Message from the Chairman

Dear Shareholders,

In the past year 2023, I regret to inform that our company has suffered a continuous loss of 306 million baht, which is a loss of 161 million baht from the real estate business and 145 million baht from the hotel business. This is partly due to the economic conditions of Thailand and the world, which are still fragile, declining or growing gradually. The Thai economy this year expanded only 1.9%, lower than the expected 3.4% and decreasing from the 2.6% expansion in 2022, resulting in negative factors for various real estate sectors, including decreased purchasing power. Interest rates are rising. Household debt is above 90% of GDP. It clearly makes lending tighter and more difficult. Production costs are more expensive while purchasing power has not yet recovered.

The Company’s operating results in 2023 had total income of 2,251 million baht, an increase of approximately 75 million baht from the previous year. This is income from real estate sales of 794 million baht per year, a decrease of 356 million baht. The income from hotel operations is 947 million baht, an increase of 275 million baht from the previous year. The company has total assets of 12,820 million baht, an increase of 1,667. Million baht from 2022

Income from real estate sales mainly comes from project sales, Baan Rama IX 210 million baht, the Issara Chiang Mai 167 million baht, Thew Talay Group 124 million baht, The Issara Sathorn 139 million baht, and Sasara Hua Hin 76 million baht. The transfer of these two projects was later than scheduled. The transfer began at the end of last year. Therefore, there are remaining sales awaiting transfer at the beginning of 2024 in the amount of 450 million baht and 860 million baht, respectively. The project that is selling very slowly is the Baan Issara Bangna project. In 2023, our company invested in construction of several houses and completed them. But we are still unable to sell as targeted. As for the various projects at Thew Talay Estate Cha-Am, sales have slowed down significantly because the number of people traveling to Cha-Am and Hua Hin has decreased significantly.

In Hotel business, more tourists are starting to travel to Phuket. Even though the number is still not the same as before Covid. The operating results of Sri Panwa Hotel improved sequentially, but the operations of Baba Beach Club Natai Phang Nga and Habita Sea View Hua Hin were still at a loss. However, both hotels and Sri Panwa Yaya - Convention Hall are assets. The total value of over 3,000 million baht that the company will be able to sell at the appropriate time. As for negotiating to reduce the rent during the period when the hotel had to close due to the COVID crisis with Assets of the Sri panwa Hotel Real Estate Investment Trust (REIT). The trust that owns three parts of the Sri Panwa Hotel assets, namely SPM 1, SPM 2, and SPM 3, which is a very detailed and complicated matter. It took us three years to negotiate.

Therefore, we received a partial rent reduction for SPM 1 and SPM 3. As for SPM 2, the lease agreement has ended. Negotiations are close to being concluded by calling an extraordinary meeting of unitholders in March 2024, where there will be no rent reduction. However, installment payments can be agreed upon by the unit holder giving authority to the Trustee to negotiate for a better return. On the day of the meeting, unitholders voted unanimously to renew the lease agreement with the existing tenant instead of opening the general auction again.

In 2023, the company also purchased three more plots of land. One plot in Bangkok, to develop the Baan Issara Rama 9 Wongwaen project, worth 798 million baht, which is a location that the company has seen as having potential. One plot in Hua Hin, to develop the Sasa project worth 248 million baht, with a press release announcing the launch at the end of last year. It is a seven-story vacation condominium next to a golf course and close to the sea, 248 units, and another plot in Phuket for the Sri Panwa Laguna project worth 677 million baht. We have also launched the Sky Series, four five-bedroom luxury pool villas in the plot. The last project of Sri Panwa is in Phuket to support the foreign market that has come to buy houses in Phuket in large numbers in the past year

Investment in this new plot of land, the interest rate is very high. Interest is recognized as an expense rather than a project cost when it is in the construction phase and carrying out various construction projects to complete. These are all common causes that cause the company to suffer a loss from operations in 2023.

Despite continuous losses, if our money is invested in the assets or projects of the company which intends to create only valuable things to offer to customers. Even though some projects are selling slowly, we hope to sell it when factors favor the growth of the real estate market and in conditions where negative factors have a greater impact. The company is not complacent in developing, improving and being thorough in every aspect.

I pray that 2024 will be better than 2023. The economy and politics of Thailand and other countries in the world are stability and peace. I wish everyone would have a great business, purchasing power returned. Everyone can travel and relax happily. I would like to thank all shareholders and apologize.

Sriwara Issara
Chairman of the Board