddhaprasart (Mrs.Suwanna Buddhaprasart) Senior Executive Vice President

Financial and Accounting Department
Tel. [phone]
Fax. [phone]

Information of the Connected Transactions of the Quality Houses Public Company Limited

Referring to the sixth meeting of the Board of Directors of the Quality Houses Public Company Limited ("the Company"), which was held on 24th September B.E. 2556 (2013), the Board of Directors approved the Company or its subsidiary company ("Subsidiary") to take employment in managing Mandarin Hotel ("Hotel") for Mandarin Hotel Public Company Limited which is classified as connected transaction, details as follows;

Date of Transaction	:	The Board of Directors will determine the date for transaction after the date that this transaction is approved by this resolution of the Board of Directors.
The Connected Parties	:	Employee is Quality Houses Public Company Limited ("the Company") or its subsidiary company ("Subsidiary"). Employer is Mandarin Hotel Public Company Limited (The Connected Company).
Characteristics of Transaction	:	The Company or Subsidiary will be employed to manage the Hotel for two years and will be able to extend the contract every two year or the pursuit of the mutual agreement made by concerned parties. The Company or Subsidiary will receive the remuneration from the transaction from total revenues and net operating profit from the Hotel transaction for two years, approximately Baht 20 Million. The Board of Directors have appointed the Chief Executive Officer or the Senior Executive Vice President, as a person who has authority to negotiate and sign the contract and other related documents and negotiate for determining remunerations in managing the Hotel transaction and other related details as appropriated.
Detail of assets involved	:	The detailed information of Mandarin Hotel is : - The Hotel Owner is the Mandarin Hotel Public Company Limited - Hotel building - Two reinforce concrete buildings The M building has 7 floors and the P building has 14 floors.

- Located on the title deed number 1912 and 1908 with the area of 4 rai and 80 square wah and the address is 662 Rama IV, Mahaprutharam, Bangrak, Bangkok - 399 rooms for accommodation - 200 parking lots - Total area is 37,062.4 square metres comprising of (1) 10,652.6 square metres for the area of accommodation (2) 2,222.1 square metres for the area of meeting rooms and banquet (3) 16,292.7 square metres for the area of public utility and mechanical & electrical system (4) 7,895.0 square metres for the parking lots
Total Value of consideration	:	Annual Management Fee, Incentive Management Fee based on total revenues and net operating profit throughout 2-year contract around Baht 20.0 Million, details as follows; A) Annual Management Fee equivalent to 2 % of total revenues which is not included some kinds of revenues as indicated in the contract of the Hotel transaction B) Incentive Management Fee equivalent to 4 % of net operating profit before Annual Management Fee, depreciation, land lease, interest expenses and others specified in the Management Agreement. Forecast of revenues and net profit of the Company or Subsidiary shall receive from operating before Annual Management Fee , depreciation , land lease, interest expenses and others can be summarized as follows ; (Unit: Million Baht) Year(B.E.) 2556 2557 2558 (Oct. - Dec.) (Jan. - Sept.) Total Revenues 68 270 216 Net operating profit * 26 102 84 Note: *The operating profit before Annual Management Fee, depreciation, land lease and interest expenses.
Criterion to Determine the Value of remuneration	:	The Company and Subsidiary determine remunerations based on the same basis as the Company and Subsidiary enter into the contract

with the same type of project of others. This rate is in the same range of the remunerations paid by other operators in the same business.
Relationship between the connected parties	:	1) MS. Piengchai Harnpanich and the connected persons are the major shareholders of the Mandarin Hotel Public Company Limited in 49.78%, and MS. Piengchai Harnpanich is the President of Board of directors, the President of Executives and the Managing Director of the Mandarin Hotel Public Company Limited, 2) MS. Piengchai Harnpanich is a mother of Mr. Anant Asavabhokhin, who is a director of Quality Houses Public Company Limited.
Type and scope of interest of the connected parties	:	The Company or Subsidiary take employment in managing hotel and shall receive Annual Management Fee and Incentive Management Fee in the total amount of Baht 20 Million throughout 2-year contract.
The Board of Directors' opinion	:	The Board of Directors have considered that the said connected transactions is reasonable and make it useful for hotel and residential project for rent of the Company or Subsidiary which is the Company or Subsidiary normal business operating activities. The Company or Subsidiary shall receive management fee from managing the Project together with impact to our prospective customers to be more familiarized to the "Centre Point Hotel" brand. In this case, there is a director, who has interests and did not attend the meeting and has no voting right in the meeting, which is Mr. Anant Asavabhokhin.
Opinions of Audit Committee which differ from the Board of Directors' opinions	:	There is no opinions of the Audit Committee which differ from those of the Board of Directors.
Type of Transaction	:	The connected transaction is an ordinary and usual of business transaction without a referential market price, according to the announcement of the Stock Exchange of Thailand regarding

Disclosure of Information and Procedures of Listed Companies on Connected Transaction B.E. 2546 (2003), which the calculated size of this transaction would represent a value of 0.12% of net tangible assets of the Company as of June, 30 2013. It is greater than 0.03 % but lower than 3% of the Company's net tangible assets as of June

30, 2013. Therefore, the approval from the Board of Directors of the Company is required and the arrangement of report and disclosure of this transaction to the Stock Exchange of Thailand have to be done.