CENTEL: Annual Report 2012 EN by Central Plaza Hotel Public Company Limited

AWARDS

CONTENTS

004 006 008 010 016 017 021 030 036 038 039 040 114 126 128 130 132 140 152 153 154 155 160 166 170 171 172 173

Financial Highlights Message from the Chairman Board of Directors Group History Thailand’s Tourism Industry Overview Hotel Business Overview Restaurant Business Overview Sustainable Development Report of the Audit Committee Report of the Nomination and Compensation Committee Report of the Board of Directors’ Responsibilities for Financial Statements Audit Report and Financial Statements Analysis And Explanation of the Financial Status and Operating Result Nature of Business Revenue Structure Risk Factors Policy on Corporate Governance Details of Directors List of Shareholders Directors and Management Remuneration Auditor’s Fee Good Corporate Governance Connected Transactions General Information of Businesses held by the Company 10% Upward Company’s General Information Information of Debentures Other Reference Firms Corporate Management

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FINANCIAL HIGHLIGHTS

* Detail as shown in ANALYSIS AND EXPLANATION OF THE FINANCIAL STATUS and OPERATION RESULT SECTION

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FINANCIAL HIGHLIGHTS Unit : Baht Million 2012

2011

Consolidated

Separated

Consolidated

Revenues from sales (1)

14,389.3

1,989.7

11,163.2

Total revenues

15,380.4

3,210.4

Gross profit

7,849.9

Earnings before interest expenses and income tax Net profit (loss)

2010 (Restated)

Separated

Consolidated

Separated

1,524.2

9,140.9

1,430.2

11,574.2

2,489.8

9,500.2

2,323.1

1,154.7

6,039.2

841.6

4,910.6

764.2

2,322.8

1,162.2

1,259.7

472.3

513.3

516.3

1,580.8

775.5

550.4

130.1

(55.8)

263.2

Total assets

27,757.2

16,380.6

21,683.6

15,500.1

20,437.9

15,011.1

Total liabilities

17,698.4

10,338.2

15,634.9

11,237.0

14,801.3

10,810.6

Interest bearing debts (2)

12,053.6

8,373.3

10,002.9

8,872.3

9,452.8

8,414.5

Shareholders' equity

10,058.8

6,042.4

6,048.7

4,263.1

5,636.6

4,200.5

Retained earnings (3)

3,305.7

2,515.3

1,927.4

1,942.3

1,444.6

1,879.7

1,350

Net profit margin (%) (4), (5)

7.6%

14.2%

5.2%

-5.2%

-0.3%

-4.5%

Return on assets (%) (5)

4.2%

4.7%

2.8%

0.8%

-0.1%

1.8%

Return on equity (%) (5)

11.6%

12.8%

10.0%

3.1%

-0.5%

6.3%

Interest bearing debts / Equity (times)

1.2

1.4

1.7

2.1

1.7

2.0

Total liabilities / Equity (times)

1.8

1.7

2.6

1.17

0.57

0.41

0.10

(0.04)

0.19

n/a

TBA

n/a

0.15

n/a

0.05

7.45

4.48

3.16

4.18

3.11

Operating Results

Financial Position

Weighted Average Number of ordinary shares (million shares)

Key Financial Ratios

Earnings (loss) per share (Baht) Dividend per share (Baht) Book value per share (Baht) (1) (2) (3) (4) (5)

Revenue from sales in Consolidated financial statements exclude revenues from investment properties. Interest bearing debts in Consolidated and Separated financial statements include loans from related parties. Retained earnings include appropriated retained earnings for legal reserve. Net profit margin in Separated financial statements exclude dividend income, land rental expenses payable to the property fund and loss from guarantee provision. Net profit margin, Return of assets and Return on equity in Consolidated financial statements were excluded extra-ordinary items as follows: FY/2012 - loss from guarantee provision, extra-gain from investment in property fund accounted for equity method and gain from business acquisition and gain on re-measuring to fair value of investments totaling Baht 410.6 million. FY/2011 - loss from guarantee provision and extra-gain from investment in property fund accounted for equity method totaling Baht 55.0 million. FY/2010 - loss from guarantee provision and extra-gain from investment in property fund accounted for equity method totaling Baht 25.2 million.

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MESSAGE FROM THE CHAIRMAN

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The year 2012 was undoubtedly the most significant and thus far the best year for Centara Hotels & Resorts (CHR) as well as Central Restaurants Group (CRG) which are both under Central Plaza Hotel Public Company Limited (CENTEL), with CHR marking three decades of operation. The “Celebrating 30 Years Centara Hotels & Resorts” grand party was held on December 12, or 12.12.12, at our first hotel, Centara Grand at Central Plaza Ladprao Bangkok, to offer our warmest thanks to valued customers, shareholders, business partners and the press for all their support through the years. The celebration was also to thank our management and employees for their contribution, which has led to the success of the company both in Thailand and beyond. From our humble beginning in 1983, without any previous experience in the hotel business, Centara Hotels & Resorts network has grown and continues to grow with the support of our clients and business partners. We now have a total of 58 hotels with more than 10,000 rooms in Thailand and overseas, in Vietnam, Bali, China, the Maldives, India, Sri Lanka and Mauritius, making Centara Hotels & Resorts Thailand’s leading hotel chain. Along with the 30th anniversary, 2012 was also the company’s best year in terms of financial performance. Revenue of Centara Hotels & Resorts increased to Baht 6,473 million, an increase of 32% compared to 2011, with profit growth of over 30 times! All company-owned hotels registered strong performance with highest revenues than projected. Our business development plan was also carried out successfully with the opening of five new hotels, namely Centra Government Complex Hotel & Convention Centre Chaeng Wattana, Centara Hotel & Convention Centre Khon Kaen, Centra Coconut Beach Resort Samui, Centara Poste Lafayette Resort & Spa Mauritius and Centara Sandy Beach Resort Danang, Vietnam. The company further secured new another three hotel management contracts, in 2012, namely Centara Hudhufushi Resort & Spa Maldives, Centara Grand Modus Resort & Spa Pattaya, and Centara Koh Lan Resort & Villas. In December 2012 we launched a new hotel brand, COSI Hotels, designed to cover the economy hotel segment in response to an enormous growth in travel and the significant growth of low-cost airlines travel, which now accounts for 51% of the aviation industry in Asean. The Asean Economic Community (AEC) will be implemented in less than two years from now, adding further demand. The first COSI Hotel is projected to open in 2015 and we plan to have at least 30 COSI hotels in Thailand, the Asean countries, China, Australia and New Zealand by 2020. As for our existing brands, the company expects to open 11 more hotels in Thailand, Indonesia, Sri Lanka, Mauritius and Maldives during 2013. The year 2012 was also a very successful year for our food business under Central Restaurants Group Co., Ltd. (CRG), which is 100% owned by Central Plaza Hotels plc, had record high revenue with Baht 8,356 million, an increase of 27.6% compared to 2011, from its 677 stores and 12 brands. In 2013, it is expected that Thailand’s economy will be stronger, albeit with stronger competition in the food services business. CRG is well prepared with various strategies to handle the situations as they arise. From the success of 2012 the company is confident that the businesses will continue to grow strongly and sustainably. The Board of Directors would like to take this opportunity to thank our shareholders, business partners, public and private organisations, valued customers, management and staff for all their support and outstanding contributions that have helped the company attain its excellent position today.

Suthikiati Chirathivat Chairman of the Board

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BOARD OF DIRECTORS

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GROUP HISTORY Hotel Business 1983

Hyatt Central Plaza, Bangkok and

1986

HRH. Princess Somsawali graciously presided over the grand opening ceremony.

607

rooms/suites

195

rooms/suites

178

rooms/suites

%DQJNRN &RQYHQWLRQ &HQWUH RIÂżFLDOO\ RSHQHG 2SHQHG DQG IXOO\ UHQRYDWHG 6RÂżWHO &HQWDO +XD +LQ 5HVRUW 1988

Entered into Hotel Management Agreement for Central Wong Amat Beach Resort

1990

Listed on Stock Exchange of Thailand Acquired Central Mae Sot Hotel

120

rooms/suites

1993

Purchased a newly built hotel in Los Angeles

180

rooms/suites

1993/94

Acquired Central Floating Hotel (a converted vessel)

133

rooms/suites

1995

Opened Central Sukhontha Hotel, Hat Yai

238

rooms/suites

1996

HRH. Princess Somsawali graciously presided over the grand opening

208

rooms/suites

6RÂżWHO &HQWUDO +XD +LQ 5HVRUW DGGHG QHZ *DUGHQ :LQJ RI URRPV

255

rooms/suites

Central Waterfront Suites at Karon, Phuket commenced of operation

suites

Became Public Company Limited

ceremony of Central Samui Beach Resort Sold Central Plaza hotel Los Angeles 1997 1998

Created â&#x20AC;&#x153;Villageâ&#x20AC;? brand concept. 3XUFKDVHG &HQWUDO %XWWHUĂ&#x20AC;\ 9LOODJH .RK 6DPXL

villas

and commenced extension of 60 villas, total now

100

villas

Renamed CentraO %XWWHUĂ&#x20AC;\ 9LOODJH DV &HQWUDO 6DPXL 9LOODJH

100

villas

Moved Central Floating Hotel to East Timor and

133

rooms/suites

villas

%DQJNRN DV 6RÂżWHO &HQWUDO 3OD]D +RWHO DQG

607

rooms/suites

Hat Yai as Novotel Central Sukhontha

238

rooms/suites

192

rooms/suites

505

rooms/suites

Central Mirage Beach Resort, Pattaya

555

rooms/suites

Central Phuket Beach Resort, Phuket

262

rooms/suites

Additional 10 suites â&#x20AC;&#x201C; Novotel Central Sukhontha Hat Yai

248

rooms/suites

Hotel Management Agreementt for Central Duangtawan Hotel

500

rooms/suite

192

rooms/suites

namely the Islandia 335 rooms, now Central Karon Beach Resort

335

rooms

and the Jiva, 128 rooms, now Central Kata Resort.

128

rooms

Rebranded the group as Central Hotels & Resorts. 1999 2000

Opened Central Karon Village, Phuket

re-opened as Central Maritime Hotel, Dili, East Timor. 2001

Added 8 more villas to Central Karon Village, Phuket Signed Franchise agreements for :

6WDUWHG FRQVWUXFWLRQ RI 6.< +$// H[KLELWLRQ IDFLOLW\ DW 6RÂżWHO &HQWUDO 3OD]D %DQJNRN 2002

0DMRU UHQRYDWLRQV DW &HQWUDO 6DPXL %HDFK 5HVRUW DQG 6RÂżWHO &HQWUDO +XD +LQ 5HVRUW $GGHG QHZ IDFLOLWLHV WR 6RÂżWHO &HQWUDO 3OD]D ZLWK D &HQWDUD 6SD DW 0H]]DQLQH level as well as Cencio Karaoke Lounge.

2003

Broke ground for Central Krabi Bay Resort a 5 star luxury property. Opening of ZICOâ&#x20AC;&#x2122;s Brazilian Grill and Bar in Samui. Signed Agreement signed to develop the Central World Hotel at CentralWorld Plaza, including a 20,000 sqm. Convention and Exhibition Centre.

2004

2005

Obtained construction permits for :

in Chiangmai on January 1. 5HFHLYHG ÂżUVW JXHVWV DW &HQWUDO .UDEL %D\ 5HVRUW RQ 'HFHPEHU 2006

Sold Central Floating Hotel, Dili, East Timor. Acquisition through a JV with Lehman Brothers (50:50) for two hotels in Phuket,

HRH. Princess Ubonrattana graciously presided over the grand opening ceremony of Central Krabi Bay Resort on November 12, 2006.

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CENTARA GRAND AT CENTRAL PLAZA LADPRAO BANGKOK

CENTARA GRAND BEACH RESORT & VILLAS HUA HIN

CENTARA GRAND BEACH RESORT PHUKET

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

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CENTARA GRAND ISLAND RESORT & SPA MALDIVES

CENTARA GRAND BEACH RESORT SAMUI

CENTARA KATA RESORT PHUKET

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CONTENTS Major renovation of Central Hua Hin Village with upgrading to Pool Villas now The Villas at 6RÂżWHO &HQWUDO +XD +LQ 5HVRUW Upgrading of Central Samui Beach Resort and Central Samui Village through the addition of Pool Suites and Pool Villas, respectively. 2007

In March, the board approved name change for the Companyâ&#x20AC;&#x2122;s hotel division to CENTARA HOTELS AND RESORTS. Opened Bangkok Convention Centre at Centara Grand at CentralWorld. Centara Kata Resort added 30 more rooms

2008

158

rooms

suites

555

rooms

112

villas

124

villas/rooms

Centara Pariya Resort Koh Pha-Ngan

villas

Siripanna Villas Resort Chiang Mai

suites/villas

suites

secluded area of Karon Beach in Phuket has its soft opening on November 3

262

rooms

Centra, new mid-range brand is launched in Phuket, Centra Ashlee Hotel Patong

110

rooms

Expansion of Centara Boutique Collection from 1 hotel to 12 hotels

494

rooms

Centara Boutique Collection

rooms

2SHQHG ÂżUVW PDQDJHG KRWHO LQ WKH 3KLOLSSLQHV &HQWDUD +RWHO 0DQLOD

rooms

2,682

rooms

1,830

rooms

The Centara Chaan Talay in Trat, managed by CHR, opened in March Centara Grand at Central World and Bangkok Convention Centre (BCC), WKH QHZ )ODJVKLS RI WKH FRPSDQ\ FHOHEUDWHG LWV RIÂżFLDO *UDQG 2SHQLQJ RQ December 2 in the presence of HRH Princess Ubonrattana. In December, Central Group renewed its lease with State Railway of Thailand with respect to the Central Plaza complex at Ladprao, Bangkok; which includes the 6RÂżWHO &HQWDUD *UDQG %DQJNRN IRU \HDUV WR (QWHUHG LQWR -RLQW 9HQWXUH DQG Hotel Management Agreements for the Centara Grand Island Resort Maldives, scheduled to open in the second part of 2009.

2009

&HQWDUD *UDQG 0LUDJH %HDFK 5HVRUW 3DWWD\D D ÂżUVW WKHPHG KRWHO LQ 7KDLODQG 5-star property on Wong Amat Beach had its Grand Opening on November 3. The Centara Grand Island Resort Maldives opened its mainly over ZDWHU YLOODV EHLQJ WKH ÂżUVW RYHUVHDV SURSHUW\ RI &HQWDUD +RWHOV 5HVRUWV Earlier in the year 2 management contract were signed for Bhundari Resort and Spa Samui property was taken over in April together with

D VWDU SURSHUW\ WKH ÂżUVW &HQWDUD %RXWLTXH &ROOHFWLRQ RSHQHG RQ 1RYHPEHU The second overseas property, Moksha Himalaya Spa Resort, Centara Boutique Collection opened its Spa and hotel suites late in the year. A second ZICO, Brazilian Grill and Steak Restaurant, opened at the Central Festival Shopping Centre, Pattaya. 2010

2011

Centara Grand Beach Resort Phuket, 5-star beach resort located at the most

2SHQHG ÂżUVW PDQDJHG UHVRUW LQ 9LHWQDP &KHQ 6HD 5HVRUW 6SD 3KX 4XRF

Acquired 11 managed hotels & resorts in Thailand Acquired 12 managed hotels & resorts overseas including new locations in Bali, Sri Lanka, China and Mauritius 2012

Opened first managed hotel in Mauritius, Centara Poste Lafayette Resort & Spa Mauritius

100

keys

Opened Centara Hotel & Convention Centre Khonkaen

196

keys

Opened Centra Government Complex Hotel & Convention Centre Chaeng Wattana

204

keys

Acquired 3 management contracts in Thailand

307

keys

Acquired 2 management contracts in Vietnam and Maldives

308

keys

3,827

keys

Owned and joint venture total 15 hotels and resorts in Thailand and Maldives Managed total 43 hotels and resorts in Thailand, Vietnam, Indonesia, Sri Lanka, India, Maldives, China, and Mauritius

Total portfolio 58 hotels and resorts

7,393

keys

11,220

keys

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THE TERRACE YOSHINOYA

OOTOYA

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ANNUAL REPORT 2012

KFC MISTER DONUT

CONTENTS

COLD STONE CREAMERY

Food Business 1978

)LUVWO\ LQWURGXFHG ³0LVWHU 'RQXW´ WR 7KDL FRQVXPHU DV SLRQHHU RI 465 EXVLQHVV LQ 7KDLODQG

1984

Being authorized franchisee of KFC, the strong and widely accepted international brand.

1998

Entering snack segment in Thailand with the premium Soft Pretzel brand “Auntie Anne’s ” from the USA.

2007

Bringing in New Japanese Fast Casual Restaurant, “Pepper Lunch”.

2009

Being Authorized Franchisee of Beard Papa’s, Fresh ‘n natural cream puffs.

2010

Brought “Chabuton” Ramen into Thai market, which is “TV Champion chef’s Japanese Ramen restaurant”. Being Authorized Franchisee of Cold Stone Creamery from the USA. Opened Japanese Food restaurant in Thailand, “RYU Shabu Shabu” Operated The Terrace Restaurant Introduced Café Andonand, a Japanese styles finest coffee and fusion donuts café.

2011

Being Authorized Franchisee of Yoshinoya, the Authentic Japanese Rice Bowl Acquired Thailand operations of the well-known Japanese Home Cooking Style Restaurant Ootoya

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THAILAND’S TOURISM INDUSTRY OVERVIEW According to Bank of Thailand, the Thai economy in 2012 was stable and GDP grew 4.7% over 2011. Part of the economic came growth from the restoration and renovation works by the private sector of the damages caused by the floods in late 2011. The government’s consumption-stimulating measures and favourable political climate also facilitated the over all economic performance of the country, as evidenced by the record performance of the Stock Exchange of Thailand. As for the tourism industry, Bank of Thailand’s Business Report, which is the compilation and analysis of information obtained from private sector throughout the country, stated that the tourism industry in the first quarter of 2012 started to recover from the floods of 2011’s past quarter. The number of international tourists increased during the high season. Although visitors from Europe and North America were down slightly as economic uncertainty in these regions continued, visitors from the emerging markets such as China, Russia, India, Middle East and ASEAN replaced the loss. After the high season, tourism industry during the second quarter slowed down somewhat but improved in the third quarter and continued to grow in the last quarter of the year. This was due to the increase in demand for meetings and conferences by both government and private sectors. Moreover, businesses in many provinces benefited from the increases of direct flights both domestic and international. Promotional campaigns conducted by both private and public sectors also helped boost the tourism industry in all regions of Thailand. According to the Department of Tourism, Ministry of Tourism and Sports, the number of international arrivals in 2012 was 22.3 million, compared to 19.2 million in 2011, representing an increase of about 15.6%. The average hotel occupancy was also up, from 57.5% in 2011 to 60.9% in 2012. Total revenue from foreign tourists was Baht 965 billion, and the revenue from domestic tourists increased to Baht 500 billion. Together, the total revenue from the tourism industry was higher than expected and registered a record-high at Baht 1.5 trillion (Baht 1,500 billion). The strong performance in 2012 has increased the confidence of both the government and private sectors to set targets for the number of international visitors and revenue from the tourism industry for following years. The Tourism Council of Thailand (TCT) has expressed confidence that Thailand can attract 26.2 million international tourists and achieve a total of two trillion Baht tourism revenue target in 2015, which is good for the hotel business although revenue from accommodation establishments nationwide accounts for about one third of the country’s entire tourism revenue. The Thai Hotels Association (THA) has stated that it will push for tougher enforcement of hotel standards and licensing as well as hotel development zoning, especially in the tourism destinations facing oversupply of rooms, in order to help hotels throughout the country. According to THA, presently the room rates of Thai hotels are among the lowest in ASEAN.

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HOTEL BUSINESS OVERVIEW There are six different brands under the CENTARA Hotels and Resorts, namely:

Centara Grand Hotels & Resorts Set in prime city and beachfront locations, all hotels and resorts in the Centara Grand category are five-star, offering outstanding facilities and service whilst assuring absolute value for our guests. Each Centara Grand hotel has served restaurants, luxurious Spa Cenvaree and fitness centre, along with sports and recreation facilities.

Centara Hotels & Resorts Enjoying premium settings in city-centre locations and beach and island destinations, our core range of hotels and resorts are all fourstar category and provide a memorable experience in both facilities and service

Centara Boutique Collection Our Boutique Collection is a series of distinctive properties designed to an intimate scale, imparting a residential quality.

Centara Residence & Suites Conveniently located to attract the corporate and the leisure long-stay guest, there are two categories available, namely Centara Grand, which is five-star category; and Centara, which provides a fourstar experience.

Centra Hotels & Resorts Offers affordable hotels and resorts that provide a quality experience designed to exceed expectations.

COSI Hotels The latest brand from Centara, COSI Hotels is designed for cost-conscious travellers who mostly do all their own bookings on-line and who look for pocket-friendly accommodation prices.

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PERFORMANCE HIGHLIGHTS In 2012, revenue from our hotel business increased from Baht 4,904 million in 2011 to Baht 6,473 million, an increase of 32%, with profits growth of 30 times. Our 14 company-owned hotels and resorts generated revenues that were up by 31.3% from the previous year to Baht 6,131 million, while revenues from hotel management fees increased by 20.6% to Baht 164 million. For our hotels in Bangkok, Centara Grand & Bangkok Convention Centre at CentralWorld set a record high in revenue and profits from rooms, food and beverage, and from Bangkok Convention Centre. Centara Grand at Central Plaza Ladprao Bangkok has shown positive signs with higher RevPAR and the hotel occupancy has gradually picked up following the completion of its massive renovation. The hotels and resorts in major tourist destinations have also shown strong performance. Centara Grand Mirage Beach Resort Pattaya was a good example with record high revenues and earnings, with revenue increase of 14% over the previous year, while profits increased by over 20%. Centara Grand Beach Resort & Villas Hua Hin The resort witnessed good results, showing a clear increase over 2011, and the overall performance of the hotel has proven successful with occupancy and RevPAR. For the beach hotels in the Southern provinces such as Phuket, Krabi and Samui, although there were concerns about the economic uncertainty in Europe, all hotels still achieved higher revenues than expected and were also higher than the previous year. In 2012, three hotels in Phuket underwent rooms and exterior renovations, namely Centara Villa Phuket, Centara Karon Resort Phuket and Centara Kata Resort Phuket. With all the improvements, the performances of all three resorts were better than previous year in most areas of operations, including rooms, spa, and food and beverage. For the company-owned hotel outside of Thailand, Centara Grand Island Resort & Spa Maldives experienced improved performance for the year and the best year since the opening of the resort due to increased tourist arrivals to the Maldives in 2012. As a result, the company will open a second hotel in Maldives under the name Centara Ras Fushi Resort & Spa Maldives in March 2013 which is also owned by the company.

GROUP BUSINESS DEVELOPMENT BY CENTARA INTERNATIONAL MANAGEMENT (CIM) As Thailandâ&#x20AC;&#x2122;s leading hotel chain, Centara Hotels & Resorts is committed to enlarging its network across Asia. In 2012, the Centara portfolio grew to 58 properties. Of these, 15 properties are owned and operated by Centara Hotels & Resorts. There are 32 properties managed for third party hotel owners that are in operation. In the coming year, Centara Hotels & Resorts expects to open 11 properties in Thailand, Indonesia, Sri Lanka, Mauritius and Maldives. The following is the development of Centara Hotels & Resorts in 2012. Opening of managed Hotels and Resorts: 1. 2. 3. 4. 5.

Centra Government Complex Hotel & Convention Centre Chaeng Wattana (204 rooms) Centara Hotel & Convention Centre Khon Kaen (196 rooms) Centara Poste Lafayette Resort & Spa Mauritius (100 rooms) Centra Coconut Beach Resort Samui (55 rooms) Centara Sandy Beach Resort Danang (198 rooms)

New hotels management contracts: 1. Centra Coconut Beach Resort Samui (55 rooms) 2. Centara Sandy Beach Resort Danang (198 rooms) 3. Centara Hudhufushi Resort & Spa Maldives (110 rooms, open in 2014) 4. Centara Grand Modus Resort & Spa Pattaya (215 rooms, open in 2013) 5. Centara Koh Lan Resort & Villas (100 rooms, open in 2015)

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In December 2012, Centara Hotels & Resorts launched its economy hotel brand, COSI Hotels. Due to an enormous growth in the travel industry and significant growth of low-cost airlines, travellers can now travel more easily and conveniently. COSI Hotels aims for smart travellers with friendly prices, and in preparation for the AEC in 2015. The first COSI Hotels property is expected to open in 2015. Future business development of the company will continue to pursue expansion with “asset light” strategy. The focused destinations will be in ASEAN, China, the Indian Ocean, Middle East, Australia and New Zealand.

CENTARA GRAND ISLAND RESORT & SPA MALDIVES

CENTARA KARON RESORT PHUKET

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GROUP MARKETING 5HERXQGLQJ VWURQJO\ IURP WKH IORRG FULVLV RI 4 7KDLODQG HQMR\HG H[FHOOHQW KLJK VHDVRQ GHPDQG LQ 4 IROORZHG E\ WKUHH TXDUWHUV RI VWURQJ VDOHV JURZWK \HDU RQ \HDU Thailandâ&#x20AC;&#x2122;s visitor arrivals grew almost 16% to 22.3 million visitors in 2012, mainly from Chinese, Russian and Indian markets. Whilst the country saw less buoyant number from more traditional markets, Centara was able to enjoy continued growth from such markets including UK at 14 %, France at 60 % and Germany at 40 %. This is in part due to our policy of being close to the market with locally based sales infrastructure in all core business generating locations; critical in times of leaner demand. In this regard, Centara Hotels and Resorts has set up network including presence in UK, France, Germany, Russia, UAE, India, Japan, Hong Kong/China, Vietnam, Australia and South Africa. In 2012, Centara Hotels and Resorts also set up a Revenue Management business unit focused in yield and inventory control to maximize our returns on available rooms, as well as providing valuable data for our growing global sales force. In addition, a dedicated Social Media unit was established to further develop and enhance the distribution opportunities and provides data of our past and potential guests, with aim to engage, entertain and understand their likes and needs as tastes change. Our Social Media unit has gained incredible success in a very short time, recording the largest and most popular Thai based fan base. Within the year, we enjoyed a very successful launch of Centara Poste Lafayette Resort, our first of 3 properties on the vacation island of Mauritius. The resort opened to a very strong occupancy. The pre-marketing activities conducted by the Group Marketing division were extremely active in 2012, as a result of the fast growing number of properties joining the network in 2013/4. Active communication, marketing and selling of new resorts is a process started at least 12 to 18 months prior to welcoming the first guests and remains critical to the success of startup properties. Finally, as previously reported, technology continues to lead. We launched a revamped website, mobile applications and booking engine (B2C), together with an upgrade to our industry contacting system and booking engines (B2B).

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RESTAURANT BUSINESS OVERVIEW The year 2012 sees another significant achievement for Central Restaurants Group (CRG) exceeding its own goals and breaking all past records. CRG, with a total of 677 stores and 12 brands, has increased its revenues to 8.3 billion baht, up by 27.6% compared to 2011. The growth was achieved through the company’s effective strategic plans as well as its flexible operations to adapt to changing circumstances. Other than business achievements, CRG also received several recognition awards from KFC and Cold Stone Creamery.

KFC: 2012 AMCHAM CSR Excellence Recognition from the American Chamber of Commerce in Thailand This award is for an organisation that shows its great support for CSR activities.

KFC: Trusted Brand 2012 from Reader’s Digest KFC is voted by readers of Reader’s Digest in Thailand to be the most trusted brand in 2012.

KFC: Cadenza Award # 11 from Restaurant Excellence Department of Yum Restaurants International (Thailand) Co.,Ltd. KFC earned this award for its CHAMPS, CBCC, and CMS scores being higher than targets.

Cold Stone Creamery: Golden Spade IPS Award Nominations from Cold Stone Creamery, United States. The brand earned this award because its new branch at Mega Bangna achieved the highest sales for a new branch.

Cold Stone Creamery: Most Successful Marketing Promotion IPS Award Nominations from Cold Stone Creamery, United States. The brand won this award for its splendid marketing promotion.

Cold Stone Creamery: Best Community Focused Charity Program IPS Award Nominations from Cold Stone Creamery, United States. The brand earned this award for its CSR activity

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PERFORMANCE HIGHLIGHTS In 2013, it is expected that the country’s economy will continue to grow. At the same time, competition in the restaurant business continues to be intense. However, CRG is well prepared with well thought-out strategies and implementation plans with regard to cost efficiency, service improvement, human resources development and targeted marketing to take advance of Thailand’s economic growth.

Mister Donut Mister Donut, the undisputed leader in the donut market with more than 60% market share, reinforces its leadership by means of in-depth analysis of the changing market and consumer behavior which enables the brand to fully understand and respond to the needs as well as sustaining its competitive advantages through innovative products, effective brand communications and activations, and store coverage. In 2012, Mister Donut celebrated the success of 33 years of operations by organising a “33rd Anniversary Celebration” activity on 1 February 2012. The event featured a lucky draw to win prizes valued at over 3.3 million Baht, including a Nissan March, Yamaha Fino motorcycles, iPhone 4, iPad 2, Mister Donut Premium Gold Card for free donuts throughout the year, and many other prizes. Other fun activities included talk with celebrities, donut decoration at “Donut I Do” corner with a popular actress, and an auction of masterpieces created by two celebrities. All proceeds from the auction were donated to the Rajaprajanugroh Foundation under Royal Patronage to help flood victims. In addition, Mister Donut celebrated “Donut Day” by giving away a “Free Pon De Ring Glaze”, with 200 pieces per branch worth over one million Baht to customers nationwide. Last year, Mister Donut achieved an 11.6% increase from 2012 in total sales. As its main strategy, Mister Donut introduced several new products that were well accepted by customers, such as Deluxe Parade, Jibi Do, Pizza Do and Choco Fiesta at the end of the year. Additionally, a major marketing campaign named “12 varieties at only at 10 Baht/piece” was launched. Mister Donut has also strengthened its brand awareness through TV, BTS as well as in-store advertisements, websites, printed media and social networks to respond to new consumer lifestyles. Mister Donut added 24 new stores in 2012, with 289 stores at the end of year, spread across 68 provinces.

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KFC .)& WKH OHDGLQJ EUDQG LQ 7KDLODQGÂśV 4XLFN 6HUYLFH 5HVWDXUDQWV 465 PDUNHW FXUUHQWO\ RSHUDWHV D WRWDO number of 464 stores countrywide in 2012. Around 40% of the stores (181 stores) are operated by CRG while the rest are operated by YUM Thailand (the parent franchisor of KFC). In 2012, KFC continued to increase its revenue growth, with an increase of 17.4% over 2012. The brand continued its focus on developing new menus in order to achieve consumer satisfaction for every meal occasion by offering menus that fit with todayâ&#x20AC;&#x2122;s urban lifestyle and the needs of a socialising world. A â&#x20AC;&#x153;breakfast day partâ&#x20AC;? under the name of â&#x20AC;&#x153;KFC AMâ&#x20AC;?, started selling from 7am to 11am. Then came the â&#x20AC;&#x153;lunch day partâ&#x20AC;? with two new menus, â&#x20AC;&#x153;Twisterâ&#x20AC;? and â&#x20AC;&#x153;The Boxâ&#x20AC;?, to build visit frequency and increase relevancy among young workers during the weekday. A value meal set lunch was introduced with three prices and a range of menu choices for consumer preference like fried chicken, rice or burger. For the â&#x20AC;&#x153;dinner day partâ&#x20AC;?, KFC focuses on promoting the hi-end Bucket to serve its family target customers using thematic TVC to communicate on strengthening family bonding. Apart from the activities mentioned above, KFC also focuses on all-day snacking, which is categorised into Savory Snack and Sweet Snack in order to build KFC as an all-day snacking destination for everyone, especially teens. This year KFC launched a new savoury snack, the Charger burger, and also continually promoted its sweet snack Egg Tart throughout the year. A new beverage line Krushers was also introduced, to expand its customer base as well as extend its all-day snacking concept. Besides the menu variety, KFC emphasises on the relevancy of target consumer lifestyles as part of its new positioning. New products and promotions were introduced to fulfill each target segment, such as the Bucket promotion for families with children, snacks, ice cream, sweet snacks for teenagers etc. KFC continued to promote the â&#x20AC;&#x153;Product Guaranteeâ&#x20AC;? campaign from the previous year to deliver the message of KFC menus that consumers can trust. KFC expanded its stores in shopping malls, department stores, hypermarkets, supermarkets and other retail locations in all communities/ areas in order to reach all target consumers in Thailand under the concept that KFC will make lifestyles so good, hence the new slogan â&#x20AC;&#x153;KFC So Good!â&#x20AC;?

KFC

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Auntie Anneâ&#x20AC;&#x2122;s With the intention of reaching the goal of â&#x20AC;&#x153;the best snack chainâ&#x20AC;?, Auntie Anneâ&#x20AC;&#x2122;s success continued to show remarkable results by finishing the year 2012 with a growth in revenue of 25% over the previous year. The brand has maintained its leading position in the soft pretzel market for 15 consecutive years, since its inception in Thailand. With the theme concept of â&#x20AC;&#x153;Truly Special Widely Selectionâ&#x20AC;?, five new products have been launched through 2012, including Mozza Italian Pretzel, Extra Pretzel Dog and Super Pretzel Bites, all well received by customers. Introduction of these products was effectively communicated to its target customers through several media channels, such as TV commercials, transits media, magazines and social media. Additionally, Auntie Anneâ&#x20AC;&#x2122;s membership programme has built a close relationship with its customers. The brand continued to expand through hospitals such as Siriraj Hospital. The strategy of reaching the core target has been carried out in order to cover more of the potential market. With the great success and outstanding performance, Auntie Anneâ&#x20AC;&#x2122;s Thailand has been recognised and certified with two Auntie Anneâ&#x20AC;&#x2122;s stores, namely Central Rama 9 and Siam Paragon, as Store Model and Training Centre of the Asia Pacific region by Focus Brands Inc, the parent franchisor of Auntie Anneâ&#x20AC;&#x2122;s. CRG operated, operated a total of 101 Auntie Anneâ&#x20AC;&#x2122;s stores in Thailand, the largest number of stores in a country outside USA.

Pepper Lunch Pepper Lunch, a popular fast casual Japanese steak restaurant with five years of operations in Thailand, improved its revenues by 34% from the previous year, with 16 stores of which stores were opened in 2012. One of the key strategies of Pepper Lunch in 2012 was the transforming of its service model from counter service to table service in order to increase brand value perception, and the convenience of customers. At the end of 2012, 13 Pepper Lunch stores had transformed to the new service model, and the remaining stores will all be WUDQVIRUPHG E\ 4 $V RQH RI WKH NH\ JURZWK GULYHUV 3HSSHU /XQFK FRQWLQXHG LWV VXFFHVV E\ LQWURGXFLQJ WKH new Grand menu in 2012 with more offerings such as premium steak that highlights the new Rib Eye steak from Australia, curry rice category, pasta category and pepper rice with a new recipe of beef. The reinforcement of Pepper Lunchâ&#x20AC;&#x2122;s Japanese DIY teppan restaurant concept, through various media channel with partners, social media and online media throughout the year, has resulted in increasing the customer base.

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Beard Papa’s Beard Papa’s, the “World’s Best Cream Puffs” operated by CRG since 2009, grew 28% over 2011. During 2012, Beard Papa’s introduced several new products that were well accepted by customers, such as Mocha Almond Cream Puff, Matcha Cream Puff, and Royal Milk Tea Cream Puff. Apart from this, Beard Papa’s initiated the special promotion Friday Bonus to create product trials and gain new customers. The brand also introduced member card to improve visit frequency and brand loyalty. Beard Papa’s has strengthened its brand awareness by introducing a new image through social network activities, PR, printed media and in-store activities. In addition, Beard Papa’s added four new stores in 2012 in order to reach more customers.

Chabuton Chabuton Ramen, the Japanese TV celebrity chef’s only ramen brand in Thailand, has been very popular and widely known amongst Thai ramen lovers since 2010. Mr Yasuji Morizumi, the “King of Ramen” chef from TV Champion, in Japan, created this premium brand and one of his ramen restaurants was the first ramen restaurant to appear in the Michelin Guide. Chabuton has shown extraordinary achievement with a revenue growth of 60% over 2011. Apart from Chabuton’s signature ramen menus, which include Tonkotsu Ramen, Shio Tonkotsu Ramen, Shoyu Ramen, Shoyu Zaru Ramen, and Tonkotsu Miso Ramen, in 2012 Chabuton introduced a new menu, with Wafu Hiyashi Torisoba, Tori Uma Ramen (Tasty Chicken Collagen Ramen), and Spirulina Ramen which again have been well accepted by customers. Chabuton added five new stores in 2012 with total 12 Chabuton stores at the end of 2012.

AUNTIE ANNE’S

CHABUTON

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Cold Stone Creamery Cold Stone Creamery, the first super premium ice cream mix-ins from the USA, has the exclusive signature of its American rich flavour and a unique serving style that have gained the brand enormous success worldwide. For Cold Stone Creamery, Thailand is ranked 15th in the world and 6th in Asia. Cold Stone Creamery was established in Thailand in 2010 with first store at CentralWorld and quickly gained popularity. At end of 2012, CRG had 10 Cold stone in Bangkok with 65% revenue growth over 2011 increasing 65%. In 2012, Cold Stone Creamery aimed to serve a greater variety of customers by launching new seasonal products e.g. Ice Cream Moon Cake, a moon cake stuffed with ice cream mix-ins, which is a new creation in Thailand and which has hit the market well. Next step taken was the proactive strategy of implementing social network marketing to gain customers’ involvement. In 2012, the brand received three awards from IPS (International Partner Summit), namely Best Community Focused Charity Programme Award, Most Successful Marketing Promotion Award, and Golden Spade Award.

RYU Shabu Shabu RYU Shabu Shabu, CRG’s own brand, was launched in March 2010 at Siam Square. The Japanese style shabu shabu with an “all you can eat” concept is customarily served with traditional gourmet soups such as the Katsuobushi Dashi Soup and the Osaka-styled Kombu Dashi Soup. RYU introduced several new menu items as well as special promotion activities during 2012, such as “come 4 pay 3” and “come 4 get 15% discount” which were well received by customers. RYU Shabu Shabu also gained popularity among targeted consumers for its freshness, great taste and reasonable price. The Ryu Shabu Shabu Osaka-style concept was reinforced through various media channels such as food reviews in newspapers, releases in magazines, and social media.

RYU SHABU SHABU

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The Terrace In 2012, The Terrace rolled out several menu campaigns that helped create excitement for the brand, including the “Spicy”, “Seafood”, and “Let’s Be Healthy “Campaign. There was also promotion of the concept “Feel Greenery Feel The Terrace” through various media channels such as food reviews in newspapers, magazines, TV, cable TV and social media. The Terrace added two new restaurants at Central Grand Rama 9 and Central Rama 3, making total 10 The Terrace restaurants at end of 2012.

Yoshinoya Central Restaurants Group launched its new brand Yoshinoya in August, 2012 at Central Plaza Ladprao. Yoshinoya is the original beef bowl and rice bowl restaurant chain from Japan. Its beef bowl, also known as Gyudon, is Japan’s oldest beef bowl, originating in the Meiji era in 1899. Nowadays, Yoshinoya has more than 1,700 branches in eight countries: Japan, USA, Indonesia, Singapore, Philippines, Taiwan, Hong Kong, and Thailand. In 2012, Yoshinoya offered several new menus and condiments such as spicy beef/pork yakiniku, spicy chicken kara-age, and onsen egg. In addition, several set promotions were successfully introduced. Yoshinoya continued its growth by expanding from three to nine stores in Bangkok and vicinity.

THE TERRACE

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Ootoya Central Restaurants Group took over the Ootoya business in Thailand in September 2011. The brand is well accepted as a premium Japanese chain restaurant in the market. Ootoya positioned itself as a home cooking Japanese restaurant to differentiate from other Japanese restaurants. The brand prides itself in providing the best dining experience for all, with additive-free foods and well-balanced dishes. The signature style of cooking includes the use of special charcoal for grilling. The rice absorbs minerals from the charcoal, and the infrared particles emitted during the cooking process help make the rice sticky. In 2012, one new Ootoya was opened at Mega Bangna shopping complex, taking the total to 36 restaurants, all in prime locations in Bangkok. Ootoya operates three types of business model: Ootoya Gohandokoro is full UHVWDXUDQW 2RWR\D .LWFKHQ LV -DSDQHVH FRQYHQLHQFH PHDOV VLPLODU WR 4XLFN 6HUYLFH 5HVWDXUDQWV DQG 2RWR\D 'HOL is a kiosk for take-away. After eight years of success in Thailand, having been established on 2005, Ootoya is stepping into the delivery business, delivering to the Bangkok area through CRGâ&#x20AC;&#x2122;s Central number 02-6633888. Ootoya is also continuing to develop authentic menus to serve Japanese food lovers under the philosophy of â&#x20AC;&#x153;Taste the Freshest Japanese Foods in Japanese Mom-Made Styleâ&#x20AC;?.

OOTOYA

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BUSINESS DEVELOPMENT The year 2012 was a bright one for Thailand’s retailing industry after the flooding crisis in 2011. Many government policies contributed to domestic spending which played an important role in supporting the economic recovery. Even though the Retail and Wholesale Business Act still regulates the growth of modern mass retailers and has slowed down large-scale shopping mall expansions, there remained room for growth in 2012. The Act itself drove retailers towards further expansion in the increasingly popular small to medium-size retail outlet segment in 2012. New shopping malls with smaller models, friendlier concepts, and more impressive designs continued to be opened, aiming to maintain market share and keep up with modern Thai customers’ tastes and demands. CRG enhanced its leadership in Thailand’s food services business in 2012 by having 677 stores across the country, as of December 31, 2012. CRG expanded its business into every type of retail developments: shopping malls department store, community malls, hypermarkets, Supermarkets, as well as stand-alone, Location. 74 new stores were opened countrywide across all brands in 2012. The continuing challenge for CRG lies in the consumer behaviour, which has become increasingly more difficult to understand and predict, due largely to the proliferate social media and changing lifestyles. In anticipation of the ASEAN Economic Community in 2015, which is likely to create more demand for retail business, CRG is well prepared in expanding its businesses to support future demand. This was achieved by establishing new networks with Thailand’s main retail developers, who are gearing up for the opening of largescale retail projects in other cities in Thailand, especially in border provinces where their people from neighboring countries are viewing Thailand as a shopping destination. These include cities such as Chiang Mai, Udon Thani, Songkhla (Hat Yai), Lam Pang, and Surat Thani. Progress in 2013 and beyond will see an evolution in how retailers create value for consumers and shareholders. “One Store Fits All” is going out of style. Retailers will be segmented to meet the niche demands of consumers. The ASEAN Economic Community when it comes into effect will bring about huge changes in Thailand’s retail landscape, especially with new international retailers entering the market. To cope with the change and more intense competition stirred up by new international players, CRG in particular has an aggressive expansion plan, including market expansion, and new customer outreach formats. Caution will be taken in selecting strategic locations to ensure the success of the business expansion, and good performance of the new brands launched. Implementation of CRG’s brands stands apart from other competitors, and exploring new avenues of growth will be considered.

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SUSTAINABLE DEVELOPMENT Hotel Business Sustainable Development Values Being a good, socially responsible corporate citizen is a vital part of the values of Centara Hotels & Resorts. We are committed to strive for sustainable business development with integrity and social responsibility, in conformity with UNESCO’s development policy and the government’s National Economic and Social Development Plan. Both give importance to the practice of social responsibility to ensure benefits be equitably shared between stakeholders including customers, shareholders, business partners, employees, surrounding communities, and philanthropic organisations, for a better society at large.

Sustainability Approach To ensure that our social responsibility management is in line with our sustainability visions and commitment, the company has established a sustainable approach that is detailed as follows: 1. Corporate social responsibility policy with clear objectives and detailed framework is clearly defined and implemented by the company’s chief executive officer and board of directors to ensure companywide practice. 2. Corporate social responsibility committee is in charge of defining policy and operation guidelines for undertaking social activities as well as considering linkage and progress of operation plans. The achievement is then summarised and included in the company’s sustainability report presented to the Stock Exchange of Thailand. 3. Central committee for sustainable development comprises of management from relevant units including human resource, finance and accounting, maintenance, operation as well as corporate communications department to ensure operational standards meet or exceed local and international legislative environmental requirements. 4. Comprehensive company-wide communications ensure that every employee is fully aware of the sustainability policy and contributes through positive engagement. 5. Sustainable development and corporate social responsibility is publicised to solicit cooperation from the surrounding communities, business partners, shareholders, media, and charitable organisations. 6. Stakeholders’ benefits are taken care of by careful application of corporate social responsibility policy to ensure that the policy is effectively implemented and is truly beneficial to the stakeholders and communities at large. The above approach is designed to drive Centara Hotels & Resorts to sustainable development under the management of Central Plaza Hotel Public Company Limited. The company, together with the Central Group, divides the basic sustainable development into four parts; namely Cultural Diversity, Social Equity, Environmental 4XDOLW\ DQG (FRQRPLF 6XIILFLHQF\ 7KH FRPSDQ\ KDV FRQWLQXHG WR SURPRWH WKH IRXU EDVLF VXVWDLQDEOH GHYHORSPHQW elements with the strong belief that corporate responsibility towards our environment and our society is beneficial for the future of the country. This is done through a number of projects, which in 2012 included: Central Cultural Project supports religion-related activities including the recent 2,600th Buddha Jayanti celebration to commemorate the 2,600th anniversary of Lord Buddha’s Enlightenment, held between May 31st and June 4th, 2012 at Wat Pathum Wanaram.

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CONTENTS Central Development Project provides funding for the construction of several Thai schools and materials for classroom use, making them the community educational centres. In 2012, five schools were funded including Thongchai Wittaya School, Muang district, Lumpang; Baan Klong Sa School, Kanchandit district, Surat Thani; Baan Taak Dad School, Trakarnpeuchpon district, Ubon Rachathani; Baan Lae Po Dei Border Patrol School, Mae Wa Luang sub-district, Tha Song Yang district, Tak; and the Border Patrol School at Baan Nong Yai, Roong sub-district, Kantararak district, Sri Saket. Central Health Care Project arranges monthly health check-up service at no cost for users at the Police Hospital. Central Disaster Relief Project distributed 10,000 blankets to needy people in distressed areas and donated 2,600 survival bags to a number of organisations in 2012. Central Community Development Programme: Sum Soong Model in Khon Kaen (three-year project) is a pilot project in cooperation with Central Group of Companies. Commencing in 2010, this community development programme has empowered many

Aluminum ring pull caps donation ceremony to the Prostheses foundation of HRH the Princess Mother

local farmers. The programme helped a number of farmers cut the usual planting-to-harvest cycle from eight months down to four. The initiative also taught farmers to add organic vegetable crops during the usual non-growing season, providing a welcome source of income during a normally difficult time. Mon Mai at Baan Hua Fai, Chonabot district and Baan Nong Ya Plong, Munjakiri district, Khon Kaen is a career development programme that provides funding to support local Thai silk weavers in terms of training, designing and colouring to ensure that production suits market demand. The programme also includes loans for the members. Agriculture development programme with Som O Khao Yai in Samut Songkram, Nang Lae pineapple in Chiang Rai, Luempua sticky rice in Tak, Sang Yod rice in Pattaloong, and Khao Jib in Buriram is a threeyear project that began in 2012. The programme helps farmers improve and increase agricultural produce by training and providing financial support as well as arranging for the packaging design, marketing, and distribution of the agricultural produce.

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Community Forest for Ecology Study at Mae Pok Forest, Lee district and Mae Ta Pa Pao Forest, Mae Ta district, Lumpoon is a three-year project in which Centara Hotels & Resorts, together with Central Group of Companies, provides financial assistance, training and raising awareness in natural resources

Centara Happy Memory for the Kids of Klong Toey

preservation to people in the community to ensure sustainable benefits towards the local communities. The support includes reforestation and transforming to a centre of ecology education, installation of water purifier to ensure hygienic drinking water supply, building of earthen houses for home-stay tourism development, and tourist guide training for people in the community, as well as learning to grow ecologically appropriate plants. Besides the projects in coordination with the Central Group of Companies, Centara Hotels & Resorts has initiated a number of projects focusing on human resources development and reduction of environmental effects, which are keys to sustainable growth of both organisation and country.

Development of Human Resources Realising that people are the engine that drives business, supports national competitiveness and ultimately on the strength of the economy, Centara Hotels & Resorts continues placing emphasis the development of human resources through a variety of programmes and activities as outlined below: Â&#x2021; Four Cs: Centara Career Creation for Children: This development programme was originally derived from the Youth Career Development Programme (YCDP). However, as a result of UNICEFâ&#x20AC;&#x2122;s discontinuation to grant support, the company decided to maintain this programme aiming to advocate sustainable careers amongst Thai youth. Later, the company launched the programme with partial financial support given by the Department of Skill Development. Upon the completion of the programme, students have been employed in different properties of Centara Hotels & Resorts. Up to the present, more than 160 students from the programme are full-time staff at different properties within Centara Hotels & Resorts. Â&#x2021; Memorandum of Understanding (MOU) with 36 universities in Thailand for the acceptance of interns. This is a crucial part of developing a new workforce through the establishment of a network with 36 universities and colleges, such as Sripatum University, Nakorn Phanom University, Ubon Rachathani

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University, Songkhla Nakarin University, Sakon Nakorn Rajabhat University, Payup University, Kampaengphet Rajabhat University, Trat Technical College, and Chiang Mai Vocational College. Acceptance of Overseas Trainees. Apart from local universities and colleges, the company has also accepted hospitality management students from prestigious institutes such as Glion Institute of Higher Education, Les Roches International School of Hotel Management, Switzerland, University of Stenden, The Netherlands, and Erasmus College of Hospitality, Belgium. The programme offers the students six months’ training in both front-of-the-house and back-of-the-house areas. A few participants in the programme became full-time staff at Centara Hotels & Resorts after training. Management Development Programme (MDP) is a career development programme for potential hotel executives. In 2012, the company signed an agreement with Dhurakij Pandit University. The programme includes five-month course at Dhurakij Pandit University followed by two months of on-the-job training at selected properties of Centara Hotels & Resorts, finished with seven months training with Swiss College of Hospitality Management Lenk in Switzerland. Up to the present, 57 participants of the programme, including first-year participants, have worked at selected Centara Hotels & Resorts properties. Some participants who may not be able to go abroad for training but have high potential can join the Fast Track Development Programme, which offers six months of training in various departments, with comprehensive assessment. Upon completion of the programme, the participants will be promoted to

4 Cs : Centara Career Creation for Children

supervisors, assistant managers, or managers. Each year the programme is well attended, with more than 300 participants. Standards for Good Practice in Human Resources and Training Projects ensure that Centara Hotels & Resorts properties in different locations operate under the same standards. Initiated in 2012 by the human resources department, each property will undergo comprehensive assessment and if any of them are not up to the standards they will be re-assessed until the standards are achieved. Synergised Human Resources Projects is held in collaboration with other business units of Central Group of Companies. The first collaborative project is the establishment of a Career Training Centre at which certain generic training programmes are conducted for the participants from each business unit. Create Partnership Agreement with local and national government agencies, international organisations and companies throughout the supply chain helps strengthen environmental and sustainability practices on a wider scale. Centara’s partnership with ECPAT (End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes) reflects the company’s commitment to ending the commercial sexual exploitation of children. The company officially adopted the Code of Conduct for the Protection of Children from Sexual Exploitation in Travel and Tourism drawn up by ECPAT and the World Tourism Organisation and has established the principles for an active policy to combat child sex tourism. By signing up for this initiative, Centara is committed to training its employees and to boosting customer awareness on this important issue. CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

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Managing Environmental Impacts Centara Hotels & Resorts has been actively promoting environmental sustainability for many years with the aspiration of operating green hotels. The company encourages positive engagement among employees in reduction of energy use and protection of the environment. During the past year, the company has initiated many environment-related projects. An energy-saving committee was set up at the corporate level to ensure that properties throughout the group control, monitor, and evaluate their energy usage and that state-of-the-art technologies are installed to reduce energy usage and protect the environment. Wastewater is treated and used within the hotels for functions such as air-conditioning and for watering the grounds, while solid wet waste is processed for biogas and organic fertiliser, and wastepaper and fabrics are recycled. Regular programmes are held for staff to encourage individual initiatives and to promote knowledge, while guests are given every opportunity to take part in various activities. Actions taken include:

Installation of solar water heaters and heat recovery system to use the warm air emission from air conditioners to heat water within the properties. This helps reduce energy usage and results in significant reduction of electricity costs;

Installation of energy saving light bulbs within the properties;

Ozone laundry system to replace the traditional laundry method. The wastewater requires no special treatment with chemical agents and can be reused for the hotels’ herbal plots;

Campaigning against usage of plastic and foam food containers and changing to ecologically friendly food containers;

Reduction of paper use by recycling and introducing e-document system;

Discontinuing use of plastic bags for laundry and newspaper distribution at all properties;

Boiling leftover soaps from guest rooms for washing the floor-cleaning mops;

Growing herbal plants and vegetables and attaching name tags of each plant both in Thai and English. This is not only an opportunity to showcase healthy local herbs and a source of healthy ingredients for cooking, but also serves as decoration in place of costly flowers;

Participating in local and international environmental organisations winning numerous in awards and certificates for conservation. This reflects the company’s consistent and continuing efforts to sustainably manage the environment. Awards and certificates received include Thailand Tourism Award for 10 consecutive years, EarthCheck Silver and Bronze status from the Pacific Asia Travel Association, the Green Leaf Smoke Free Hotel Certificate from the Green Leaf Foundation, ASEAN Green Hotel and Thai *UHHQ +RWHO E\ 'HSDUWPHQW RI (QYLURQPHQWDO 4XDOLW\ 3URPRWLRQ.

Companies all over the world have been playing an increasingly important role in sharing and promoting the principles of sustainability both within their organisations and their broader communities. More people have adapted their lifestyle in response to growing pressures on the environment and as a result their expectations and choices of travel destinations and experiences have also evolved. It is important for the company to be able to respond to customers’ environmental choices and changing expectations on responsible tourism. Centara Hotels & Resorts has therefore advanced its commitment to protecting the environment by undertaking the benchmarking with EarthCheck, a leading international centre for scientific excellence in sustainable tourism, using programme aimed at reducing carbon footprint and ensuring the environmental sustainability for growth and development. Centara properties were assessed against these EarthCheck benchmarking indicators and checklists:

Greenhouse Gas Emissions

Energy Efficiency, Conservation and Management

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Management of Freshwater Resources

Ecosystems Conservation and Management

Management of Social and Cultural Issues

Land Use Planning and Management

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Wastewater Management

Solid Waste Management

Management of Environmentally Harmful Substances

Ten Centara properties currently hold EarthCheck Bronze and Silver status and the company is on track to expand the achievement and upgrade to the higher status across all properties. The company’s commitment to reducing environmental impacts is total and well adopted throughout the organisation. Centara Hotels & Resorts also invites guests to participate in the programme by reducing the changing of towels and bed sheets, and making donations for environmental NGOs.

RESTAURANT BUSINESS Development of Human Resources Central Restaurants Group’s human resource development programmes focus on functional trainings according to the specific needs for strategic business development and growth. The Career Path programme encourages store employees to progress in their career as part of the company’s employee development and retention policy. A number of functional training courses have been initiated to ensure positive engagement in corporate visions, missions, strategic plans and goals. In addition, Central Restaurants Group (CRG) has established human resources development projects in collaboration with other business units within Central Group. The main purpose of the project is to raise awareness of the job opportunities available for internal employees whom the company expects to retain. It is crucial to build a happy and satisfying work environment, within the aim of making CRG the employer of choice among management and job seekers.

Development of Social and Communities Being a good corporate citizen is one of CRG’s policies. CRG took part in one of the main social contribution activities of Central Group, the Hygienic Kitchen project, which was one of many projects initiated in 2012. The project is an important part of Central Group’s educational development programmes with the aim of enhancing quality of life for less-privileged students. Besides providing necessary crockery for needy schools, CRG campaigns on food safety, which is crucial to promote healthy eating. In 2012, the Hygienic Kitchen project has operated in three schools, namely Thongchai Wittaya, Lumpang; Klongsa School, Surat Thani; and Baan Tak Dad School in Ubon Ratchathani. Among these, two schools are maintaining these programmes through 2013.

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REPORT OF THE AUDIT COMMITTEE

To: Shareholders of CENTRAL PLAZA HOTEL plc. The Audit Committee of Central Plaza Hotel plc. consists of 4 Independent Directors, all of who possess WKH TXDOLÂżFDWLRQV DV UHTXLUHG E\ WKH 6WRFN ([FKDQJH RI 7KDLODQG 6(7 DQG DUH IXOO\ LQGHSHQGHQW LQ GLVFKDUJLQJ their responsibilities in full compliance with the Charter of the Audit Committee. Subsequent to the resignation of Mr. Vichate Tantiwanich as an Independent Director and Audit Committee member, the members of the Audit Committee were appointed by the resolution of the Companyâ&#x20AC;&#x2122;s Board of Directors at the meeting held on May 14, 2012. Thus, the current Audit Committee comprises of Mr. Bhisit Kuslasayanon (acting as the Chairman), Dr. Chanvitaya Suvarnapunya, Mr. Vichien Tejapaibul, and Mr. Kanchit Bunajinda 'XULQJ WKH ÂżQDQFLDO \HDU WKH $XGLW &RPPLWWHH KHOG D WRWDO RI PHHWLQJV (YHU\ PHPEHU DWWHQGHG DOO Audit Committee meetings, with the exception of Mr. Bhisit Kuslasayanon and Mr. Vichien Tejapaibul both whom were absent for one meeting each due to other important commitments. These meetings were also attended by 'LUHFWRU RI WKH ,QWHUQDO $XGLW *URXS DQG H[WHUQDO $XGLWRUV RI WKH &RPSDQ\ DQG DV VSHFLÂżFDOO\ UHTXLUHG E\ WKH respective agenda items being considered, by senior Corporate Management or senior Management of Subsidiary FRPSDQLHV DQG RWKHU LQYROYHG PDQDJHPHQW VWDII LQ RUGHU WR FODULI\ GHWDLOV RU JLYH WKHLU RSLQLRQV WKDW ZHUH EHQHÂżFLDO to the Companyâ&#x20AC;&#x2122;s operations. Details of all discussions and resolutions made at all these Audit Committee meetings were recorded and submitted to the Board of Directors for their information and consideration, which can be summarised as follows :

4XDUWHUO\ DQG DQQXDO ÂżQDQFLDO VWDWHPHQWV IRU 7KH $XGLW &RPPLWWHH KDV UHYLHZHG WKH &RPSDQ\ÂśV 4XDUWHUO\ DQG $QQXDO )LQDQFLDO 6WDWHPHQWV IRU WKH ÂżQDQFLDO year 2012, as well as has discussed them with the external Auditors and the Management members responsible for their preparation. We have assessed their accuracy and full compliance to accepted accounting practices, and UHYLHZHG DQ\ DGMXVWPHQWV ZKLFK PD\ KDYH DQ\ VLJQLÂżFDQW LPSDFWV RQ LPSDFW RQ WKH UHVSHFWLYH ÂżQDQFLDO VWDWHPHQWV together with any comments from the external Auditors before presenting them to Companyâ&#x20AC;&#x2122;s Board of Directors for their consideration and approval. Moreover, the Audit Committee has also held a closed-door meeting with the external Auditors but without any member of the Companyâ&#x20AC;&#x2122;s Management being present; whereby the external $XGLWRUV UHSRUWHG DQG FRQÂżUPHG WKDW WKHUH KDYH QRW HQFRXQWHUHG DQ\ RSHUDWLRQDO HUURUV LVVXHV RU LUUHJXODULWLHV as well as have always received full cooperation from the Management group 7KXV LW LV WKH RSLQLRQ RI WKH $XGLW &RPPLWWHH WKDW DOO VLJQLÂżFDQW LQIRUPDWLRQ DV UHSRUWHG LQ WKH DERYH PHQWLRQHG Financial Statements have been prepared and presented in a manner and process that are in accordance with generally accepted accounting standards and principles.

2. Internal Controls System The Audit Committee, together with both the internal audit group and the external Auditors, has reviewed the Companyâ&#x20AC;&#x2122;s internal controls system during each quarter of 2012. Based on the internal audit reports, the responsible executives have already corrected any issues in accordance with their recommendations. Also based RQ FORVH DQG UHJXODU IROORZ XS RQ WKHVH FRUUHFWLYH DFWLRQV QR IXUWKHU VLJQLÂżFDQW LUUHJXODULWLHV KDYH EHHQ IRXQG The Audit Committee has reviewed and approved the annual internal audit plans that are based on risk-based audit activities and focused on the current operations of the Group of Companies, the scope of which encompasses the various key operating procedures as well as associated key risks factors. Additionally, the Audit Committee has regularly commented and given recommendations on the techniques and know-how of being professional internal auditors, in order to continually improve and develop the internal audit functions of the Company.

036

ANNUAL REPORT 2012

CONTENTS

3. Compliance with the applicable securities laws and associated SET regulations 7KH $XGLW &RPPLWWHH WRJHWKHU ZLWK WKH /HJDO $IIDLUV 'HSDUWPHQW WKH ,QWHUQDO $XGLW *URXS DQG WKH 2IÂżFH RI the Company Secretary, has reviewed that the Companyâ&#x20AC;&#x2122;s operations are in accordance and fully comply with all the securities laws and associated SET regulations as well as any laws relating to the Companyâ&#x20AC;&#x2122;s businesses. It has concluded that Company has properly and appropriately ensured that all its operational activities and dealings with external parties have fully complied with all the applicable legal and regulatory requirements

7UDQVDFWLRQV ZLWK 3RWHQWLDO &RQĂ&#x20AC;LFW RI ,QWHUHVWV The Audit Committee has assessed and reviewed, on a quarterly basis, all business transactions involving any related parties and/or related companies. It has determined that the Company has used both prices or fees as well as applicable terms and conditions EHWZHHQ VXFK SDUWLHV ZKR PD\ KDYH D FRQĂ&#x20AC;LFW RI LQWHUHVWV LQ D IDLU DQG OHJDO PDQQHU DQG RQ WKH VDPH EDVLV DV WKRVH XVHG IRU H[WHUQDO SDUWLHV LQ D QRUPDO EXVLQHVV WUDQVDFWLRQ DV ZHOO DV KDV VXIÂżFLHQWO\ DQG FRPSOHWHO\ UHSRUWHG such transactions in full accordance with the legal and regulatory requirements.

5. Risks Management Review The Audit Committee, together with the Risk Management Committee (that consists of the Companyâ&#x20AC;&#x2122;s senior Executives), has, on quarterly basis, continued to closely monitor the progress of the risks management activities, IRFXVLQJ RQ WKH LGHQWLÂżFDWLRQ FDWHJRULVDWLRQ DQG DVVHVVPHQW RI DOO ULVNV WRJHWKHU ZLWK WKH HIIHFWLYH PDQDJHPHQW of any situations involving high risks. It has concluded that the Company has appropriately monitored all risks in accordance with the risks PDQDJHPHQW IUDPHZRUN DQG SROLFLHV DV GHWHUPLQHG E\ WKH 5LVN 0DQDJHPHQW &RPPLWWHH VR WKDW WKH LGHQWLÂżHG ULVNV WKDW FRXOG KDYH DQ\ VLJQLÂżFDQW LPSDFW IRU WKH &RPSDQ\ KDYH EHHQ HIIHFWLYHO\ PDQDJHG RU PLQLPLVHG WR acceptable levels.

6. Appointment of external Auditors for the year 2013 During the past year, the Audit Committee has reviewed the performance of the external Auditors, taking LQWR FRQVLGHUDWLRQ WKH TXDOLÂżFDWLRQV H[SHULHQFH LQ DXGLWLQJ D KRWHOV RSHUDWLRQ EXVLQHVV WKH H[HUFLVH RI WKHLU independence in making observations and recommendations, as well as the outputs from each auditor. We have found them all to be satisfactory and acceptable. Additionally, the Audit Committee has reviewed the appropriateness of the remuneration for the external Auditors. We, therefore, recommend that the Board of Directors submit, for consideration and approval at the Annual General Shareholders Meeting, the proposed appointment of Mrs.Nattaporn Phan-Udom (CPA No.3430), or Mr. Paiboon Tankoon (CPA No. 4298) or Miss Sakuna Yamsakul (CPA No.4906) from PricewaterhouseCoopers ABAS /WG DV WKH &RPSDQ\ÂśV H[WHUQDO $XGLWRUV IRU DQRWKHU WHUP IRU WKH ÂżQDQFLDO \HDU WRJHWKHU ZLWK D SURSRVHG WRWDO audit fee of Baht 1,447,000 (one million, four hundred and forty-seven thousand). In summary, the Audit Committee is of the opinion that the Board of Directors and the responsible Executives of Central Plaza Hotel plc. are strongly committed to perform their duties, so that the Company can achieve its plans and targets, in a professional manner; that the external Auditors have carried out their responsibilities DSSURSULDWHO\ DQG ZLWK IXOO LQGHSHQGHQFH WKDW WKH ULVNV PDQDJHPHQW DFWLYLWLHV DV ZHOO DV LQWHUQDO ÂżQDQFLDO FRQWUROV V\VWHP DUH ERWK HIIHFWLYH DQG VXIÂżFLHQW DQG WKDW WKH SULQFLSOHV RI JRRG FRUSRUDWH JRYHUQDQFH KDYH EHHQ IXOO\ complied to. On behalf of Audit Committee

Mr. Bhisit Kuslasayanon Chairman, Audit Committee February 11, 2013

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

037

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REPORT OF THE NOMINATION AND COMPENSATION COMMITTEE

In 2012, the Nomination and Compensation Committee has performed its duties and responsibilities under its Charter by held four meetings, with a summary of the meetings as follows: 1. &RQVLGHULQJ DQG UHFUXLWLQJ TXDOLÂżHG FDQGLGDWHV IRU GLUHFWRUVKLS DQG VXEPLWWLQJ WKHP WR WKH %RDUG RI Directors and Shareholdersâ&#x20AC;&#x2122; meetings for their consideration and nomination to replace the directors retired by rotation in 2012. 2. Considering the 2012 compensation for the Board and its subcommittees, consisting of Audit Committee, Nomination and Compensation Committee and submitting it to the Board and Shareholdersâ&#x20AC;&#x2122; meeting for consideration and approval, taking into account their responsibilities and performance, compared within industry peers and the shareholders have approved it as proposed. 3. Considering the succession plan for the Companyâ&#x20AC;&#x2122;s senior executives. 4. Considering the remuneration for senior executives. 5. Considering and giving opinion on human resource policies and work processes. 6. &RQVLGHULQJ GHWHUPLQLQJ JRDO VHWWLQJ DQG SURYLGLQJ SHUIRUPDQFH DVVHVVPHQW IRU &KLHI ([HFXWLYH 2IÂżFHU 7. Considering and reviewing duties and responsibilities, as well as performance under the Nomination and Compensation Committee Charter. The Nomination and Compensation Committee has performed its assigned duties independently and properly IRU WKH KLJKHVW EHQHÂżW RI WKH &RPSDQ\ VKDUHKROGHUV DQG RWKHU VWDNHKROGHUV 7KH &RPPLWWHH KDV UHSRUWHG LWV VXPPDUL]HG SHUIRUPDQFH DQG ÂżQGLQJV WR WKH %RDUG RI 'LUHFWRUV IRU LWV DFNQRZOHGJPHQW HYHU\ WLPHV

Dr. Chanvitaya Suvarnapunya The Nomination and Compensation Committee Chairman

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ANNUAL REPORT 2012

CONTENTS

REPORT OF THE BOARD OF DIRECTORSâ&#x20AC;&#x2122; RESPONSIBILITIES FOR FINANCIAL STATEMENTS

The Board of Directors of Central Plaza Hotel Publi Public Company Limited (â&#x20AC;&#x153;the Companyâ&#x20AC;?) is responsible for the FRQVROLGDWHG ÂżQDQFLDO VWDWHPHQWV RI WKH FRPSDQ\ DQG LWV VXEVLGLDULHV DV ZHOO DV ÂżQDQFLDO LQIRUPDWLRQ LQ WKH DQQXDO FRQVROLGDWHG ÂżQDQFLDO VWDWHPHQWV RI WKH FRPSDQ\ DQG LW VXEVLGLDULHV DV ZHOO DV ÂżQDQFLDO LQIRUPDWLRQ LQ WKH DQQXDO UHSRUW 7KH ÂżQDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG LQ DFFRUGDQFH ZLWK 7KDL )LQDQFLDO 5HSRUWLQJ 6WDQGDUGV 7KH UHSRUW 7KH ÂżQDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG LQ FFRUGDQFH ZLWK 7KDL )LQDQFLDO 5HSRUWLQJ 6WDQGDUGV 7KH policies pursued are deemed appropriate and applied consistently c nsistently and conservation judgment and best estimate H RI LPSRUWDQW LQIRUPDWLRQ LQ WKH QRWHV WR WKH ÂżQDQFLDO ÂżQDQFLDO DUH DGRSWHG LQ WKLV SUHSDUDWLRQ ZLWK DGHTXDWH GLVFORVXUH statements. The Board of Directors has appointed an audit committee ttee comprising independent directors to provide effective RYHUVLJKW RI ÂżQDQFHV DQG WKH LQWHUQDO FRQWURO V\VWHP WR HQVXUH WKDW DFFRXQWLQJ UHFRUGV DUH DFFXUDWH FRPSOHWH DQG VXUH WKDW DFFRXQWLQJ UHFRUGV DUH DFFXUDWH FRPSOHWH DQG timely, to prevent fraud and materially irregular operations. s. The views of the Audit Committee are reported in the Committeeâ&#x20AC;&#x2122;s report in this annual report. In this regard, the Board of Directors is of an opinion that internal control systems of the Company are in VDWLVIDFWRU\ DQG VXIÂżFLHQW OHYHO WR UHDVRQDEO\ EXLOG WKH FRQÂżGHQFH LQ WKH UHOLDELOLW\ RI WKH FRQVROLGDWHG ÂżQDQFLDO statement of the Company and its subsidiaries as at December 31, 2012.

Mr. Suthikiati Chirathivat

Mr.Thirayuth Chirathivat

Chairman of the Board

&KLHI ([HFXWLYH 2IÂżFHU

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

039

CONTENTS

AUDITORâ&#x20AC;&#x2122;S REPORT To the Shareholders and the Board of Directors of Central Plaza hotel Public Company Limited , KDYH DXGLWHG WKH DFFRPSDQ\LQJ FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO VWDWHPHQWV RI &HQWUDO 3OD]D KRWHO 3XEOLF Company Limited and its subsidiaries and of Central Plaza hotel Public Company Limited, which comprise the FRQVROLGDWHG DQG FRPSDQ\ VWDWHPHQWV RI Â¿QDQFLDO SRVLWLRQ DV DW 'HFHPEHU DQG WKH UHODWHG FRQVROLGDWHG DQG FRPSDQ\ VWDWHPHQWV RI FRPSUHKHQVLYH LQFRPH FKDQJHV LQ VKDUHKROGHUVÂ¶ HTXLW\ DQG FDVK Ã&#x20AC;RZV IRU WKH \HDU WKHQ HQGHG DQG D VXPPDU\ RI VLJQLÂ¿FDQW DFFRXQWLQJ SROLFLHV DQG RWKHU QRWHV Managementâ&#x20AC;&#x2122;s Responsibility for the Financial Statements 0DQDJHPHQW LV UHVSRQVLEOH IRU WKH SUHSDUDWLRQ DQG IDLU SUHVHQWDWLRQ RI WKHVH Â¿QDQFLDO VWDWHPHQWV LQ DFFRUGDQFH with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to HQDEOH WKH SUHSDUDWLRQ RI Â¿QDQFLDO VWDWHPHQWV WKDW DUH IUHH IURP PDWHULDO PLVVWDWHPHQW ZKHWKHU GXH WR IUDXG RU error. Auditorâ&#x20AC;&#x2122;s Responsibility 0\ UHVSRQVLELOLW\ LV WR H[SUHVV DQ RSLQLRQ RQ WKHVH Â¿QDQFLDO VWDWHPHQWV EDVHG RQ P\ DXGLW , FRQGXFWHG P\ DXGLW LQ accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and SODQ DQG SHUIRUP WKH DXGLW WR REWDLQ UHDVRQDEOH DVVXUDQFH DERXW ZKHWKHU WKH Â¿QDQFLDO VWDWHPHQWV DUH IUHH IURP material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Â¿QDQFLDO VWDWHPHQWV 7KH SURFHGXUHV VHOHFWHG GHSHQG RQ WKH DXGLWRUÂ¶V MXGJPHQW LQFOXGLQJ WKH DVVHVVPHQW RI WKH ULVNV RI PDWHULDO PLVVWDWHPHQW RI WKH Â¿QDQFLDO VWDWHPHQWV ZKHWKHU GXH WR IUDXG RU HUURU ,Q PDNLQJ WKRVH ULVN assessments, the auditor considers internal control relevant to the entityâ&#x20AC;&#x2122;s preparation and fair presentation of WKH Â¿QDQFLDO VWDWHPHQWV LQ RUGHU WR GHVLJQ DXGLW SURFHGXUHV WKDW DUH DSSURSULDWH LQ WKH FLUFXPVWDQFHV EXW QRW IRU the purpose of expressing an opinion on the effectiveness of the entityâ&#x20AC;&#x2122;s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made E\ PDQDJHPHQW DV ZHOO DV HYDOXDWLQJ WKH RYHUDOO SUHVHQWDWLRQ RI WKH Â¿QDQFLDO VWDWHPHQWV

, EHOLHYH WKDW WKH DXGLW HYLGHQFH , KDYH REWDLQHG LV VXIÂ¿FLHQW DQG DSSURSULDWH WR SURYLGH D EDVLV IRU P\ DXGLW RSLQLRQ Opinion ,Q P\ RSLQLRQ WKH FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO VWDWHPHQWV UHIHUUHG WR DERYH SUHVHQW IDLUO\ LQ DOO PDWHULDO UHVSHFWV WKH FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO SRVLWLRQ RI &HQWUDO 3OD]D KRWHO 3XEOLF &RPSDQ\ /LPLWHG DQG LWV subsidiaries and of Central Plaza hotel Public Company Limited as at 31 December 2012, and its consolidated DQG FRPSDQ\ UHVXOWV RI RSHUDWLRQV DQG LWV FDVK Ã&#x20AC;RZV IRU WKH \HDU WKHQ HQGHG LQ DFFRUGDQFH ZLWK 7KDL )LQDQFLDO Reporting Standards.

Nattaporn Phan-Udom &HUWLÂ¿HG 3XEOLF $FFRXQWDQW 7KDLODQG 1R PricewaterhouseCoopers ABAS Ltd. Bangkok 21 February 2013

040

ANNUAL REPORT 2012

CONTENTS C CO ON

CENTRAL C CENT ENTRAL LP PLAZA HOTEL PUBLIC P LIC COMPANY COM Y LIMITED Statements of Financial Position As at 31 December 2012 and 2011 and 1 January 2011

Consolidated

Company Restated

31 December Notes

31 December

1 January

Restated 31 December

31 December

1 January

2012

2011

2012

2011

Baht

356,281,149

315,941,985

299,352,113

20,053,882

6,000,448

42,100,200

3,960,256

836,138,013

646,966,908

526,262,890

314,507,017

210,387,275

169,017,983

Assets Current assets Cash and cash equivalents

Temporary investments Trade and other receivables

150,094,840

167,495,000

464,850,000

430,650,000

1,414,500,000

Inventories

473,384,494

399,890,413

304,062,823

23,264,904

20,644,752

21,827,879

Other current assets

169,171,058

232,441,979

327,856,694

13,231,992

13,025,973

50,443,338

1,989,029,810

1,762,736,285

1,625,029,520

835,907,795

680,708,448

1,697,889,400

Short-term loans to others Short-term loans to related parties

Total current assets Non-current assets Investments in subsidiaries

4,622,962,561

4,274,695,445

4,211,489,748

Investments in associates

842,131,542

884,000,020

921,664,308

805,204,788

Interests in joint ventures

82,319,796

351,268,126

157,666,297

60,000,000

240,000,000

552,407

311,280

327,205

157,000,000

96,213,375

93,511,025

3,740,700,000

4,061,600,000

2,758,176,105

491,387,587

507,628,676

500,395,143

315,582,530

328,502,347

321,148,244

19,191,653,595 13,320,034,444 12,563,276,109

5,860,037,630

4,789,811,145

4,528,634,615 -

Other long-term investments Long-term loans to related parties

Investment properties

Property, plant and equipment

Assets under financial lease agreement

2,796,267,301

2,955,925,532

3,111,119,922

Goodwill

314,602,238

115,416,847

Leasehold rights

876,087,576

416,540,368

480,352,132

84,991,440

156,610,721

224,528,588

Other intangible assets

318,962,710

341,447,753

107,454,717

36,666,088

43,218,378

45,057,845

Other non-current assets

697,187,685

732,879,227

761,692,315

18,550,285

119,791,773

179,013,897

Total non-current assets

25,768,152,437 19,920,851,039 18,812,876,020 15,544,695,322 14,819,434,597 13,313,253,830

Total assets

27,757,182,247 21,683,587,324 20,437,905,540 16,380,603,117 15,500,143,045 15,011,143,230

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ 多QDQFLDO VWDWHPHQWV CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

041

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Statements of Financial Position (Cont’d) As at 31 December 2012 and 2011 and 1 January 2011 Consolidated

Company Restated

31 December Notes

31 December

1 January

Restated 31 December

31 December

1 January

2012

2011

2012

2011

Baht

Liabilities and shareholders’ equity Current liabilities Bank overdrafts and short-term borrowings from financial institutions Trade and other payables

2,599,441,615

1,917,865,027

1,124,691,676

2,407,315,474

1,851,401,392

1,592,495,717

1,197,174,637

221,441,753

1,698,331,463 1,111,929,924 367,287,174

270,152,093

Current portion of long-term borrowings from financial institutions Current portion of debentures

958,000,000

408,000,000

888,000,000

588,000,000

288,000,000

788,000,000

1,399,862,968

1,598,966,615

999,032,667

1,399,862,968

1,598,966,615

999,032,667

Current portion of equity of unit holder in property fund Current portion of deferred income

62,000,000

281,917,223

175,506,485

125,142,509

96,654,027

89,835,580

87,219,508

Current portion of liability under consignment agreement

116,726,443

75,839,496

Short-term loans from others

61,065,935

Short-term loans from related parties Provision of guarantee payment

33, 19 21

6,000,000

749,000,000

70,000,000

821,500,000

56,188,542

88,917,402

90,580,000

28,189,791

44,609,861

45,440,000 66,201,480

Current portion of leasehold rights payable Income tax payable Other current liabilities

Total current liabilities

70,173,600

66,201,480

70,173,600

104,808,703

152,996,740

154,925,342

468,549,215

449,820,186

514,247,448

181,242,623

189,151,464

164,328,626

7,843,235,593

6,522,741,772

5,221,995,759

5,788,433,079

4,492,195,253 4,429,643,794

Non-current liabilities Long-term borrowings from 19

5,143,150,930

2,718,000,000

2,226,000,000

1,430,000,000

2,018,000,000

Debentures

1,799,117,717

3,199,049,302

3,998,128,363

1,799,117,717

3,199,049,302 3,998,128,363

Equity of unit holder in property fund

financial institutions

Deferred income

31,000,000

93,000,000

155,000,000

2,542,949,386

2,771,122,291

2,888,524,840

1,244,957,079

696,000,000

1,295,290,412 1,345,623,745

Liability under consignment agreement Provision of guarantee payment

116,726,443

192,565,939

15,796,620

28,582,103

7,924,505

14,344,203

70,173,600

117,254,837

167,949,165

142,502,087

45,204,280

57,858,283

49,903,224

72,393,372

63,638,297

52,174,078

149,257,858

83,650,370

18,247,279

30,471,168

49,983,060

14,198,187

9,855,124,100

9,112,206,045

9,579,332,350

4,549,750,244

Leasehold rights payable Employee benefit obligations Provision for decommissioning Other non-current liabilities Total non-current liabilities Total liabilities

6,744,832,005 6,380,937,261

17,698,359,693 15,634,947,817 14,801,328,109 10,338,183,323 11,237,027,258 10,810,581,055

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ ¿QDQFLDO VWDWHPHQWV

042

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Statements of Financial Position (Cont’d) As at 31 December 2012 and 2011 and 1 January 2011 Consolidated

Company Restated

31 December Notes

31 December

1 January

Restated 31 December

31 December

1 January

2012

2011

2012

2011

Baht

1,350,000,000

1,580,800,000

1,350,000,000

1,580,800,000

1,350,000,000

970,000,000

Liabilities and shareholders’ equity (Cont’d) Shareholders’ equity Share capital Authorised share capital 1,350,000,000 ordinary shares (2011: 1,580,800,000 shares) of Baht 1 each

Issued and paid-up share capital 1,350,000,000 ordinary shares of Baht 1 each Premium on paid-up capital Retained earnings 25

158,080,000

3,147,628,281

1,769,362,067

1,286,477,049

2,357,235,586

1,784,247,495

1,721,663,641

3,751,378,559

1,548,532,166

1,592,212,513

1,207,104,208

788,292

818,534

9,377,086,840

5,795,974,233

5,356,769,562

6,042,419,794

4,263,115,787

4,200,562,175

681,735,714

252,665,274

279,807,869

Total shareholders’ equity

10,058,822,554

6,048,639,507

5,636,577,431

6,042,419,794

4,263,115,787

4,200,562,175

Total liabilities and shareholders’ equity

27,757,182,247 21,683,587,324 20,437,905,540 16,380,603,117 15,500,143,045 15,011,143,230

Appropriated-Legal reserve Unappropriated Other components of equity Equity attributable to owners of the parent Non-controlling interests

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ ¿QDQFLDO VWDWHPHQWV CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

043

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Statements of Comprehensive Income For the years ended 31 December 2012 and 2011

&RQVROLGDWHG

&RPS SDQ\

%DKW

Revenues from hotel operations and related services

6,245,278,177

4,782,490,305

2,040,041,699

1,574,557,096

Revenues from food and beverage

8,258,555,903

6,495,316,863

524,581,217

386,932,568

876,567,869

296,422,671

645,767,189

528,275,220

15,380,401,949

11,574,229,839

3,210,390,105

2,489,764,884

Cost of sales - hotel operations and rerated services

4,184,486,917

3,819,957,114

1,442,154,022

1,244,132,466

Cost of sales - food and beverage

4,485,237,346

3,162,968,437

1RWH 5HYHQXHV

Dividends received Other income

7RWDO UHYHQXHV ([SHQVHV

614,912,767

526,227,056

177,750,993

155,666,892

3,832,044,886

2,883,399,038

428,264,231

617,703,710

7RWDO H[SHQVHV

13,116,681,916

10,392,551,645

2,048,169,246

2,017,503,068

2SHUDWLQJ SURILW

2,263,720,033

1,181,678,194

1,162,220,859

472,261,816

Joint ventures

30,509,355

39,240,685

Associates

28,579,354

38,742,008

59,088,709

77,982,693

2,322,808,742 (486,342,148)

1,259,660,887 (414,072,559)

1,162,220,859 (386,732,768)

472,261,816 (342,177,962)

845,588,328 (255,100,320)

775,488,091 -

130,083,854

Income tax expense

1,836,466,594 (212,760,197)

1HW SURILW IRU WKH \HDU

1,623,706,397

590,488,008

775,488,091

130,083,854

1,580,766,214

550,385,018

775,488,091

130,083,854

42,940,183

40,102,990

1,623,706,397

590,488,008

775,488,091

130,083,854

1.17

0.41

0.57

0.10

Selling expenses Administrative expenses

6KDUH RI QHW SURILW RI LQYHVWPHQWV

7RWDO 3URILW EHIRUH ILQDQFH FRVWV DQG LQFRPH WD[ H[SHQVH Finance costs

3URILW EHIRUH LQFRPH WD[ H[SHQVH

3URILW DWWULEXWDEOH WR Owners of the parent Non-controlling interests

(DUQLQJV SHU VKDUH Basic earnings per share (Baht)

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044

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Statements of Comprehensive Income For the years ended 31 December 2012 and 2011

&RQVROLGDWHG

Net profit for the year

&RPS SDQ\

%DKW

1,623,706,397

590,488,008

775,488,091

130,083,854

239,312

(15,925)

2,119,848,213

1,185,897,250

338,265,152

(267,558,478)

79,152,774

20,452,650

(29,585,806)

2,240,361,167

(15,925)

1,206,349,900

3,864,067,564

590,472,083

1,981,837,991

130,083,854

3,826,335,088

550,369,093

1,981,837,991

130,083,854

37,732,476

40,102,990

3,864,067,564

590,472,083

1,981,837,991

130,083,854

2WKHU FRPSUHKHQVLYH LQFRPH Gain (loss) on remeasuring of available-for-sale investments Gains on asset revaluation

Share of other comprehensive income from investment Reclassification of revaluation of previously held interest in investments Actuarial gains Exchange differences on translating financial statements Other comprehensive income (loss) for the year, net of income tax 7RWDO FRPSUHKHQVLYH LQFRPH IRU WKH \HDU 7RWDO FRPSUHKHQVLYH LQFRPH DWWULEXWDEOH WR Owners of the parent Non-controlling interests

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ 多QDQFLDO VWDWHPHQWV CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

045

7RWDO FRPSUHKHQVLYH LQFRPH IRU WKH \HDU

Opening balance 1 January 2012

'LYLGHQG UHFHLYHG IURP D VXEVLGLDU\

7RWDO FRPSUHKHQVLYH LQFRPH IRU WKH \HDU

Baht

Legal reserve Unappropriated

Retained earnings

Baht

investment

available-for-sale

Remeasuring of

Baht

revaluation

Gain on asset

046

ANNUAL REPORT 2012

Baht

adjustment

Translation

Total other

Baht

gains

Baht

equity

Actuarial component to

Other components of equity

Consolidated

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO VWDWHPHQWV

Closing balance 31 December 2012

DQG EXLOGLQJ

7UDQVIHU GHSUHFLDWLRQ RI ODQG

IURP DTXLULQJ RI LQYHVWPHQW LQ VXEVLGLDU\

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'LYLGHQG SDLG 1RWH

Closing balance 31 December 2011

DQG EXLOGLQJ

7UDQVIHU GHSUHFLDWLRQ RI ODQG

Baht

capital

share capital

'LYLGHQG SDLG 1RWH

on paid-up

paid-up

'LYLGHQG UHFHLYHG IURP D VXEVLGLDU\

Opening balance 1 January 2011

Premium

Issued and

For the years ended 31 December 2012 and 2011

Statements of Changes In Shareholdersâ&#x20AC;&#x2122; Equity

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

Baht

of the parent

Total owners

Non-

Total

Baht

equity

shareholdersâ&#x20AC;&#x2122;

Baht

interests

controlling

CONTENTS

capital Baht

share capital Baht

7RWDO FRPSUHKHQVLYH LQFRPH IRU WKH \HDU

7UDQVIHU GHSUHFLDWLRQ RI ODQG DQG EXLOGLQJ

Baht

Legal reserve Unappropriated

Retained earnings

047

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

Baht

revaluation

Baht

gains

Actuarial

Other components of equity Gain on asset

Company

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO VWDWHPHQWV

Closing balance 31 December 2012

'LYLGHQG SDLG 1RWH

Opening balance 1 January 2012

7UDQVIHU GHSUHFLDWLRQ RI ODQG DQG EXLOGLQJ

7RWDO FRPSUHKHQVLYH LQFRPH IRU WKH \HDU

Closing balance 31 December 2011

paid-up

Premium on

Issued and

'LYLGHQG SDLG 1RWH

Opening balance 1 January 2011

For the years ended 31 December 2012 and 2011

Statements of Changes In Shareholdersâ&#x20AC;&#x2122; Equity (Contâ&#x20AC;&#x2122;d)

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

Baht

of the parent

Total owners

Baht

equity

shareholdersâ&#x20AC;&#x2122;

Total

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Statements of Cash Flows For the years ended 31 December 2012 and 2011

SDQ\ &RPS

&RQVROLGDWHG

%DKW

1,836,466,594

845,588,328

775,488,091

130,083,854

1,351,426,417

1,134,804,103

234,789,449

216,376,698

&DVK IORZV IURP RSHUDWLQJ DFWLYLWLHV Profit before income tax for the year Adjustments: Depreciation and amortisation Allowance for doubtful accounts

1,071,730

(1,281,646)

(418,750)

1,027,150

486,342,148

414,072,559

386,732,768

342,177,962

(59,088,709)

(77,982,693)

(524,581,217)

(386,932,568)

(529,361)

1,106,957

(444,716)

Realisation of deferred income

(173,625,049)

(221,146,162)

(98,973,085)

(130,168,005)

Gain on business acquisition

(146,029,477)

Gain on re-measuring to fair value of investments

(312,138,587)

36,972,250

Finance costs Share of profit from investments in associates and interests in joint ventures (net from income tax) Dividends received (Reversal of) allowance for inventory obsolescence

Loss from guarantee provision

40,391,922

73,696,403

20,265,286

Loss from discontinue branch

11,259,680

10,123,919

Loss on disposals of plant and equipment

14,198,656

31,148,920

9,010,567

14,854,142 245,139,917

Loss on investment

4,068,269

(2,702,350)

Provision for employee benefits

27,890,329

23,464,403

9,010,244

7,955,060

Provision for decommissioning

8,755,075

1,533,963

3,090,459,637

2,232,426,704

810,878,637

477,486,460

Trade and other receivables

(89,585,845)

(136,192,174)

(103,700,992)

(33,013,158)

Inventories

(52,814,718)

(96,934,544)

(2,175,436)

738,411

Unrealised gain on exchange rate

Changes in working capital

Other current assets

152,537,781

124,984,609

(206,019)

43,236,118

Other non-current assets

(19,465,192)

(18,401,528)

85,995,428

80,256,132

41,216,209

257,076,896

(107,256,389)

18,943,977

(92,761,520)

(77,203,843)

2,121,422

(39,352,724)

50,362,884

107,983,592

53,242,848

82,450,744

Provision of guarantee payment

(88,917,402)

(88,144,483)

(44,609,861)

(44,222,087)

Other non-current liabilities

(24,212,855)

82,452,919

17,321,057

52,834,698

2,966,818,979

2,388,048,148

711,610,695

639,358,571

(257,370,189)

(234,545,038)

2,709,448,790

2,153,503,110

711,610,695

639,358,571

Trade and other payables Other current liabilities Deferred income

Cash generated from operating activities Income tax paid Net cash flows from operating activities

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ 多QDQFLDO VWDWHPHQWV

048

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Statements of Cash Flows (Cont’d) For the years ended 31 December 2012 and 2011

&RQVROLGDWHG

&RPS SDQ\

%DKW

2,257,000,000 (1,970,300,000) (187,687,120)

1,992,926,105 (2,312,500,000) (879,000,000)

(756,174,960)

(761,807,564)

12,156,987

617,360,083

(1,358,903,917) -

(1,524,844,126) -

(158,715,848) 353,648,075

(508,069,863) 214,068,156

71,492,030

76,406,296

170,933,143

172,864,412

(4,574,528) 8,818,262

50,514,717 -

19,420,000 6,059,990 2,572,797

19,420,000 33,863,521 540,493

15,324,309

12,175,691

15,324,309

12,175,691

(2,011,861,817)

(2,147,554,986)

508,255,346

(636,351,402)

710,000,000 (517,248,017) (202,500,000) (50,594,458) 61,065,935 (6,000,000) (1,600,000,000) 1,500,000,000 (453,000,000) (62,000,000) (8,547,857) -

793,173,352 (409,532,947) (67,500,000) (53,351,844) 6,000,000 800,000,000 (1,000,000,000) 1,700,000,000 (1,688,000,000) (62,000,000) (11,527,010) -

750,000,000 (421,796,618) (202,500,000) 1,426,500,000 (747,500,000) (1,600,000,000) (288,000,000) (81,500,000)

586,401,539 (347,008,460) (67,500,000) 117,000,000 (868,500,000) 800,000,000 (1,000,000,000) 1,110,000,000 (288,000,000) (81,500,000)

(628,824,397)

7,261,551

(1,164,796,618)

(39,106,921)

1HW GHFUHDVH LQFUHDVH LQ FDVK DQG FDVK HTXLYDOHQWV Cash and cash equivalents at the beginning of the year

68,762,576 228,076,958

13,209,675 214,867,283

55,069,423 (42,331,015)

(36,099,752) (6,231,263)

&DVK DQG FDVK HTXLYDOHQWV DW WKH HQG RI WKH \HDU

296,839,534

228,076,958

12,738,408

(42,331,015)

1RWHV &DVK IORZV IURP LQYHVWLQJ DFWLYLWLHV Loan payments received from related parties Loans made to related parties Payment for additional investments in subsidiaries Net cash payment for acquisition of investment in subsidiaries Cash received from decrease in share capital of a subsidiary Purchase of property, plant and equipment software licenses Dividends received from subsidiaries Dividends received from associates and property funds Proceeds from redemption of investment in property funds Net changes in land deposit Proceed from disposals of plant and equipment Cash received from account receivable from reciprocation agreement under construction of hotel and hotel improvement Net cash (used in) from investing activities &DVK IORZV IURP ILQDQFLQJ DFWLYLWLHV Net changes in short-term loans from financial institutions Interest paid Dividends paid to owners of the Company Dividends paid to non-controlling interests Proceeds from loans from others Proceeds from loans from related parties Repayments of loans from related parties Proceeds from debentures Repayments of debentures Proceeds from long-term borrowings Repayments of long-term borrowings Equity of unit holders in property funds Dividends paid to unit holders in property funds Cash paid for liabilities under consignment agreement Net cash (used in) from financing activities

33 33

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ ¿QDQFLDO VWDWHPHQWV CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

049

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Statements of Cash Flows (Cont’d) For the years ended 31 December 2012 and 2011 &DVK DQG FDVK HTXLYDOHQWV DV DW 'HFHPEHU &RQVROLGDWHG 1RWH Cash Cash and andcash cashequivalent equivalenst Bank overdrafts

&RPS SDQ\

%DKW

356,241,444 (59,441,615)

315,941,985 (87,865,027)

20,053,882 (7,315,474)

6,000,448 (48,331,463)

296,799,829

228,076,958

12,738,408

(42,331,015)

304,999,425 -

293,703,618 70,173,600

19,453,516 -

88,065,868 70,173,600

1RQ FDVK WUDQVDFWLRQV Acquisition of property, plant and equipment, and software licenses by payable Outstanding debts arising from leasehold rights

7KH DFFRPSDQ\LQJ QRWH RQ SDJHV WR DUH DQ LQWHJUDO SDUW RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ ¿QDQFLDO VWDWHPHQWV

050

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 1. General information Central Plaza Hotel Public Company Limited, (the “Company”) is a public limited company which is incorporated and domiciled in Thailand and is listed on the Stock Exchange of Thailand on 10 January 7KH DGGUHVV RI WKH &RPSDQ\¶V UHJLVWHUHG RI¿FH LV DV IROORZV 1695 Phaholyothin Road, Chatuchak, Bangkok, Thailand For reporting purposes, the Company and its subsidiaries are referred to as the Group. The principal businesses of the Company are in the hotel business. Details of the Company’s subsidiaries, associates and interests in joint ventures as at 31 December 2012 and 2011 are as follows:

Name of the entity

Type of business

Country of incorporation

Ownership interest (%) 31 December 31 December 2012 2011

Direct subsidiaries Investment in subsidiaries Central Samui Beach Resort Co., Ltd.

Hotel

Thailand

100.0

Central Karon Village Co., Ltd.

Hotel

Thailand

100.0

Central Krabi Bay Resort Co., Ltd. Central Hua Hin Beach Resort Co., Ltd.

Hotel Hotel

Thailand Thailand

100.0 63.9

Central World Hotel Co., Ltd.

Hotel

Thailand

100.0

Central Koh Kood Hotel Co., Ltd.

Hotel

Thailand

100.0

Central Hotel Management Co., Ltd.

Holding company

Thailand

100.0

Central Restaurants Group Co., Ltd.

Food and beverage Thailand

100.0

Triplenine Decor Co., Ltd.

Not operate yet

Thailand

100.0

Central Samui Hotel Management Co., Ltd.

Hotel

Thailand

100.0

Centara International Management Co., Ltd.

Holding company and hotel management

Thailand

100.0

S.P. Realty Had Farang Resort Co., Ltd.

Not operate yet

Thailand

100.0

S.P. Realty Pattaya Beach Co., Ltd.

Not operate yet

Thailand

100.0

Cenvaree Healthy Spa Co., Ltd.

Not operate yet

Thailand

100.0

Central Bangkok Convention & Exhibition Co., Ltd. Not operate yet Thailand Centara International Management (Thailand) Co., Ltd. (Formerly known as Centara Thai Hotel Management Co., Ltd.) Hotel management Thailand Karon Phuket Hotel Co., Ltd.

Hotel

Thailand

83.9*

Cosi Hotels Co., Ltd.

Not operate yet

Thailand

100.0

Centara Import-Export Co., Ltd.

Not operate yet

Thailand

100.0

Investment in property fund Thai Pattana Fund 2

Property fund

Thailand

23.9

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

051

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 1. General information (Cont’d) The principal businesses of the Company are in the hotel business. Details of the Company’s subsidiaries, associates and interests in joint ventures as at 31 December 2012 and 2011 are as follows: (Cont’d)

Type of business

Name of the entity

Ownership interest (%) 31 December 31 December 2012 2011

Country of incorporation

Indirect subsidiaries Investment in subsidiaries Central Sukhontha Hotel Co., Ltd.

Hotel

Thailand

100.0

Central Samui Village Co., Ltd.

Hotel

Thailand

100.0

Central Mae Sot Hill Hotel Co., Ltd.

Hotel

Thailand

98.4

Food and beverage

Thailand

100.0

Dormant Company Dissolution

Thailand

100.0

CRG Manufacturing Co., Ltd. Central Laundry Services Co., Ltd. Centara Egypt for Hotels Management Co., Ltd.

100.0

CRG International Food Co., Ltd.

Food and beverage

Egypt Thailand

100.0

S.P. Realty Lanta Beach Co., Ltd.

Not operate yet

Thailand

100.0

Centara Maldives Pvt. Ltd.

Hotel

Maldives

75.0

R.M.L. Leisure Pvt. Ltd. (Formerly known as Regent Maldives Pvt. Ltd.)

Hotel

Maldives

74.0

Property fund

Thailand

25.3

Hotel Hotel

Maldives Thailand

25.0

Kata Phuket Hotel Co., Ltd.

Hotel

Thailand

50.0

Centara Maldives Pvt. Ltd.

Hotel

Maldives

Investment in associates and interests in joint ventures Centara Hotels & Resorts Leasehold Property Fund R.M.L. Leisure Pvt. Ltd. (Formerly known as Regent Maldives Pvt. Ltd.) Karon Phuket Hotel Co., Ltd.

%\ GLUHFW DQG LQGLUHFW VKDUHKROGLQJ These Group consolidated 21 February 2013.

052

ANNUAL REPORT 2012

financial

statements

were

authorised

for

issue

the

Board

Directors

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies 7KH SULQFLSDO DFFRXQWLQJ SROLFLHV DSSOLHG LQ WKH SUHSDUDWLRQ RI WKHVH FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO statements are set out below: 2.1 Basis of preparation 7KH FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG LQ DFFRUGDQFH ZLWK 7KDL JHQHUDOO\ accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Financial Reporting 6WDQGDUGV LVVXHG XQGHU WKH $FFRXQWLQJ 3URIHVVLRQ $FW % ( DQG WKH Â¿QDQFLDO UHSRUWLQJ UHTXLUHPHQWV of the Securities and Exchange Commission under the Securities and Exchange Act. 7KH FRQVROLGDWHG DQG FRPSDQ\ Â¿QDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG XQGHU WKH FRVW FRQYHQWLRQ except revaluation of property, plant and equipment and some investments which are carried at fair value as disclosed in the accounting policies below. 7KH SUHSDUDWLRQ RI Â¿QDQFLDO VWDWHPHQWV LQ FRQIRUPLW\ ZLWK 7KDL JHQHUDOO\ DFFHSWHG DFFRXQWLQJ SULQFLSOHV requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Groupâ&#x20AC;&#x2122;s accounting policies. The areas involving a higher degree RI MXGJHPHQW RU FRPSOH[LW\ RU DUHDV ZKHUH DVVXPSWLRQV DQG HVWLPDWHV DUH VLJQLÂ¿FDQW WR WKH FRQVROLGDWHG Â¿QDQFLDO VWDWHPHQWV DUH GLVFORVHG LQ QRWH

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

053

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.1 Basis of preparation (Contâ&#x20AC;&#x2122;d) &RPSDUDWLYH ÂżJXUHV KDYH EHHQ DGMXVWHG WR FRQIRUP ZLWK FKDQJHV LQ SUHVHQWDWLRQ LQ WKH FXUUHQW \HDU DV IROORZV

Consolidated As at 1 January 2011 Originally stated Adjustment Baht Baht

Restated Baht

As at 31 December 2011 Originally stated Adjustment Restated Baht Baht Baht

Other current assets Trade and other receivables Receivables from related parties VAT receivable Other current assets Non-current assets Other non-current assets Current liabilities Trade and other payables Current portion of deferred income Payables to related parties Income tax payable Other current liabilities Non-current liabilities Other non-current liabilities

, ,

69,142,055

526,262,890

555,948,503

91,018,405

646,966,908

69,142,055 280,411,634 47,445,060

(69,142,055) (280,411,634) 280,411,634

327,856,694

107,788,208 178,926,188 33,711,889

(107,788,208) (178,926,188) 198,730,090

232,441,979

761,692,315

735,913,326

(3,034,099)

732,879,227

1,194,452,838

2,721,799

1,197,174,637

1,540,881,466

51,614,251

1,592,495,717

, , 2,721,799 154,925,342 514,247,448

(2,721,799) -

, , 154,925,342 514,247,448

121,272,529 94,008 157,602,308 540,145,729

54,233,956 (94,008) (4,605,568) (90,325,543)

175,506,485 152,996,740 449,820,186

18,247,279

94,473,458

(10,823,088)

83,650,370

Company As at 1 January 2011 Originally stated Adjustment Baht Baht Other current assets Trade and other receivables Receivables from parties VAT receivable Other current assets

Restated Baht

As at 31 December 2011 Originally stated Adjustment Restated Baht Baht Baht

113,283,395

55,734,588

169,017,983

145,423,485

64,963,790

210,387,275

55,734,588 42,311,408 8,131,930

(55,734,588) (42,311,408) 42,311,408

50,443,338

55,830,506 10,990,229

(55,830,506) 2,035,744

13,025,973

179,013,897

130,960,801

(11,169,028)

119,791,773

Non-current assets Other non-current assets Current liabilities Trade and other payables Current portion of deferred income Payables to related parties Other current liabilities

302,354,562

(32,202,469)

270,152,093

312,436,532

54,850,642

367,287,174

50,333,333 4,683,706 164,328,626

36,886,175 (4,683,706) -

87,219,508 164,328,626

50,333,333 71,179,499 201,501,765

39,502,247 (71,179,499) (12,350,301)

89,835,580 189,151,464

Non-current liabilities Other non-current liabilities

14,198,187

60,806,149

(10,823,089)

49,983,060

054

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.1 Basis of preparation (Contâ&#x20AC;&#x2122;d) With the effective of TAS 1 (Revised 2009) â&#x20AC;&#x153;Presentation of Financial Statementsâ&#x20AC;?, the Group presented VWDWHPHQWV RI ÂżQDQFLDO SRVLWLRQ DV DW 'HFHPEHU 'HFHPEHU DQG -DQXDU\ IRU WKH UHFODVVLÂżFDWLRQ RI FRPSDUDWLYH ÂżJXUHV The effects of the statement of comprehensive income for the year ended 31 December 2011 are as follows;

Consolidated

Company

Originally stated Baht

Adjustment Baht

Restated Baht

Originally stated Baht

Adjustment Baht

Restated Baht

Revenues Revenues from hotel operations

2,556,818,244

2,225,672,061

4,782,490,305

794,448,878

780,108,218

1,574,557,096

Revenues from food and beverage

8,177,526,089

(1,682,209,226)

6,495,316,863

579,327,090

(579,327,090)

Other operating income

428,850,306

(428,850,306)

150,447,795

(150,447,795)

Rental income

114,612,529

(114,612,529)

50,333,333

(50,333,333)

488,287,270

3,331,669,844

3,819,957,114

149,462,078

1,094,670,388

1,244,132,466

4,315,767,619

(1,152,799,182)

3,162,968,437

408,220,903

(408,220,903)

319,966,413

(319,966,413)

124,947,987

(124,947,987)

526,227,056

155,666,892

2,762,901,410

120,497,628

2,883,399,038

534,260,234

83,443,476

617,703,710

Land and building rental expenses

336,264,608

(336,264,608)

188,242,248

(188,242,248)

Marketing expenses

526,227,056

(526,227,056)

155,666,892

(155,666,892)

Maintenance and energy expenses

517,612,403

(517,612,403)

162,543,056

(162,543,056)

1,005,027,237

(1,005,027,237)

210,716,194

(210,716,194)

Key management benefit expenses

46,801,226

(46,801,226)

46,471,226

(46,471,226)

Loss from guarantee provision

73,696,403

(73,696,403)

36,972,250

(36,972,250)

Expenses Cost of sales - hotel operations Cost of sales - food and beverage Cost of sales - other operating income Selling expenses Administrative expenses

Depreciation and amortisation expenses

$Q (QJOLVK YHUVLRQ RI WKH FRQVROLGDWHG DQG FRPSDQ\ ÂżQDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG IURP WKH VWDWXWRU\ ÂżQDQFLDO VWDWHPHQWV WKDW DUH LQ WKH 7KDL ODQJXDJH ,Q WKH HYHQW RI D FRQĂ&#x20AC;LFW RU D GLIIHUHQFH LQ LQWHUSUHWDWLRQ EHWZHHQ WKH WZR ODQJXDJHV WKH 7KDL ODQJXDJH VWDWXWRU\ ÂżQDQFLDO VWDWHPHQWV VKDOO SUHYDLO

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

055

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 1HZ DFFRXQWLQJ VWDQGDUGV QHZ ÂżQDQFLDO UHSRUWLQJ VWDQGDUG QHZ LQWHUSUHWDWLRQV DQG DPHQGPHQWV to accounting standard D 1HZ DFFRXQWLQJ VWDQGDUGV QHZ ÂżQDQFLDO UHSRUWLQJ VWDQGDUG QHZ LQWHUSUHWDWLRQV DQG DPHQGPHQWV to accounting standard that are not yet effective and have not been early adopted by the Group: Effective for the periods beginning on or after 1 January 2013 TAS 12 TAS 20 TAS 21 (Revised 2009) TFRS 8 76,& TSIC 21 TSIC 25

Income taxes Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Operating Segments *RYHUQPHQW $VVLVWDQFH 1R 6SHFLÂżF 5HODWLRQ WR 2SHUDWLQJ $FWLYLWLHV Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

TAS 12 deals only with taxes on income, comprising current and deferred tax. Current tax expense for a period is based on the taxable and deductible amounts that will be shown on the tax return for the current year. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and tax laws that KDYH EHHQ HQDFWHG RU VXEVWDQWLYHO\ HQDFWHG E\ WKH VWDWHPHQW RI ÂżQDQFLDO SRVLWLRQ GDWH 'HIHUUHG WD[ accounting is based on the temporary differences between the tax base of an asset or liability and its FDUU\LQJ DPRXQW LQ WKH ÂżQDQFLDO VWDWHPHQWV 76,& FODULÂżHV WKDW GHIHUUHG WD[ OLDELOLW\ RU DVVHW WKDW DULVHV IURP WKH UHYDOXDWLRQ RI D QRQ GHSUHFLDEOH asset in accordance with TAS 16 shall be measured on the basis of the tax consequences that would follow from recovery of the carry amount of that asset through sale, regardless of the basis of measuring the carrying amount of that asset. 76,& FODULÂżHV WKDW D FKDQJH LQ WKH WD[ VWDWXV RI DQ HQWLW\ RU LWV VKDUHKROGHUV GRHV QRW JLYH ULVH WR LQFUHDVHV RU GHFUHDVHV LQ DPRXQWV UHFRJQLVHG RXWVLGH SURÂżW RU ORVV 7KH FXUUHQW DQG GHIHUUHG WD[ FRQVHTXHQFHV RI D FKDQJH LQ WD[ VWDWXV VKDOO EH LQFOXGHG LQ SURÂżW RU ORVV IRU WKH SHULRG XQOHVV WKRVH consequences related to transactions and events that result, in the same or different period, in a direct credit or charge to the recognised amount of equity or in amounts recognised in other comprehensive income. Those tax consequences shall be charged directly to equity or other comprehensive income, respectively. The group is assessing the impact of deferred tax. TAS 20 applies in accounting for, and in the disclosure of, government grants and in the disclosure of other forms of government assistance. Government grants are recognised when there is reasonable assurance that the entity will comply with conditions related to them and that the grants will be received. *UDQWV UHODWHG WR LQFRPH DUH UHFRJQLVHG LQ SURÂżW RU ORVV RYHU SHULRGV QHFHVVDU\ WR PDWFK WKHP ZLWK WKH related costs that they are intended to compensate. Grants related to assets are either offset against WKH FDUU\LQJ DPRXQW RI WKH UHOHYDQW DVVHW RU SUHVHQWHG DV GHIHUUHG LQFRPH LQ WKH VWDWHPHQW RI ÂżQDQFLDO position. 76,& FODULÂżHV RQ 7$6 WKDW JRYHUQPHQW DVVLVWDQFH WR HQWLWLHV PHHWV WKH GHÂżQLWLRQ RI JRYHUQPHQW JUDQWV LQ 7$6 HYHQ LI WKHUH DUH QR FRQGLWLRQV VSHFLÂżFDOO\ UHODWLQJ WR WKH RSHUDWLQJ DFWLYLWLHV RI WKH entity other than the requirement to operate in certain regions or industry sectors. Such grants shall therefore not be credited directly to shareholdersâ&#x20AC;&#x2122; interests.

056

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 1HZ DFFRXQWLQJ VWDQGDUGV QHZ ÂżQDQFLDO UHSRUWLQJ VWDQGDUG QHZ LQWHUSUHWDWLRQV DQG DPHQGPHQWV to accounting standard (Contâ&#x20AC;&#x2122;d) TAS 21 (revised 2009) requires an entity to determine its functional currency which is the currency of the primary economic environment in which the entity operates. Currency other than functional currency of an entity is foreign currency. Foreign currency transactions are required to be translated into the functional currency using the exchange rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation at \HDU HQG H[FKDQJH UDWH RI PRQHWDU\ LWHPV GHQRPLQDWHG LQ IRUHLJQ FXUUHQF\ DUH UHFRJQLVHG LQ SURÂżW or loss. The standard permits the presentation currency of a reporting entity to be any currencies. 7KH UHVXOWV DQG ÂżQDQFLDO SRVLWLRQV RI DOO WKH *URXS HQWLWLHV WKDW KDYH D IXQFWLRQDO FXUUHQF\ GLIIHUHQW from the presentation currency are translated in the presentation currency as follows: (a) assets and OLDELOLWLHV DUH WUDQVODWHG DW WKH FORVLQJ UDWH DW WKH GDWH RI WKDW VWDWHPHQW RI ÂżQDQFLDO SRVLWLRQ E LQFRPH and expenses are translated at the exchange rate at the date of the transactions; and (c) all resulting exchange differences are recognised in the statement of comprehensive income. The management is currently assessing the impact of applying this standard. TFRS 8 requires a management approach under which segment information is presented on the same basis that used for internal reporting purpose as provided to the chief operating decision makers. The new standard will have an impact on disclosure. The management is currently assessing the impact of applying these standards and interpretations. Effective for the periods beginning on or after 1 January 2014 TFRIC 4 TFRIC 12 TFRIC 13 TSIC 29

Determining whether an Arrangement contains a Lease Service Concession Arrangements Customer Loyalty Programmes Service Concession Arrangements: Disclosure

TFRIC 4 requires the determination of whether an arrangement is or contains a lease to be based on the VXEVWDQFH RI WKH DUUDQJHPHQW ,W UHTXLUHV DQ DVVHVVPHQW RI ZKHWKHU D IXOÂżOPHQW RI WKH DUUDQJHPHQW LV GHSHQGHQW RQ WKH XVH RI D VSHFLÂżF DVVHW RU DVVHWV WKH DVVHW DQG E WKH DUUDQJHPHQW FRQYH\V D ULJKW to use the asset. The management is currently assessing the impact of TRIC 4. TFRIC 12 deals with public-to-private service concession arrangements for the delivery of public services. It applies only to concession agreements where the use of the infrastructure is controlled by WKH JUDQWRU 7KLV LQWHUSUHWDWLRQ UHTXLUHV WZR GLIIHUHQW DFFRXQWLQJ WUHDWPHQWV GHSHQGLQJ RQ WKH VSHFLÂżF terms of the concession agreement. When the operator builds infrastructure and has an unconditional FRQWUDFWXDO ULJKW WR UHFHLYH FDVK RU DQRWKHU ÂżQDQFLDO DVVHW IURP WKH JUDQWRU WKDW ULJKW LV WUHDWHG DV D ÂżQDQFLDO DVVHW :KHQ WKH RSHUDWRU EXLOGV LQIUDVWUXFWXUH DQG UHFHLYHV D ULJKW D OLFHQFH WR FKDUJH XVHUV of the public service, that right is treated as an intangible asset. TFRIC 4 is not relevant to the Groupâ&#x20AC;&#x2122;s operation. 7)5,& FODULÂżHV WKDW ZKHUH JRRGV RU VHUYLFHV DUH VROG WRJHWKHU ZLWK D FXVWRPHU OR\DOW\ LQFHQWLYH (for example, loyalty points or free products), the arrangement is a multiple-element arrangement, and the consideration received or receivable from the customer is allocated between the components of the arrangement using fair values. The management is currently assessing the impact of applying this interpretation. TSIC 29 contains disclosure requirements in respect of public-to-private service arrangements. TSIC 29 is not relevant to the Groupâ&#x20AC;&#x2122;s operation.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

057

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.3 Group Accounting - Investments in subsidiaries and associates and interests in joint ventures (1) Subsidiaries Subsidiaries are all entities (including special purpose entities) over which the Group has the power WR JRYHUQ WKH ÂżQDQFLDO DQG RSHUDWLQJ SROLFLHV JHQHUDOO\ DFFRPSDQ\LQJ D VKDUHKROGLQJ RI PRUH WKDQ one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related FRVWV DUH H[SHQVHG DV LQFXUUHG ,GHQWLÂżDEOH DVVHWV DFTXLUHG DQG OLDELOLWLHV DQG FRQWLQJHQW OLDELOLWLHV assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interestâ&#x20AC;&#x2122;s proportionate share of the acquireeâ&#x20AC;&#x2122;s net assets. ,QYHVWPHQWV LQ VXEVLGLDULHV DUH DFFRXQWHG IRU DW FRVW OHVV LPSDLUPHQW &RVW LV DGMXVWHG WR UHĂ&#x20AC;HFW changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of WKH *URXSÂśV VKDUH RI WKH LGHQWLÂżDEOH QHW DVVHWV DFTXLUHG LV UHFRUGHG DV JRRGZLOO ,I WKLV LV OHVV WKDQ WKH fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference LV UHFRJQLVHG GLUHFWO\ LQ SURÂżW RU ORVV Intercompany transactions, balances and unrealised gains or loss on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. (2) Transactions and non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. :KHQ WKH *URXS FHDVHV WR KDYH FRQWURO RU VLJQLÂżFDQW LQĂ&#x20AC;XHQFH DQ\ UHWDLQHG LQWHUHVW LQ WKH HQWLW\ LV UH PHDVXUHG WR LWV IDLU YDOXH ZLWK WKH FKDQJH LQ FDUU\LQJ DPRXQW UHFRJQLVHG LQ SURÂżW RU ORVV 7KH IDLU value is the initial carrying amount for the purposes of subsequently accounting for the retained interest DV DQ DVVRFLDWH MRLQW YHQWXUH RU ÂżQDQFLDO DVVHW ,Q DGGLWLRQ DQ\ DPRXQWV SUHYLRXVO\ UHFRJQLVHG LQ RWKHU comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. ,I WKH RZQHUVKLS LQWHUHVW LQ DQ DVVRFLDWH LV UHGXFHG EXW VLJQLÂżFDQW LQĂ&#x20AC;XHQFH LV UHWDLQHG RQO\ D proportionate share of the amounts previously recognised in other comprehensive income is reclassiÂżHG WR SURÂżW RU ORVV ZKHUH DSSURSULDWH

058

ANNUAL REPORT 2012

CONTENTS

2.4 Foreign currency translation ,WHPV LQFOXGHG LQ WKH ÂżQDQFLDO VWDWHPHQWV RI HDFK RI WKH *URXSÂśV HQWLWLHV DUH PHDVXUHG XVLQJ 7KDL %DKW 7KH FRQVROLGDWHG ÂżQDQFLDO VWDWHPHQWV DUH SUHVHQWHG LQ 7KDL %DKW Foreign currency transactions are translated into Thai Baht using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated to 7KDL %DKW DW WKH H[FKDQJH UDWH SUHYDLOLQJ DW WKH VWDWHPHQW RI ÂżQDQFLDO SRVLWLRQ GDWH *DLQV DQG ORVVHV resulting from the settlement of foreign currency transactions, and from the translation of monetary DVVHWV DQG OLDELOLWLHV GHQRPLQDWHG LQ IRUHLJQ FXUUHQFLHV DUH UHFRJQLVHG LQ WKH SURÂżW RU ORVV 7KH VWDWHPHQWV RI FRPSUHKHQVLYH LQFRPH DQG FDVK Ă&#x20AC;RZV RI IRUHLJQ HQWLWLHV DUH WUDQVODWHG LQWR WKH Groupâ&#x20AC;&#x2122;s reporting currency at the weighted average exchange rates for the year and statement of ÂżQDQFLDO SRVLWLRQ DUH WUDQVODWHG DW WKH H[FKDQJH UDWHV UXOLQJ RQ WKH HQG RI UHSRUWLQJ SHULRG &XUUHQF\ translation differences arising from the retranslation of the net investment in foreign entities are taken to shareholdersâ&#x20AC;&#x2122; equity. On disposal of a foreign entity, accumulated exchange differences are recognised in the statement of comprehensive income as part of the gain or loss on sale.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

059

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.5 Cash and cash equivalents ,Q WKH FRQVROLGDWHG DQG FRPSDQ\ VWDWHPHQW RI FDVK Ă&#x20AC;RZV FDVK DQG FDVK HTXLYDOHQWV LQFOXGHV FDVK LQ hand, deposits held at call with banks, other short-term highly liquid investments with original maturities RI WKUHH PRQWKV RU OHVV DQG EDQN RYHUGUDIWV ,Q WKH FRQVROLGDWHG DQG &RPSDQ\ VWDWHPHQW RI ÂżQDQFLDO position, bank overdrafts are shown within borrowings in current liabilities. 2.6 Trade accounts receivable Trade accounts receivable are carried at the original invoice amount and subsequently measured at the remaining amount less any allowance for doubtful receivables based on a review of all outstanding amounts at the year-end. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written-off during the year in ZKLFK WKH\ DUH LGHQWLÂżHG DQG UHFRJQLVHG LQ SURÂżW RU ORVV ZLWKLQ VHOOLQJ DQG PDUNHWLQJ FRVWV 2.7 Inventories ,QYHQWRULHV DUH VWDWHG DW WKH ORZHU RI FRVW DQG QHW UHDOLVDEOH YDOXH &RVW LV GHWHUPLQHG E\ WKH ÂżUVW LQ ÂżUVW RXW PHWKRG IRU IRRG DQG EHYHUDJH ÂżQLVKHG JRRGV UDZ PDWHULDOV IRU PDQXIDFWXULQJ DQG VSD SURGucts and by the moving average method for a subsidiary engaged in the manufacturing and sale of icecream products. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charges, less all attributable GLVFRXQWV DOORZDQFHV RU UHEDWHV 7KH FRVW RI ÂżQLVKHG JRRGV DQG ZRUN LQ SURJUHVV FRPSULVHV GHVLJQ costs, raw materials, direct labour, other direct costs and related production overheads based on normal operating capacity. It excludes borrowing costs. Net realisable value is the estimate of the selling price in the ordinary course of business, less applicable variable selling expenses. Allowance is made, where necessary, for obsolete, slow-moving and defective inventories. 2.8 Investments Investments other than investments in subsidiaries, associates and interests in joint ventures are clasVLÂżHG LQWR WKH IROORZLQJ IRXU FDWHJRULHV WUDGLQJ LQYHVWPHQWV KHOG WR PDWXULW\ LQYHVWPHQWV DYDLODEOH IRU VDOH LQYHVWPHQWV DQG JHQHUDO LQYHVWPHQWV 7KH FODVVLÂżFDWLRQ LV GHSHQGHQW RQ WKH SXUSRVH IRU ZKLFK WKH LQYHVWPHQWV ZHUH DFTXLUHG 0DQDJHPHQW GHWHUPLQHV WKH DSSURSULDWH FODVVLÂżFDWLRQ RI its investments at the time of the purchase and re-evaluates such designation on a regular basis. 1. ,QYHVWPHQWV WKDW DUH DFTXLUHG SULQFLSDOO\ IRU WKH SXUSRVH RI JHQHUDWLQJ D SURÂżW IURP VKRUW WHUP Ă&#x20AC;XFWXDWLRQV LQ SULFH DUH FODVVLÂżHG DV WUDGLQJ LQYHVWPHQWV DQG LQFOXGHG LQ FXUUHQW DVVHWV 2. ,QYHVWPHQWV ZLWK Âż[HG PDWXULW\ WKDW WKH PDQDJHPHQW KDV WKH LQWHQW DQG DELOLW\ WR KROG WR PDWXULW\ DUH FODVVLÂżHG DV KHOG WR PDWXULW\ DQG DUH LQFOXGHG LQ QRQ FXUUHQW DVVHWV H[FHSW IRU PDWXULWLHV ZLWKLQ PRQWKV IURP WKH VWDWHPHQW RI ÂżQDQFLDO SRVLWLRQ GDWH ZKLFK DUH FODVVLÂżHG DV FXUUHQW DVVHWV 3. ,QYHVWPHQWV LQWHQGHG WR EH KHOG IRU DQ LQGHÂżQLWH SHULRG RI WLPH ZKLFK PD\ EH VROG LQ UHVSRQVH WR OLTXLGLW\ QHHGV RU FKDQJHV LQ LQWHUHVW UDWHV DUH FODVVLÂżHG DV DYDLODEOH IRU VDOH DQG DUH LQFOXGHG LQ non-current assets unless management has expressed the intention of holding the investment for OHVV WKDQ PRQWKV IURP WKH VWDWHPHQW RI ÂżQDQFLDO SRVLWLRQ GDWH RU XQOHVV WKH\ ZLOO QHHG WR EH VROG to raise operating capital, in which case they are included in current assets. 4. ,QYHVWPHQWV LQ QRQ PDUNHWDEOH HTXLW\ VHFXULWLHV DUH FODVVLÂżHG DV JHQHUDO LQYHVWPHQWV All categories of investment are initially recognised at cost, which is equal to the fair value of consideration paid plus transaction cost.

060

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.8 Investments (Contâ&#x20AC;&#x2122;d) Trading investments and available for sale investments are subsequently measured at fair value. The IDLU YDOXH RI LQYHVWPHQWV LV EDVHG RQ TXRWHG ELG SULFH DW WKH FORVH RI EXVLQHVV RQ WKH VWDWHPHQW RI ÂżQDQcial position date by reference to the Stock Exchange of Thailand. The unrealised gains and losses of trading investments are recognised in income statement. The unrealised gains and losses of available for sale investments are recognised in equity. Held-to-maturity investments are carried at amortised cost using the effective yield method less impairment loss. General investments are carried at cost less impairment loss. A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount LV FKDUJHG RU FUHGLWHG WR WKH SURÂżW RU ORVV :KHQ GLVSRVLQJ RI SDUW RI WKH &RPSDQ\ÂśV KROGLQJ RI D SDUWLFXlar investment in debt or equity securities, the carrying amount of the disposed part is determined by the weight average carrying amount of the total holding of the investment.

2.9 Investment Property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied E\ WKH FRPSDQLHV LQ WKH FRQVROLGDWHG *URXS LV FODVVLÂżHG DV LQYHVWPHQW SURSHUW\ ,QYHVWPHQW SURSHUW\ also includes property that is being constructed or developed for future use as investment property. Investment property is measured initially at its cost, including related transaction costs and borrowing costs. Borrowing costs are incurred for the purpose of acquiring, constructing or producing a qualifying investment property are capitalised as part of its cost. Borrowing costs are capitalised while acquisition or construction is actively underway and cease once the asset is substantially complete, or suspended if the development of the asset is suspended. After initial recognition, investment property is carried at cost less any accumulated depreciation and any accumulated impairment losses. Land is not depreciated. Depreciation on other investment properties is calculated using the straight line method to allocate their cost to their residual values over their estimated useful lives, as follows: Buildings and building improvement

15 and 30 years

Subsequent expenditure is capitalised to the assetâ&#x20AC;&#x2122;s carrying amount only when it is probable that future HFRQRPLF EHQHÂżWV DVVRFLDWHG ZLWK WKH H[SHQGLWXUH ZLOO Ă&#x20AC;RZ WR WKH *URXS DQG WKH FRVW RI WKH LWHP FDQ EH measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

061

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.10 Property, plant and equipment 3URSHUW\ SODQW DQG HTXLSPHQW FRPSULVH PDLQO\ ODQG DQG EXLOGLQJV H[FHSW DVVHWV XQGHU ÂżQDQFLDO OHDVH agreement are shown at fair value, based on valuations by external independent valuers every 5 years, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the assetâ&#x20AC;&#x2122;s carrying amount or recognised as a separate asset, as DSSURSULDWH RQO\ ZKHQ LW LV SUREDEOH WKDW IXWXUH HFRQRPLF EHQHÂżWV DVVRFLDWHG ZLWK WKH LWHP ZLOO Ă&#x20AC;RZ WR the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is GHUHFRJQLVHG $OO RWKHU UHSDLUV DQG PDLQWHQDQFH DUH FKDUJHG WR SURÂżW RU ORVV GXULQJ WKH ÂżQDQFLDO SHULRG in which they are incurred.

Increases in the carrying amount arising on revaluation of land and building are credited to statement of comprehensive income and shown as gain on asset revaluation in shareholdersâ&#x20AC;&#x2122; equity. Decreases that offset previous increases of the same asset are charged in other comprehensive income and debited DJDLQVW JDLQ RQ DVVHW UHYDOXDWLRQ GLUHFWO\ LQ HTXLW\ DOO RWKHU GHFUHDVHV DUH FKDUJHG WR SURÂżW RU ORVV Each year, the difference between depreciation based on the revalued carrying amount of the asset FKDUJHG WR SURÂżW RU ORVV DQG GHSUHFLDWLRQ EDVHG RQ WKH DVVHWÂśV RULJLQDO FRVW LV WUDQVIHUUHG IURP ÂľJDLQ RQ asset revaluationâ&#x20AC;&#x2122; to retained earnings.

Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost (or the revalued amount) to their residual values over their estimated useful lives, as follows:

Land improvements

10 - 15 years

Buildings and improvements

10 - 50 years

Machinery and equipment

5 - 30 years

)XUQLWXUH Âż[WXUHV DQG RIÂżFH HTXLSPHQW Vehicles

\HDUV 7 - 10 years

The assetsâ&#x20AC;&#x2122; residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

The assetâ&#x20AC;&#x2122;s carrying amount is written-down immediately to its recoverable amount if the assetâ&#x20AC;&#x2122;s carrying amount is greater than its estimated recoverable amount (note 2.14).

Gains or losses on disposals are determined by comparing the proceeds with the carrying amount and DUH UHFRJQLVHG ZLWKLQ Âł2WKHU ORVVHVJDLQV QHWÂ´ LQ SURÂżW RU ORVV

When revalued assets are sold, the amounts included in gain on asset revaluation are transferred to retained earnings.

062

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.11 Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Groupâ&#x20AC;&#x2122;s share of WKH QHW LGHQWLÂżDEOH DVVHWV RI WKH DFTXLUHG VXEVLGLDU\ XQGHUWDNLQJ DW WKH GDWH RI DFTXLVLWLRQ *RRGZLOO RQ DFTXLVLWLRQV RI VXEVLGLDULHV LV VHSDUDWHO\ UHSRUWHG LQ WKH FRQVROLGDWHG VWDWHPHQW RI ÂżQDQFLDO SRVLWLRQ Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is PDGH WR WKRVH FDVK JHQHUDWLQJ XQLWV RU JURXSV RI FDVK JHQHUDWLQJ XQLWV WKDW DUH H[SHFWHG WR EHQHÂżW IURP WKH EXVLQHVV FRPELQDWLRQ LQ ZKLFK WKH JRRGZLOO DURVH LGHQWLÂżHG DFFRUGLQJ WR RSHUDWLQJ VHJPHQW

2.12 Leasehold right Leasehold right is prepaid rental expense that is capitalised and amortised using the straight-line method over the lease period. Leasehold right is not re-valued. The carrying amount of leasehold right is reviewed annually for impairment where it is considered necessary.

2.13 Intangible assets License agreements Expenditure on acquired patents, trademarks and licences relating to restaurant franchises is capitalised and amortised using the straight-line method over the related agreement periods, generally over 10 years. The intangible assets are not revalued. The carrying amount of intangible asset is reviewed annually and adjusted for impairment where it is considered necessary.

Computer software Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and EULQJ WR XVH WKH VSHFLÂżF VRIWZDUH 7KHVH FRVWV DUH DPRUWLVHG RYHU WKHLU HVWLPDWHG XVHIXO OLYHV QRW RYHU 10 years. Costs associated with maintaining computer software programmes are recognised as an expense as LQFXUUHG 'HYHORSPHQW FRVWV WKDW DUH GLUHFWO\ DWWULEXWDEOH WR WKH GHVLJQ DQG WHVWLQJ RI LGHQWLÂżDEOH DQG unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: Â&#x2021;

it is technically feasible to complete the software product so that it will be available for use;

Â&#x2021;

management intends to complete the software product and use or sell it;

Â&#x2021;

there is an ability to use or sell the software product;

Â&#x2021;

LW FDQ EH GHPRQVWUDWHG KRZ WKH VRIWZDUH SURGXFW ZLOO JHQHUDWH SUREDEOH IXWXUH HFRQRPLF EHQHÂżWV

Â&#x2021;

DGHTXDWH WHFKQLFDO ÂżQDQFLDO DQG RWKHU UHVRXUFHV WR FRPSOHWH WKH GHYHORSPHQW DQG WR XVH RU VHOO the software product are available; and

Â&#x2021;

the expenditure attributable to the software product during its development can be reliably measured.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

063

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) 2.14 Impairment of assets $VVHWV WKDW KDYH DQ LQGHÂżQLWH XVHIXO OLIH IRU H[DPSOH JRRGZLOO DUH QRW VXEMHFW WR DPRUWLVDWLRQ DQG DUH tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount. The recoverable amount is the higher of an assetâ&#x20AC;&#x2122;s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for ZKLFK WKHUH DUH VHSDUDWHO\ LGHQWLÂżDEOH FDVK Ă&#x20AC;RZV 1RQ ÂżQDQFLDO DVVHWV RWKHU WKDQ JRRGZLOO WKDW VXIIHUHG an impairment are reviewed for possible reversal of the impairment at each reporting date. 2.15

Leases Leases - Where a Group company is the lessee /HDVHV LQ ZKLFK D VLJQLÂżFDQW SRUWLRQ RI WKH ULVNV DQG UHZDUGV RI RZQHUVKLS DUH UHWDLQHG E\ WKH OHVVRU DUH FODVVLÂżHG DV RSHUDWLQJ OHDVHV 3D\PHQWV PDGH XQGHU RSHUDWLQJ OHDVHV QHW RI DQ\ LQFHQWLYHV UHFHLYHG IURP WKH OHVVRU DUH FKDUJHG WR SURÂżW RU ORVV RQ D VWUDLJKW OLQH EDVLV RYHU WKH SHULRG RI WKH OHDVH The Group leases certain property, plant and equipment. Leases of property, plant or equipment where WKH *URXS KDV VXEVWDQWLDOO\ DOO WKH ULVNV DQG UHZDUGV RI RZQHUVKLS DUH FODVVLÂżHG DV ÂżQDQFH OHDVHV Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. (DFK OHDVH SD\PHQW LV DOORFDWHG EHWZHHQ WKH OLDELOLW\ DQG ÂżQDQFH FKDUJHV VR DV WR DFKLHYH D FRQVWDQW UDWH RQ WKH ÂżQDQFH EDODQFH RXWVWDQGLQJ 7KH FRUUHVSRQGLQJ UHQWDO REOLJDWLRQV QHW RI ÂżQDQFH FKDUJHV DUH LQFOXGHG LQ RWKHU ORQJ WHUP SD\DEOHV 7KH LQWHUHVW HOHPHQW RI WKH ÂżQDQFH FRVW LV FKDUJHG WR SURÂżW RU loss over the lease period so as to achieve a constant periodic rate of interest on the remaining balance RI WKH OLDELOLW\ IRU HDFK SHULRG 7KH SURSHUW\ SODQW RU HTXLSPHQW DFTXLUHG XQGHU ÂżQDQFH OHDVHV LV GHSUHFLated over the shorter period of the useful life of the asset and the lease term. Leases - Where a Group company is the lessor :KHQ DVVHWV DUH OHDVHG RXW XQGHU D ÂżQDQFH OHDVH WKH SUHVHQW YDOXH RI WKH OHDVH SD\PHQWV LV UHFRJnised as a receivable. The difference between the gross receivable and the present value of the receivDEOH LV UHFRJQLVHG DV XQHDUQHG ÂżQDQFH LQFRPH /HDVH LQFRPH LV UHFRJQLVHG RYHU WKH WHUP RI WKH OHDVH XVLQJ WKH QHW LQYHVWPHQW PHWKRG ZKLFK UHĂ&#x20AC;HFWV D FRQVWDQW SHULRGLF UDWH RI UHWXUQ ,QLWLDO GLUHFW FRVWV DUH LQFOXGHG LQ LQLWLDO PHDVXUHPHQW RI WKH ÂżQDQFH OHDVH UHFHLYDEOH DQG UHGXFH WKH DPRXQW RI LQFRPH recognised over the lease term. Assets leased out under operating leases are included in property, plant and equipment in the statement RI ÂżQDQFLDO SRVLWLRQ 7KH\ DUH GHSUHFLDWHG RYHU WKHLU H[SHFWHG XVHIXO OLYHV RQ D EDVLV FRQVLVWHQW ZLWK other similar property, plant and equipment owned by the Group. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.

2.16

Borrowings Borrowings are recognised initially at the fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between proceeds (net of transaction costs) and WKH UHGHPSWLRQ YDOXH LV UHFRJQLVHG LQ SURÂżW RU ORVV RYHU WKH SHULRG RI WKH ERUURZLQJV XVLQJ WKH HIIHFWLYH yield method. %RUURZLQJV DUH FODVVLÂżHG DV FXUUHQW OLDELOLWLHV XQOHVV WKH *URXS KDV DQ XQFRQGLWLRQDO ULJKW WR GHIHU VHWtlement of the liability for at least 12 months after the end of reporting date.

064

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Contâ&#x20AC;&#x2122;d) (PSOR\HH %HQHÂ¿WV 7KH *URXS KDV ERWK GHÂ¿QHG EHQHÂ¿W DQG GHÂ¿QHG FRQWULEXWLRQ SODQV $ GHÂ¿QHG EHQHÂ¿W SODQ LV D SHQVLRQ SODQ WKDW LV QRW D GHÂ¿QHG FRQWULEXWLRQ SODQ 7\SLFDOO\ GHÂ¿QHG EHQHÂ¿W SODQV GHÂ¿QH DQ DPRXQW RI SHQVLRQ EHQHÂ¿W WKDW DQ HPSOR\HH ZLOO UHFHLYH RQ UHWLUHPHQW XVXDOO\ GHSHQGHQW RQ RQH RU PRUH IDFWRUV VXFK DV age, years of service and compensation. 7KH OLDELOLW\ UHFRJQLVHG LQ WKH VWDWHPHQW RI Â¿QDQFLDO SRVLWLRQ LQ UHVSHFW RI GHÂ¿QHG EHQHÂ¿W SHQVLRQ SODQV LV WKH SUHVHQW YDOXH RI WKH GHÂ¿QHG EHQHÂ¿W REOLJDWLRQ DW WKH HQG RI WKH UHSRUWLQJ SHULRG OHVV WKH IDLU YDOXH RI SODQ DVVHWV WRJHWKHU ZLWK DGMXVWPHQWV IRU XQUHFRJQLVHG SDVW VHUYLFH FRVWV 7KH GHÂ¿QHG EHQHÂ¿W REOLJDWLRQ LV FDOFXODWHG DQQXDOO\ E\ LQGHSHQGHQW DFWXDULHV XVLQJ WKH SURMHFWHG XQLW FUHGLW PHWKRG 7KH SUHVHQW YDOXH RI WKH GHÂ¿QHG EHQHÂ¿W REOLJDWLRQ LV GHWHUPLQHG E\ GLVFRXQWLQJ WKH HVWLPDWHG IXWXUH FDVK RXWÃ&#x20AC;RZV XVLQJ PDUNHW \LHOG RI JRYHUQPHQW ERQGV WKDW DUH GHQRPLQDWHG LQ WKH FXUUHQF\ LQ ZKLFK WKH EHQHÂ¿WV ZLOO EH SDLG DQG WKDW KDYH WHUPV WR PDWXULW\ DSSUR[LPDWLQJ WR WKH WHUPV RI WKH UHODWHG SHQVLRQ liability. 3DVW VHUYLFH FRVWV DUH UHFRJQLVHG LPPHGLDWHO\ LQ SURÂ¿W RU ORVV XQOHVV WKH FKDQJHV WR WKH SHQVLRQ SODQ DUH FRQGLWLRQDO RQ WKH HPSOR\HHV UHPDLQLQJ LQ VHUYLFH IRU D VSHFLÂ¿HG SHULRG RI WLPH WKH YHVWLQJ SHULRG In this case, the past-service costs are amortised on a straight-line basis over the vesting period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. )RU GHÂ¿QHG FRQWULEXWLRQ SODQV WKH *URXS SD\V FRQWULEXWLRQV WR SXEOLFO\ RU SULYDWHO\ DGPLQLVWHUHG pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised DV HPSOR\HH EHQHÂ¿W H[SHQVH ZKHQ WKH\ DUH GXH 3UHSDLG FRQWULEXWLRQV DUH UHFRJQLVHG DV DQ DVVHW WR the extent that a cash refund or a reduction in the future payments is available. 2.18

Provisions 3URYLVLRQV ZKLFK H[FOXGH WKH SURYLVLRQV UHODWLQJ WR HPSOR\HH EHQHÂ¿WV DUH UHFRJQLVHG ZKHQ WKH *URXS KDV D SUHVHQW OHJDO RU FRQVWUXFWLYH REOLJDWLRQ DV D UHVXOW RI SDVW HYHQWV LI LW LV SUREDEOH WKDW DQ RXWÃ&#x20AC;RZ of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

2.19

Current and deferred income taxes The Group does not recognise income taxes payable or receivable in future periods with respect to temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in WKH Â¿QDQFLDO VWDWHPHQWV 7KH SULQFLSDO WHPSRUDU\ GLIIHUHQFHV DULVH IURP >GHSUHFLDWLRQ RQ SURSHUW\ SODQW and equipment, revaluations of certain non-current assets and of derivative contracts, provisions for penVLRQV DQG RWKHU SRVW UHWLUHPHQW EHQHÂ¿WV DQG WD[ ORVVHV FDUULHG IRUZDUG DQG LQ UHODWLRQ WR DFTXLVLWLRQV on the difference between the fair values of the net assets acquired and their tax base.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

065

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 2. Accounting policies (Cont’d) 2.20

Share Capital 2UGLQDU\ VKDUHV DUH FODVVL¿HG DV HTXLW\ Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the company’ s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transact costs and the related income tax effects, is included in equity attributable to the company’s equity holders.

2.21

Revenue recognition Hotel revenues from rooms, food and beverage and other services are recognised when the rooms are occupied, food and beverage are sold and the services are rendered. Revenues from quick service restaurant business are recognised when food and beverage are sold to the customers. Revenue from investments comprises rental income from investment properties and dividend and interest income from investments and bank deposits. Rental income from investment property is recognised in the statement of income on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income. Contingent rentals are recognised as income in the accounting period in which they are earned. Dividend income is recognised in the statement of income on the date the Group’s/Company’s right to receive payments is established. Interest income is recognised in the statement of income as it accrues.

2.22 Dividend distribution 'LYLGHQG GLVWULEXWLRQ WR WKH &RPSDQ\¶V VKDUHKROGHUV LV UHFRJQLVHG DV D OLDELOLW\ LQ WKH *URXS¶V ¿QDQFLDO statements in the period in which the dividends are approved by the Company’s shareholders.

066

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011

3. Financial risk management 3.1

Financial risk factors 7KH *URXSÂśV DFWLYLWLHV H[SRVH LW WR D YDULHW\ RI ÂżQDQFLDO ULVNV FXUUHQF\ ULVN DQG LQWHUHVW UDWH ULVN 7KH *URXSÂśV RYHUDOO ULVN PDQDJHPHQW SURJUDPPH IRFXVHV RQ WKH XQSUHGLFWDELOLW\ RI ÂżQDQFLDO PDUNHWV DQG VHHNV WR PLQLPLVH SRWHQWLDO DGYHUVH HIIHFWV RQ WKH *URXSÂśV ÂżQDQFLDO SHUIRUPDQFH 7KH *URXS XVHV GHULYDWLYH ÂżQDQFLDO LQVWUXPHQWV VXFK DV LQWHUHVW UDWH VZDS WR KHGJH FHUWDLQ H[SRVXUHV Interest rate risk 7KH *URXSÂśV LQFRPH DQG RSHUDWLQJ FDVK Ă&#x20AC;RZV DUH VXEVWDQWLDOO\ LQGHSHQGHQW RI FKDQJHV LQ PDUNHW interest rates. All interest rate derivative transactions are subject to approval by the Finance Director EHIRUH H[HFXWLRQ 7KH *URXS KDV QR VLJQLÂżFDQW LQWHUHVW EHDULQJ DVVHWV 7KH *URXSÂśV SROLF\ LV HQWHU LQWR interest rate swap. Under the interest rate swaps, The Group agrees with the other parties to exchange, DW VSHFLÂżHG LQWHUYDOV JHQHUDOO\ TXDUWHUO\ WKH GLIIHUHQFH EHWZHHQ Âż[HG FRQWUDFW UDWHV DQG Ă&#x20AC;RDWLQJ UDWH interest amounts calculated by reference to the agreed notional principal amounts. Any differential to be paid or received on an interest rate swap agreement is recognised as a component of interest revenue or expense over the period of the agreement. Gains and losses on early termination of interest rate VZDSV RU RQ UHSD\PHQW RI WKH ERUURZLQJ DUH WDNHQ WR SURÂżW RU ORVV Foreign exchange risk The Group has two investments in foreign subsidiaries, whose net assets are exposed to currency translation risk. However, the Group does not enters into forward exchange contract to hedge the foreign currency exposure of its subsidiaries.

$FFRXQWLQJ IRU GHULYDWLYH ÂżQDQFLDO LQVWUXPHQWV DQG KHGJLQJ DFWLYLWLHV Interest rate swap agreements protect the Group from movements in interest rates. Any differential to be paid or received on an interest rate swap agreement is recognised as a component of interest revenue or expense over the period of the agreement. Gains and losses on early termination of interest rate VZDSV RU RQ UHSD\PHQW RI WKH ERUURZLQJ DUH WDNHQ WR SURÂżW RU ORVV 4. Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estiPDWHV ZLOO E\ GHÂżQLWLRQ VHOGRP HTXDO WKH UHODWHG DFWXDO UHVXOWV 7KH HVWLPDWHV DQG DVVXPSWLRQV WKDW KDYH D VLJQLÂżFDQW ULVN RI FDXVLQJ D PDWHULDO DGMXVWPHQW WR WKH FDUU\LQJ DPRXQWV RI DVVHWV DQG OLDELOLWLHV ZLWKLQ WKH QH[W ÂżQDQFLDO \HDU DUH RXWOLQHG EHORZ (a)

Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the ac-

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

067

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 counting policy stated in Note 2.14. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates. 4. Critical accounting estimates and assumptions (Cont’d) E 3HQVLRQ EHQH¿WV The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will have an impact on the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each year. This is the interest rate WKDW VKRXOG EH XVHG WR GHWHUPLQH WKH SUHVHQW YDOXH RI HVWLPDWHG IXWXUH FDVK RXWÀRZV H[SHFWHG WR EH required to settle the pension obligations. In determining the appropriate discount rate, the Group conVLGHUV WKH PDUNHW \LHOG RI JRYHUQPHQW ERQGV WKDW DUH GHQRPLQDWHG LQ WKH FXUUHQF\ LQ ZKLFK WKH EHQH¿WV will be paid, and that have terms to maturity approximating the terms of the related pension liability. Other key assumptions for pension obligations are based in part on current market conditions. Additional information is disclosed in Note 23. 5. Capital risk management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a JRLQJ FRQFHUQ LQ RUGHU WR SURYLGH UHWXUQV IRU VKDUHKROGHUV DQG EHQH¿WV IRU RWKHU VWDNHKROGHUV DQG WR maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. 6. Segment information Segment information Segment reporting is presented in respect of the Group’s business segments. The primary format, business segments, is based on the Group’s and its subsidiaries’ management and internal reporting structure. Inter-segment pricing is determined on mutually agreed terms. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest or dividendearning assets and revenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses. 6.1

Financial information by business segments The Company and its subsidiaries comprise the following main business segments: Segment 1 Hotel Segment 2 Food and ice-cream

068

ANNUAL REPORT 2012

549

130

7 7

069

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

Profit for the years

703 (9) (145)

881 (705) (46)

1, 6 (821) (68)

Profit before finance costs and income tax expense Financial costs Income tax expense

4,903 78

6,099 9

Total expenses Share profit from investments

7,74 -

4,544 2,867 331

3,634 908 361

,285 1,445 369

8,445

8,342 5 98

5,706

4,782 306 618

6,376 37 898

2012

7,646

2011

2012

Total revenue Cost of sale Administrative expenses Other expenses

Revenues from operation Interest income Other income

487

700 (4) (209)

5,929 -

3,516 2,118 295

6,629

6,569 9 51

2011

1,2 6

2, 9 (830) (213)

13,84 59

,829 4,312 700

16,09

14,718 37 996

2012

617

1,581 (709) (255)

10,832 78

7,150 3,026 656

12,335

11,351 315 669

2011

Total continuing operations

Food and ice-cream operation

Hotel operation

Unit : Million Baht

%XVLQHVV VHJPHQW UHVXOWV DQG ÂżQDQFLDO SRVLWLRQ IRU WKH \HDU HQGHG 'HFHPEHU DQG ZHUH DV IROORZV

Financial information by business segments (Contâ&#x20AC;&#x2122;d)

6.1

6. Segment information (Coutâ&#x20AC;&#x2122;d)

For the years ended 31 December 2012 and 2011

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

1 344 -

( ) -

(159) (560) (6)

(71 )

(214) (344) (153)

2012

Eliminations

(27)

(322) 295 -

(439) -

(166) (262) (11)

(761)

(74) (296) (391)

2011

1,624

2,323 (486) (213)

13,116 59

8,670 3,752 694

15,3

14,504 33 843

2012

11,277 19 278

2011

590

1,259 (414) (255)

10,393 78

6,984 2,764 645

11,574

Consolidated

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 6. Segment information (Coutâ&#x20AC;&#x2122;d) 6.2

Financial information by business segments The Groupâ&#x20AC;&#x2122;s business segments are managed on a worldwide basis and, they operate in main geographical areas as follows: Thailand is the home country of the parent company which is also the main operating. The areas of operation are principally hotel operations, food and beverage operations, manufacturing and management operations. Republic of Maldives - The main activities are hotel operation and spa. Million Baht Segment results

Revenues

Total assets

2012

2011

2012

2011

2012

2011

,31

11,574

1,6 6

590

2 ,658

21,684

Maldives

(41)

2,972

Eliminated

(1)

(873)

15,3

11,574

1,624

590

2 ,757

21,684

Company 2012 Baht

2011 Baht

Thailand

7. Cash and cash equivalents q Consolidated 2012 Baht Cash on hand Cash at bank Short-term investment less than 3 months

2011 Baht

56,895,096 ,390,740

49,396,839 186,545,146

1,826,400 18,227,482

2,305,500 3,694,948

2,995,313

80,000,000

356,281,149

315,941,985

20,053,882

6,000,448

Bill of exchange

The average effective interest rate of deposits with banks was 0.8% to 2.1% per annum (2011: 0.5% to 1.5% per annum). 8. Trade and other receivables Consolidated 2012 Baht

Company 2012 Baht

2011 Baht

Trade receivables - gross Less Provision for impairment of trade receivables

467,618,108

267,721,126

104,993,004

68,257,357

(3,824,331)

(2,752,601)

(651,700)

(1,070,450)

Trade receivables - net

463,793,777

264,968,525

104,341,304

67,186,907

85,988,549

47,017,744

25,416,766

41,446,635

Prepaid expenses Advance to suppliers

, ,

30,329,961

Accrued income

11,000,636

53,066,423

179,513,485

143,796,047

13,161,677

45,230,634

63,531,938

107,788,208

171,587,270

56,523,099

836,138,013

646,966,908

314,507,017

210,387,275

Other receivables Receivables from related parties (Note 33)

070

2011 Baht

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 8. Trade and other receivables (Cout’d) Outstanding trade accounts receivable as at 31 December can be analysed as follows: Consolidated 2012 Baht Within credit terms Overdue: Less than 3 months 3 6 months 6 - 12 months Over 12 months Less Provision for impairment of trade receivables

2011 Baht

Company 2012 Baht

2011 Baht

328,051,340

203,258,080

73,144,326

56,876,760

86,791,582 37,152,318 3,075,568 12,547,300

36,795,363 11,299,567 7,058,139 9,309,977

24,135,557 5,233,826 771,875 1,707,420

7,633,470 1,722,302 781,875 1,242,950

467,618,108

267,721,126

104,993,004

68,257,357

(3,824,331)

(2,752,601)

(651,700)

(1,070,450)

463,793,777

264,968,525

104,341,304

67,186,907

9. Inventories Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Food and beverage Raw materials Work in process Finished goods Operating supplies Others

56,986,826 328,625,537 1,784,510 5,451,171 68,987,899 14,846,601

45,600,844 294,333,408 1,821,560 287,492 51,192,908 10,481,612

14,125,358 7,205,020 1,934,526

13,211,530 5,454,765 2,423,173

Less Allowance for obsolete stock

476,682,544 3,298,050

403,717,824 3,827,411

23,264,904 -

21,089,468 444,716

473,384,494

399,890,413

23,264,904

20,644,752

The cost of food and beverage which is recognised as an expense and included in ‘cost of sales’ for the year ended 31 December 2012 amounted to Baht 3,815 million (2011: Baht 2,992 million).

10. Other current assets Consolidated 2012 Baht Withholding income tax and input tax receivable Undue input tax

98,415,813

2011 Baht

Company 2012 Baht

2011 Baht

111,639,665

12,580,372

11,169,025

1,295,845

2,235,633

651,620

1,856,948

Retentions

14,062,057

48,091,285

Office supplies

13,674,311 41,723,032

30,329,961 40,145,435

169,171,058

232,441,979

13,231,992

13,025,973

Others

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

071

CONTENTS

Company 2012 Baht

2011 Baht

4,274,695,445

, , ,

8,500,000

945,375,000

Disposals

(250,000)

Decrease shares capital of subsidiaries

(862,499,303)

359,187,116 (19,420,000)

- (19,420,000)

, , , 1

4,274,695,445

Transfer from interests in joint ventures (Note 11 b) Proceeds from redemption of property funds At 31 December

On 23 August 2012, the Company invested in Cosi Hotels Co., Ltd. Consisting of 300,000 ordinary shares with a par value of Baht 100 per share (call-up of Baht 25 per share), totalling Baht 7.5 million. Total invested shares represent 100% ownership. The Company paid for share capital on 23 August 2012. On 19 September 2012, the Company invested in Centara Import-Export Co., Ltd. Consisting of 100,000 ordinary shares with a par value of Baht 10 per share (call-up of Baht 10 per share), totalling Baht 1.0 million. Total invested shares represent 100% ownership. The Company paid for share capital on 19 October 2012. On 9 March 2011, Central Hotel Management Co., Ltd. registered with the Ministry of Commerce to decrease in authorised share capital of 7,500,000 shares with a par value of Baht 100 per share, totalling Baht 750 million. On 16 March 2011, Central Karon Village Co., Ltd. registered with the Ministry of Commerce to decrease authorised share capital of 1,125,000 shares, with a par value of Baht 100 per share, totalling Baht 112.5 million. On 25 August 2011, Central World Hotel Co., Ltd. registered additional ordinary shares from 10,000,000 shares to 20,000,000 shares, with a par value of Baht 100 per share, (call-up of 80 percent of additional shares), totalling Baht 800 million. Total invested shares represent 100% ownership. The Company paid for share capital on 25 August 2011. On 13 October 2011, S.P. Realty Had Farang Resort Co., Ltd. has called-up additional shares of 885,000 shares with a par value of Baht 100 per share, at call-up of Baht 75 per share, totalling Baht 66.3 million. Total invested shares represent 100% ownership. The Company has recorded as account payable amount due for the share subscription as at 31 December 2011. On 18 October 2011, Triplenine Decor Co., Ltd. registered additional ordinary shares of 800,000 shares, with a par value of Baht 100 per share (fully call-up). The Company had invested in these additional shares, amounting to Baht 79 million. Total invested shares represent 100% ownership. On 26 October 2011, the Company sold its investment in S.P. Realty Lanta Beach Co., Ltd. to Central Krabi Bay Resort Co., Ltd. consisting of 10,000 shares with par value of Baht 100 per share (call-up 25 Baht per share), amounting to Baht 0.25 million.

072

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 11. Investments in subsidiaries, associates and interests in joint ventures a) Investments in subsidiaries (Contâ&#x20AC;&#x2122;d) $OO LQYHVWPHQWV LQ VXEVLGLDULHV LQFOXGHG LQ WKH FRQVROLGDWHG ÂżQDQFLDO VWDWHPHQWV DUH LQYHVWPHQWV LQ RUGLQDU\ shares of subsidiaries and units in property funds as follows: Company

Subsidiaries Central Samui Beach Resort. Co., Ltd. Central Karon Village Co., Ltd.

Country of incorporation Thailand Thailand

Central Krabi Bay Resort Co., Ltd. Central Hua Hin Beach Resort Co., Ltd. Central World Hotel Co., Ltd. Central Koh Kood Hotel Co., Ltd. Central Hotel Management Co., Ltd. Central Restaurants Group Co., Ltd. Triplenine Decor Co., Ltd. Central Samui Hotel Management Co., Ltd. Centara International Management Co., Ltd. S.P. Realty Had Farang Resort Co., Ltd. S.P. Realty Pattaya Beach Co., Ltd. Cenvaree Healthy Spa Co., Ltd.

Voting power from % Ownership (if different interest ownership interest) 2012 2011 2012 2011

Thailand

Thailand Thailand

63.9

Thailand

Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand

Central Bangkok Convention & Exhibition Co., Ltd. Centara International Management (Thailand) Co., Ltd. Karon Phuket Hotel Co., Ltd.

Thailand Thailand Thailand

Cosi Hotels Co., Ltd.

Thailand

Centara Import-Export Co., Ltd.

Thailand

Property funds Thai Pattana Fund 2

100.0

* By direct and indirect shareholding

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

073

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 11. Investments in subsidiaries, associates and interests in joint ventures b) Investments in associates and interests in joint ventures Consolidated 2012 Baht At 1 January Share of net profit of investments in associates - equity method Shared of other comprehensive income of investment Additional investment Remeasuring of investments to fair value Change/transfer to investment in subsidiaries (Note 11 a) Dividend received At 31 December

2011 Baht

Company 2012 Baht

2011 Baht

1,235,268,146

1,079,330,605

1,045,204,788

,045,204,788

59,088,709

77,982,693

70,706,677 756,174,960

154,361,144

179,187,116

312,138,587

(1,437,433,711) (71,492,030)

(76,406,296)

(359,187,116) -

924,451,338

1,235,268,146

865,204,788

1,045,204,788

On 30 January 2012 and 28 March 2012, the Group additional paid for share capital of Centara Maldives Pvt. Ltd. consisting of 10,000,000 shares with a par value of USD 1 per share (additional call-up of USD 0.25 per share) totalling Baht 77.88 million (USD 2.5 million) and Baht 77.12 million (USD 2.5 million) respectively. Total invested shares represent 50% ownership. On 27 February 2012, the Group additionally acquired the investment portion of 33.92%, (existing portion is 50.00%), totalling Baht 179.19 million of the share capital of Karon Phuket Hotel Co., Ltd. This made the Group increase the investment portion to 83.92%. The investment in Karon Phuket Hotel Co., Ltd. changed from “Interests in joint venture” to “Investment in subsidiary” at the date that the Group has control of this entity. On 7 June 2012, the Group additionally acquired the investment portion of 25.00%, (existing direct portion is 50.00%) of the share capital of Centara Maldives Pvt. Ltd., totalling Baht 157.38 million (USD 5 million). This made the Group increase the investment portion to 75.00%. The investment in Centara Maldives Pvt. Ltd. changed from “Interests in joint venture” to “Investment in subsidiary” at the date that the Group has control of this entity. On 3 December 2012, the Group additionally acquired the investment portion of 49.00%, (existing direct portion is 25.00%) of the share capital of R.M.L. Leisure Pvt. Ltd., totalling Baht 264.60 million (USD 8.6 million). This made the Group increase the investment portion to 74.00%. The investment in R.M.L. Leisure Pvt. Ltd. changed from “Investment in associate” to “Investment in subsidiary” at the date that the Group has control of this entity. On 23 September 2011, the Group has invested in Centara Maldives Pvt. Ltd. consisting of 10,000,000 shares (Authorised share capital of 20,000,000 shares) with a par value of USD 1 per share (call-up of USD 0.5 per share) totalling Baht 154.4 million (USD 5 million). Total invested shares represent 50% ownership. The Company paid for share capital on 23rd and 28th September 2011.

074

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 11. Investments in subsidiaries, associates and interests in joint ventures b) Investments in associates and interests in joint ventures (cout’d) 7KH LQYHVWPHQWV LQ DVVRFLDWHV DQG LQWHUHVWV LQ MRLQW YHQWXUHV LQ WKH FRQVROLGDWHG ¿QDQFLDO VWDWHPHQWV DV DW ¿QDQFLDO SRVLWLRQ GDWH DUH DV IROORZV

Consolidated

Country of incorporation

Associates

Voting power from % Ownership (if different interest ownership interest) 2012 2011 2012 2011

Centara Hotels & Resorts Leasehold Property Fund R.M.L. Leisure Pvt. Ltd.

Thailand Maldives

25.3 -

25.3 25.0

Joint Ventures Kata Phuket Hotel Co., Ltd. Karon Phuket Hotel Co., Ltd. Centara Maldives Pvt. Ltd.

Thailand Thailand Maldives

50.0 -

50.0 50.0* 50.0

- -

Company

Country of incorporation Centara Hotels & Resorts Leasehold Property Fund

Thailand

Joint Ventures

Kata Phuket Hotel Co., Ltd. Karon Phuket Hotel Co., Ltd.

Thailand Thailand

Voting power from % Ownership (if different interest ownership interest) 2012 2011 2012 2011

25.3

50.0 50.0

50.0 50.0*

* By direct and indirect shareholding

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

075

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 12. Investment properties

Consolidated 2012 Baht As at 1 January Cost Less Accumulated depreciation

2011 Baht

Company 2012 Baht

2011 Baht

643,284,205 (135,655,529)

618,100,232 (117,705,089)

367,489,498 (38,987,151)

347,384,498 (26,236,254)

Net book amount

507,628,676

500,395,143

328,502,347

321,148,244

For the year ended 31 December Opening net book amount Additions Depreciation

507,628,676 (16,241,089)

500,395,143 25,183,973 (17,950,440)

328,502,347 (12,919,817)

321,148,244 20,105,000 (12,750,897)

Closing net book amount

491,387,587

507,628,676

315,582,530

328,502,347

643,284,205 (151,896,618)

643,284,205 (135,655,529)

367,489,498 (51,906,968)

367,489,498 (38,987,151)

491,387,587

507,628,676

315,582,530

328,502,347

3,643,000,000

1,673,671,200

114,612,529

50,333,333

As at 31 December Cost Less Accumulated depreciation Net book amount Fair value Rental Income

Depreciation expenses of have been charged in the cost of sales and administration expenses. As at 31 December 2012, investment properties at net book value of Baht 323.4 million (Company: Baht PLOOLRQ ZHUH UHYDOXHG E\ %URNH 5HDO (VWDWH &R /WG D ÂżUP RI LQGHSHQGHQW SURIHVVLRQDO YDOXHUV on 8 May 2010 at open market values on an existing use basis. The appraised value was Baht 3,336 million (Company: Baht 1,673.7 million). The remainder of its investment properties at net book value of %DKW PLOOLRQ ZDV UHYDOXHG E\ $PHULFDQ $SSUDLVDO 7KDLODQG &R /WG D ÂżUP RI LQGHSHQGHQW SURfessional valuers, on 21 December 2011 at open market values on an existing use basis. The appraised value was Baht 307 million. Total market value of investment properties as at 31 December 2012 were Baht 3,643 million.

076

ANNUAL REPORT 2012

1,015,105,008

3,240,626,670

1,352,197,627

3,277,595,167

Depreciation charge

Less Provision for impairment

4,409,144,107

1,352,197,627

3,277,595,167

Less Provision for impairment

077

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

Net book amount

(10,191,450)

(490,802)

(2,289,198,692)

(212,198,449)

Less Accumulated depreciation

6,708,534,249

4,409,144,107

2,003,400

(364,680,374)

196,422,515

1,564,886,878

394,713,453

1,292,877

4,300,149

393,354,557

4,176,450,983

(12,194,850)

(2,036,270,461)

6,224,916,294

Buildings and improvements Baht

3,277,595,167

Cost/Revaluation

At 31 December 2011

Closing net book amount

(60,438,448)

Transfer from (to) other accounts

Disposals, net

2,817,614

36,968,497

Acquisition from investment in a subsidiary

Additions

Opening net book amount

Year ended 31 December 2011 1,015,105,008

(490,802)

3,240,626,670

(151,760,001)

Less Accumulated depreciation

Less Provision for impairment

Net book amount

1,167,355,811

Land Baht

Land improvements Baht

3,240,626,670

Cost/Revaluation

At 1 January 2011

13. Property, plant and equipment

For the years ended 31 December 2012 and 2011

Machinery and equipment Baht

2,085,444,400

(1,918,989,370)

4,004,433,770

2,085,444,400

(389,000)

(299,939,073)

395,948,601

(719,000)

62,962,410

178,220,921

1,749,359,541

(389,000)

(1,588,897,307)

3,338,645,848

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

932,818,149

(511,854)

(1,252,685,964)

2,186,015,967

932,818,149

(57,000)

(199,829,302)

239,339,273

(2,240,697)

113,290,026

97,217,134

685,098,715

(568,854)

(976,283,420)

1,661,950,989

286,076,680

(3,097,845)

289,174,525

286,076,680

(878,213)

1,060,249

(26,958,679)

33,483,570

279,369,753

(2,220,767)

281,590,520

Consolidated Furniture, fixtures Hotel and office operating equipment equipment Baht Baht

585,035,841

(60,306,688)

645,342,529

585,035,841

(37,156,904)

377,775,880

44,334,425

200,082,440

(23,148,064)

223,230,504

Leasehold improvements Baht

53,437,028

(193,531,955)

246,968,983

53,437,028

(17,211,061)

(841,000)

16,372,228

55,116,861

(190,396,554)

245,513,415

Vehicles Baht

338,285,445

(1,638,555,693)

3,109,042

811,665,958

1,162,066,138

Assets under construction Baht

13,320,034,444

(11,194,106)

(5,930,008,963)

19,261,237,513

13,320,034,444

1,557,400

(980,133,375)

(33,295,722)

(29,466,499)

183,661,627

1,614,434,904

12,563,276,109

(13,643,506)

(4,968,976,574)

17,545,896,189

Total Baht

CONTENTS

(490,802) 347,613,097

4,542,765,811

Less Provision for impairment

8,959,586,609

(490,802) 347,613,097

4,542,765,811

078

ANNUAL REPORT 2012

Net book amount

(30,884,194)

(203,664,704)

Less Accumulated depreciation

Less Provision for impairment

(2,619,820,554)

551,768,603

11,610,291,357

8,959,586,609

(30,884,194)

(1,510,227)

1,259,304,439

(430,137,751)

1,127,726,537

(3,476,916)

(5,209,262)

2,247,034,670

387,595,206

4,409,144,107

Buildings and improvements Baht

4,542,765,811

Cost/Revaluation

At 31 December 2012

Closing net book amount

76,097,417

784,446,357

Revaluation surplus

(31,200,300)

(1,080,104,621)

15,471,958

6,121,377

9,520,441

1,352,197,627

Land improvements Baht

Translation adjustment

2,870,347

Depreciation charge

Transfer from (to) other accounts

406,926

(18,020,340)

Write-offs, net

Reclassification

402,002,406

93,464,948

3,277,595,167

Land Baht

Disposals, net

Acquisition from investment in subsidiaries

Additions

Opening net book amount

Year ended 31 December 2012

13. Property, plant and equipment (Coutâ&#x20AC;&#x2122;d)

For the years ended 31 December 2012 and 2011

Machinery and equipment Baht

2,200,825,940

(89,207)

(2,107,415,431)

4,308,330,578

2,200,825,940

(89,207)

(140,484)

(334,576,314)

101,571,315

(28,386,920)

(2,814,727)

141,498,567

238,319,310

2,085,444,400

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

987,805,113

(686,554)

(1,292,056,121)

2,280,547,788

987,805,113

(686,554)

(133,868)

(221,846,756)

80,854,998

(6,606,605)

(2,492,803)

86,688,752

119,209,800

932,818,149

322,993,486

(543,330)

(3,799,503)

327,336,319

322,993,486

(543,330)

(12,061)

(3,868,812)

138,181

(26,929,040)

(22,806,034)

22,722,793

68,215,109

286,076,680

Consolidated Furniture, fixtures Hotel and office operating equipment equipment Baht Baht

804,059,470

(117,327,007)

921,386,477

804,059,470

(57,089,687)

272,823,269

(276,297)

3,566,344

585,035,841

Leasehold improvements Baht

70,407,520

(128,296,627)

198,704,147

70,407,520

(21,436)

(10,715,490)

4,728,709

(15,892,654)

(1,717,041)

12,826,328

27,762,076

53,437,028

Vehicles Baht

955,596,549

(511,816,965)

60,876,932

232,973,046

835,278,091

338,285,445

Assets under construction Baht

19,191,653,595

(32,694,087)

(6,472,379,947)

25,696,727,629

19,191,653,595

(32,694,087)

(1,818,076)

2,119,848,213

(1,089,435,110)

(1,208,230)

(4,812,616)

(18,020,340)

(35,039,867)

3,151,867,939

1,782,931,325

13,320,034,444

Total Baht

CONTENTS

(29,542,241)

(23,568,088) 198,573,370

772,116,599 772,116,599

Depreciation charge

079

(153,728,085) 1,852,655,463

259,947,876 (61,374,506) 198,573,370

772,116,599

2,006,383,548

1,852,655,463

772,116,599

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

Net book amount

Less Accumulated depreciation

Cost/Revaluation

At 31 December 2011

Closing net book amount

2,700,000

(13,460,420)

Transfer from (to) other accounts

(67,100,284)

17,689,800

Reclassification

457,900

1,877,968,324

Disposals, net

286,083,842

1,877,968,324

286,083,842

772,116,599

(124,185,844)

323,890,260 (37,806,418)

2,002,154,168

Buildings and improvements Baht

Land improvements Baht

772,116,599

Land Baht

Additions

Opening net book amount

Year ended 31 December 2011

Net book amount

Less Accumulated depreciation

Cos/Revaluation

At 1 January 2011

13. Property, plant and equipment (Coutâ&#x20AC;&#x2122;d)

For the years ended 31 December 2012 and 2011

Machinery and equipment Baht

834,632,482

(244,067,018)

1,078,699,500

834,632,482

(69,613,138)

17,914,970

35,444,930

(243,642)

10,319,603

840,809,759

(174,604,346)

1,015,414,105

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

294,441,333

(135,758,834)

430,200,167

294,441,333

(33,668,162)

79,442,931

13,678,262

(128,102)

12,832,290

222,284,114

(107,180,245)

329,464,359

97,963,912

924,040

(839,324)

(9,630,252)

7,943,393

99,566,055

Company Furniture, fixtures Hotel and office operating equipment equipment Baht Baht

463,423,994

(53,183,812)

516,607,806

463,423,994

(30,161,331)

319,977,785

42,922,720

130,684,820

(23,022,481)

153,707,301

Leasehold improvements Baht

15,571,510

(73,073,577)

88,645,087

15,571,510

(8,042,779)

(922,835)

10,591,066

13,946,058

(75,030,984)

88,977,042

Vehicles Baht

260,432,482

(421,872,475)

397,129,913

285,175,044

Assets under construction Baht

4,789,811,145

(721,185,832)

5,510,996,977

4,789,811,145

(194,595,739)

(912,749)

(32,276,836)

(10,924,831)

499,886,685

4,528,634,615

(541,830,318)

5,070,464,933

Total Baht

CONTENTS

Reclassification

080

ANNUAL REPORT 2012

Net book amount

Less Accumulated depreciation

Cost/Revaluation

At 31 December 2012 282,192,230 (79,822,173) 202,370,057

1,304,815,641 2,457,907,725

(186,312,041)

2,644,219,766

2,457,907,725

202,370,057

1,304,815,641

Revaluation surplus

1,304,815,641

628,359,346

27,709,209

Closing net book amount

(30,144,131)

(20,874,743)

5,396,182

1,640,865

1,852,655,463

Buildings and improvements Baht

529,828,695

3,785,047

(8,623,022)

1,800,196

198,573,370

Land improvements Baht

Depreciation charge

2,870,347

Disposals, net

Transfer from (to) other accounts

772,116,599

Land Baht

Additions

Opening net book amount

Year ended 31 December 2012

13. Property, plant and equipment (Coutâ&#x20AC;&#x2122;d)

For the years ended 31 December 2012 and 2011

10,826,943

(7,045,007)

(1,655,487)

20,227,927

834,632,482

Machinery and equipment Baht

786,560,441

(310,807,216)

1,097,367,657

786,560,441

(70,426,417)

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

291,841,904

(169,143,182)

460,985,086

291,841,904

(37,955,171)

23,472,633

(691,123)

(379,883)

12,954,115

294,441,333

104,854,768

19,750

539,133

(8,622,922)

14,954,895

97,963,912

Company Furniture, fixtures Hotel and office operating equipment equipment Baht Baht

686,834,335

(103,444,203)

790,278,538

686,834,335

(50,263,042)

270,955,872

(246,949)

2,964,460

463,423,994

Leasehold improvements Baht

14,304,245

(69,883,526)

84,187,771

14,304,245

(1,893,968)

1,187,710

309,421

(870,428)

15,571,510

Vehicles Baht

10,548,514

(316,816,151)

(9,009,524)

75,941,707

260,432,482

Assets under construction Baht

5,860,037,630

(919,412,341)

6,779,449,971

5,860,037,630

1,185,897,250

(211,557,472)

(3,697,849)

(19,370,889)

(11,528,720)

130,484,165

4,789,811,145

Total Baht

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 13. Property, plant and equipment (Coutâ&#x20AC;&#x2122;d) At 31 December 2012, the Company and 3 subsidiaries mortgaged land, buildings and construction with carrying value of Baht 4,284 million (2011: Baht 3,933 million) as collateral for bank overdrafts and long WHUP ORDQ ZLWK ÂżQDQFLDO LQVWLWXWLRQV The land lease agreement for the Hua Hin Railway Hotel stipulates that hotel buildings and premises LQFOXGLQJ WKH DGGLWLRQDO Âż[WXUHV SDLG E\ D VXEVLGLDU\ &HQWUDO +XD +LQ %HDFK 5HVRUW &R /WG EHORQJ WR the State Railway of Thailand. The gross amount of fully depreciated property and equipment that was still in use as at 31 December 2012 and 2011 was the following:

The Group The Company

2012 Baht

2011 Baht

3,730,547,209

2,374,857,292

123,002,039

80,213,086

Revaluation of assets In December 2012, the Company and its four subsidiaries engaged an independent appraiser to appraise existing property, plant and equipment. Valuation methodologies applied are income approach. The increasing in revaluation surplus of the Company and subsidiaries approximately Baht 2,190.6 million (Company: Baht 1,185.9 million) has been charged to other comprehensive income (Note 26). In the third quarter of 2008, eight subsidiaries engaged an independent appraiser to appraise existing property and equipment as at 31 August 2008, which included property and equipment which were previously appraised. The subsidiaries recorded property and equipment at the new appraisal value according to the appraisal report dated 31 August 2008. The asset appraisal stated above, resulted in an increase in revaluation surplus of the Company and subsidiaries in consolidated balance sheet as at 31 August 2008 of approximately Baht 1,824 million. The revaluation surplus could not be used for dividend payment. Additionally, in the consolidated statement of comprehensive income, the Company and subsidiaries recorded net gain from appraisal and loss from impairment of asset of approximately Baht 3.1 million and Baht 15.2 million, respectively. On 12 April 2011, the Federation of Accounting Profession (â&#x20AC;&#x153;FAPâ&#x20AC;?) announced â&#x20AC;&#x153;Accounting Record on Revaluationâ&#x20AC;? FAP announcement No. 18/2554 giving the Group two alternatives to be applied on depreciating revalued assets: (a) comply with the principle as stipulated in paragraph No. 38 of TAS No. 16 â&#x20AC;&#x153;Property, Plant and Equipmentâ&#x20AC;?, and depreciate the revalued sum or (b) comply with the cost method when revaluation is made and continue to depreciate the original cost only. The Group adopted the alternative to comply with the cost method when revaluation is made. The effects of the above accounting treatment on the Groupâ&#x20AC;&#x2122;s results for the years ended 31 December 2012 DQG ZHUH WR LQFUHDVH WKH *URXSÂśV SURÂżW E\ %DKW PLOOLRQ DQG %DKW PLOOLRQ UHVSHFWLYHO\ DQG increase in earnings per share by Baht 0.03 per share and Baht 0.03 per share, respectively.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

081

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 $VVHWV XQGHU ÂżQDQFLDO OHDVH DJUHHPHQW +RWHO EXLOGLQJV FRQVWUXFWLRQV DQG Âż[WXUHV WKHUHRQ RI D VXEVLGLDU\ &HQWUDO :RUOG +RWHO &R /WG Âł&:+Â´ must be transferred the rights on buildings and constructions thereon which CWH repair and maintenance or construct on the sub-lease land to the land owner, the Crown Property Bureau, at the date of those repair and maintenance or construction would be completed. According to the sub-lease land DJUHHPHQW DV DW 'HFHPEHU DQG DVVHWV XQGHU ÂżQDQFLDO OHDVH DJUHHPHQW ZHUH DV WKH following: Consolidated

Land improvements Baht

Buildings and improvements Baht

Machinery and equipment Baht

Furniture, fixtures and office equipment Baht

Total Baht

At 1 January 2011 Cost Less Accumulated depreciation

65,993,654 (6,129,027)

2,417,456,944 (267,076,543)

1,029,982,006 (152,452,813)

27,726,347 (4,380,646)

3,541,158,951 (430,039,029)

Net book amount

59,864,627

2,150,380,401

877,529,193

23,345,701

3,111,119,922

Year ended 31 December 2011 Opening net book amount Additions Transfer from other accounts Depreciation charge

59,864,627 (2,720,898)

2,150,380,401 3,630,074 775,803 (97,926,385)

877,529,193 (55,457,834)

23,345,701 (3,495,150)

3,111,119,922 3,630,074 7 ,803 (159, ,267)

Closing net book amount

57,143,729

2,056,859,893

822,071,359

19,850,551

2,955,925,532

At 31 December 2011 Cost Less Accumulated depreciation

65,993,654 (8,849,925)

2,421,862,821 (365,002,928)

1,029,982,006 (207,910,647)

27,726,347 (7,875,796)

3,545,564,828 (589,639,296)

Net book amount

57,143,729

2,056,859,893

822,071,359

19,850,551

2,955,925,532

Year ended 31 December 2012 Opening net book amount Additions Transfer from other accounts Adjustment Depreciation charge

57,143,729 87,993 (2,721,271)

2,056,859,893 8,783,949 6,598,964 (23,762,834) (93,607,262)

822,071,359 1,035,650 (53,918,646)

19,850,551 (2,154,774)

2,955,925,532 9,819,599 6,686,957 (23,762,834) (152,401,953)

Closing net book amount

54,510,451

1,954,872,710

769,188,363

17,695,777

2,796,267,301

66,081,647 (11,571,196)

2,413,482,900 (458,610,190)

1,031,017,656 (261,829,293)

27,726,347 (10,030,570)

3,538,308,550 (742,041,249)

54,510,451

1,954,872,710

769,188,363

17,695,777

2,796,267,301

At 31 December 2012 Cost Less Accumulated depreciation Net book amount

082

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 15. Goodwill Consolidated 2012 Baht

2011 Baht

At 1 January Addition from acquisition a subsidiary

314,602,238 -

115,416,847 199,185,391

At 31 December

314,602,238

Goodwill arising from the acquisition of Central Restaurants Group Co., Ltd. and indirect interest in CRG International Food Co., Ltd. are Baht 115 million and Baht 199 million respectively. The Group has tested for impairment of goodwill annually by comparing the carrying amount to the recoverable amount for each cashJHQHUDWLQJ XQLW 7KLV LV GHWHUPLQHG EDVHG RQ YDOXH LQ XVH FDOFXODWLRQV 7KHVH FDOFXODWLRQV XVH D FDVK Ă&#x20AC;RZ SURMHFWLRQ IRU \HDUV DQG FDVK Ă&#x20AC;RZV EH\RQG WKH \HDU SHULRG DUH H[WUDSRODWHG XVLQJ WKH HVWLPDWHG JURZWK UDWHV at 0.00% per annum. The discount rate after tax used in the calculation is 10.00% per annum.

16. Leasehold rights Consolidated 2012 Baht At 1 January Additions Acquisition from investment in subsidiaries Amortisation charge At 31 December

2011 Baht

Company 2012 Baht

2011 Baht

416,540,368

480,352,132

156,610,721

224,528,588

, ,

57,097,545

11,317,501

10,324,381

(135,597,530)

(120,909,309)

(82,936,782)

(78,242,248)

876,087,576

416,540,368

84,991,440

156,610,721

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

083

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 17. Other intangible assets

Software licenses Baht

Consolidated License Agreement Baht

Total Baht

Company Software licenses Baht

At 1 January 2011 Cost Less Accumulated amortisation

178,052,221 (70,597,504)

69,989,805 (24,931,960)

Net book amount

107,454,717

45,057,845

Year ended 31 December 2011 Opening net book amount Additions Acquisition from investment in a subsidiary Transfer from other accounts Amortisation charge

107,454,717 13,876,731 19,130,155

239,926,421

107,454,717 13,876,731 259,056,576

45,057,845 5,956,337 -

990,47 (31,933,198)

(7,997,547)

990, 7 (39,930,745)

912,750 (8,708,554)

Closing net book amount

109,518,879

231,928,874

341,447,753

43,218,378

At 31 December 2011 Cost Less Accumulated amortisation

207,382,329 (97,863,450)

239,926,421 (7,997,547)

447,308,750 (105,860,997)

76,871,188 (33,652,810)

Net book amount

109,518,879

231,928,874

341,447,753

43,218,378

Year ended 31 December 2012 Opening net book amount Additions Acquisition from investment in a subsidiary (Note 32) Disposals, net Transfer from other accounts Adjustment Translation adjustment Amortisation charge

109,518,879 38,158,247

231,928,874 -

341,447,753 38,158,247

43,218,378 5,659,075

923,760 (4,940,610) 1,208,230 (7,356,270) (26,484,470) ( , 88)

(23,992,642) -

923,760 (4,940,610) 1,208,230 (7,356,270) (50,477,112) ( , 88)

(54,644) 3,697,849 (6,957,537) (8,897,033) -

Closing net book amount

111,026,478

207,936,232

318,962,710

36,666,088

235,440,994 (124,414,516)

,926,421 (31,990,189)

475,367,415 (156,404,705)

78,020,280 (41,354,192)

111,026,478

207,936,232

318,962,710

36,666,088

At 31 December 2012 Cost Less Accumulated amortisation Net book amount

084

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 18. Other non-current assets Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Receivable from reciprocation agreement on hotel construction and renovation Deposits Advance payment for construction land and equipment Prepaid car park service Others

349,515,306

15,324,309 308,047,101

8,427,634

15,324,309 9,551,508

59,089,077 87,914,434 200,668,868

129,781,000 92,310,156 187,416,661

9,264,320 858,331

81,300,161 13,615,795

Total

697,187,685

732,879,227

18,550,285

119,791,773

On 28 December 2004, the Company entered into a reciprocation agreement with Duangtawan Hotel Co., Ltd. (â&#x20AC;&#x153;CDCâ&#x20AC;?), under hotel improvement regarding the construction and renovation of CDC, according to the details and related documents for the development and improvement of the infrastructure of the hotel of not exceeding Baht 50 million, repayable within 5-year period commencing from the agreement date. The said amount is guaranteed by pledging share of CDC and guaranteed by a person who is both shareholder and director of CDC. Compensation fee is charged quarterly at MLR of a commercial bank minus 1%. As at 31 December 2012, there is no the receivable under the said reciprocation agreement (2011: Baht 15.3 million). 19. Borrowings Consolidated 2012 Baht Current Bank overdrafts Short-term borrowings from financial institutions Current portion of long-term borrowings Financial institutions Current portion of debentures Current portion of equity of unit holder in property fund Short-term loans from others Short-term loan from related parties

Non-Current Long-term from financial institutions Debentures Equity of unit holder in property fund

Total borrowings

2011 Baht

Company 2012 Baht

2011 Baht

59,441,615

87,865,027

7,315,474

48,331,463

2,540,000,000

1,830,000,000

2,400,000,000

1,650,000,000

958,000,000 1,399,862,968

408,000,000 1,598,966,615

588,000,000 1,399,862,968

288,000,000 1,598,966,615

62,000,000 61,065,935 -

62,000,000 6,000,000

749,000,000

70,000,000

5,080,370,518

3,992,831,642

5,144,178,442

3,655,298,078

5,143,150,930 1,799,117,717 31,000,000

2,718,000,000 3,199,049,302 93,000,000

1,430,000,000 1,799,117,717 -

2,018,000,000 3,199,049,302 -

6,973,268,647

6,010,049,302

3,229,117,717

5,217,04 ,302

12,053,639,165

10,002,880,944

8,373,296,159

8,872,347,380

The borrowings include secured liabilities in a total amount of Baht 4,284 million (2011: Baht 1,826 million). The bank borrowings are secured over a part of the land and buildings of the Group (Note 13). Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

085

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 19. Borrowings (Contâ&#x20AC;&#x2122;d) The interest rate exposure on the borrowings of the Group and the Company is as follows: Consolidated 2012 Baht

Company 2012 Baht

2011 Baht

Borrowings: - at fixed rates - at floating rates

4,660,046,620 7,393,592,545

3,855,049,052 6,147,831,642

5,347,980,685 3,025,3 , 74

3,919,049,302 4,953,298,078

Total borrowings

12,053,639,165

10,002,880,944

8,373,296,159

8,872,347,380

Maturity of long-term borrowings are as follow: Consolidated 2012 Baht Within 1 year After 1 year but within 5 years Over 5 years

Company 2012 Baht

2011 Baht

958,000,000

408,000,000

588,000,000

288,000,000

4,567,382,450 575,768,480

2,432,000,000 286,000,000

1,430,000,000 -

1,952,000,000 66,000,000

6,101,150,930

3,126,000,000

2,018,000,000

2,306,000,000

Under the terms and conditions on the loan agreements, the Company need to comply with debt to equity ratio not exceed 2:1 , 2.5:1 and 2.75:1. /RQJ WHUP ORDQV IURP ÂżQDQFLDO LQVWLWXWLRQV EHDU LQWHUHVW DW PDUNHW UDWHV 'XULQJ WKH &RPSDQ\ KDV UHQHZHG ORQJ WHUP ORDQ DJUHHPHQW ZLWK D ÂżQDQFLDO LQVWLWXWLRQ ZKLFK KDG been due in 2011 amounting to Baht 500 million. The new agreement is repayable in year 2014. %DQN RYHUGUDIWV DQG VKRUW WHUP ORDQV IURP ÂżQDQFLDO LQVWLWXWLRQV DQG ORQJ WHUP ORDQV RI WKH *URXS DV DW 31 December 2012 and 2011 were secured by the Groupâ&#x20AC;&#x2122;s property, plant and equipment with carrying value of Baht 3,896 million as at 31 December 2012 (2011: Baht 3,933 million). Central Restaurants Group Co., Ltd (â&#x20AC;&#x153;CRGâ&#x20AC;?) entered into the agreements with three local banks to obtain various short-term credit facility lines. Under the term of the agreement, CRG shall not dispose, pledge or mortgage the existing or future property and leasehold right in an amount over the agreed amount stated in the agreements without consent from the bank. According to the loan agreement between Central World Hotel Co., Ltd (â&#x20AC;&#x153;CWHâ&#x20AC;?) and a local bank, CWH shall not dispose, transfer, lease, or make any commitment in leasehold land and building and construction thereon without consent from the bank.

086

ANNUAL REPORT 2012

CONTENTS

Consolidated / Company 2012 2011 Baht Baht

Maturity date

No. 1/2009, Set 2

4.55

29 July 2012

600,000,000

No. 2/2009

4.45

24 July 2012

1,000,000,000

No. 1/2010

3.50

30 September 2013

1,000,000,000

No. 2/2010

3.85

23 June 2017

500,000,000

No. 3/2010

3.85

29 June 2017

500,000,000

No. 4/2010

3.40

3 September 2013

400,000,000

No. 1/2011

4.86

29 March 2016

No. 2/2011

4.75

29 March 2016

500,000,000 300,000,000

3,200,000,000

4,800,000,000

(1,019,315)

(1,984,083)

3,198,980,685 (1,399,862,968)

4,798,015,917 (1,598,966,615)

1,799,117,717

3,199,049,302

Deferred expense in issuing debenture Net Debenture due within one year Debenture due after one year

The debentures are in the name of specific holders, unsubordinated and without collateral. The debenture deed contains certain restrictions and conditions relating to financial ratios, payment of dividends, decrease in paid up share capital, pledge, mortgage, and disposal of assets, which are material for business operations. Under the terms and conditions on the prospectus, the Company need to comply with interest bearing debt to equity ratio not exceed 2:1. As at 31 December 2012 and 2011, the Company has various interest rate swap contracts which the details of the contracts are as follows: Conditions under previous contracts Principal Interest rate

Baht 2,000,000,000 Quarterly, fixed interest rate of 3.50% - 3.85% p.a.

Conditions under interest rate swaps contracts Principal Interest rate

Baht 2,000,000,000 Monthly, floating interest rate of MLR minus 3% p.a. Quarterly, fixed interest rate 4.65% p.a.

The above contracts are mature during 30 September 2013 to 29 June 2017.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

087

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 19. Borrowings (Contâ&#x20AC;&#x2122;d)

Unit holder in Thai Pattana fund 2 equity Consolidated 2012 Baht

2011 Baht

Due within one year Due after one year but within five years

62,000,000 31,000,000

62,000,000 93,000,000

Total

93,000,000

155,000,000

As at 31 December 2012 and 2011, unit holder equity consisted of investment of unit holder type A, (denominated in Thai Baht) which guaranteed for payment by the Company. Dividend payment for unit holders is calculated at the percentage of the latest net asset value per unit as specified in the unit holder agreement. The carrying amounts and fair values of certain long-term borrowings are as follows: Consolidated Carrying amounts 2012 Baht Long-term bank borrowings Debentures

Fair values 2012 Baht

2011 Baht

5,143,150,930 1,799,117,717

2,718,000,000 3,199,049,302

5,199,044,928 1,806,967,151

2,848,934,406 3,185,410,763

6,942,268,647

5,917,049,302

7,006,012,079

6,034,345,169

Company Carrying amounts 2012 Baht

Fair values 2012 Baht

2011 Baht

Long-term borrowings from bank

1,430,000,000

2,018,000,000

1,476,435,015

2,098,563,005

Debentures

1,799,117,717

3,199,049,302

1,806,967,151

3,185,410,763

122,250,000

127,229,301

3,229,117,717

5,339,299,302

3,283,402,166

5,411,203,069

Liability under consignment agreement

088

2011 Baht

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 19. Borrowings (Contâ&#x20AC;&#x2122;d) Borrowing facilities The Group and the Company have the following undrawn bank overdrafts and committed borrowing facilities: Consolidated 2012 Baht Float rate - expiring within one year

2011 Baht

Company 2012 Baht

2011 Baht

892,040,337

2,202,134,973

198,684,526

157,668,537

892,040,337

2,202,134,973

198,684,526

157,668,537

20. Trade and other payables

Consolidated 2012 Baht Trade payable - other parties

2011 Baht

Company 2012 Baht

2011 Baht

653,933,057

571,605,975

50,953,983

36,566,239

7,127,705

94,008

371,740

125,026

14,207,925

71,054,473

Other payables

101,367,090

57,694,615

35,835,210

31,665,939

Payables for purchase of building and equipment

297,027,975

285,732,425

12,285,529

80,094,567

24,923,895

28,448,370

11,549,557

90,823,089

741,690,270

623,181,924

95,414,713

56,957,841

25,331,400

25,738,400

823,096

1,851,401,392

1,592,495,717

221,441,753

367,287,174

Trade payable - related parties (Note 33) Amounts due to related parties (Note 33)

Current portion of finance lease liabilities Accrued expenses Other Total trade and other payables

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

089

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 21. Provision for guarantee payment Provision for guarantee payment represented guarantee under the building lease agreement which the Company and a subsidiary guarantee lease fee income of Centara Hotels & Resorts Leasehold Property Fund. Balances as 31 December 2012 and 2011 of provision for guarantee payment were as follows: Consolidated 2012 Baht Short-term provision for guarantee payment Long-term provision for guarantee payment Total

2011 Baht

Company 2012 Baht

2011 Baht

56,188,542

88,917,402

28,189,791

44,609,861

15,796,620

7,924,505

56,188,542

104,714,022

28,189,791

52,534,366

Movements during the years ended 31 December 2012 and 2011 of provision for guarantee payment were as follows: Consolidated 2012 Baht At 1 January Increase Decrease At 31 December

2011 Baht

Company 2012 Baht

2011 Baht

104,714,022 40,391,922 (88,917,402)

119,162,103 73,696,402 (88,144,483)

52,534,366 20,265,286 (44,609,861)

59,784,203 36,972,250 (44,222,087)

56,188,542

104,714,022

28,189,791

52,534,366

22. Other current liabilities Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Deposits

234,274,618

231,581,847

132,683,168

118,201,324

Retentions

135,879,278

156,299,321

15,574,121

37,930,618

36,827,970 61,567,349

42,458,935 19,480,083

32,934,638 50,696

33,019,522

468,549,215

449,820,186

181,242,623

189,151,464

Withholding tax and value added tax payables Others Total

3URYLVLRQ IRU HPSOR\HH EHQHÂżWV 7KH *URXS DGRSWHG 7$6 (PSOR\HH %HQHÂżWV ZLWK HIIHFW IURP -DQXDU\ WKH *URXS KDV RSWHG WR record the entire amount of the transitional obligation as at 1 January 2011, totalling Baht 142.5 million for the Group and Baht 49.9 million for the Company, as an adjustment to retained earnings as at 1 January 2011.

090

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 3URYLVLRQ IRU HPSOR\HH EHQH¿WV &RXW¶G

7KH DPRXQWV UHFRJQLVHG LQ WKH VWDWHPHQW RI ¿QDQFLDO SRVLWLRQ DUH GHWHUPLQHG DV IROORZV

Consolidated 2012 Baht

2011 Baht

Present value of unfunded obligations Actuarial gains

196,407,611 (79,152,774)

Liability in the statement of financial position

117,254,837 167,949,165

Company 2012 Baht

167,949,165 65,656,930 (20,452,650) 45,204,280

2011 Baht

57,858,283 57,858,283

The movement in the defined obligation over the year is as follows: Consolidated 2012 Baht At 1 January Current service cost Interest cost Actuarial gains Benefits paid Acquisition from investment in subsidiary (Note 32) At 31 December

2011 Baht

Company 2012 Baht

2011 Baht

167,949,165 20,150,755 7,739,574 (79,152,774)

142,502,087 21,125,789 6,969,249 -

57,858,283 6,494,227 2,516,017 (20,452,650)

49,903,223 6,582,557 2,317,203 -

(2,250,042)

(2,647,960)

(1,211,597)

(944,700)

2,818,159

117,254,837

167,949,165

45,204,280

57,858,283

The amount recognised in expenses is as follows Consolidated 2012 Baht Current service cost Interest cost Total, included in staff costs

2011 Baht

Company 2012 Baht

2011 Baht

20,150,755

21,125,787

6,494,227

6,582,557

7,739,574

6,969,249

2,516,017

2,317,203

27,890,329

28,095,036

9,010,244

8,899,760

Of the total charge, Baht 27,890,329 (2011: Baht 28,095,036) were included in administrative expenses. The principal actuarial assumptions used were as follows: Consolidated 2012 %

2011 %

Company 2012 %

2011 %

Discount rate Inflation rate

3.6 3.5

4.0, 4.75 -

3.6 3.5

4.75 -

Future salary increases

5.0

4.0 - 6.0

5.0

4.0

Mortality assumption of the mortality rate is based from Thailand mortality ordinary 2008 (TMO08) issued by the Office of the Insurance Commission.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

091

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 24. Share capital Authorised Shares number of Shares

Consolidated/Company Issued and paid-up shares Ordinary number of shares Shares Baht

Share premium Baht

Total Baht

At 1 January 2011 Issue of shares

,580,800,000 -

1,350,000,000 -

970,000,000 -

2,320,000,000 -

At 31 December 2011 Issue of shares Reduction of shares

,580,800,000 (230,800,000)

1,350,000,000 -

970,000,000 -

2,320,000,000 -

At 31 December 2012

1,350,000,000

970,000,000

2,320,000,000

The total number of authorised ordinary shares is 1,350,000,000 shares (2011: 1,580,800,000 shares) with a par value of Baht 1 per share. The issued and paid-up shares is 1,350,000,000 shares (2011: 1,350,000,000 shares). At the Annual General Meeting of Shareholders on 23 April 2012, the shareholders approved the reduction of the Company’s registered capital from Baht 1,580,800,000 to Baht 1,350,000,000 through the elimination of the registered, but unissued of 230,800,000 shares, with a par value of Baht 1 each.

25. Legal reserve Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

At 1 January Appropriation during the year

158,080,000 -

At 31 December

158,080,000

Under the Public Limited Company Act., B.E. 2535, the Company is required to set aside as a legal UHVHUYH DW OHDVW RI LWV QHW SUR¿W DIWHU DFFXPXODWHG GH¿FLW EURXJKW IRUZDUG LI DQ\ XQWLO WKH UHVHUYH LV not less than 10 percent of the registered capital. The legal reserve is non-distributable. As at 31 December 2012, legal reserve of subsidiaries amounting to Baht 6,463,000 (2011: Baht 1,476,066) KDYH EHHQ LQFOXGHG LQ WKH XQDSSURSULDWHG UHWDLQHG HDUQLQJV RI WKH FRQVROLGDWHG ¿QDQFLDO VWDWHPHQWV

092

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 26. Other component of equity Consolidated Remeasuring of available-forsale investment Baht

Land and building revaluation Baht

Translation adjustment Baht

Actuarial gains on employee benefits Baht

Total Baht

At 1 January 2011 Depreciation transfer Loss on remeasuring of available-for-sale investments

240,107 -

1,591,972,406 (43,664,422)

1,592,212,513 (43,664,422)

(15,925)

At 31 December 2011

224,182

1,548,307,984

1,548,532,166

At 1 January 2012 Revaluation Revaluation transfer Gain on remeasuring of available-for-sale investments Currency translation difference Actuarial gains

224,182 -

1,548,307,984 2,190,554,890 ( ,722,481)

1,548,532,166 2,190,554,890 (42,722,481)

239,312 -

(21,620,634) -

76,395,306

239,312 (21,620,634) 76,395,306

At 31 December 2012

463,494

3,696,140,393

(21,620,634)

76,395,306

3,751,378,559

Land and building revaluation Baht

Company Actuarial gains on employee benefits Baht

Total Baht

At 1 January 2011 Revaluation transfer

818,534 (30,242)

At 31 December 2011

788,292

At 1 January 2012 Revaluation Revaluation transfer Actuarial gains At 31 December 2012

788,292 1,185,897,250 (33,984) -

20,452,650

788,292 1,185,897,250 (33,984) 20,452,650

,186,651,558

20,452,650

1,207,104,208

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

093

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 27. Other income Consolidated 2012 Baht

Interest income

2011 Baht

Company 2012 Baht

2011 Baht

33,073,417

19,388,809

205,964,922

205,819,493

Management income

163,479,752

,465,568

381,431,461

285,525,074

Gain on business acquisition (Note 32)

146,029,477

312,138,587

38,294,215

28,536,878

4,740,000

8,449,113

Subsidy

28,998,177

21,138,924

Gain on insurance claim

57,116,555

Sale of used oil Others

20,669,005 76,768,684

18,400,224 72,492,268

53,630,806

28,481,540

876,567,869

296,422,671

645,767,189

528,275,220

Gain on re-measuring to fair value of investments (Note 32) Rental and other services income

Total other income

28. Finance cost

Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Interest expense: Related parties Financial institutions and debenture holders Unit holders in property fundâ&#x20AC;&#x2122;s

17,287,894

12,727,966

479,156,903 7,185,245

402,952,690 11,119,869

369,444,874 -

329,449,996 -

Net

486,342,148

414,072,559

386,732,768

342,177,962

29. Expenses by nature 7KH IROORZLQJ H[SHQGLWXUH LWHPV FODVVLÂżHG E\ QDWXUH KDYH EHHQ FKDUJHG LQ DUULYLQJ DW RSHUDWLQJ SURÂżW

2011 Baht

Company 2012 Baht

2011 Baht

Cost of food and beverage used

3,815,375,727

2,992,116,006

308,824,983

197,177,469

Staff costs

1,719,892,862

2,178,824,461

432,570,489

594,592,747

Royalty fee

1,259,288,715

434,743,036

4,375,187

811,876,792

446,264,608

192,936,783

188,242,248

1,482,902,651

1,455,609,771

316,311,104

282,168,585

Land and building rental Depreciation and amortisation

094

Consolidated 2012 Baht

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 30. Earnings per share %DVLF HDUQLQJV SHU VKDUH LV FDOFXODWHG E\ GLYLGLQJ WKH QHW SUR¿W DWWULEXWDEOH WR VKDUHKROGHUV RI WKH FRPSDQ\ by the weighted average number of ordinary shares in issue during the year, excluding treasury shares (see Note 24).

Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Earnings (Baht) Net profit attributable to ordinary shareholders of the company

1,576,060,744

550,385,018

775,488,091

130,083,854

Weighted average number of ordinary shares outstanding (Shares)

1,350,000,000

1.17

0.41

0.57

0.10

Basic earnings per share (Baht per share)

There are no potential dilutive ordinary shares in issue for the years ended 2012 and 2011.

31. Dividends per share At the Annual General Meeting of Shareholders on 23 April 2012, the shareholders approved the declaration of the annual dividend for the year 2012 at Baht 0.15 each (2011: Baht 0.05), totalling Baht 202.5 million (2011: Bath 67.5 million). The dividends were paid on 21 May 2012. 32. Business Acquisition Karon Phuket Hotel Co., Ltd. On 27 February 2012, the Group additionally acquired the investment portion of 33.92%, (existing portion is 50.00%), totalling Baht 179.19 million of the share capital of Karon Phuket Hotel Co., Ltd. from the one of shareholder who desires to exit from the business. The investment in Karon Phuket Hotel Co., Ltd. changed from “Interests in joint venture” to “Investment in subsidiary” at the date that the Group has control of this entity. The group recognised a gain of Baht 287.59 million as a result of measuring at fair value of investment held before the business acquisition. The gain is included in other income in the group’s statement of comprehensive income. The acquired companies generated revenue of Baht 281.68 million and net income of Baht 67.43 million to the Group for the period from 1 March 2012 to 31 December 2012. If the acquisition had occurred on 1 January 2012, the Group’s revenue would have been of Baht 380.57 million, and net income would have been of Baht 115.49 million.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

095

CONTENTS

Details of net assets acquired are as follows: Purchase consideration

Baht Million

Purchase price Fair value of investment held before business acquisition Fair value of net assets acquired (see below)

179.19 532.04 (857.26)

Gain from business acquisition present in other income

(146.03)

Cash and cash equivalents Amount due from related parties Trade and other receivables Inventories Loans to related parties Other current assets Property, plant and equipment, net Intangible assets, net Refundable deposit Trade and other payables Amount due to related parties Accrued expenses Other current liabilities Borrowings from financial institutions Employees benefit obligations

12.16 0.43 38.43 3.24 116.00 2.89 1,512.00 0.17 3.38 (37.05) (11.91) (4.57) (5.82) (605.00) (2.82)

Fair value of net assets Non-controlling interests

1,021.53 (164.27)

Fair value of net assets acquired

096

ANNUAL REPORT 2012

857.26

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 32. Business Acquisition (Cont’d) Centara Maldives Pvt. Ltd., On 7 June 2012, the Group additionally acquired the investment portion of 25.00%, (existing portion is 50.00%) of the share capital of Centara Maldives Pvt. Ltd., totalling Baht 157.38 million (USD 5 million) for business expansion in overseas purpose. This made the Group increase the investment portion to 75.00%. As a result, the investment in Centara Maldives Pvt. Ltd. changed from “Interest in joint venture” to “Investment in subsidiary”. The group recognised a gain of Baht 24.55 million as a result of measuring at fair value of investment held before the business acquisition. The gain is included in other income in the group’s statement of comprehensive income. At the date that the Group had control over this entity, the acquired company generated revenue of Baht 2.2 million and net loss at Baht 50.54 million to the Group for the period from 1 June 2012 to 31 December 2012. If the acquisition had occurred on 1 January 2012, the Group’s revenue would have been Baht 3.00 million, and net loss would have been Baht 50.49 million. Details of net assets acquired are as follows:

Purchase consideration Purchase price Fair value of investment held before business acquisition Fair value of net assets acquired (see below)

Baht Million 157.38 314.74 (435.29) 36.83

Purchases price over net assets presented in expense

1 59 81.55 2.81 232.97 243.77 0.70 (0.50) (4.98) (0.08) (0.20) (17.24)

Cash and cash equivalents Trade and other receivables Other current assets Property, plant and equipment, net Leasehold rights Other non-current assets Trade and other payables Amount due to related parties Accrued expenses Other current liabilities Other non-current liabilities Fair value of net assets Non-controlling interests

580.39 (145.10) 435.29

Fair value of net assets acquired

Net assets from acquisition of investment in Centara Maldives Pvt. Ltd. are stated at the net book value of the date of acquisition. Since the Group just started the operation and in the process of construction the hotel thus the book value considered closed to fair value, the group uses the difference between net book value of investment and net book value of net assets acquired to record in expense.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

097

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 32. Business Acquisition (Cont’d) R.M.L. Leisure Pvt. Ltd. On 3 December 2012, the Group additionally acquired in the investment portion of 49.00%, (existing portion is 25.00%) of the share capital of R.M.L. Leisure Pvt. Ltd., totalling Baht 264.61 million (USD 8.6 million) for business expansion in overseas purpose. This made the Group increase the investment portion to 74.00%. The investment in R.M.L. Leisure Pvt. Ltd. changed from “Investment in associate” to “Investment in subsidiary” at the date that the Group has control of this entity, the acquired company generated revenue of Baht 68.10 million and net income at Baht 9.77 million to the Group for the period from 1 December 2012 to 31 December 2012. If the acquisition had occurred on 1 January 2012, the Group’s revenue would have been Baht 672.44 million, and net loss would have been Baht 22.74 million. Details of net assets acquired are as follows:

Purchase consideration Purchase price Book value of investment held before business acquisition Book value of net assets acquired (see below) Purchases price over book value Cash and cash equivalents Trade and other receivables Inventory Property, plant and equipment, net Other non-current assets Trade and other payables Loans Accrued expenses Other current liabilities Book value of net assets Non-controlling interests Book value of net assets acquired

Baht Million 264.61 69.67 (334.28) 45.45 66.56 16.91 1,887.72 4.71 (217.41) (1,246.31) (59.51) (46.39) 451.73 (117.45) 334.28

Net assets from acquisition of investment in R.M.L. Leisure Pvt. Ltd., are stated at the net book value of the date of acquisition. The Group is in the process of appraising the fair value of tangible and intangible assets and liabilities and the adjustments to fair value will be done. The difference between net book value and net fair value will be adjusted with goodwill.

098

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the company. Associates and individuals owning, directly or LQGLUHFWO\ DQ LQWHUHVW LQ WKH YRWLQJ SRZHU RI WKH FRPSDQ\ WKDW JLYHV WKHP VLJQLÂżFDQW LQĂ&#x20AC;XHQFH RYHU WKH HQWHUSULVH NH\ PDQDJHPHQW SHUVRQQHO LQFOXGLQJ GLUHFWRUV DQG RIÂżFHUV RI WKH FRPSDQ\ DQG FORVH PHPEHUV of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related-party relationship, attention is directed to the substance of the relationship, and not merely the legal form. The Company is ultimate parent company. Relationships with related parties that control or jointly control the Company or are being controlled or jointly controlled by the Company or have transactions with the Group were as follows: 33.1 Incomes and expenses

Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Subsidiaries: Rental income Interest income Management fee income Dividend income Interest expense Other expenses Rental expense

4,140,000 202,825,833 353,125,086 524,581,217 17,287,894 2,646,560 120,147,204

4,140,000 202,942,628 198,245,463 310,526,272 12,727,966 2,646,514 120,147,204

Joint ventures: Management fee income Interest income Other income

19,374,206 2,460,000 25,000,000

31,825,334 2,461,790 2,903,533

19,374,206 2,460,000 -

31,825,334 2,461,790 -

71,492,030 15,372,829 32,358,298 225,000,000 40,391,921

76,406,296 15,774,135 33,996,269 225,000,000 73,696,403

71,492,030 20,265,286

76,406,296 36,972,250

14,279,196 10,403,892 23,692,911 118,177,661 39,674,729 13,167,007

14,279,196 2,095,309 17,159,481 108,497,669 36,142,027 19,327,722 8,081,963

1,331,586 89,273,243 39,674,729 -

2,095,309 80,959,726 36,142,027 3,593,496 -

Associates: Dividend income Interest income Management fee income Rental expense Loss from guarantee provision Entities controlled by ultimate shareholders Rental income Management fee income Other income Rental expense Electricity expense Management fees expense Other service fees

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

099

CONTENTS

Consolidated 2012 Baht

Company 2012 Baht

2011 Baht

Receivables from: Subsidiaries Entities controlled by ultimate shareholders

167,693,521

51,385,195

63,531,938

107,788,208

3,893,749

5,137,904

Total

63,531,938

107,788,208

171,587,270

56,523,099

Consolidated 2012 Baht

100

2011 Baht

Company 2012 Baht

2011 Baht

Payables to: Subsidiaries Entities controlled by ultimate shareholders

14,207,925

71,054,473

7,127,705

,008

371,740

125,026

Total

7,127,705

94,008

14,579,665

71,179,499

ANNUAL REPORT 2012

101

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

Short-term loans to related parties

Associate R.M.L Leisure Pvt. Ltd.

Short-term loans Subsidiaries Central Krabi Bay Resort Co., Ltd. Central World Hotel Co., Ltd. S.P. Realty Pattaya Beach Co., Ltd. Triplenine Decor Co., Ltd.

33.3 Loans to related parties

33. Related party transactions (Contâ&#x20AC;&#x2122;d)

For the years ended 31 December 2012 and 2011

4.75 4.75 4.75 4.75

Interest rate (%) 2012

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

10.00

4.75 4.75 4.75 4.75

2011

464,850,000

167,495,000 -

, 0,000 284,700,000 24,000,000 2,250,000

2012 Baht

167,495,000

2011 Baht

430,650,000

179,000,000 226,400,000 23,000,000 2,250,000

Company

2012 Baht

Consolidated

CONTENTS

102

ANNUAL REPORT 2012

Long-term loans to related parties

Associate R.M.L Leisure Pvt. Ltd.

Joint ventures Kata Phuket Hotel Co., Ltd.

Long-term loans Subsidiaries Central Samui Hotel Management Co., Ltd. Central Karon Village Co., Ltd. Central Hotel Management Co., Ltd. Central Krabi Bay Resort Co., Ltd. Central World Hotel Co., Ltd. S.P. Realty Had Farang Co., Ltd. Centara International Management Co., Ltd. Central Samui Beach Resort Co., Ltd.

33.3 Loans to related parties (Cout’d)

33. Related party transactions (Cont’d)

For the years ended 31 December 2012 and 2011

0.00

3,740,700,000

96,213,375 157,000,000

41,000,000

1,155,500,000 -

275,000,000 117,000,000 137,000,000 455,100,000 1,559,800,000 300,000

, ,375

41,000,000

2011 Baht

4,061,600,000

41,000,000

449,500,000 740,000,000

184,000,000 124,500,000 154,000,000 463,000,000 1,905,600,000 -

Company 2012 Baht

157,000,000

4.75 4.75

6.00 - 6.50

4.75 4.75 4.75 -

2011

Consolidated 2012 Baht

4.75 4.75 4.75 4.75 4.75 4.75

Interest rate (%) 2012

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions (Cont’d) 33.3 Loans to related parties (Cout’d) Movements during the years ended 31 December 2012 and 2011 of loans to related parties were as follows:

Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Subsidiaries At 1 January Increase Decrease

4,451,250,000 4,131,676,105 1,951,300,000 2,312,500,000 - (2,238,000,000) (1,992,926,105)

At 31 December

4,164,550,000

4,451,250,000

Joint ventures At 1 January Acquisition of a subsidiary

41,000,000 116,000,000

41,000,000 -

At 31 December

157,000,000

41,000,000

Associate At 1 January Reclassify to indirect subsidiary Unrealised gain on exchange

222,708,375 (222,708,375) -

220,006,025 2,702,350

222,708,375

261,006,025 4,492,250,000 - 1,951,300,000 - (2,238,000,000) 2,702,350 -

4,172,676,105 2,312,500,000 (1,992,926,105) -

At 31 December Total loans to related parties At January Increase Acquisition of a subsidiary Decrease Reclassify to indirect subsidiary Unrealised gain on exchange

263,708,375 116,000,000 (222,708,375) -

At 31 December

157,000,000

263,708,375

4,205,550,000

4,492,250,000

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

103

104

Total

ANNUAL REPORT 2012

Joint venture Centara Maldives Pvt. Ltd.

Short-term loans Subsidiaries Centara International Management (Thailand) Co., Ltd. Central Hua Hin Beach Resort Co., Ltd. Cosi Hotels Co., Ltd. Central Samui Beach Resort Co., Ltd.

33.4 Loans from related parties (Cont’d)

33. Related party transactions (Cont’d)

For the years ended 31 December 2012 and 2011

3.00 - 4.75 1.75 - 3.00 3.00 - 4.75 4.75

2011

4.75

1.85 -3.00 3.00 - 4.75 -

Interest rate (%) 2012

Notes to the Consolidated and Company Financial Statements

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

749,000,000

6,000,000 -

72,500,000 10,000,000 5,000,000 661,500,000

6,000,000

2011 Baht

Company 2012 Baht

Consolidated 2012 Baht

70,000,000

25,000,000 45,000,000 -

2011 Baht

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions (Contâ&#x20AC;&#x2122;d) 33.4 Loans from related parties (Contâ&#x20AC;&#x2122;d) Movements during the year ended 31 December 2012 and 2011 of short-term loans from related parties were as follows: Company Consolidated 2012 2011 2012 2011 Baht Baht Baht Baht Short-term loans from related parties At 1 January 6,000,000 70,000,000 821,500,000 Increase 6,000,000 1,426,500,000 117,000,000 - (747,500,000) (868,500,000) (6,000,000) Decrease

6,000,000

At 31 December

749,000,000

70,000,000

33.5 Provision for guarantee payment

Consolidated 2012 Baht Short-term provision for guarantee payment Long-term provision for guarantee payment Total

Company 2012 Baht

2011 Baht

56,188,542

88,917,402

28,189,791

44,609,861

15,796,620

7,924,505

56,188,542

104,714,022

28,189,791

52,534,366

33.6 Liability under consignment agreement The outstanding amount due to Thai Pattana Fund II matured as follows: Company

Net

Amount due

2011 Deferred expenses

Net

(5,523,557)

116,726,443

81,500,000

(5,660,504)

75,839,496

122,250,000

(5,523,557)

116,726,443

122,250,000

(5,523,557)

116,726,443

203,750,000

(11,184,061)

192,565,939

Amount due

2012 Deferred expenses

Within 1 year Later than 1 year, but not later than 5 years

122,250,000

Total

33.7 Key management personnel compensation Key management personnel compensation comprised:

Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Short-term employee benefits Post-employment benefits

39,080,543 603,501

45,925,688 875,538

38,720,543 603,501

45,595,688 875,538

Total

39,684,044

46,801,226

39,324,044

46,471,226

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

105

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions (Contâ&#x20AC;&#x2122;d) 33.8 Long-term contracts Long-term lease agreement The Company Under the terms of a reciprocal agreement entered into with Central International Development Co., Ltd. (â&#x20AC;&#x153;CIDâ&#x20AC;?) who entered into long-term land lease agreement with State Railway of Thailand (â&#x20AC;&#x153;SRTâ&#x20AC;?), the Company was granted the right to construct a hotel building on the leased property of Central International 'HYHORSPHQW &R /WG DQG WR RSHUDWH WKH KRWHO IRU WKH &RPSDQ\ÂśV EHQHÂżWV XS WR 'HFHPEHU 7KLV agreement is renewable for period of 10 years each. The Company is committed to make payments for this right totaling approximately Baht 73.7 million payable in various installments up to 2008. On 26 March 2003, CID entered into a memorandum of understanding with SRT in which the said related company agreed to pay certain compensation on lease agreement as mutually agreed with SRT. The Company agreed to share the said compensation for the total amount of approximately Baht 65 million to EH SDLG LQ LQVWDOOPHQWV WKH ÂżUVW LQVWDOOPHQW ZDV SDLG RQ 0DUFK DQG WKH ODVW LQVWDOOPHQW ZLOO EH paid by 18 December 2008. Transfer of assets to State Railway of Thailand As at 18 December 2008 which was the expiration date of the said reciprocation agreement, the Company ZDV UHTXLUHG WR WUDQVIHU WKH FRQVWUXFWLRQ RQ VXE OHDVH ODQG Âż[WXUHV DQG LPSURYHPHQWV LQFOXGLQJ SDUW RI equipment to SRT. The net book value at the expiration date of agreement was Baht 23.9 million, resulting the Company incurred loss from disposal assets at the same amount. On 9 December 2008 CID entered into a new land and/or building lease agreement of 20 years lease term with SRT. The Company then signed the memorandum of agreement with CID in order to preserve and DIÂżUP RI XQGHUWDNLQJ WKH ULJKW WR HQWHU LQWR WKH QHZ VXE OHDVH DJUHHPHQW ZLWK &,' &RPSDQ\ KDV WR SD\ the guarantee deposit on land and/or building lease agreement of Central Plaza Hotel at Ladprao, in the amount of Baht 95 million on the day which CID entered into lease agreement with SRT. In 2009, the Company entered into a sub-lease agreement with Central International Development Co., /WG ÂłVXE OHVVRUÂ´ IRU WKH VXE OHDVLQJ RI 6RÂżWHO &HQWDUD *UDQG %DQJNRN +RWHOÂśV EXLOGLQJ )RUPHUO\ &HQWUDO Plaza Ladprao Hotel) and hotel building improvements including durable goods for a period of 20 years. The lease will expire on 18 December 2028. The Company was required to pay the sub-lessor of Baht 2,556 million for the sub-leasing right and annual rent for the whole lease term. During 2009, the Company recorded sub-leasing right and annual rent of Baht 361 million as leasehold right in the consolidated and separate balance sheets (see note 16). In addition, the Company was required to pay durable goods rental fee totalling Baht 31 million for the whole lease term. The Company recorded durable goods rental IHH DV DVVHW XQGHU ÂżQDQFH OHDVH VHH QRWH Leased assets, which the Company has renovated, improved or constructed, altered, added, maintained or rebuilt, will be transferred to SRT as soon as the said activities are completed. In addition, the Company has to return leased supplies according to the list in the lease agreement in a manner which appropriate to their condition and useful lives to SRT at the end of the lease agreement.

106

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions (Cont’d) 33.8 Long-term contracts (Cont’d) Long-term lease agreement (Cont’d) Subsidiaries (Cont’d) Centara Grand Beach Resort Samui Project Agreements between Central Plaza Hotel Public Co., Ltd., its subsidiaries and Thai Pattana Fund I On 12 December 2002, Central Samui Beach Resort Co., Ltd., (“CSBR”) entered into a purchase and sales agreement with Thai Pattana Fund I (“TP1”) in which CSBR agreed to sell a hotel building and furniture for hotel operations to TP1. CSBR also entered into a leaseback agreement with TP1 on the same date for a three years period from the agreement date. The leaseback agreement can be renewed for threeyear periods. In addition, on 12 December 2002, CSBR entered into a land lease agreement with TP1 for a 15 years period. Under this agreement, TP1 as the owner of the hotel buildings which are located on the leased land, agreed to sell the said hotel buildings including furniture back to CSBR on the transfer of the building ownership date. The transfer of building ownership will be made when CSBR has made full repayment for repurchase of the hotel buildings and furniture to TP1 as stated in the agreement. TP1 hired CSBR as property manager according to property management agreement dated 12 December 2002 for a 15 years period. As guarantee for the repayment and compliance with related agreements, CSBR had mortgaged land, which is the location of the leased assets, and Central Plaza Hotel Public Co., Ltd. (“CPH”) had provided a guarantee letter to TP1 for repayment and compliance with the building lease agreement and property management agreement. On 26 September 2008, CSBR and TP1 arranged a memorandum of agreement for termination of agreements which CSBR and TP1 agreed to terminate the land lease agreement, the building lease agreement, the property management agreement and the mortgage of land. All the said agreements were ceased on the day that the memorandum of agreement was signed. In addition, CSBR agreed to buy and TP1 agreed to sell furniture and equipments remained in the hotel building as at the date in the memorandum of agreement, in the amount of Baht 1 million. TP1 agreed to transfer rights and deliver the said furniture and equipment to CSBR and CSBR paid for the said furniture and equipment to TP1 on the date of the memorandum of agreement. And on the same date, CPH and TP1 arranged a memorandum of agreement to annul the guarantee letter, dated 12 December 2002, which CPH had prepared for TP1 for a guarantee of debt repayment of CSBR under the property management agreement, building lease agreement and land lease agreement. On 26 September 2008, TP1 sold the hotel building to CPH since CSBR did not exercise its right to buy the hotel building under the land lease agreement dated 12 December 2002. TP1 received Baht 1,450 million from sale of the building. Agreements between Central Plaza Hotel Public Co., Ltd., its subisidiaries and Centara Hotels & Resorts Leasehold Property Fund On 25 September 2008, Central Plaza Hotel Public Company Limited and its subsidiary entered into agreements relating to land and hotel building of Centara Grand Beach Resort Samui Hotel (formerly: Central Samui Beach Resort Hotel) with Centara Hotels & Resorts Leasehold Property Fund (“CTARAF”), in the following matters

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CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions (Contâ&#x20AC;&#x2122;d) 33.8 Long-term contracts (Contâ&#x20AC;&#x2122;d) Long-term lease agreement (Contâ&#x20AC;&#x2122;d) Subsidiaries (Contâ&#x20AC;&#x2122;d) Centara Grand Beach Resort Samui Project (Contâ&#x20AC;&#x2122;d) 1. Central Samui Beach Resort Co., Ltd. (â&#x20AC;&#x153;CSBRâ&#x20AC;?) entered into the land lease agreement with CTARAF for lease the land to CTARAF for the period of 30 years commencing from the date on which both parties register the lease agreement (26 September 2008). CTARAF agreed to pay the land lease fee in the total amount of Baht 1,500 million with full payment on the date on which the lease was registered. CSBR recognised such proceeds from lease as deferred income in its balance sheet and amortises to income using the straight line method over the lease term of 30 years. As at 31 December 2012, the balance of GHIHUUHG LQFRPH LQ FRQVROLGDWHG ÂżQDQFLDO VWDWHPHQWV QHW RI DPRUWLVDWLRQ RI %DKW PLOOLRQ %DKW 50.0 million) was Baht 1,286.7 million (2011: Baht 1,336.7 million). 2. Central Plaza Hotel Public Company Limited (â&#x20AC;&#x153;CPHâ&#x20AC;?) entered into the property lease agreement with Centara Grand Beach Resort Samui Hotel, including the utility facilities and related equipment with CTARAF in order to lease to CTARAF for the period of 30 years commencing from the date that both parties registered the lease agreement (26 September 2008). CTARAF agreed to pay the property lease fee in the total amount of Baht 1,510 million with full payment on the date on which the lease was registered. CPH recognised VXFK SURFHHGV IURP OHDVH DV GHIHUUHG LQFRPH LQ LWV EDODQFH VKHHW LQ VHSDUDWH ÂżQDQFLDO VWDWHPHQWV DQG amortises to income using the straight line method over the lease term of 30 years. As at 31 December 2012, the balance of deferred income net of amortisation of Baht 50.3 million (2011: Baht 50.3 million) was Baht 1,295.4 million (2011: Baht 1,345.7 million). Under the property lease agreement, CPH agreed and guaranteed that, in the period of four years from the registry date of lease, CTARAF would receive lease fee income from the lease assets in the amount QRW OHVV WKDQ WKH DFFXPXODWHG JXDUDQWHHG OHDVH IHH VSHFLÂżHG LQ WKH DJUHHPHQW ,I &7$5$) UHFHLYHV WKH accumulated lease fee income less than the accumulated guaranteed lease fee as in the agreement, CPH agreed to pay CTARAF the difference between the accumulated lease fee income of the fund and the accumulated guaranteed lease fee income. On 1 December 2008, CPH and CSBR entered into the agreement regarding guarantee CTARAF lease IHH LQFRPH &6%5 DV D ODQG OHVVRU ZKLFK PXWXDOO\ JHW EHQHÂżWV IURP &7$5$) RQ OHDVH DJUHHPHQW WR be the co-guarantor in guarantee CTARAF lease fee income. In case CPH have to pay any payments to CTARAF under the above guarantee agreement, CSBR agree to pay partial guarantee payment to CPH DFFRUGLQJ WR WKH UDWH VSHFLÂżHG LQ WKH DJUHHPHQW ,Q WKH &RPSDQ\ÂśV VHSDUDWH ÂżQDQFLDO VWDWHPHQWV &3+ UHFRJQLVHG ORVV IURP JXDUDQWHH SURYLVLRQ LQ WKH amounts of Baht 20.3 million (2011: Baht 37 million) in the statements of comprehensive income for the year ended 31 December 2012, whereby as at 31 December 2012, provision for guarantee payment in WKH EDODQFH VKHHWV LV WRWDOLQJ %DKW PLOOLRQ %DKW PLOOLRQ ,Q WKH FRQVROLGDWHG ÂżQDQFLDO statements, CPH and CSBR recorded loss from guarantee provision totaling Baht 40.4 million (2011: Baht 73.7 million) in the consolidated statements of comprehensive income for the year ended 31 December 2012, whereby as at 31 December 2012, provision for guarantee payment in the consolidated statements RI ÂżQDQFLDO SRVLWLRQ LV WRWDOLQJ %DKW PLOOLRQ %DKW PLOOLRQ VHH QRWH If CTARAF wished to renew the land lease agreement and building lease agreement as in No.1 and No. 2 above when the lease period was due, CTARAF has to state its intention to CSBR and CPH, depending RQ WKH FDVH LQ ZULWLQJ ZLWKLQ WKH WK \HDU IURP WKH ÂżUVW \HDU RI WKH OHDVH SHULRG DQG ERWK SDUWLHV QHJRWLDWH DQG ÂżQDOLVH WKH GHWDLOV IRU UHQHZDO RI OHDVH DJUHHPHQW ZLWKLQ WKH WK \HDU IURP WKH ÂżUVW \HDU RI WKH OHDVH period.

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CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions (Contâ&#x20AC;&#x2122;d) 33.8 Long-term contracts (Contâ&#x20AC;&#x2122;d) Long-term lease agreement (Contâ&#x20AC;&#x2122;d) Subsidiaries (Contâ&#x20AC;&#x2122;d) Centara Grand Beach Resort Samui Project (Contâ&#x20AC;&#x2122;d) 3. CSBR entered into the agreement for sale of furniture and equipment installed / used within the Centara Grand Beach Resort Samui Hotel with CTARAF, under which CTARAF agreed to pay for rights transferring of the said furniture and equipment in the amount of Baht 80 million (including VAT) by making a full payment on the day that the rights are transferred (26 September 2008). 4. CTARAF entered into the sub-lease agreement of Centara Grand Beach Resort Samui Hotel with Central Samui Hotel Management Co., Ltd. (â&#x20AC;&#x153;CSHMâ&#x20AC;?) for lease the land, building and utility facility and relating equipment, and furniture and equipment to CSHM to use in operating the hotel business. The lease term is three years commencing from 26 September 2008. CTARAF promised to CSHM that CSHM is able to lease the assets for another three years since the end of the lease term. CSHM must inform the fund for exercise of the promised right in writing not less than 6 months before the end the lease term. According WR WKLV DJUHHPHQW &6+0 DJUHHG WR SD\ D PRQWKO\ OHDVH IHH FRPSULVH RI Âż[HG OHDVH IHH LQ WKH DPRXQW of Baht 225 million per annum and variable lease fee calculating from percentage as enumerate in the DJUHHPHQW RI UHYHQXH DIWHU GHGXFWLRQ RI FRVWV DQG RSHUDWLQJ H[SHQVHV RWKHU H[SHQVHV DQG Âż[HG UHQWDO According to the sub-lease agreement and other relating agreements, CSHM must comply with the FRQGLWLRQV VWLSXODWHG LQ WKH DJUHHPHQW VXFK DV VXEPLVVLRQ RI GRFXPHQWV DQG RWKHU LQIRUPDWLRQ VSHFLÂżHG in the agreement, opening and maintaining of various bank accounts including transfer of rights over the said bank accounts to CTARAF, without the increase of additional debt, selling, disposing, lease, forming a commitment in part or all of assets, loaning to, investing, except for the consent in writing from CTARAF is granted. Central Wong Amat Beach Resort, Pattaya On 23 December 2003, Central International Development Co., Ltd. (â&#x20AC;&#x153;the Consignorâ&#x20AC;?) entered into a consignment agreement of land and building with Thai Pattana Fund 2 (â&#x20AC;&#x153;the Consigneeâ&#x20AC;?) and other party as another consignor had entered into a consignment agreement of land with Thai Pattana Fund 2 (â&#x20AC;&#x153;the Consigneeâ&#x20AC;?) for Central Hua Hin Beach Resort Co., Ltd. (â&#x20AC;&#x153;CHBRâ&#x20AC;?) to lease and operate the hotel business, the contracting parties of which agreed with the consignors or Central Hua Hin Beach Resort Co., Ltd. or Central Plaza Hotel Public Company Limited, either of which will have the right to redeem the assets on consignment from the consignee at the redeemable price stipulated in the agreement within 10 years counting from the registration date of the ownership transfer or in the case of the one who has the right WR UHGHHP ZLVKLQJ WR ÂżQDOL]H WKH UHGHPSWLRQ RI WKH DVVHWV RQ FRQVLJQPHQW SULRU WR \HDUVÂś SHULRG ZLOO have to notify the consignee in writing, in advance not less than 30 days before the next installment is due. On 18 December 2003, both consignors issued the renounce letter for the right to redeem the assets on consignment to Central Hua Hin Beach Resort Co., Ltd. and Central Plaza Hotel Public Company Limited. As guarantee for the repayment and compliance with this agreement, Central Plaza Hotel Public Co., Ltd. has prepared a guarantee letter for the repayment of CHBR to Thai Pattana Fund 2. On 1 March 2006, CHBR issued the renounce letter for the right to redeem the assets on consignment for the Company only.

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CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 33. Related party transactions (Contâ&#x20AC;&#x2122;d) 33.8 Long-term contracts (Contâ&#x20AC;&#x2122;d) Long-term lease agreement (Contâ&#x20AC;&#x2122;d) Subsidiaries (Contâ&#x20AC;&#x2122;d) Central Wong Amat Beach Resort, Pattaya (Contâ&#x20AC;&#x2122;d) On 23 December 2003, Central Hua Hin Beach Resort Co., Ltd. (â&#x20AC;&#x153;CHBRâ&#x20AC;?) entered into a land and hotel buildings lease agreement of Central Wong Amat Beach Resort, Pattaya (â&#x20AC;&#x153;Hotel Buildingsâ&#x20AC;?) with Thai Pattana Fund 2 (â&#x20AC;&#x153;The Fundâ&#x20AC;?) to operate the hotel business for a period of 10 years, starting from 23 December 2003 onwards. Thus, CHBR agreed to pay the rent, on a semi-annual basis, by instalments of Baht 55 million each. The lease rate will be in force for the lease period starting from the date of signing the agreement XQWLO )HEUXDU\ DIWHU ZKLFK WKH FRQWUDFWLQJ SDUWLHV ZLOO DGMXVW WKH UHQWDO DV DSSURSULDWH 7KH ÂżUVW payment of rent was due on 26 August 2004 to cover the lease period from 23 December 2003 until 31 August 2004 and the next payment is due on the third working day before the end of February and August of each year. The last payment of rent will be made upon termination or ending of the agreement, in the amount calculated based on the actual number of days counting from the date following the preceding payment of rent until the end of the agreement. The Companyâ&#x20AC;&#x2122;s land title deed with carrying value of Baht 772 million, as at 31 December 2012 and 2011, was under the name of Thai Pattana Fund 2, the consignee. This land relates to Central Wong Amat Beach Resort Project, Pattaya. In addition, CHBR agreed to build a building or other construction on the leased land in order to add value to the land and hotel buildings as compensation to the Fund for agreeing with CHBR to lease the assets and, one year after the beginning of the lease period, CHBR agreed to renovate and/or consider to renovate the hotel building to improve the value of leased assets and the suitableness of its hotel business. On 1 March 2006, the Company entered into a leasehold rights transfer agreement with CHBR and the Fund. The transfer agreement granted the Company the leaseholder rights and responsibilities under land and hotel buildings lease agreement. Central World Hotel Co., Ltd. On 28 April 2005, Central World Hotel Co., Ltd. (â&#x20AC;&#x153;CWHâ&#x20AC;?), entered into a sublease of hotel land and building with Thai Business Fund 4 (â&#x20AC;&#x153;the Fundâ&#x20AC;?) to develop and to operate a hotel or other related businesses. CWH is required to pay rental in advance and annual rental fee of totalling Baht 1,188.8 million to the Fund up to the end of the agreement on 22 December 2032. CWH paid the rental in advance upon signing the agreement of Baht 275 million. During 2012, CWH paid the annual rent of Baht 15.8 million (2011: Baht PLOOLRQ ZKLFK ZDV UHFRUGHG DV OHDVHKROG ULJKW LQ WKH FRQVROLGDWHG VWDWHPHQWV RI ÂżQDQFLDO SRVLWLRQ (see not 16). 7KH DERYH DJUHHPHQW DOVR VSHFLÂżHG &:+ WR WUDQVIHU WKH ULJKWV RQ EXLOGLQJV DQG FRQVWUXFWLRQV WKHUHRQ which CWH repair and maintenance or construct on the sub-lease land to the land owner, the Crown Property Bureau, at the date of those repair and maintenance or construction would be completed. As at 31 December 2012, CWH has not transferred the rights on buildings and constructions thereon to the land owner, as CWH obtained approval for an extension period for development and hotel buildings construction and consequence will transfer buildings and construction rights to the owner within the year 2013.

11 0

ANNUAL REPORT 2012

CONTENTS

The Company entered into management agreements with its seven subsidiaries in the hotel group to manage the hotel operations. Under the said agreements, the Company would receive management IHH EDVHG RQ WKH SHUFHQWDJH RI QHW VDOHV VSHFLÂżHG LQ WKH DJUHHPHQWV GLYLGHG LQWR RSHUDWLRQDO management fee and marketing management fee.

Â&#x2021;

The Company entered into a marketing management agreement with another subsidiary in the hotel group. Under this agreement, the Company would receive the marketing management fee at the SHUFHQWDJH RI QHW VDOHV VSHFLÂżHG LQ WKH DJUHHPHQW

Â&#x2021;

The Company entered into a management agreement with Central Restaurants Group Co., Ltd. (â&#x20AC;&#x153;CRGâ&#x20AC;?), for the operational management of CRG. Under the said agreement, the Company would UHFHLYH D PRQWKO\ Âż[HG PDQDJHPHQW IHH DV VSHFLÂżHG LQ WKH DJUHHPHQW

On 26 September 2008, the Company entered into management agreement with Central Samui Hotel Management Co., Ltd. to manage the hotelâ&#x20AC;&#x2122;s operation for 30 years commencing from the agreement date. 8QGHU WKH VDLG DJUHHPHQW WKH &RPSDQ\ ZRXOG UHFHLYH WKH PDQDJHPHQW IHH DV VSHFLÂżHG LQ WKH DJUHHPHQW On 31 March 2011 and 26 May 2011, the Company entered into management agreements with Karon Phuket Hotel Co., Ltd. (â&#x20AC;&#x153;CKRâ&#x20AC;?) and Kata Phuket Hotel Co., Ltd. (â&#x20AC;&#x153;CKTâ&#x20AC;?) to manage the hotelâ&#x20AC;&#x2122;s operation for 5 years ending March 2016 and May 2016, respectively. The agreements are automatically renewable IRU \HDUV 8QGHU WKH VDLG DJUHHPHQWV WKH &RPSDQ\ ZRXOG UHFHLYH WKH PDQDJHPHQW IHH DV VSHFLÂżHG in the agreements. On 31 January 2012, the Company entered into a service agreement with Harng Central Department Store Co., Ltd. for a period of 1 year in order to receive information and various suggestions, which are EHQHÂżFLDO WR WKH &RPSDQ\ 7KH DJUHHPHQW LV DXWRPDWLFDOO\ UHQHZDEOH IRU D \HDU 7KH VHUYLFH IHH LV %DKW 500,000 per month with the increased by 5% for service fee from the previous year. Subsidiaries Central Sukhontha Hotel Co., Ltd. (â&#x20AC;&#x153;CHYâ&#x20AC;?) has entered into a rental and services agreement with Central Department Store Co., Ltd. for a period of 30 years ending on 31 May 2024. Central Department Store Co., Ltd. agreed to lease part of the building as a shopping center. Total income to CHY under the agreement will amount to approximately Baht 428 million in total. As at 31 December 2012, the balance of deferred UHQWDO LQFRPH LQ FRQVROLGDWHG ÂżQDQFLDO VWDWHPHQWV QHW RI DPRUWLVDWLRQ ZDV %DKW PLOOLRQ %DKW 183.2million). On 31 January 2012, Central Restaurant Group Co., Ltd. (â&#x20AC;&#x153;CRGâ&#x20AC;?) entered into a service agreement with Harng Central Department Store Co., Ltd. for a period of 1 year in order to receive information and various &5* VXJJHVWLRQV ZKLFK DUH EHQHÂżFLDO 7KH DJUHHPHQW LV DXWRPDWLFDOO\ UHQHZDEOH IRU D \HDU 7KH VHUYLFH fee is Baht 500,000 per month with the increased by 5% for service fee from the previous year.

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Consolidated 2012 2011 Baht Baht Non-cancellable operating lease commitments Within one year After one year but within five years After five years

323,647,489 294,493,057 256,608,160 258,895,477 11,244,063 13,729,715

Total

591,499,712 567,118,249

33. Related party transactions (Contâ&#x20AC;&#x2122;d) 33.9 Commitments under agreements with related parties The Company As at 31 December 2012, the Company guaranteed the overdraft lines, letters of credit and various guarantees for subsidiaries to various local banks totaling Baht 32 million (2011: Baht 32 million). 7KH &RPSDQ\ SURYLGHG JXDUDQWHH LQ UHVSHFW WR &HQWUDO :RUOG +RWHO &R /WG Âł&:+Â´ ORDQV WR D ÂżQDQFLDO institution in the amount not less than Baht 2,350 million. In June 2009, CWH had drawn down the loan totalling Baht 2,300 million. As at 31 December 2012, the outstanding loan is equal to Baht 500 million (2011: Baht 500 million). Subsidiaries $V DW 'HFHPEHU &HQWUDO 5HVWDXUDQWV *URXS &R /WG KDG SURYLGHG JXDUDQWHHV WR D ÂżQDQFLDO institution for bank overdraft and long-term loan facility of a subsidiary totalling Baht 10 million (2011: Baht 10 million).

11 2

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2012 and 2011 34. Commitments with non-related parties

Consolidated 2012 Baht

2011 Baht

Company 2012 Baht

2011 Baht

Capital commitments Contracted but not provided for - Hotel construction

294,402,009

166,454,895

6,195,779

9,564,319

Total

294,402,009

166,454,895

6,195,779

9,564,319

Non-cancellable operating lease and service Commitments of Central Restaurant Groups Co., Ltd. Within one year After one year but within five years After five years

138,572,582 120,705,679 2,338,334

107,123,647 102,326,263 2,752,434

Total

261,616,595

212,202,344

35. Event after the reporting period On 13 February 2013, the Company invested in Cosi Hotels Management Co., Ltd. consisting of 50,000 ordinary shares with a par value of Baht 100 per share (call-up of Baht 25 per share), totalling Baht 1.25 million. Total invested shares represent 100% ownership. On 13 February 2013, the Company invested in Centara Royalty Marketing Co., Ltd. consisting of 500,000 ordinary shares with a par value of Baht 100 per share (call-up of Baht 25 per share), totalling Baht 12.5 million. Total invested shares represent 100% ownership. At the Board of Directorsâ&#x20AC;&#x2122; meeting No.1/2013 on 21 February 2013, the board approved the declaration of the annual dividend at Baht 0.30 each (2011: Baht 0.15), totalling Baht 405.0 million (2011: Bath 202.5 million). At the Board of Directorsâ&#x20AC;&#x2122; meeting No.1/2013 on 21 February 2013, the board approved additionally acquired the investment portion of 30.77%, (existing direct portion is 68.54%), totalling Baht 120 million of the share capital of Karon Phuket Hotel Co., Ltd. This made the Company increase the investment direct portion to 99.31%.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

11 3

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 1. OPERATING PERFORMANCE RESULTS : Full Year 2012 Overview For the full year (FY) 2012 period, Central Plaza Hotels plc. and its Subsidiaries achieved total consolidated revenues of Baht 14,829.2 million, an increase of Baht 3,374.0 million (or 29.5%) year-on-year (YoY), comprising of hotels business revenues that increased by 31.3%YoY and food business revenues that also increased by 27.1%YoY. The Company and its Subsidiaries achieved total consolidated Earnings before Interest, Tax, and Depreciation & Amortisation (EBITDA) of Baht 3,024.9 million, an increase of Baht 675.8 million (or 28.8%)YoY, and Net Profit of Baht 1,580.8 million,an increase of Baht 1,030.4 million (or 187.2%)YoY. In 2012, the Companyâ&#x20AC;&#x2122;s hotels business rebounded to its normal level of operations, resulting in increased hotel guests staying and using its hotels services together with a corresponding growth in various meetings events and banqueting functions. Additionally, during the year, the Hotels Business Group made additional investments in 2 existing joint venture companies and 1 associated company, namely: ,Q 4 .DURQ 3KXNHW +RWHO &R /WG D MRLQW YHQWXUH FRPSDQ\ ,Q 4 &HQWDUD 0DOGLYHV 3YW /WG D MRLQW YHQWXUH FRPSDQ\ ,Q 4 5 0 / /HLVXUH 3YW /WG DQ DVVRFLDWHG FRPSDQ\ In expanding its business as mentioned above, the Hotels Business Group was able to consolidate them as Subsidiary Companies and, thus, recognised additional consolidated revenues accordingly. Further, the larger hotel properties â&#x20AC;&#x201C; ie: the Centrara Grand Central Plaza Ladprao, Bangkok (of which major refurbishments were completed as at the end of 2011); the Centara Grand and Bangkok Convention Center, Central World; the Centara Grand Mirage Beach Resort, Pattaya; and the Centara Grand Beach Resort, Phuket (which opened for full operations in 2011) â&#x20AC;&#x201C; all continued to achieved satisfactory revenues and average occupancy rates throughout the year. These factors all contributed to the overall significant year-on-year hotels business revenues increase. At the same time, during 2012 the Food Business Group also achieved continuing significant business JURZWK ZLWK D WRWDO UHYHQXHV LQFUHDVH RI %DKW PLOOLRQ RU <R< ZLWK D QHW WRWDO RI QHZ 465 outlets being added and the first full year operations of the OOTOYA and YOSHINOYA brand concepts. As for the full year Net Profit, 2012 can be considered as another outstanding year for the CENTEL Group, in achieving an unprecedented record-breaking total consolidated Net Profit of Baht 1,580.8 million when compared to the previous year. A summary of the consolidated operating performance results of the Company and its Subsidiaries is as follows:

11 4

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012

(Amount : in Baht –Million)

2012 Amount

YoY Changes ( + increase / - decrease )

2011 %

Amount

41.3%

4,667.9

40.7%

+1,462.8

+31.3%

Revenues from Hotels Business

6,130.7

Revenues from Food Business

8,258.6

55.7%

6,495.3

56.7%

+1,763.3

+27.1%

439.9

3.0%

292.0

2.6%

+147.9

+50.7%

TOTAL CONSOLIDATED REVENUES

14,829.2

100.0%

11,455.2

100.0%

+3,374.0

+29.5%

Costs of sales – Hotels Business

(2,448.3)

(39.9%)

(1,961.1)

(42.0%)

+487.2

+24.8%

Costs of sales - Food Business (1)

(3,974.9)

(48.1%)

(3,068.9)

(47.2%)

+906.0

+29.5%

TOTAL COSTS of SALES (1)

(6,423.2)

(43.3%)

(5,030.0)

(43.9%)

+1,393.2

+27.7%

LESS: Selling & General Administrative Expenses

(5,440.2)

Other income

ADD : Share of Net Profit/(Loss) from investments, equity method

(36.7%)

(4,154.1)

(36.3%)

+1,286.1

+31.0%

59.1

0.4%

78.0

0.7%

-18.9

-24.2%

3,024.9

20.4%

2,349.1

20.5%

+675.8

+28.8%

(1,213.0)

(8.2%)

(1,134.7)

(9.9%)

+78.2

+6.9%

EBIT

1,811.9

12.2%

1,214.4

10.6%

+597.5

+49.2%

LESS : Financial Costs

(486.3)

(3.3%)

(414.1)

(3.6%)

+72.2

+17.4%

LESS : Corporate Income Tax

(212.8)

(1.4%)

(255.1)

(2.2%)

-42.3

-16.6%

/(66 1HW SUR¿W /RVV IURP 1RQ FRQWUROOLQJ interests

(42.9)

(0.3%)

(40.1)

(0.4%)

+2.8

+7.0%

ADD : Amortisation of Deferred Rental Income (CG Samui)

100.3

0.7%

0.9%

EBITDA LESS: Depreciation & Amortisation

1HW SUR¿W IURP QRUPDO RSHUDWLRQ

100.3

1,170.2

7.9%

605.4

5.3%

+564.8

+93.3%

Extra-ordinary items LESS: Loss from guarantees provisions

(40.4)

(0.3%)

(73.7)

(0.6%)

+33.3

+45.2%

ADD: Extra-share of net profit from investment in property fund by equity method (25% of loss from guarantee provision)

(7.2)

(0.0%)

18.7

0.2%

-25.9

-138.5%

ADD: Gain from business acquisition and gain on re-measuring to fair value of investments

458.2

3.1%

+458.2

+100.0%

NET PROFIT/(LOSS)

1,580.8

10.7%

550.4

4.8%

+1,030.4

+187.2%

Gross Profit

7,966.1

55.4%

6,133.2

54.9%

+1,832.9

+29.9%

Note: (1) Costs of sales excludes the depreciation & amortisation costs allocated as Costs of sales. Consolidated Revenues from Sales and Services Consolidated revenues of Company and its Subsidiaries are derived from 2 core business groups namely from the hotels business and the food business; whereby for FY/2012 the achieved revenues mix was 44 : 56 percent respectively (compared to 42 : 58 for FY/2011). Total consolidated FY/2012 revenues of Company and its Subsidiaries was Baht 14,829.2 million (compared to Baht 11,455.2 million in 2011), an increase of Baht 3,374.0 million (or 29.5%)YoY, with details of each core business group as follows :

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

11 5

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 Hotels business revenues Revenues for the Hotel Business Group consist of 1) rooms sales, 2) food & beverage sales, and 3) sales of various additional services (such as transfers and transportation, laundry and dry cleaning, spa services, banqueting and functions sales); whereby for 2012 the revenue mix for each of these categories was approximately 53: 38: 9 percent respectively. The average occupancy (OCC), average room rate (ARR), and total revenues for each hotel property achieved by the Hotels Business Group are as shown below : Hotels Business : KPIs

FY 2012

Average Occupancy (OCC) - %*

FY 2011

69.9%

Increase/ (decrease)

63.9%

YoY% change

+6.0%

+9.4%

Average Room Rate (ARR) - Baht *

3,744

3,663

+81

+2.2%

RevPAR – Baht *

2,617

2,341

+276

+11.8%

*includes CENTARA KATA RESORT, Phuket (a joint venture company)

Hotels Business : Revenues (Baht – Million)

FY/2012 Baht

FY/2011 Baht

Centara Grand & Bangkok Convention Center, Central World (CGCW)

1,392.0

1,016.3

Increase (decrease) Baht +375.7

YoY% change +37.0%

Centara Grand Mirage Beach Resort, Pattaya (CMBR)

1,049.0

907.9

+141.1

+15.5%

Centara Grand Central Plaza Ladprao, Bangkok (CGLB)

940.7

616.3

+324.4

+52.6%

Centara Grand Beach Resort, Phuket (CPBR)

677.4

528.6

+148.8

+28.1%

Centara Grand Beach Resort & Villa, Hua Hin (CHBR)

552.4

529.7

+22.7

+4.3%

Centara Grand Beach Resort & Villa, Krabi (CKBR)

403.0

377.1

+25.9

+6.9%

Centara Grand Beach Resort, Samui (CSBR)

389.8

348.0

+41.8

+12.0%

Centara Karon Resort (CKR)*

251.8

+251.8

+100.0%

Centara Haadyai (CHY)

155.4

161.2

-5.8

-3.6%

Centara Villa, Samui (CSV)

120.6

80.2

+40.4

+50.4%

Centara Villa, Phuket(CVP)

99.1

76.1

+23.0

+30.2%

Centara Grand Island Resort & Spa, Maldives (CIRM)**

67.9

+67.9

+100.0%

Centara Mae Sot Hill Resort (CMS)

TOTAL HOTELS BUSINESS REVENUES

31.6

26.5

+5.1

+19.2%

6,130.7

4,667.9

+1,462.8

+31.3%

* CKR from a joint venture company became a full Subsidiary Company in March 2012 ** CIRM from an associated company became a full Subsidiary Company in December 2012

Total FY/2012 hotels business revenues increased by Baht 1,462.8 million (or 31.3%)YoY, as a result of the sustained promotions as well as marketing activities by Government agencies and associated organisations to maintain continuing increases in international tourist arrivals and growth in domestic tourism, coupled with a more stable local political situation. This facilitated the achievement of an average occupancy (OCC) of 69.9% (or 6.0%) and an average room rate (ARR) of Baht 3,774 per night for the year. Hotel properties that achieved significant increases in revenues during 2012 are :

11 6

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 Â&#x2021;

Centara Grand and Bangkok Convention Centre at Central World achieved increased revenues of Baht 375.7 million (or 37.0%)YoY as a result of rebounding to its normal level of operations, with increases in both guest room bookings and usage of its various services - including increased meetings, events and banqueting functions.

Â&#x2021;

Centara Grand Central Plaza Ladprao, Bangkok achieved increased revenues of Baht 324.4 million (or 52.6%)YoY after completion of major refurbishments as at the end of 2011.

Â&#x2021;

Centara Grand Beach Resort, Phuket (a 5-star resort with 262 rooms, which opened for full operations in 2011) continued to achieve satisfactory operating results, with total FY/2012 revenues of Baht 677.4 million , an increase of Baht 148.8 million (or 28.1%)YoY.

$GGLWLRQDOO\ GXH WR WKH +RWHOV %XVLQHVV *URXS DOVR LQFUHDVLQJ LWV LQYHVWPHQWV LQ 4 LQ WKH .DURQ 3KXNHW +RWHO Co. Ltd., this company changed from being a joint venture company (with CENTEL holding, directly and indirectly, a 50% equity) to become a full Subsidiary Company (with CENTEL now holding, directly and indirectly an 83.9% equity), and, thus, resulted in CENTEL being able to recognised and consolidate additional revenues totaling Baht 251.8 million. Food business revenues 5HYHQXHV IRU WKH )RRG %XVLQHVV *URXS FRQVLVW RI VDOHV RI IRRG DQG EHYHUDJHV XQGHU YDULRXV 465 EUDQG FRQFHSWV namely : KFC, Mister Donut, Auntie Anneâ&#x20AC;&#x2122;s, Pepper Lunch, Beard Papaâ&#x20AC;&#x2122;s, Chabuton Ramen, Coldstone Creamery, Ryu Shabu Shabu, Ootoya, Yoshinoya, and The Terrace. For FY/2012, total food business revenues and corresponding YoY growth are as shown below : Food Businessâ&#x20AC;&#x2122;s QSR Brands (Baht â&#x20AC;&#x201C; Million)

Increase / decrease Baht

FY/2012 Baht

FY/2011 Baht

4,425.5

3,768.9

+656.6

+17.4%

1,646.8

1,476.4

+170.4

+11.5%

YoY% change

KFC

Mister Donut

Ootoya

719.7

207.5

+512.2

+246.8%

Auntie Anneâ&#x20AC;&#x2122;s

664.0

530.5

+133.5

+25.2%

Chabuton Ramen

190.3

119.4

+70.9

+59.4%

Pepper Lunch

184.2

137.0

+47.2

+34.5%

Yoshinoya

100.2

19.9

+80.3

+403.5%

Beard Papaâ&#x20AC;&#x2122;s

88.8

69.7

+19.1

+27.4%

Coldstone Creamery

63.9

38.5

+25.4

+66.0%

The Terrace

45.5

7.4

+38.1

+514.9%

Ryu Shabu Shabu

26.3

28.3

-2.0

-7.1%

Others

103.4

91.8

+11.6

+12.6%

8,258.6

6,495.3

+1,763.3

+27.1%

TOTAL FOOD BUSINESS REVENUES Food Business Revenues Growth (YoY)

FY/2012

Total System Sales (TSS) Growth

+33.27%

Same Store Sales (SSS) Growth

+6.15%

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

11 7

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 $GGLWLRQDOO\ WKH WRWDO QXPEHU RI RXWOHWV IRU HDFK 465 EUDQG FRQFHSW DV DW WKH HQG RI FRPSDUHG WR LV also shown below :

QSR brands as at :

Dec 31, 2012

Dec 31, + /- outlets 2011

KFC

181

168

+16 / -3

Mister Donut

290

266

+29 / -5

Auntie Anneâ&#x20AC;&#x2122;s

101

+18 / -3

Pepper Lunch

+4 / -1

Beard Papaâ&#x20AC;&#x2122;s

+4 / -1

Chatbuton Ramen (launched Mar 13, 2010) (launched Mar 14, 2010)

+5 / -0

Coldstone Creamery (launched Mar 14, 2010)

+2 / -0

Ryu Shabu Shabu (launched Mar 18, 2010)

+0 / -0

Yoshinoya (launched Sept 1, 2011)

+6 / -0

Ootoya (launched Sept 1, 2011)

+1 / -0

The Terrace (launched Oct 1, 2011)

+2 / -0

677

603

+87 / -13

TOTAL

Total FY/2012 food business revenues increased by Baht 1,763.3 million (or 27.1%)YoY, mainly as a UHVXOW RI FRQWLQXLQJ H[SDQVLRQ RI LWV 465 RXWOHWV IRU ERWK H[LVWLQJ EUDQGV DV ZHOO DV RI WKH QHZ 465 EUDQGV launched in 2011, the ongoing development and introduction of new menu offerings, price increases, and also sustained proactive marketing and sales promotions campaigns.

'XULQJ WKH )RRG %XVLQHVV *URXS DGGHG D QHW WRWDO RI QHZ 465 RXWOHWV WR UHDFK D WRWDO RI

outlets as at the end of December 2012, achieving same-stores-sales and total-systems-sales growth of 6.15% and 33.27% (compared to 14.73% and 20.21% in 2011) respectively. Other income Other income consists of those derived from hotels management services (in managing and operating various hotel properties owned by others under the Hotels Management Agreements), commercial space rental and services income, and cooperative marketing income; whereby for FY/2012 total other income increased by Baht 147.9 million (or 50.7%) compared to the previous year, as a result of the increased number of properties being managed by the Company and also due to additional revenues derived from the Karon Phuket Hotel Co., Ltd.

11 8

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 COSTS OF SALES and GROSS PROFIT For FY/2012, the Company and its Subsidiaries had total costs of sales of Baht 6,423.2 million (compared to Baht 5,030 million in 2011); thus achieving an overall Gross Margin of 55.4% (compared to 54.9% in 2011), with details for each business group shown below : FY/2012 Business Group (Baht – Million)

Cost of Sales

*URVV 3UR¿W

FY/2011 Gross Margin %

Cost of Sales

*URVV 3UR¿W

Gross Margin %

% Change in Cost of sales

Hotels Business

2,448.3

3,682.4

60.1%

1,961.1

2,706.8

58.0%

+24.8%

Food Business

3,974.9

4,283.7

51.9%

3,068.9

3,426.4

52.8%

+29.5%

TOTAL *

6,423.2

7,966.1

55.4%

5,030.0

6,133.2

54.9%

+27.7%

*Costs of sales EXCLUDES the depreciation & amortisation costs allocated as costs of sales Hotels business For FY/2012, the Company and its Subsidiaries had total costs of sales for its hotels business totaling Baht 2,448.3 million (ie: consisting of direct costs, cost of providing in-room services, costs of food & beverage, salaries and welfare benefits for the direct staff, and consumables costs). Thus, relative to total hotel business revenues, this represents a Gross Margin of 60.1%, which is an increase compared to 58.0% in 2011, resulting from the overall growth in hotel business revenues and due to some of the existing hotels returning to their normal level of operations – especially, the Centara Grand and Bangkok Convention Centre, Central World. Food business For FY/2012, the Company and its Subsidiaries had total costs of sales for its food business totaling Baht 3,974.9 million (ie: consisting of direct costs, costs of food & beverage, salaries and welfare benefits for the direct staff, and consumables costs). Thus, relative to total food business revenues, this represents a Gross Margin of 51.9%, which is a very marginal decrease (compared to 52.8% achieved in 2011), resulting from the direct costs that reflects the significant increases in revenues together with an increased allocation of the overall selling and administrative expenses. Additionally, ongoing increases in the raw food ingredients prices and the expenses for marketing promotions campaigns also contributed to overall increased costs of sales. SELLING and GENERAL ADMINISTRATIVE EXPENSES During FY/2012, selling and general administrative expenses (ie: consisting of salaries and welfare benefits of management and other staff, costs of credit cards usage, as well as use of brand name and franchise fees) of the Company and its Subsidiaries totaled Baht 5,440.2 million, an increase of Baht 1,286.1 million (or 31.0%)YoY. This total amount is equal to 36.7% of total consolidated revenues (compared to 36.3% in 2011), and is PDLQO\ GXH WR WKH RYHUDOO LQFUHDVH LQ LQYHVWPHQWV DV ZHOO DV RQJRLQJ H[SDQVLRQ RI WKH IRRG EXVLQHVV¶V 465 RXWOHWV DEPRECIATION & AMORTISATION COSTS Total depreciation & amortisation costs, in 2012, for the Company and its Subsidiaries totaled Baht 1,213.0 million, an increase of Baht 78.2 million (or 6.9%)YoY. This total amount is equal to 8.2% of total consolidated revenues (compared to 9.9% in 2011), and is due to the increases in both building or facilities and equipment directly resulting from the consolidation of the hotels business during the year.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

11 9

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 GAINS FROM SHARE OF PROFITS (by the equity method) During FY/2012, the Company and its Subsidiaries gained from the share in profits (by the equity method) derived from its investments, totaling Baht 59.1 million (a YoY decrease of Baht 18.9 million, or 24.2%), resulting IURP WKH +RWHO %XVLQHVV *URXS LQFUHDVLQJ LWV LQYHVWPHQW LQ WKH .DURQ 3KXNHW +RWHO &R /WG LQ 4 LQ WKH &HQWDUD 0DOGLYHV 3YW /WG LQ 4 DQG LQ WKH 5 0 / /HLVXUH 3YW /WG LQ 4 Thus, the 2 joint venture companies and the 1 associated company all became full Subsidiary Companies of the group, resulting in the overall share of profits, using the equity method, to decrease. Finance Costs The Company and its Subsidiaries had total financing costs of Baht 486.3 million in FY/2012, an increase of Baht 72.2 million (or 17.4%)YoY. This total amount is equal to 3.3% of total consolidated revenues (compared to 3.6% in 2011), and is mainly due to the additional loans used as a result of ongoing business expansion. EBITDA For FY/2012, the Company and its Subsidiaries achieved total consolidated EBITDA of Baht 3,024.9 million, an increase of Baht 675.8 million (or 28.8%) YoY, with details as follows: Â&#x2021;

Hotels business : Total EBITDA increased by Baht 612.0 million (or 48.1%)YoY resulting from the overall improved performances of all hotel properties.

Â&#x2021; Food business : Total EBITDA increased by Baht 63.8 million (or 5.9%) YoY, primarily due to ongoing DGGLWLRQ RI QHZ 465 RXWOHWV DQG IRRG EXVLQHVV H[SDQVLRQ FRQWLQXLQJ GHYHORSPHQW RI QHZ PHQX offerings, and the sustained proactive marketing and promotions campaigns; all of which resulted in continuing increased revenues as well as EBITDA. EBIT and NET PROFIT For FY/2012 the Company and its Subsidiaries achieved a total EBIT of Baht 1,811.9 million, an increase of Baht 597.5 million (or 49.2%)YoY; whereby this total EBIT is equal to 12.2% of total consolidated revenues and an increase when compared to 10.6% for 2011. Therefore, total consolidated Net Profit for FY/2012 was Baht 1,580.8 million, which is a record breaking increase of Baht 1,030.4 million (or 187.2%)YoY. This amount is equal to 10.7% of total consolidated revenues and an increase when compared to 4.8% for 2011. This is primarily because of the overall significantly increased revenues from the hotels business together with the continuing revenues growth from the food business, as described in detail above. Extraordinary Items Loss from Guarantee Provisions Guarantee provisions relate to guarantees for the rental income stream derived from the buildings and facilities of the Centara Grand Beach Resort, Samui, that the Company and one of its Subsidiary Company had given to the unit holders of the CTRAF Property Fund, which is valid for a period of 4 years ending in 2012. During 2012 the Centara Grand Beach Resort, Samui property was adversely affected by external events relating to global economic downturn and natural disasters together with the very intensive competitive environment of the tourist and hotel business of this travel destination, all of which factors resulted in the overall performance of the Centara Grand Beach Resort, Samui being lower than the expected. Thus, the Company and its Subsidiary Company had to pay the unit holders an additional guarantee amount; whereby the Company decided to make an additional provision amounting to Baht 40.4 million.

120

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 Gains on business acquisition and re-measuring to fair value of investments As a result of the continuing expansion of the Hotels Business Group, which made additional investments during 2012 as follows: In Q1/12 : Karon Phuket Hotel Co. Ltd. purchased an additional 33.9% equity of the joint venture company (from an existing 50% equity holding), resulting in this Company now becoming a full Subsidiary Company (with the Group now, directly and indirectly, having an 83.9% equity) In Q2/12 : Centara Maldives Pvt. Ltd. made additional investments to purchase another 25% equity (from an existing 50% equity holding) resulting in the Group now having a 75% equity holding and, thus, instead of recognising the joint venture company based on the equity method, it has become a full Subsidiary Company. In Q4/12 : R.M.L Leisure Pvt. Ltd. made additional investments to purchase another 49% equity (from an existing 25% equity holding) resulting in the Group now having a 74% equity holding and, thus, instead of being an associated company, it has now become a full Subsidiary Company. Whereas, prior to the additional investments being made, the shares of the profits were recorded based on the amount of equity holding in the 2 joint venture companies and the 1 associate company; however after the new investments and resulting increased equity holdings, these 3 companies have now become full Subsidiary Companies. Therefore, from the accounting viewpoint, the Company had to undertake a â&#x20AC;&#x2DC;fair valueâ&#x20AC;&#x2122; asset revaluation exercise before making the additional investments, which, instead of recognising then current value of the investments, resulted in a revaluation of the assets to its new â&#x20AC;&#x2DC;fair valueâ&#x20AC;&#x2122; for the overall business, the Company had to recognise an extra gain on business acquisition and re-measuring to fair value of investments of totaling Baht 458.2 million for the FY/2012 financial period. Lastly, in view of the current global economic and the local political environment as well as possible natural disasters that could all have potentially adverse impacts for the overall tourism industry and the hotels business sectors, the CENTEL Group has maintained its efforts to find various measures to reduce overall costs and expenses (ie: ongoing negotiations with key suppliers, making efficient use of energy and utilities, and ongoing effective costs management initiatives). While, additionally, CENTEL will also continue to increase overall revenues, through focusing on expanding its hotels management services activities as well as in maintaining its core food business strategies to FRQWLQXH DGGLQJ QHZ 465 RXWOHWV DQG EUDQG FRQFHSWV WRJHWKHU ZLWK RQJRLQJ GHYHORSPHQW RI QHZ PHQX RIIHULQJV DQG sustaining its proactive marketing and sales promotions campaigns. 2. FINANCIAL STATUS As at December 31, 2012, the Company and its Subsidiaries have total assets of Baht 27,757.2 million, an overall increase of Baht 6,073.6 million (or 28.0%)YoY, primarily due to the hotels business expansion and its additional investments relating to the Karon Phuket Hotel Co. Ltd., the Centara Maldives Pvt. Ltd., and the R.M.L Leisure Pvt. /WG WRJHWKHU ZLWK RQJRLQJ LQYHVWPHQWV IRU WKH IRRG EXVLQHVV LQYHVWPHQWV UHODWLQJ WR DGGLQJ QHZ 465 RXWOHWV WKDW increased, during 2012, by 74 new outlets). Details of the assets of the Company and its Subsidiaries are as follows. Trade Receivables As at December 31, 2012, the Company and its Subsidiaries have total trade receivables of Baht 463.8 million, a increase of Baht 198.8 million (or approximately 75%) compared to the end of 2011; whereby the Company and its Subsidiaries collected payments for its trade receivables in approximately 22 days (that excludes the collection of the revenues for its CRG Subsidiary, all of which are mainly cash sales) which is in line with the Groupâ&#x20AC;&#x2122;s credit policy of requiring payments within a 15 â&#x20AC;&#x201C; 30 period. An analysis of the aging of its trade receivables are given in the chart below:

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

121

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 Trade Receivables

As at Dec 31, 2012 Baht - Million

Within credit terms

328.0

As at Dec 31, 2011

Baht â&#x20AC;&#x201C; Million

70.1%

203.3

75.9%

Overdue: Less than 3 months

86.8

18.6%

36.8

13.7%

3-6 months

37.2

8.0%

11.3

4.2%

6-12 months

3.1

0.7%

7.1

2.7%

Over 12 months

12.5

2.6%

9.3

3.5%

467.6

100.0%

267.8

100.0%

Total Less : Provisions for impairment of trade AR

(3.8)

Net Trade Receivables

463.8

(2.8) 265.0

As at December 31, 2012, the current portion of trade receivables accounted for 70.1% of its total trade receivables, while those less than 3 months accounted for 18.6% of the total. The Company and its Subsidiaries have a policy of making provision for possible uncollectable bad debts, that is based on the customerâ&#x20AC;&#x2122;s past payments track record and estimated collections going forward. Therefore, a provision of Baht 3.8 million has been made as at the end of 2012, which amount is considered to be sufficient to cover any possible uncollectible trade receivables. Property, plant and equipment, intangible assets, and leasehold rights (net) : As at December 31, 2012, the Company and its Subsidiaries have property, plant and equipment assets with a total net value of Baht 19,191.7 million (compared to Baht 13,320 million as at the end of 2011), together with an additional net value of intangible assets totaling Baht 319.0 million (compared to Baht 341.4 million in 2011) and a net value of leasehold rights totaling Baht 876.1 million (compared to Baht 416.5 million in 2011), details of which are given below : NET ASSETS (Baht million) Property, plant and equipment (net) Hotels business Food business Sub total Intangible Assets (net) Hotels business Food business Sub total Leasehold rights (net) Hotels business Food business Sub total Over 12 months TOTAL ASSETS (net) (property, plant & equipment, intangible assets and leasehold rights)

122

ANNUAL REPORT 2012

As at Dec 31, 2012

As at Dec 31, 2011

17,685.0 1,506.7

12,102.9 1,217.1

19,191.7 64.6 254.4 319.0 816.7 59.4 876.1

13,320.0 68.4 273.0 341.4 350.1 66.4 416.5

12.5

2.6%

20,386.8

14,077.9

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 The total net value of all its property, plant and equipment increased by Baht 5,871.7 million (or 44.1%) compared to the end of 2011, comprising of : 1. Additional investments for its hotels business (as described above) relating to the Karon Phuket Hotel Co. Ltd., the Centara Maldives Pvt. Ltd., and the R.M.L Leisure Pvt. Ltd. 2. DGGLWLRQ RI QHZ 465 RXWOHWV WRWDOLQJ DSSUR[LPDWHO\ %DKW PLOOLRQ 3. Asset revaluation, in December 2012, of the company and 4 Subsidiaries (based on revenues projections) resulting in the Company and its subsidiaries recording the additional asset values based on the value of accrued income taxes totaling Baht 2,190.6 million. The total (net) value of intangible assets decreased by Baht 22.4 million, due to related amortization during 2012. The total (net) value of leasehold rights, as at the end of 2012, increased by Baht 459.6 million (or 110.3%) as a result of the increased investment in Centara Maldives Pvt. Ltd., and R.M.L Leisure Pvt. Ltd., the assets of which companies include existing leasehold rights in the Maldives. 3. SOUCES OF FUNDS Debts As at December 31, 2012, the Company and its Subsidiaries have total outstanding debts of Baht 17,698.4 million, an increase of Baht 2,063.5 million (or 13.2%) compared to the end of 2011, resulting from the Company using both increased short term loans from financial institutions totaling Baht 710 million and long term loans from financial institutions totaling Baht 2,975.2 million. The increased mainly came from made use of previously unused available credit facilities totaling Baht 1,500 million and loans from financial institutions of Centara Maldives Pvt. Ltd. and R.M.L. Leisure Pvt Ltd. which taking into consolidation in Financial Statement for the year 2012 amounting to Baht 1,352.2 million. Further, during 2012, the Company also redeemed debentures that matured during the year amounting to Baht 1,600 million. As at December 31, 2012, the Company and its Subsidiaries have total interest bearing debts and associated loan facilities and associated interest costs as follows: Types of Loans/Debts

Available Credit Facilities

Used Credit Facilities

Baht - Million

Baht â&#x20AC;&#x201C; Million

Applicable Interest Rates

/RDQV IURP ÂżQDQFLDO LQVWLWXWLRQV Bank Overdrafts

954.0

59.4

Short term loans

2,540.0

2.92% - 3.02%

Long term loans*

6,101.2

3 months Fixed Deposit Rate + 2.50%, MLR -1.75%

2. Debentures (net)

3,199.0

3.40%, 4.65% - 4.86% MLR -3.0%

3. Short term loans from persons/other businesses

61.1

4. Debts relating to PPF unit holders TOTAL

MOR

93.0

0.0% MLR â&#x20AC;&#x201C; 1.0%

12,053.7

*for use in the Centara Grand Beach Resort & Villa, Krabi (CKBR) , the Centara Grand and Bangkok Convention Center, Central World (CGCW), Centara Grand Mirage Beach Resort, Pattaya (CMBR), and the Centara Grand Beach Resort, Phuket (CPBR) projects. **net of associated accrued costs relating to the issue of debentures, totaling Baht 1.0 million CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

123

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 Shareholders’ Equity : At the EGM No 1/2006 held on June 21, 2006, the Shareholders approved the following resolutions relating to the Group’s registered capital : 1. Approved the change in the par value of the Company’s share to Baht 1.00 per share (from Baht 5.00 per share previously), resulting in the total number of share issued to be 900 million (from 180 million) shares. 2. Approved a registered capital increase of the Company to be Baht 1,580.8 million (from the Baht 900 million), through the issue of 680.8 million new ordinary share with a par value of Baht 1.00 per share. 3. Approved the allocation of these new ordinary shares issued as a result of the increase in the registered capital as follows: 3.1 allocate not more than 450 million new ordinary shares (at a par value of Baht 1.00 per share) to be sold to existing Shareholders on a pro rata basis 3.2 allocate not more than 170 million new ordinary shares (at a par value of Baht 1.00 per share) to be sold to the general public 3.3 allocate not more than 60.8 million new ordinary shares (at a par value of Baht 1.00 per share) to be made available to meet the rights to purchase new ordinary shares by holders of issued warrants of the Company. Therefore, in August 2006 the Company received a total of Baht 720.0 million from the sale of 450 million new ordinary shares (offered at a selling price of Baht 1.60 per share) issued; and also registered a capital increase from Baht 900 million to Baht 1,350 million on August 3, 2006. At the Annual General Meeting of Shareholders on 23 April 2012, the shareholders approved the reduction of the Company’s registered capital from Baht 1,580,800,000 to Baht 1,350,000,000 through the elimination of the registered, but unissued of 230,800,000 shares, with a par value of Baht 1 each. Appropriateness of the Capital Structure As at December 31, 2012 and 2011, the Company and its Subsidiaries have a Debt/Equity ratio of 1.20 : 1 and 1.65 : 1 respectively, which capital structure is still in accordance with all the covenants of its loans agreements, whereby a portion of its funds for investments come from the achieved cash flows from operations in addition to its various loans facilities. 4. CASH FLOW and MAINTAINING LIQUIDITY RATIO Net Cash Flows The Company and its Subsidiaries achieved net cash flows from the various activities as at the end of December 31, 2012 as shown below : CASH FLOW (Baht –Million) From operating activities Used in investing activities

124

2012 2,709.4 (2,011.9)

)URP XVHG LQ ¿QDQFLQJ DFWLYLWLHV

(628.8)

TOTAL – NET

68.7

ANNUAL REPORT 2012

2011

% Change

2,153.5

+25.8%

(2,147.6)

-6.3%

7.3

-8,713.7%

13.2

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED ANALYSIS AND EXPLANATION OF FINANCIAL STATUS AND OPERATING RESULTS For the years ended 31 December 2012 Operating Activities: Net cash flow from the operations of the Company and its Subsidiaries as at the end of December 31, 2012 totaled Baht 2,709.4 million, an increase of 25.8% from the end of the previous year. Investing Activities: Net cash flow used in the investing activities of the Company and its Subsidiaries as at the end of December 31, 2012 totaled Baht 2,011.9 million, used primarily for investments in the additional new 6XEVLGLDU\ &RPSDQLHV DV GHVFULEHG DERYH DV ZHOO DV IRU WKH RQJRLQJ H[SDQVLRQ RI 465 RXWOHWV QHWZRUN Financing Activities: Net cash flow used in the financing activities of the of the Company and its Subsidiaries as at the end of December 31, 2012 totaled Baht 628.8 million, primarily for the repayment of existing loans from financial institutions and payment of interest expenses. Liquidity Ratio As at the end of December 31, 2012 and 2011, the Company and its Subsidiaries have a liquidity ratio of 0.25 and 0.27 respectively; whereby this liquidity ratio has decreased from the end of 2011 as a result of the increase use of both short term and long term loans from financial institutions. In assessing the ability to meet principal and interest payment commitments by the Company and its Subsidiaries, as at the end of December 31, 2012, its â&#x20AC;&#x153;Debt Service Coverage Ratioâ&#x20AC;? was 1.50 times (compared to 1.10 times as at the end of 2011); whereby the Company and its Subsidiaries have sufficient net cash flows to meet these commitments. Additionally, the Company and its Subsidiaries still have sufficient positive cash flow to meet its ongoing debts principal and interest payments commitments.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

125

CONTENTS

NATURE OF BUSINESS

126

ANNUAL REPORT 2012

CONTENTS

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

127

CONTENTS

REVENUE STRUCTURE

(Unit : Million Baht) Business

Hotel

Operated by

2012

2011

2010

Amount

6.3

616.3

5.4

664.9

7.1

529.7

4.6

515.9

5.5

Sales revenues Centara Grand at Central Plaza Ladprao Bangkok

940.7

Centara Grand Beach Resort & Villas Hua Hin

63.9%

552.4

Centara Grand Beach Resort Samui

100.0%

389.8

2.6

348.0

3.0

401.0

4.2

Centara Hat Yai

100.0%

155.4

1.0

161.2

1.4

147.1

1.5

Centara Mae Sot Hill Resort

98.4%

31.6

0.2

26.5

0.2

30.3

0.3

3.7

Centara Villas Samui

100.0%

120.6

0.8

80.2

0.7

89.9

1.0

Centara Villas Phuket

100.0%

99.1

0.7

76.1

0.7

82.8

0.9

Centara Grand Beach Resort & Villas Krabi

100.0%

403.0

2.7

377.1

3.3

363.0

3.9

Centara Grand & Bangkok Convention Centre at Central World

100.0%

1,392.0

9.4

1,016.3

8.9

779.2

8.3

Centara Grand Mirage Beach Resort Pattaya

100.0%

1,049.0

7.1

907.9

7.9

765.3

8.1

Centara Grand Beach Resort Phuket(1)

100.0%

677.4

4.6

528.6

4.6

52.2

0.6

Centara Karon Resort Phuket

83.9%*

251.8

1.7

Centara Grand Island Resort & Spa Maldives

74.0%

67.9

0.5

6,130.7

41.3

4,667.9

40.7

3,891.6

41.4

Total sales from Hotel Business

128

Current % Holding

ANNUAL REPORT 2012

CONTENTS

REVENUE STRUCTURE

(Unit : Million Baht) Business

Food

Operated by

Current % Holding

2012

2011

2010

Amount

29.8

1,476.4

12.9

1,318.7

14.0

3,768.9

32.9

3,185.4

33.9

4.5

530.5

4.6

463.4

4.9

Sales revenues Mister Donut

100.0%

1,646.8

KFC

100.0%

4,425.5

Auntie Anneâ&#x20AC;&#x2122;s

100.0%

664.0

Pepper Lunch

100.0%

184.2

1.2

137.0

1.2

80.2

0.8

Beard Papa

100.0%

88.8

0.6

69.7

0.6

50.3

0.5

Chabuton Ramen

100.0%

190.3

1.3

119.4

1.1

25.6

0.3

Cold Stone Creamery

100.0%

63.9

0.4

38.5

0.3

15.3

0.2

Ryu Shabu Shabu

100.0%

26.3

0.2

28.3

0.2

15.4

0.2

11.1

Yoshinoya

100.0%

100.2

0.7

19.9

0.2

Ootoya

100.0%

719.7

4.9

207.5

1.8

The Terrace

100.0%

45.5

0.3

7.4

0.1

Other sales revenues

100.0%

103.4

0.7

91.8

0.8

95.0

1.0

8,258.6

55.7

6,495.3

56.7

5,249.3

55.8

Other income(2)

439.9

3.0

292.0

2.6

259.0

2.8

Total revenues(3)

14,829.2

100.0

11,455.2

100.0

9,399.9

100.0

Total sales from Food Business

*By direct and indirect shareholding

Note: 1. Centara Grand Beach Resort Phuket partially operated (soft opening) in November 2010 and fully operated (grand opening) in February 2011. 2. Other income comprised hotel management fee, rental and service fee, marketing support fund and subsidy, etc. 3. Total revenues did not include amortization of rental income (from the property fund) relating to the Centara Grand Samui Hotel Project for the year 2012 of Baht 100.3 million (Y2011 and Y2010: Baht 100.3 million each) and extra-loss from investment in property fund accounted for equity method of Baht 7.2 million. (Y2011: extra-gain Baht 18.7 million and Y2010: extra-loss Baht 13.2 million)

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

129

CONTENTS

RISK FACTORS This document is a summary report on the various possible and foreseen risk factors that may potentially LPSDFW ERWK WKH ÂżQDQFLDO VWDWXV DQG WKH RSHUDWLQJ SHUIRUPDQFH RI WKH &RPSDQ\ ZKHUHE\ DW WKLV WLPH WKHUH DUH VWLOO DV \HW RWKHU XQGHÂżQHG XQFHUWDLQWLHV 7KHUHIRUH DOO 6WDNHKROGHUV QHHG WR DVVHVV IRU WKHPVHOYHV RWKHU SRVVLEOH risk factors in addition to those detailed below. EXTERNAL BUSINESS ENVIRONMENTAL RISKS The Hotels Business sector is one that can be directly and immediately affected by those external business environment factors which can impact the tourism industry and which are basically beyond the control of hotel operators â&#x20AC;&#x201C; such as: political instability or unrest and resultant political rallies; as well as natural disasters economic downturns and fuel continuously price up including deterioration of natural environment. All these events can have a critical affect on the decision of international and local tourists whether to travel or not. However, since the Company and its Subsidiaries have established hotels properties in diverse key travel destinations within the various key parts of Thailand as well as the regions of Asia, while it has also been expanding its hotels properties management business activities and it has been able to managed its costs effectively, the Group is able to adapt to the potentially ever-changing business environment and market conditions. This business Ă&#x20AC;H[LELOLW\ WRJHWKHU ZLWK IXUWKHU FROODERUDWLRQ ZLWK LWV NH\ EXVLQHVV SDUWQHUV VXFK DV DLUOLQHV DQG WRXU FRPSDQLHV ZLOO enable the Group to effectively minimize any potential adverse impacts resulting from any or all of the abovementioned possible external risk factors. 7KH IRRG VHUYLFH TXLFN VHUYLFH UHVWDXUDQWV 465 EXVLQHVV LV DOVR VXVFHSWLEOH WR SRVVLEOH H[WHUQDO ULVN IDFtors, such as health epidemics or widespread animal diseases, which is a major raw material for the food service EXVLQHVVHV Âą LH $YLDQ ,QĂ&#x20AC;XHQ]D RU %LUG )OX HSLGHPLF 6XFK HYHQWV FDQ KDYH DQ DGYHUVH LPSDFW RQ WKH IRRG EXVLness revenues in the immediate stage of an epidemic or crisis; however once consumers become more informed DV WR WKH DFWXDO VLWXDWLRQ VXFK QHJDWLYH LPSDFWV ZLOO EH UHGXFHG +RZHYHU VLQFH WKH *URXSÂśV IRRG VHUYLFH 465 EXVLQHVV FRQVLVWV RI PRUH WKDQ 465 EUDQG FRQFHSWV DV ZHOO DV KDYH YDULRXV RXWOHWV VSUHDG WKURXJKRXW WKH market, these factors will facilitate to minimize any potential negative impacts from such possible external risks. Moreover, the Company will continue to focus on further R&D efforts in developing new product/menu offerings as well as new services and marketing channels in order to be able to maintain effective responses to any possible external risk factors as mentioned above. RISKS OF POSSIBLE PARTIAL LOSSES OF REVENUES DUE TO COMPETITIVE ACTIVITIES The hotels business has always been very competitive due to the continuing entrance of new top-end hotel properties as well as ongoing properties and services development by existing hotel operators, thus resulting in keen price-oriented competition. This business environment may have some potential adverse impacts on both the &RPSDQ\ÂśV KRWHOV EXVLQHVV UHYHQXHV DQG SURÂżW $V IRU WKH IRRG VHUYLFH 465 EXVLQHVV LW KDV DOVR EHHQ IDLUO\ FRPSHWLWLYH GXH WR QHZ FRPSHWLWRUV FRQWLQXLQJ WR FRPH LQWR WKH PDUNHW EHFDXVH RI WKH LQKHUHQW ÂľORZ EDUULHU RI HQWU\Âś WR WKH 465 EXVLQHVV E\ QHZ SOD\HUV DV ZHOO as due to the sustain development of new food products or menu offerings. This business environment may have VRPH SRWHQWLDO DGYHUVH LPSDFWV RQ ERWK WKH &RPSDQ\ÂśV IRRG EXVLQHVV UHYHQXHV DQG SURÂżW The Company and its Subsidiaries realizes the high level of competitiveness in the food services business and have, therefore, always given great importance to continued development and training of its human resources WRJHWKHU ZLWK PDLQWDLQLQJ LWV IRFXV RQ VHUYLFHV TXDOLW\ VR WKDW LWV YDULRXV 465 EUDQGV ZLOO EH ZHOO DOZD\V EH DFcepted and popular with the consumers. This is effectively achieved through having a team of well-experienced food services professionals. Furthermore, the Company has always emphasized the need for good business and marketing planning IRU LWV KRWHOV EXVLQHVV DQG HVSHFLDOO\ VR IRU LWV IRRG VHUYLFH 465 EXVLQHVV 7KH &RPSDQ\ KDV DOVR PDLQWDLQHG RQgoing efforts in developing and launching new innovative food products and menu offerings as well as in expanding its business footprint to cover a widespread area throughout all the regions of Thailand. This has resulted in a solid UHSXWDWLRQ DQG JRRG FRQVXPHU DFFHSWDQFH RI WKH YDULRXV EUDQGV RI WKH &RPSDQ\ÂśV KRWHOV DQG IRRG VHUYLFH 465 EXVLQHVVHV 7KHUHIRUH WKH &RPSDQ\ DQG LWV 6XEVLGLDULHV DUH FRQÂżGHQW WKDW LW FDQ HIIHFWLYHO\ FRPSHWH ZLWK DOO SOD\ers in the market place. RISKS OF POSSIBLE PARTIAL LOSSES OF REVENUES FROM FRANCHISED OPERATIONS 7KH &RPSDQ\ DQG LWV 6XEVLGLDULHV RSHUDWH YLUWXDOO\ DOO RI LWV IRRG VHUYLFH 465 EXVLQHVV XQGHU IUDQFKLVLQJ arrangements from the respective principal international Franchisors; whereby the franchise agreement includes YDULRXV FRQGLWLRQV DQG Âż[HG IUDQFKLVH WHUPV 7KXV LQ WKH HYHQW WKDW WKH )UDQFKLVRU GRHV QRW ZLVK WR UHQHZ LWV franchise to the Company or its Subsidiaries, or agrees to renew the franchise term under new conditions that are QRW IDYRUDEOH WR WKH &RPSDQ\ Âą VXFK DV DQ LQFUHDVH LQ WKH LQLWLDO IHH IRU DQ\ QHZ 465 RXWOHWV WR EH RSHQHG RU DQ adjustment in the revenue sharing arrangement, these factors may then result in an overall or, at least a partial, ORVV RI UHYHQXHV IRU WKH &RPSDQ\ÂśV IRRG VHUYLFH 465 EXVLQHVV

130

ANNUAL REPORT 2012

CONTENTS

The Company has emphasized the maintenance of good business relationships with the respective Franchisors and on always being well-prepared to negotiate franchise term renewals prior to its expiry date. Additionally, because the Company has been the Franchisee to the respective international Franchisors for a long time and KDV H[WHQVLYH H[SHULHQFH DV ZHOO DV DQG D VROLG UHSXWDWLRQ LQ WKH IRRG VHUYLFH 465 EXVLQHVV WKH &RPSDQ\ KDV continued to remain successful in renewing franchise terms and agreements. RISKS OF POSSIBLE PARTIAL LOSSES OF FOOD BUSINESS REVENUES DUE TO FACILITIES LEASE AND/OR RENTAL CONTRACT RENEWALS 0RVW RI WKH IRRG VHUYLFH 465 EXVLQHVV RXWOHWV ZKHWKHU WKH\ DUH IXOO UHVWDXUDQWV RU NLRVNV Âą RSHUDWHG E\ the Company and its Subsidiaries are rented facilities located in shopping malls or within department stores under D UHQWDO DJUHHPHQW ZLWK VSHFLÂżF WHUPV DQG FRQGLWLRQV 2QFH WKH UHQWDO WHUP KDV H[SLUHG DQG LI WKH 6XEVLGLDULHV does not obtain a rental agreement renewal â&#x20AC;&#x201C; especially for those locations with high revenue potential, or if the UHQHZDO DJUHHPHQW LQFOXGHV FRQGLWLRQV QRW IDYRUDEOH WR WKH 6XEVLGLDULHV Âą VXFK DV VLJQLÂżFDQWO\ LQFUHDVHG PRQWKO\ rents or required payment increases relating to upfront fees for the right to rent or to register the rental agreement, these factors may then have an overall, or partial, impact on the potential revenues for the Companyâ&#x20AC;&#x2122;s food service/ 465 RSHUDWLRQV ORFDWHG LQ VXFK UHQWHG IDFLOLWLHV However, since most of the current facilities rental agreements have varying terms as well as different start-up and expiry dates, this enables the Company to partly â&#x20AC;&#x2DC;spread outâ&#x20AC;&#x2122; the potential risks. At the same time, the Company has always continued to expand and open new outlets into new locations as well as to give importance in focusing on rented facilities that offer the most satisfactory terms and returns, and to initiate each agreement renewal negotiations well in advance of their expiry dates. Additionally, since the Company and its Subsidiaries RSHUDWHV PDQ\ SRSXODU DQG ZHOO DFFHSWHG 465 EUDQGV WKHUHE\ LW LV DEOH DWWUDFW VLJQLÂżFDQW QXPEHU RI FRQVXPHUV to the shopping mall or department store locations, and also because the Subsidiaries rent altogether a cumulaWLYHO\ VLJQLÂżFDQW ODUJH SRUWLRQ RI WKH UHQWDEOH DUHD IRU DOO PRUH WKDQ 465 EUDQGV LW RSHUDWHV LW RIWHQ UHFHLYHV special consideration and priority treatment in any rental agreement renewals negotiations from the shopping mall and department store operators. RISKS FACTORS DUE TO THE NEED TO COMPLY WITH THE TERMS AND CONDITIONS OF THE DEBENTURE ISSUE AND LONG TERM LOANS AGREEMENTS Under the various conditions and covenants relating to its debentures issue as well as its long term loans agreements, the Company and one of its Subsidiary Company is obliged to maintain an overall Debt to Equity (D/E 5DWLR IRU LWV LQWHUHVW EHDULQJ ORDQV RI QRW PRUH WKDQ EDVHG RQ LWV 4XDUWHUO\ FRQVROLGDWHG ÂżQDQFLDO VWDWHPHQWV In fact, as at December 31, 2012, the Company and its Subsidiaries have maintained a D/E Ratio of 1.20 :1. RISKS FACTORS AS A RESULT OF THE LOANS FACILITIES STRUCTURE As at December 31, 2012, the Company and its Subsidiaries have these loans obligations : overdraft facilities and short term loans totaling Baht 5,080.4 million, and long term loans totaling Baht 6,973.2 million respectively; whereby it still has unused loans facilities that is almost equal to its current total outstanding short term loans. RISKS FACTORS DUE TO FOREIGN EXCHANGE RATES FLUCTUATIONS Part of the overall revenues of the Company and its Subsidiaries are receipts in foreign currencies, which are payments for hotels services from overseas travelers, whereby each year the Company sets room rates that are based on the current foreign exchanges rates and forecasts of foreign exchanges analysts as well as include VRPH ÂłEXIIHUÂ´ WR DFFRXQW IRU H[SHFWHG IRUHLJQ H[FKDQJH Ă&#x20AC;XFWXDWLRQV $GGLWLRQDOO\ WKH &RPSDQ\ DOVR KDV VRPH H[SHQVHV SD\DEOH LQ IRUHLJQ FXUUHQFLHV Âą VXFK DV LQLWLDO IUDQFKLVH IHHV IRU QHZ 465 RXWOHWV DQG SXUFKDVHV RI VRPH UDZ PDWHULDOV XVHG LQ WKH 465 EXVLQHVV IURP RYHUVHDV VXSSOLHUV However, in the past, both the foreign currency receipts and payments together only account for a very small portion of the overall total revenues and payments of the Company and its Subsidiaries respectively; whereE\ WKH\ GR QRW SRVH DQ\ VLJQLÂżFDQW LPSDFW 7KHUHIRUH LW LV QRW QHFHVVDU\ WR EX\ DQ\ IRUZDUG IRUHLJQ FXUUHQF\ SXUFKDVH RU FRYHUDJH WR PHHW VXFK SRVVLEOH PLQRU ULVNV UHODWLQJ WR IRUHLJQ H[FKDQJH Ă&#x20AC;XFWXDWLRQV RISKS FACTORS DUE TO INTEREST RATES VARIATIONS $V DW 'HFHPEHU WKH &RPSDQ\ DQG LWV 6XEVLGLDULHV KDYH ORDQV IURP ÂżQDQFLDO LQVWLWXWLRQV DPRXQW RI %DKW PLOOLRQ HTXDO WR RI LWV WRWDO OLDELOLWLHV ZLWK PRVW RI WKHVH ORDQV DUH EDVHG RQ D ÂľĂ&#x20AC;RDWLQJ LQWHUest rateâ&#x20AC;&#x2122;; whereby for every 0.25% increase or decrease in the overall interest rate, the impact for the Company will be an increase or decrease in total interest costs payable of approximately Baht 18 million.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

131

CONTENTS

POLICY ON CORPORATE GOVERNACE MESSAGE FROM THE CHAIRMAN 7KH %RDUG RI 'LUHFWRUV RI WKH &HQWUDO 3OD]D +RWHO SOF LV FRQÂżGHQW WKDW SROLFLHV DQG SUDFWLFHV UHODWLQJ WR good corporate governance that are in place is a key operational success factor for the group that affords our 6KDUHKROGHUV WKH EHVW SRVVLEOH EHQHÂżWV RQ D VXVWDLQHG EDVLV 7KHUHIRUH WKH &RPSDQ\ KDV SUHSDUHG WKLV GRFXPHQW that summarises the various Board and Management structure together with the related 6 key policies as well as associated practices and procedures, based on principles of good corporate governance, that are required to be complied to by the Board, Management and the staff, namely : 1. ACCOUNTABILITY : being accountable for oneâ&#x20AC;&#x2122;s own decisions and actions, as well as being able to clarify and effectively explain the basis of such decisions and actions. 2. RESPONSIBILITY : being responsible in discharging oneâ&#x20AC;&#x2122;s responsibilities and duties to the best of oneâ&#x20AC;&#x2122;s ability and effectiveness. 3. (48,7$%/( 75($70(17 WUHDWLQJ DQG EHKDYLQJ WRZDUGV DOO 6WDNHKROGHUV LQ D MXVW PDQQHU DQG RQ the same basis, as well as being able to effectively explain such behavior. 4. 75$163$5(1&< XQGHUWDNLQJ DOO DFWLRQV LQ D FOHDU DQG RSHQ PDQQHU WKDW FDQ EH YHULÂżHG DV ZHOO DV disclosing the required and relevant information in an open manner to all parties involved. 5. VISION TO CREAT LONG TERM VALUE : having the foresight to be able to see through situations as well as to make business-related decisions that will effectively build value for the business and Company in the long term. 6. (7+,&6 KDYLQJ PRUDO ÂżEUH DV ZHOO DV SURIHVVLRQDOLVP LQ RSHUDWLQJ WKH EXVLQHVV LQ DQ HWKLFDOO\ DQG just manner. The Board of Directors will undertake its best possible efforts to oversee the operations and ensure that all the above key policies as well as associated practices and procedures are all observed and strictly complied to, whereby close follow-up actions and continuing improvements will be initiated to ensure that they are always FXUUHQW DV ZHOO DV DSSURSULDWH WR WKH HYHU FKDQJLQJ EXVLQHVV HQYLURQPHQW DQG WKH H[SHFWHG EHQHÂżWV RQ WKH SDUW RI our Shareholders. The Board of Directors hopes that the summary document will clearly demonstrate our genuine intent, our transparency and our continuing commitment to determine effective strategic directions as well as to constantly RYHUVHH WKH RSHUDWLRQV RI WKH &RPSDQ\ VR WKDW 6KDUHKROGHUV ZLOO KDYH EHOLHYH WKDW WKH EHQHÂżWV RI RXU 6KDUHKROGers will always be well looked after.

Mr. Suthikiati Chirathivat Chairman of the Board November, 2011

132

ANNUAL REPORT 2012

CONTENTS

BOARD OF DIRECTORS Composition and Appointments 7KH &RPSDQ\ÂśV %RDUG RI 'LUHFWRUV FRPSULVHV RI TXDOLÂżHG SHUVRQV ZKR DUH NQRZOHGJHDEOH FDSDEOH DQG ZHOO experienced in this business as well as having the skills and vision; whereby they are appointed by the Shareholders Meeting while the Board itself will elect and appoint the Chairman, Vice Chairman and a number of other Board positions as appropriate to the size of the Companyâ&#x20AC;&#x2122;s business operations as well as to ensure their effective performances. 1.

The Board of Directors will consist of not less than 5 Directors with at least one-third of the total number of Directors being Independent Directors, of which there will be at least 3; while not less than half of the Directors must reside in Thailand.

The Board of Directors will elect and appoint one of the Directors as the Chairman and, as deemed appropriate, one (or several) Vice Chairman. The Board can also authorised one or more Directors or any other person(s) to act on its behalf.

7KH &KDLUPDQ DQG WKH &(2 VKRXOG QRW EH RQH DQG WKH VDPH SHUVRQ VR DV WR HQVXUH D FOHDUO\ GHÂżQHG GLYLVLRQ of roles and responsibilities as well as balance of power in the overall operations of the business.

The appointments of Directors must be in accordance with the laws as well as all the relevant rules and regulations as well as in a transparent and clear manner. (1) In the event that a Director complete his term of service and retires from the Directorship, the Shareholders PHHWLQJ ZLOO VHOHFW DQG DSSRLQW D QHZ 'LUHFWRU IURP WKH QRPLQDWHG TXDOLÂżHG SHUVRQ ZKR KDV WKH KLJKHVW QXPEHU of votes in his/her favour so as to have the total number of Directors as agreed; and in the event that there is a tie (between two nominated persons), the Chairman will have the deciding vote. (2) In the event that a directorship becomes vacant due to any reason other than a retirement after completion of the term of service, at the immediate next Board meeting the Board of Directors will appoint a person who is TXDOLÂżHG DQG DOVR QRW SURKLELWHG E\ ODZ DV WKH UHSODFHPHQW 'LUHFWRU ZKHUHE\ WKH DSSRLQWHH ZLOO VHUYLFH RXW WKH remaining terms of service of that directorship â&#x20AC;&#x201C; unless the remaining term of service in question is less than 2 months; whereby such an appointment must receive not less than three quarters of total votes of the remaining number of Directors.

4XDOLÂżFDWLRQV RI D 'LUHFWRU RI WKH &RPSDQ\ 1.

A Director must be a normal person, who 1) has come of age, 2) is not bankrupt, incapable or seemingly incapable, KDV QRW UHFHLYHG D ÂżQDO VHQWHQFH WR D SULVRQ WHUP IRU FRPPLWWLQJ IUDXGXOHQW DFWV DQG KDV QRW EHHQ LQYROXQWDULO\ WHUPLQDWHG IURP HPSOR\PHQW DV D *RYHUQPHQW RIÂżFLDO RU DV DQ HPSOR\HH RI DQ\ Government and non-Government organisation due to fraudulent acts in the discharge of responsibilities.

A Director must have the knowledge, capability and extensive experiences that will be of added value in from EHLQJ DSSRLQWHG DV D 'LUHFWRU DV ZHOO DV D SHUVRQ ZLWK PRUDO SULQFLSOHV LQWHJULW\ DQG VXIÂżFLHQW WLPH WR IXOO\ devote to the responsibilities in being a Director.

A Director can take up directorships in other business organizations, without being a hindrance to the discharge of responsibilities as a Director of the Company; whereby not more than a total of 5 concurrent directorships in listed companies on the Stock Exchange of Thailand can be held at any one time.

A Director is prohibited from undertaking any business that is similar in nature to and in competition with that of the Company; and also is prohibited in being (a)a partner in an ordinary partnership or being as partner with unlimited liability in any limited liabilities partnerships or (b) in a Director in any private companies or organisations that operate a business that is similar in nature to and in competition with that of the Company - regardOHVV RI WKH IDFW WKDW VXFK XQGHUWDNLQJV DUH IRU WKH EHQHÂżW RI RWKHUV XQOHVV LW LV GLVFORVHG WR WKH 6KDUHKROGHUV meeting prior to being appointed as such.

$Q ,QGHSHQGHQW 'LUHFWRU LV D 'LUHFWRU RI WKH &RPSDQ\ ZKR LV IXOO\ IUHH DQG LQGHSHQGHQW RI DQ\ LQĂ&#x20AC;XHQFH RU control of the Companyâ&#x20AC;&#x2122;s Management and/or majority Shareholders, and not in any way be involved with or KDYH YHVWHG LQWHUHVWV LQ WKH GHFLVLRQV RI WKH 0DQDJHPHQW ZKHUHE\ WKH TXDOLÂżFDWLRQV RI DQ ,QGHSHQGHQW 'LUHFtor are as follows : 1) Having not more than 0.5% ownership of the total number of voting shares of the Company, the parent Company as well as of any Subsidiary Companies, joint venture Companies or any juristic entity that may have FRQĂ&#x20AC;LFWV RI LQWHUHVW ZKHUHE\ WKLV WRWDO DPRXQW RI VKDUHKROGHUV DOORZHG PXVW DOVR LQFOXGH WKRVH RZQHG E\ DQ\ persons related to the respective Independent Director in question. CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

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CONTENTS

2) Currently is or has been in the past a Director involved in the management or an employee, staff, or consultant with a regular monthly salary of the Company, as well as in a position of control over the Company, the parent Company and its Subsidiaries, joint venture Companies, a Subsidiary of the same level or any juristic HQWLW\ WKDW PD\ KDYH FRQĂ&#x20AC;LFWV RI LQWHUHVW XQOHVV VXFK VWDWXV KDV EHHQ WHUPLQDWHG RU KDV HQGHG IRU D SHULRG RI at least 2 years prior to being appointed as a Director of the Company. 3) Is not related to by blood, or by legal registration, as a father, mother, spouse, sibling, or child and including spouses of the children and of member of management member, and to the majority Shareholder of or a party with control over the Company, or persons(s) nominated to be the management and person with control over the Company and its Subsidiaries. 4) Currently has or in the past has had any business relationships with the Company, the parent Company DQG LWV 6XEVLGLDULHV MRLQW YHQWXUH &RPSDQLHV RU DQ\ MXULVWLF SHUVRQ V WKDW PD\ KDYH FRQĂ&#x20AC;LFWV RI LQWHUHVW WKDW may result in impeding the fully independence of consideration and judgment being exercised; and including not being or having been a major shareholder, a Director (who is not an Independent Director), member of the Management of those organisations that have a business relationship with the Company, the parent Company and its Subsidiaries, joint venture Companies, a Subsidiary of the same level or any juristic entity that may have FRQĂ&#x20AC;LFWV RI LQWHUHVW XQOHVV VXFK VWDWXV KDV EHHQ WHUPLQDWHG RU KDV HQGHG IRU D SHULRG RI DW OHDVW \HDUV SULRU to being appointed as a Director of the Company. The business relationship as described in the paragraph above includes any normal transactions in the course of operating the businesses â&#x20AC;&#x201C; namely the leasing/rental of property by either party; transactions relating to DVVHWV VDOHV RU VHUYLFHV DV ZHOO DV JUDQWLQJ RU UHFHLSW RI DQ\ ÂżQDQFLDO VXSSRUW UHODWLQJ WR ORDQV JXDUDQWHHV pledging of assets as a security against loans received and other activities of a similar nature that result in either the Company or the counter party having a debt liability towards the other party from 3% of the total tangible assets of the Company or from Baht 20 million upwards. The calculation of such debt liabilities should be in accordance to the method of calculating the value of any related transactions as prescribed by the announcement of the Capital Markets Supervisory Board (CMSB) in regard to the compliance regulations in undertaking related transactions; but however in taking into consideration any such debt liabilities that have been incurred during a period of 1 year prior the start of any business relationship(s) with another party. 5) Currently is or has been in the past an external auditor of the Company, the parent Company and its 6XEVLGLDULHV MRLQW YHQWXUH &RPSDQLHV RU DQ\ MXULVWLF SHUVRQ V WKDW PD\ KDYH FRQĂ&#x20AC;LFWV RI LQWHUHVW DV ZHOO DV not being a major shareholder or Director (who is not an Independent Director), member of Management, and 0DQDJLQJ 3DUWQHU RI WKH DXWKRULVHG $XGLW ÂżUP RI WKH &RPSDQ\ WKH SDUHQW &RPSDQ\ DQG LWV 6XEVLGLDULHV MRLQW YHQWXUH &RPSDQLHV RU DQ\ MXULVWLF HQWLW\ WKDW PD\ KDYH FRQĂ&#x20AC;LFWV RI LQWHUHVW XQOHVV VXFK VWDWXV KDV EHHQ WHUminated or has ended for a period of at least 2 years prior to being appointed as a Director of the Company. 6) Currently is or has been in the past been a professional services provider to (inclusive of business, legal DQG ÂżQDQFLDO FRQVXOWLQJ VHUYLFHV DQG UHFHLYLQJ DQ DQQXDO VHUYLFHV IHHV H[FHHGLQJ %DKW PLOOLRQ IURP WKH Company, the parent Company and its Subsidiaries, joint venture Companies, or any juristic person(s) that may KDYH FRQĂ&#x20AC;LFWV RI LQWHUHVW ZKHUHE\ LQ WKH HYHQW WKDW VHUYLFHV EHLQJ SURYLGHG LV LQ WKH IRUP RI D MXULVWLF HQWLW\ then this criteria should also include being a major shareholder, Director (who is not an Independent Director), PHPEHU RI 0DQDJHPHQW RU 0DQDJLQJ 3DUWQHU RI WKH SURIHVVLRQDO VHUYLFHV SURYLGHU ÂżUP LQ TXHVWLRQ XQOHVV such status has been terminated or has ended for a period of at least 2 years prior to being appointed as a Director of the Company. 7) Is not a Director who has been appointed the authorised representative of a Director of the Company, of the majority Shareholder of the Company, or of a shareholder who is connected to the majority Shareholder of the Company. ,V QRW LQYROYHG LQ RU RSHUDWHV D EXVLQHVV WKDW LV VLPLODU LQ QDWXUH WR DQG D VLJQLÂżFDQW FRPSHWLWRU RI WKH &RPSDQ\ RU LWV 6XEVLGLDULHV RU LV QRW D VLJQLÂżFDQW VKDUHKROGHU RI EXVLQHVV SDUWQHUVKLS RU DQ ([HFXWLYH 'LUHFtor, employee staff, consultant with a regular monthly salary, or holds more than 1% of the total voting shares of another company which operates a business that is similar in nature to and a competitor of the Company or its Subsidiaries. 'RHV QRW KDYH DQ\ RWKHU TXDOLÂżFDWLRQV RU VWDWXV WKDW ZRXOG KLQGHU WKH DELOLW\ WR LQGHSHQGHQWO\ H[SUHVV DQ\ opinions in regard to the business operations and activities of the Company. Independent Director(s) may be assigned by the Board of Directors to make decisions relating to the operations of the Company, the parent Company and its Subsidiaries, joint venture Companies, or Subsidiaries at the same level RU DQ\ MXULVWLF SHUVRQ V WKDW PD\ KDYH FRQĂ&#x20AC;LFWV RI LQWHUHVW ZKHUHE\ VXFK GHFLVLRQV ZLOO EH PDGH RQ D FROOHFWLYH EDVLV Term of Service 1.

At every Annual General Shareholders Meeting (AGM), one-third (or the nearest equivalent number) of the total number of Directors are required to retire by rotation.

7KH UHWLUHPHQW RI 'LUHFWRUV GXULQJ WKH ÂżUVW DQG VHFRQG \HDUV DIWHU WKH &RPSDQ\ ZDV OLVWHG ZDV XQGHUWDNHQ by all drawing lots to see who had to retire by rotation; but thereafter, those Directors with the longest term of

134

ANNUAL REPORT 2012

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service retired by rotation. However, Directors who retire may be nominated for appointment as a Director of the Company for another term. Apart from retiring by rotation in the above manner, the termination of a Directorâ&#x20AC;&#x2122;s term of service may be through: 1).

Death

2).

Resignation

)DLOLQJ WR KDYH WKH UHTXLUHG TXDOLÂżFDWLRQV RU EHLQJ SURKLELWHG E\ ODZ WKURXJK DQ RUGHU RI WKH &RXUW RU E\ the Companyâ&#x20AC;&#x2122;s regulations, whereby either the Shareholders meeting make a resolution to terminate the Directorship, requiring at least a total of at least three quarters and not less than half of the total number of valid votes present at the meeting voting in favour of the termination. 3.

Directors wishing to resign must do so by submitting a written resignation letter to the Company.

Independent Directors cannot serve for more than 2 consecutive terms for the sake of ensuring full independence in the consideration of any matters and expressing any opinions in the capacity as an Independent Director.

Duties and Responsibilities of Directors 1.

To discharge their duties and responsibilities in accordance with the laws, objectives and regulations of the Company as well as all the resolutions of the Board of Directors and Shareholdersâ&#x20AC;&#x2122; meetings, and with a duty of loyalty, duty of care, together with full accountability and ethics by always taking into consideration the best LQWHUHVW DQG EHQHÂżWV RI DOO 6KDUHKROGHUV DOLNH DQG HTXDOO\

'HÂżQH WKH YLVLRQ VWUDWHJLF GLUHFWLRQ DV ZHOO DV GHWHUPLQH WKH RYHUDOO EXVLQHVV DQG DQQXDO EXGJHW SODQV RI WKH Company and undertaking close follow-up and monitoring of the various operations performance results on a continuing basis in order to ensure that the operational activities are in accordance with the established business directions and plans and that any obstacles or issues can be resolved in a timely manner.

&RQVLGHU DQG DSSURYH DQ\ LPSRUWDQW RU VLJQLÂżFDQW WUDQVDFWLRQV ZLWKLQ WKH GHÂżQHG DXWKRULW\ DQG UHVSRQVLELOLWLHV of the Board according to the law and regulations of the Company, including the approval of the any investment budgets in excess of Baht 100 million

Consider and approve the setting up of and appointments to Board Committees so that they can effectively support the Board, as appropriate and necessary; whereby close monitoring of the activities and performance pf these Board Committees will also be undertaken on a regular basis.

Independent Directors must exercise their judgment in a fully independent manner in their consideration of matters relating to proposed strategies, management of the Company, appointments of Directors, and setting operational standards, as well as must be prepared to oppose any actions on the part of management or other Directors in the event they have opposing views with regard matters impacting the equal treatment of all Shareholders alike.

Ensuring proper disclosure of relevant information to all Shareholders and Stakeholders groups in a correct, comprehensive, transparent, reliable and timely manner as well as on an equal basis.

(VWDEOLVK DQG HQVXUH WKDW HIIHFWLYH DQG HIÂżFLHQW LQWHUQDO FRQWUROV DV ZHOO DV LQWHUQDO DXGLW V\VWHPV DUH LQ SODFH

Establish as well as implement appropriate and effective risks management procedures and processes, so as to enable sound assessment, monitoring and management of risks.

Appoint a Company Secretary, who will be able to assist the Board in various oversight activities, and ensuring that the Board as well as the Company fully comply with all the relevant; laws and regulations.

10. 'HÂżQH DQG HVWDEOLVK WKH &RGH RI %XVLQHVV (WKLFV DQG &RQGXFW IRU XVH DV D JXLGHOLQH DQG RSHUDWLRQDO IUDPHwork for members of the Board, Management and the staff. 11. 'HÂżQH DQG HVWDEOLVK WKDW WKH SULQFLSOHV DQG SUDFWLFHV JXLGHOLQHV IRU JRRG FRUSRUDWH JRYHUQDQFH DQG WKDW WKH\ are implements, as well as promote the dissemination of this guideline, in order to ensure that they are fully understood and strictly complied to within the operations of the Company. 12. 'HÂżQH DQG LPSOHPHQW FOHDU JXLGHOLQHV UHJDUGLQJ WKH &RPSDQ\ XQGHUWDNLQJ DQ\ FRQQHFWHG WUDQVDFWLRQV ZLWK related parties in a transparent manner. 13. 'HÂżQH FOHDU SURFHGXUHV DQG SURFHVVHV IRU WKH UHSRUWLQJ WR WKH %RDUG E\ WKH $XGLW &RPPLWWHH LQ WKH HYHQW WKDW RI GLVFRYHULQJ DQ\ DFWXDO RU VXVSLFLRXV WUDQVDFWLRQV RU DFWLYLWLHV ZKLFK PD\ SRVVLEO\ KDYH D VLJQLÂżFDQW LPSDFW RQ WKH ÂżQDQFLDO VWDWXV DQG RSHUDWLQJ UHVXOWV RI WKH &RPSDQ\ ZKHUHE\ WKH %RDUG RI 'LUHFWRUV LV WKHQ

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

135

CONTENTS

required to take corrective actions within the recommended and appropriate time frame as proposed by the Audit Committee. 14. 'HÂżQH DQG LPSOHPHQW DSSURSULDWH VXFFHVVLRQ SODQQLQJ DFWLYLWLHV UHODWLQJ WR WKH VHQLRU ([HFXWLYH DQG 0DQDJHment positions of the Company. 15. Review and improve, on a regular basis, any key policies and important business plans, so that they are always current with and correspond to the latest situation or business environment. 16. Review and improve, on a regular basis, the Charter of the Board of Directors. 17. Solicit and acquire professional opinions regarding the operations of the Company through hiring outside consultants at the expense of the Company. 18. Discharge any other duties relating to the business of the company as authorized and assigned by the Shareholders. Board of Directors Meetings 1.

The Board of directors must meet at least every quarter, whereby schedule meeting dates are determined in advance for the entire year but additional special meetings can be schedules as deemed necessary.

A minimum of 2 Directors, together, can call for a Board meeting to take place, whereby the Chairman or an authorised person will schedule the meeting date within a period of 14 days that such a meeting is formally requested.

In holding a Board meeting, the Chairman or an authorised person will send out a notice of the meeting, that indicates the date, time and venue for the meeting together with the purpose and agenda, to all Directors at least 7 days in advance or and prior to the scheduled meeting date, except in the event of an urgent need to have a meeting in order to protect the Company rights or interests whereby other appropriate means of giving notice of a planned meeting within a shorter period of time will be used.

For every Board meeting, at least half of the total number of Directors of the Company must be present to constitute a quorum, with the Chairman of the Board acting as the Chairman of the meeting. However, in the event that the Chairman of the Board is not present or is unable to attend the meeting, then the Directors present will appoint a Director to act as the Chairman for the meeting accordingly.

In voting for and making a resolution regarding an agenda item being considered during a Board meeting, the majority vote will win whereby one Director has one vote; and in the event of a tie then the chairman can cast an additional vote to decide on the matter. Further, Directors who have a vested interest in the agenda item being considered must excuse themselves and will also not have a vote in that matter.

The Board of Directors has the authority to invite members of Management, Executives or various persons within the Company who are involved in a matter being considered to attend a meeting and give their opinions ÂżUVWKDQG RU WR VXEPLW DQ\ UHTXLUHG UHOHYDQW VXSSRUWLQJ LQIRUPDWLRQ

Non-Executive Directors must meet without Executive Directors or members of management being present at least once a year, in order to discuss and review their discharge of duties and performance.

The Company Secretary will be responsible for taking the minutes of Board meetings.

Board Reports The Board of Directors must submit a report on the operating performance results of the Company to the Shareholders by using the 56-1 detailed report form and the Companyâ&#x20AC;&#x2122;s Annual Report ( 56 -2 form), containing the details as required by law as well as relevant rules and regulations. BOARD COMMITTEES The Board of Directors is authorised to establish two Board Committees and appoint Directors to be members in order to undertake special and additional responsibilities assigned to them, namely the Audit Committee and the Nomination and Compensation Committee. The above established Board Committees are authorised to invite members of Management to attend their reVSHFWLYH PHHWLQJV RU VXEPLW UHSRUWV WR JLYH DQ\ UHTXLUHG DGGLWLRQDO GHWDLOV DQG RU FODULÂżFDWLRQ DV ZHOO DV WR KLUH RXWVLGH consultants, at the expense of the Company, to give their appropriate opinions as required on any relevant matters. Audit Committee The Audit Committee has a role relating to the activities assigned to it from the Board of Directors, whereby they will perform in accordance the agreed charter of the Audit Committee as well as the authorised scope of authority and responsibilities in

136

ANNUAL REPORT 2012

CONTENTS Â&#x2021;

reviewing and assessing, together with the external auditor(s) and the internal audit group, that the Company has the proper, appropriate and effective internal controls in place

Â&#x2021;

investigating and reviewing internally in the event that a suspicious or presumed case of fraudulent or abnorPDO DFWLYLW\ KDV RFFXUUHG RU WKDW D VHULRXV Ă&#x20AC;DZ LQ WKH LQWHUQDO FRQWUROV V\VWHP LV DSSDUHQW

whereby a full report is submitted to the Board of Directors for their consideration accordingly. Further, the $XGLW &RPPLWWHH LV UHVSRQVLEOH IRU WKH VHOHFWLRQ DQG SURSRVDO WR WKH %RDUG RI LQGHSHQGHQW DQG TXDOLÂżHG SDUWLHV WR EH appointed as the authorised external auditor(s) of the Company as well as the associated remuneration. And the Audit committee is also required to hold a meeting, at least once a year, with the external auditor(s) without any member of the Management being present. The Audit Committee must have at least 3 Independent Directors or a total number as prescribed by the Securities Exchange Commission, the Chairman of the Board, or the Chairman of the Audit Committee, whereby all members be Directors with full independence as well as able to exercise completely independent judgment in an equitable manner in their considerations and in the course of discharge their assigned responsibilities. They must also possess the qualiÂżFDWLRQV DV SUHVFULEHG E\ WKH 6HFXULWLHV ([FKDQJH &RPPLVVLRQ KDYH WKH UHOHYDQW NQRZOHGJH DQG EH ZHOO H[SHULHQFHG VR WKDW WKH\ ZLOO EH HIIHFWLYH LQ WKHLU UROH 7KH $XGLW &RPPLWWHH PXVW KDYH DW OHDVW RQH PHPEHU ZKR LV VXIÂżFLHQWO\ NQRZOedgeable and experienced to be able to review the accuracy and correctness of the Financial Statements of the Company. For meetings of the Audit Committee there must be at least half of the members present to constitute a quorum. Membership of the Audit Committee will have a term of service of not more than 3 years per term or equal to the remaining term of service as a Director. Members whose term has been completed, and thus retiring, will be eligible to be nominated for appointment to another term. However, should a membership becomes vacant for any reason other WKDQ UHTXLUHG UHWLUHPHQW E\ URWDWLRQ WKHQ WKH %RDUG RI 'LUHFWRUV ZLOO DSSRLQW DQRWKHU 'LUHFWRUV GHHPHG TXDOLÂżHG WR WDNH up that membership for the remaining term of service, so that there will be the total number of members of the Audit Committee as originally established. The Director of the Internal Audit will serve as the Secretary of the Audit Committee, responsible for arranging the meetings of the Committee to take place as well as to coordinate that required and relevant reports of the Audit Committee be prepared and submitted to the Board of Directors, investors, Shareholders and the Stock Exchange of Thailand. The Secretary of the Audit Committee is required to attend all meetings of the Committee but is not entitled to a vote, but can, however propose the appointment of an assistant to the Secretary. At least a total of 4 meetings of the Audit Committee must be held each year, in order to review the Financial Statements, as well as assess activities relating to internal controls, risks management, and compliance to the applicable regulations of the Stock Exchange of Thailand and laws for listed companies. Written notices of Audit Committee meetings are to be sent to members at least 5 days prior to the scheduled meeting date, which have been determined in advance for the year; whereby members of the Audit Committee are required to attend a minimum of three quarters of the total number of Committee meetings held during the year. Nomination and Compensation Committee The Nomination and Compensation Committee must have at least 5 members, of which at minimum of half must be Independent or outside Directors, whereby there must be at least half of the total members and including at least 1 Independent Director present to constitute a quorum. Membership of the Nomination and Compensation Committee will have a term of service of not more than 3 years per term or equal to the remaining term of service as a Director, and must be selected for appointment by the Board of Directors. Members whose term has been completed, and thus retiring, will be eligible to be nominated for appointment to another term. There must be a minimum of 1 meeting of the Nomination and Compensation Committee per year or as reTXLUHG DQG DSSURSULDWH WR HIIHFWLYHO\ GLVFKDUJH LWV UHVSRQVLELOLWLHV DV GHÂżQHG LQ WKH FKDUWHU IRU 1RPLQDWLRQ DQG &RPSHQsation Committee, whereby written notices of Committee meetings together with the proposed agenda and supporting LQIRUPDWLRQ DUH WR EH VHQW WR PHPEHUV LQ DGYDQFH SULRU WR WKH VFKHGXOHG PHHWLQJ GDWH LQ RUGHU WR DOORZ VXIÂżFLHQW WRPH for members to review the topics to be considered, and reports of the activities of each Committee meeting are to be prepared and submitted to the Board. Responsibilities in selecting and nominating proposed appointees 1.

Determine and propose to the Board of Directors, for consideration and approval, policies and criteria for the VHOHFWLRQ DQG QRPLQDWLRQ RI TXDOLÂżHG SHUVRQV WKDW DUH FOHDUO\ GHÂżQHG ORJLFDO HTXLWDEOH DQG UHDVRQDEOH 2QFH approved by the Board, these policies and criteria will then also be submitted to the Shareholders meeting for consideration and approval.

Propose to the Board of Directors, for consideration and approval, policies and criteria for the selection and QRPLQDWLRQ RI TXDOLÂżHG SHUVRQV WR EH DSSRLQWHG DV WKH &(2 RI WKH &RPSDQ\ WKDW DUH FOHDUO\ GHÂżQHG ORJLFDO equitable and reasonable.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

137

CONTENTS 3.

Review and propose to the Board of Directors, for consideration and approval, policies and strategies relating to human resources that are considered appropriate for the operations of the Company.

6HOHFW DQG QRPLQDWH VXLWDEOH SHUVRQV ZLWK PRUDO SULQFLSOHV PRUDO SULQFLSOHV LQWHJULW\ DQG UHTXLUHG TXDOLÂżFDtions for consideration to be appointed as Directors and/or the CEO of the Company as the case may be.

Review the ratio by type, total number, and required experiences of the Directors to be appointed to the Board of Directors, as well as making recommendations in regard to the selection of those to be appointed to take up any vacant Directorships.

Ensure that an effective succession plan is in place â&#x20AC;&#x201C; especially in regard to the Directors and the CEO of the Company.

Determine the various terms and conditions in the Agreement of Employment/Appointment for the CEOof the Company, as well as undertake regular performance evaluation of the incumbent and/or propose a successor to that position as required.

Responsibilities in determining compensation 1.

Determine and propose to the Board of Directors, for consideration and approval, policies relating to and the types of compensation for Directors of the Company that are appropriate with the strategies and operations of WKH &RPSDQ\ WKDW DUH FOHDUO\ GHÂżQHG ORJLFDO HTXLWDEOH DQG UHDVRQDEOH 2QFH DSSURYHG E\ WKH %RDUG WKHVH policies and criteria will then also be submitted to the Shareholders meeting for consideration and approval.

Determine and propose to the Board of Directors, for consideration and approval, policies relating to and the types of compensation for the CEO of the Company that are appropriate with the strategies and operations of WKH &RPSDQ\ WKDW DUH FOHDUO\ GHÂżQHG ORJLFDO HTXLWDEOH DQG UHDVRQDEOH

Propose framework and means of implementation of remuneration schemes - for Directors on the main Board and on Board Committees established as well as for the CEO position - that are in monetary as well as other forms.

Review the both the compensation structure and payment procedures as well as the monetary amount to be paid that are appropriate to the current market environment as well as for the operations of the company and the performance outputs of the Directors and/or the CEO of the Company as the case may be.

Ensure and revise, as needed, the compensation plans for Directors and the CEO of the Company, so that they are appropriately and adequately compensated for the required roles and the responsibilities as well as accountability to the Company.

Determine the performance evaluation process for the Directors and the CEO of the Company for the purpose of facilitating a review of and revision to their compensation, taking into consideration their respective roles, responsibilities and associated risks including giving special emphasis to the creation, on their part, of Shareholders value in the long term.

Review the annual remuneration plan for Directors for proposal to the Shareholders Meeting for their consideration and approval.

INFORMATION DISCLOSURES 7KH %RDUG RI 'LUHFWRUV KDV D SROLF\ WR FRPPXQLFDWH DQG GLVFORVH DOO UHOHYDQW ERWK WKH ÂżQDQFLDO DQG QRQ ÂżQDQFLDO information relating to the operations and performance results of the Company that are accurate, truthful, complete and DGHTXDWH ERWK RQ D UHJXODU EDVLV DQG LQ D WLPHO\ PDQQHU 6XFK LQIRUPDWLRQ ZLOO UHĂ&#x20AC;HFW WKH DFWXDO RSHUDWLRQV DQG ÂżQDQFLDO status as well as the perceived future direction of the Company. T he Board of Directors is fully committed to ensure full transparent and strict compliance to all applicable laws as ZHOO DV UXOHV DQG UHJXODWLRQV UHODWLQJ WR WKH UHTXLUHG LQIRUPDWLRQ GLVFORVXUHV ZKHUHE\ D VSHFLÂżF JURXS ZLWKLQ WKH &RPpany will be established to be responsible for investor communications and relations, and for facilitating the dissemination of information to all investors and securities analysts on an equal basis and in an appropriate manner. Such information will also be made available via the Company website both in Thai and English. SHAREHOLDERS MEETINGS The Board of directors gives great importance to holding Shareholders Meetings and has a policy to afford all Shareholders, on an equal basis, the same convenience in being able to participate in such Shareholders Meetings and in being able to receive the same communications and information, as well as the opportunity to ask questions, express opinions and exercise the rights to votes in the Shareholders Meetings. It is the policy of the Company that the Board of Directors to arrange the preparation of the Companyâ&#x20AC;&#x2122;s Annual Report, as well as to present the operating performance results and prepared to propose/submit any important matters for consideration at the Annual General Shareholders Meeting in addition to requirement by law that all Shareholders must be able to participate in the decisions. Additionally, the Board will also arrange that all relevant information be communicated and disclosed to all Shareholders in a comprehensive, adequate and timely manner in order to facilitate any deci-

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ANNUAL REPORT 2012

CONTENTS sion to be made at the Shareholders Meetings, as well as will facilitate and actively support the exercise of their rights to vote in person or via their authorised proxy, together allowing Shareholders the opportunity to express their opinions, DVN TXHVWLRQV RU UHTXHVW DQ\ FODULÂżFDWLRQV ZKHUHE\ 'LUHFWRUV DWWHQGLQJ WKH PHHWLQJV DUH DOO UHVSRQVLEOH IRU UHVSRQGLQJ to such questions as required. The Board of Directors will also arrange to have minutes of the Shareholders Meetings be recorded and communicated to all Shareholders via the Company website as soon as possible but not later than 14 days after each Shareholders Meeting. INTERNAL CONTROLS SYSTEM AND RISKS MANAGEMENT The Board of Directors has arranged to have a comprehensive internal controls system be established â&#x20AC;&#x201C; coverLQJ DOO DVSHFWV RI WKH &RPSDQ\ QDPHO\ ÂżQDQFLDO RSHUDWLRQV FRPSOLDQFH WR DOO DSSOLFDEOH ODZV DQG UHOHYDQW UHJXODWLRQV and management of risks, together with an audit and review procedures, with effective checks and balances, in regard to the continuous protection and oversight of the investments made by Shareholders and the asset of the Company. 9DU\LQJ OHYHOV RI DSSURYDO DXWKRULW\ IRU 0DQDJHPHQW DQG VWDII KDYH DOVR EH GHÂżQHG DQG SXW LQ SODFH DV ZHOO DV ZULWWHQ UXOHV UHJXODWLRQV DQG UHJXODWLRQV LQ GLVFKDUJLQJ WKHLU UHVSRQVLELOLWLHV KDYH EHHQ GHÂżQHG DQG SXEOLVKHG +HUH LV DQ LQWHUnal audit group responsible for reviewing the activities of all operational and support Departments within the Company to ensure that they are in accordance with those agreed to as well as to assess the internal controls within each respective Department. Further, the Board ensures that the internal audit group is completely independent and fully able to discharge its audit and review role within the established checks and balance framework, whereby it is required to submit their reports DQG ÂżQGLQJV GLUHFWO\ WR WKH %RDUG RQ D UHJXODU VFKHGXOHG EDVLV The Director of the Internal Audit will serve as the Secretary of the Audit Committee, responsible for arranging the meetings of the Committee to take place as well as to coordinate that required and relevant reports of the Audit Committee be prepared and submitted to the Board of Directors, investors, Shareholders and the Stock Exchange of Thailand. The Secretary of the Audit Committee is required to attend all meetings of the Committee but is not entitled to a vote, but can, however propose the appointment of an assistant to the Secretary. Incase of appointment, demotion and relation, The Director of the Internal Audit must be approved by Audit Committee. As at 31 December 2012, totaling number of Internal Audit was 12 persons. Biography of Director of the Internal Audit, detail as follow Name - Surname

Piphit Yengyugsakol

Position

Director of Internal Audit

Age

48 years

Education and Training

- Bachelor of Accountancy, Ramkhamhaeng University - Bachelor of Laws, Thammasat University

&HUWLÂżHG 3XEOLF $FFRXQWDQW &3$ )HGHUDWLRQ RI $FFRXQWLQJ 3URIHVVLRQV - Tax Auditor, Revenue department - Attorney, Lawyers Council

Experience

&HUWLÂżHG 3URIHVVLRQDO ,QWHUQDO $XGLW RI 7KDLODQG &3,$7 7KH ,QVWLWXWH RI Internal Auditors of Thailand 1989 â&#x20AC;&#x201C; 2002 Audit Manager, Mitr Pracha Audit and Law

BUSINESS ETHICS ,Q XQGHUWDNLQJ WR RSHUDWH WKH &RPSDQ\ DQG EXVLQHVV IRU WKH JUHDWHVW EHQHÂżW WR 6KDUHKROGHUV WKH %RDUG RI 'Lrectors has a policy to give great and equal importance between the successful achievement of targeted results as well as to the means and manner of achieving them. 7KHUHIRUH LQ DFFRUGDQFH WR VXFK DV SROLF\ WKH %RDUG KDV GHÂżQHG D VHW RI EHKDYLRXU IRU 'LUHFWRUV 0DQDJHPHQW and staff to observed and adhere to in the course of their duties and have compiled them in a â&#x20AC;&#x153;Code of Ethics and Conduct â&#x20AC;&#x153;, so as a facilitate a clear and full understanding by all Directors, members of Management team and employees of the Company of the expected behaviour on their part towards the staff, Shareholders, customers, competitors, as well as society and communities and the environment in which the Company operates. Further, the Board has also put in place procedure and process to oversee and ensure that these expected behaviours are fully and strictly complied to by all parties.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

139

CONTENTS

DIRECTOR BIOGRAPHY As at 31 December 2012, Board of Director composed of 11 persons, details are as follow

Ĺ&#x2122; 0U 6XWKLNLDWL &KLUDWKLYDW

Position Age % Shareholding in the Company Education

x x x

x x x x

Completed Program from Thai Institute of Directors (IOD) Experience

x x

Other Current Positions Listed Company

Non Listed Company

x x

140

x x ANNUAL REPORT 2012

Chairman of the Board Ĺ&#x;Ĺ&#x2DC; years Ĺ&#x203A;Ĺ&#x; Ĺ&#x2122;Ĺ&#x161;Ĺ&#x203A; Ĺ&#x17E;Ĺ&#x153;Ĺ&#x17E; shares or Ĺ&#x161; Ĺ&#x;Ĺ?% of paid up shares Honorary PhD in Business Administration Program, Dhurakij Pundit University Honorary PhD in Hotel and Tourism Studies, Kasem Bundit University Honorary PhD in Mass Communications, Ramkamhaeng University M.A. (Political Science), Ramkamhaeng University B.A. (Political Science), Ramkamhaeng University Diploma in Mechanical Engineering, South West Essex Technical Collage, U.K. National Defense College, The Joint State - Private Sectors Course, Class 1 National Defense College, The Modern Management Course, Class 1 Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ , Director Accreditation Program (DAP) Assistant Manager, Central Trading Co., Ltd. Assistant General Manager, Central Department Store Co., Ltd. Heads of Political Science Association, Ramkamhaeng University and Committee of Ramkamhaeng University Council The Founder and Head of Thai Retails Association, Thai Retails Association Advisor to The Minister of Tourism and Sports, Ministry of Tourism and Sports One of the Founding Members importer and owner in usage of barcodes in Thailand, Central Ladprao Shopping Complex project Chairman Executive Committee, Post Publishing Director, Central Pattana Plc. Vice Chairman of Supervisory Board, Central Group of Companies Co., Ltd. Director, Post International Media Co., Ltd. Director, Post â&#x20AC;&#x201C; ACP Co., Ltd.

CONTENTS

Director, Post â&#x20AC;&#x201C; IM Plus Co., Ltd. Director, Thai Tourism Industry Association None

Ĺ? Ĺ?

Vice Chairman Ĺ&#x;Ĺ&#x161; years Ĺ?Ĺ&#x2DC; Ĺ&#x153;Ĺ&#x153;Ĺ Ĺ&#x;Ĺ&#x;Ĺ&#x203A; shares or 3 74% of paid up shares

x x

Other companies which materially compete directly or have related business with the Company (possible conflict of interest) Meeting Attendance in 2012 The Board of Directorâ&#x20AC;&#x2122;s meetings meetings

Ĺ&#x161; 0U 6XWKLFKDL &KLUDWKLYDW

Position Age % Shareholding in the Company Education

x x

Honorary Doctor of Business Administration Program, Chiangrai Rajphat University Diploma in Civil Engineering Kingston College of Technology, U.K. Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x17E;, Director Accreditation Program (DAP) Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x2DC;, Role of Chairman Program (RCP) Vice Chairman, Chief Financial Officer, Central Group of Companies Co., Ltd. Assistant General Manager, Central Department Store Co., Ltd. Manager, Central Department Store-Silom Branch Assistant Manager, Central Department Store-Silom Branch Plc. Chairman, Central Pattana Pcl. Chairman of Supervisory Board, Central Group of Companies Co., Ltd. None

Ĺ? Ĺ?

Completed Program from Thai Institute of Directors (IOD) Experience

x x

x x x

Other Current Positions Listed Company Non Listed Company Other companies which materially compete directly or have related business with the Company (possible conflict of interest) Meeting Attendance in 2012 The Board of Directorâ&#x20AC;&#x2122;s meetings meetings

x x

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

141

CONTENTS

ś 0U %KLVLW .XVODVD\DQRQ

Position

x x x

Age % Shareholding in the Company Education

x x

Experience

x x x

Other Current Positions Listed Company Non Listed Company

x x x x

Independent Director Audit Committee Chairman Nomination and Compensation Committee Member şř years None Master degree of Engineering, New South Wale University, Australia Bachelor degree of Engineering, The University of Sydney, Australia National Defense College, The Joint State - Private Sectors Course, Class 8 Director, Committee of Mahidol University Advisor of Tourism Council of Thailand Advisor of Dean, Faculty of Science, Mahidol University -None Chairman, Flying Orange Co., Ltd. Vice Chairman, Stang Holding Co., Ltd. Director, International Drug Development Co., Ltd. None

Other companies which x materially compete directly or have related business with the Company (possible conflict of interest) Meeting Attendance in 2012 The Board of Director’s x ŝ ŝ meetings meetings x Ş Ş Audit Committee’s meeting x Ŝ Ŝ Nomination and Compensation Committee’s meeting Information regarding to appointed The relationship in the Company, Subsidiary, Associated Company or other Independent director conflicted business entity in present of during the past Ś years - 1RW being a director who takes part in the management of the Company, employee, staff member, or advisor receiving a regular salary - 1RW being a professional service provider (i.e. auditor or legal advisory) 1 4 2 ANNUAL REPORT 2012

CONTENTS

- 1RW having business relationship significantly in a way that may impact the performing task independently (i.e.buy – sell materials/ products/ service or financial support)

'U &KDUQYLWD\D 6XYDUQDSXQ\D

Position

x x x

Age % Shareholding in the Company Education

x x

Honorary Doctor of Private Law, Ghent University, France Diploma in American Laws, Wisconsin University, USA Bachelor degree of Law, Thammasat University ŚŘŘŝ, Audit Committee Program (ACP), Director Accreditation Program (DAP) Director and Lawyer, Koodare Brothers Co., Ltd. Lawyer, Dr. Ukrit Mongkolnavin Law Office -None Director, DLA Piper (Thailand) Co., Ltd. Director, Kentop (Thailand) Ltd. Director, CS & CV Co., Ltd. Director, Hyundai Merchant Marine (Thailand) Co., Ltd. None

ŝ ŝ

Ş Ş Ŝ Ŝ

x x x

Completed Program from Thai Institute of Directors (IOD) Experience

x x

Other Current Positions Listed Company Non Listed Company

x x x x x

Other companies which materially compete directly or have related business with the Company (possible conflict of interest) Meeting Attendance in 2012 The Board of Director’s meetings meetings Audit Committee’s meeting Nomination and Compensation Committee’s meetings meeting

Independent Director Nomination and Compensation Committee Chairman Audit Committee Member ŞŘ years None

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

143

CONTENTS

Information regarding to appointed The relationship in the Company, Subsidiary, Associated Company or other Independent director conflicted business entity in present of during the past Ś years - 1RW being a director who takes part in the management of the Company, employee, staff member, or advisor receiving a regular salary - 1RW being a professional service provider (i.e. auditor or legal advisory) - 1RW having business relationship significantly in a way that may impact the performing task independently (i.e.buy – sell materials/ products/ service or financial support) ŝ

0U 9LFKLHQ 7HMDSDLEXO Position

x x

Age % Shareholding in the Company Education

x x

Completed Program from Thai Institute of Directors (IOD) Experience

x x x x x x x

Other Current Positions Listed Company Non Listed Company

144

x x x x x

ANNUAL REPORT 2012

Independent Director Audit Committee Member Nomination and Compensation Committee Member şś years None B.A. (Business Administration), Boston University, USA National Defense College, The Joint State - Private Sectors Course, Class 2 King Prajadhipok's Institute, Class ř Diploma in Capital Market Academy, Class řŘ ŚŘŘŞ, Finance for Non-Finance Directors (FND) ŚŘŘŜ, Director Accreditation Program (DAP) Vice Chairman, Srinakorn Bank Ltd. Senator Advisor, Thailand Trade Representative (Dr. kantathi suphamongkhon) Advisor, Chairman of Senator (General Teeradej Meepien) Honorary Advisor, Thai Chamber of Commerce and Concil of Thailand Chambers Honorary Advisor, Thai Chamber of Commerce University Chairman, Funding Management Committee of Huachiew Chalermprakiet University Chairman, Tokyo Marine Srimuang Insurance Co., Ltd. Director, Asia Fiber Plc. Chairman, Phatra Sathit Co. Ltd. Chairman, Film Mania Plus Co., Ltd. Director, Tejapaibul Co., Ltd. Director, Utah Capital Co., Ltd.

CONTENTS

x x x x x

Director, CB Richard Ellis(Thailand) Co., Ltd. Director, Thai Housing Development Co., Ltd. Director, Worawat Co., Ltd. Director, Sedthakarn Co., Ltd. Director, Pracha Nu Khro Co., Ltd. None

Other companies which x materially compete directly or have related business with the Company (possible conflict of interest) Meeting Attendance in 2012 The Board of Director’s x ŝ ŝ meetings meetings Audit Committee’s meeting x Ŝ Ŝ x Ŝ Ŝ Nomination and Compensation Committee’s meeting Mr. Vichien Tejapaibul was appointed on May 14, 2012 Information regarding to appointed The relationship in the Company, Subsidiary, Associated Company or other Independent director conflicted business entity in present of during the past Ś years - 1RW being a director who takes part in the management of the Company, employee, staff member, or advisor receiving a regular salary - 1RW being a professional service provider (i.e. auditor or legal advisory) - 1RW having business relationship significantly in a way that may impact the performing task independently (i.e.buy – sell materials/ products/ service or financial support)

Ş 0U .DQFKLW %XQDMLQGD

Position

x x x

Age % Shareholding in the Company Education

Independent Director Audit Committee Member Ŝŝ years None Kellogg Graduate School Management Northwestern University Exchange Programme, Sasin Graduate Institute of Business Administration, Chulalongkorn University MBA (Finance and International Business) Sasin Graduate Institute of Business Administration, Chulalongkorn University CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

145

CONTENTS

Completed Program from Thai Institute of Directors (IOD)

Bachelor degree of Civil Engineering Chulalongkorn University ŚŘŘš, Director Luncheon Briefing (DLB), Monitoring of the Quality of Financial Reporting (MFR), Monitoring the Internal Audit Function (MIA), Monitoring the System of Internal Control and Risk Management (MIR) ŚŘŘŞ, Audit Committee Program (ACP) ŚŘŘŝ, Director Accreditation Program (DAP) ŚŘŘś, Director Certification Program (DCP) Deputy Managing Director/Private Equity (An affiliate of Lombard Investment Inc.) Senior Vice President, Heading the Finance Institutions group and the Mergers and Acquistion practice, Merril Lynch - Phatara Securities Co., Ltd. (Currently: Phatara Securities Co., Ltd.) Audit Committee Member, True Vision Plc. Plc. Director, Central Pattana Pcl. Director, Robinson Department Store Plc. Alternate Director, Asian Corporate Governance Association Limited, Hong Kong None

Experience

Other Current Positions Listed Company

Other companies which x materially compete directly or have related business with the Company (possible conflict of interest) Meeting Attendance in 2012 The Board of Director’s x ŝ ŝ meetings Audit Committee’s meeting x Ŝ Ŝ Mr. Kanchit Bunajinda was appointed on May 14, 2012 Information regarding to appointed The relationship in the Company, Subsidiary, Associated Company or other Independent director conflicted business entity in present of during the past Ś years - 1RW being a director who takes part in the management of the Company, employee, staff member, or advisor receiving a regular salary - 1RW being a professional service provider (i.e. auditor or legal advisory) - 1RW having business relationship significantly in a way that may impact the performing task independently (i.e.buy – sell materials/ products/ service or financial support)

x x x

x x

Non Listed Company

146

ANNUAL REPORT 2012

CONTENTS

Ĺ&#x; 0U 6XGKLWKDP &KLUDWKLYDW

Position

Age % Shareholding in the Company Education

x x

Completed Program from Thai Institute of Directors (IOD) Experience

Ĺ? Ĺ?

Ĺ&#x153; Ĺ&#x153;

x x x

Non Listed Company

x x x

MBA (Operations Research), Lona University, USA Bachelor degree of Electrical Engineering, University of Maryland (College Park), USA National Defense College, The Joint State - Private Sectors Course, Class 13 Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x203A;, Director Certification Program (DCP) Director, The Thai Chamber of Commerce President, Rotary Club Bangkhen Chairman, Coffee Partners Co., Ltd. (Starbucks-Thailand) President and Founder, Thai Shopping Center Association Managing Director and Chief Executive Officer, Central Pattana Pcl. Advisory, The Ministry of Commerce Plc. Director, Central Pattana Pcl. Vice Chairman, Robinson Department Store Plc. Plc. Chairman, Jasmine International Pcl. Executive Chairman, Central Group of Companies Co., Ltd. Chairman, Earth Care (Thailand) Co., Ltd. Director, The Vintage Club Co., Ltd. None

Other Current Positions Listed Company

Director Nomination and Compensation Committee Member Ĺ&#x17E;Ĺ? years Ĺ&#x2122;Ĺ&#x203A; ĹĄĹ&#x;Ĺ&#x; Ĺ&#x;Ĺ?Ĺ&#x153; shares or Ĺ&#x2122; Ĺ&#x2DC;Ĺ&#x153; % of paid up shares

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

147

CONTENTS

Ĺ 0U 3ULQ &KLUDWKLYDW

Position

x x

Age % Shareholding in the Company Education

Completed Program from Thai Institute of Directors (IOD)

Experience

x x x x x x

Other Current Positions Listed Company

148

x x x

ANNUAL REPORT 2012

Director Nomination and Compensation Committee Member Ĺ?Ĺ&#x2DC; yesrs Ĺ&#x203A;Ĺ Ĺ&#x2DC;Ĺ&#x;Ĺ&#x153; Ĺ Ĺ?Ĺ&#x153; shares or Ĺ&#x161; Ĺ Ĺ&#x161;% of paid up shares MBA (Business Management) Sasin Graduate Institute of Business Administration, Chulalongkorn University B.A. (Accounting) Skidmore College, USA National Defense College, The Joint State - Private Sectors Course, class 22 Operational Pyschology Programme for directors Class 73 at The Psychology Defense Institute Public Economy Management Programme for Senior Management, King Prajadhipok's Institute, Class 4 Diploma in Capital Market Academy, Class Ĺ&#x2122; Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2122;Ĺ&#x2DC;, Advanced Audit Committee Program Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;ĹĄ, Monitoring Fraud Risk Management (MFM), Monitoring of Quality of Financial Reporting (MFR) Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ , The Program of Senior Executive on Justice Administration (Class 13) Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x;, Monitoring the Internal Audit Function (MIA) Monitoring the System of Internal Control and Risk Management (MIR) Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x17E;, Chief Financial Officer Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ?, Director Accreditation Program (DAP), Audit Committee Program (ACP), The Role of Chairman (RCP) Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x2DC;, Director Certification Program Director, Thanamitr Factoring Plc. Director, Indra Insurance Plc. Executive director, Interlife John Hancock Life Insurance Plc. Director, General Guard Service Co., Ltd. Executive director, Central Department Store Co., Ltd. Investment Banking, Thanachart Securities Plc. Chairman of Audit Committee, Bualuang Securities Plc. Plc. Director, Central Pattana Pcl. Director, Robinson Department Store Plc.

CONTENTS

Non Listed Company

Executive Director, Central Group of Companies Co., Ltd. Director, Central Department Store Co., Ltd. Director, Central Inter Pattana Co., Ltd. Director, Central Retail Corporation Ltd. Director, Central Food Retail Co., Ltd. Director, Central Marketing Group Co., Ltd. Director, The Vintage Club Co., Ltd. None

4 Ĺ?

Ĺ&#x153; Ĺ&#x153;

Director Ĺ&#x17E;Ĺ&#x; years Ĺ&#x2122;Ĺ&#x2122; Ĺ?Ĺ&#x;Ĺ&#x161; Ĺ&#x2DC;Ĺ?Ĺ&#x153; shares or Ĺ&#x2DC; Ĺ Ĺ&#x17E;% of paid up shares

x x x x x x x

ĹĄ 0U 6XWKLFKDUW &KLUDWKLYDW

Position Age % Shareholding in the Company Education Completed Program from Thai Institute of Directors (IOD)

Experience

x x

B.A. (Accounting), St.Joseph's College, USA x National Defense College, The Joint State - Private Sectors Course, Class 11 x Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x153;, Director Accreditation Program (DAP) x Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x203A;, Finance for Non-Finance Directors (FND), Board and CEO Assessment x 2000, Role Â&#x17E;Â¸ 2000, Roleof ofChairman Program Chairman Program(RCP) (RCP) x President and Chief Executive Officer, Central Retail Corporation Ltd. x Chairman, Big C Super Center Plc. x President, Thai Retailers Association x Chairman, Committee of Retail Business, Thai Chamber of Commerce x Advisor, Board of Trade of Thailand x Director, Treasurer, Foundation for Environment Preservation x

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

149

CONTENTS

Other Current Positions Listed Company Non Listed Company

Director, Central Pattana Plc. Pcl. Director of Supervisory Board, Central Group of Companies Co., Ltd. Director, Central Inter Pattana Co., Ltd. Director, Central Department Store Co., Ltd. Director, The Vintage Club Co., Ltd. Director, Tiang Chirathivat Foundation None

Ĺ&#x153; Ĺ?

Director Ĺ&#x17E;Ĺ&#x; years Ĺ&#x161;Ĺ&#x161; Ĺ&#x2DC;Ĺ?Ĺ? Ĺ&#x2DC;ĹĄĹ? shares or Ĺ&#x2122; Ĺ&#x17E;Ĺ&#x203A;% of paid up shares)

x x x x x x

Ĺ&#x2122;Ĺ&#x2DC; 0U 6XGKLVDN &KLUDWKLYDW

Position Age % Shareholding in the Company Education Completed Program from Thai Institute of Directors (IOD) Experience

x x

x x x

Other Current Positions Listed Company

x x

Non Listed Company

Other companies which materially compete directly or have related business with the Company (possible conflict of 1 5 0 ANNUAL REPORT 2012

x x x x x x

B.A. (Mathematic), St. John Fisher College, USA Ĺ&#x161;Ĺ&#x2DC;Ĺ&#x2DC;Ĺ&#x;, Director Accreditation Program (DAP), Director Certification Program (DCP) President, Central Marketing Group Co., Ltd. Managing Director, Central Garment Factory Co., Ltd. Managing Director, Prin Inter Trade Co., Ltd. Chairman, Robinson Department Store Plc. Director, Central Pattana Pcl. Plc. Director of Supervisory Board, Central Group of Companies Co., Ltd. Director, Central Garment Factory Co., Ltd. Director, Central Retail Corporation Ltd. Director, Harng Chiangmai Department Store Ltd. Director, Central Trading Co., Ltd. None

CONTENTS

Company (possible conflict of interest) Meeting Attendance in 2012 The Board of Directorâ&#x20AC;&#x2122;s x 5 Ĺ? meetings meetings

Ĺ&#x2122; 0U 7KLUD\XWK &KLUDWKLYDO

Position Age % Shareholding in the Company Education

x x x

x x

Completed Program from Thai Institute of Directors (IOD) Experience

x x x x x x

Chief Executive Officer (CEO) Ĺ&#x153;Ĺ&#x; years Ĺ? Ĺ Ĺ&#x;Ĺ? Ĺ?Ĺ&#x2DC;Ĺ&#x17E; shares or Ĺ&#x2DC; Ĺ&#x153;Ĺ&#x153;% of paid up shares Master degree of Food, Hotel and Tourism Management, Rochester Institute of Technology, Rochester, USA Bachelor degree of Political Science, Chulalongkorn University 2011, The Program of Senior Executive on Justice Administration (Class 15) 2008, TLCA Executive Development Program (Class 1) 2003, Program for Management Development, Executive Education Harvard Business School 1997, Finance for Management, Chulalongkorn University 1996, Mini MBA Program, Chulalongkorn University 1993, Psychology Institute, National Defense College 2002, Directors Certification of Program (DCP) Senior Vice President - Project Management Vice President - Project Management Director of Project Management and Procurement Promotion & New project Manager Food and Beverage Coordinator, Centara Hotels & Resorts Assistant Manager, Marriott Hotel & Resort, Park Ridge, NJ, USA

Other Current Positions materially compete directly or have related business with the Company (possible conflict of interest) Meeting Attendance in 2012 x Ĺ&#x203A; Ĺ&#x203A; * The Board of Directorâ&#x20AC;&#x2122;s meetings meetings Mr.Thirayuth Chirathival was appointed on April 2, 2012

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

151

CONTENTS

SHAREHOLDER The majority of Shareholders The top 10 of majority shareholders as of 28 December 2012, as follows Shareholder

Number of Shares

Tiang Chirathivat Co.,Ltd

67,523,190

5.00

2. 3. 4.

Mrs. Nutteera Boonsri Mr. Suthichai Chirathivat Mr. Suthiluk Chirathivat

53,000,000 50,448,773 48,793,148

3.93 3.74 3.61

Mr. Suthiporn Chirathivat

45,160,040

3.35

Khunying Suchitra Mongkolkiti

39,989,694

2.96

Mr. Prin Chirathivat

38,074,854

2.82

Mr. Suthikiati Chirathivat

37,123,646

2.75

Mr.Tos Chirathivat

36,182,192

2.68

36,129,511

2.68

10. Mr. Niti Ostanukrau

The Chirathivat Group holds a total of 67.63% of the paid-up share capital of CENTEL Directors and executives holding CENTEL shares Directors and executives holding CENTEL shares as at 28 December 2012, as follows Shareholder

Number of Shares

Mr. Suthichai Chirathivat

50,448,773

3.74

2. 3. 4. 5. 6. 7.

Mr. Prin Chirathivat Mr. Suthikiati Chirathivat Mr. Sudhisak Chirathivat Mr. Sudhitham Chirathivat Mr. Suthichart Chirathivat Mrs. Supatra Chirathivat

38,074,854 37,123,646 22,055,095 13,977,754 11,572,054 10,326,576

2.82 2.75 1.63 1.04 0.86 0.76

Mr. Thirayuth Chirathivat

Mr. Ronnachit Mahattanapreut

5,875,506

0.44

158,831

0.01

Dividend payment policy 'LYLGHQG SD\PHQW SROLF\ RI WKH &RPSDQ\ DQG LWV VXEVLGLDULHV DUH QRW OHVV WKDQ RI QHW SUR多W XQOHVV WKH company has the business expansion.

152

ANNUAL REPORT 2012

CONTENTS

REMUNERATION OF THE DIRECTORS AND MANAGEMENT &HQWUDO 3OD]D +RWHO 3XEOLF &RPSDQ\ /LPLWHG VSHFLÂżHV SROLF\ IRU IDLU DQG UHDVRQDEOH UHPXQHUDWLRQ RI directors, which has been considered by The Nomination and Compensation Committee. The Committee takes into consideration of role and responsibilities, the Companyâ&#x20AC;&#x2122;s performance and be comparable to the same or related type of business which is compatible with the Company. The budget for the year 2012 was not exceeding amount of Baht 7,000,000, was approved by the Annual General Meeting of Shareholders, as follows: Monetary Remuneration Type of Remuneration Amount (Baht) 1. 4XDUWHUO\ 5HWDLQHU %DKW 4XDUWHU

Â&#x2021; Chairman 55,000 Â&#x2021; Director 42,000 2. Meeting Fee for Board of Directors (Baht/Meeting) Â&#x2021; Chairman 27,500 Â&#x2021; Director 23,500 3. Meeting Fee for Audit Committee (Baht/Meeting) Â&#x2021; Chairman of Audit Committee 27,500 Â&#x2021; Audit Committee Member 25,000 4. Meeting Fee for Nomination and Compensation Committee (Baht/Meeting) Â&#x2021; Chairman of Nomination and Compensation Committee 25,000 Â&#x2021; Nomination and Compensation Committee Member 20,000 Total remuneration of directors in form of director fees and meeting fees paid by Central Plaza Hotel Public Company Limited was amount of Baht 3,976,500. The details of the meeting attendance and remuneration in 2012 as follows:

Meeting Attendance (Meeting) Director

Position

Board of Director

Audit Committee

Nomination And Compensation Committee

Total (Baht)

1. Mr. Suthikiati Chirathivat

Chairman of the Board

5/5

350,000

2. Mr. Suthichai Chirathivat

Vice Chairman

5/5

277,500

3. Mr. Bhisit Kuslasayanon

Independent Director

5/5

516,000

Audit Committee Chairman

6/6

Nomination and Compensation Committee Member 4. Mr. Chanvitaya Suvarnapunya

Independent Director

4/4 5/5

518,500

Nomination and Compensation Committee Chairman

4/4

Audit Committee Member 5. Mr. Vichate Tantiwanich

Independent Director

6/6 2/2

Audit Committee Member 6. Mr. Vichien Tejapaibul 2

Independent Director

105,000 1/2

5/5

Audit Committee Member

453,500 4/4

Nomination and Compensation Committee Member 7. Mr. Kanchit Bunajinda 2

Independent Director Audit Committee Member

4/4 5/5

377,500 4/4

Remark 1.) Mr. Vichate Tantiwanich resigned from Independent Director and Audit Committee Chairman on April 30, 2012 2.) Mr. Vichien Tejapaibul and Mr. Kanchit Bunajinda were appointed as Independent Director and Audit Committee Member on May 14, 2012. 3.) Mr. Thirayuth Chirathivat ZDV DSSRLQWHG DV &KLHI ([HFXWLYH 2IÂżFHU RQ $SULO E\ UHSODFHPHQW RI 0U *HUG .XUW 6WHHE CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

153

CONTENTS

Meeting Attendance (Meeting) Director

8. Mr. Sudhitham Chirathivat

Position

Director

Board of Director

Audit Committee

5/5

Nomination and Compensation Committee Member 9. Mr. Prin Chirathivat

Director

Nomination And Compensation Committee

Total (Baht) 353,500

4/4 4/5

Nomination and Compensation Committee Member

330,000 4/4

10. Mr. Suthichart Chirathivat

Director

4/5

254,000

11. Mr. Sudhisak Chirathivat

Director

5/5

277,500

12. Mr. Thirayuth Chirathivat 3

&KLHI ([HFXWLYH 2IÂżFHU

3/3

126,000

13. Mr.Gerd Kurt Steeb 3

&KLHI ([HFXWLYH 2IÂżFHU

2/2

37,500 3,976,500

Management Remuneration: The remunerations amount of Baht 33,364,043 was paid to 5 managements in term RI VDODULHV ERQXV DQG RWKHU EHQHÂżWV Other Remunerations (a) Meal allowance The company provides meal allowanceâ&#x20AC;&#x2122;s restaurant to Board of Director the amount of Baht 40,000. In 2012, The Board of Director consumed at the actual amount of Baht 395,160. (b) Provident Fund The Company automatically provides â&#x20AC;&#x153;Provident Fundâ&#x20AC;? to all Thai employees who completed 6 months period of working. By this mean, the Company will deduct from the employeeâ&#x20AC;&#x2122;s payroll and the company contributes to the Fund at the same amount.

AUDITORâ&#x20AC;&#x2122;S FEE 1. Audit fee $XGLW IHH RI WKH &RPSDQ\ DQG LWV VXEVLGLDULHV LQ WKLV \HDU KDG EHHQ SDLG IRU DXGLW ÂżUP WKDW WKH DXGLWRU ZRUN IRU SHUVRQ RU FRPSDQLHV ZKR UHODWHG WR WKH DXGLWRU DQG DXGLW ÂżUP DPRXQWHG WR %DKW 2. Non-Audit fee In 2012, The Companyâ&#x20AC;&#x2122;s subsidiary had paid professional fees in respect of tax services to the auditor amounted to Baht 750,000.

154

ANNUAL REPORT 2012

CONTENTS

GOOD CORPORATE GOVERNANCE The Board of Directors of Central Plaza Hotel Public Company Limited realized the importance of good corporate governance, leading to proper practices across the organization to support the Companyâ&#x20AC;&#x2122;s competitive SRWHQWLDO LQ ERWK VKRUW DQG ORQJ WHUPV 0RUHRYHU JRRG FRUSRUDWH JRYHUQDQFH ZRXOG EROVWHU WKH FRQÂżGHQFH RI LQYHVWRUV ÂżQDQFLDO LQVWLWXWLRQ EXVLQHVV DOOLDQFH DQG DOO VWDNHKROGHUV OHDGLQJ WR YDOXH DSSUHFLDWLRQ IRU VKDUHKROGHUV DQG EDODQFHG PXWXDO EHQHÂżWV DPRQJ DOO UHOHYDQW SDUWLHV 7KH %RDUG KDV DSSURYHG WKH JRRG FRUSRUDWH JRYHUQDQFH guidelines for all the Companyâ&#x20AC;&#x2122;s business operations and for its directors, management and employees. The Board constantly updates the principles and operational guidelines. Central Plaza Hotel Public Company Limited announces the policy by posted on the Companyâ&#x20AC;&#x2122;s website http://www.centarahotelsresorts.com as well as communicates good practices through internal media including of announcement boards. The Companyâ&#x20AC;&#x2122;s sections of good corporate governance areas following Section 1: Section 2: Section 3: Section 4: Section 5:

Rights of Shareholders Equitable Treatment of Shareholders Roles of Stakeholders Disclosure and Transparency Board Responsibilities

1.Rights of Shareholders The Company acknowledges the importance of the rights of Shareholders, and have incorporated such considerations as part of our policies on Good Corporate Governance, whereby various initiatives have been set up LQ RUGHU WR FUHDWH FRQÂżGHQFH LQ WKH PLQGV RI RXU 6KDUHKROGHUV WKDW WKHLU EDVLF ULJKWV ZLOO EH SURWHFWHG LQ VXFK DUHDV DV GLVWULEXWLRQ DQG UHFHLSW RI VXIÂżFLHQW DQG UHOHYDQW WKH &RPSDQ\ÂśV LQIRUPDWLRQ SDUWLFLSDWLRQ LQ WKH 6KDUHKROGHUV Meetings and the opportunity to exercise their rights to vote on important issues concerning the Companyâ&#x20AC;&#x2122;s operations, namely: Â&#x2021; The company provides shareholders with basic rights and fair treatment in protecting their rights to hold shares, which include the right to buy, sell, and transfer shares; the right to receive clear and accurate LQIRUPDWLRQ WKH ULJKW WR DWWHQG VKDUHKROGHUVÂś PHHWLQJV DQG YRWH IRU WKH DSSURYDO RI VLJQLÂżFDQW WUDQVDFWLRQV WKH ULJKW WR HOHFW WKH GLUHFWRU E\ DQ LQGLYLGXDO WKH ULJKW WR Âż[ WKH UHPXQHUDWLRQ IRU WKH %RDUG RI 'LUHFWRUV the right to appoint external auditors and decide their fees; the right to receive the dividend. Â&#x2021;

Â&#x2021;

The Company authorised the Thailand Securities Depository Co., Ltd. who acts as the Shares Registrar for the Company to distribute all notices of invitations to Shareholders to attend the Shareholders Meeting at least 9 days prior to the date of the Shareholders meeting. The notice of invitation to attend the Shareholders Meeting and associated documents that are sent out in advance to all Shareholders include details for the conduct of Meeting, the Agenda Items due for consideration as well as an relevant supporting documents and data, the opinions of the Board on each respective Agenda Item to be considered, and a map showing the location and venue of the Shareholders Meeting. The notice of invitation to attend the Shareholders Meeting is also posted on the Company website (http:// www.centarahotelsresorts.com) 30 days prior to the date of the Shareholders meeting; and the Minutes of the Shareholders Meeting, which was held in 2012 is also posted on the website 14 days after the Meeting takes place. The Company also allows those Shareholders who arrive late after the start of the Meeting to be able to make their opinions known and to cast their votes on any Agenda Items that have yet to be considered and voted on. At the Shareholderâ&#x20AC;&#x2122;s Meeting, Company Directors attending as well as all the Chairman of the various Board &RPPLWWHHV ZKR ZHUH DYDLODEOH WR UHVSRQG WR DQ\ TXHVWLRQV IURP WKH Ă&#x20AC;RRU Âą DV WKH $*0 &KDLUPDQ DOORZHG all shareholders attending the Meeting equally the opportunity to check on the operations of the Company, to ask questions, to make comments. At the beginning of the AGM, the Chairman also explained to all the CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

155

CONTENTS

Shareholders the procedure to be used in casting and counting their votes, which enable the counting of votes in an effective and transparent manner. Further, comprehensive minutes of the discussions were also taken at these meetings and they were open to monitoring by the Shareholders. 2. Equitable Treatment of Shareholders The Company attached great importance to giving fair and equal treatment to all Shareholders alike, namely: 1. The Company allows Shareholders to propose any Agenda Items for consideration, prior to the Meeting being held â&#x20AC;&#x201C; which fact is clearly announced, in advance of the Meeting, via the various communications channels of the SET; whereby the Company also announces clearly (on its website) in advance of the meeting the process as well as criteria used in selecting any proposed item to be included in the Meetingsâ&#x20AC;&#x2122; RIÂżFLDO $JHQGD 2. The Company allows Shareholders the opportunity to nominate for consideration any person(s) as a Director RI WKH &RPSDQ\ ZKHUHE\ WKH QRPLQHH V PXVW KDYH DOO WKH TXDOLÂżFDWLRQV WKDW FRQWDLQHG LQ WKH Âľ6XPPDU\

RI 4XDOLÂżFDWLRQV RI D &RPSDQ\ 'LUHFWRUÂś GRFXPHQW VR WKDW WKH &RPSDQ\ PD\ WKHQ SURFHHG WR FRQVLGHU such nominee(s) in accordance with the selections procedures that are undertaken by the Selections Committee. As such, the Company has also made announcements throughout the various communications channels of the SET as well as posted on the Company website, prior to the Annual General Shareholders Meeting, the announcement for accepting nominations and the various relevant criteria to be used as well as the procedures to be observed. During the AGM the selection of any nominees for Directors are subject to a voting process. At the Shareholders Meeting, consideration of all the Agenda Items is made in sequence according the notice of the Meeting that are sent out in advance; and it is a policy that no extra Agenda Items can be added for consideration without any prior notice being made or without any relevant information being given out in advance to all Shareholders (so that they may have an opportunity to study and learn any details about the proposed Agenda Item before being asked to make up their minds). The Company advises all Shareholders the names of all independent Directors on the Power of Attorney forms, whereby the format of which enables Shareholders who cannot attend in person to (a) actually SUH GHWHUPLQH WKH ZD\ KH VKH ZLVKHV WR FDVW D YRWH IRU DQ\ VSHFLÂżF $JHQGD ,WHP LI KH VKH VR ZLVKHV DQG (b) to select whichever independent Director to be given his/her power of attorney. The Company promotes the use of ballot cards (which are colour coded in accordance with the importance of the Agenda Items being considered) by Shareholders in casting their votes. These ballots are counted in the Shareholders meetings and are then added to those votes already casted in advance via the use RI WKH SRZHU RI DWWRUQH\ IRUPV EHIRUH WKH ÂżQDO FRXQW LV DQQRXQFHG IRU HDFK $JHQGD ,WHPV DW WKH 0HHWLQJ The Company makes a complete and thorough record of all the discussions and proceedings for each 6KDUHKROGHUV 0HHWLQJ LQ WKH RIÂżFLDO PLQXWHV RI WKH 0HHWLQJ ZKLFK DUH WKHQ GLVWULEXWHG WR DOO 6KDUHKROGHUV within 14 days after the Meeting date â&#x20AC;&#x201C; subsequent to these minutes having been distributed to the SET and the SEC. Furher, these minutes are also posted n the Companyâ&#x20AC;&#x2122;s website. The Company also requires that all Directors and Senior Management member declare his/her shareholdings at the start of his/her tenure as well as to make additional declarations to the SEC 3 days after the fact whenever he/ she subsequently buy or sells any shares. Also the Directors and Senior Management members who are SULY\ WR VHQVLWLYH DQG FRQÂżGHQWLDO LQIRUPDWLRQ DERXW WKH &RPSDQ\ DUH SURKLELWHG IRUP EX\LQJ DQG RU VHOOLQJ any shares of the Company within a a period of 1 month before and after the announcement disclosure RI ÂżQDQFLDO VWDWHPHQW

3. Roles of Stakeholders The Company has issued a Code of Conduct and Ethics Guideline for all Board Members, Management Staff and General Employees to observe and comply, so that they may undertake and discharge their respective roles and responsibilities as well as act towards the Company and other outside stakeholders in an honest and straight forward manner. The Company gives great importance to all stakeholders and constituents of the Company alike:

156

ANNUAL REPORT 2012

CONTENTS Â&#x2021;

Employees - treating all in a just and equitable manner and offering them appropriate remuneration and compensation that is competitive with others in the same business

Â&#x2021; Â&#x2021;

Creditors â&#x20AC;&#x201C; complying strictly to all agreed terms and conditions of payments Customers â&#x20AC;&#x201C; showing all due care and responsibility towards our clients, offering levels of customer service WKDW DUH LQ DFFRUGDQFH ZLWK WKH HVWDEOLVKHG VWDQGDUGV RU VHUYLFH OHYHOV UHVSHFWLQJ DOO FOLHQW FRQÂżGHQWLDOLW\ DQG PDNLQJ DYDLODEOH D VSHFLDO JURXS RI SHRSOH ZKR DUH VSHFLÂżFDOO\ UHVSRQVLEOH IRU OLVWHQLQJ WR DOO FXVWRPHU complaints or demands so that all customer â&#x20AC;&#x201C; related issues are resolved as fast as possible

Â&#x2021;

Competitors â&#x20AC;&#x201C; observing and maintaining all accepted standards of good behaviour towards our competitors and avoiding the use price cutting strategies or other dishonest means of directly destrying the competition

Â&#x2021;

Community â&#x20AC;&#x201C; always promoting and contributing towards various community programmes (such as cooperating with UNICEF in its Youth Career Development Programme, keeping cleaning all the areas open to the general public near to or surrounding each hotel location or employees participating in blood donations campaigns)

Anti â&#x20AC;&#x201C; Corruption Practices The Company stated its position with regard to the Anti â&#x20AC;&#x201C; Corruption practices by participation in the â&#x20AC;&#x153;Establishing Thailandâ&#x20AC;&#x2122;s Private Sector Collective Action Coalition Against Corruptionâ&#x20AC;? (Corrective Anti â&#x20AC;&#x201C; Corruption: CAC). Moreover, the Company encouraged staffs to take part in every seminar which related to Anti â&#x20AC;&#x201C; Corruption practices for improving their knowledge. 4. Disclosure and Transparency Clear disclosure and communications of information is a critical part of good corporate governance. Therefore, the Company gives great importance to the disclosure of all relevant information to the SET as well as DOO 6KDUHKROGHUV Âą HVSHFLDOO\ LQ UHJDUG WR WKH GLVFORVXUH RI DFFXUDWH DQG VXIÂżFLHQW LQIRUPDWLRQ LQ WLPHO\ PDQQHU DV well as to disclosing such information to all groups in an equal manner, whereby such disclosures are within the HVWDEOLVKHG DQG DFFHSWHG EXVLQHVV HWKLFV IUDPHZRUN 7KHUH LV D VSHFLÂżF JURXS RI SHRSOH UHVSRQVLEOH IRU ,QYHVWRUV Relations and for Corporate Communications activities, charged with the dissemination of relevant information and/ or responding to any queries. .H\ FRPPXQLFDWLRQV WRROV IRU WKH &RPSDQ\ LQFOXGH )LQDQFLDO 6WDWHPHQWV DV ZHOO DV QRQ ÂżQDQFLDO DQQRXQFHPHQWV RU VWDWHPHQWV 'XULQJ DOO ÂżQDQFLDO GLVFORVXUHV Âą HVSHFLDOO\ ÂżQDQFLDO VWDWHPHQWV KDYH EHHQ DXGLWHG E\ WKH RIÂżFLDO H[WHUQDO DXGLWRU RI WKH &RPSDQ\ DV KDYLQJ FRPSOLHG WR WKH DFFHSWHG VWDQGDUGV RI DFFRXQWLQJ practices as well as have been reviewed and approved by both the Audit Committee and the Board of Directors before WKH\ DUH GLVFORVHG WR WKH 6KDUHKROGHUV DQG WKH JHQHUDO SXEOLF $V IRU WKHQ QRQ ÂżQDQFLDO LQIRUPDWLRQ GLVFORVXUHV IRU example they include disclosures on the details of any connected transactions between related parties, Management Analysis of the Operations as well as the Corporate Management and the 56-1 Report. Once the respective information have been disclosed to Shareholders, investors, and/or the general public these are posted on the Companyâ&#x20AC;&#x2122;s website â&#x20AC;&#x201C; for example; the Annual 56-1 Report, notice of invitations to and 0LQXWHV RI DOO 6KDUHKROGHUV PHHWLQJV DQG WKH 4XDUWHUO\ $QDO\VWV SUHVHQWDWLRQ RQ WKH &RPSDQ\ÂśV RSHUDWLQJ UHVXOWV In the both the Annual Reports and the 56-1 report, the Company also discloses the general and/or any VSHFLÂżF UROHV DQG UHVSRQVLELOLWLHV RI HDFK PHPEHU RI WKH %RDUG RI 'LUHFWRUV DQG WKH YDULRXV %RDUG &RPPLWWHHV DV well the number of times each Board Member attends Board or Shareholders Meetings, together with respective remunerations details of each Board Member and Senior Management Member. The Company has always acknowledge the critical importance of comprehensive and accurate disclosure of information in a transparent and timely manner are important criteria for good corporate governance practices as well a sound business ethics, and has deployed all measures to undertake such responsibilities as best as it can. INVESTORS RELATIONS (IR) Group 7KH &RPSDQ\ LV ZHOO DZDUH WKDW ÂżQDQFLDOV DV ZHOO DV QRQ ÂżQDQFLDO LQIRUPDWLRQ RI WKH &RPSDQ\ KDYH DQ LPSDFW on any decisions by both the investors and any stakeholders of the Company. Therefore, it has charged Management with the responsibility of constantly ensuring the disclosure of any relevant information in as a complete, creditable and CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

157

CONTENTS timely manner as possible, whereby Management has always sought to discharge its responsibilities in this respect and to comply to these criteria at all times. As for the maintaining good relations with our investors, the Company has VHW XS D VSHFLÂżF JURXS RI SHRSOH UHVSRQVLEOH IRU LQYHVWRU UHODWLRQV DQG FRPPXQLFDWLRQV DFWLYLWLHV FKDUJLQJ WKH 6HQLRU Vice President for Finance and Administration and his team with the responsibility of maintaining communications ZLWK LQVWLWXWLRQDO LQYHVWRUV LQGLYLGXDO VKDUHKROGHUV ÂżQDQFLDO DQDO\VWV DQG DQ\ UHOHYDQW *RYHUQPHQW 2UJDQLVDWLRQV Interested Investors or parties can contact the Company at 66 (0) 2769 1234 Ext 6640 or siwichayali@chr.co.th for any investor related information or communications. As for the IR activities senior management in cooperation with the IR Group had made various announcements or disclosures during 2012 consisted of the following: - including personal interviews, tele-conference calls, or TXDUWHUO\ SUHVHQWDWLRQV WR ÂżQDQFLDO DQDO\VWV 1. Joining SET in the organization of the quarterly â&#x20AC;&#x153;Opportunity dayâ&#x20AC;? to meet retail investors and presented a quarterly report on operating results. 2. Holding 79 companies visit following appointments from investors to meet executives and investor relations to acquire Company information. 3. 3UHYLHZ PHHWLQJV DQG SUHVHQWDWLRQV WR ÂżQDQFLDO DQDO\VWV WLPHV 4. Personal interviews via the telephone including tele-conference 491 calls 5. Conducting 15 road shows 5. Board Responsibilities The Companyâ&#x20AC;&#x2122;s board of directors and its members The Companyâ&#x20AC;&#x2122;s Board of Directors consists of 11 persons, namely Â&#x2021; 2 Executive Directors Â&#x2021; 5 Non- Executive Directors Â&#x2021; 4 Independent Directors ZKRVH IXOO SHUVRQDO DQG EXVLQHVV TXDOLÂżFDWLRQV DUH JLYHQ RQ SDJH DV WKH DWWDFKHG GRFXPHQWV The Board Committees The Company has set up these various Committees and Sub Committees of the Board, each charged with assisting the Companyâ&#x20AC;&#x2122;s Board of Directors in their respective areas of responsibility 1. Audit Committee â&#x20AC;&#x201C; consisting of 4 Independent Directors; and due to Khun Kanchit Bunajinda â&#x20AC;&#x2122;s knowledge and expertise in overseeing Financial and Accounting matters, he was appointed as a member of the Audit Committee. 2. Nomination and Compensation Committee â&#x20AC;&#x201C; consisting of 5 Directors, responsible for establishing the policies and criteria used in selection of as well as setting of the appropriate compensation for the members of the Board of Directors, the Board Committees/Sub Committees and the Senior Management or Executives of the Company â&#x20AC;&#x201C; that are to be proposed to and/or approved by the Board of Directors or the Shareholders Meetings. 6HSDUDWLRQ RI WKH &KDLUPDQ RI 7KH %RDUG RI 'LUHFWRUV DQG &KLHI ([HFXWLYH 2IÂżFHU &(2 3RVLWLRQV The Company has established a policy of selecting BOTH the Chairman of the Board and the Chief Executive 2IÂżFHU &(2 IURP DPRQJ LWV VHOHFWHG PHPEHUV RI WKH %RDUG RI 'LUHFWRUV DQG WKH\ VKRXOG EH WZR VHSDUDWH SHUVRQV holding these key positions, responsible for setting policy directions and monitoring the Companyâ&#x20AC;&#x2122;s performance. He should be a separate person from that responsible for the management of the Company, acting as the leader of the Board of Directors as well as being responsible for overseeing management and determining Agenda Items to be included in the Meetings of the Board, for overseeing the Boardâ&#x20AC;&#x2122;s activities, and for acting as Chairman of Board Meetings and/or Shareholders meetings and ensuring that all Directors play an active role in these Meetings. Company Secretary The Company has assigned the company secretary to be in charge of the following responsibilities:

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ANNUAL REPORT 2012

CONTENTS 1. 3UHSDUH DQG ÂżOH %RDUG DQG 6KDUHKROGHU GRFXPHQWV ZKLFK DUH WKH GLUHFWRUVÂś VKDUH UHJLVWUDWLRQ UHFRUGV notices of Board and Shareholders, minutes of Board and Shareholders, and the Companyâ&#x20AC;&#x2122;s annual repot DQG TXDUWHUO\ ÂżQDQFLDO UHSRUWV 2. )LOH UHSRUWV UHODWLYH WR WKH FRQĂ&#x20AC;LFW RI LQWHUHVW RI GLUHFWRUV DQG PDQDJHPHQW 3. Advise the rules and regulations relative to the directorâ&#x20AC;&#x2122;s functions and responsibilities. 4. Administer other activities as directed. As at 31 December 2012, Dr. Ronnachit Mahattanapreut acted as Company Secretary, his biography detail as follow Name â&#x20AC;&#x201C; Surname Position

Dr. Ronnachit Mahattanapreut Senior Vice President - Finance & Administration and Company Secretary

Age

56 years

Education

- Ph.D. Business Administration, Suan Dusit Rajaphat University - Master of Business Administration, Thammasat University

- Bachelor of Accountancy, Thammasat University &RPSOHWHG 3URJUDP IURP 7KDL &HUWLÂżHG IURP 7KDL ,QVWLWXWH 2I 'LUHFWRUV Institute of Directors (IOD) Experience Director of Finance and Strategy Planning, Prasit Pattana Plc. Other Current Positions Specialized Committee Member of Suan Dusit Rajaphat University

7KH %RDUG OD\V GRZQ PHDVXUHV WR FDUHIXOO\ PRQLWRU FRQĂ&#x20AC;LFWV RI LQWHUHVW 7KH FRPSDQ\ KDV LQ SODFH SURFHGXUHV IRU JUDQWLQJ DSSURYDO ZKLFK PXVW EH VWULFWO\ IROORZHG 7KH $XGLW &RPPLWWHH UHYLHZV DQG UHPDUNV RQ VLJQLÂżFDQW connected transactions beyond the authority of the management. The Board gives thorough consideration on such transactions, taking into account the best interests of the company. In this respect, directors with invested interests in these transactions must abstain from the meeting and voting on those particular agenda items. The Board requires the disclosure of information on the involvement of directors, executives and other stakeholders on every December 31.The Company secretary submits all information to the Board.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

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CON N E C TED T RANSACT IONS As of December 31, 2012 the Company and its Subsidiaries undertook various â&#x20AC;&#x153;connectedâ&#x20AC;? transactions with UHODWHG FRPSDQLHV DQG RU RWKHU SDUWLHV ZKR PD\ KDYH SRWHQWLDO FRQĂ&#x20AC;LFW RI LQWHUHVWV ZKHUHE\ WKHVH DUH FRQVLGHUHG normal commercial transactions and have been approved as â&#x20AC;&#x153;connected transactionsâ&#x20AC;? within the normal operational authorization procedures of the Company. Details are as shown on the attached document. PROCEDURES AND PROCESS IN APPROVING CONNECTED TRANSACTIONS As a listed company on the Stock Exchange of Thailand (SET) since 1990 (BE 2533), we have always been appreciative and aware of the need for full and transparent disclosure of any information as well as activities regarding any connected transactions. Therefore, at the 84th meeting of the Audit Committee (1/2013) on February 11, 2013 the Audit Committee was informed of all the connected transactions that took place during 2012, where by the Committee reviewed the necessity as well as reasonableness of these transactions and was of the opinion that all such transactions were reasonable and appropriate in every respect. As for any connected transactions that may take place in the future, the Company has instructed that the Audit Committee undertake a review and approve all such transactions, which must be undertaken only as necessary and with all reasonableness, whereby any payments received from or related parties must be accordance with standard market practices as well as must be equitable to all parties concerned and fully transparent. POLICIES AND GUIDELINES FOR UNDERTAKING CONNECTED TRANSACTIONS 7KH &RPSDQ\ KDV D SROLF\ WR XQGHUWDNH FRPPHUFLDO WUDQVDFWLRQV ZLWK UHODWHG SDUWLHV ZKR PD\ EH D SRWHQWLDO FRQĂ&#x20AC;LFW of interest that are only part of the normal business activities of the Company, whereby it is required that all such transactions be undertaken within normal accepted business practices and at commercial terms that are no different than those transactions undertaken with outside third parties. $W WKH %RDUG 0HHWLQJ 1R RQ 1RYHPEHU WKH &RPSDQ\ HVWDEOLVKHG VSHFLÂżF SROLFLHV DQG SURFHGXUHV for the approval of such connected transactions, whereby the must follow the normal approval process as used for any other business transactions â&#x20AC;&#x201C; except that those Directors or Executives who themselves (or who are related to those who) are involved in the transaction being considered for approval must not approve such transactions. Further, in the event that such the transaction comes up for consideration, full disclosure of their involvement must be made to the Board for review; and such Directors or Executives will have no right to exercise their approval accordingly. The Board must also comply with all the legal requirements of the Securities Laws and the SET as well as with the regulations, announcements and instructions or procedures of SET. 7KXV LQ XQGHUWDNLQJ D FRQQHFWHG WUDQVDFWLRQ E\ WKH &RPSDQ\ ZLWK D SDUW\ ZKR PD\ KDYH D SRWHQWLDO FRQĂ&#x20AC;LFW RI LQWHUHVW RU ZKR PD\ KDYH VRPH RWKHU YHVWHG RU SRVVLEOH FRQĂ&#x20AC;LFW RI LQWHUHVW LQ WKH IXWXUH WKHQ WKH &RPSDQ\ UHTXLUHV that the Audit Committee must give its opinion as to the necessity and appropriateness of such transaction. Should WKH $XGLW &RPPLWWHH QRW KDYH WKH VSHFLÂżF H[SHUWLVH LQ UHYLHZLQJ DQ\ VXFK SRVVLEOH FRQQHFW WUDQVDFWLRQ WKHQ WKH Audit Committee must get an independent expert or the external auditor of the Company to give their opinion that transaction, which will then be used as part of the decision process (of the Audit Committee or the Shareholders) in approving that connected transaction accordingly. Further, in disclosing a connected transaction the Company must comply with all the legal requirements of the Securities Laws and the SET as well as with the regulations, announcements and instructions or procedures of the SET together with the required general accounting practices with regards to the disclosure of details concerning any related parties or businesses.

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ANNUAL REPORT 2012

CONTENTS

For the Year Related Companies

Transaction Details

Facts and Reasons

2012 (Baht - Million)

1. Thai Business Fund 4 Relationship:

A Subsidiary Company, Central World Hotel Co., Ltd.

1. Common Majority Shareholders : Chirathivat Group

(CGCW), subleased land and buildings relating to the hotels facilities

with the opinion that the proposed transaction

2. Thai Business Fund 4 has Central Pattana plc.

from Thai Business Fund 4 in order to operate its hotel and associated

was reasonable and for the best benefit of

15.75

At the AGM 1/2004 considered the matter,

& Subsidiary Companies owning 50% of the total investment business activities, with CGCW paying the leasehold rights fees in

the Company; whereby the proposed charges are

Units (or 100% of the Investment Units Type C (owner type); advance as well as annual rental fees payable to the Thai Business

in line with market rates as well as normal terms

whereby the Chirathivat Group is the majority shareholders

and conditions.

Fund throughout the term of the lease.

in Central Pattana plc. A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG)

15.42

rents retail space within the Central World from the Central World Co. Ltd. for use in its restaurants and retail food services businesses with rental fees paid in advance and the monthly services fees (calculated on a sq.m basis) payable. The rental fees, payable in advance to the Thai Business Fund 4 are based on rental rates that are clearly defined. 2. Central Department Store Co., Ltd. Relationship:

A Subsidiary Company, Central Sukhontha Hotel Co.,Ltd. (CSH), has

1. Common Majority Shareholders : Chirathivat Group

executed a space rental and services agreement with the Central

2. Common Directors

36.30

The Audit Committee reviewed the matter and is of the opinion that : both the proposed rental and

Department Store Co., Ltd. (Hat Yai branch) with a 30 year term;

service fees are in line with market rates, with clearly

whereby the Central Department Store Co., Ltd. (Hat Yai branch)

defined rental fees and agreement terms; and that

rents part of the CSH facilities and buildings to operate a shopping

the proposed transaction is reasonable.

complex with CSH receiving both rental and service fees in advance.

Central Plaza Hotel plc. and subsidiary companies purchases goods

0.47

The opinion that the seller is selling quality goods

from the Central Department Store Co., Ltd. in providing services to

with the agreed prices being in line with market rates

its hotel guests.

and that the proposed transaction is reasonable.

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG)

19.85

rents space from the Central Department Store Co., Ltd. to sell food

The Audit Committee reviewed the matter and is of the opinion that : both the proposed rental and

and drinks.

service fees are in line with market rates, with clearly

The Central Plaza Hotel plc. provides F & B services to the Central

0.16

Department Store Co., Ltd.

defined rental fees and agreement terms; and that the proposed transactions are reasonable with maximum benefits for the Company.

3. Tiang Chirathivat Co., Ltd. Relationship:

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG)

1. Common Majority Shareholders : Chirathivat Group

rents retail space in the Central Silom Building from Tiang Chirathivat

is of the opinion that : both the proposed rental and

2. Common Directors

Co., Ltd. for use as its Head Office.

service fees are in line with market rates, with clearly

19.31

The Audit Committee reviewed the matter and

defined rental fees and agreement terms; and that the proposed transactions are reasonable with maximum benefits for the Company

The Central Plaza Hotel plc. provides F & B services to Tiang

1.28

Chirathivat Co., Ltd.

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges are the same as for normal clients; and that the proposed transactions are reasonable.

4. Central Pattana Plc. Relationship:

A Subsidiary Company, Central World Hotel Co., Ltd. rents space and

1. Common Majority Shareholders : Chirathivat Group

parking facilities in the Office Building, from Central Pattana plc.,

2. Common Directors

for use by its clients in holding various meetings and promtional

service fees are in line with market rates, with clearly

exhibitions events.

defined rental fees and agreement terms; and that

73.67

The Audit Committee reviewed the matter and is of the opinion that : both the proposed rental and

the proposed transactions are reasonable with A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

220.04

maximum benefits for the Company

rents space in the Central World commercial complex to sell food and drinks. The Central Plaza Hotel plc. sells hotel rooms and provides F & B services to Central Pattana plc.

2.31

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges are the same as for normal clients; and that the proposed transactions are reasonable.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

161

CONTENTS

For the Year Related Companies

Transaction Details

Facts and Reasons

2012 (Baht - Million)

p p

5.Central Online Co., Ltd. Relationship:

These Group Companies purchase IT/computer products and

The Audit Committee reviewed the matter and

1. Common Majority Shareholders : Chirathivat Group

accessories from Central Online Co., Ltd.

is of the opinion that the seller is selling quality goods,

2. Common Directors

- Central Plaza Hotel plc.

2.99

with the agreed prices being in line with market rates,

- Central Restaurants Group Co., Ltd. (CRG)

11.44

and that the purchase is in accordance with the normal procurement regulations and procedures; and that the proposed transaction is reasonable with maximum benefits for the Company.

6. Central Trading Co., Ltd. Relationship:

Central Plaza Hotel plc. and Subsidiary Companies purchase

1. Common Majority Shareholders : Chirathivat Group

electronic equipment/machines (ie: cash registers, calcuators and

2. Common Directors

1.72

The Audit Committee reviewed the matter and is of the opinion that the seller is selling quality goods,

related accessories) for use in its business operations from Central

with the agreed prices being in line with market rates,

Trading Co., Ltd.

and that the purchase is in accordance with the normal procurement regulations and procedures.

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

12.45

The Audit Committee reviewed the matter and

rents retail space space from Central Trading Co., Ltd. to sell food

is of the opinion that the seller is selling quality goods,

and drinks.

with the agreed prices being in line with market rates and that the purchase is in accordance with the normal procurement regulations and procedures; and that the proposed transaction is reasonable with maximum benefits for the Company.

The Central Plaza Hotel plc. provides F & B services to

1.95

Central Trading Co., Ltd.

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges are the same as for normal clients; and that the proposed transactions are reasonable.

7. Power Buy Co.,Ltd. Relationship:

Central Plaza Hotel plc. and Subsidiary Companies purchase

1. Common Majority Shareholders : Chirathivat Group

electrical products (eg: audio systems speakers, digital cameras,

2. Common Directors

DVD players) from Power Buy Co.,Ltd.

1.67

The Audit Committee reviewed the matter and is of the opinion that the seller is selling quality goods, with the agreed prices being in line with market rates, and that the purchase is in accordance with the the normal procurement regulations and procedures; and that the proposed transaction is reasonable with maximum benefits for the Company.

8. Harng Central Department Store Co., Ltd. Relationship:

These Group Companies purchase electronic equipment, office

The Audit Committee reviewed the matter and

1. Common Majority Shareholders : Chirathivat Group

equipment, as well as legal and business information consulting

is of the opinion that the seller is selling quality goods,

Harng Central Department services, and rent retail space from HARNG

with the agreed prices as well as services and rental

2. Common Directors

charge begin in line with marketing rates, and that the

Store Co., Ltd. - Central Plaza Hotel plc.

12.47

- Central Restaurants Group Co., Ltd.

6.12

purchase is in accordance with normal procurement charges being in line with market rates, and that regulations and procedures, and that the proposed the purchase is in accordance with normal WUDQVDFWLRQ LV UHDVRQDEOH ZLWK PD[LPXP EHQH多WV IRU procurement regulations and procedures, and that the proposed Company.transaction is reasonable with the

maximum benefits for the Company. 9. Office Club (Thailand) Co., Ltd. Relationship:

These Group Companies purchase office equipment and stationery

The Audit Committee reviewed the matter and

1. Common Majority Shareholders : Chirathivat Group

from Office Club (Thailand) Co., Ltd.

is of the opinion that the seller is selling quality goods,

2. Common Directors

- Central Plaza Hotel plc.

1.34

with the agreed prices being in line with market rates

- Central Restaurants Group Co., Ltd.

3.90

and that the purchase is in accordance with normal procurement regualtions and procedures, and that the proposed transaction is reasonable with maximum benefits for the Company.

10. Post Publishing Plc. Relationship:

These Group Companies purchase newspaper and print advertising

1. Common Majority Shareholders : Chirathivat Group

space from Post Publishing Plc. for use by its hotel guests and food

is of the opinion that the agreed process are in line

2. Common Directors

services clients

with market rates, and that the purchase is in

The Audit Committee reviewed the matter and

- Central Plaza Hotel plc.

9.86

accordance with the normal procurement regulations

- Central Restaurants Group Co., Ltd.

8.74

and procedures; and that the proposed transaction is reasonable with maximum benefits for the Company.

The Central Plaza Hotel plc. sells hotel rooms and provides F & B services to the Post Publishing Plc.

162

ANNUAL REPORT 2012

0.04

The Audit Committee reviewed the matter and is of the opinion that the proposed services

CONTENTS

For the Year Related Companies

Transaction Details

Facts and Reasons

2012 (Baht - Million)

charges are the same as for normal clients; and that the proposed transactions are reasonable. 11. Central Food Retail Co., Ltd. Relationship:

Central Plaza Hotel plc. and Subsidiary Companies purchase goods

1. Common Majority Shareholders : Chirathivat Group

from Central Food Retail Co., Ltd. for use by its hotel guests and

is of the opinion that the seller is selling quality goods,

2. Common Directors

customers.

with the agreed prices being in line with market rates

5.31

The Audit Committee reviewed the matter and

and that the purchase is in accordance with the normal procurement regulations and procedures. A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

2.72

Both the rental and services charges are in line with

rents retail space in TOPS Supermarket from Central Food Retail

market rates as well as appropriate to the location

Co., Ltd. to sell food and drinks.

and proposed services, and that transaction is reasonble.

Central Plaza Hotel plc. and Subsidiary Companies sells hotel rooms

0.24

The Audit Committee reviewed the matter and

and rents meeting facilities as well as provides F & B services to

is of the opinion that the proposed services charges

Central Food Retail Co., Ltd.

are the same as for normal clients; and that the proposed transactions are reasonable.

12. Central Realty Service Co., Ltd. Relationship:

Central Plaza Hotel plc. uses public utilities services

1. Common Majority Shareholders : Chirathivat Group

provided by Central Realty Service Co., Ltd.

0.14

The Audit Committee reviewed the matter and is of the opinion that both the ageed rental and

2. Common Directors

services charges are in line with market rates as well Central Restaurants Group Co., Ltd. (CRG), rents commercial space

1.46

from CENTRAL REALTY SERVICE LTD. toand sell drinks. food and drinks. Central Reality Service Co.,Ltd CO. to sell food

as appropriate for the location and the proposed services,and that the proposed transactions are reasonable.

13. Central World Co., Ltd. Relationship:

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

1. Common Majority Shareholders : Chirathivat Group

rents retail space in Central World Complex from Central World Co.,

2. Common Directors

Ltd.to sell food and drinks, with rental fees paid in advance and also

charges are in line with market rates as well as

monthly service fees (calculated on per sq.m basis) payable.

appropriate for the location and the proposed services,

15.53

The Audit Committee reviewed the matter and is of the opinion that both the rental and services

with the rental agreement terms and charges clearly defined, and that the proposed transaction is reasonable with maximum benefits for the Company.

The Central Plaza Hotel plc.. provides F & B services

0.02

to Central World Co., Ltd.

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges are the same as for normal clients; and that the proposed transactions are reasonable.

14. Bangna Central Property Co., Ltd. Relationship:

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

1. Common Majority Shareholders : Chirathivat Group

rents retail space in Central Bangna Complex from Bangna Central

is of the opinion that both the rental and services

2. Common Directors

Property Co., Ltd. to sell food and drinks.

charges are in line with market rates as well as

17.55

The Audit Committee reviewed the matter and

appropriate for the location and the proposed services, with the rental agreement terms and charges clearly defined, and that the proposed transaction is reasonable with maximum benefits for the Company. 15. Robinson Department Store Plc. Relationship:

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

1. Common Majority Shareholders : Chirathivat Group

rents retail space in the Robinson shopping complex from

2. Common Directors

Robinson Department Store Plc. to sell food and drinks

41.95

The Audit Committee reviewed the matter and is of the opinion that both the rental and services charges are in line with market rates as well as appropriate for the location and the proposed services, with the rental agreement terms and charges clearly defined, and that the proposed transaction is reasonable with maximum benefits for the Company.

16. Central Garment Factory Co., Ltd. Relationship:

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

1. Common Majority Shareholders : Chirathivat Group

rents warehouse space from Central Garment Factory Co., Ltd. for

is of the opinion that both the rental and services

2. Common Directors

storage use.

charges are in line with market rates as well as

0.29

The Audit Committee reviewed the matter and

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

163

CONTENTS

For the Year Related Companies

Transaction Details

2012

Facts and Reasons

(Baht - Million) 17. Central Retail Corporation Co., Ltd. Relationship:

Central Retail Corporation Co., Ltd. provides business planning

1. Common Majority Shareholders : Chirathivat Group

consulting and warehousing services to a Subsidiary Company,

is of the opinion that the services provider is both

2. Common Directors

Central Restaurants Group Co., Ltd. (CRG).

capable and well-experienced in warehousing

13.10

The Audit Committee reviewed the matter and

management, the services fees charged are in line with market rates, and that the purchase is in accordance with normal procurement regulations and procedures; and that the proposed transaction is reasonable with maximum benefits for Company. 18. CRC Power Retail Co., Ltd. Relationship:

These Group Companies purchase equipments and various

The Audit Committee reviewed the matter and

1. Common Majority Shareholders : Chirathivat Group

components parts (eg: aluminum ladders, carts and trolleys, and

is of the opinion that the seller is selling quality goods,

2. Common Directors

hand dryers) for use in its F&B/food services outlets from

with the agreed prices being in line with market rates,

CRC Power Retail Co., Ltd.

and that the purchase is in accordance with normal

- Central Plaza Hotel plc.

0.49

procurement regulations and procedures; and that the

- Central Restaurants Group Co., Ltd.

2.71

proposed transaction is reasonable with maximum benefits for the Company.

19. Big C Supercenter plc. Relationship:

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

1. Common Majority Shareholders : Chirathivat Group

rents retail space in BIG C shopping centers from Big C Supercenter

is of the opinion that both the rental and services

2. Common Directors

plc.to sell food and drinks

charges are in line with market rates as well as

358.89

The Audit Committee reviewed the matter and

appropriate for the location and the proposed services, with the rental agreement terms and charges clearly defined; and that the proposed transaction is reasonable with maximum benefits for the Company.

The Central Plaza Hotel plc. and Subsidiary Companies provide

0.02

F & B services to Big C Supercenter plc.

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges are the same as for normal clients; and that the proposed transactions are reasonable.

20. TT & T plc. Relationship:

The Central Plaza Hotel plc. uses telecommunications and related

1. Common Majority Shareholders : Chirathivat Group

services provided by TT&T Plc.

0.26

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges

2. Common Directors

are the same as for normal clients; and that the proposed transactions are reasonable.

21. B2S Co., Ltd. Relationship:

The Central Plaza Hotel plc. purchaes writing and stationery products

1. Common Majority Shareholders : Chirathivat Group

from B2S Co., Ltd.

0.03

The Audit Committee reviewed the matter and is of the opinion that the seller is selling quality goods,

2. Common Directors

with the agreed prices being in line with market rates, and that the purchase is in accordance with normal procurement regulations and procedures; and that the proposed transaction is reasonable.

22. Central Retail Corporation Co., Ltd. Relationship:

The Central Plaza Hotel plc. and Subsidiary Companies sell hotel

1. Common Majority Shareholders : Chirathivat Group

rooms and rent meeting facilities as well as provide F & B services

is of the opinion that the proposed services charges

2. Common Directors

to Central Retail Corporation Co., Ltd.

are the same as for normal clients; and that the

1.20

The Audit Committee reviewed the matter and

proposed transactions are reasonable. 23. Harng Central Department Store Co., Ltd. Relationship:

The Central Plaza Hotel plc. and Subsidiary Companies sell hotel

1. Common Majority Shareholders : Chirathivat Group

rooms and rent meeting facilities as well as provide F & B services

2. Common Directors

to Harng Central Department Store Co., Ltd.

2.05

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges are the same as for normal clients; and that the proposed transactions are reasonable.

24. Post ACP Co., Ltd. (Formerly is Hachette Filipacchi Co., Ltd. Relationship:

A Subsidiary Company, Central Restaurants Group Co., Ltd. (CRG),

1. Common Majority Shareholders : Chirathivat Group

purchases advertising space to place advertising in "CLEO" magazine

is of the opinion that the services provider has some

2. Common Directors

a fashion and lifestyle magazine for young and trendy readers

good innovative ideas, understands the products, and

0.11

published by Post ACP Co., Ltd.

The Audit Committee reviewed the matter and

is appropriate for the target audience; and that the proposed services charges are the same as for norma clients and the proposed transaction is reasonable.

25. Central Marketing Group Co. Ltd. Relationship:

The Central Plaza Hotel plc. and Subsidiary Companies purchase

The Audit Committee reviewed the matter and

1. Common Majority Shareholders : Chirathivat Group

merchandise from Central Marketing Group Co. Ltd.

is of the opinion that the seller is selling quality goods,

2. Common Directors

- Central Plaza Hotel plc.

164

ANNUAL REPORT 2012

0.42

with the agreed prices being in line with market rates,

CONTENTS

Related Companies

For the Year 2012 (Baht - Million)

Transaction Details - Central Restaurants Group Co., Ltd.

0.81

Facts and Reasons and that the purchase is in accordance with normal procurement regulations and procedures; and that the proposed transaction is reasonable.

26. Central Food Avenue Co., Ltd. Relationship:

Central Plaza Hotel plc. purchases food and drinks from

1. Common Majority Shareholders : Chirathivat Group

Central Food Avenue Co., Ltd.

0.03

The Audit Committee reviewed the matter and is of the opinion that the seller is selling quality goods,

2. Common Directors

with the agreed prices being in line with market rates, and that the purchase is in accordance with normal procurement regulations and procedures, and that the proposed transaction is reasonable.

27. Central Inter Pattana Co., Ltd. Relationship:

Central Plaza Hotel plc. pays insurance premiums and sub lease fees

1. Common Majority Shareholders : Chirathivat Group

to Central Inter Pattana Co., Ltd.

0.19

The Audit Committee reviewed the matter and is of the oipinion that the proposed insurance premium

2. Common Directors

and sublease fees are both correct and appropriate.

28. CG Training Center Co., Ltd. Relationship:

The Central Plaza Hotel plc. and Subsidiary Companies provide

1. Common Majority Shareholders : Chirathivat Group

F & B services to CG Training Center Co., Ltd.

0.09

The Audit Committee reviewed the matter and is of the opinion that the proposed services charges

2. Common Directors

are the same as for normal clients; and that the proposed transactions are reasonable.

29. Central Embassy Hotel Co., Ltd. Relationship:

The Central Plaza Hotel plc. and Subsidiary Companies sell hotel

1. Common Majority Shareholders : Chirathivat Group

rooms and provide F & B services, at market prices, to

2. Common Directors

Central Embassy Hotel Co., Ltd.

0.20

The Audit Committee have reviewed the matter and is of the opinion that the proposed services charges are the same as for normal clients; and that the proposed transactions are reasonable.

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

165

CONTENTS

GE N E R A L INFORMAT ION OF BUSI NESSES HELD BY THE COMPANY 10% UPWARD Company

Nature of Business

Issued Ordinary Share

Issued Ordinary Share held by the Company

Percentage of Shareholding (%)

Central Hua Hin Beach Resort Co., Ltd. 1 Damnernkasem Road, Hua Hin, Prachuab-Khirikhan Tel. : (032) 512-021 Fax : (032) 511-099

Centara Grand Beach Resort & Villas Hua Hin )RUPHUO\ LV 6R多WHO Centara Grand Resort & Villas Hua Hin) (248 rooms)

1,850,000 shares, at par 100 Baht each

1,183,104 shares

63.9%

Central Samui Hotel Management Co., Ltd. 38/2 Moo 3 Tambon Bophut, Koh Samui, Suratthani Tel. : (077) 230-500 Fax : (077) 230-522

Centara Grand Beach Resort Samui (203 rooms)

12,500 shares at par 100 Baht each

12,493 shares

100.0%

Central Samui Beach Resort Co., Ltd. 38/2 Moo 3 Tambon Bophut, Koh Samui, Suratthani Tel. : (077) 230-500 Fax : (077) 230-522

Centara Grand Beach Resort Phuket (262 rooms)

2,500,000 shares at par 100 Baht each

2,499,994 shares

100.0%

Central Samui Village Co., Ltd. 111 Moo 2 Tambon Maret, Koh Samui, Suratthani Tel. : (077) 424-020 Fax : (077) 424-022

Centara Villas Samui (102 rooms)

550,000 shares at par 100 Baht each

549,994 shares (Owned by Central Samui Beach Resort Co., Ltd.)

100.0%

Central Hotel Management Co., Ltd. 1695 Paholyothin Road, Chatuchak, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Holding Company

2,500,000 shares at par 100 Baht each

2,499,993 shares

100.0%

Central Sukhontha Hotel Co., Ltd. 3 Sanehanusorn Road, Had Yai, Songkla Tel. : (074) 352-222 Fax : (074) 352-223

Centara Hotel Hat Yai (Formerly is Novotel Centara Hat Yai) (248 rooms)

1,450,000 shares at par 100 Baht each

1,449,994 shares (Owned by Central Hotel Management Co., Ltd.)

100.0%

Central Karon Village Co., Ltd. 701 Patak Road, Tambon Karon, Muang, Phuket Tel. : (076) 286-300 Fax : (076) 286-316

Centara Villas Phuket (72 rooms)

375,000 shares at par 100 Baht each

374,994 shares

100.0%

Central Mae Sot Hill Hotel Co., Ltd. 100 Asia Road, Mae Sot, Tak Tel. : (055) 532-601 Fax : (055) 532-600

Centara Mae Sot Hill Resort (120 rooms)

190,000 shares at par 1,000 Baht each

186,996 shares (Owned by Central Hotel Management Co., Ltd.)

98.4%

166

ANNUAL REPORT 2012

CONTENTS

G E N E R A L INF O RMAT ION OF BUSI NESSES HELD BY THE COMPANY 10% UPWARD Company

Nature of Business

Issued Ordinary Share

Issued Ordinary Share held by the Company

Percentage of Shareholding (%)

Central Krabi Bay Resort Co., Ltd. 396-396/1 Moo 2 Tambon Ao Nang Muang, Krabi Tel. : (075) 637-789 Fax : (075) 637-800

Centara Grand Beach Resort & Villas Krabi (193 rooms)

5,000,000 shares at par 100 Baht each

4,999,993 shares

100.0%

10.

Karon Phuket Hotel Co., Ltd. 502/3 Patak Road, Tambon Karon, Muang, Phuket Tel. : (076) 396-200-5 Fax : (076) 396-491

Centara Karon Resort Phuket (335 rooms)

5,200,000 shares at par 100 Baht each

3,564,000 shares (Direct holding of 3,564,000 shares (68.54%) by the Company and indrect holding of 1,600,000 shares (15.4%) by Kata Phuket Hotel Co., Ltd.)

83.9%

11.

Kata Phuket Hotel Co., Ltd. 54 Kedkwan Road, Tambon Karon, Muang, Phuket Tel. : (076) 370-300 Fax : (076) 333-462

Centara Kata Resort Phuket (158 rooms)

1,200,000 shares at par 100 Baht each

600,000 shares

50.0%

12.

Central World Hotel Co., Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 100-1234 Fax : (02) 100-1235

Centara Grand & Bangkok Convention Centre at CentralWorld (512 rooms)

20,000,000 shares at par 100 Baht each Paid up of 100 Baht and 80 Baht per share for 10,000,000 shares each

19,999,993 shares

100.0%

13.

Central Laundry Services Co., Ltd. 1695 Paholyothin Road, Chatuchak, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Dormant Company

15,000 shares at par 100 Baht each

14,994 shares (Owned by Central Hotel Management Co., Ltd.)

100.0%

14.

Central Koh Kood Hotel Co., Ltd. 1695 Paholyothin Road, Chatuchak, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Centara Koh Kood Hotel

1,200,000 shares at par 100 Baht each

1,199,993 shares

100.0%

15.

Triplenine Decor Co., Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Dormant Company

800,000 shares at par 100 Baht each

799,994 shares

100.0%

16.

S.P. Realty Lanta Beach Co.,Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Dormant Company

360,000 shares at par 100 Baht each

359,994 shares (Owned by Central Krabi Bay Resort Co., Ltd.)

100.0%

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

167

CONTENTS

GE N E R A L INFORMAT ION OF BUSI NESSES HELD BY THE COMPANY 10% UPWARD

Company

Nature of Business

Issued Ordinary Share

Issued Ordinary Share held by the Company

Percentage of Shareholding (%)

17.

S.P. Realty Pattaya Beach Co.,Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Dormant Company

800,000 shares at par 100 Baht each

799,993 shares

100.0%

18.

S.P. Realty Hadfarang Resort Co.,Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Dormant Company

885,000 shares at par 100 Baht each

884,994 shares

100.0%

19.

Centara International Management Co., Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Holding Company and Hotel Management

1,500,000 shares at par 100 Baht each

1,499,996 shares

100.0%

20.

R.M.L. LEISURE Pvt. Ltd. (Formerly is Regent Maldives Pvt. Ltd.) 4th Floor Rowville, Fareedhi Magu Maafannu, Republic of Maldives Tel : + 960 330 6566 Fax : + 960 330 9796

Centara Grand Island Resort & Spa Maldives (112 Suites & Villas)

17,990 shares at par of US$ 778.21 per share

13,312 shares (Owned by Centara International Management Co., Ltd.)

74.0%

21.

Cenvaree Healthy Spa Co., Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Not operate yet

10,000 shares at par 100 Baht each

9,994 shares

100.0%

22.

Central Bangkok Convention & Exhibition Co., Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Not operate yet

10,000 shares at par 100 Baht each

9,994 shares

100.0%

23.

Centara International Management (Thailand) Co., Ltd. (Formerly is Centara Thai Hotel Management Co., Ltd.) 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Not operate yet

1,000,000 shares 999,997 shares at par 100 Baht each Paid up of 25 Baht per share

100.0%

24.

Centara Maldives Pvt. Ltd. 2nd Floor (Eastwing), AAGE Henveiru, Male 20094 Republic of Maldives Tel : + 960 333 3644 Fax : + 960 331 5453

Centara Ras Fushi Resort & Spa Maldives (Formerly is Centara Giraavaru Resort & Spa Maldives) ( 140 Suites & Villas )

20,000,000 shares at par of US$ 1 per share

75.0%

168

ANNUAL REPORT 2012

15,000,000 shares (Owned by Centara International Management Co., Ltd.)

CONTENTS

G E N E R A L INF O RMAT ION OF BUSI NESSES HELD BY THE COMPANY 10% UPWARD

Company

Nature of Business

Issued Ordinary Share

Issued Ordinary Share held by the Company

Percentage of Shareholding (%)

25.

Central Restaurants Group Co., Ltd. 306 Silom Road, Suriyawong Bangrak, Bangkok Tel. : (02) 635-7930-9 Fax : (02) 635-7940-1

Franchisee of “KFC”, “Mister Donut”, “Auntie Anne’s”, “Pepper Lunch”, “Beard Papa”, “Chabuton”, “Cold Stone Creamery”, “Ryu Shabu Shabu”, “Yoshinoya”, “The Terrace”, and “Café’ Andonand”

6,200,000 shares at par 100 Baht each

6,199,991 shares

100.0%

26.

CRG Manufacturing Co., Ltd. 55/18 Moo 13 Paholyothin Road, Tambon Klong Neung, Klong Luang, Pathumthani Tel. : (02) 909-2277-9 Fax : (02) 529-4900

Manufacturer of ice cream

16,000,000 shares at par 10 Baht each

15,999,994 shares (Owned by Central Restaurants Group Co., Ltd.)

100.0%

27.

CRG International Food Co., Ltd. 240/35 Ayothaya Tower Building, Soi Ratchadaphisek 18, Ratchadaphisek Rd, Huaykwang, Bangkok Tel. : (02) 274-1724-27 Fax : (02) 692-6634

Japanese Restaurant “Ootoya”

1,797,600 shares at par 100 Baht each

1,797,591 shares

100.0%

28.

Centara Import-Export Co., Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Not operate yet

100,000 shares at par 10 Baht each

99,997 shares

100.0%

29.

Cosi Hotels Co., Ltd. 999/99 Rama 1 Road, Pathumwan, Bangkok Tel. : (02) 769-1234 Fax : (02) 100-6232

Not operate yet

299,997 shares 300,000 shares at par 100 Baht each Paid up of 25 Baht per share

100.0%

30.

Thai Pattana Fund 2 21st -23rd Floor, Column Tower 199 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Tel. : (02) 649-2000 Fax : (02) 649-2100

Property Fund

81,500,000 units at par 10 Baht each

19,500,000 units (19,420,000 units owned by the Company and 80,000 units owned by subsidiaries)

23.9%

31.

Centara Hotels & Resorts Leasehold Property Fund 400/22 6th Floor, Kasikornbank Building Paholyothin Road, Samsen Nai, Phaya Thai, Bangkok Tel : (02) 673-3999 Fax : (02) 673-3900

Property Fund

320,000,000 units at par 10 Baht each

81,093,500 units

25.3%

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

169

CONTENTS

COMPA N Y’S GENERAL INFORM ATI ON Name Type of Business Company registration no. Home Page

Central Plaza Hotel Public Company Limited Service business – hotel, restaurants, food and beverages, etc. 0107536001389 (Previously, Bor. Mor. Jor. 212) http://www.centarahotelsresorts.com

Share capital as at 31 December 2012 Registered: Baht 1,350,000,000, comprising of 1,350,000,000 ordinary shares at par value of Baht 1 per share Issued and fully paid: Baht 1,350,000,000, comprising of 1,350,000,000 ordinary shares at par value of Baht 1 per share &HQWDUD +RWHOV 5HVRUWV 2I¿FH Address 999/99 Rama 1 Road, Pathumwan, Bangkok Telephone (02) 769-1234 Fax (02) 769-1235 &HQWDUD *UDQG DW &HQWUDO 3OD]D /DGSUDR %DQJNRN 2I¿FH Address 1695 Paholyothin Road, Chatuchak, Bangkok Telephone (02) 541-1234 Fax (02) 541-1087

CENTARA GRAND & BANGKOK CONVENTION CENTRE AT CENTRALWORLD

170

ANNUAL REPORT 2012

A-

Debenture

CENT139A

CENT176A

CENT176B

CENT139B

CENT163A

CENT163B

300

500

400

500

1,000

Amount (MB)

09/08/2011

29/07/2011

03/09/2010

05/07/2010

23/06/2010

25/02/2010

Issuance Date

4 Years 7 months

4 years 8 months

3 years

6 years 11 months 24 days

7 years

3 years 7 months 5 days

Tenor (year)

4.75%

4.86%

3.40%

4.65%

MLR -3%

Interest Rate

Collateral

30/09/2013

23/06/2017 29/06/2017

03/09/2013 29/03/2016 09/03/2016

4XDUWHUO\ 4XDUWHUO\

4XDUWHUO\ 4XDUWHUO\ 4XDUWHUO\

Maturity Date

Monthly

Interest Payment Cycle

300

500

400

500

1,000

Balance as at 31 December 2012

171

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

2. 7KH &RPSDQ\ PD\ QRW SD\ GLYLGHQG WR WKH VKDUHKROGHUV RI WKH FRPSDQ\ LQ WKH DPRXQW H[FHHGLQJ RI QHW SUR多W LQ WKH \HDU

1. The Company has to maintain Interest - bearing debt to equity ratio of not more than 2 : 1 as at the ending period of each year, calculated from the FRQVROLGDWHG 多QDQFLDO VWDWHPHQWV

Conditions of debentures issuance

Credit Rating

I N FO RM ATI O N O F D E BE N TU R E S

CONTENTS

OT H E R R EF ERENCE F IRM S Securities Registrar Thailand Securities Depository Co., Ltd. 4th,6th - 7th Floor, 62 Stock Exchange of Thailand Building, Ratchadaphisek Road, Klongtoey, Bangkok 10110 Tel. : (02) 359-1200-01 Fax : (02) 359-1259

Debenture Registrar CIMB Thai Public Co., Ltd. +HDG 2IÂżFH /DQJVXDQ 5RDG /XPSLQL 3DWXPZDQ %DQJNRN Tel. : (02) 626-7000 Â&#x2021; â&#x20AC;&#x153;Debentures of Central Plaza Hotel Public Company Limited No. 4/2010 Due B.E. 2556â&#x20AC;?(CENTEL139B) Siam Commercial Bank Public Co., Ltd. +HDG 2IÂżFH 5DFKDGDSLVHN 5RDG &KDWXFKDN %DQJNRN Tel. : (02) 544-1000 Â&#x2021; â&#x20AC;&#x153;Debentures of Central Plaza Hotel Public Company Limited No. 1/2010 Due B.E. 2556â&#x20AC;?(CENTEL139A) Â&#x2021; â&#x20AC;&#x153;Debentures of Central Plaza Hotel Public Company Limited No. 2/2010 Due B.E. 2560â&#x20AC;?(CENTEL176A) Â&#x2021; â&#x20AC;&#x153;Debentures of Central Plaza Hotel Public Company Limited No. 3/2010 Due B.E. 2560â&#x20AC;?(CENTEL176B) Bank of Ayudhaya Public Co., Ltd. +HDG 2IÂżFH 5DPD ,,, 5RDG %DQJ 3KRQJSKDQJ <DQ 1DZD %DQJNRN Tel. : (02) 296-3582 Â&#x2021; â&#x20AC;&#x153;Debentures of Central Plaza Hotel Public Company Limited No. 1/2011 Due B.E. 2559â&#x20AC;? (CENTEL163A) Â&#x2021; â&#x20AC;&#x153;Debentures of Central Plaza Hotel Public Company Limited No. 2/2011 Due B.E. 2559â&#x20AC;? (CENTEL163B)

Auditor PricewaterhouseCoopers ABAS Ltd. By Khun Nattaporn Phun-Udom (Registration No. 3430) 15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120 Tel. : (02) 344-1000 Fax : (02) 286-5050

Legal Counselors Weerawong, Chinnavat & Peangpanor Ltd. 22nd Floor, Mercury Tower, 540 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Tel. : (02) 264-8000, (02) 657-2121 Fax : (02) 657-2222 Business Advisory (Thailand) Ltd. 15th Floor, Maneeya Center Building, 518/5 Ploenchit Road, Pathumwan, Bangkok 10330 Tel. : (02) 255-8977-8, (02) 251-2285 Fax : (02) 254-4576

Credit Rating Company Tris Rating Co., Ltd. 24th Floor, Silom Complex Building, 191 Silom Road, Bangkok 10500 Tel. : (02) 231-3011

172

ANNUAL REPORT 2012

CONTENTS

COR P OR AT E MANAG EMENT Centara Hotels & Resorts Executive Advisor Executive Advisor Advisor to Chairman of the Board

Maj. Gen. Krawee Sudasna Na Ayudhya Prof. Viroj Lowhaphandu Mr. Dan Chinsupakul

Honorary Advisor to the Board

Mr. Gerd K. Steeb

HOTELS BUSINESS GROUP Operations &KLHI ([HFXWLYH 2I¿FHU ± &(2 Vice President – Operations

Vice President – Operations

0U 7KLUD\XWK &KLUDWKLYDW Mr. David R. Good Mr. Michel Horn

Corporate Affairs & Social Responsibilities Senior Vice President - Corporate Affairs & Social Responsibilities

Mrs. Supatra Chirathivat

Centara International Management Vice President - Business Development

Mr. Suparat Uahwatanasakul

Finance & Administration Senior Vice President - Finance & Administration

Dr. Ronnachit Mahattanapreut

Vice President - Procurement

Mr. Thirakiati Chirathivat

Sales & Marketing Senior Vice President - Sales & Marketing

Mr. Chris Bailey

Human Resources Vice President - Human Resources

Ms. Pattara Jongcharoenkulchai

General Manager &HQWDUD *UDQG %DQJNRN &RQYHQWLRQ &HQWUH DW &HQWUDO:RUOG Centara Grand at Central Plaza Ladprao Bangkok Centara Grand Beach Resort & Villas Krabi Centara Grand Beach Resort Samui Centara Grand Beach Resort & Villas Hua Hin Centara Grand Mirage Beach Resort Pattaya Centara Grand Beach Resort Phuket Centara Grand West Sands Resort & Villas Phuket Centara Grand Island Resort & Spa Maldives Centara Grand Nusa Dua Resort & Villas Centara Villas Samui Centara Kata Resort Phuket Centara Karon Resort Phuket Centara Mae Sot Hill Resort Centara Chaan Talay Resort & Villas Trat Centara Hotel Hat Yai Centara Duangtawan Hotel Chiang Mai

0U 5REHUW ) 0DXUHU /RHIÀHU Mr. Michel Serrano Mr. David Martens Mr. Danny McCafferty Mr. Jacques A.Mury Mr. Andre Brulhart Mr. Denis Thouvard Mr. Andreas Korf Mr.Voytek Klasicki Mr. Martin Heiniger Mr. Scott Bowen Mr. Michael Gaarde-Neilsen Mr. Darren shaw Mr. Somsak Saisawad Mr. Kris Vanitchnont Mr. Pattavee Pongnontakul Mr. Boonchai Suwatsakulsawad

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

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Centara Hotel & Convention Centre Udon Thani Mr. Chaiphun Thongsuthum Centara Hotel & Convention Centre Khonkaen Mr. Phakapol Yawaluk Centara Anda Dhevi Resort & Spa Krabi Mr. Wayne Duberly Centara Watergate Pavillion Hotel & Spa Bangkok Mr. Wim N.M. Fagel Centara Pattaya Hotel Mr. Austin Stanley Robinson Centara Ras Fushi Resort & Spa Maldives Mr. Ulrich Hoffgen Away Suansawan Chiang Mai, Centara Boutique Collection Mr. Peter Brown Khum Phaya Resort & Spa, Centara Boutique Collection Mr. Jerome Sim Nova Hotel & Spa Pattaya, Centara Boutique Collection Mr. Austin Stanley Robinson &KHQ 6HD 5HVRUW 6SD 3KX 4XRF &HQWDUD %RXWLTXH &ROOHFWLRQ 0U 2OLYLHU 3HWLW Centra Ashlee Hotel Patong Mrs. Wilawan Chiammanasombut Centra Government Complex Hotel & Convention Centre Cheang Watthana Ms. Temsiri Kidchob Centra Taum Seminyak Bali Mr. Agus Suananda Waterfront Suites Phuket by Centara Mr. Darren Shaw Centara Ceysands Resort & Spa, Srilanka Mr. Alexandre Glauser Centara Passikudah Resort & Spa Srilanka Mr. Alexandre Glauser Centara Koh Chang Tropicana Resort Mr. Jonas Sjostedt Centara Poste Lafayette Resort & Spa Mauritius Mr.John Dimon Bendtsen Centara Grand Azuri Resort & Spa Mauritius Mr.John Dimon Bendtsen Centara Grand Resort & Spa Pattaya Mr. Dominique Ronge Sandy Beach Non Nuoc Resort Da Nang Vietnam, Managed by Centara Mr.VatthanachaiPhipatthongpanta Centara Wuku Resort & Spa Bali Mr. Dermot Gale Centra Central Station Bangkok Mr. Asdang Sukwises Baga Waterfront Resort & Spa Goa, Centara Boutique Collection Mr. Richard Jacques

Resort Manager Centra Coconut Beach Resort Samui Centara Sappaya Design Resort Rayong

Mr. Sunan Wetcharat Mr. Khajohn Wimolcharoensuk

Hotel Manager Centara Villas Phuket

Mr. Santichai Boonrasri

CENTARA GRAND BEACH RESORT & VILLAS KRABI

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ANNUAL REPORT 2012

CONTENTS

KFC

AUNTIE ANNE”S

PEPPER LUNCH

Central Restaurant Group CEO COO - Operations VP Human Resources Development VP Human Resources VP Marketing Group VP Business Development VP Supply Chain Management VP IT Director of Finance General Manager / Mister Donut General Manager / KFC General Manager / Auntie Anne’s General Manager / Pepper Lunch Asst. General Manager / Beard Papa’s General Manager / Chabuton General Manager / Cold Stone Creamery Director / The Terrace , RYU General Manager / Yoshinoya General Manager / CRG Manufacturing

Mr. Thiradej Chirathivat Mr. Sucheep Tamacheepjaroen Mr. Wichai Charoenthanmanon Mrs. Premhatai Phungbun na Ayuthaya Mr. Takrit Sanitprachakorn Mr. Nathapol Montolsophon Mrs. Ampaipan Chirathivat Mr. Kriruek Tawichai Mrs. Kalya Subhakornpichan Mr. Kantapol Srisuwan Mr. Chainarong Lerlertvanich Mrs. Nongnapas Rumpeuy Ms. Orawan Komolphanporn Mrs. Pananya Borwornnuntakul Mr. Yasuto Togashi Ms. Wachiraporn Wanitchai Mrs. Pavinee Vachirapisutsopin Mr. Pol Sridaeng Mr. Rastam Benraheem

CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED

175

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CEN TA R A HO T EL S & RESORTS

CONTENTS

CENTRAL RESTAURANTS GROUP (CRG)

CONTENTS