NATURE OF BUSINESS

Dynasty Ceramic Public Company Limited was formerly known as Royal Floor Tiles Co., Ltd. Its primary business is the manfacture and distribution of ceramic tiles. The Company was founded on 1 August 1989, listed on the Stock Exchange of Thailand on 3 January 1992, and registered as a Public Company on 9 March 1994. The registered capital was increased to 280 million Baht, with capital paid-up at a par value of 10 Baht per share, equivalent to a value of 272 million Baht in January 1995.

In 1997, the economic crisis struck and was followed by the Government's devaluation of the Baht currency. The impact on the construction materials business was severe, including the ceramic tile segment. The major shareholder in the Company, which was a financial institution, announced the diverstiture of its ordinary shareholdings representing 14.9million shares, or a 54.82 percent equity stake of paid-up capital. The successful bidders for this lot were a shareholder and Director group from Tile Top Industry Public Co., Ltd., which was likewise a producer of ceramic tiles with a factory located in the same vicinity as Dynasty's factory. The management of Tile Top was assigned the responsibility of administrating Dynasty and its first task was to cease the factory's activities in the first quater of 1998, in order to overhaul production machinery for greater efficiency. The team also undertook the development of new products with improved quality and attractive packaging, while simultaneously adjusting the marketing policy to emphasize better production distribution to consumers.

Towards the end of 2000, the Company increased its registered capital to 480 million Baht, comprising 40.8 million shares with a par value of 10 Baht per share. The funds were to be utilized for the expansion of production capacity through the purchase of the entire ordinary shareholding in Tile Top Industry PCL from the original shareholders. The Company is currently therefore the major shareholder in Tile Top Industry Public Co., Ltd. With an equity stake of 96.83 percent. The par value now split at 1 Baht per share for 408 million shares, of which 91.65 percent is held by Thai nationals and 8.35 percent is held by foreign nationals (as of the close of the share registrar on 28 February 2005).

In relation to marketing activities, the Company purchases the entire production output of Tile Top Industry Public Co., Ltd. for sold distribution, in order to economize on marketing and transportation costs. The Company also purchases sanitary ware and other related products, staircase components and glue sealants for sale, thereby boosting its sales volume. The Company's operating performance has since consistently improved.

The Company and its subsidiary embarked on a project of ongoing production capacity expansion from 2002 untill 2004. The combined production capacity of both firms therefore increased from 1.9 million square meters per month to 3.3 million square meters per month, or expansion of 74 percent. The Company's revenues over the past 3 years period have thus grown impressively and it currently maintains the leading market share of ceramic tile products in Thailand.

Dynasty Ceramic Pubic Company Limited's main business is the production and distribution of ceramic tiles, including the purchase of the entire output of ceramic floor, wall and decorative tiles from Tile Top Industry Public Company Limited, which is the sole subsidiary of the Company. The purchase is made at wholesale price and is distributed to the factory outlets, which currently number approximately 140 branches, together with a domestic network of distributors numbering approximately 120 agents. The range of tiles produced by the Company and its subsidiary are:

1. Floor and wall ceramic tiles under the "Dynasty" trademark.
2. Floor and wall ceramic tiles under the "Tile Top" trademark.
3. Decorative ceramic tiles under the "Tile Top" trademark.
4. Floor ceramic tiles under the "Tomahawk" trademark.
5. Floor ceramic tiles under the "Jaguar" trademark.
6. Floor ceramic tiles under the "Navar" trademark.

In addition, Dynasty Ceramic imports polish porcelain tiles from China for sale, as well as sanitary ware and other related products such as gule sealant for sale under the "Top stick" trademark. The Company purchases the latter product from the Siam Standard Products Co., Ltd. which is produced according to its size and volume requirements.