East Coast Furnitech Public : The Disclosure of Asset Acquisition of a New Warehouse and the Connected Transaction about Land Lease

- Translation -

No. ECF2 018/2022

	August, 11 2022
Subject	: The Disclosure of Asset Acquisition of a New Warehouse and the Connected Transaction about
	Land Lease
To	President
	The Stock Exchange of Thailand

In accordance with, East Coast Furnitech Public Company Limited ("the Company") held the Board of Directors meeting No.6/2022 on Thursday, August 11, 2022, the Meeting has passed the significant resolution regarding the asset acquisition of a new warehouse and the connected transaction about land lease by approving of the Company to enter into the land lease agreement with Mr.Wanlop Suksawad as the Director and Chairman of the Executive Committee, who is the connected person. The lease term is 20 years (including the construction period) and will commence the land lease agreement after the date of receiving the approval from the Board of Directors in the total value of not exceeding Baht 3,200,000 (Three million two hundred thousand) with the objective to be used as the land for a new warehouse. The details of the asset acquisition of a new warehouse and the connected transaction about the land lease are as follows;

1. Transaction of Asset Acquisition: A New Warehouse

The Company will construct a new warehouse under the construction budget in the total value of Baht 46,700,000.00 (Forty-six million and seven hundred thousand) which the size of the transaction does not fall under the criterion which is required to comply with Notification of the Capital Market Supervisory Board No. TorJor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, B.E. 2547 (2004).

If considering the sizes of transactions, the highest transaction value equals 1.11 percent based on a total value of the consideration paid basis and the total value of consideration equals Baht 46,700,000.00 (Forty-six million and seven hundred thousand), calculated from the reviewed consolidated financial statements of the Company for the latest six-month period ended 30 June 2022. In addition, the Company has not had any asset acquisition transaction occurring over the past six months prior to the date on which the Board of Directors' Meeting.

2. Connected Transaction: Land Lease

The above land lease transaction is considered a connected transaction according to the Notification of the Board of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of

Listed Companies Concerning Connected Transactions, B.E. 2546: Type of connected transactions relating to real estate lease. The details of the information are as follows;

1.	Transaction Date	Expected to finish the transaction by August, 31 2022
2.	Relating Parties	Tenant	:	East Coast Furnitech Public Company Limited
		Lessor	:	Mr.Wanlop Suksawad, as the Director and Chairman of the
					Executive Committee, who is the connected person
3.	Nature of Transaction	The Company will lease some parts of land title deeds located at
		Tambon Thang Kwian, Klaeng District, Rayong Province, totaling 5
		plots and the area of approximately 2 rai 1 ngan, 90 square wa (or a
		total of 990 square wa), which is owned by the lessor so that the land
		will be used in the construction of the Company's new warehouse.
		The lease term is 20 years (including the construction period) from
		the date of signing the land lease agreement unless this contract is
		terminated before the expiration of the said lease term. The total rental
		value does not exceed Baht 3,200,000 (Three million two hundred
		thousand), according to the details of the monthly rental rates in the
		following table.
					Lease Period	Monthly Rental Rates (Baht)
					Year 1	- 3	9,900.00
					Year 4	- 6	10,890.00
					Year 7	- 9	11,979.00
					Year 10	- 12	13,176.90
					Year 13	- 15	14,494.59
					Year 16	- 18	15,944.05
					Year 19	- 20	17,538.45
		During the 6 (Six) months before the maturity date of the lease
		term, the Company is entitled to request the tenure to extend the lease
		term or to engage in the new land lease agreement. In this regard, the
		terms and conditions of the extended term or the new land lease
		agreement will be in line with the agreement of both parties.
		Moreover, the reason to determine the lease term of 20 years
		comes from it is a suitable period when considering the cost of
		construction and comparing it to the necessity of usage of the
		Company.

					If the Company considers that the warehouse is suitable to be
					used and accommodated for the business extension in the future, the
					Company will be entitled to extend the land lease agreement according
					to the term deemed appropriate at that time.
4.	Total Value	and	the	The total value of the land lease agreement for 20 years (including
	Criteria used to Determine	the construction period) does not exceed Baht 3,200,000 (Three million
	the Transaction Value		two hundred thousand)
					The criteria used to determine the value of the transaction or rental
					expense is referenced from the appraisal reports regarding the rental
					expenses from two independent appraisers namely, General Valuation
					and Consultant Co., Ltd. dated July 7, 2022, and the other appraiser is
					Prefer Appraisal Co., Ltd. dated June 27, 2022., then the Company
					choose the valuation report given the lower rental expense.
5.	Attendance and Voting at	The director, who is the connected person or has a conflict of
	the Meeting			interest under Clause 2., did not attend the Board of Directors' Meeting
					and did not vote on the said agenda as well.
6.	Nature	and	Scope	of	Such connected transaction has a total value of not exceeding
	Conflict of Interest of the	Bath 3,200,000 (Three million two hundred thousand), which falls in the
	Connected	Person	in	middle size of transaction that is more than Bath 1,000,000 but not
	Entering		into	the	more than 3 percent of the Company's net tangible assets according to
	Transaction			the financial statements as of June 30, 2022, which has a value of
					Baht 39.83 million.
					Therefore, it is considered a connected transaction under the
					Notification of the Stock Exchange of Thailand; Subject: The Disclosure
					of Information and Practice of Listed Companies Concerning the
					Connected Transaction Type of Transactions relating to real estate
					lease, the Company must request the Board of Directors to approve
					such connected transaction and disclose the information to the Stock
					Exchange of Thailand.
7.	Opinion	of the Board	of	The Board of Directors has considered and deemed that entering
	Directors	Relating to	the	into the land lease agreement is reasonable and beneficial to the
	Transaction			Company because at present the Company has the growth of the
					manufacturing and distributing furniture which needs to procure the area
					for keeping more stock and that land is in the nearby area with the
					factory of the Company so that it will accommodate the usage, time-
					saving and transportation cost saving.
					In addition, the counterparty has determined the lease term and
					rental rate that are evident, and that rate is not higher than the rate

					that the independent appraisers have valued it. However, the rental
					rate will be increased every 3 years at the rate of 10 percent which is
					in line with normal practice of land lease agreement.
					Therefore, entering into the transaction is beneficial, reasonable,
					and fair pricing to the Company, and passed the consideration of the
					Audit Committee. Then, the Board of Directors approved such
					transaction, without the director who has a conflict of interest attending
					and voting on this agenda.
8.	Opinion	of	the	Audit	-None-
	Committee	and/or	any
	Director		which	are
	different	from the opinion
	of the Board of Directors
	under Clause 7
	Please be informed accordingly,
					Yours sincerely,
					East Coast Furnitech Public Company Limited
					-Signature-
					(Mr.Arak Suksawad)
					Managing Director