12 Financial Position and Operating Results

12.1 Summary of Financial Position and Operating Results for the past 3
years

12.1.1 Summary of auditors findings and significant accounting policies.

The name of Company’s and its subsidiaries’ Auditor for the 2003
Financial Statements is Sophon Permsirivallop, Certified Public
Accountant (Thailand) No. 3182 of Ernst & Young Office Limited.

Conclusion of the Auditors Report

For the year ended 31 December 2003

In summary, a clean audit report was issued.

  Reference was made to two subsidiary companies included in
  consolidated financial statements, Laguna Beach Club Limited and
  Laguna (1) Co., Ltd. that were audited by another auditor for the year
  ended 31 December 2003. The company’s financial statements included
  investments in these subsidiaries as at 31 December 2003 of Baht 402
  million, accounted for under the equity method, and the share of
  profit from these subsidiaries for the year then ended amounted to
  Baht 39 million.

  The financial statements were audited in accordance with generally
  accepted auditing standards which included such tests of the
  accounting records and such other auditing procedures as considered
  necessary in the circumstances.

  The auditors issued a clean audit opinion on the financial statements
  for the year ended 31 December 2003 and stated that the financial
  statements presented fairly the financial position of the company in
  conformity with generally accepted accounting principles.

For the year ended 31 December 2002

In summary, a clean audit report was issued.

  Reference was made to two subsidiary companies included in
  consolidated financial statements, Laguna Beach Club Limited and
  Laguna (1) Co., Ltd. that were audited by another auditor for the year
  ended 31 December 2002. The company’s financial statements included
  investments in these subsidiaries as at 31 December 2002 of Baht 292
  million, accounted for under the equity method, and the share of
  profit from these subsidiaries for the year then ended amounted to
  Baht 48 million.

  The financial statements were audited in accordance with generally
  accepted auditing standards which included such tests of the
  accounting records and such other auditing procedures as considered
  necessary in the circumstances.

  The auditors issued a clean audit opinion on the financial statements
  for the year ended 31 December 2002 and stated that the financial
  statements presented fairly the financial position of the company in
  conformity with generally accepted accounting principles.

For the year ended 31 December 2001

In summary, a clean audit report was issued.

  Reference was made to two subsidiary companies included in
  consolidated financial statements, Laguna Beach Club Limited and
  Laguna (1) Co., Ltd. that were audited by another auditor for the year
  ended 31 December 2001. The company’s financial statements included
  investments in these subsidiaries as at 31 December 2001 of Baht 251
  million, accounted for under the equity method, and the share of
  profit from these subsidiaries for the year then ended amounted to
  Baht 53 million.

  The financial statements were audited in accordance with generally
  accepted auditing standards which included such tests of the
  accounting records and such other auditing procedures as considered
  necessary in the circumstances.

  The auditors issued a clean audit opinion on the financial statements
  for the year ended 31 December 2001 and stated that the financial
  statements presented fairly the financial position of the company in
  conformity with generally accepted accounting principles.

Accounting policies

The financial statements have been prepared in accordance with
accounting standards pronounced by the Institute of Certified
Accountants and Auditors of Thailand and with the Accounting Act B.E.
2543.

There have been no material changes in accounting policies in 2003 and
the significant accounting policies adopted by the Company and its
subsidiaries are summarized below :-

    Revenue recognition

  (a) Revenue from hotel and restaurant operations

  Revenue from hotel and restaurant operations mainly comprises room
  sales, food and beverage sales and revenues from auxiliary activities,
  and represents the invoiced value (excluding value added tax) of goods
  supplied and services rendered after deducting discounts and adding
  service charges.

  (b) Revenue from sales of property under development

  Revenues from property development operations are recognised when a
  legally binding contract is signed and by applying the percentage of
  completion method. The percentage of completion is arrived at based on
  actual costs incurred as compared to the total anticipated
  construction costs, excluding cost of land, and estimations performed
  by independent engineers. The subsidiaries recognise income when the
  initial payment and installments received are at least twenty percent
  of the contract price and the construction work is at least ten
  percent completed. Revenue recognition is discontinued when there are
  three consecutive installments overdue.

  (c) Revenue from sales of furniture in condominium units

  Revenue from sales of furniture in condominium units is recognised
  when furniture is completely installed according to the customers’
  specifications.

  (d) Sale of right to use of condominium units (time-share business)

  Revenue from sales of right to use of condominium units under
  time-share membership is recognised as income when a legally binding
  contract has been signed and the initial payment and installments
  received amount to at least twenty – five percent of the contract
  price.

    Cash & cash equivalents

    Cash & cash equivalents include cash on hand, cash at banks and
    deposits with financial institutions with an original maturity of 3
    months or less and without restrictions.

    Trade accounts receivable and allowance for doubtful accounts

Trade accounts receivable are stated at net realisable value. Allowance
for doubtful accounts is provided for the estimated collection losses
that may be incurred in the collection of receivables. The allowance is
based on collection experience and current status of receivables
outstanding at the balance sheet date.

    Property development cost

Property development cost is stated at the lower of cost and net
realisable value. Cost comprises cost of land, design fee,
infrastructure, construction and related interest.

In determining the cost of sales of the time-share business, the cost of
each condominium unit is divided equally by the number weeks in a year
and then the cost of each week sold is recognized in the earnings
statement on the first-in, first-out basis.

    Inventories

Inventories are valued at the lower of cost and net realisable value,
cost being determined on either the first-in, first-out or the weighted
average basis.

    Investments

Investments in subsidiaries (in the financial statements of the Company)
and associated companies are stated under the equity method of
accounting. Under this method, the investment is recorded at cost. For
each subsequent year the investment is adjusted to incorporate the
Company's proportionate share of the operating results in the
subsidiaries and associated companies. Losses over the cost of
investment are presented as a liability under the caption of "Provision
for loss on investment in subsidiaries and associated companies".

    Other long-term investments

Long-term investments in marketable equity securities, which the Company
and subsidiaries intend to hold as available-for-sale are determined at
fair value (fair value is based on the latest bid prices quoted by the
Stock Exchange of Thailand on the last working day as of the balance
sheet date) and recognise changes in value of investments as a separate
item under shareholders’ equity under the caption of “Unrealised
gain/loss of investment on available-for-sale securities”.

Long-term investments in non-marketable equity securities which the
Company and subsidiaries hold as other investments are carried at cost.

For long-term investments in both marketable and non-marketable equity
or debt securities, a test for impairment is carried out when there is a
factor indicating that such investment might be impaired. Loss on
impairment (if any) is recognised in the earnings statement.

On disposal of an investment, the difference between the net disposal
proceeds and the carrying amount is charged or credited to the earnings
statement.

When disposing of part of a particular investment in debt or equity
securities, the carrying amount of the disposed part is determined as
the weighted average carrying amount of the total holding of the
investment.

    Property, plant and equipment

  (a) Hotel properties

  Hotel properties which consist of land, buildings, fixtures and
  equipment of buildings are stated at cost less accumulated
  depreciation. The Company and subsidiaries initially record land,
  buildings, fixtures and equipment of buildings at cost at the
  acquisition date. Such fixed assets have been subsequently revalued by
  an independent appraiser, to their fair values. As a policy, the
  revaluation will be performed every three years. If within that
  period, there are factors which may cause significant changes in the
  value of assets, the revaluation will be performed in that year.

  (b) Other fixed assets/land awaiting for future development

  Fixed assets other than hotel properties are stated at cost less
  accumulated depreciation, except for land and land awaiting for future
  development which is stated at revaluation made by an independent
  appraiser. As a policy, land revaluation by an independent appraiser
  will be made every three years. If within that period, there are
  factors which may cause significant changes in the value of assets,
  the revaluation will be performed in that year.

The differences arising from revaluation are dealt with in the financial
statements of the Company and subsidiaries as follows:

- When an asset’s carrying amount is increased as a result of the
revaluation of the Company and subsidiaries assets, the increase is
credited directly to equity under the heading of “Revaluation surplus”.
The Company’s proportional interest in the surplus from revaluation of
the fixed assets of the subsidiaries (based on the Company’s equity
holding in the subsidiaries) is also presented under the caption of
“Revaluation surplus” in shareholders’ equity in the balance sheet.
However, a revaluation increase will be recognised as income to the
extent that it reverses a revaluation decrease of the same asset
previously recognised as an expense.

- When an asset’s carrying amount is decreased as a result of the
revaluation of the Company and subsidiaries assets, the decrease is
recognised as an expense in the earnings statement. However, a
revaluation decrease is to be charged directly against the related
“Revaluation surplus ” to the extent that the decrease does not exceed
the amount held in the revaluation surplus in respect of those same
assets. Any excess amount is to be recognised as expense in the earnings
statement.

    Depreciation

Depreciation of plant and equipment is calculated by reference to its
cost or reappraised value on a straight-line basis over estimated useful
lives as follows:-

  ------------------------------------------------ --------------- -------
  Buildings and improvements                       10 – 50         years

  Operating equipment                              5 – 10          years

  Furniture, fixtures and equipment                5 – 15          years

  Golf course                                      5 – 10          years

  Vehicles                                         5               years
  ------------------------------------------------ --------------- -------

No depreciation has been provided for land.

Depreciation on revalued/devalued assets is calculated on the
straight-line method, based on the revalued amount of the fixed assets
and its remaining useful life. Depreciation is included in determining
earnings.

The amount of the surplus amortised is the difference between
depreciation based on the revalued carrying amount of the asset and
depreciation based on the asset’s original cost. Amortisation is
transferred to the earnings statement.

Intangible assets and amortisation

Intangible assets are stated at cost less accumulated amortisation.
Amortisation of intangible assets are calculated by reference to their
costs on a straight-line basis over the following estimated useful
lives:-

License and computer software 5 – 10 years

Goodwill and negative goodwill

Goodwill is generated as a result of investments in subsidiaries being
made at a cost higher than the subsidiaries’ net book value.

Negative goodwill is generated as a result of investments in
subsidiaries being made at a cost lower than the subsidiaries’ net book
value.

Goodwill and negative goodwill are amotised on a straight-line basis
over 20 years for hotel operation acquisitions, and over 3 years for
other business acquisitions.

Foreign currencies

Foreign currency transactions during the year are translated into Baht
at the rates of exchange ruling on the transaction dates. Monetary
assets and liabilities in foreign currency outstanding on the balance
sheet date are translated into Baht at the rates ruling on the balance
sheet date.

Exchange gains and losses are included in determining earnings.

The financial statements of the subsidiaries and associated companies
incorporated overseas are translated to Thai Baht at the closing
exchange rate for assets and liabilities, and at the average exchange
rate for revenues and expenses. The resulting difference has been shown
under the caption of “Currency translation differences” in the
shareholders’ equity.

Provident Fund

The Company and its subsidiaries and their employees have jointly
established a provident fund as approved by the Ministry of Finance in
accordance with the Provident Fund Act (B.E. 2530). Contributions are
made to the fund by both employees and the Company and its subsidiaries
and will be paid to employees upon termination in accordance with the
rules of the Company and its subsidiaries’ provident fund.

Basic earnings per share

Basic earnings per share is calculated by dividing the net earnings for
the year by the weighted average number of ordinary shares in issue
during the year.

Use of accounting estimates

Preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates for
certain accounting transactions, impacting amounts reported in the
financial statements and notes related thereto. Subsequent actual
results may differ from these estimates.

12.1.2 Summary of financial statements

Consolidated Income Statement

Unit : Baht

+-----------------------------------+---+----------+----------+----------+
|                                   |   | Cons     |          |          |
|                                   |   | olidated |          |          |
+-----------------------------------+---+----------+----------+----------+
|                                   |   | 2003     | 2002     | 2001     |
+-----------------------------------+---+----------+----------+----------+
| REVENUES                          |   |          |          | Restated |
+-----------------------------------+---+----------+----------+----------+
|   Revenue from hotel operations   |   | 2,443    | 2,557    | 2,629    |
|                                   |   | ,245,997 | ,132,070 | ,786,992 |
+-----------------------------------+---+----------+----------+----------+
|   Revenue from property           |   | 366      | 142      | 168      |
|   development operations          |   | ,363,804 | ,085,040 | ,816,906 |
+-----------------------------------+---+----------+----------+----------+
|   Sale of right to use of         |   | 175      | 135      | 143      |
|   condominium units               |   | ,042,576 | ,923,389 | ,240,159 |
+-----------------------------------+---+----------+----------+----------+
|   Interest income                 |   | 10       | 19       | 40       |
|                                   |   | ,470,050 | ,566,400 | ,413,201 |
+-----------------------------------+---+----------+----------+----------+
| Other income                      |   | 37       | 14       | 18       |
|                                   |   | ,418,458 | ,182,465 | ,807,661 |
+-----------------------------------+---+----------+----------+----------+
| Total revenues                    |   | 3,032    | 2,868    | 3,001    |
|                                   |   | ,540,885 | ,889,364 | ,064,919 |
+-----------------------------------+---+----------+----------+----------+
| EXPENSES                          |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Direct hotel operations         |   | 1,742    | 1,769    | 1,710    |
|   expenses                        |   | ,048,923 | ,977,804 | ,655,028 |
+-----------------------------------+---+----------+----------+----------+
|   Direct cost of property         |   | 205      | 94       | 99       |
|   development operations          |   | ,389,463 | ,531,916 | ,585,986 |
+-----------------------------------+---+----------+----------+----------+
|   Direct cost of sale of right to |   | 89       | 87       | 94       |
|   use of condominium units        |   | ,299,245 | ,492,352 | ,931,415 |
+-----------------------------------+---+----------+----------+----------+
|   Selling & administrative        |   | 188      | 163      | 198      |
|   expenses                        |   | ,366,236 | ,301,469 | ,359,056 |
+-----------------------------------+---+----------+----------+----------+
|   Loss on impairment of           |   | -        | 283      | -        |
|   investment in                   |   |          | ,796,722 |          |
|   available-for-sale securities   |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Provision for diminution in     |   | -        | -        | 40       |
|   value of other long-term        |   |          |          | ,590,246 |
|   investment                      |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Directors’ remuneration         |   | 6        | 5        | 5        |
|                                   |   | ,847,699 | ,396,000 | ,933,832 |
+-----------------------------------+---+----------+----------+----------+
|   Foreign exchange loss           |   | 22       | 4        | -        |
|                                   |   | ,382,872 | ,995,124 |          |
+-----------------------------------+---+----------+----------+----------+
| Total expenses                    |   | 2,254    | 2,409    | 2,150    |
|                                   |   | ,334,438 | ,491,387 | ,055,563 |
+-----------------------------------+---+----------+----------+----------+
| Earnings before interest expenses |   | 778      | 459      | 851      |
| and income tax                    |   | ,206,447 | ,397,977 | ,009,356 |
+-----------------------------------+---+----------+----------+----------+
| Interest expenses                 |   | (57,     | (78,     | (66,     |
|                                   |   | 169,203) | 663,343) | 870,961) |
+-----------------------------------+---+----------+----------+----------+
| Corporate income tax              |   | (158,    | (151,    | (279,    |
|                                   |   | 553,338) | 313,732) | 391,316) |
+-----------------------------------+---+----------+----------+----------+
| Earnings after income tax         |   | 562      | 229      | 504      |
|                                   |   | ,483,906 | ,420,902 | ,747,079 |
+-----------------------------------+---+----------+----------+----------+
| Net earnings of minority interest |   | (61,     | (76,     | (180,    |
| in subsidiaries                   |   | 927,759) | 872,950) | 413,013) |
+-----------------------------------+---+----------+----------+----------+
| Net earnings for the year         |   | 500      | 152      | 324      |
|                                   |   | ,556,147 | ,547,952 | ,334,066 |
+-----------------------------------+---+----------+----------+----------+
| Basic earnings per share          |   | 6.64     | 2.71     | 5.96     |
|                                   |   |          |          |          |
|   Earnings before minority        |   |          |          |          |
|   interest                        |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Net earnings of minority        |   | (0.73)   | (0.91)   | (2.13)   |
|   interest in subsidiaries        |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Net earnings                    |   | 5.91     | 1.80     | 3.83     |
+-----------------------------------+---+----------+----------+----------+

 

Consolidated Balance Sheet

Unit : Baht

+------------------------------------+---+----------+----------+---+----------+
|                                    |   | Cons     |          |   |          |
|                                    |   | olidated |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
|                                    |   | 2003     | 2002     |   | 2001     |
+------------------------------------+---+----------+----------+---+----------+
| ASSETS                             |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
| Current Assets                     |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
|   Cash and cash equivalents        |   | 390      | 249      |   | 230      |
|                                    |   | ,887,127 | ,901,587 |   | ,845,958 |
+------------------------------------+---+----------+----------+---+----------+
|   Current investment–deposit at    |   | 37       | 33       |   | -        |
|   financial institutions with      |   | ,914,560 | ,184,330 |   |          |
|   institutions                     |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
|   Current investment–deposit at    |   | -        | -        |   | 25       |
|   financial institutions with      |   |          |          |   | ,366,436 |
|   commitment                       |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
|   Other current investment         |   | -        | -        |   | 20       |
|                                    |   |          |          |   | ,148,946 |
+------------------------------------+---+----------+----------+---+----------+
|   Trade accounts receivable - net  |   | 586      | 397      |   | 432      |
|                                    |   | ,482,978 | ,577,924 |   | ,925,974 |
+------------------------------------+---+----------+----------+---+----------+
|   Amounts due from related         |   | 53       | 45       |   | 28       |
|   companies                        |   | ,388,275 | ,319,158 |   | ,682,100 |
+------------------------------------+---+----------+----------+---+----------+
| Short-term loans to other company  |   | -        | -        |   | 375      |
|                                    |   |          |          |   | ,490,414 |
+------------------------------------+---+----------+----------+---+----------+
|   Inventories – net                |   | 106      | 110      |   | 107      |
|                                    |   | ,609,895 | ,256,117 |   | ,852,432 |
+------------------------------------+---+----------+----------+---+----------+
|   Property development cost – net  |   | 222      | 187      |   | 109      |
|                                    |   | ,750,545 | ,663,324 |   | ,342,737 |
+------------------------------------+---+----------+----------+---+----------+
| Other current assets               |   | 51       | 51       |   | 80       |
|                                    |   | ,389,407 | ,625,561 |   | ,035,146 |
+------------------------------------+---+----------+----------+---+----------+
| Total current assets               |   | 1,449    | 1,075    |   | 1,410    |
|                                    |   | ,422,787 | ,528,001 |   | ,690,143 |
+------------------------------------+---+----------+----------+---+----------+
| Non Current Assets                 |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
| Long term trade accounts           |   | 48       | 93       |   | 121      |
| receivable – net                   |   | ,230,567 | ,585,257 |   | ,714,738 |
+------------------------------------+---+----------+----------+---+----------+
| Other long term investments        |   | 216      | 177      |   | 309      |
|                                    |   | ,684,519 | ,256,919 |   | ,945,504 |
+------------------------------------+---+----------+----------+---+----------+
| Property, plant and equipment -    |   | 6,334    | 6,474    |   | 6,114    |
| net                                |   | ,303,261 | ,193,692 |   | ,576,346 |
+------------------------------------+---+----------+----------+---+----------+
| Land awaiting future development   |   | 658      | 658      |   | 540      |
|                                    |   | ,266,855 | ,506,916 |   | ,066,916 |
+------------------------------------+---+----------+----------+---+----------+
| Intangible assets                  |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
| - Negative goodwill on             |   | (9,      | (6,      |   | (504,    |
| consolidation                      |   | 198,019) | 368,304) |   | 858,387) |
+------------------------------------+---+----------+----------+---+----------+
| - Licenses and computer software   |   | 10       | 10       |   | -        |
|                                    |   | ,054,258 | ,051,991 |   |          |
+------------------------------------+---+----------+----------+---+----------+
| Other non current assets           |   | 16       | 15       |   | 8        |
|                                    |   | ,921,717 | ,682,841 |   | ,265,332 |
+------------------------------------+---+----------+----------+---+----------+
| Total non-current assets           |   | 7,275    | 7,422    |   | 6,589    |
|                                    |   | ,263,158 | ,909,312 |   | ,710,449 |
+------------------------------------+---+----------+----------+---+----------+
| TOTAL ASSETS                       |   | 8,724    | 8,498    |   | 8,000    |
|                                    |   | ,685,945 | ,437,313 |   | ,400,592 |
+------------------------------------+---+----------+----------+---+----------+
| LIABILITIES AND SHAREHOLDERS'      |   |          |          |   |          |
| EQUITY                             |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
| Current liabilities                |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
|   Bank overdrafts and short-term   |   | 210      | 185      |   | 20       |
|   loans from financial             |   | ,000,000 | ,059,960 |   | ,190,031 |
|   institutions                     |   |          |          |   |          |
+------------------------------------+---+----------+----------+---+----------+
|   Trade accounts payable           |   | 138      | 109      |   | 142      |
|                                    |   | ,495,403 | ,597,113 |   | ,846,415 |
+------------------------------------+---+----------+----------+---+----------+
|   Current portion of long-term     |   | 320      | 377      |   | 370      |
|   loans                            |   | ,000,000 | ,500,000 |   | ,000,000 |
+------------------------------------+---+----------+----------+---+----------+

 

Consolidated Balance Sheet (continued)

Unit : Baht

+-------------------------------------+---+---------+----------+----------+
|                                     |   | Conso   |          |          |
|                                     |   | lidated |          |          |
+-------------------------------------+---+---------+----------+----------+
| LIABILITIES AND SHAREHOLDERS'       |   | 2003    | 2002     | 2001     |
| EQUITY (continued)                  |   |         |          |          |
+-------------------------------------+---+---------+----------+----------+
|   Amounts due to related companies  |   | 61,     | 30       | 15       |
|                                     |   | 463,199 | ,318,660 | ,925,668 |
+-------------------------------------+---+---------+----------+----------+
|   Corporate income tax payable      |   | 82,     | 71       | 120      |
|                                     |   | 423,436 | ,965,638 | ,355,042 |
+-------------------------------------+---+---------+----------+----------+
| Other current liabilities           |   | 524,    | 382      | 351      |
|                                     |   | 892,908 | ,320,646 | ,953,037 |
+-------------------------------------+---+---------+----------+----------+
| Total current liabilities           |   | 1,337,  | 1,156    | 1,021    |
|                                     |   | 274,946 | ,762,017 | ,270,193 |
+-------------------------------------+---+---------+----------+----------+
|                                     |   |         |          |          |
+-------------------------------------+---+---------+----------+----------+
| Non Current liabilities             |   |         |          |          |
+-------------------------------------+---+---------+----------+----------+
| Long-term loans from subsidiaries   |   | 5,      | -        | -        |
|                                     |   | 746,255 |          |          |
+-------------------------------------+---+---------+----------+----------+
| Long-term loans - net of current    |   | 690,    | 885      | 562      |
| portion                             |   | 000,000 | ,000,000 | ,500,000 |
+-------------------------------------+---+---------+----------+----------+
| Provision for loss on investment in |   | -       | 4        | 4        |
| associated company                  |   |         | ,850,123 | ,850,123 |
+-------------------------------------+---+---------+----------+----------+
| Other non current liabilities       |   | 36,     | 35       | 35       |
|                                     |   | 617,832 | ,197,498 | ,767,604 |
+-------------------------------------+---+---------+----------+----------+
| Total non-current liabilities       |   | 732,    | 925      | 603      |
|                                     |   | 364,087 | ,047,621 | ,117,727 |
+-------------------------------------+---+---------+----------+----------+
| TOTAL LIABILITIES                   |   | 2,069,  | 2,081    | 1,624    |
|                                     |   | 639,033 | ,809,638 | ,387,920 |
+-------------------------------------+---+---------+----------+----------+
| Shareholders' equity                |   |         |          |          |
+-------------------------------------+---+---------+----------+----------+
|   Share capital - registered,       |   | 846,    | 846      | 846      |
|   issued and fully paid-up,         |   | 701,430 | ,701,430 | ,701,430 |
|   84,670,143 ordinary shares of     |   |         |          |          |
|   Baht 10 each                      |   |         |          |          |
+-------------------------------------+---+---------+----------+----------+
|   Premium on ordinary shares        |   | 2,062,  | 2,062    | 2,062    |
|                                     |   | 460,582 | ,460,582 | ,460,582 |
+-------------------------------------+---+---------+----------+----------+
|   Capital reserve                   |   | 634,    | 634      | 634      |
|                                     |   | 698,720 | ,698,720 | ,698,720 |
+-------------------------------------+---+---------+----------+----------+
|   Revaluation surplus               |   | 1,592,  | 1,669    | 1,399    |
|                                     |   | 803,768 | ,833,202 | ,214,033 |
+-------------------------------------+---+---------+----------+----------+
|   Unrealised gain (losses) on       |   | 38,     | -        | (282,    |
|   available-for-sale securities     |   | 349,480 |          | 813,402) |
+-------------------------------------+---+---------+----------+----------+
|   Currency translation differences  |   | 84,     | 88       | 89       |
|                                     |   | 371,915 | ,602,459 | ,676,249 |
+-------------------------------------+---+---------+----------+----------+
|   Retained earnings:                |   |         |          |          |
+-------------------------------------+---+---------+----------+----------+
|   Appropriated – statutory reserve  |   | 84,     | 79       | 71       |
|                                     |   | 670,143 | ,259,146 | ,631,748 |
+-------------------------------------+---+---------+----------+----------+
|   Unappropriated                    |   | 713,    | 388      | 666      |
|                                     |   | 975,510 | ,170,646 | ,600,807 |
+-------------------------------------+---+---------+----------+----------+
|                                     |   | 798,    | 467      | 738      |
|                                     |   | 645,653 | ,429,792 | ,232,555 |
+-------------------------------------+---+---------+----------+----------+
|   Equity attributable to Company’s  |   | 6,058,  | 5,769    | 5,488    |
|   shareholders                      |   | 031,548 | ,726,185 | ,170,167 |
+-------------------------------------+---+---------+----------+----------+
|   Minority interests – equity       |   | 597,    | 646      | 887      |
|   attributable to minority          |   | 015,364 | ,901,490 | ,842,505 |
|   shareholders of subsidiaries      |   |         |          |          |
+-------------------------------------+---+---------+----------+----------+
| Total shareholders' equity          |   | 6,655,  | 6,416    | 6,376    |
|                                     |   | 046,912 | ,627,675 | ,012,672 |
+-------------------------------------+---+---------+----------+----------+
| TOTAL LIABILITIES AND SHAREHOLDERS' |   | 8,724,  | 8,498    | 8,000    |
| EQUITY                              |   | 685,945 | ,437,313 | ,400,592 |
+-------------------------------------+---+---------+----------+----------+

Consolidated Statement of Cash Flows 

Unit : Baht

  ------------------------------------ -- --------------- --------------- ---------------
                                          Consolidated                    

                                          2003            2002            2001 Restated

  Cash flows from (used in) operating                                     
  activities                                                              

  Net cash inflow (outflow) from          821,001,627     700,918,154     948,021,321
  operating activities                                                    

  Cash flows from (used in) investing                                     
  activities                                                              

  Net cash inflow (outflow) from          (265,598,423)   (685,196,409)   (839,040,535)
  investing activities                                                    

  Cash flows from (used in) financing                                     
  activities                                                              

  Net cash inflow (outflow) from          (409,687,434)   36,518,214      (246,068,512)
  financing activities                                                    

  Net increase (decrease) in cash and     145,715,770     52,239,959      (137,087,726)
  cash equivalents                                                        

  Cash and cash equivalents at the        283,085,917     230,845,958     367,933,684
  beginning of the year                                                   

  Cash and cash equivalents at the end    428,801,687     283,085,917     230,845,958
  of the year                                                             
  ------------------------------------ -- --------------- --------------- ---------------

 

Company Income Statement

Unit : Baht

+-------------------------------------+----------+----------+----------+
|                                     | The      |          |          |
|                                     | Company  |          |          |
|                                     | Only     |          |          |
+-------------------------------------+----------+----------+----------+
|                                     | 2003     | 2002     | 2001     |
+-------------------------------------+----------+----------+----------+
|                                     |          |          | Restated |
+-------------------------------------+----------+----------+----------+
| REVENUES                            |          |          |          |
+-------------------------------------+----------+----------+----------+
|   Revenue from hotel operations     | 381      | 422      | 461      |
|                                     | ,635,424 | ,137,705 | ,713,682 |
+-------------------------------------+----------+----------+----------+
|   Interest income                   | 402,084  | 14       | 66       |
|                                     |          | ,559,993 | ,400,441 |
+-------------------------------------+----------+----------+----------+
|   Other income                      | 33       | 16       | 13       |
|                                     | ,478,178 | ,871,140 | ,964,621 |
+-------------------------------------+----------+----------+----------+
|   Share of profit from investments  | 569      | 197      | 258      |
|   accounted for under the equity    | ,904,557 | ,681,342 | ,143,399 |
|   method                            |          |          |          |
+-------------------------------------+----------+----------+----------+
| Total revenues                      | 985      | 651      | 800      |
|                                     | ,420,243 | ,250,180 | ,222,143 |
+-------------------------------------+----------+----------+----------+
| EXPENSES                            |          |          |          |
+-------------------------------------+----------+----------+----------+
|   Direct hotel operations expenses  | 258      | 273      | 265      |
|                                     | ,563,220 | ,921,963 | ,035,946 |
+-------------------------------------+----------+----------+----------+
|   Selling & administrative expenses | 157      | 160      | 133      |
|                                     | ,643,575 | ,418,993 | ,011,917 |
+-------------------------------------+----------+----------+----------+
|   Loss on impairment of investment  | -        | 845,000  | -        |
|   in available-for-sale securities  |          |          |          |
+-------------------------------------+----------+----------+----------+
|   Directors’ remuneration           | 6        | 5        | 5        |
|                                     | ,847,699 | ,396,000 | ,933,832 |
+-------------------------------------+----------+----------+----------+
|   Foreign exchange loss             | 897,595  | 1        | -        |
|                                     |          | ,449,207 |          |
+-------------------------------------+----------+----------+----------+
| Total expenses                      | 423      | 442      | 403      |
|                                     | ,952,089 | ,031,163 | ,981,695 |
+-------------------------------------+----------+----------+----------+
| Earnings before interest expenses   | 561      | 209      | 396      |
| and income tax                      | ,468,154 | ,219,017 | ,240,448 |
+-------------------------------------+----------+----------+----------+
| Interest expenses                   | (60,     | (56,     | (34,     |
|                                     | 912,007) | 671,065) | 762,145) |
+-------------------------------------+----------+----------+----------+
| Corporate income tax                | -        | -        | (37,     |
|                                     |          |          | 144,237) |
+-------------------------------------+----------+----------+----------+
| Net earnings for the year           | 500      | 152      | 324      |
|                                     | ,556,147 | ,547,952 | ,334,066 |
+-------------------------------------+----------+----------+----------+
|                                     |          |          |          |
+-------------------------------------+----------+----------+----------+
| Basic earnings per share            | 5.91     | 1.80     | 3.83     |
+-------------------------------------+----------+----------+----------+

Company Balance Sheet 

Unit : Baht

+-----------------------------------+---+----------+----------+----------+
|                                   |   | The      |          |          |
|                                   |   | Company  |          |          |
|                                   |   | Only     |          |          |
+-----------------------------------+---+----------+----------+----------+
|                                   |   | 2003     | 2002     | 2001     |
+-----------------------------------+---+----------+----------+----------+
| ASSETS                            |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
| Current Assets                    |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Cash and cash equivalents       |   | 40       | 26       | 36       |
|                                   |   | ,586,887 | ,669,901 | ,728,375 |
+-----------------------------------+---+----------+----------+----------+
|   Other current investment        |   | -        | -        | 20       |
|                                   |   |          |          | ,148,946 |
+-----------------------------------+---+----------+----------+----------+
|   Trade accounts receivable - net |   | 65       | 66       | 76       |
|                                   |   | ,503,956 | ,453,939 | ,834,155 |
+-----------------------------------+---+----------+----------+----------+
|   Amounts due from related        |   | 9        | 19       | 42       |
|   companies                       |   | ,688,311 | ,055,073 | ,292,164 |
+-----------------------------------+---+----------+----------+----------+
|   Inventories - net               |   | 9        | 9        | 10       |
|                                   |   | ,232,525 | ,198,204 | ,864,190 |
+-----------------------------------+---+----------+----------+----------+
|   Other current assets            |   | 11       | 7        | 8        |
|                                   |   | ,815,912 | ,378,662 | ,042,749 |
+-----------------------------------+---+----------+----------+----------+
| Total current assets              |   | 136      | 128      | 194      |
|                                   |   | ,827,591 | ,755,779 | ,910,579 |
+-----------------------------------+---+----------+----------+----------+
| Non Current Assets                |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
| Investment in subsidiaries        |   | 6,836    | 6,216    | 4,717    |
| accounted for under the equity    |   | ,717,419 | ,676,368 | ,916,421 |
|                                   |   |          |          |          |
| method                            |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
| Other long term investments       |   | 55       | 23       | 88       |
|                                   |   | ,855,000 | ,851,800 | ,955,300 |
+-----------------------------------+---+----------+----------+----------+
| Long term loans to subsidiaries   |   | 5        | -        | 700      |
|                                   |   | ,901,950 |          | ,824,000 |
+-----------------------------------+---+----------+----------+----------+
| Property, plant and equipment -   |   | 684      | 698      | 754      |
| net                               |   | ,147,887 | ,189,437 | ,037,565 |
+-----------------------------------+---+----------+----------+----------+
| Intangible assets                 |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
| - Negative goodwill on            |   | (9,      | (6,      | (504,    |
| consolidation                     |   | 198,019) | 368,304) | 858,387) |
+-----------------------------------+---+----------+----------+----------+
| - Licenses and computer software  |   | 3        | 1        | -        |
|                                   |   | ,968,388 | ,072,490 |          |
+-----------------------------------+---+----------+----------+----------+
| Other non current assets          |   | 6        | 5        | 3        |
|                                   |   | ,531,084 | ,458,503 | ,072,848 |
+-----------------------------------+---+----------+----------+----------+
| Total non-current assets          |   | 7,583    | 6,938    | 5,759    |
|                                   |   | ,923,709 | ,880,294 | ,947,747 |
+-----------------------------------+---+----------+----------+----------+
| TOTAL ASSETS                      |   | 7,720    | 7,067    | 5,954    |
|                                   |   | ,751,300 | ,636,073 | ,858,326 |
+-----------------------------------+---+----------+----------+----------+
| LIABILITIES AND SHAREHOLDERS'     |   |          |          |          |
| EQUITY                            |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
| Current liabilities               |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Bank overdrafts and short-term  |   | 200      | 125      | -        |
|   loans from financial            |   | ,000,000 | ,000,000 |          |
|   institutions                    |   |          |          |          |
+-----------------------------------+---+----------+----------+----------+
|   Trade accounts payable          |   | 26       | 27       | 29       |
|                                   |   | ,654,389 | ,228,483 | ,124,732 |
+-----------------------------------+---+----------+----------+----------+
|   Current portion of long-term    |   | 240      | 247      | 160      |
|   loans                           |   | ,000,000 | ,500,000 | ,000,000 |
+-----------------------------------+---+----------+----------+----------+
|   Amounts due to related          |   | 18       | 12       | 12       |
|   companies                       |   | ,590,887 | ,168,584 | ,930,760 |
+-----------------------------------+---+----------+----------+----------+
|   Corporate income tax payable    |   | -        | -        | 10       |
|                                   |   |          |          | ,618,820 |
+-----------------------------------+---+----------+----------+----------+
|   Other current liabilities       |   | 49       | 44       | 50       |
|                                   |   | ,285,901 | ,974,759 | ,047,615 |
+-----------------------------------+---+----------+----------+----------+
| Total current liabilities         |   | 534      | 456      | 262      |
|                                   |   | ,531,177 | ,871,826 | ,721,927 |
+-----------------------------------+---+----------+----------+----------+

 

Company Balance Sheet (continued)

Unit : Baht

+----------------------------------+---+----------+----------+----------+
|                                  |   | The      |          |          |
|                                  |   | Company  |          |          |
|                                  |   | Only     |          |          |
+----------------------------------+---+----------+----------+----------+
|                                  |   | 2003     | 2002     | 2001     |
+----------------------------------+---+----------+----------+----------+
| LIABILITIES AND SHAREHOLDERS'    |   |          |          |          |
| EQUITY                           |   |          |          |          |
|                                  |   |          |          |          |
| (continued)                      |   |          |          |          |
+----------------------------------+---+----------+----------+----------+
| Non Current liabilities          |   |          |          |          |
+----------------------------------+---+----------+----------+----------+
| Long-term loans - net of current |   | 400      | 640      | 187      |
| portion                          |   | ,000,000 | ,000,000 | ,500,000 |
+----------------------------------+---+----------+----------+----------+
| Provision for loss on investment |   | -        | -        | 7        |
| in subsidiary                    |   |          |          | ,921,170 |
+----------------------------------+---+----------+----------+----------+
| Long-term loans from             |   | 719      | 193      | -        |
| subsidiaries                     |   | ,600,000 | ,000,000 |          |
+----------------------------------+---+----------+----------+----------+
| Other non-current liabilities    |   | 8        | 8        | 8        |
|                                  |   | ,588,575 | ,038,062 | ,545,062 |
+----------------------------------+---+----------+----------+----------+
| Total non-current liabilities    |   | 1,128    | 841      | 203      |
|                                  |   | ,188,575 | ,038,062 | ,966,232 |
+----------------------------------+---+----------+----------+----------+
| TOTAL LIABILITIES                |   | 1,662    | 1,297    | 466      |
|                                  |   | ,719,752 | ,909,888 | ,688,159 |
+----------------------------------+---+----------+----------+----------+
| Shareholders' equity             |   |          |          |          |
+----------------------------------+---+----------+----------+----------+
|   Share capital - registered,    |   | 846      | 846      | 846      |
|   issued and fully paid-up,      |   | ,701,430 | ,701,430 | ,701,430 |
|                                  |   |          |          |          |
|   84,670,143 ordinary shares of  |   |          |          |          |
|   Baht 10 each                   |   |          |          |          |
+----------------------------------+---+----------+----------+----------+
|   Premium on ordinary shares     |   | 2,062    | 2,062    | 2,062    |
|                                  |   | ,460,582 | ,460,582 | ,460,582 |
+----------------------------------+---+----------+----------+----------+
|   Capital reserve                |   | 634      | 634      | 634      |
|                                  |   | ,698,720 | ,698,720 | ,698,720 |
+----------------------------------+---+----------+----------+----------+
|   Revaluation surplus            |   | 1,592    | 1,669    | 1,399    |
|                                  |   | ,803,768 | ,833,202 | ,214,033 |
+----------------------------------+---+----------+----------+----------+
|   Unrealised gain (losses) on    |   | 38       | -        | (282,    |
|   available-for-sale securities  |   | ,349,480 |          | 813,402) |
+----------------------------------+---+----------+----------+----------+
|   Currency translation           |   | 84       | 88       | 89       |
|   differences                    |   | ,371,915 | ,602,459 | ,676,249 |
+----------------------------------+---+----------+----------+----------+
|   Retained earnings:             |   |          |          |          |
+----------------------------------+---+----------+----------+----------+
|   Appropriated – statutory       |   | 84       | 79       | 71       |
|   reserve                        |   | ,670,143 | ,259,146 | ,631,748 |
+----------------------------------+---+----------+----------+----------+
|   Unappropriated                 |   | 713      | 388      | 666      |
|                                  |   | ,975,510 | ,170,646 | ,600,807 |
+----------------------------------+---+----------+----------+----------+
|                                  |   | 798      | 467      | 738      |
|                                  |   | ,645,653 | ,429,792 | ,232,555 |
+----------------------------------+---+----------+----------+----------+
| Total shareholders' equity       |   | 6,058    | 5,769    | 5,488    |
|                                  |   | ,031,548 | ,726,185 | ,170,167 |
+----------------------------------+---+----------+----------+----------+
| TOTAL LIABILITIES AND            |   | 7,720    | 7,067    | 5,954    |
| SHAREHOLDERS' EQUITY             |   | ,751,300 | ,636,073 | ,858,326 |
+----------------------------------+---+----------+----------+----------+

 

Company Statement of Cash Flows 

Unit : Baht

+-------------------------------------+----------+----------+----------+
|                                     | The      |          |          |
|                                     | Company  |          |          |
|                                     | Only     |          |          |
+-------------------------------------+----------+----------+----------+
|                                     | 2003     | 2002     | 2001     |
|                                     |          |          |          |
|                                     |          |          | Restated |
+-------------------------------------+----------+----------+----------+
| Cash flows from (used in) operating |          |          |          |
| activities                          |          |          |          |
+-------------------------------------+----------+----------+----------+
| Net cash inflow (outflow) from      | (18,     | 218      | 103      |
| operating activities                | 554,196) | ,937,192 | ,047,278 |
+-------------------------------------+----------+----------+----------+
| Cash flows from (used in) investing |          |          |          |
| activities                          |          |          |          |
+-------------------------------------+----------+----------+----------+
| Net cash inflow (outflow) from      | (152,    | (470,    | 72       |
| investing activities                | 288,532) | 644,951) | ,577,447 |
+-------------------------------------+----------+----------+----------+
| Cash flows from (used in) financing |          |          |          |
| activities                          |          |          |          |
+-------------------------------------+----------+----------+----------+
| Net cash inflow (outflow) from      | 184      | 241      | (331,    |
| financing activities                | ,759,714 | ,649,285 | 840,286) |
+-------------------------------------+----------+----------+----------+
| Net increase (decrease) in cash and | 13       | (10,     | (156,    |
| cash equivalents                    | ,916,986 | 058,474) | 215,561) |
+-------------------------------------+----------+----------+----------+
| Cash and cash equivalents at the    | 26       | 36       | 192      |
| beginning of the year               | ,669,901 | ,728,375 | ,943,936 |
+-------------------------------------+----------+----------+----------+
| Cash and cash equivalents at the    | 40       | 26       | 36       |
| end of the year                     | ,586,887 | ,669,901 | ,728,375 |
+-------------------------------------+----------+----------+----------+

12.1.3 Financial ratios of the company and its subsidiaries

+------------------------------+-----+--------+---+--------+---+----------+---+
| CONSOLIDATED FINANCIAL       |     |        |   |        |   |          |   |
| RATIOS                       |     |        |   |        |   |          |   |
|                              |     |        |   |        |   |          |   |
| LTD.                         |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
|                              |     | Consol |   |        |   |          |   |
|                              |     | idated |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
|                              |     | 2003   |   | 2002   |   | 2001     |   |
|                              |     |        |   |        |   |          |   |
|                              |     |        |   | Re     |   | Restated |   |
|                              |     |        |   | stated |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Liquidity Ratio’s            |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Current Ratio                | Ti  | 1.08   |   | 0.93   |   | 1.38     |   |
|                              | mes |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Quick Ratio                  | Ti  | 0.76   |   | 0.59   |   | 0.69     |   |
|                              | mes |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Cash Flow From Operating     | Ti  | 0.66   |   | 0.64   |   | 0.97     |   |
| Activities Ratio             | mes |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Receivables Turnover         | Ti  | 5.89   |   | 6.53   |   | 6.23     |   |
|                              | mes |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Collection Period            | D   | 61.12  |   | 55.16  |   | 57.75    |   |
|                              | ays |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Inventory Turnover           | Ti  | 16.07  |   | 16.23  |   | 19.19    |   |
|                              | mes |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Inventory Turnover Period    | D   | 22.40  |   | 22.18  |   | 18.76    |   |
|                              | ays |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Accounts Payable Turnover    | Ti  | 14.04  |   | 14.02  |   | 12.26    |   |
|                              | mes |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Payment Period               | D   | 25.64  |   | 25.67  |   | 29.36    |   |
|                              | ays |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Cash Cycle                   | D   | 57.88  |   | 51.67  |   | 47.15    |   |
|                              | ays |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
|                              |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Profitability Ratio’s        |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Gross Profit Margin          | %   | 31.76  |   | 31.08  |   | 35.24    |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Profit Margin from           | %   | 26.07  |   | 16.20  |   | 28.93    |   |
| Operations                   |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Net Profit Margin            | %   | 16.51  |   | 5.32   |   | 10.81    |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Return On Equity             | %   | 7.66   |   | 2.38   |   | 5.03     |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
|                              |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Efficiency Ratio’s           |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Return On Total Assets       | %   | 5.81   |   | 1.85   |   | 4.03     |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Return On Fixed Assets       | %   | 10.36  |   | 5.59   |   | 8.92     |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
| Asset Turnover               | Ti  | 0.35   |   | 0.35   |   | 0.37     |   |
|                              | mes |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+
|                              |     |        |   |        |   |          |   |
+------------------------------+-----+--------+---+--------+---+----------+---+

+----------------------------+-----+----------+---+----------+---+----------+---+
| CONSOLIDATED FINANCIAL     |     |          |   |          |   |          |   |
| RATIOS (Continued)         |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     | Cons     |   |          |   |          |   |
|                            |     | olidated |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     | 2003     |   | 2002     |   | 2001     |   |
|                            |     |          |   |          |   |          |   |
|                            |     |          |   |          |   | Restated |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Financial Policy Ratio’s   |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Debt To Equity             | Ti  | 0.31     |   | 0.32     |   | 0.25     |   |
|                            | mes |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Interest Coverage          | Ti  | 17.91    |   | 12.30    |   | 18.81    |   |
|                            | mes |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Payout Ratio (Cash Basis)  | Ti  | 0.97     |   | 0.33     |   | 0.66     |   |
|                            | mes |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Dividend Payout Ratio      | %   | 33.83    |   | 249.77   |   | 65.26    |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Share value’s              |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Book Value Per Share       | B   | 78.60    |   | 75.78    |   | 75.30    |   |
|                            | aht |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Earnings (loss) Per Share  | B   | 5.91     |   | 1.80     |   | 3.83     |   |
|                            | aht |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Dividend Per Share         | B   | 2.00     |   | 4.50     |   | 2.50     |   |
|                            | aht |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Growth rate’s              |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Assets               | %   | 2.66     |   | 6.23     |   | (1.20)   |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Liabilities          | %   | (0.58)   |   | 28.16    |   | 2.95     |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Revenues             | %   | 5.70     |   | (4.40)   |   | 6.71     |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Expenses             | %   | (6.44)   |   | 12.07    |   | 10.08    |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Net Income (Loss)          | %   | 228.13   |   | (52.97)  |   | (12.32)  |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+

+----------------------------+-----+---------+---+---------+---+---------+---+---+
| COMPANY FINANCIAL RATIOS   |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
|                            |     | Company |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
|                            |     | 2003    |   | 2002    |   | 2001    |   |   |
|                            |     |         |   |         |   |         |   |   |
|                            |     |         |   |         |   | R       |   |   |
|                            |     |         |   |         |   | estated |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Liquidity Ratio’s          |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Current Ratio              | Ti  | 0.26    |   | 0.28    |   | 0.74    |   |   |
|                            | mes |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Quick Ratio                | Ti  | 0.20    |   | 0.20    |   | 0.51    |   |   |
|                            | mes |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Cash Flow From Operating   | Ti  | (0.04)  |   | 0.61    |   | 0.41    |   |   |
| Activities Ratio           | mes |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Receivables Turnover       | Ti  | 5.50    |   | 5.52    |   | 5.45    |   |   |
|                            | mes |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Collection Period          | D   | 65.47   |   | 65.19   |   | 66.01   |   |   |
|                            | ays |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Inventory Turnover         | Ti  | 28.06   |   | 27.32   |   | 28.20   |   |   |
|                            | mes |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Inventory Turnover Period  | D   | 12.83   |   | 13.18   |   | 12.77   |   |   |
|                            | ays |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Accounts Payable Turnover  | Ti  | 9.60    |   | 9.73    |   | 9.61    |   |   |
|                            | mes |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Payment Period             | D   | 37.51   |   | 37.02   |   | 37.46   |   |   |
|                            | ays |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Cash Cycle                 | D   | 40.79   |   | 41.35   |   | 41.32   |   |   |
|                            | ays |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
|                            |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Profitability Ratio’s      |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Gross Profit Margin        | %   | 32.25   |   | 35.08   |   | 42.60   |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Profit Margin from         | %   | (2.21)  |   | 2.73    |   | 29.91   |   |   |
| Operations                 |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Net Profit Margin          | %   | 120.47  |   | 33.63   |   | 59.83   |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Return On Equity           | %   | 8.46    |   | 2.71    |   | 6.07    |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
|                            |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Efficiency Ratio’s         |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Return On Total Assets     | %   | 6.77    |   | 2.34    |   | 5.51    |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Return On Fixed Assets     | %   | 77.49   |   | 25.90   |   | 47.95   |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
| Asset Turnover             | Ti  | 0.06    |   | 0.07    |   | 0.09    |   |   |
|                            | mes |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+
|                            |     |         |   |         |   |         |   |   |
+----------------------------+-----+---------+---+---------+---+---------+---+---+

+----------------------------+-----+----------+---+----------+---+----------+---+
| COMPANY FINANCIAL RATIOS   |     |          |   |          |   |          |   |
| (Continued)                |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     | Company  |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     | 2003     |   | 2002     |   | 2001     |   |
|                            |     |          |   |          |   |          |   |
|                            |     |          |   |          |   | Restated |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Financial Policy Ratio’s   |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Debt To Equity             | Ti  | 0.27     |   | 0.22     |   | 0.09     |   |
|                            | mes |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Interest Coverage          | Ti  | 0.70     |   | 5.06     |   | 5.08     |   |
|                            | mes |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Payout Ratio (Cash Basis)  | Ti  | (0.03)   |   | 0.12     |   | 0.22     |   |
|                            | mes |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Dividend Payout Ratio      | %   | 33.83    |   | 249.77   |   | 65.26    |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Share value’s              |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Book Value Per Share       | B   | 71.55    |   | 68.14    |   | 64.82    |   |
|                            | aht |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Earnings (loss) Per Share  | B   | 5.91     |   | 1.80     |   | 3.83     |   |
|                            | aht |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Dividend Per Share         | B   | 2.00     |   | 4.50     |   | 2.50     |   |
|                            | aht |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
|                            |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Growth rate’s              |     |          |   |          |   |          |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Assets               | %   | 9.24     |   | 18.69    |   | 2.41     |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Liabilities          | %   | 28.11    |   | 178.11   |   | (23.59)  |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Revenues             | %   | (8.93)   |   | (16.33)  |   | (7.42)   |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Total Expenses             | %   | (4.09)   |   | 9.42     |   | (2.07)   |   |
+----------------------------+-----+----------+---+----------+---+----------+---+
| Net Income (Loss)          | %   | 228.13   |   | (52.97)  |   | (12.32)  |   |
+----------------------------+-----+----------+---+----------+---+----------+---+

 

12.2 Explanation and Analysis by management

  The net earnings attributable to the shareholders of Baht 501 million
  for the year ended 31st December 2003 was Baht 348 million higher than
  that of the prior year. This comparison is distorted by the one-off
  recognition in the profit and loss account of the permanent diminution
  in the value of the Groups investment in available-for-sale securities
  in 2002 which had the effect of reducing the net earnings by Baht 284
  million. When comparing the 2003 result with 2002 before this
  exceptional item the net earnings for the year ended 31 December 2003
  increased by Baht 64 million or 15%.

  The improvement in net earnings was despite a very difficult operating
  environment for the hotel operations in the first half of 2003 which
  saw the continued impact of the Bali bombing in October 2002, and
  subsequent travel advisories warning against travel to Phuket flow
  into the first quarter of 2003. This together with the uncertainty
  surrounding the Iraq War, and then the war itself, meant that there
  was a reduction in the traditional high season European travelers and
  resulted in a lower than expected first quarter performance. The
  impact of the SARS virus on the second quarter performance was
  devastating as travel to and within the South East Asia region was
  severely reduced. This resulted in very low occupancies and average
  room rates during this period. On the positive side, the recovery from
  SARS has been exceptional with occupancies across Laguna Phuket for
  the second half of the year being 83%. During the course of SARS our
  hotels introduced promotional rates to the market in order to
  stimulate demand as soon as SARS was contained. This strategy proved
  to be successful with high occupancies were achieved at the expense of
  lower average room rates. The good second half performance resulted in
  the revenue of the hotel operations being only Baht 114 million or 4%
  lower than that achieved in 2002.

  The reason for the improved group net earnings in 2003 as compared to
  2002 was entirely due to the Property Sales division. This division
  capitalised on the buoyant Phuket property market with its well
  positioned and priced “Residence” and “Townhome” products to register
  an increase in revenues of Baht 224 million, or 158%, as compared to
  last year. Allamanda Vacation Club also had a very good year with
  revenues Baht 39 million, or 29%, higher than the prior year. This was
  largely due to the Bangkok Sales office which took advantage of
  favourable market conditions in Bangkok.

  Expenses were generally well controlled in the face of reduced hotel
  revenues in the first half of the year. Corporate income tax continues
  to benefit from tax planning projects and the interest expense is
  lower than last year due to a combination of lower loan balances and
  reduced interest rates. The strengthening of the Thai Baht throughout
  2003 resulted in an exchange loss of Baht 22 million.

Hotel Operations (Unit: Million Baht)

  --------------- ---------- ---------- ---------- ------- ---------- -------
                  2003       %          2002       %       2001       %
                                                           Restated   

                                                                      

  Revenues        2,443      100.0%     2,557      100.0   2,630      100.0

                                                                      

  Expenses        1,742      71.3%      1,770      69.2    1,711      65.1

                                                                      

  Operating       701        28.7%      787        30.8    919        34.9
  Profit                                                              

                                                                      
  --------------- ---------- ---------- ---------- ------- ---------- -------

  As 81% of the Group Revenue is generated by the Hotel Operations, the
  performance of the Rooms and Food and Beverage divisions, which
  comprise over 75% of the Hotel Operations revenue in 2003 are very
  important to the Groups revenue result.

  The revenue of the rooms division for the year ended 31 December 2003
  experienced an 8% reduction as compared to the prior year and was
  driven by a 16% reduction in the Baht average room rate, only 3% of
  which could be attributed to a stronger Thai Baht. This reduction in
  average room rate was only partially offset by a 9% increase in
  occupancies, the dynamics of which are explained above.

  Food and Beverage revenues decreased by only 1% in 2003 as compared to
  2002 and was due to a combination of higher occupancies offset by an
  8% lower average spend per customer resulting from the lower yielding
  market mix in 2003.

  Expenses relating to the Hotel Operations decreased by Baht 28 million
  as compared to 2002. Given that many of the expenses in the hotel
  industry are fixed it is difficult to reduce costs in the face of
  reducing revenues. Expenditure on areas such as repairs and
  maintenance, linen, china other visible guest services are required to
  be maintained to keep the properties in prime condition and providing
  the premium level of service associated with our resorts. Whilst these
  expenditures are carefully controlled, these costs, together with
  ongoing capital programmes, are considered to be essential to
  maintaining the resort in prime condition. The other major expense
  that is predominantly fixed is that of payroll and staff expenses.
  During the midst of the SARS crisis all staff in Laguna Phuket
  voluntary took unpaid leave to assist the Company reduce its staff
  costs during this difficult period.

  Property Sales and Timeshare Operation

  Another significant area of revenue generation is Laguna Property
  Sales, both in direct villas, rooms, house and land and land sales,
  and indirectly from the Allamanda Vacation Club, a professional and
  successful time share operation. The Baht 224 million, or 158%
  increase, in revenue from the Property Sales division was the back
  bone of the 2003 performance was primarily due to the popular products
  of the Laguna Residences (15 sold in 2003) and Laguna Townhomes (9
  sold in 2003) which have leveraged of the buoyant property market in
  Phuket this year.

  The Allamanada Vacation Club also performed well in 2003 with revenues
  Baht 39 million, or 29% higher than the prior year.

  Balance Sheet

  The main balance sheet items at 31 December 2003 are as follows:

+-----------------------------+---------+--------------+--------------+
|                             | Note    | 31 December  | 31 December  |
|                             |         | 2003         | 2002         |
|                             |         |              |              |
|                             |         | Baht 000     | Baht 000     |
+-----------------------------+---------+--------------+--------------+
| Cash, cash equivalents and  | 1       | 428,802      | 283,086      |
| fixed deposits              |         |              |              |
+-----------------------------+---------+--------------+--------------+
| Trade accounts receivable   | 2       | 586,483      | 397,578      |
+-----------------------------+---------+--------------+--------------+
| Other investments           | 3       | 216,685      | 177,257      |
+-----------------------------+---------+--------------+--------------+
| Property, equipment and     | 4       | 6,992,570    | 7,132,701    |
| land                        |         |              |              |
+-----------------------------+---------+--------------+--------------+
| Property Development Cost   | 5       | 222,751      | 187,663      |
+-----------------------------+---------+--------------+--------------+
| Loans from banks            | 6       | 1,220,000    | 1,447,560    |
+-----------------------------+---------+--------------+--------------+
|                             |         |              |              |
+-----------------------------+---------+--------------+--------------+

  The main points of note in regard to the Balance Sheet movements in
  the year ended 31 December 2003 are:

1.  Main movements are explained in the commentary on Cash Flows below

2.  The increase in accounts receivable balances is due to an increase
    in the Property Sales receivables of Baht 141 million due to the
    revenue recognition policy relating land and house sales, and Baht
    48 million increase in hotel debtors which is all attributable to
    the improved performance of the hotels. The ageing of all debts has
    improved compared to last year.

3.  Other investments increased in 2003 due to the increase in the share
    price of Thai Wah PLC which is marked to market.

4.  The decrease in property & equipment is a result of the purchase of
    the Mae Joe land in March 2003 and other fixed asset additions being
    more than offset by the higher depreciation charge for the year.

5.  The increase in Property Development Cost in 2003 is due to the
    higher level of activity in the Property Sales division this year.

6.  Long term loans of Baht 378 million have been repaid from year to
    date cash flow. A long term loan of Baht 125 million and short term
    loans of Baht 25 million were drawn down in 2003 to overcome the
    impact of the very poor second quarter.

Cash Flows

The cash and cash equivalents of Baht 429 million at 31 December 2003
represented as Baht 146 million increase as compared to 31 December
2002. The main components of the cash generated during the year are as
follows:

-   Net cash generated from operations amounted to Baht 819 million and
    is largely a function of net earnings for the year adjusted for
    depreciation and working capital movements.

-   As a result of the poor first quarter performance capital
    expenditure on the resort was severely restricted to the extent that
    only Baht 178 million was spent on the purchases of property plant
    and equipment. The only other significant investment of note was the
    purchase of 10% of the ordinary shares of Laguna Beach Club Limited
    for Baht 85 million.

-   A dividend of two Baht was paid during 2003.

-   Scheduled loan repayments of Baht 378 million were made in 2003. The
    last drawdown of a long term loan of Baht 125 million was also made.

Commentary on Consolidated Financial Ratios

Liquidity ratios

-   Current ratio – this is higher in 2003 due to the higher cash
    balances at 31 December 2003 and the increase in trade accounts
    receivable primarily due to the amounts owing by property sales
    customers. These increases were higher than the increase in other
    current liabilities. Other current liabilities were higher in 2003
    due to significantly higher advance receipts from hotel and property
    sales customers at 31 December 2003.

-   Quick ratio – significantly improved position in 2003 as compared to
    2002 due to the higher cash and accounts receivable balances.

-   Cash flow from operating activities – this is slightly higher than
    last year due to the higher profits and improved working capital
    position which resulted in higher Cash Flow from Operating
    Activities. This was partially offset by the increase in current
    liabilities.

-   Receivable turnover – lower turnover due to trade receivables
    increasing as compared to lower annual revenue. This can be
    explained by a very good second half performance in 2003 as compared
    to a very poor first half performance.

-   Collection period – lower turnover due to trade receivables
    increasing as compared to lower annual revenue. This can be
    explained by a very good second half performance in 2003 as compared
    to a very poor first half performance.

-   Inventory turnover – similar to last years ratio. This reflects
    better stock control in 2003 in the face of reducing revenues,
    particularly in the retail operation.

-   Inventory turnover period – similar to last years ratio. This
    reflects better stock control in 2003 in the face of reducing
    revenues, particularly in the retail operation.

-   Accounts payable turnover – trend is consistent with the prior year.

-   Payment period – trend is consistent with the prior year.

-   Cash cycle – higher than the prior year and is all due to the
    increase in the Collection Period of trade debtors.

Profitability ratios

-   Gross profit margin – trend is consistent with the prior year
    despite the higher mix of property sales revenue in 2003.

-   Profit margin from operations –significant improvement as compared
    to last year is due to the better economic environment being
    experienced in the second half 2003, the excellent performance of
    the property sales division and the one-off write down in the
    carrying value in the investment available-for-sale securities that
    occurred in 2002.

-   Net profit margin – significant improvement as compared to last year
    is due to the better economic environment being experienced in the
    second half 2003, the excellent performance of the property sales
    division and the one-off write down in the carrying value in the
    investment available-for-sale securities that occurred in 2002.

-   Return on equity – significant improvement as compared to last year
    is due to the better economic environment being experienced in the
    second half 2003, the excellent performance of the property sales
    division and the one-off write down in the carrying value in the
    investment available-for-sale securities that occurred in 2002.

Efficiency ratios

-   Return on total assets – the better position is due to the higher
    net earnings for the year in 2003 and the one-off write down in the
    carrying value in the investment in available-for-sale securities in
    2002.

-   Return on fixed assets – the better position is due to the higher
    net earnings for the year in 2003 and the one-off write down in the
    carrying value in the investment in available-for-sale securities in
    2002.

Financial policy ratios

-   Debt to equity – this ratio is consistent with the prior year.

-   Interest cover – a significant improvement on the prior year which
    is a combination of higher cash flow from operations coupled with
    the lower interest change that has resulted from lower loan balances
    and lower interest rates.

-   Pay-out ratio (cash) – the significantly better position is a result
    of an increase in operating cash flows and a decrease in loan
    repayments, capital and investment expenditure as compared to the
    prior year.

-   Dividend pay-out ratio – the Board of Directors have proposed a
    dividend of Baht 2.00 per share for the 2003 financial year, but at
    the time of this report being published it had not been confirmed.