Annual Report 2003 by Piyanat Kimhamanon

Annual Report

L.P.N. Development Public Company Limited

Our Vision

To Be The Market Leader In Residential Condominium Development

Contents 03

Summary of Financial Statements

Balance Sheets

Message from the Chairman

General Information

Observance of the Superb

Report of the Audit Committee

Nature of Business

Operational Supervision

Management Team

Income Structure of Revenue from

Code of Business Ethics

The Companyâ&#x20AC;&#x2122;s Background

Businesses where the Company

Supervision over the Use of

Investment Structure

Corporate Organization Chart

Changes in the Past Year

Internal Control

Our Projects

Risk Factors

Inter-transactions

On-going Projects

Shareholding and Administration

Others Factors that may effect

Future Projects

Summary of the Real Estate Business

Administration Structure

Situations of 2003

Details of the Management of L.P.N.

In-house Information

holds at least a 20% of shares

Investment Decisions

Structure

Financial Statements 64

15 Clauses of Report on

Explanation and Analysis of the Management

Development Public Company Limited

Address of Projects

Remuneration to the Management

Check List

Assets Total asset Current portion of land and project development cost Inventories Land and project development cost Assets for rent-net Liabilities and Shareholdersû Equity Short-term loan Long-term loan Total liabilities Issued and paid-up share capital Shareholdersû equity Operation Result Sales Total revenue Cost Net profit margin Net profit (Loss) Financial Ratio Book value per share Net profit per share Diluted earning per share Return on total revenue Return on Equity Return on assets Dividend per share Net asset value

Million Baht 1998

2000

1999

1,698.32 -

2,365.80 -

2,778.32 -

4,366.95 -

159.65 702.47 183.68

38.49 1,308.50 174.94

233.71 373.55 739.71

565.38 339.33 796.82

157.54 3,214.94 567.44

530.50 363.93 1,297.39 938.42 1,599.16

572.98 38.37 847.14 924.64 1,212.30

404.03 148.76 1,113.62 460.00 584.69

257.94 856.24 1,782.81 460.00 582.38

218.54 1,316.76 2,116.23 460.00 650.09

2,545.20 201.51 3,742.29 460.00 608.35

1,754.18 1,943.58 1,206.59 637.79 464.66

911.50 1,071.00 749.95 212.18 162.97

410.11 492.64 413.29 59.31 301.46

375.77 460.23 416.91 32.52 (54.94)

330.51 446.31 346.79 91.69 (381.85)

270.71 520.42 435.36 (113.10) (662.22)

17.04 4.97 3.85 23.91 29.06 16.04 1.00 16.01

13.11 2.01 1.49 15.23 13.44 7.91 24.70

12.72 6.55 61.19 51.55 17.75 8.98

12.66 (1.19) (11.94) (9.43) (2.32) 5.49

14.13 (8.30) (85.56) (58.74) (13.74) 10.15

13.22 (13.53) (119.56) (102.28) (14.25) 13.19

2003

2002

2001

2,896.55 1,186.96

2,059.45 422.97

139.02 660.87 267.74

Note : Information from Consolidated Financial Statements

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

To: Shareholders On behalf of the Management and staff members of L.P.N. Development Public Company Limited, I would like to take this opportunity to present a report on the Companyûs operational results in 2003 to the shareholders as follows: In 2003, it is deemed as the year of recovery and resuming in growth of the real estate business which was vividly pictured. After all the attempts and stimulus from every sector, as they realised significance of such business to the overall economy, mingled with the consistent support from public sector or diligence of the business operators, reliability and purchasing power subsequently refuelled into the business system simultaneously with the other factors activating the consumers to make a purchase such as the remained low-rated interest, sustained demand on the residences etc. On side of L.P.N. Development Public Company Limited, other than its potential indevelopment which is broadly recognised by the customers, the Company also focuses on continuous development of products and services quality and after-sale services to maintain standard of quality and service provided for the customers as our on-going commitment. Subsequent to the marvellous response from the customers, the Company in 2003 won the satisfactory operation results, gained the gross revenue 1,943.58 Million Baht outperformed 2002 of 1,071.20 Million Baht or rising by 81.44%, and earned the net profit of 464.66 Million Baht increasing by 185.2%. The capability of management is better off 22.07% to be 33.93% or climbing by 11.86%. The aforementioned profit was wholly generated from business operation. The foregoing is resulted from efficient control of costs and expenditures,and management over the ratio of liabilities to capital to be in the satisfactory level and non-risk state. With the Managementûs vision and moral collaboration of the staff members at all ranks who are determined to perform their works with strong concern on needs and reacted response of the customers, the Company therefore achieved the dramatical success on sale of every previous project, and can close the projects promptly. Moreover, the construction, which is completed on due under the strict inspection at every step, leads to the transfer of the condominium ownership reached the Companyûs target and then the income can be realised continuously contribute to the constructive compensation to every shareholder.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

In 2004, other than the continuous development of the residential condominium project in CBD area and the attempts in development of the project style under the uniqueness of L.P.N. Design which is generally accepted on the best utilisation in favour of the residents, the Company also has the policy to initiate the development to the potential area outside CBD area. This is the Companyûs critical steps in expand the customer base and location in the broad area, and cover more area in Bangkok. In this opportunity, the Company will celebrate our 15th anniversary of operation in this June, the Company therefore plan for arrangement of various events to thank all the honoured customers and supporters throughout the year. The Company, however, pay attention to research and development which lead to the accurate and reliable information to be used in product development corresponding to the needs of customers and personnel development: the most precious resource of the Company. Beyond all those, the Company also concentrates on the efficient after-sale service, the Company accordingly had set up the customer relations department since April 2003 to enhance the after-sale service. Ultimately, I take this opportunity to express my gratitude to all the shareholders, customers, financial institutes, governmental and private authorities for the splendid support provided to us. This enabled the Company to enjoy the growth in succession up to this moment.

Professor Mora Bunyaphala Chairman

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

The Audit Committee of L.P.N. Development Public Company Limited were assigned to examine the financial statement for its accuracy and proper exposition. The Audit Committee then examined the internal control system to ascertain that it was in a proper condition and examined the relevant entries to be adequately transparent. To enable the Company to strictly comply and observe the law provisions, the Audit Committee coordinated with the internal auditor and certified public accountant on this matter and proposed the shareholders to appoint a certified public auditor. During the past accounting period, the Audit Committee examined the financial statement every quarter, whereupon the proper clarifications and additional information were given from the management and internal auditor. The Audit Committee also examined the entries in connection with the report of the internal auditor to be in accordance with the annual audit schedule, for this purpose, the clarifications and additional information on which were given by the management in order to be submitted to the shareholdersû meeting. Examining the Balance Sheet, the Audit Committee found no material defect which may affect the Companyûs financial statement and accordingly reported the same to the meetings of directors every quarter. On behalf of the Audit Committee

(Professor Siri Keiwalinsrit) Chairman of Audit Committee 1st March 2004

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Board of Directors 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Professor Mora Bunyaphala Mr. Pakorn Thavisin Professor Siri Keiwalinsrit Mr. Vudhiphol Suriyabhivadh Mr. Thep Roongtanapirom Mr. Tirachai Panchasarp Mr. Somkiert Tangthavorn Ms. Jongjit Thapanangkun Mr. Anthony Kai Chiu Cheng Mr. Tawechai Chitasaranachai Mr. Tikhamporn Plengsrisuk Ms. Yupa Techakraisri Mr. Pichet Supakijjanusan Mr. Kumpee Chongthurakit

Chairman and Independent Director Vice Chairman and Independent Director Independent Director Independent Director Independent Director Director Director Director Director Director Director Director Director Director

Executive Directors 1. 2. 3. 4. 5.

Mr. Tawechai Chitasaranachai Mr. Tikhamporn Plengsrisuk Ms. Yupa Techakraisri Mr. Pichet Supakijjanusan Mr. Kumpee Chongthurakit

Chief of Executive Directors Managing Director Deputy Managing Director Executive Director Executive Director

Audit Committee 1. 2. 3.

Professor Siri Keiwalinsrit Mr. Vudhiphol Suriyabhivadh Mr. Thep Roongtanapirom

Chairman of Audit Committee Audit Committee Audit Committee

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

1989

➤

1990 1992

➤

1993

➤

1994

➤

➤ ➤ ➤

1997

➤ ➤

1999

➤

➤ ➤

2000

➤

2001

➤

Established the Company with Baht 50 Million registered capital on 21 June 1989 to develop Lumpini Tower Project. Invested in Pornsanti Co., Ltd. in proportion of 20.00%. Incorporated Lumpini Property Management Co.,Ltd. having 99.98% of its shares held by the Company, in order to manage the various projects of condominiums developed by the Company and subsidiary-companies; and also ones developed by other real estates companies. Increased the proportion of investment by holding of 99.99% of the paid-up capital of Baht 200 Million in Pornsanti Co.,Ltd.. Effect the registration of conversion into public limited company on 21 June 1994 - registration No. BorMorJor.477. The Company was listed at the Stock Exchange of Thailand with the Securities named çLPNé. Issued ordinary shares to increase the capital and distribute among public for 9.2 Million shares of Baht 10 par value with offering value per share of Baht 64. Increased the capital to be Baht 460 million on 4 November 1994. Expands scope of services of Lumpini Property Management Co.,Ltd. to cover and support the markeûs needs. Reorganized the Company and enhance capacity of the employees compatible to economical recession. On 26 July 1999, the Company had appointed Cathay Asset Management Co.,Ltd. as the consultant in respect of restructuring and increase of the Companyûs capital by jointly formulating the negotiation trend on restructuring with each creditor, and also planning for the Companyûs increase of capital. The Company enjoyed success in restructuring with financial institutes for the total obligation of value Baht 3,305.93 Million. Board of Directors of L.P.N. Development Public Company Limited had held the Extraordinary General Meeting of Shareholders No. 1/1999 on 4 October 1999 for consideration on the increase of the Companyûs capital from Baht 460,000,000 (Four Hundred Sixty Million Baht Only) to Baht 3,983,000,000 (Three Thousand Nine Hundred Eighty Three Million Baht Only) by the creation of 352,300,000 (Three Hundred Fifty Two Million and Three Hundred Thousand) new ordinary shares, each of par value 10 Baht, making up the total amount of Baht 3,523,000,000 (Three Thousand Five Hundred Twenty Three Million Baht Only) . On 1 February 2000, the Companyûs Board of Directors considered and appointed the Audit Committee whose names are as follows: Chairman of the Audit Committee Prof. Siri Keiwalinsrit Audit Committee Mr. Vudhiphol Suriyabhivadh Audit Committee Mr. Thep Roongtanapirom Secretary of the Audit Committee Mrs. Navanuj Chintapitak and also determined the scope, power, duties, and responsibility pursuant to the criteria on business supervision of the Stock Exchange of Thailand. Launched Lumpini Place Sathorn Project-the residential condominium valued Baht 750 Million, which was the only residential condominium opened in the economical recession period and achieved a satisfactory response; and also Lumpini Center Project (Happyland) Phase 3, the residential condominium in Bangkapi area. As the project development policy rules the occupancy of the customers within a 1- year period, as a result the construction works were completed and all of the revenue was recognized in 2002. There were continuous promotion activities held.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

➤

2002

➤

2003

➤

2004

➤

In September 2001, the Company agreed to enter into a joint venture agreement with Uni - Venture Public Company Limited, Sansiri Public Company Limited and Yaowawong Co., Ltd. setting up Grand Unity Co., Ltd. for the purpose of development of the WaterCliff Project-the residential condominium in Rama III area, that had been postponed since 1997, due to the economic crisis. The said joint venture company developed the project under the new name çLumpini Place WaterCliffé having L.P.N. Development Public Company Limited responsible for marketing administration, sales and construction work of the whole project. The Companyûs Board of Directors considered and appointed the former Audit Committee. Subject to the resolution of Ordinary Meeting of Shareholders 2002, the meeting resolved on 30 April 2002 to decrease the registered capital from Baht 3,983,000,000.00 (Three Thousand Nine Hundred Eighty Three Million Baht Only) to Baht 460,000,000.00 (Four Hundred Sixty Million Baht Only) and later increased the capital to 75,000,000.00 shares (Seventy Five Million shares) of value Baht 750,000,000.00 (Seven Hundred Fifty Million Baht Only) when added up to the existing registered capital of Baht 460,000,000.00 (Four Hundred Sixty Million Baht Only), then the Company had total registered capital of 2002 in amount of Baht 1,210,000,000.00 (One Thousand Two Hundred Ten Million Baht Only) which was paid-up capital on 30 January 2003 of Baht 933,815,950.00 (Nine Hundred Thirty Three Million Eight Hundred Fifteen Thousand Nine Hundred Fifty Baht Only). The Companyûs Board of Directors resolved to appoint Mr. Pakorn Thavisin as the Vice Chairman of the Companyûs Board of Directors. On the occasion that the Company had been carried on for 15th year in 2004, the Company had held various events under the ç15 years of bounded relationshipé to express the gratitude to the honoured customers and supporters who have provided the Company with the satisfactory support all along and also subsidised the charitable events such as subsidisation of fund in construction of tennis court for youth or contribution to Thai Red Cross Society to buy the kidney filter equipment in assistance of terminal chronic nephritic patient. The Company entered into the Agreement to lease out the whole area of Lumpini Residence building with Riei (Thailand) Co. Ltd. for the expansion purpose of the business in field of serviced apartment and rental for long stay for the Japanese customers. Increase the proportion of investment in Grand Unity Development Co.,Ltd. from 25% to 33.33% in order to enlarge the opportunity in development of project, marketing, and products including to increase the business alliance. As the Company had existed for 15 years this year, in order to express their gratitude to the honoured supporters, either customers, business alliances or media, the Company arranged activities under the project name ç15 years of bounded relationshipé in order to reward this support in various activities such as subsidization to construction of tennis courts for youth at Lumpini Garden, donation to the Thai Red Cross Society to buy kidney dialysis equipment for the assistance of terminal chronic nephritic patients etc. The Company signed a Contract to lease out the whole area of Lumpini Residence Project with Riei (Thailand) Co., Ltd. in order to operate a business in the field of serviced apartments and rental for long stay of Japanese customers. The Company maximized the proportion of investment in Grand Unity Development Co., Ltd. from 25% to 33% in order to widen the opportunities for project marketing and product development including increasing business alliances. In this regard, the products of Grand Unity Development Co.,Ltd. must not compete with the Company. ∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

99.99% Pornsanti Co., Ltd. th

1168/109, 36 Floor, Lumpini Tower, Rama IV Road, Sathorn, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017

Type of shares: Ordinary Number of shares: 200,000 shares Par value: 1,000.00 Baht Issued and paid-up capital: 200.00 Million Baht Register Date: 14 November 1990

99.88% Lumpini Property Management Co., Ltd. th

1168/109, 36 Floor, Lumpini Tower, Rama IV Road, Sathorn, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017

Type of shares: Ordinary Number of shares: 10,000 shares Par value: 100.00 Baht Issued and paid-up capital: 1.00 Million Baht Register Date: 2 April 1992

33.33% Grand Unity Development Co., Ltd. 427/3-5, Sathupradit Road, Kwaeng Chong Nonsee, Yannawa Bangkok 10120 Tel. 02-212-7878 Fax 02-674-1070

Type of shares: Ordinary Number of shares: 5,000,000 shares Par value: 10.00 Baht Issued and paid-up capital: 50.00 Million Baht Register Date: 7 September 2001

*The paid-up capital being registered for the increase of capital at Ministry of Commerce on 29 January 2004. Remark -

L.P.N. Development Public Company Limited carries on the business of residential and office condominium development. Pornsanti Co., Ltd. carries on the business of residential condominium development. Lumpini Property Management Co.,Ltd. carries on the business of property management services. Grand Unity Development Co., Ltd. is a joint venture company carrying on the business of condominium and townhouse development.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

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

Internal Audit Dept.

Administration Dept.

After Sales Construction Service Dept.

Management Information System Dept.

Dept.

Information Technology

Customer Service Dept.

Brokerage Business Dept.

Sales Dept.

Construction Dept. 2

Finance Dept.

Public Relations Dept.

Cleaning Service Dept.

Condo System Development Dept.

Building Management Dept. 2

Building Management Dept. 1

Building Management

Managing Director

Finance Dept.

Accounting Dept.

Human Resource Development Dept.

General Affairs Dept.

Administrative and Finance Management

Lumpini Property Management Co.,Ltd.

Brokerage Management Marketing Dept.

Construction Management

Executive Directors

Construction Dept. 1

Accounting Dept.

Corporate Finance

Deputy Managing Director

Managing Director

L.P.N. Development Plc.

Executive Secretary Dept.

Directorsû Office

Audit Committee

Board of Directors

Corporate Organization Chart

Management Dept.

Customers Relations

Legal Dept.

Research & Development Dept.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Lumpini Tower Area/Location Project Type Purpose Value

: 2-3-33 rai / Rama IV Road (near the Expressway Exit) : 113 units, 38-storey office building with 49,954 sq.m. usable area and 806 car park spaces : For sale and rent : Baht 2,118 million

L.P.N. Tower Area/Location Project Type Purpose Value

: 1-2-42 rai / Nang Linchi-Ratchadapisek Road Intersection : 76 units, 18-storey office building with 13,592 sq.m. usable area and 200 car park spaces : For sale and rent : Baht 564 million

Lumpini Place Area/Location Project Type Purpose Value

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

: 1-3-26 rai / Soi Kraisri, Sri Bumpen Road (near Rama IV Road and the Expressway Exit) : 34 units, 19-storey residential condominium with 10,200 sq.m. usable area and 75 car park spaces : For sale and rent : Baht 408 million

L.P.N. Mini Office Area/Location Project Type Purpose Value

: 90 sq.wah / Nang Linchi-Ratchadapisek Road Intersection (near the Chalerm Maha Nakorn Expressway) : 7-storey office building with 996 sq.m. usable area : For sale : Baht 29 million

P.S.T. Condoville Tower 1, 2 Area/Location Project Type Purpose Value

: 6-2-78.7 rai / Soi Nak Suwan, Nonsee Road (near the Sathupradit Intersection) : 22-storey residential condominium with a full range of facilities : For sale and rent : Baht 1,944 million

P.S.T. Mini Office Area/Location Project Type Purpose Value

: 1-1-79 rai / Soi Nak Suwan, Nonsee Road (near Sathupradit Intersection) : 10 units, 7-storey office building-cum-residence : For sale : Baht 188 million

Siphaya River View Area/Location Project Type Purpose Value

: 2-0-16.6 rai / Yotha Road across Samphanthawongse District Office : 308 units, 31-storey residential condominium with 23,161 sq.m. usable area and 236 car park spaces : For sale and rent : Baht 1,100 million

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

P.S.T. City Home Area/Location Project Type Purpose Value

: : : :

4-1-34.2 rai / Soi Nak Suwan, Nonsee Road, Sathupradit 764 units, 29-storey residential condominium For sale and rent Baht 1,374 million

Baan Lumpini Bang Bua Thong Area/Location Project/Type Purpose Value

: : : :

36-1-31.2 rai / Talingchan-Supanburi Road, Nonthaburi 709 units, Townhouses and commercial buildings For sale Baht 725 million

Baan Lumpini 2 Bang Bua Thong Area/Location Project Type Purpose Value

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

: 2-1-84.9 rai / Talingchan-Supanburi Road, Nonthaburi : Townhouses and commercial buildings with 150 sq.m. usable area (35 units) : For sale : Baht 96 million

Lumpini Place Sathorn Area/Location Project Type Purpose Project Value

: 3-2-52.6 rai / Narathiwat Rachanakharin Road : 9-Storey with 1 Basement Residential Condominium (4 Buildings, 603 units) : For Sale and Rent : Baht 725 million

Lumpini Center (Happyland) Area/Location Project Type Purpose Project Value

: 14-0-7.2 rai / Latphrao Road Soi 117-119 : - 7-8-Storey Residential Condominium (20 buildings, 1,765 units) - 3.75-Storey of Commercial Building with 23 units : For Sale : Baht 919 million

Lumpini Place WaterCliff (Joint Venture Project, which L.P.N. will manage in the areas of Sale, Marketing, and Construction.) Area/Location

Project Type Purpose Project Value

: 5-1-91.3 rai / An intersection between Ratchadaphisake Road and Narathiwat Rachanakharin Road, close to Central Department Store Rama 3 : 36-Storey Residential Condominium (4 Buildings, 620 units) : For Sale : Baht 1,425 million

Lumpini Center Latphrao 111 Phase 1 Area/Location Project Type Purpose Project Value

: : : :

3-3-0 rai / Latphrao 111 Road 8-Storey Residential Condominium (4 Buildings, 534 units) For Sale Baht 360 million

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Lumpini Place Suanplu-Sathorn Area/Location Project Type Purpose Project Value

: : : :

2-2-22.5 rai / Sathorn 8 Road 9-Storey Residential Condominium (2 Buildings, 281 units) For Sale Baht 372 million

Lumpini Place Rama 4-Sathorn Area/Location Project Type Purpose Project Value

: : : :

2-0-98 rai / Rama 4 Road, Soi Sri Bumpen 9-Storey Residential Condominium (2 Buildings, 231 units) For Sale Baht 405 million

Lumpini Townhome Ratchada-Rama 3 (Joint Venture Project, which L.P.N. will manage in the areas of Sale, Marketing, and Construction.) Area/Location : 2-2-2.5 rai / Ratchada-Rama 3 Road Project Type : 4.5-Storey townhouse with 250 Sq.m. usable area (28 units) Purpose : For Sale Project Value : Baht 270 million

Lumpini Residence Area/Location Project Type

Purpose Project Value

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

: 0-0-199 rai / Narathiwat Rachanakharin Road : 9-Storey Service Apartment (1 Building, 38 units) (The Company signed a contract to lease out the whole area of Lumpini Residence Project with Riei (Thailand) Co., Ltd.) : For Sale : Baht 90 million

Lumpini Place Narathiwat 24 Area/Location Project Type Purpose Project Value Opening Date

: : : : :

2-0-25 rai / Narathiwat Rachanakharin 24 Road 9-Storey Residential Condominium (2 Buildings, 190 units) For Sale Baht 352 million January 2003

Lumpini Place Rama 3-Charoenkrung Area/Location Project Type Purpose Project Value Opening Date

: : : : :

2-3-65.1 rai / Rama 3 Road 9-Storey Residential Condominium (2 Buildings, 312 units) For Sale Baht 482 million March 2003

Lumpini Ville Mary-Sathorn Area/Location Project Type Purpose Project Value Opening Date

: : : : :

2-3-65 rai / Chan Road, Soi Pramaemaree 9-Storey Residential Condominium (2 Buildings, 300 units) For Sale Baht 453 million May 2003

Lumpini Place Narathiwatratchanakharin Area/Location Project Type Purpose Project Value Opening Date

: : : : :

2-2-11.2 rai / Narathiwat Rachanakharin Road 9-Storey Residential Condominium (2 Buildings, 233 units) For Sale Baht 478 million June 2003

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Lumpini Center Latphrao 111 Phase 2 Area/Location Project Type Purpose Project Value Opening Date

: : : : :

2-2-7 rai / Latphrao 111 Road, close to Vetchthani Hospital 9-Storey Residential Condominium (3 Buildings, 322 units) For Sale Baht 300 million July, November 2003

Lumpini Suite Sukhumvit 41 Area/Location Project Type Purpose Project Value Opening Date

: : : : :

1-2-78 rai / Sukhumvit 41 Road, close to BTS Station (Promphong) 9-Storey Residential Condominium (2 Buildings, 159 units) For Sale Baht 487 million September 2003

Lumpini Suite Ratchada-Rama 3 (Joint Venture Project, which L.P.N. will manage in the areas of Sale, Marketing, and Construction.) Area/Location : 0-0-386.6 rai / Ratchada-Rama 3 Road (near Central Department Store) Project Type : 9-Storey Residential Condominium (1 Building, 53 units) Purpose : For Sale Project Value : Baht 250 million Opening Date : September 2003

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Lumpini Center Sukhumvit 77 Area/Location Project Type Purpose Project Value Opening Date

: : : : :

12-0-58 rai (Phase 1 and 2) / Sukhumvit 77 Road 9-Storey Residential Condominium (Phase 1 : 5 Buildings, 912 units) For Sale Phase 1 : Baht 900 million January 2004

Lumpini Ville Ratchada-Latphrao Area/Location Project Type Purpose Project Value Opening Date

: : : : :

4-0-85.4 rai / Latphrao 21 Road 9-Storey Residential Condominium (4 Buildings, 508 units) For Sale Baht 700 million January 2004

Lumpini Place Rama 3-Riverview Area/Location Project Type Purpose Project Value Opening Date

: : : : :

3-0-67 rai / Rama 3 Road 19-Storey Residential Condominium (1 Building, 500 units) For Sale Baht 900 million March 2004

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

1234567890123456789012345678901212345678901234567890123456789012 1234567890123456789012345678901212345678901234567890123456789012 1234567890123456789012345678901212345678901234567890123456789012 1234567890123456789012345678901212345678901234567890123456789012 Summary of the Real Estate Business Situations in 2003 1234567890123456789012345678901212345678901234567890123456789012 1234567890123456789012345678901212345678901234567890123456789012 The real estate business in 2003 continued to grow from 2002, the overall market was dynamic subsequent to measures to stimulate the real estate business since 2002 and the saving and loan interest was slammed down which was portrayed in the rising purchasing power on residence. The previously-halted project resumed in renovation and development. Apparently, in the second half, there was movement of the buyer and the operators: means the old operators, the restructured operators and the operators who freshly invested in the real estate business; and also the acceleration on the construction and transfer of residential ownership to tax measures in the end of 2003. Considering the real estate figure, it was found that the overall market still grew in size but slow down than that in 2002. The newly-opened residence figure at the end of 2003 totalled 27,000 units (therein was 8,000 condominium units or 30%), which was only 10% of figure 1994 of 250,000 units. Further considering on the figures of Land Deposition Permit issuance, newly-granted personal loan, and outstanding personal loan, they fared better the past year but not in startling figures, the better figures were due to the low-rated interest in 2003 which was expected to continue in 2004. However, the newly-opened condominium and registered condominium was increasing but in the lesser percentage, the registered condominium in 2003 totalled 7,006 units or 7% of 1994. In conclusion, the development of the condominium is on the continuous rising trend and not in the worrisome situation like in the economic crisis. % Of increment from the previous year Newly-opened residences Deposition Permit issuance Condominium Registration Newly-opened condominiums Newly-granted personal loan Outstanding personal loan Source :

2000 124.02 72.22 (25.15) 69.34 (3.35)

2001 102.53 45.97 (27.93) 2.86 0.05

2002 114.18 2.21 47.80 248.88 46.50 11.10

2003 106.77 32.43 15.02 140.56 62.86 * 14.24 *

Government Housing Bank, Bank of Thailand and Land Department and Research & Development Department of L.P.N. Development Plc. * Comparable figure in the 3rd quarter of 2002 to 3rd quarter of 2003

Demand and Supply In 2003, the change of all-year demand and supply is active and on the positive tendency at the year-end. Money and capital market including security trading is on active trend, the foreign investors and investors makes the index of stock exchange climbing to 600 points, the security trading value then was dramatically high at the year-end particularly in the real estate and its related industry shares. This instigated the trend that Thailand economic will again fall in the economic crisis, whereupon incurred analysis and close monitor from the operators and financial institutes. Bank of Thailand thereby issued many measures to control over granting of project loan or personal loan of the financial institutes, many sectors gave the information that the real estate business was on the positively recovery trend which was corresponding to the marketing functions in the normal business state and is not the worrisome economic crisis. Based on the data which was processed by the research and development department of the Company and analysis on the demand towards the condominium from many methods, came into the similar conclusion that the annual average demand was approximately 15,000 - 20,000 units. It was apparent that the newly-opened condominium in the previous year of 8,000 units approximately when compared to the annual demand, there are unresponding demand in the previous year plus the existing demand in period of 1998-2001 wherein no condominium launched into the market, resulted in the demand of the condominium kept rising and sustain in such state continuously and even gain more 30 - 50% at least. Especially, the target, that is, the middle or middle-low who wishes to live in urban nearby their working places, which is the huge group and the market target where having the residential demand, this was expected to be the interesting market in 2004.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Unit 120,000

% 600

100,000

500

80,000

400

60,000

300

40,000

200

20,000

100

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

0 -100

-20,000 Condominium

Source : 1993 - 2002 2003

Growth Rate based on (1996)

National Housing Authority (Collected by Government Housing Bank) Research & Development Department , L.P.N. Development Public Company Limited

Unit

Condominium Registeration in Bangkok

70,000

60,000

300

50,000 40,000

200

30,000 20,000

100

10,000 0

0 1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

-10 -20 Excluding NHA&LPN

-100 NHA

LPN

Growth Rate based on 1998 (Excluding NHA)

Source : Department of Lands (Collected by Research & Development Department , L.P.N. Development Public Company Limited) Look at the number of the finished and registered condominium in 2003, there were about 7,600 units which was slightly outnumbered 2002ûs, and such number can continue to increase based on the annual demand as above-referred. The newly-launched condominium in 2003 was around 8,000 units which can be calculated the proportion of the finished and registered condominiums in 2004, 2005 and 2006, that is, 55%, 30% and 15% respectively. Based on the above figures, it was obviously to see that supply to be registered can be extended to 10,000 units. The areas that having condense development of condominium are Sukhumvit 30%, Silom and Sathorn 14%, these figures indicated that more than 45% of development occurred in CBD area. All the aforementioned projects which are the high-rise and the building of less than 9 ∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Aggregate index of

150

140 136.8

136.4

135.9

134.5

139.5 135.5 135.8

136.6

136.7

136.8

137.4

131.8

130

120 Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Costs From the aggregate construction materials index in 2003, it was shown that in the beginning of the year the aggregate construction materials index overcame those in the previous year for 5% contributed to the change of the oil price and maintain in the middle of the year, but in the year-end the index was tending upwards. The newly-launched projects in the second half of the year was not the great amount since the market competition became more acute.

Operators For the operators of the real estate business, especially those were listed in the Stock Exchange of Thailand, their operation results in the previous year shown more profits than the year-before wherein many companies that were restructured, returned to trade in the Stock Exchange. The foregoing livened up the market as they announced the launch of many big projects. Accordingly, L.P.N. Development Public Company Limited achieved the better operation results than the previous year, due to the sales brought by the development of the project reaching the target and the customers needed to transfer the finished condominium units before the tax privilege ended in the year-end of 2003. The index of the real estate group soared by 100% to 180 points-expressing the apparent recovery. In aspect of the capital source, the operators had adjusted themselves to more rely on their own funding source by issuing their shares to increase capital, seeking the joint venture alliances or issuing the debentures. The large operators who had potential in investment mainly dominated the competition in the market.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Competition Status and Competitors Since the economic crisis in 1997 majority of the operators, in order to reduce the risk from project development, had adjusted their styles and practices, to develop the project in the housing estates and townhouse styles mainly. Therefore, there burst the gap in urban residential condominium market, since the supply was downward while the demand was maintained existing especially the residential condominium for the average-income to the low-income groups, which covered the largest proportion of the population base. From such marketing gap, the Company and affiliated companies had laid the strategies in development of the residential condominium projects in continuous manner in support of the considerable demand, this made the Company successful and occupied the highest shares of the residential condominium market. From the statistical figures of condominium registration collected by Land Department in 2002, the Companyûs market share was around 40% (excluding National Housing Authority Projects). As well as in 2003, the Company still sustained the market share, which lessen the competitors to the Companyûs products. This reflected in the statistic of the newly-launched projects in 2003, the projects of the style and selling price rate based on the same customer group as the Company were only 25%, besides that were the newly-launched projects intended for the high-end customers with selling prices ranged from Baht 50,000/sq.m. at the proportion of 67%. Due to the Companyûs marketing strategies and policies, the customers base was subsequently broadened because of the reliability in project, the splendid after-sale service and condominium management, which were deemed as the advantages of the Company and affiliated companies all along. In 2003, the overall competition in the condominium market started with upbeat situation in the beginning of the year, as many operators turned to develop the condominium seriously due to proper situations and growing reliability on the market, they had developed the projects similar to the Companyûs, that is, in the low-rise building style. Up to the year - end of 2003, there were many newly-launched projects, the competition circumstance became stern, particularly in November and December 2003. Condominium Range Price ranged from Bt.50,000+/sq.m. (A) Price ranged Bt.30,001-50,000/sq.m. (B) Price ranged less than Bt.30,000/sq.m. (C) Total

Total amount Project Number Unit Number 33 3,835 13 3,205 4 851 50 7,891

LPN Project Number Unit Number 2 228 4 1,037 1 322 7 1,587

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Information of Number, Size of Competitors and Market Share Table 1 :

Ranking 1 2 3 4 5 6 7 8 9 10 11 12 Total

Source :

Describe market value of the companies categorized real estate that operated the comparable nature to the Company 2003 Rent & Service Name % QH 41.16% SIRI 37.46% LPN 8.15% SPALI 7.58% GOLD 5.66% KMC 0.00% LH 0.00% LALIN 0.00% MK 0.00% NOBLE 0.00% PF 0.00% SAMCO 0.00% % 100.00% M.Baht 1,543.06

Sale Housing & Land Name % LH 39.43% QH 10.92% PF 7.94% SPALI 7.38% LALIN 6.61% NOBLE 6.52% SIRI 6.04% GOLD 4.11% LPN 3.71% MK 3.25% KMC 2.68% SAMCO 1.41% % 100.00% M.Baht 47,345.77

Total Revenue Name % LH 37.82% QH 11.11% PF 7.59% SIRI 7.01% SPALI 6.95% NOBLE 5.82% LALIN 5.78% KMC 5.47% GOLD 4.44% LPN 3.57% MK 3.11% SAMCO 1.33% % 100.00% M.Baht 54,415.01

RSIMS system of Stock Exchange of Thailand

Table 1 above indicates the ranking of the real estate development companies listed in Stock Exchange of Thailand that operated the business comparable to the Company and affiliated companies and took the highest market share compared to the total revenue, income from sales and income from rent and service in 2003. In this table, it was shown that the Company and affiliated companies took the market share calculated from the total revenue at 3.57% or equivalent to 1,943.58 Million Baht ranked at 10th and earned the income from sales calculated at 3.71% or equivalent to 1,754.18 Million Baht ranked at 9th and income from rent and service at 8.15% or 125.69 Million Baht ranked 3rd.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Trends of Real Estate Business 2004 The real estate business in 2004 is expected to be climbing in the upward trends followed 2003. Despite expiration of the governmental measures to stimulate the real estate business, this will not send much impact but may defer the purchase at the beginning of the year. However the continuous demand of the residences may lead the situation back on the normal track sooner. The other factors expected to impact the real estate business in 2004 of which the operators must adjust to keep updated, i.e.: Increase of the construction materials; Official regulations such as new town plan to be announced and the new land assessment value; Higher competition; Interest which may be increased at the year-end. The costs of the construction materials are expected to be increase due to the higher demand especially rising demand for use of steel in the world market which lead to the materials used in steel production for construction is soared. Besides, the domestic demand of cement, which is based upon the marketing function, may slightly effect the adjustment of the operatorsû selling price. New town plan to be announced will lay the requirements on F.A.R. and O.S.R. that are more rigid to diminish the population density in town conducive to more restriction on the area for construction the high-rise in CBD area and also the rural area developed to be the housing estates are also affected. The size of area per unit to be developed will become bigger to relax the population density. Therefore, the residences of middle-low to low price must be constructed farther the inner area of Bangkok which gave positively affect on the development of the condominiums in the middle and low groups obviously. For the condominiums within Bangkok area, those being affected are the high-rise as aforementioned, but for those that not being categorized as the high-rise under the Condominium Control Act are slightly affected. The projects that the Company has policy to develop are categorized as the Condominium with F.A.R. under the requirements of town plan, therefore, are not much affected. It is expected that in 2004, the operators who developing the condominium are likely to develop the projects in low-rise style due to the reasons of town plan and demand quantity of the real estate of middle price as above-referred. In aspect of the land assessment value in the inner area of Bangkok, there is slight change when compared with the outskirt on where developed the housing estates and also the change corresponding to the market price in pursuant to the marketing function on competition of the project sale. Expected, the operators in 2004 will develop the residential condominiums in greater number since the economy condition is now steadily outstanding and in the upward trend which heats the competition. Therefore, the purchasers have more alternatives, and spend more time for purchase decision. Subsequently, the operators must develop their products in support of the customerûs needs and valued in the reasonable price, that will truly respond to the existing demands and prevent the surplus project development which lead to the overloaded demand.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

REPORT OF INDEPENDENT AUDITORS To The Board of Directors and shareholders of L.P.N. DEVELOPMENT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES.

I have audited the accompanying consolidated balance sheets of L.P.N. DEVELOPMENT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES as at December 31, 2003 and 2002, and the related consolidated statements of income, consolidated changes in shareholdersû equity and consolidated cash flows for each year then ended, and audited for the company only of L.P.N. DEVELOPMENT PUBLIC COMPANY LIMITED. These financial statements are the responsibility of the Companyûs management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standard. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of L.P.N. DEVELOPMENT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES and for the company only of L.P.N. DEVELOPMENT PUBLIC COMPANY LIMITED as at December 31, 2003 and 2002, and the results of its operations changes in shareholdersû equity and its cash flows for each year then ended in conformity with generally accepted accounting principles. Without further qualifying my opinion, I draw attention to note 24, the company is accused by their contractor in civil suit amounting to Baht 46.67 million while the construction cost was recorded in the book of company amounting Baht 30.45 million. The company also accused the contractor claiming for Baht 261.48 million, thereafter as at December 21, 2003, Court of the first instance had decided the company to pay the contractor amounting Baht 29.85 million and the contractor to pay the company amounting Baht 3.00 million. The net payment was Baht 26.85 million together with interest charge at rate 7.5 % p.a. amounting to Baht 12.36 million totally Baht 39.21 million. The company did not yet recorded the difference of Baht 8.76 million in annual financial statement due to the company had appealed and the result would be positive.

PIPAT & ASSOCIATES CO., LTD. Bangkok February 12, 2004

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

(Pipat Pusayanonda) Certified Public Accountant of Thailand No.56

ASSETS Current assets Cash and cash equivalent (Note 3.9) Trade account and notes receivable Account receivable-net (Note 3.3 and 4) Notes receivable Other Installment receivable (Note 3.1 and 5) Current portion of Land and project development cost (Note 7) Account receivable from related parties Inventories (Note 3.2 and 6) Short-term loan to related parties (Note 8.1) Other current assets Deposit Accrued revenue Others Total current assets Non-current assets Pledged deposit (Note 19.1) Investment and loans Investment in subsidiaries and associated (Note 3.5 and 8.3) Long-term loan to related parties (Note 8.2) Land and project development cost (Note 7) Assets for rent-net (Note 3.7,9 and 19.2) Land plants and equipments-net (Note 3.6,10 and 19.2) Other non-current assets Withholding tax Other Negative goodwill-net (Note 2.4 and 11) Total non-current assets TOTAL ASSETS

Consolidated 2003 2002

As at December 31, 2003 and 2002 (Baht) The Company only 2003 2002

333,254,751.93

292,450,951.10

9,819,883.00 62,202,216.89 520,946.59 5,796,649.84

6,949,786.25 40,751,262.60 196,946.73 12,933,149.74

1,186,960,378.22 2,989,329.33 139,020,836.85 -

301,988,543.74 271,389,494.68 9,558,883.00 62,132,959.99 513,312.95 5,760,649.84

5,713,749.25 39,125,057.60 196,946.73 9,455,951.24

422,966,319.46 1,186,960,378.22 422,966,319.46 22,289,464.22 1,679,320.76 21,829,254.21 159,659,910.55 135,396,801.02 153,325,182.96 86,079,155.14 97,326,196.79

20,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00 7,072,855.69 13,778,732.21 25,049,931.03 20,790,697.57 23,600,408.26 19,959,981.73 1,792,687,779.37 1,012,767,220.43 1,833,670,412.92 1,061,288,134.65

2,058,049.24

3,602,417.70

36,206,379.61 660,865,791.22 267,743,615.18

12,782,520.87 78,568,150.69 702,479,407.22 183,676,335.76

91,058,873.99

23,902,788.59

1,954,622.15

1,949,911.38

105,643,150.05 77,798,920.76 78,568,150.69 660,865,791.22 702,479,407.22 167,747,996.28 80,851,793.84 76,391,278.06

11,292,742.14

41,148,469.50 41,433,053.01 29,801,841.01 23,512,017.99 4,779,889.63 2,633,420.37 4,396,827.54 2,255,834.38 (2,390,116.00) 1,103,861,068.37 1,046,687,978.21 1,046,801,506.31 978,708,778.40 2,896,548,847.74 2,059,455,198.64 2,880,471,919.23 2,039,996,913.05

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Liabilities and Shareholdersû Equity Current liabilities Bank overdrafts and loans from financial institutions (Note 13) Refund down payment payable (Note 14) Trade accounts and notes payable Current portion of long-term loans (Note 15 and 16) Accrued interest Deposit for Share Capital Other current liabilities Unrealized revenue (Note 5) Deposit received Retention Other Total current liabilities Non-current liabilities Hire-purchase payable-net (Note 15) Long-term loans (Note 16) Other non-current liabilities Deposit for rent and service Others Total non-current liabilities Total liabilities Unrealized revenue (Note 17) Shareholdersû Equity Share Capital (Note 25) Authorized share capital 121,000,000 ordinary shares at Baht 10.00 each Baht 1,210,000,000.00 Issued and paid-up share capital 93,841,577 ordinary shares at Baht 10.00 each Issued and fully paid-up Premium on share capital (Note 25.1) Premium on assetsû valuation (Note 3.7 and 9) Retained earnings Appropriated Legal reserve (Note 25.7) Unappropriated Total shareholdersû equity Minority interest in subsidiaries Total shareholdersû equity-net TOTAL LIABILITIES AND SHAREHOLDERSû EQUITY

Consolidated 2003 2002

As at December 31, 2003 and 2002 (Baht) The Company only 2003 2002

472,855,785.67 792,650.00 115,977,276.53 57,640,095.92 1,142,637.90 -

565,218,740.92 40,828,298.00 48,250,995.81 7,757,185.28 61,189.03 300,000.00

472,471,115.17 792,650.00 112,086,395.71 57,298,496.00 1,142,637.90 -

565,109,703.31 40,828,298.00 46,551,823.97 7,415,585.36 61,189.03 300,000.00

7,362,496.00 196,875,957.07 37,142,379.78 39,926,999.45 929,716,278.32

5,262,583.00 75,616,444.10 27,363,868.43 31,469,910.26 802,129,214.83

7,362,496.00 196,523,750.61 37,142,379.78 26,676,549.03 911,496,470.20

5,262,583.00 75,012,637.00 27,361,984.07 12,859,662.08 780,763,465.82

56,933.64 363,926,996.79

398,533.56 38,372,764.14

363,926,996.79

38,372,764.14

2,377,387.20 1,818,724.73 3,870,170.07 1,030,401.05 45,018,854.97 366,776,122.57 847,148,069.80 1,278,272,592.77 1,990,583.76

1,681,348.42 3,623,850.07 43,677,962.63 824,441,428.45 2,193,213.63

924,648,800.00 124,041,255.60 1,699,893.54

2,316,419.59 1,376,721.05 367,677,071.07 1,297,393,349.39 -

938,415,770.00 125,770,923.60 1,651,335.61

8,148,616.09 8,148,616.09 525,164,256.85 161,914,481.28 526,222,097.40 162,972,321.83 1,599,150,902.15 1,212,304,430.42 1,600,208,742.70 1,213,362,270.97 4,596.20 2,698.42 1,599,155,498.35 1,212,307,128.84 1,600,208,742.70 1,213,362,270.9 2,896,548,847.74 2,059,455,198.64 2,880,471,919.23 2,039,996,913.05

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

1,754,177,517.10 911,506,998.15 1,750,627,517.10 125,690,145.95 92,336,440.38 44,243,770.95 15,112,611.57 10,891,579.23 12,859,939.11 1,905,394.56 22,530,704.29 1,387,692.14 22,530,704.29 198,961.00 26,068,923.54 54,876,372.81 24,407,853.93 1,943,579,902.45 1,071,198,043.71 1,856,575,179.94

886,026,298.15 34,093,878.11 15,206,958.24 (414,570.51) 1,387,692.14 53,915,958.50 990,216,214.63

1,206,585,635.38 35,490,272.75 229,307,486.49 939,572.49 4,050,000.00 1,476,372,967.11 467,206,935.34 1,575,694.11 974,366.79 464,656,874.44 (1,747.77) 464,655,126.67

1,220,125,635.89 10,571,300.33 154,830,001.80 831,572.49 4,050,000.00 1,390,408,510.51 466,166,669.43 1,511,542.76 464,655,126.67 464,655,126.67

737,789,575.77 10,261,911.24 97,567,805.06 754,736.55 320,000.00 3,180,000.00 849,874,028.62 140,342,186.01 80,498,961.00 6,049,403.74 53,793,821.27 53,793,821.27

144,178,500.56 (35,000,000.00) 162,972,321.83 464,655,126.67

144,178,500.56 (35,000,000.00) 162,972,321.83

Expenses Cost of goods sold Cost of rent and service Selling and administrative expenses Bad debt and doubtful debt Loss from Investment Directorsû remuneration Total expenses Profit (loss) before interest and income tax Loss for diminution value of assets Interest expenses Income tax expenses Net profit (loss) before minority interest Profit of minority interest Net profit (loss) from ordinary activities Extraordinary item (Note 23) Profit on restructuring debt Loss on debt for capital conversion Net profit Basic earning per share (Note 3.11) Profit before extraordinary item Extraordinary item Earning per share Weighted average number of ordinary shares (share) Diluted earning per share (Note 3.11 and 28) Profit before extraordinary item Extraordinary item Earning per share Weighted average number of ordinary shares (share)

464,655,126.67 4.97 4.97 93,447,265 3.85 3.85 120,605,688

749,947,010.11 32,334,421.49 143,300,617.65 683,143.45 320,000.00 3,180,000.00 929,765,192.70 141,432,851.01 80,498,961.00 6,118,067.55 1,021,274.27 53,794,548.19 (726.92) 53,793,821.27

0.66 1.35 2.01 80,930,103 0.49 1.00 1.49 109,465,223

4.97 4.97 93,447,265 3.85 3.85 120,605,688

0.66 1.35 2.01 80,930,103 0.49 1.00 1.49 109,465,223

(Please see notes to the financial statements which formed an integral part of these statements)

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

2002

Issued and fully paid share capital

Share premium

Balance-beginning as at Jan. 1, 2002 460,000,000.00 643,050,000.00 Share capital Increased during period 464,648,800.00 Share premium Increased (decreased) during period (519,008,744.40) Premium on assets valuation Increased (decreased) during period Legal reserve Increased (decreased)during period Retained earnings Increased (decreased)during period (Note 25.1) Net earnings (loss) for the period Balance-end as at Dec. 31, 2002 924,648,800.00 124,041,255.60

For the each year December 31, 2003 and 2002 (Baht) The Company only Premium on assets Legal reserve Retained Total valuation earnings 1,748,451.47 42,019,126.54 (561,064,510.94) 585,753,067.07 464,648,800.00

(519,008,744.40)

(48,557.93)

(42,019,126.54)

1,699,893.54

561,064,510.94 561,064,510.94 162,972,321.83 162,972,321.83 162,972,321.83 1,213,362,270.97

1,699,893.54

162,972,321.83 1,213,362,270.97

2003 Balance-beginning as at Jan. 1, 2003 924,648,800.00 124,041,255.60 Share capital Increased during period 13,766,970.00 Share premium Increased (decreased)during period 1,729,668.00 Premium on assets valuation Increased (decreased)during period Legal reserve Increased (decreased)during period(Note 25.7) Prior year adjustment (Note 18) Net earnings for the period Paid out the Dividends (Note 25.7) Balance-end as at Dec. 31, 2003 938,415,770.00 125,770,923.60

13,766,970.00

1,729,668.00

(48,557.93)

8,148,616.09

1,651,335.61

(8,148,616.09) 124,859.99 124,859.99 464,655,126.67 464,655,126.67 (93,381,595.00) (93,381,595.00) 8,148,616.09 526,222,097.40 1,600,208,742.70

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

2002 Balance-beginning as at Jan. 1, 2002 Share capital Increased during period Share premium Increased (decreased)during period Premium on assets valuation Increased (decreased)during period Legal reserve Increased (decreased)during period Retained earnings Increased (decreased)during period (Note 25.1) Minority interest in subsidiaries Increased during period Net earnings (loss) for the period Balance-end as at Dec. 31, 2002

Issued and fully paid share capital

Share premium

460,000,000.00 643,050,000.00

For the each year December 31, 2003 and 2002 (Baht) Consolidated Minority Premium on interest assets Legal Retained in Total valuation reserve earnings subsidiaries 1,748,451.47

42,019,126.54 (562,122,351.49)

1,971.50

464,648,800.00

584,697,198.02 464,648,800.00

(519,008,744.40)

(519,008,744.40) (48,557.93)

(48,557.93) (42,019,126.54)

(42,019,126.54)

561,064,510.94

561,064,510.94 726.92

924,648,800.00 124,041,255.60

1,699,893.54

162,972,321.83 161,914,481.28

726.92 162,972,321.83 2,698.42 1,212,307,128.84

924,648,800.00 124,041,255.60

1,699,893.54

161,914,481.28

2,698.42 1,212,307,128.84

2003 Balance-beginning as at Jan. 1, 2003 Share capital Increased during period Share premium Increased (decreased)during period Premium on assets valuation Increased (decreased)during period Legal reserve Increased (decreased)during period (Note 25.7) Prior year adjustment (Note 18) Net earnings for the period Paid out the Dividends (Note 25.7) Minority interest in subsidiaries Increased (decreased) during period Balance-end as at Dec. 31, 2003

13,766,970.00

13,766,970.00 1,729,668.00

1,729,668.00 (48,557.93)

(48,557.93)

8,148,616.09

938,415,770.00 125,770,923.60

1,651,335.61

(8,148,616.09) 124,859.99 464,655,126.67 (93,381,595.00)

124,859.99 464,655,126.67 (93,381,595.00)

8,148,616.09 525,164,256.85

1,897.78 1,897.78 4,596.20 1,599,155,498.35

(Please see notes to the financial statements which formed an integral part of these statements)

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

123456789012345678901234567890121234567890123456789012345678901 123456789012345678901234567890121234567890123456789012345678901 123456789012345678901234567890121234567890123456789012345678901 123456789012345678901234567890121234567890123456789012345678901 123456789012345678901234567890121234567890123456789012345678901 Statement of Cash Flow 123456789012345678901234567890121234567890123456789012345678901 For the each year December 31, 2003 and 2002 (Baht) Consolidated The Company only 2003 2002 2003 2002 CASH FLOWS FROM OPERATING ACTIVITIES Net profit (loss) 464,655,126.67 162,972,321.83 464,655,126.67 162,972,321.83 Items to reconcile net income to net cash flows From operating activities Bad debt and doubtful debt 939,572.49 683,143.45 831,572.49 754,736.55 Depreciation 13,804,578.32 9,125,029.40 8,631,542.79 4,495,244.64 Negative goodwill (1,486,477.57) (3,195,576.28) (1,486,477.57) (3,195,576.28) Interest from subsidiaries and associated (202,629.87) (4,483,168.94) Loss from sales assets (1,686,173.74) (1,747,324.80) Equity profit (loss) from subsidiaries and associated (22,530,704.29) (1,387,692.14) (24,436,098.85) (973,121.63) Profit on restructuring debt (144,178,500.56) (144,178,500.56) Unrealized revenue from debt (32,281,018.01) (32,281,018.01) Profit on transfer of assets (198,961.00) Loss for diminution value of assets 80,498,961.00 80,498,961.00 Loss from devaluation of withholding tax 788,314.86 842,816.85 Loss on debt for capital conversion 35,000,000.00 35,000,000.00 Minority interest in subsidiaries (decrease) 1,747.77 726.92 Profit (loss) from operations before change in operating assets and liabilities 454,485,984.51 107,881,251.46 446,245,710.86 98,609,878.60 Operating assets (increase) decrease Trade account and notes receivable (25,129,337.15) (39,910,444.40) (27,548,688.61) (37,712,526.66) Installment receivable 7,136,499.90 607,403.48 3,695,301.40 (1,782,463.40) Account receivable from related parties 19,300,134.89 (22,289,464.22) 20,149,933.45 (21,829,254.21) Inventories 612,427,741.22 657,227,252.95 609,717,049.46 646,121,573.29 Land and project development cost (1,416,277,114.68) (715,938,550.46) (1,416,277,114.68) (715,938,550.46) Other current assets 2,255,825.16 (29,196,908.68) (3,831,244.43) (18,731,648.30) Other non-current assets (2,789,658.95) (10,834,567.49) (8,692,284.52) (9,338,263.68) Operating assets (increase) decrease (803,075,909.61) (160,335,278.82) (822,787,047.93) (159,211,133.42) Operating liabilities increase (decrease) Trade account and notes payable 67,875,277.41 (1,769,385.26) 65,683,568.43 (3,042,000.89) Refund down payment payable (40,035,648.00) (40,269,300.00) (40,035,648.00) (40,269,300.00) Accounts payable from related parties (2,183,288.64) Other current liabilities 142,673,475.38 380,063.49 148,286,758.14 (7,054,475.90) Other non-current liabilities (2,554,416.63) (5,585,098.40) (2,456,072.71) (5,374,690.98) Operating liabilities increase (decrease) 167,958,688.16 (47,243,720.17) 171,478,605.86 (57,923,756.41) Net cash provided (used) by operating activities (180,631,236.94) (99,697,747.53) (205,062,731.21) (118,525,011.23)

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

1,544,368.46 (10,869.95) (4,710.77) (4,687.53) 78,568,150.69 89,815,192.34 (2,711,242.87) (1,796,792.88) (1,796,792.88) (10,125,000.01) (10,125,000.01) (76,696,237.87) (6,964,942.63) (72,225,819.44) (4,209,131.16) (3,422,862.24) (3,422,862.24) 727,780.49 720,175.11 17,960,000.00 17,960,000.00 16,884,406.65 (17,100,812.59) 31,045,182.12 (17,050,061.57)

CASH FLOWS FROM FINANCING ACTIVITIES Received (paid) to bank overdraft Received short-term loans from financial institutions Paid short-term loans from financial institutions Received long-term loans Paid long-term loans Hire-purchase payable Paid to other payable swap interest rate Increased ordinary shares Paid out the Dividends Net cash provided (used) by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents as at January 1, Cash and cash equivalents as at December 31, Supplemental disclosures of cash flow information Cash paid during the period for: Interest expenses Income tax

(362,955.25) 613,000,000.00 (705,000,000.00) 540,915,000.00 (165,360,767.35) (458,689.28) 15,196,638.00 (93,378,595.00) 204,550,631.12 40,803,800.83 292,450,951.10 333,254,751.93

(14,132,062.14) 619,350,270.00 (245,000,000.00) 265,191,000.00 (510,662,341.85) (1,077,683.32) (10,000,000.00) 289,985,440.00 393,654,622.69 276,856,062.57 15,594,888.53 292,450,951.10

(638,588.14) 613,000,000.00 (705,000,000.00) 540,915,000.00 (165,360,767.35) (117,089.36) 15,196,638.00 (93,378,595.00) 204,616,598.15 30,599,049.06 271,389,494.68 301,988,543.74

(14,196,733.83) 619,350,270.00 (245,000,000.00) 265,191,000.00 (510,662,341.85) (736,083.40) (10,000,000.00) 289,985,440.00 393,931,550.92 258,356,478.12 13,033,016.56 271,389,494.68

37,557,200.56 24,974,819.93

40,150,733.68 11,894,959.36

37,554,529.29 20,431,263.47

40,143,549.95 9,370,577.54

(Please see notes to the financial statements which formed an integral part of these statements)

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

1. Companyûs operating L.P.N. Development Public Company Limited has been listed in the Stock Exchange of Thailand since on June 21, 1994. Type Type of business is Real Estate. Location : 1168/109 36th, Lumpini Tower, Rama IV Rd., Sathorn, Bangkok. As at December 31, 2003 The company has 60 employees and employeeûs expenses is amounting of Baht 45.02 million.

2. Basis of preparation of the financial statements 2.1 2.2

The presentation of these financial statements has been made in compliance with the Notification of the Commercial Registration Department dated 14 September 2001, issued under the Accounting Act B.E. 2543. The consolidated financial statement for year ended December 31, 2003 and 2002 it consists of the financial statements of L.P.N. DEVELOPMENT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES. The company held its in subsidiaries shares capital as follows:Percentage PORNSANTI CO., LTD. 99.99 LUMPINI PROPERTY MANAGEMENT CO., LTD. 99.88

2.3 2.4

2.5

Type of business Real Estate Service

Relationship Shareholding/Power to director Shareholding/Power by director

Transaction with related companies Intercompany transactions have been eliminated in the consolidated financial statements. Net book value of subsidiary which is excess than cost of investment is recorded as çNegative Goodwillé and present at less accumulated amortization. Negative goodwill is amortised and will be realised as income over a period of 10 years by straight-line method which is relation to useful life of assets. Negative goodwill amortization recognise as çOther incomeé in profit and loss statement. Negative goodwill less amortization is present as çNegative Goodwill-neté which shown deduct from asset in Balance sheet. The consolidated financial statements have been presented the financial position and operation results of L.P.N. Development Public Co., Ltd. and its subsidiaries companies. The usage of transaction of consolidated financial statements for other purposes may be limited because of the different business nature of those companies which were consolidated.

3. Significant Accounting Policies 3.1

Realization on income and expenses. The company used accounting policies of income and expenses on accrual basis Accounting Policies for Realization for sales of property and condominium are as follows : For new projects started in 1994, revenue received from customers who had signed contract were base on the value of work completed as compared with the total investment of project.

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

3.2

3.3

3.4

3.5

3.6

3.7

Income is realized on percentage of completion method, the excess income which is over the amount due in contract are shown in Balance Sheet as çinstallment receivableé. Cost of condominiums and properties sold are recorded on the basis of percentage of revenue realized. Inventories Being the completion of condominium constructions in the proportion which are not assigned to buyers. The Company shows the total cost value by specific method which is lower than net realisable value. Sparepart is present at the lower of cost by FIFO method and net realisable value (NRV) Allowance for doubtful accounts The company has made the allowance for doubtful accounts of installment receivable which has been overdue more than six periods. Short - term investment The accounting policy for investment is in accordance to practice from TASû40 çAccounting for Investmenté as follows :Short - term investment in the marketable securities and equity instrument - available for trade are state at fair value. Unrealized gain or loss on revaluation of the securities available for trade is separately presented in Statement of Income. Fair value is computed by using closed price from SETûs report as at the end of the period Cost of securities sold is calculated by weighted average method. Long-term investment Investment in related parties the company recorded the investment in related parties by Equity Method. And adjust from updated of financial statements for the year ended by auditor. The said investment which the company had held the shares more than 50 % of voting right and the company had controllable right to determine financial and operational policy. Land plants and equipments-net/Depreciation Lands are valued at cost. Buildings and equipments are valued at cost less accumulated depreciation. The depreciation is computed on straight-line method to the highest percentage allowed by Revenue Code. Assets for rent Land are valued at fair market value which appraised by external appraised-person. Building and equipmentûs are valued at fair market value which appraised by external appraisedperson, less accumulated depreciation that computed from fair market value and the different between original cost and fair market valued presented under ownersû equity named çPremium on assetsû valuationé The depreciation is computed on straight-line method to the highest percentage allowed by Revenue Code.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Provident Fund The company has a provident fund for employees. The fund consists of voluntary contributions by employees based on monthly salary at the rate of 2-4%, the companyûs contribution of an additional 3-7% of the employeeûs basic salary which was paid in to the fund, and benefits earned from the investment of the fund. The fund is managed by TFB SUBMUNKONG Registered Provident Fund No.24/1997 at January 28, 1997. 3.9 Cash and cash equivalent For the purposes of the statements of cash flows, cash and cash equivalent include cash on hand and at banks which an original maturity period of 3 months or less. 3.10 Use of accounting estimate Preparation of finanical statements in conformity generally accepted accounting principles requires management to make estimate assumptions that effect the reported amounts of revenues, expense, assets and liabilities and disclosure of contingent assets and liabilities. Actual results may differ from those estimates. 3.11 earnings (loss) per share Basic earnings (loss) per share for the current period is determined by dividing net earnings for the period by the number of ordinary shares in issued after the stock increase as discussed in Note 25. For comparative purposes, the prior periodûs basic earnings per share has been recalculated to reflect the impact of the stock increase as mentioned above. Diluted earnings per share is calculated by dividing net earnings for the year by the total sum of the weighted average number of ordinary shares in issue during the year and the weighted average number of ordinary shares to be issued for conversion of all dilutive potential ordinary shares (warrants) into ordinary shares.

4. Accounts receivable-net As at December 31, 2003 and 2002 are as follow :Consolidated Contract value (Dec. 31, 2003 : 87.66 Dec. 31, 2003 : 83.54 from project sale) Installment due Less Received Total accounts receivable Add Account receivable on collection of Tower 1 and Tower 2 Total Less Allowance for doubtful account Net

The company only 2003 2002

2003

2002

7,185,012,687.25 34,979,466.41 (23,935,797.16) 11,043,669.25

5,358,813,934.45 42,769,105.91 (35,184,319.66) 7,584,786.25

6,103,456,997.25 30,778,266.41 (19,995,597.16) 10,782,669.25

4,277,258,244.45 23,725,554.41 (17,261,805.16) 6,463,749.25

105,000.00 11,148,669.25 (1,328,786.25) 9,819,883.00

115,000.00 7,699,786.25 (750,000.00) 6,949,786.25

10,782,669.25 (1,223,786.25) 9,558,883.00

6,463,749.25 (750,000.00) 5,713,749.25

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

5. Installment receivable/Unrealized revenue As at December 31, 2003 and 2002 are as follow :Consolidated Installment receivable-net Less Income which recognized method under percentage of completion Total This disclosure consists of: Installment receivable Less Unrealized revenue Total Unrealized revenue Less Allowance for doubtful account Total

The company only 2003 2002 30,778,266.41 23,725,554.41

2003 34,979,466.41

2002 42,769,105.91

(33,319,120.25) 1,660,346.16

(50,439,672.65) (7,670,566.74)

(29,081,920.25) 1,696,346.16

(27,918,922.65) (4,193,368.24)

5,796,649.84 (7,456,996.00) (1,660,346.16) 7,456,996.00 (94,500.00) 7,362,496.00

12,933,149.74 (5,262,583.00) 7,670,566.74 5,262,583.00 5,262,583.00

5,760,649.84 (7,456,996.00) (1,696,346.16) 7,456,996.00 (94,500.00) 7,362,496.00

9,455,951.24 (5,262,583.00) 4,193,368.24 5,262,583.00 5,262,583.00

The obligation of remaining contract value to complete the developing project is about Baht 884.04 million. (2002 : Baht 577 million)

6. Inventory As at December 31, 2003 and 2002 are as follow :Consolidated PROJECT Lumpini Center Lumpini Place P.S.T. Condoville Tower 1 P.S.T. Condoville Tower 2 P.S.T. City Home Spare part Total Less related transaction Net

2003

2002

51,693,640.08 83,703,160.94 4,142,375.71 95,357.71 139,634,534.44 (613,697.59) 139,020,836.85

123,087,154.19 26,838,028.77 3,400,000.00 1,674,310.00 5,368,482.71 108,262.34 160,476,238.01 (816,327.46) 159,659,910.55

The company only 2003 2002 51,693,640.08 83,703,160.94 135,396,801.02 135,396,801.02

123,087,154.19 26,838,028.77 3,400,000.00 153,325,182.96 153,325,182.96

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

7. Land and project development cost As at December 31, 2003 and 2002 are as follow :-

Land Cost of construction and design Other expenses Interest paid Total *Less Cost of good sold accumulated Transfer to loss on impairment of assets Transfer to inventories Total transfer Less Current portion of land and project development cost Project development cost-net

2002 1,252,704,322.42 718,356,145.38 126,068,864.72 250,940,350.94 2,348,069,683.46 258,057,919.77 84,014,357.48 880,551,679.53 1,222,623,956.78 1,125,445,726.68 422,966,319.46 702,479,407.22

Consolidated and company only Addition 2003 781,221,232.41 2,033,925,554.83 652,739,586.37 1,371,095,731.75 16,683,598.67 142,752,463.39 29,006,090.32 279,946,441.26 1,479,650,507.77 3,827,720,191.23 394,094,851.45 652,152,771.22 (4,014,357.48) 80,000,000.00 367,189,571.04 1,247,741,250.57 757,270,065.01 1,979,894,021.79 722,380,442.76 1,847,826,169.44 763,994,058.76 1,186,960,378.22 (41,613,616.00) 660,865,791.22

As at December 31, 2003 and 2002 The company adjusted Land and project development cost by transfer to current portion of land and project development amounted to Baht 1,186.96 and Baht 422.97 million. * As for the cost of sales , it is calculated on the basis of percentage to revenue which have been accumulated each years, starting from date when revenue is realized by each project. - As at December 31, 2003 and 2002 the remaining project in progress are nine and seven project respectively.

8. Transaction with related companies The company has transactions with their related companies. These companies are related through common shareholdings and/or directorships. Transaction entries as at December 21, 2003 and 2002 consist of :Consolidated 2003 2002

The company only 2003 2002

8.1 Short-term loan to party companies Subsidiary PORNSANTI CO., LTD. LUMPINI PROPERTY MANAGEMENT CO., LTD. Total Associated GRAND UNITY DEVELOPMENT Co., LTD. Net

77,070,746.92 9,008,408.22 86,079,155.14

87,070,746.92 10,255,449.87 97,326,196.79

86,079,155.14

97,326,196.79

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

2002

67,500,000.00 11,068,150.69 78,568,150.69 78,568,150.69

The company only 2003 2002

87,070,746.92 87,070,746.92

105,759,731.00 105,759,731.00

(10,000,000.00) 77,070,746.92 (77,070,746.92) -

(18,688,984.08) 87,070,746.92 (87,070,746.92) -

67,500,000.00 11,068,150.69 78,568,150.69 78,568,150.69

According to the resolution of directorsû meeting No.4.2/1999 on September 14,1999. which approved to restructuring contract on November 30, 1999 with PORNSANTI CO.,LTD. which principal and interest in amount of Baht 244.97 million will be pay of within September 27, 2002 and stop to charge interest since January 1, 2000. The company has interest receivable from the date of contract until stop to charge interest date in amounting of Baht 1.99 million. According to the resolution of directorsû meeting No.22/2002 on October 24 ,2002. which approved contract to defer next year. According to the resolution of directorsû meeting No.22/2003 on November 27,2003. which approved contract to defer next year. 8.3 Investment in subsidiaries and associated Percentage of ownership Subsidiaries PORNSANTI CO., LTD. LUMPINI PROPERTY MANAGEMENT CO., LTD. Associated GRAND UNITY DEVELOPMENT CO., LTD. Total

99.99 99.88

25.806

Consolidated

The company only 2003 2002

2003

2002

60,520,197.50

57,638,494.43

8,916,572.94

7,377,905.46

36,206,379.61 105,643,150.05

12,782,520.87 77,798,920.76

36,206,379.61 36,206,379.61

12,782,520.87 12,782,520.87

The company only 8.4 Cost of sold and service 8.5 Selling and administrative expenses

2003 21,565,344.65 42,634,210.41

2002 11,023,411.83 22,341,255.72 ∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

9. Assets for rent - net As at December 31, 2003 and 2002 are as follow :-

Cost Land Land-premium Building Building-premium Office decoration and equipments Office decoration and equipment-premium Total Accumulated depreciation Building Building-premium Office decoration and equipments Office decoration and equipment-premium Total Net Less related transaction Assets for rent-net Depreciation for the period January 1 - December 31, 2003 January 1 - December 31, 2002

2002

Addition

Consolidated Increase (Decrease)

23,357,393.91 (72,271.64) 183,921,210.87 1,942,317.50 6,929,754.55 216,078,405.19

45,606,624.00 56,536,766.87 3,504,577.24 105,647,968.11

(8,053,248.00) (7,956,654.66) (16,009,902.66)

60,910,769.91 (72,271.64) 232,501,323.08 1,942,317.50 10,434,331.79 305,716,470.64

27,468,691.60 170,152.32 3,386,339.34 31,025,183.26 185,053,221.93 (1,376,886.17) 183,676,335.76

4,938,037.74 48,557.93 767,756.45 5,754,352.12 99,893,615.99 99,893,615.99

(183,566.09) (183,566.09) (15,826,336.57) (15,826,336.57)

32,223,163.25 218,710.25 4,154,095.79 36,595,969.29 269,120,501.35 (1,376,886.17) 267,743,615.18

Disposal

2003

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

5,705,794.19 4,849,789.66

Cost Land Land-premium Building Building-premium Office decoration and equipments Office decoration and equipment-premium Total Accumulated depreciation Building Building-premium Office decoration and equipments Office decoration and equipment-premium Total Net Depreciation for the period January 1 - December 31, 2003 January 1 - December 31, 2002

The company only Increase (Decrease)

2002

Addition

Disposal

2003

12,919,441.92 (72,271.64) 82,665,869.22 1,942,317.50 3,393,345.53 100,848,702.53

45,606,624.00 56,536,766.87 3,504,577.24 105,647,968.11

(8,053,248.00) (7,956,654.66) (16,009,902.66)

50,472,817.92 (72,271.64) 131,245,981.43 1,942,317.50 6,897,922.77 190,486,767.98

17,974,069.91 170,152.32 1,852,686.46 19,996,908.69 80,851,793.84

2,428,905.32 48,557.93 447,965.85 2,925,429.10 102,722,539.01

(183,566.09) (183,566.09) (15,826,336.57)

20,219,409.14 218,710.25 2,300,652.31 22,738,771.70 167,747,996.28 2,876,871.17 2,020,866.64

According to the resolution of directorsû meeting No. 3/1999 on June 3, 1999, the company has appraised fixed assets for rent by external appraised person which fair market valued of appraisal is higher than original cost and as at December 31, 2003 and 2002 it has premium on assetsû valuation in amounting of Baht 1,651,335.61 Baht 1,699,893.54 respectively.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

10. Land plants and equipments-net As at December 31, 2003 and 2002 are as follow :Addition

Consolidated Increase (Decrease)

Disposal

2003

9,882,572.79 1,081,831.72 1,912,023.99 37,439,733.79 3,251,035.84 4,664,549.47 6,484,000.00 765,109.17 65,480,856.77

54,500,000.00 922,326.80 6,482,344.95 1,986,724.64 4,077,571.24 8,580,000.00 65,555.24 76,614,522.87

(2,430,367.26) (174,734.95) (4,776,000.00) (7,467.29) (7,388,569.50)

64,382,572.79 1,081,831.72 2,834,350.79 41,491,711.48 5,237,760.48 8,567,385.76 10,288,000.00 823,197.12 134,706,810.14

3,220,698.65 861,617.96 1,388,110.90 27,277,677.35 2,953,533.10 1,693,078.16 3,710,858.16 472,493.90 41,578,068.18 23,902,788.59

604,918.54 51,077.24 241,016.81 2,733,029.49 221,224.32 1,098,578.32 3,044,627.86 104,311.55 8,098,784.13 68,515,738.74

(1,676,981.71) (157,944.35) (4,186,523.81) (7,466.29) (6,028,916.16) (1,359,653.34)

3,825,617.19 912,695.20 1,629,127.71 28,333,725.13 3,174,757.42 2,633,712.13 2,568,962.21 569,339.16 43,647,936.15 91,058,873.99

2002 Cost Land and Building Office decoration Furniture Office equipments RMS System Computer Vehicles Tools-its subsidiary Total Accumulated-depreciation Land and Building Office decoration Furniture Office equipments RMS System Computer Vehicles Tools-its subsidiary Total Net Depreciation for the period January 1 - December 31, 2003 January 1 - December 31, 2002

8,098,784.13 4,275,239.74

As at December 31, 2003 the company has plant and equipment value fully depreciated, but can use normally at the cost value amounting to Baht 6.05 million.

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Addition

The company only Increase (Decrease)

Disposal

2003

584,489.77 29,215,901.00 3,251,035.84 4,664,549.47 4,776,000.00 42,491,976.08

54,500,000.00 3,199,808.56 1,786,724.64 4,077,571.24 8,580,000.00 72,144,104.44

(2,207,891.79) (174,734.95) (4,776,000.00) (7,158,626.74)

54,500,000.00 584,489.77 30,207,817.77 5,037,760.48 8,567,385.76 8,580,000.00 107,477,453.78

427,928.86 23,047,433.50 2,953,533.10 1,693,078.16 3,077,260.32 31,199,233.94 11,292,742.14

444,212.33 35,166.67 1,252,462.12 221,224.32 1,098,578.32 2,703,027.86 5,754,671.62 66,389,432.82

(1,523,261.68) (157,944.35) (4,186,523.81) (5,867,729.84) (1,290,896.90)

444,212.33 463,095.53 22,776,633.94 3,174,757.42 2,633,712.13 1,593,764.37 31,086,175.72 76,391,278.06 5,754,671.62 2,474,378.00

As at December 31, 2003 the company has plant and equipment value fully depreciated, but can use normally at the cost value amounting to Baht 3.63 million.

11. Negative goodwill-net As at December 31, 2003 and 2002 are as follow :-

Negative goodwill Less Amortized Net

2002 31,955,762.85 29,565,646.85 2,390,116.00

Consolidated Addition 2,390,116.00 2,390,116.00

2003 31,955,762.85 31,955,762.85 -

12. Deferred tax liabilities The Company shown tax liabilities in the financial statement as çDeferred tax liabilitiesé which arisen from difference in recognizing revenue between tax and accounting purpose, where the investments properties income is recognized by installment method but the company recognized revenue by the percentage of completion.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

13. Bank overdraft and loans from financial institutions As at December 31, 2003 and 2002 are as follow :Consolidated Bank overdrafts * Short-term loans from bank Total

2003 2,855,785.67 470,000,000.00 472,855,785.67

2002 3,218,740.92 562,000,000.00 565,218,740.92

The company only 2003 2002 2,471,115.17 3,109,703.31 470,000,000.00 562,000,000.00 472,471,115.17 565,109,703.31

* The company had issued Bill of Exchanges (B/E) to the financial institutions and interest rate was charged at market rate.

14. Refund down payment payable In 1999, The construction of LPN Sukhumvit Tower was stopped which caused the defaulted of sales contract. The company has to refund downpayment included interest. As at December 31, 2003 the company had fully complied the entire debt had complete repaid.

15. Hire-purchase payable-net As at December 31, 2003 and 2002 are as follow :-

Accounts payable hire-purchase Less Deferred interest Total Less Current portion of long-term loans Net

Consolidated 2003 2002 470,260.00 1,024,868.00 (71,726.44) (167,645.16) 398,533.56 857,222.84 (341,599.92) (458,689.28) 56,933.64 398,533.56

The company only 2003 2002 151,528.00 (34,438.64) 117,089.36 (117,089.36) -

Consolidated 2003 2002 121,225,492.79 45,671,260.14 300,000,000.00 421,225,492.79 45,671,260.14 (57,298,496.00) (7,298,496.00) 363,926,996.79 38,372,764.14

The company only 2003 2002 121,225,492.79 45,671,260.14 300,000,000.00 421,225,492.79 45,671,260.14 (57,298,496.00) (7,298,496.00) 363,926,996.79 38,372,764.14

16. Long-term loans As at December 31, 2003 and 2002 are as follow :-

Local loan Loan from financial institution Total Less Current portion of long-term loans Net

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Local loan The company had a loan agreement with the financial institution as follow ; * Amounting Baht 30 million and shall be repaid within 5 years, haring the principal and interest repayment in monthly basis at Baht 608,208.00 per month which starting from March 21, 2002 and interest charge shall be at MLR p.a. * Amounting Baht 191 million and shall be repaid within 15 months, haring the principal and interest repayment in February 25, 2005 Loan from financial institution The company had issued Bill of Exchanges (B/E) amounting Baht 300 million to the financial institutions and interest rate was charged at market rate. The said B/E shall be dued commencing from August 2005.

17. Unrealized revenue The company had recorded interest income from related parties to build condominium project. The company will adjust it at unrealized income by equity method and interest income is recognized when the subsidiaries can sell condominium.

18. Retained Earnings Adjusting As at December 31, 2003 the subsidiary company adjusted retained earning because realized over incom tax expenses in 2002 amounting Baht 0.12 million. As at December 31, 2002 the company adjusted retained earning by transfer to legal reserve and premium on shares to offset the retained loss of Baht 561.07 million according to the ordinary meeting of shareholders 2002 held on 30th April 2002. (See note 25)

19. Pledged securities 19.1 Pledged deposit amounting to Baht 2.06 million (2002 : Baht 3.60 million) was placed for the issuance of letter of bank guarantee. 19.2 Land including buildings , Land in project partial and assets for rent amounted to Baht 1,025 million. (2002 : Baht 312 million). The Company mortgaged the aforementioned with banks and financial institutions at collateralûs for loans.

20. Contingent liabilities and obligation 20.1 Letter of guarantee of the company and others amounted to Baht 26.40 million (2002 : Baht 1.50 million) 20.2 The company had the obligation to the agreement to the construction companies which had to complete the construction work for the blance of approximately Baht 162.61 million. (2002 : Baht 108.43 million)

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

21. Guarantee As at December 31, 2003 subsidiary has guaranteed loan to customers with bank for 2 years in amounting of Baht 2.74 million. (2002 : Baht 22.16 million)

22. Reclassified Certain account items in the 2002 financial statement had been reclassified to conform with the 2003 presentation. The reclassification had no effect on the net profit (loss) of the period.

23. Extraordinary item Consolidated financial statement and financial statement of the company only as at December 31, 2002 Extraordinary item which follow : 23.1 Profit on restructuring debt amounting 144.18 million. From repaid debt less than outstanding debt amounting Baht 11.16 million. From transacted from doing interest rate SWAP then payableûs company was wound up thus the said transaction was automatically terminated. The result was that LPN had different liability amounting USD 5.72 million. Finally, the payable accepted and agreed with LPN to settle the aforementioned debt only Baht 10.00 million in which was fully paid by LPN and the company had profit on restructuring debt amounting Baht 128.27 million. As at October 3, 2002 the company had fully repaid the rest of debt restructure to one of creditor then occurring the profit from debt restructure amounting ot Baht 6.19 million. The company had paid amounting Baht 1.45 million to the creditor for profit sharing which is more than Baht 20 million in portion of 50 : 50 23.2 The company had loss from converting debt to equity due to allotment of new ordinary share 17.5 million shares at par Baht 10 to the creditor according to debt restructuring agreement the occurring loss amounting Baht 35 million.

24. Law case The company is accused by my contractor in civil suit amounting to Baht 46.67 million. The company was recorded itûs construction cost in amounting Baht 30.45 million and also accusing to this contractor for claiming in amounting of Baht 261.48 million. As at December 31, 2003, Court of the first instance had decided the company to pay the contractor amounting Baht 29.85 million and the contractor paid to the company amounting Baht 3.00 million. The net payment was Baht 26.85 million together with interest charge at rate 7.5 % p.a. amounting to Baht 12.36 million totally Baht 39.21 million. The difference Baht 8.76 million, the company did not yet recorded in this financial statement due to the company had been appealing and the result would be positive.

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

25. Share capital 25.1 25.2

25.3

25.4

25.5

25.6

The Ordinary Meeting of Shareholders 2002 held on 30th April 2002 passed a resolution as follows : Approved the transfer of legal reserve of 42,019,126.54 and premium on shares of Baht 519,045,384.40 to offset the retained loss of Baht 561,064,510.94 Approved the decrease of the registered capital of the Company from Baht 3,983,000,000 to Baht 460,000,000 divided into 46,000,000 shared at a par value of Baht 10 by canceling 352,300,000 shares at a par value of Baht 10 Totaling Baht 3,523,000,000 and the previous resolution of the Annual Greneral Meeting of Shareholders No. 1/1999 held on 4th October 1999, regarding the share allotment related to the canceled shares be revoked. Approved the amendment of Clause 4 of the Companyûs Memorandum of Association set out herein below to be in compliance with the decrease of the Companyûs registered capital. The registered capital Baht 460,000,000 Divided into 46,000,000 shares At a par value of Baht 10 Approved the increase of the registered capital of the Company by Baht 750,000,000 from Baht 460,000,000 to Baht 1,210,000,000 divided into 121,000,000 shares by an issue of 75,000,000 new ordinary shares at par value of Baht 10. Approved the issue of 29.9 million units of warrants with the indicative terms set out herein below, The allotment of 27.6 million units offered to the existing shareholders by way of right offering one unit of warrant : One ordinary share par value Baht 10 with exercise price Baht 14 for each new ordinary share and 3 years commencing from the issue date of warrants. Exercise period every three months. The allotment of 2.3 million unites offered to the directors an employees of the company (ESOP), one unit of warrant : one ordinary share par value Baht 10 and 5 years commencing from the issue date of warrants. Exercise period every three months. Exercised period of shareholders ù warrants are from OCT. 25, 2002 to OCT. 3, 2005 and directors and employeesû warrants are from OCT. 25, 2002 to OCT. 3, 2007. Approved the allotment of the Companyûs newly issued ordinary shares in amount of 75 million shares at a par value of Baht 10 according to the details set out herein below. Allocation of 27.6 million new ordinary shares will be offered by way of the rights issue to the existing shareholders at the subscription ration of 5 existing shares to 3 new ordinary shares. In which the company had fully allocate the shares on Jun 30, 2002 Allocation of 27.6 million new ordinary shares will be reserved for the exercise of warrants. Allocation of 2.3 million new ordinary shares will be reserved for the exercise of warrants offered to the directors and employees of the Company. Allocation of 17.5 million new ordinary shares will be offered to Krung Thai Bank Public Company Limited for debt restructuring at the offering price of Baht 10 per share The Ordinary Meeting of Shareholders 2003 held on 24th April 2003 passed a resolution as follows :

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

26. Financial instruments Financial risk management and policies The Company and its subsidiary companies are exposed to risk from changes in market interest rates and from nonperformance of contractual obligations by counterparties. The Company and its subsidiary companies do not hold or issue derivative instruments for speculative or trading purposes. Interest rate risk The interest rate risk is the risk that future movements in market interest rates will affect the results of the Companyûs and its subsidiary companiesû operation and their cashflows. The Companyûs and its subsidiary companiesû exposure to interest rate risk relates primarily to their deposits with financial institutions, bank overdrafts and loans. According to their management the Company and its subsidiary companies do not use derivative financial instruments to hedge such risk since there is no domestic market for such activity. Credit risk The Company and its subsidiary companies are exposed to credit risk primarily with respect to accounts receivable and unbilled receivables. However, since the Company and its subsidiary companies do not transfer to rights of assets until the total amount of the contract value has been paid, they do not anticipate material losses from their debt collection. Fair value of financial instruments The Company and its subsidiaries used the following methods and assumptions in estimating fair value of financial instruments as disclosed herein : Cash and cash at banks and short-term investments : the carrying values approximate their fair values. Trade accounts and notes receivable with their maturities less than 90 days from the end of the period and past due accounts receivable, the carrying values approximate their fair values. Loan to the carrying values approximate their fair values. Bank overdraft, trade accounts and notes payable due less than 90 days ; the carrying amounts of these financial liabilities approximate their fair values. Accrued interest payable; the carrying values approximate their fair values. Long-term loan with floating rate of interest; the carrying amounts of loan approximate its fair value.

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

27. Segment information As at December 31, 2003 it consists of : Parent Company Business Type Net sales Equity profit from associated Other income Total revenues Cost of goods sold Selling and administrative expenses Bad debt and doubtful debt Directorsû remuneration Total expenses Profit (loss) before interesst and income tax Interest expenses Income tax Net profit (loss) before minority interest Profit of minority interest Net profit (loss) from ordinary activities Extra ordinary item Profit on restructuring debt Net profit (loss) Fixed assets as at December 31, 2003

Real estate 1,750.63 1,750.63 1,220.13 1,220.13

For rent 44.24 44.24 10.57 10.57

Other 34.68 34.68 153.93 0.83 4.05 158.81

530.50 -

33.67 -

530.50 530.50 530.50

(Unit : Million Baht) Total

Subsidiaries Total 1,794.87 34.68 1,829.55 1,230.70 153.93 0.83 4.05 1,389.51

Real estate 3.55 3.55 2.90 2.90

For rent 146.34 146.34 30.44 30.44

Other 4.24 4.24 117.61 0.11 117.72

Total 1,944.76 38.92 1,983.68 1,264.04 271.54 0.94 4.05 1,540.57

Eliminate (64.89) 22.53 2.27 (40.09) (22.76) (41.43) (64.19)

Total 1,879.87 22.53 41.19 1,943.59 1,241.28 230.11 0.94 4.05 1,476.38

(124.13) 1.51 -

440.04 1.51 -

0.65 -

115.90 -

(113.48) 0.19 0.97

443.11 1.70 0.97

24.10 (0.12) -

467.21 1.58 0.97

33.67 33.67

(125.64) (125.64)

438.53 438.53

0.65 0.65

115.90 115.90

(114.64) (114.64)

440.44 440.44

24.22 0.002 24.22

464.66 0.002 464.66

33.67

(125.64)

438.53

0.65

115.90

(114.64)

440.44

24.22

464.66

76.39

6.77

7.90

91.06

Income from service, rental and interest income from subsidiaries are eliminated between recorded. Transaction with related companies are normal proce according to the business.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

(Unit : Million Baht) Total

Subsidiaries

Real estate 886.03 886.03 737.79 737.79

For rent 34.09 34.09 10.26 10.26

Other 61.44 61.44 97.57 0.75 0.32 3.18 101.82

Total 920.12 61.44 981.56 748.05 97.57 0.75 0.32 3.18 849.87

Real estate 25.48 25.48 24.12 24.12

For rent 79.26 79.26 26.31 26.31

Other 0.20 14.86 15.06 68.65 (0.07) 68.58

Total 1,024.86 0.20 76.30 1,101.36 798.48 166.22 0.68 0.32 3.18 968.88

148.24 148.24 148.24

23.83 23.83 23.83

(40.38) 80.50 6.05 (126.93) (126.93)

131.69 80.50 6.05 45.14 45.14

1.36 1.36 1.36

52.95 52.95 52.95

(53.52) 0.17 1.02 (54.71) (54.71)

132.48 80.50 6.22 1.02 44.74 44.74

8.95 (0.10) 9.05 (0.001) 9.05

141.43 80.50 6.12 1.02 53.79 (0.001) 53.79

148.24

23.83

144.18 (35.00) (17.75)

144.18 (35.00) 154.32

1.36

52.95

(54.71)

144.18 (35.00) 153.92

9.05

144.18 (35.00) 162.97

11.29

7.03

5.58

23.90

Fixed assets as at December 31, 2002

Eliminate Total (30.39) 994.47 1.39 1.39 0.20 (1.16) 75.14 (30.16) 1,071.20 (16.19) 782.29 (22.92) 143.30 0.68 0.32 3.18 (39.11) 929.77

Income from service, rental and interest income from subsidiaries are eliminated between recorded. Transaction with related companies are normal proce according to the business.

Financial statement for the year 2003 were audited by auditor who has not been approved by S.E.C. but being certified public accountant.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

28. Earnings per share Consolidated and The Company only as at December 31, 2003 Net profit Weighted average Earnings per share (Baht) number of ordinary (Baht) shares Basic earnings per share Net profit Effect of dilutive potential ordinary shares Warrants Diluted earning per share

464,655,126.67

93,447,265

4.97

464,655,126.67

27,158,423 120,605,688

3.85

29. Approval of financial statements These financial statements have been approved by the directors of the company.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

General Information L.P.N. Development Public Company Limited, a public company with Registration No. BorMorJor 477, has its head office located at 1168/109, 36th floor, Lumpini Tower, Rama IV Road, Thungmahamek, Sathorn, Bangkok 10120. The company carried on the business of real estate development and had affiliated-companies engaged in real estate development, condominium project administration, and provision of a comprehensive range of real estate related services. (See more details : Investment Structure)

Other Referential Persons

Share Registrar:

Thailand Securities Depository Company Limited for Depositors 62 Stock Exchange of Thailand Building Floor 4, 6, 7 Ratchadapisek Road, Klongtoey, Bangkok 10110 Tel. 02-229-2800, 02-654-5599 Fax: 02-359-1262-63

Auditors:

Mr.Pipat Pusayanonda C.P.A. No. 56 Ms.Paneeporn Angatichart C.P.A. No. 3887 Pipat & Associates Co.,Ltd. 9/9 Soi Pipat, Silom Road, Bangkok 10500 Tel. 02-636-6191-5 Fax: 02-238-3766

Legal Counselor:

Sermsak Vecha & Associates Law Office Chokchairuammitr Condominium Building, 12th Floor 399/365-368 Soi Chokchairuammitr, Kwaeng Lardyao, Chatuchak, Bangkok 10900 Tel. 02-691-5541-5 Fax: 02-691-5541-5

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Nature of Business L.P.N. Development Public Company Limited and affiliated-companies carry on the business of real estate development for the purpose of sale and rent of the various projects operated under development of L.P.N. Development Public Company Limited and Pornsanti Co., Ltd. an affiliated company, in style of the office and residential condominium in business centre area of Bangkok (CDB) and neighbouring area. The earlier projects for offices and residential condominiums were mainly High Rise buildings. However, since 1996 development has broadened to target customers of average income through short - term and Low Rise residential condominium projects as the Company studied and researched the market and found that considerably demand still existed. The products of the Company can be divided into 4 categories as follows: 1.

Product under project name çLumpini Suiteé is the residential condominium in Luxury Condominium style located at the business centre of Bangkok (CBD) in support of the needs of high-end customers with a location surrounded by luxurious facilities and in an uptown area-convenient for travelling with modern transportation such as skytrain and expressway. This project was interior and exterior designed with optimum facilities and emphasized the best use of every area for convenient urban life.

Product under project name çLumpini Placeé is a residential condominium in the business centre area of Bangkok (CDB) that is, conveniently located for various transportation system reducing time consumed in travelling back and forth to home and office. This was augmented by the project and unit style designed to be used in the whole area which assisted those living in the city, including their family members. Besides, at the economically viable rate of approximately one Million Baht per unit, the project was overwhelmed with success and remarkable response from customers.

Product under project name çLumpini Villeé is a residential condominium armed at middle-end customers, also located in the business centre of Bangkok (CBD) but differing from çLumpini Placeé project in that this one does not connect to the name road. However, it is in a convenient urban residential area with fast-track travel to main routes and modern transportation like the underground. Arrangement of room function suiting every residential need makes this project perfect for those who have just started to settle down or live in town without the burden of large instalments.

Product under project name çLumpini Centeré is a residential condominium in the economic centre area outside Bangkok located in a desirable residential area nearby the economic centre and important community ; supporting the middle to low level target customers who need a quality residence. In this regard, the Company made it sufficiently convenient to the project area which more than satisfied the target customersû demands, but the project also spread out the flourish in the outer area of Bangkok.

For every developed and completely transferred project, the Company has set out policies on the post-sale service to maintain care of the projectûs customers through the subsidiary-company i.e. Lumpini Property Management Co., Ltd. This Company was responsible for the whole range of building administration and other service works for completion of each building and convenience of the customers in every respect. The aforementioned services are inclusive of building administration works, purchase-sale service, transfer, exchange, contracting works, installation, repairs and maintenance, and security and cleaning services. Being continuously elected to administrate every past project reflected the exercise of responsibility to the customers in real manner by the respect gained from the customersû and in accountability to the Company. After the economic crisis badly impacting the real estate market, the Company carried on reorganization by transferring responsibility to marketing, sales, customer services and engineering for Lumpini Property Management Co.,Ltd. in order to create liquidity in better efficient administration in both parent and subsidiary companies.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Income Structure of Revenue from Businesses where the Company Holds At Least a 20% of Shares For the each year ended December 31, 2003, 2002 and 2001 % of Company 2003 2002 Shareholding revenue % revenue % Property Development L.P.N. Development 1,831.79 94.25 984.66 91.94 Pubilc Company Limited Property Development Pornsanti Co.,Ltd. 99.99 8.84 0.45 28.13 2.63 Administration & Lumpini Property 99.88 80.42 4.14 56.82 5.31 Services Management Co.,Ltd. Property Development Grand Unity 25.806 22.53 1.16 1.39 0.12 Development Co.,Ltd. Total 1,943.58 100.00 1,071.00 100.00

Products & Services

Operated by

2001 revenue % 282.33 57.44

176.98 33.33

36.01 6.78

(1.11)

(0.23)

491.53

100.00

Changes in the Past Year 1. No.

Project

Project Value (Million Baht)

Units Number

Project Period

Lumpini Place Narathiwat 24

352

190

January - December 2003

2 3 4 5

Lumpini Place Rama 3 - Charoenkrung Lumpini Ville Mary - Sathorn Lumpini Place Narathiwatratchanakarin Lumpini Center Latphrao phase 2 (E Building) Lumpini Suite Ratchada - Rama 3 Lumpini Suite Sukhumvit 41 Lumpini Center Latphrao phase 2 (F and G Building)

482 453 478 95

312 300 233 98

March - December 2003 May 2003 - April 2004 June 2003 - June 2004 July 2003 - June 2004

250 487 205

53 159 224

September 2003 - October 2004 September 2003 - December 2004 September 2003 - September 2004

6 7 8

The Company launched 8 new residential condominium projects with details as follows:

As the Company had existed for 15 years this year, in order to express their gratitude to the honoured supporters, either customers, business alliances or media, the Company arranged activities under the project name ç15 years of bounded relationshipé in order to reward this support in various activities such as subsidization to construction of tennis courts for youth at Lumpini Garden, donation to the Thai Red Cross Society to buy kidney dialysis equipment for the assistance of terminal chronic nephritic patients etc.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

The Company signed a Contract to lease out the whole area of Lumpini Residence Project with Riei (Thailand) Co., Ltd. in order to operate a business in the field of serviced apartments and rental for long stay of Japanese customers.

The Company had a policy to disseminate information on business operation to investors, analysts, and other interested persons in 2003.

The Company maximized the proportion of investment in Grand Unity Development Co., Ltd. from 25% to 33% in order to widen the opportunities for project marketing and product development including increasing business alliances. In this regard, the products of Grand Unity Development Co.,Ltd. must not compete with the Company.

The Company encouraged and developed the in-house Research Development section, conducive to an accurate, reliable and referable database used in planning the development of the Companyûs real estate with prudence and able to lead the market into the proper trends.

The Company set up the Customers Relations Department to increase channels of communication between customers and the Company via the Call Center system at No. 02-800-9009. Further, the Company also plans to hold various activities for customers of projects developed by the company in order to create a strong relationship and improve the life quality of residents in our projects.

The Company continuously encouraged and supported the Board of Directors to attend Director Certification Program and courses on good corporate governance topics established by the Association of Thai Companiesû Directors Promotion, Stock Exchange of Thailand or other authorities.

One of the Companyûs schemes was to improve the potential of in-house personnel by lectures from skilled outsiders and in-house Management.

10.

The Company again set up the provident fund as the welfare for the customers, after forced to cancel it in the economic crisis of 1997.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Risk Factors 1. A risk arising out of legal disputes The Company had instituted a lawsuit, as the Plaintiff, against a contractor an the grounds of default of the Contracting Agreement-delaying the prescribed period. This caused the Company to suffer from losses in the ability to hand over to the customers the residential units under Purchase and Sale Agreement, with a claimed amount of 261.48 Million Baht. The same contractor brought a counter action against the Company claiming for damages of 46.67 Million Baht. The Company allowed the amount of Baht 30.45 Million or 65.25 of the claimed amount in the accounts. On 22nd December 2003, the Court of first instance rendered judgment that the contractor must compensate the Company by Baht 3.00 Million and the Company must compensate the contractor for Baht 29.85 Million, therefore leaving the deficit amount of Baht 26.85 Million with interest at the rate of 2.5% per annum or Baht 12.36 Million making a grand total of Baht 39.21 Million. However the Company did not add the difference of Baht 8.76 Million.

A risk in aspect of liquidity

Real estate development business, particularly residential condominium developments, consumed a critical amount of investment costs: land and construction costs and also more time to construct than detached houses and townhouses. Also, the aspect of realised revenue from transfer of ownership must remain pending until the completion of the whole building construction, without severability. To reduce the risk in aspects of liquidity, the Company therefore set up a strategy on organisation management in order to expedite construction in order to lead to positive cash flow. The Company, nevertheless is, in 2004, now studying equity financing from money and capital markets.

A risk on construction materials cost

Introducing the policy forcing that contractors must submit bids for turnkey projects, the Company can reduce the risk of increasing cost of construction materials. The Company provides an engineering team to strictly control and monitor the construction works. Also the Company established a cost leadership strategy to be a pillar for management-expediting the reduction of indirect and direct costs such as costs in form of money and marketing expenditures etc.

A risk on personnel

The Company, in 2003, was speeding more on improvement and training personnel to gain a better knowledge and ability in support of greater workloads and also used the system of Balanced Scorecard, Key Performance Indicator, Pay for Performance and Continuous Process Improvement for stimulation of work performance at optimum efficiency. The Company preferred to highlight enhancing personnel potential to increasing personnel, e.g. the Company introduced the system that the supplementary sales officer from Back Office must help working in Presale and Grand Opening events etc.

A risk from avian flu epidemic

Spreading of avian flu in the year-end of 2003 up to the early 2004, did not impact the business of the Company since a residence is one of the four requisites for livelihood.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Shareholding and Administration Structure Shareholders List of the first ten shareholders of L.P.N. Development Public Company Limited at the date of closing register book, on 4 April, 2003

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Names of Shareholders Krung Thai Bank Public Company Limited SCB Securities Co.,Ltd. HSBC (Singapore) Nominees Pte Ltd Mr. Pichet Supakijjanusan Mr. Sumet Techakraisri Mr.Tikhamporn Plengsrisuk Eksin Finance & Securities Public Company Limited Ayudhya Insurance Public Co.,Ltd. Mr.Tirachai Panchasarp Thai NDVR Co.,Ltd.

Number of Shares held 7,180,000 4,582,600 4,464,000 4,086,500 3,600,000 3,025,500 2,414,900 2,339,100 1,990,000 1,954,321

% 7.69 4.91 4.78 4.38 3.86 3.24 2.59 2.50 2.13 2.09

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Administration Structure Administration Structure of the company comprises the Board of Directors, the Executive Directors, and the Audit Committee, the details of which are as follows;

Board of Directors The Companyûs Board of Directors are the following 14 persons, namely; 1. Professor Mora Bunyaphala Chairman (Independent Director) 2. Mr. Pakorn Thavisin Vice Chairman (Independent Director) 3. Professor Siri Keiwalinsrit Director (Independent Director) 4. Mr. Vudhiphol Suriyaphivadh Director (Independent Director) 5. Mr. Thep Roongtanapirom Director (Independent Director) 6. Mr. Tirachai Panchasarp Director 7. Mr. Somkiert Tangthavorn Director 8. Ms. Jongjit Thapanangkun Director 9. Mr. Anthony Kai Chiu Cheng Director 10. Mr. Tawechai Chitasaranachai Director 11. Mr. Tikhamporn Plengsrisuk Director 12. Ms. Yupa Techakraisri Director 13. Mr. Pichet Supakijjanusan Director 14. Mr. Kumpee Chongthurakit Director Ms. Somsri Techakraisri is in charge as secretary to the Board of Directors.

Duties and Responsibilities of the Board of Directors The Board of Directors has rights and duties in administration over the Company pursuant to the objectives, rules, and resolutions of the meeting of shareholders; setting forth the strategic policies for the operation of the Company; supervising the Companyûs operation through the appointed committees; and also to screen items to be considered at the meeting of shareholders.

The Appointment of the Board of Directors In each session of Annual General Meeting of Shareholders, one third of the directors shall vacate their offices and the meeting of shareholders will elect new directors to assume the offices in the same number. However, the departing directors may be elected to resume their positions. In the election process of directors, each shareholder has the right to one vote per one share held. Each shareholder must exercise all of his voting rights in appointing one or more directors to the Board. However, votes must not be equivocally cast for each candidate. The candidates receiving the highest number of votes will be appointed to the Board in descending order and only up to the point where the number of available positions has been filled. In the event that any two persons receive the same number of votes and there are not enough positions left available, the Chairman of the Board will have the authority to make the final decision.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

The Highest Number of Directors The Directors of the company must comprise at least 5 persons and at least half of those persons must be residents of the Kingdom of Thailand.

The Executive Directors The Executive Directors of the company is made up of the following 5 individuals: 1. Mr. Tawechai Chitasaranachai Chief Executive Directors 2. Mr. Tikhamporn Plengsrisuk Managing Director 3. Ms. Yupa Techakraisri Deputy Managing Director 4. Mr. Pichet Supakijjanusan Executive Director 5. Mr. Kumpee Chongthurakit Executive Director

Duties and Responsibilities of the Executive Directors The Executive Directors have rights and duties to supervise management and operation of the Company; to be responsible for performance of the day-to-day functions of the Company. They are also committed to exercise the rights empowered by the Board of Directors in order to carry on the business and develop the relevant projects and works; to administrate the budget fund approved in accordance with the Board of Directorsû criteria; to sign any juristic documents which are binding on the Company in conformity to regulations, rules and policies of the Board of directors and also to screen those proposed items for consideration from the management unit that are beyond the authority of Executive Directors for submitting to the Board of Directors later.

The Audit Committee The Audit Committee is made up of the following 3 distinguished individuals: 1. Professor Siri Keiwalinsrit Chairman of Audit Committee 2. Mr. Vudhiphol Suriyaphivadh Audit Committee 3. Mr. Thep Roongtanapirom Audit Committee Ms. Navanuj Chintapitak Secretary to the Audit Committee

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Duties and Responsibilities of the Audit Committee 1. 2. 3. 4. 5. 6. 7.

To examine the Companyûs financial reports for its sufficient acuteness and transparency. To examine the internal control and audit system for its appropriateness and efficiency. To examine the Companyûs performance to ensure that the Company abides by the regulations set forth by the Stock Exchange of Thailand and all other relevant laws. To consider, elect and nominate the auditor of the Company and also to propose its remuneration. To consider on the Companyûs information disclosure for its accuracy and completeness, in case, it may cause either relations or interest conflicts. To perform any other duties that are assigned by the Board of Directors and admitted by the Audit Committee. To make available a report on the activities of the Audit Committee to be shown in the Companyûs annual report.

The Process of Selecting Company Directors -

In the process of selecting Directors of the Board, all incumbent Directors initially, screen, evaluate, and select qualified candidates for the available positions and submit their choices to the directorsû meeting for further screening and evaluation. A list of qualified candidates is compiled and submitted at the meeting of shareholders so an election (by vote) can be executed to appoint the new directors. The elected directors must win by a majority of at least on half of the total number of votes cast. Selection for the Executive: the Executive Directors will be selected and appointed form the Board of Directors with consideration on individual qualifications and relevant experiences. Selections for management positions subordinate to Managing Director, are evaluated and approved by the Managing Director

Details of the Management of L.P.N. Development Public Company Limited Details of names, titles, highest educational qualifications and working experiences of persons holding management positions in the past five years, including number of the Companyûs shares held as of 31 December 2003 are as follows:

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

1. Prof. Mora Bunyaphala

2. Prof. Siri Keiwalinsrit

3. Mr. Pakorn Thavisin

4. Mr. Vudhiphol Suriyabhivadh 59

Age (year)

Name

Board of Directors

- Bar of Thailand Accredited Lawyer class 25 - Honorary Degree in Law, Chulalongkorn University - Training course on development in faculty of Land possession and administration and works, Cambridge University, England - Dulwich College, London - The Chatered Institute of Bankers, London - Diploma from the Academy of Nation Defence - Bachelor Degree in Accounting, University of New South Wales, Australia - Bachelor Degree in Law, Faculty of Law, Sukhothai Thammathirat University - Diploma, Management Course IMEDE Management Development Institute, Lausanne, Switzerland

- Full Professor at Faculty of Law, Ramkamhaeng University - Bachelor Degree in Law, Thammasat Lae Karn Muang University - Diploma from the Academy of Nation Defense (class24)

Education

0.03

0.11

0.03

0.07

% of shares held

At present

1996-2000

At present

- Vice Chairman, Independent Director - President - Independent Director, Chairman of the Audit Committee - Director - Audit Committee, Independent Director - President - Audit Committee, Independent Director - Audit Committee, Independent Director - Director - Director - Independent Director

- Part-Time lecturer on taxation law - Expert to the House Standing Committee on Finance, Banking and Financial Institutions - Chairman of the Audit Committee, Independent Director - Law Drafting Committee - Law Drafting Committee - Part-Time lecturer on law - Member of the Senate House

- Judging Committee on factory rental disputes

1975-2002 1997-2000

- Chairman, Independent Director - Deputy Chief of Executive Directors

Position

At present

Period Company

Bank of Ayudhaya Pcl. L.P.N. Development Plc. Thai Agri Foods Plc. Tisco Finance Plc. Thai Wah Food Products Plc. Listed Company Association East Asiatic (Thailand) Plc. Laguna Resort and Hotel Co.,Ltd.

L.P.N. Development Plc. Colgate-Palmolive (Thailand) Co.,Ltd. Royal Orchid Hotel (Thailand) Plc.

Ministry of Labour and Social Welfare Office of Juridical Council Faculty of Law, Chulalongkorn University Senate House

L.P.N. Development Plc.

L.P.N. Development Plc. The Distant Learning Centre (under Ministry of Educationûs supervision)and Distant Television Station via satellite from Glai Gang Won Palace under H.M. the Kingûs patronage Department of Industrial Works Ministry of Industry The Bar of Thailand House of Representatives

Work Experiences

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

- Educated and qualified as a Chartered Accountant in England

- Certificate English of Proficiency, AUA Language Institute - Diamond Grading Gemological Institute of America - Bachelor Degree in Engineering, Chemical Engineering, Tienjin University

7. Mr. Somkiert Tangthavorn

8. Mr. Anthony Kai Chiu Cheng 44

6. Mr. Tirachai Panchasarp

9. Ms. Jongjit Thapanangkun*

10. Mr. Tawechai Chitasaranachai

11. Mr. Tikhamporn Plengsrisuk 3.24

0.64

0.43

0.42

0.68

2.13

0.03

% of shares held

1980-2001 At present

At present

Period

* Ms.Jongjit Thapanangkun, Ms.Yupa Techakraisri and Mr.Kumpee Chongthurakit are of the same family

- Bachelor Degree in Engineering, Chulalongkorn University - Common engineer registration No.SorYor. 140 from Office of the Board for Control of the Engineering Professional

- Master Degree in Business Administration, Faculty of Finance and Accounting Columbia University, USA - Bachelor Degree in Commerce (Honour) - Bachelor Degree in Accounting (Honour) Thammasat University - Secondary School Darasamutr School,Chonburi - Highest Diploma, Assumption Commercial Academy

5. Mr. Thep Roongtanapirom

Education

Age (year)

Name

Director Director Director Director Managing Partner Director Chairman

Director, Chief of Executive Directors Director Director Managing Director Director Managing Director, Executive Director, Director Director Director

- Director - Director

- Audit Committee, Independent Director - Independent Director, Chairman of Audit Committee - Director - Director - Sub-Committee

Position Company

L.P.N. Development Plc. Pornsanti Co.Ltd. Lumpini Property Management Co.Ltd. Vela Co.Ltd. P.L. International (PTE) Ltd. Singapore L.P.N. Development Plc. Lumpini Property Management Co.Ltd. Pornsanti Co.Ltd.

L.P.N. Development Plc. Pornsanti Co.,Ltd. L.P.N. Development Plc. R.T.L. Fasteners (Thailand) Co.,Ltd. Dusit Gun Ltd. Partnership L.P.N. Development Plc. Property Trust (PVT) Holding Limited (a property company listed on the London Stock Exchange) L.P.N. Development Plc. Burapa Golf & Country Club Co.Ltd.

Thai Investors Promotion Foundation Family Knowhow Co.,Ltd. Capital Market Opportunity Center Stock Exchange of Thailand

L.P.N. Development Plc. Sun Wood Industries Plc.

Work Experiences

- Master Degree of Business and Administration, Chulalongkorn University

- Master Degree in Business Administration, University of The Thai Chamber of Commerce - Master Degree in Accounting, University of the Thai Chamber of Commerce - Bachelor Degree in Business Administration, Faculty of Accounting, Assumption University - Bachelor Degree in Law, Thammasat University

- Bachelor Degree in Architecture, Chulalongkorn University - Architect Diploma No.SorThor. 348 Wor from Office of the Board for Control of the Architectural Professional - Bachelor Degree in Business Administration, Assumption University

- High Diploma in Advanced Accounting from the Pitman Examination Institute

Education

0.002

1.70

4.38

1.70

% of shares held

At present 2002-2003 1995-2002 At present 2001-2002 1997-2000

At present 1999-2001

At present 2000-2001

At present 1999-2000

At present

Period

* Ms.Jongjit Thapanangkun, Ms.Yupa Techakraisri and Mr.Kumpee Chongthurakit are of the same family

16. Ms. Achara Charoensat

19. Ms. Rungtip Piyateravong

15. Mr. Sombat Kittipokiratana

14. Mr. Kumpee Chongthurakit*

18. Ms. Somsri Techakraisri

13. Mr. Pichet Supakijjanusan

12. Ms. Yupa Techakraisri*

17. Ms. Navanuj Chintapitak

Age (year)

Name

Assistant Managing Director Directorsû Office Senior Manager Directorsû Office Manager Finance Manager Project Department Assistant Vice President Project Department Manager

- Internal Audit Manager - Internal Audit Manager in charge

- Account Manager - Accountant

- Executive Director, Director - Honorary Chairman of Footwear Industry Club, Director - Director - Director - Director - Director - Director, Managing Director - Assistant Managing Director - Director, Specialist on Stock Exchange

- Deputy Managing Director, Executive Director, Director - Director - Director - Executive Director - Executive Director - Executive Director, Director - Director - Director - Managing Director, Director

Position Company

L.P.N. Development Plc. L.P.N. Development Plc. L.P.N. Development Plc. L.P.N. Development Plc. The Industrail Finance Corporation of Thailand The Industrail Finance Corporation of Thailand

L.P.N. Development Plc. L.P.N. Development Plc.

L.P.N. Development Plc. MD Food Supply Co.,Ltd.

Pornsanti Co.Ltd. Lumpini Property Management Co.Ltd. T. Krungthai Industies Plc. S.S.A. Industries Co.Ltd. Sri Sam Ang Supplier Co.Ltd. L.P.N. Development Plc. Tantawan Industries Plc.

L.P.N. Development Plc. The Federation of Thai Industries

Pornsanti Co.Ltd. Lumpini Property Management Co.Ltd. Sri Sam Ang Supplier Co.Ltd. T.Krungthai Industries Co.Ltd. L.P.N. Development Plc. Grand Unity Development Co.Ltd. Pornsanti Co.Ltd. Lumpini Property Management Co.Ltd.

L.P.N. Development Plc.

Work Experiences

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Remuneration to the Management 1.

Remuneration in form of money 1.1

1.2

The Companyûs Directors are entitled to a monthly meeting allowance. In 2003 there were a total of 14 directors, however, only 9 persons who were entitled to the meeting allowance whilst the other 5 persons, who simultaneously were in charge as executive directors-were not. The amount of the meeting allowance of 2003 was Baht 3,240,000. The amount of Directorûs remuneration of 2003 was Baht 1,080,000. Remuneration to the Executive Board and the Executives The Executive Board and the Executives (9 persons) were remunerated in a total amount of Baht 28,429,620.

Other Remuneration - none -

15 Clauses of Report on Observance of the Superb Operational Supervision 1.

Policy on operational supervision

The Companyûs Board of Directors realized and paid attention to good operational supervision-concentrating on transparency of business operation to gain confidence of the shareholders, investors, and every associated person. The supporting guidelines on the good operational supervision include the major points below i.e: Treat the shareholders and concerned persons equally and fairly. With devotion, perform works in a careful and transparent manner to the best benefit of the organization, shareholders and all authorities. Define business morals for performance of the staff members.

Rights of the shareholders

In 2003, the Company held 1 Annual General Meeting of Shareholders of 2003 at the Companyûs head office in which the conference function room well equipped with audio-visual equipment . In this event, the Company had served the shareholders 7 working days prior to the meeting date with meeting summons accompanying with adequate supporting details on the agenda presented with the Board of Directorsû recommendations and also published summons for the meeting in newspapers for the shareholdersû thorough acknowledgment. With regard to the proxy forms prepared for those who were unable to attend in person, the Company acted under the regulations of Ministry of Commerce recently issued in 2002. In 2004, the Company had the policy to provide addition alternatives for those who are unable to attend the meetings, that is to authorize the independent directors as the shareholdersû grantees for transparent casting of votes and defending the shareholdersû best benefits.

Rights of the co-interested persons The Company considers as important the following concerned persons: - Staff members: The Company fairly, equally and reasonably treats the staff members and remunerates them properly.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

- Creditors: - Customers:

- Competitors:

- Community:

The Company shall purchase goods and services from trading parties in accordance with trading conditions without taking advantage but making an agreement and complying with the Agreement made with every trading party in a candid and accurate manner. The Company complies with the loan conditions under the agreement. The Company constantly pays attention; and is responsible for every customer, the quality and standard of the products being as advertised and keeps the customersû information confidential. There is a particular unit established for receiving the customersû grievance and proceeding thereupon as soon as possible. Furthermore, there is also a member relations section to take care of supporting the good condition of life, enhancing warmth in the family and maintaining ongoing relations to the customers. The Company operates under the framework and regulations of fair competition by using allied competitor principles which means supporting each other in a manner that not causing damage to business and relationships. The Company pays attention to the community and is obligated to be responsible for community and social environment

The Meeting of Shareholders In the Meeting of Shareholders 2003, there are presently 11 persons in Board of Directors which includes independent directors and 2 members in the audit committee. The Chairman of the Board who is the independent director acted as the Chairman of the meeting, allowed the shareholders to exercise their rights to audit, question and express their opinions as deemed proper. Moreover, the questions on significant issues were already included in the minutes.

State of Leadership and Vision -

The Board of Directors took part in determination and approval of vision, mission and budget funds of the Company. Moreover, the report on progress in accordance with business and budget fund standards must be constantly presented to the Board of Directors. The Board of Directors assigned the Audit Committee to strictly audit the internal control system and internal audit; and closely followed their performance to the best benefit of the shareholders and good governance principle. The Board of Directors supervised the Executive Board to comply with the fixed policies. The Executive Board were empowered to administrate pursuant to the approved works and budget fund plan. However, for investment in the projects which were not specified in the approved plan, approval for investment not exceeding Baht 10 Million only was allowed.

Conflicts of Interest -

The Company and the affiliated-companies engaged in transactions in a customary business manner: execution of Agreement and fixing prices, which were conducted in accordance with common business operations and did not cause conflicts of interest as the shareholding proportion in all the affiliated-companies shall be treated as the same company but only responsibilities being separated. In regard with transactions of directors with staff members, the same principle as was exercised with the common customers shall be used. However, if benefits gained are extraordinary, it shall be resolved by mutual consideration and monitoring from the Internal Audit Unit. The Company provided a report on the size of each transaction and reason for the transactions in the 2nd section of this transaction topic. ∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Supervision on usage of inside information. ● The Chairman of the Board who is also an independent director pays attention and acts strictly on disclosure on change of shareholding of directors and all directors are ruled to disclose for the change through the Director Office forthwith and prepare a report for the change on every meeting of the Board of Directors. ● Non disclosure to the outsiders provisions were prescribed in the Articles of Association and the employee manual. ● The Companyûs Data System is a visible process which had set the priority and authority of the persons who are authorised to revise and inspect data whereupon it is supervised and examined by the information section to maintain its accuracy and correctness.

Business Ethics The Executive Board sets out the instructions on business ethics for guidelines in work performance of the associated persons and also designated the management of each line to pass on and convey to every level of staff.

Balance of the non-executive directors The Company has the Board of Directors of 14 persons, namely: Executive Directors 5 persons Non-Executive Directors 4 persons Independent Directors 5 persons The independent directors are 36% of the Board of Directors which is deemed to be the proportion of the independent directors and non-executive directors that can balance the power in administration of the Management.

Mergence and Separation of position -

The Chairman of the Board is an independent director and does not have any relationships with the Management. The Chairman of the Board is not the same person as the Managing Director for the purpose of separation of duties of formulating the supervision and regular works administration policies.

10. Remuneration to Directors and Executives The Company specified the remuneration to the directors, and this was approved in the Meeting of the Shareholders, the said remuneration was considered for adoption by comparing with the same categories in industry to the extent that comparison is possible. Moreover, the directors who were assigned to more responsibilities and duties shall be remunerated in accordance with their additional commitment.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

11. The Meeting of Directors The Companyûs Board of Directors Meeting has been periodically held. In this matter, the Secretariat was responsible for compiling the annual schedules of the Board of Directorsû Meeting and the Audit Committee Meeting; advance service of invitations for meeting, agenda, documents used in the meeting to provide the Board of Directors sufficient time to study the overall details prior to the meeting which, each time, shall last for around 2.3 hours. In 2003, the ordinary Board of Directorsû Meeting was held on 6 occasions and extraordinary meetings on 32 occasions making up the total of 38 occasions. The meeting attendance of each director can be concluded as follows:

Name

1. Prof. Mora Bunyaphala 2. Mr. Pakorn Thavisin 3. Prof. Siri Keiwalinsrit 4. Mr. Vudhiphol Suriyabhivadh 5. Mr. Thep Roongtanapirom 6. Mr. Tirachai Panchasarp 7. Mrs. Jongjit Thapanangkun 8. Mr. Somkiert Thangthavorn 9. Mr. Anthony Kai Chiu Cheng 10. Mr. Tawechai Chitasaranachai 11. Mr. Tikhamporn Plengsrisuk 12. Ms. Yupa Techakraisri 13. Mr. Pichet Supakijjanusan 14. Mr. Kumpee Chongthurakit

Office duration

One third of the Board of Directors shall be vacated from their offices under the Articles of Association and the new directors will be elected.

Meeting Attendance / Total occasions of meeting Ordinary Meeting Extraordinary Total Meeting 6/6 5/6 6/6 6/6 6/6 5/6 3/6 4/6 0/6 6/6 6/6 6/6 6/6 5/6

32/32 32/32 32/32 32/32 32/32 32/32 32/32 32/32 0/32 32/32 32/32 32/32 32/32 32/32

38/38 37/38 38/38 38/38 38/38 37/38 35/38 36/38 0/38 38/38 38/38 38/38 38/38 37/38

The memorandum and documentation of the reports approved by the Board of Directors are available to be audited by the Board of Directors and associated parties.

12. Sub-committee The Board of Directors appointed the sub-committee to be in assist of business administration, that is, the Audit Committee. The mentioned committee was established on 1 February 2000 therein comprised of 3 independent directors who regularly were in charge for 2 years, their names, authorities and duties are shown in subject çThe Audit Committeeé, heading çAdministrationé page 58. The committee for consideration of remuneration: The Companyûs Board of Directors established the committee for consideration of remuneration on 13th November 2003 (at the Boardûs meeting No. 5/03), the committee for remuneration was assigned to consider the outline for fixing the remuneration, meeting allowances and other benefits granted to the board, executive board, the management and staff at a fair standard.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

13. Control System and Internal Audit The Board of Directors had been encouraging good operational supervision principal by assigning the Audit Committee to coordinate with the authorized auditor to examine the system of financial statements for its acuteness and completeness and also the report of the internal audit department that may be conducive to effectiveness of internal operation of the Company. The Companyûs Internal Audit Department was committed to audit and estimate the function of the relevant system and give advice to correct performance in pursuant to the policies. Also, the Company always adjusted the business policies to be flexible and appropriate to the market conditions and relevant regulations. The Audit Committee was of opinion that the Companyûs internal audit system was gradually modified as the Internal Audit Department, the Management and every section of the organization coordinated with each other.

14. Report form the Board of Directors The Board of Directors is responsible for the consolidated financial statements of the Company and the affiliated companies and financial information as shown in the Annual Report. The financial statements were arranged under normal recognized accounting standards in Thailand and full disclosures in remarks to the Balance Sheet. The Board of Directors also set up an Accounts Internal Control System to ascertain the accounting data is correct and complete and prepared in an adequate manner in order to maintain and preserve assets, and to prevent fraud or malpractice. In this regard, the Companyûs Board of Directors established the Audit Committee, comprising non-executive members, to monitor the quality of the financial reports and Internal Audit System, their comments on this issue were set out in the Report of The Audit Committee in the Annual Report. The committee considers that the internal control system is at a satisfactory level contributing to reasonable trust in the reliability of the financial statement of the Company and its affiliate companies as at 31st December 2003.

15. The Relationships with the Investors The Board of Directors takes of accurate, complete, transparent and thorough disclosure of financial data, general information including significant data that can impact upon the Companyûs securities value seriously, therefore, the Board regularly disseminates the aforementioned information through the various publicized channels and media of the Stock Market and press to the associated investors and parties. Contact with the investors and analysts is responsibility of the Executive Board to provide the details, so that shareholders and the public can obtain information and news service through the Board Office. Furthermore, investors can contact the said authority at Tel. 02-285-5011 or call center 02-800-9009 or web site www.bestbuycondo.com.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Code of Business Ethics The Company and the Management team carry on business in compliance with principle of honesty and good faith: not taking advantage of trading partners or staff members; administrating business with their best knowledge and ability; acting in the interest of shareholders; complying with the requirements and Agreements executed with all creditors, and establishing the frameworks thereof for the organization as follows:

Performance Guidelines toward shareholders -

Performance Guidelines towards Staff Members -

Not deliver or receive anything that creates personal or other benefit incurred from dishonest conduct to the customers or creditor. Provide relevant information in an accurate, honest and punctual manner. Strictly comply with conditions and requirements of mutual agreements.

Performance Guidelines towards Trading Competitors -

Strictly manufacture the products to the quality as publicized and as prescribed by the Agreements. Provide quality service within the proper time limit.

Performance Guidelines towards Trading Partners or Creditors -

Fix remuneration rates fairly and suitable to the position, duties and responsibilities. Pay attention to knowledge improvement and capability of staff members. Regularly provide opportunity to make suggestions and advise thoroughly. Promote understanding for the staff membersû code of ethics and roles to all levels. Be fair and sensible to the staff in all respects.

Performance Guidelines towards the Customers -

Perform duties honestly and be fair to all shareholders. Exercise ability, care and prudence in organizational administration. Maintain the organizationûs property in a normal wear and tear condition and prevent their illegal loss. Not disclosing Company information to unsuitable persons. Not exploiting the organizationûs confidential data for the benefit of oneself.

Behave according to good competition ethics. Not discredit trading competitors either by fair means or foul.

Performance Guidelines towards the Community -

Encourage creative activities that are beneficial to society to the extent of the companyûs capability. Create Society Mutual Responsibility consciousness in the staff members of all levels. Not provide assistance and support that leads to avoidance of any laws or regulations. Cooperate with all authorities to supervise and report the information of any breach of or non-compliance with any laws or regulations of such authorities.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Supervision over the use of in-house information The Company established levels of access to significant information regulations and methods for staff members at each level and also management ethics together with relevant penalties.

Personnel According to the organizational chart of L.P.N. Development Group, L.P.N. Development Public Company Limited and Lumpini Property Management Co.,Ltd. employed 405 employees categorized as follows: Brokerage Management for 80 persons Construction Management for 55 persons Building Management for 142 persons Corporate Finance for 75 persons General affairs and other supporting team for 53 persons The Companyûs policy still stresses on knowledge improvement, increase of performance efficiency of the staff, providing opportunity learn work in various departments especially at the horizontal level for staff members of every discipline and promote job rotation. Moreover, every staff member can reach the Management at every level openly without any complicated process. Total remuneration of 405 staff members in 2003 was valued at Baht 142,191,425 including bonus and commission.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Internal Auditing Opinion of the Board of Directors in relation to Internal Control To:

Secretary-General The Securities & Exchange Commission

In the past year of 2003, the Companyûs Board of Directors had continuously emphasized the conduct of internal control especially approval of work schemes, investment budgets and annual expenditure corresponding to the strategic plan and also on pursuit and review of the authority of the Executive Board, Managing Director and the Executives at any level for practical and efficient performance and being alert at all times for inspection of the internal control department. Reviewing the report presented by the Audit Committee with the comment on the control over the internal system and report submitted by the Companyûs auditor, it was apparent that in 2003 there was reasonable performance in compliance with the internal control system and no report that executives exploited the property of the Company and affiliated companies beyond their authority. Accordingly, the Board of Directors is confident that the Companyûs internal control system is appropriate and proper for inspection and pursuit of work performance. For such purpose, the Board has also established a policy to practice the managerial system and risk inspection in management in 2004.

Yours faithfully,

Professor Mora Bunyaphala Chairman

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Secretary-General The Securities & Exchange Commission

In our examination as at 31st December 2003 of the financial statement of L.P.N. Development Public Company Limited as per the auditing report dated 12th February 2004, we have conducted the study and analysis of the Companyûs accounting internal control in the scope required under generally acceptable auditing standards in order to set out methods, timeframe and scope of audit in expressing the opinion to the Companyûs financial statement. The study and analysis of the Companyûs accounting internal control is specifically limited to much more than the study and analysis of the internal control system in order to give opinions to accounting internal controls. The management of L.P.N. Development Public Company Limited has set out the proper accounting internal control system and the system is all being strictly complied with. All accounting entries have undergone management approval and they were correctly recorded so that financial statements are prepared in accordance with the principles of general acceptable accounting standard. Due to limitations of the accounting internal control system, the audit may not be able to identify possible errors or unusual transactions which may have arisen. Furthermore, in considering whether or not such internal control system would be adequate for subsequent accounting periods, the changing situation and strict operation under such system in the future would have to be taken into consideration. Since the study and analysis of the accounting internal control system specified in the first paragraph is limited and it may not indicate all the essential weak points of the internal control system, we may not be able to give our opinion on the accounting internal control system for L.P.N. Development Pubic Company Limited. However, the study and analysis on the internal control system above-referred have disclosed that no essential weak points of the internal control system were found. This report is prepared specifically for the management of L.P.N. Development Public Company Limited for use in Form 56-1 through 56-2. (as per the letter from Pipat & Associates Co., Ltd. presented to Secretary-General of the Securities & Exchange Commission No. PhorPhor. 62/2547 dated 12th February 2004)

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Inter-transactions 1.

Inter-transactions occurring in the affiliated-companies In 2003, the affiliated-companies, co-companies and associated companies engaged in inter-transactions: purchase and sale or agreement on employment, under the same conditions and market price as to the outsiders at that time. As of 31 December 2003, all could be summed up as follows: 1.1 Inter-transactions incurred between L.P.N. Development Public Company Limited and Lumpini Property Management Co., Ltd, the affiliated company, that is Description

1. 2. 3. 4. 5. 6. 7.

Administration of project works Administration on sale and transfer of ownership Administration and parking lot fee collection Administration of condominium works Cleaning of parking lot Cleaning of office Rooms rental services - Residential units - Offices 8. Maintenance works

9. Administration and management of Lumpini Residence Building commencing from 1st August 2003 10. Rental and service fees of office in Lumpini Tower Building commencing from 15th December 2003 1.2

Number (Project) 2 On demand

Contracting Price (Baht) Baht 950,000 / Month Baht 2,850,000 / Month Baht 60,000 / Month Based on the number of works Baht 7,500 / Month / Project Based on the number of works

Baht 1,500 / Month / Room Baht 5,000 / Month / Room At the market price based for the nature of works Baht 120,000 / Month

Baht 50,000 / Month

Inter-transactions incurred between Pornsanti Co., Ltd. and Lumpini Property Management Co., Ltd. i.e.

Description 1. Room rental service 2. Maintenance works 3. Rental and service fee of P.S.T. City Home Office

Number (Project) On demand 1

Contracting Price (Baht) Baht 1,500 / Month / Room At the market price based on the nature of work Baht 20,000 / Month

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Inter-transactions

Lender L.P.N. Development Plc. L.P.N. Development Plc.

Borrower

Type of Loan

Amount (Million Baht)

Period

Interest Rate

Remark

77.07

At call

8.50

As agreed

9.00

At call

3.41

As agreed

Pornsanti Co., Ltd. Promissory Note Lumpini Property Promissory Management Note Co., Ltd.

Necessities and Logistical Benefit of Inter-Transactions From the Companyûs investment structure plan (page 10), it is obvious that the company wholly holds shares in all affiliated-companies and it is the policy to distinguish the scope of duties between the Company and affiliated-companies to allow management and administrative flexibility of the company and subsidiary companies. For the expected benefits in each company, they will be added up as an overall financial statement so conflict of interest will not incur. As the construction works and service works require refinement and the highest quality for the users and service receiversû confidence and satisfaction, from the past experiences on this matter, the quality of the delivered works and the reputation of work teams in the affiliated-companies are, in general, acceptable. Also, assigning the works to the affiliated-companies to operate, the Company is able to keep close control and supervision, and their agreed service charge is normal and at a fair market price.

Steps in approving transactions Incurred inter-transactions shall be presented in the form of an annual business plan and must pass the approval of the Board of Directors and the Company Board for granting the budget. Then, associated parties must take action via their lines of control and finally offer them for the approval by authorized persons by setting certain budget limits of approval in each particular position. Transactions will be audited by the Internal Audit Division on regular and proper basis.

Trends of inter-transactions engagement in the future For such above reasons, it was still necessary to engage in inter-transactions for best benefits to the overall organization. Considering the past works results, particularly in the condominium works administration, it indicated that directors of each juristic persons condominium who are joint owners in each condominium and are not related to the company are still pleased to be provided the services by affiliated-companies. This can confirm its efficiency and fair price.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Others factors that may effect the investment decision 1.

Dividend Payment Policy The Company had the policy to pay the shareholders dividends of at least 50% of net profit in each profitable year. In 2002, the Company requested the shareholders to approve a cut off of the whole amount of accumulated funds valued at Baht 561,064,510.94, resulting in the operational results and Balance Sheet of 2002 being profitable and was able to pay the dividend at Baht 1.00 per share. For 2003, the Company held the profit as per the Profit and Loss Balance in amount of Baht 464.66 Million and net profit per share at Baht 4.97, the details of which will be presented to the Shareholderûs Meeting for dividend payment. The Dividend payment policy of Pornsanti Co.,Ltd. and Lumpini Property Management Co., Ltd. will be in compliance with the provision, that is, allocation of at least one twentieth of net profit for reserve fund must be continuously made until the reserve fund reaches one tenth of the Companyûs capital, dividend payment will not be made. Up to now, these two companies have never paid dividends. History of Dividend Payment Year Baht 1994 2.50 1995 2.75 1996 1.00 1997 1998 1999 2000 2001 2002 1.00 2003 * *During proposal to be approved by the Shareholderûs Meeting of the Annual General Meeting

Investment in purchase of land for new project development As the Company increased registered capital from 460.00 Million Baht to 1,2100.00 Million Baht in 2002 in order to invest the major part in purchasing of land to develop as residential condominiums, the Company was mainly concerned about the optimum benefit to all shareholders. For such purpose, the perfect time for increase of capital in 2002 was May. For the 2004 business plan, the Company expected to develop 8 new projects and to broaden the customer base and location, spreading to the outer area of Bangkok beyond the area of the old customer base, which may require equity financing.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Investment in Grand Unity Development Co., Ltd. Under the commitment of joint investment, the Company thereunder increased the investment proportion in Grand Unity Development Co., Ltd. bearing 2 alliance groups, for 33.33% in each group and also to pay the share value in January 2004. Moreover, expansion of investment made by Grand Unity Development Co., Ltd., which supported the policy to buy abandoned projects that possessed potential to be developed until completion. Such action, buying the projects, required large amount of funds, an increase of investment proportion caused the Company to bear the burden in a higher proportion. The aforementioned company also planned to enter into the Stock Exchange of Thailand by 2004, therefore the Company in the capacity of shareholders will gain the benefits in either share value surplus and/or dividends.

Explanation and Analysis of the Management Overall company operational result Overall operational results in 2003 showed total revenue of Baht 1,943.58 Million, faring better than 2002 by Baht 1,071.20 Million, or an increase of 81.44%, which earned a profit of Baht 464.66 Million, outperforming the previous year by Baht 301.69 Million or 185.12%. In 2002, the company suffered from a loss due to the decrease of the asset value and loss from converting debt to equity in the total sum of Baht 115.49 Million-but the company earned profit from debt restructuring in the total sum of Baht 144.18 Million. However, the profit gained in 2003 was the profit wholly generated from the business operation derived from the sale of condominiums-being the main business of the Company. In the aspect of cost of sales, the Company bore the cost against the sales decline by 82.28% in 2002 to 68.78 in 2003. Excellent control and management caused this over such cost. Also the cost of rental and services decreased from 35.02% in 2002 to 28.24% of rental and services revenue in 2003. The positive changes on the cost of sales were due to the increase of sales volume and efficient enhancement of the cost control systems. Sales and administrative expenses climbed from Baht 143.3 Million in 2003 to Baht 229.31 in 2003 but, if it is calculated on a percentage basis of the total sales income, it decreased from 13.38% in 2002 to 11.80% of the total sales revenue in 2003 since the company had a policy to control and maintain the expenses at a proper level. The loss entry, which was missed in 2003, was loss from assets depreciation of Baht 80.49 Million and the lower rate of interest falling from Baht 6.12 Million in 2002 to Baht 1.58 Million in 2003. If calculated on a percentage basis of the total sales revenue, it declined from 0.57% to 0.08%. This situation was due to the Company having high liquidity therefore leading to lessened loans for operation. However, the proportion of the interest due to the Companyûs total sale revenue at 0.15% was deemed pretty low when compared with the real estate development section of 12 companies listed in Stock Exchange of Thailand, which was at the rate 4.46%. The Companyûs Profit Margin of 33.93% in 2003 increased by 11.86% when compared with 22.07% in 2002, resulting from the Companyûs implementation of strict cost control. The Company therefore enjoyed a higher net profit at 23.91% or rising by 8.70% when compared with 15.21% in 2002.

Financial Position Current assets increased due mainly to the increment of cash resulting from the increase of the companyûs registered capital, land transactions and project costs pending under construction for not exceeding 1 year. This had the result that the Company had projects to be sold in 2003, in construction progress and from which the income realised in 2004 for around 5 projects was valued at Baht 2,200 Million. The total liability of the Company rose by Baht 450.24 Million from Baht 847.15 Million in 2002 to Baht 1,297.39 Million or equivalent to 53.15% since the Company withdrew from the loan account more than was spent on the projects.

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

Capital structure The overall 2002 capital structure shows that the Company holds liability at 44.79% and liability from shareholderûs equity at 55.21%, conducive to a ratio of total liability to capital from 0.7 times in 2002 to 0.81 time in 2003. On the other hand, the average ratio of liability to capital of real estate development category among 12 companies listed with the Stock Exchange of Thailand is equivalent to 1.17 times.

Liquidity and Profitability The average rate of profit to total sales of the real estate development category, focussing on companies with comparable business in the Stock Exchange of Thailand, was at 26.46 percent, which indicated that the real estate business picture in 2003 had improved. Such outstanding figures resulted from the governmental policy to stimulate the real estate business, encouraging consumers demand for residences. However, the governmental measures to stimulate the real estate business ended on 31st December 2003, but it was expected that the demand for residential condominiums will continue. The ratio of the Companyûs net profit to total sale revenue was at 23.91% or 8.70% greater than the net profit ratio at 15.21%. For cash management, the amount to be processed as at the year-end provided a cash surplus amounting to Baht 333.25 Million, rising by Baht 40.8 Million from Baht 292.45 Million in 2002 or by 13.95%. The Company is also able to complete the construction of all projects under the due period to transfer their ownership. Even better, as the governmental measures to stimulate the real estate business was soon to expire, the Company therefore expedited the construction of Lumpini Place Narathiwat 24 Project to be completed 1 month prior to such expiration enabling customers to transfer the ownership by December. This action was also beneficial to the Company in release of the burden of ownership transfer costs. Accordingly, the Company has a good deal of cash at the year-end as reserve funds for purchase of land and for further project development in 2004. At the end of 2003, the Company purchased 3 plots of land for development valued at Baht 470 Million in aggregate.

Major Changes and Future Trends The Company has major operating strategies for 2003 as described below: 1. Broaden the customer base from the low-end to the middle-end amongst those that live in the community area. 2. Invest on purchase of bigger-sized lands and separate the development into 2-3 phases, of period not over 1 year in each phase. 3. Expand the cooperation between the affiliated companies by: 3.1 Maximizing the investment proportion from 25.81% to 33.33% 3.2 Extending the development to 1-2 more abandoned properties in each year 3.3 Allow the affiliated companies to enter into the Stock Exchange of Thailand 4. The company anticipates that it would be able to recognize income from sales of Baht 2,415 Million from the following projects: 4.1 - Lumpini Place Narathiwat 24 Project 80 Baht 4.2 - Lumpini Place Rama 3-Charoenkrung Project 480 Baht 4.3 - Lumpini Ville Mary-Sathorn Project 453 Baht 4.4 - Lumpini Place Narathiwatratchanakarin Project 477 Baht 4.5 - Lumpini Center Latphrao 111 Project, phase 2 300 Baht 4.6 - Lumpini Suite Sukhumvit 41 Project 487 Baht

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

1168 Rama 4 Road, Thungmahamek, Sathorn, Bangkok 10120 Tel. 02-677-6356-7, 02-286-9855 Fax 02-286-9856 216 Nang Linchi Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-285-4225-6 Fax 02-285-4089

Residential Condominium Lumpini Place Siphaya River View P.S.T. Condoville Tower 1 P.S.T. Condoville Tower 2 P.S.T. City Home

111 Soi Kraisri, Sri Bumpen Road, Thungmahamek, Sathorn, Bangkok 10120 Tel. 02-671-1368-70 Fax 02-249-1793 108 Yotha Road, Samphanthawongse, Bangkok 10100 Tel. 02-639-5002-4 Fax 02-639-5004 118 Soi Nak Suwan, Nonsee Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-681-3112-3 Fax 02-681-3113 120 Soi Nak Suwan, Nonsee Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-681-3523-4 Fax 02-681-3524 128 Soi Nak Suwan, Nonsee Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-681-3501, 02-681-3505 Fax 02-681-3509

çLumpini Suiteé Luxury Residential Condominium Lumpini Suite Sukhumvit 41 Lumpini Suite Ratchada-Rama 3

6/1 Sukhumvit Soi 41, Sukhumvit Road, North Klongton, Wattana, Bangkok 10110 Tel. 02-285-5011-6 Fax 02-285-5017 Sales Office Tel. 02-259-9977 Fax 02-259-9966 441 Ratchadapisek Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017 Sales Office Tel. 02-212-7878 Fax 02-674-1070

çLumpini Placeé Residential Condominium Lumpini Place Sathorn Lumpini Place WaterCliff Lumpini Place Suanplu-Sathorn Lumpini Place Rama 4 - Sathorn Lumpini Place Narathiwat 24 Lumpini Place Rama 3 - Charoenkrung Lumpini Place Narathiwatratchanakarin

3, 7 Narathiwat Ratchanakarin Road, Sathorn Bangkok 10120 Tel. 02-287-4567 Fax 02-287-4257 427 Sathupradit Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-673-5596-9 Fax 02-673-5595 Sales Office Tel. 02-212-7878 Fax 02-674-1070 435 Suanplu Road Soi 8, Sathorn, Bangkok 10120 Tel. 02-286-1585 Fax 02-286-1850 164 Soi Sri Bumpen, Rama 4 Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-350-2895 Fax 02-350-2897 253, 255 Sathupradit Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-211-4351, 02-211-4375 Fax 02-211-4375 101 Rama 3 Road, Bangkhorlam, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017 Sales Office Tel. 02-291-9333 Fax 02-291-9339 469/1 Narathiwat Ratchanakarin Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017 Sales Office Tel. 02-294-6886 Fax 02-294-6900

çLumpini Villeé Residential Condominium Lumpini Ville Mary-Sathorn

1846/6 Chan Road, Sathorn, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017 Sales Office Tel. 02-212-3111 Fax 02-212-4311

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

24/18 Soi Latphrao 21, Latphrao Road, Chatujak, Bangkok 10900 Tel. 02-285-5011-6 Fax 02-285-5017 Sales Office Tel. 02-511-0003 Fax 02-511-0004

çLumpini Centeré Residential Condominium Lumpini Center Happyland -A Building -B Building -C Building -D Building -E Building -F Building -G Building -H Building Lumpini Center Latphrao111 Phase 1 Phase 2 Lumpini Center Sukhumvit 77

Sales Office Tel. 02-347-9501-3 Fax 02-347-9504 556/1 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-374-3890, 02-704-7799 Fax 02-704-7799 560/1 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-374-7270-1 Fax 02-374-7270 568/1 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-374-7270-1 Fax 02-374-7270 335/1 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-374-6301-2 Fax 02-374-6301-2 557 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-377-9395-6 Fax 02-378-4370 432/1 Soi Happyland 2, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-374-7270-1 Fax 02-374-7270 582 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-374-7270-1 Fax 02-374-7270 580 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-374-7270-1 Fax 02-374-7270

58, 62 Latphrao Road Soi 111, Klongchun, Bangkapi, Bangkok 10240 Tel. 02-370-2698 Fax 02-370-2606 3045 Latphrao Road Soi 111, Klongchun, Bangkapi, Bangkok 10240 Sale Office Tel. 02-375-0999 Fax 02-375-1991 585 On-nuch Road, Suanluang, Bangkok 10250 Tel. 02-285-5011-6 Fax 02-285-5017 Sales Office Tel. 02-332-1133 Fax 02-332-2199

Townhouse Baan Lumpini Bang Bua Thong (Phase 1-2) Lumpini Townhome Ratchada - Rama 3

222 Talingchan-Bang Bua Thong Road, Bang Bua Thong, Nonthaburi 11110 Tel. 02-285-5011-6 Fax 02-285-5017 431 Sathupradit Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. 02-212-7878 Fax 02-674-1070

Service Apartment Lumpini Residence

222 Narathiwat Ratchanakarin Road, Sathorn, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017

Other Department Brokerage Business Department Sales Office Tel. 02-287-3388 Fax 02-287-3377 (Sales and Rent Management)

∫√‘…—∑ ·Õ≈.æ’.‡ÕÁπ. ¥’‡«≈≈Õª‡¡π∑å ®”°—¥ (¡À“™π) L.P.N. Development Public Company Limited

page 11 11 52 4-5 6 3 3 54 54-55 20-25 57 7 64 73-74 56 75-76 76-77 26-51

L.P.N. Development Public Company Limited 1168/109 36th Floor, Lumpini Tower, Rama IV Road, Sathon, Bangkok 10120 Tel. 02-285-5011-6 Fax 02-285-5017 Call Center 02-800-9009 www.bestbuycondo.com