Annual Report 2011 by LPN Connect

2 Annual Report 2011 L.P.N. Development Public Company Limited

Table of Content Chapter 1 : Sustainable Development • Achieving Sustainable Growth • LPN Values • Operating the Business in accordance with the Sufficiency Economy Principles • Message from the Chairman • Report on Responsibility of the Board of Directors on Financial Reports

Chapter 2 : LPN and Theory of Sustainability • Theory of Sustainability • LPN and Economic Sustainability • LPN and Social Sustainability • LPN and Environmental Sustainability • Social Enterprise

Chapter 3 : Sustainability of Vibrant Community • 70 Quality Projects in the “Vibrant Community” • Development of Condominium, Brand and Vibrant Community • Management of “Lumpini” Logo and Brand • Research and Development • Innovation Development • Suam Ruam Jai • Community Activities for Better Quality of Life • LPN and the Flood Crisis

Chapter 4 : Achieving Sustainability Through Experiences • Company History • Awards • Organization Structure • Board of Directors • Investment

Chapter 5 : Making Next Steps Towards Sustainability • Real Estate Situation in 2011 and Competitive Environment • Risk Factors • Direction of the Company’s Operation in 2012

4 6 10 12 16 18

20 22 24 30 40 56 58 60 64 66 69 72 74 76 78

Chapter 6 : Adhering to Good Corporate Governance • Audit Committee Report 2011 • Risk Management Committee Report • Nomination and Remuneration Committee Report • Changes to the Management Structure • Management Structure • Code of Business Conducts • Internal Control • Anti-Corruption Policy • Connected Transactions • Legal Disputes

Chapter 7 : Financial Reports • Explanations and Analysis of the Management • Accounting Policy • Certified Public Accountant Report and Statements of Financial Status • Remuneration for Auditor

Chapter 8 : Appendix • General Information • Business Operation of Each Product Line • Project Details • Assets Used in Business Operation • Company’s Loan • Address of Projects • Location of Projects

124 126 128 130 132 136 167 173 175 176 183 184 186 190 194 233 234 236 238 246 253 256 257 260

80 82 88 90 92 102 112 114 118 122

4 Annual Report 2011 L.P.N. Development Public Company Limited

Sustainable Development Create and Deliver Integrated Values to Customers for Sustainable Growth and Development

Achieving Sustainable Growth

6 Annual Report 2011 L.P.N. Development Public Company Limited

The vision of the Company has been revised every three years in order for the Company to achieve sustainable growth targets by taking into account the balance of both quantitative and qualitative rewards for all stakeholders as well as social and environmental responsibilities. The operation of the Company is in accordance with the principles of good governance, ethics and integrity. A mission statement will be developed annually to reflect the changing environments. The organization is driven by the core competencies of the employees which derived from the experiences during the difficult time of the economic crisis in 1997. At present, the Company has developed the said core competencies into a corporate value of the organization which is embedded in the mind of the employees of all levels. 2002 – 2004 Vision

To become the market leader in the residential condominium for middle to lower-middle target segment. 2005 – 2007 Vision

To maintain leadership in the market while enhancing the efficiency by developing residential condominiums in an integrated manner for the creation of high quality communities. 2008 – 2010 Vision

To commit to maintain the leadership in the residential condominium development market by creating an integrated value to develop suitable quality of life and ensure satisfaction of the residents in the communities while also sustaining a reward for shareholders and stakeholders under good corporate governance principle.

2011 – 2013 Vision

To become the leader in the development of urban residence by creating and delivering integrated values to all stakeholders in order to achieve the development and sustainable growth.

8 Annual Report 2011 L.P.N. Development Public Company Limited

Mission 2012

Shareholders :

Provide appropriate return for sustainable growth under good corporate governance principles. Customers and Residents : Develop and deliver products and services and maintain its value to foster a bond under the “care and share” culture in order to be the “Vibrant Community” Social and Environment : Promote and participate in raising awareness about social and environmental responsibilities in all sectors to entail sustainable development. Business Alliances :

Create unity under the “care and share” culture and ensure continuous collaboration for appropriate returns and growth. Employees :

Enhance quality of life, knowledge, competency and integrity for the happiness and stability under the “care and share” culture in order to be the “Value Organisation.”

LPN Values LPN Values are the business values that all segments of the Company adhere to. The values have been developed from the core competencies within the organization aiming to drive the Company forward to achieve the targets of all departments and entail sustainable growth. From CLASSIC to LPN Value C - Collaboration

Meaning : The collaborative operation for the achievement of the main goal of the Company via useful information sharing.

“Collaboration to One LPN” The sense of collaboration from all employees of all levels in the Company and subsidiary companies will lead to the unity of the organization (One LPN). L - Lateral Thinking

Meaning : The research, development and change of the strategy and direction of the operation or new process with an aim to add value to the products and services.

“Lateral Thinking to Dynamic” At present, the situation of the real estate business is fiercely competitive and constantly changing. The lateral thinking of employees will promote the dynamic and flexibility in the operation so as to respond to the operational strategy of the Company which is adjustable and flexible.

A - Alliance

Meaning : The way of treating long-time and trustworthy business alliances with the willingness to collaborate and develop the work as if being in the same organization for the achievement of a common goal.

“Alliance to LPN Team” The Company has been treating the business alliances as our own employees who are trustworthy and loyal to the Company as well as committed to move together towards a stable and sustainable future. S - Speed

Meaning : The management of and responsibilities towards difficulties at work both in terms of output and services. The services must be speedy while the quality of the output is also being taken into consideration.

10 Annual Report 2011 L.P.N. Development Public Company Limited

S - Service Minded

Meaning : The care for all groups of customers at all time with the willingness and enthusiasm to add value on all sides to the services.

“Service Minded & Speed to Customer Centric” The real estate business does not only sell the product itself but the services that come with the product as well. The Company has developed the idea of providing the services which are in accordance with the needs of the customers. It is believed that great services should not be provided only before the delivery of quality products to customers but also after they move in. That is why the Company emphasizes the “Vibrant Community” concept which gives importance to all dimensions of services to all groups of customers.

C - Cost with Quality

Meaning : The project management which focuses on the reduction of direct costs and hidden costs as well as the reduction of extra expenses in all departments without affecting the planned target and quality.

“Cost with Quality to Cost Leadership” The costs and expenses management is one of the strengths of the Company, especially in terms of product cost management which is the strategy responding to the needs of the customers in the middle-lower middle target group to buy property at the affordable price. The success of the Company in such market is the result of the effective cost management together with product quality control.

I - Integrity

Meaning : The action towards the organization and related parties which is responsible, honest, transparent and ethical at all times.

“Integrity to Corporate Governance” In the competitive business world, good corporate governance is key to the operation of the organization especially a public organization as it reinforces transparency, honesty as well as fairness of the operation. The Company has played a critical role in fostering effective business integrity in the workplace and all employees. The operation of the Company has always been based on good corporate governance principles.

Operating the Business in accordance with the Sufficiency Economy Principles

12 Annual Report 2011 L.P.N. Development Public Company Limited

The business operation of the Company has been conducted in accordance with the sufficiency economy principles (three values, two conditions) as follows :

3 Values 1. Modesty

• Achieve appropriate growth rate with the focus on the development of internal personnel. • Create sufficient profit from business operation by not exploiting or taking advantage of customers or society. • Consider the impacts of the business operation in all dimensions. 2. Reasonableness

• Develop residences for the middle to lower-middle target group. • Focus on the quality of life of the residents with the “Vibrant Community” concept. • Create a balance of benefits of all stakeholders involved. 3. Building Immunity

• Emphasize human resources development. • Establish strategies that are suitable for all economic situations.

2 Conditions 1. Knowledge

Strive to be a learning organization and encourage knowledge sharing. 2. Integrity

Emphasize “integrity” as one of the significant values of the organization which is the basis of good corporate governance. The Company has always been conducting its business operation based on integrity, enabling the Company to achieve its objectives and acceptance from customers and other stakeholders. In 2011, the Company has taken sustainable development into consideration and has been operating the business following the principles of sufficiency economy as follows:

Operating the Business in accordance with the Sufficiency Economy Principles 2012

1. Organization Management

4. Innovation Development • Identify “Dynamic” as one of the values of the organization which will entail the regular development of new innovations.

• Create sufficient profit from business operation by not exploiting or taking advantage of customers, trade partners or competitors.

• Promote the development of new innovations by organizing annual innovation contest to encourage the employees to come up with new innovations in their line of work.

• Establish a flexible operational strategy to be adaptable to changes in economic situations and regularly monitor and evaluate the situations which may have possible impacts on the business of the Company. 2. Human Resources Management • Specify appropriate remuneration and welfare in accordance with the efficiency and effectiveness of an employee.

5. Efficient Use of Resources • Establish an operational policy focusing on cost and expense management. The target group of the Company is those who are in the middle to lower-middle income range, therefore, it is very important to be aware of the costs and expenses which may affect the selling price.

• Focus on work-life balance. • Continuously maintain and develop personnel. • Strive to be a “learning organization” and encourage knowledge sharing. • Appropriately select and plan a succession plan. 3. Balancing the Benefits for Stakeholders • Appropriately allocate benefits to all stakeholders i.e. shareholders, employees, customers and trade partners. • Take responsibilities towards the society and environment which are affected by the development of the projects of the Company from the design to the construction process (dust, noise), especially in terms of the quality of life in the community after the handover of the project (“Vibrant Community”) and establish a reasonable budget to manage the community. • Establish a budget for environmental restoration and Green Building to realize LPN Green concept in the development of projects.

• Control the use of resources to ensure highest efficiency in all processes from design, construction and community management. 6. Product Technology and Service Development • Adopt new technology in the globalization world to develop the values of products and services and establish a flexible operational plan to welcome new technologies. 7. Gradual Expansion and Growth • During the past ten years, the growth of the turnover of the Company is regular and gradual regardless of the economic situation as the Company has been aiming to achieve growth together with all stakeholders such as employees and long-time business alliances. 8. Risk Management • The Risk Management Committee of the Company which comprises all executive directors and managing directors involving in the operation of the Company has established a risk management strategy and constantly monitor and analyze the result of the management, enabling the Company to adapt the strategy to respond to changing situations.

14 Annual Report 2011 L.P.N. Development Public Company Limited

9. Sharing â&#x20AC;˘ Raise awareness of sharing in all dimensions, especially in the communities managed by the Company to create happiness from care and share culture. â&#x20AC;˘ The Company believes that the most essential sharing is knowledge sharing in all sectors concerned e.g. employees, customers and business alliances to increase the efficiency and raise awareness of sharing to the society at large. 10. Creating Culture and Values â&#x20AC;˘ Identify C-L-A-S-S-I-C as the core competency as well as corporate values which are the culture of the organization that all departments and business alliances adhere to.

C L A S

C - Collaboration L - Lateral Thinking A - Alliance S - Speed S - Service Minded I - Integrity C - Cost with Quality

Message from the Chairman

“Our success through the previous years is the evidence of the collaboration between the employees and our business alliances under “LPN Team” concept. The committee and joint owners of various communities also support the Company in creating a “Vibrant Community” for more than 50,000 families in “Lumpini” society to enjoy living in a quality “home” and environment amidst the atmosphere of care and share.”

16 Annual Report 2011 L.P.N. Development Public Company Limited

Dear Shareholders, 2011 is another year that the Company is able to achieve the target profits and growth both in terms of quality and quantity. Despite national and international risk factors i.e. the flood crisis and the economic downfall in Europe, LPN has not at all been affected by such unfortunate events, owing to the reasonable business operation based on sufficiency economy principles, good corporate governance and sustainable development principles. The vision of the Company is to deliver the first “home” to the customers in parallel with creating a good quality of life to all residents in the Lumpini family. All through the years, the Company has been giving much importance to the business operation under the good corporate governance principles. The “Excellent Good Corporate Governance” award the Company received from Securities Exchange Commission (SEC) and Thai Institute of Director (IOD) is like the promise to all stakeholders that the Company would adhere to good corporate governance principles in our business operation always. Moreover, of all 499 listed companies in the Stock Exchange of Thailand, the Company has been selected as one of the five most innovative companies in the Non-Service category (Thailand’s Most Innovative Companies 2011: In Search of Sustainable Innovation) by the Faculty of Commerce and Accounting, Chulalongkorn University and Bangkok Business Newspaper. The award is the proof of our intention to develop the product to answer to the needs and lifestyle of city dwellers by enhancing a good quality of life to all members of the “Lumpini” family. The flood crisis from September to December in the previous year has caused serious damages all over the country, especially to real estate projects in the peripheral area of Bangkok as well as many projects of the Company. In time of crisis, every-

one in the Lumpini family had demonstrated their cooperation, commitment and responsibility towards the communities. A preparedness strategy had been identified and allowed the projects of the Company to suffer only minimal damages. This has been accepted and praised by many Juristic Persons Committees and joint owners. Also, the Company took full responsibilities in restoring the residences of our employees. It is believed that the flood crisis has strengthened the trust in “Lumpini” brand among the customers and employees. Our success through the previous years is the evidence of the collaboration between the employees and our business alliances under “LPN Team” concept. The committee and joint owners of various communities also support the Company in creating a “Vibrant Community” for more than 50,000 families in “Lumpini” society to enjoy living in a quality “home” and environment amidst the atmosphere of care and share. At the same time, we have never forgotten to create a good quality of life in neighboring communities, society and environment. On behalf of the Board of Directors, I would like to express my gratitude to our executives, employees and business alliances for their commitment and trust as well as to shareholders and valuable customers for referrals they have made. I am also grateful for the support from the financial institutions, media and government and private agencies, all of which are of very importance in reinforcing the Company’s success under good corporate governance to generate growth for all stakeholders in a sustainable manner. Pakorn Thavisin Chairman of the Board of Directors

Report on Responsibility of the Board of Directors on Financial Reports

The Board of Directors is responsible for the consolidated financial statements of L.P.N. Development public Co., Ltd. and subsidiary companies as well as financial information appearing in Form 56-1 and the Annual Report. The said financial statements have been prepared in accordance with generally accepted accounting standards by applying appropriate accounting policy which has been practiced regularly and with careful discretion and best estimation. Important information is also adequately disclosed in the notes to the financial statements. The Board of Directors is aware of the accuracy and transparency of the financial statements. There are appropriate and efficient internal control systems, adequate disclosure of important information in the notes to the financial statements as well as explanations and analysis so as to ensure the accuracy and completion of the record of the accounting information for the highest benefit of the shareholders and investors in using the financial statements. With regard to this matter, the Board of Directors has appointed an Audit Committee which comprises four Independent Directors, three of whom have the knowledge and experiences in accounting and finance, to review the accounting policy and the quality of the financial report and the internal control system. The comments of the Audit Committee on this matter appear in the Audit Committeeâ&#x20AC;&#x2122;s report which is shown in Form 56-1 and in the Annual Report. The Board of Directors opines that the overall internal control system of the company is at the satisfactory level and able to reasonably build confidence on the reliability of the financial statements of the company and subsidiary companies as of 31 December 2011.

Pakorn Thavisin Chairman of the Board of Directors

18 Annual Report 2011 L.P.N. Development Public Company Limited

20 Annual Report 2011 L.P.N. Development Public Company Limited

LPN and Theory of Sustainability Promote and involve in awareness-raising for social and environmental responsibilities to all sectors.

Theory of Sustainability

In the current economic situation with fierce competition, business operators usually emphasize only on short-term profits of the company. When a crisis occurs, the majority of such businesses fail to survive because they are not operated in a sustainable manner. The Theory of Sustainability has thus been established to enhance the stability of the business operation. Most importantly, in order to achieve stability during an economic crisis, the business should be operated based on the principles that the company should not only seek profit but also concerns for the impacts of the operation on the “society” and the use of resources for the benefit of the “society.” At the same time, the “society” must be careful not to consume too much of the natural resources that the “environment” suffers a loss of balance. It could be concluded that the goal of the business operation is to achieve the steady growth of the company while applying best practices for sustainable development by keeping the balance of all the three elements (profit, people and planet). The profit must be generated following the real supply of the market, not by taking advantage of customers or competitors. Moreover, the business must be responsible for the stakeholders and do not cause any negative impacts on the society and environment.

22 Annual Report 2011 L.P.N. Development Public Company Limited

The Company has applied the principles of sustainable development in its operation by creating the balance of the three elements of the business operation (Triple Bottom Line) as follows:

Profit The objective of the Company is to gain adequate and regular profits from the operation on the basis of the consideration for profit-sharing to all stakeholders i.e. shareholders, employees, customers, trade partners as well as the society and environment. For example, the price of the products of the Company will be around 10% lower than the market price so as to be beneficial to the customers.

People The Company has always realized that the success of the business will depend most importantly on the efficiency of the employees. The Company has committed to develop its employees especially in terms of the awareness on ethics by regularly organizing trainings and workshops. The importance is not only given to internal personnel of the Company but also those who are involved with the business of the Company including the customers or joint owners residing in the projects of the Company.

Planet In this context, â&#x20AC;&#x153;planetâ&#x20AC;? refers to the society and environment. The operation of the Company as a real estate developer has impacts on the society and environment on various aspects. The Company, therefore, focuses on reducing the impacts of the development of the project and developing a good society within the project for the residents. These have become primary strategies of the project management and community management of the Company. It is evident that the Company has always applied the principles of sustainability in the business operation as shown in the business plan with the vision to emphasize not only the profits of the operation but the qualitative efficiency as well.

LPN and Economic Sustainability

24 Annual Report 2011 L.P.N. Development Public Company Limited

Summary of Financial Statements Unit: Million THB

2011

2010

2009

2008

2007

9,593.07 6,473.45 934.97 799.80 528.30

10,381.36 4,483.41 2,811.96 922.78 426.95

8,098.87 2,901.84 2,048.31 541.66 685.63

8,846.49 3,781.48 1,403.97 681.92 709.99

7,175.76 4,532.36 501.64 660.72 678.53

600.24 0.10 2,464.54 1,475.70 7,128.53

890.86 862.65 4,299.54 1,475.70 6,081.82

761.49 259.00 2,846.95 1,467.55 5,251.91

2,063.69 530.67 4,362.02 1,475.70 4,484.48

1,202.01 501.00 3,348.80 1,475.70 3,826.96

12,371.64 12,034.78 8,031.88 4,002.90 1,917.26

10,018.12 9,676.23 6,357.44 3,318.79 1,636.97

9,050.73 8,730.11 6,001.77 2,728.34 1,501.90

7,303.69 7,018.71 4,826.17 2,192.54 1,205.44

6,823.77 6,574.22 4,294.89 2,279.33 927.74

4.83 1.30 15.50 26.90 19.99 **

4.12 1.11 16.34 28.89 17.72 0.56

3.58 1.02 16.59 30.85 17.73 0.50

3.04 0.82 16.50 29.01 15.05 0.4115

2.59 0.63 13.60 25.99 14.11 0.32

Revised

Assets

Total assets Land and cost of project under development Inventories Land and cost of projects pending development Assets for rent-net

Liabilities and Shareholdersâ&#x20AC;&#x2122; Equity Short-term loans Long-term loans Total liabilities Issued and fully paid-up share Shareholdersâ&#x20AC;&#x2122; equity Operational Result Total revenues Revenues from sales Cost of sales Gross profit from sales Net profit (Loss) Financial Ratio *Book value per share *Net profit per share Net profit margin Return on Equity Return on Assets Dividend per share

* Weighted average shares ** Pending Approval from the Annual General Meeting of Shareholders in 2011 Note : Information from Consolidated Financial Statements

26 Annual Report 2011 L.P.N. Development Public Company Limited

Balance sheet Unit: Million THB • Shareholders’ equity

• Total liabilities

• Total assets 2007 : 7,175.76 2008 : 8,846.49 2009 : 8,098.87 2010 : 10,381.36

2007 : 3,348.80 2008 : 4,362.02 2009 : 2,846.95 2010 : 4,299.54

2007 : 3,826.96 2008 : 4,484.48 2009 : 5,251.91 2010 : 6,081.82

2011 : 9,593.07

2011 : 2,464.54

2011 : 7,128.53

Profit and loss statemen Unit: Million THB • Total revenues

• Gross profit from sales • Net profit (Loss)

• Revenues from sales

12,500

10,000

5,000

2,000

4,000 3,000

1,000

2007 2008 2009 2010 2011

1,000

2007 2008 2009 2010 2011

1,917.26

1,636.97

1,501.90

1,205.44

927.74

3,318.79

2,728.34

2,192.54

1,000

2,279.33

2,000

4,002.90

12,034.78

9,676.23

8,730.11

7,018.71

1,000

6,574.22

12,371.64

10,018.12

9,050.73

7,303.69

5,000

6,823.77

5,000

2007 2008 2009 2010 2011

Financial Ratio Unit: Million THB • Book value per share

• Net profit per share

• Dividend per share

• Return on Equity

• Return on Assets

0.6

0.5

1.5

15 0.4

3 0.3

2007 2008 2009 2010 2011

19.99

17.72

17.73

15.05

14.11

26.90

28.89

30.85

29.01

0.56

0.32

1.30

1.11

1.02

0.82

0.63

4.83

4.12

3.58

3.04

2007 2008 2009 2010 2011

0.1

0.50

0.4115

0.2 0.5

2.59

25.99

1 2

2007 2008 2009 2010 2011

** Pending Approval from the Annual General Meeting of Shareholders in 2011 หมายเหตุ : งบการเงินปี 2552 เป็นตัวเลขก่อนปรับตามมาตรฐานบัญชีใหม่

Summary of the Performance in 2011 L.P.N. Development Public Co., Ltd. is the leader in residential condominium development with the vision of “becoming a leader in the development of urban residence by creating and delivering integrated values to all stakeholders for sustainable development and growth.” The operation of the Company is based on the balance of all dimensions of the operation, sufficiency economy philosophy, risk management framework, corporate social and environmental responsibility as well as good corporate governance. In 2011, the Company has successfully achieved all the planned KPIs in spite of the flood crisis at the end of the year. In the previous year, the gross income from sale and services was 12,335.27 million THB which was 24% higher from the year before. Since the turnover of the Company has grown continuously and the dividend has been paid on a regular basis, the Company was selected from the Stock Exchange of Thailand as one of 30 companies in SET High Dividend 30 Index (SETHD) and received the Excellent Corporate Governance (Level 5) Award from the Securities Exchange Commission of Thailand and Thai Institute of Directors (IOD) for the second consecutive year. Also, of all the listed companies in the Stock Exchange of Thailand, the Company has been selected as one of the five most innovative companies in the Non-Service category (Thailand’s Most Innovative Companies 2011: In Search of Sustainable Innovation) by businessmen from various industries. Throughout 2011, the Company had opened the total of 11 new projects with the combined value of around 14,600 million THB. The market share of the Company from the opening of new residential condominium projects in Bangkok and peripheral area was 20% of the total of 45,000 units newly opened in the market. Moreover, the Company started to expand the location for development to other provinces which have high potential. The first project was Lumpini CondoTown North Pattaya-Sukhumvit which was positively received. This reflected that the Lumpini brand has been widely accepted. The Company commanded 26% market share of around 30,000 completed and registered residential condominiums units in Bangkok and peripheral area in 2011. The projects which had already been completed and registered are Lumpini Place Rama 9-Ratchada Phase 2, Lumpini CondoTown Ramindra-Nawamin Building D, Lumpini Park Pinklao, Lumpini Place Ratchayothin and Lumpini Place Rama 4-Kluaynamthai. The flood crisis from September to December in the previous year has caused serious damages all over the country, especially to real estate projects in the peripheral area of Bangkok as well as many projects of the Company. In time of crisis, everyone in the Lumpini family had demonstrated their cooperation, commitment and responsibility towards the communities. A preparedness strategy had been identified and allowed the projects of the Company to suffer only minimal damages. This has been accepted and praised by many Juristic Persons Committees and joint owners. Also, the Company took full responsibilities in restoring the residences of our employees. It is believed that the flood crisis has strengthened the trust in “Lumpini” brand among the customers and employees. With regard to the financial status of the Company as of 31 December 2011, the total assets of the Company was 9,593.07 million THB which was decreased from that of 10,381.36 million THB in 2010 as a result of the decrease of 1,876.96 million THB of the inventories because the Company was able to sell a number of ready-to-move-in condominium units and the decrease of 827.26 million THB in cash for loan repayment. The assets of the Company regarding land and project costs under development had increased 1,990.03 million THB. Total liabilities decreased from 4,299.54 million THB in 2010 to 2,464.54 million THB in 2011 or equivalent to 42.68% decrease as a consequence of the decrease of both long-term and short-term loans of 1,153.17 million THB and the decrease of trade account payable and notes payable of 724.16 million THB. The Company still held adequate operational liquidity. With regard to the cash flow statement of the Company as of 31 December 2011, the net cash and short-term investment capital of the Company was 294.96 million THB, decreasing from the amount of 1,122.22 million THB in the same period of the previous year or equivalent to 73.72% because the Company had paid off parts of the loan. The reserved cash for operation was sufficient.

28 Annual Report 2011 L.P.N. Development Public Company Limited

The flood crisis at the end of 2011 brought about severe changes in real estate business sector. The people in the society are very much concerned about the problem that a group of consumers decided to avoid the risk of being flooded by choosing to buy a residence in a vertical project like high-rise condominium rather than a horizontal one. This would help bring the residential condominium market back to life in the coming year. However, there is still pressure on costs in the market from the increase of the minimum wage. The Company has planned the direction of the operation in 2012 as follows: 1. Plan income growth rate from sale at 10% from 12,000 million THB in 2011 to be 13,200 million THB in 2012. 2. Plan sale volume growth rate at 15% from 14,000 million THB in 2011 to be 16,000 million THB in 2012. 3. Plan the target value of new projects opened at 15,000 million THB and plan to expand the location for development to other provinces with high potential. 4. Emphasize more on cost management to prepare for the government’s policy to increase the minimum wage. 5. Ensure that the customers are ready for loan application before the completion of the project to be well-prepared for the income clustering in Q4. 6. Prepare for a possible flood crisis both in the completed projects and projects under construction. The Company is confident that continuous growth of the core business of the Company which is the “creation of quality urban residence” targeting middle to lower-middle group would be achieved by following the “sustainable development” principles which give importance to all stakeholders in its business operation as well as managing risks appropriately under good corporate governance and social and environmental responsibilities.

LPN and Social Sustainability

30 Annual Report 2011 L.P.N. Development Public Company Limited

Shareholders Shareholders of the Company are investors who expect appropriate returns from a long-term investment in a company which has financial stability, has sustainable growth rate and operates the business following the good corporate governance principles. Prior to making any decisions, investors must be equipped with sufficient information and have trusts in the organization. As a public company, the Company is bound to create and sustain the trusts of shareholders by managing the business in a transparent, open, responsible and sustainable manner. Sustainability Principles and Responsibility towards Shareholders

The Company gives very much importance to â&#x20AC;&#x153;appropriateâ&#x20AC;? investment returns on the basis of sustainable growth which does not only focus on generating highest profits to shareholders but also recognize other stakeholders who are of equal significance to the growth of the business. Furthermore, the Company aims to sincerely and transparently disclose business information to general investors, institutional investors as well as various funds e.g. provident fund and retirement fund. As a consequence, to advance the business operation of the Company is not a general business principle only but also a responsibility towards shareholders. The key objectives are to generate steady profit growth, carefully control and manage risks and be responsible for the stakeholders as well as the society and environment. Disclosure of Information under Good Corporate Governance

The Company realizes the importance of and emphasizes the principles of good corporate governance by focusing on the transparency of the business operation to strengthen the confidence of shareholders, investors and stakeholders, all of whom are equally and fairly treated. The Company discloses the information in a transparent manner in accordance with the regulations on information disclosure, including other information that are not required by law, to the Stock Exchange of Thailand as the responsibility towards the society for the long-term benefit of investors at present and in the future.

32 Annual Report 2011 L.P.N. Development Public Company Limited

Customers The word “customers” usually refer to buyers of products or services of a business. The business operator is bound to be responsible for its customers only from the time that the transaction has been made between the two. However, “customers” of the Company are inclusive of those who are interested in the products, buy the product for residential purpose and buy the product to invest as well as renters. The Company has established a strategy to create confidence, bond and loyalty in customers by delivering the value of the product and service to different groups of customers as follows: • Customers who are interested in buying the product: The Company applies “Green Marketing” strategy which focuses on giving honest information about the product without any hidden agendas and offering fair buying/selling conditions. • Customers who buy the product for residential purpose: This is the main target group which accounts for 80% of all the customers. The Company has a clear policy to deliver values of quality product to customers and more importantly, the values of service after moving in with the “Vibrant Community” strategy which means “the true happiness of living.” • Customers who buy the product to invest: This group of customers accounts for 20% of all the customers. There is a department in the Company to provide the buying/rental services in terms of the selection and assessment of renters to minimize risks of the customers and possible problems in the community resulting from poor quality of renters. • Renters for residential purpose: The Company regards this group of customers as members of “Lumpini” community as well. The tenants in the projects of the Company are entitled to the same rights and care as the customers who buy the product for residential purpose. Value of Product

The product of the Company is the property developed by the Company both in terms of vertical and horizontal projects for residential and commercial purposes. The short-term and medium-term strategies of the Company would focus on the development of the residential condominium “product” which responds to the target customers in the middle to lower-middle income group. The Company gives significance to the strategy to deliver the value of product to the customers in all processes from the design, construction and delivery of product. The Company also takes into account the innovation to enhance the value of product in each process as follows: Design

LPN DESIGN The strategy of the Company is to focus on the target group in the middle to lower-middle income range, therefore, the price of the “product” is the important factor for the decision-making of such customers. The price is directly related to the costs of the product, especially the “condominium units” to be handed over to the customers. The condominium units must be affordable and suitable with the lifestyle of the customers. The Company has thus developed the “LPN Design” which is 26 sq.m. condominium unit at the selling price of only 1.0-1.5 million THB in order to lower construction costs to answer to the needs of the customers. Though the size of the unit is only 26 sq.m., the design has been positively received by the target customers and highly successful in terms of marketing. Also, “LPN Design” is the model to reduce the size of a condominium unit to be smaller but equally functional.

LPN GREEN The operation of the real estate business does not only affect the customers but also the society within the project as well as surrounding communities specifically in terms of environmental impacts from the location, construction process and density of communities. At present, many countries have studied the impacts of building construction and established green building measures. As a medium and large-scale condominium developer, the Company is aware of direct impacts on the society and environment of the development of projects and has the best intention to minimize such impacts. Therefore, the Company invites experts in green building design as consultants and comes up with LPN Green concept which adopts the standard of green building design of LEED (Leadership in Energy and Environment Design) from the USA as follows: • Green Marketing Strategy The marketing strategy focuses on suitability of the location for project development, appropriate marketing and advertisement to promote sale that is ethical and fair to the customers and business competitors. • Green Design Concept The design focuses on the functionality, components of the project, environmental-friendly construction materials and system which may affect the environment. The concept of LEED is adapted to be suitable with the development and strategy of the Company. • Green Construction Process The construction strategy of the Company is in place to add value to the product for customers, stakeholders and environment. The QCSES standard is as follows: • Quality : Quality of products • Cost : Reasonable costs of the project • Speed : Speed of the construction work • Environment : Awareness of the impacts from the construction on the community and environment • Safety : Safety and hygiene of the workers at the construction site. • Green Community Management The Company does not only emphasize the impacts of the development of projects but also the management of communities to improve the quality of life of the community members and develop the community to be of high quality under the “Vibrant Community” concept. In order to achieve the above objectives, the Company has planned a community management strategy (F-B-L-E-S-P) to be implemented in all communities for consistency. Construction

In the operation of the property development business, the construction is mostly likely to cause serious impacts on the society and environment from the very beginning of the construction to the delivery of the completed units. The construction will affect all stakeholders i.e. customers, construction contractors, residents of neighboring communities, construction workers as well as the environment. The QCSES strategy is thus established as a guideline for all departments and construction workers to follow. The details of the strategy are as follows:

34 Annual Report 2011 L.P.N. Development Public Company Limited

• Quality : Quality of products The construction site must be orderly and the quality of product must meet expectations of the customers. • Cost : Reasonable costs of the project The Construction Management Department must carefully control the construction costs especially indirect costs as well as other construction and operational expenses. • Speed : Speed of the construction work Lengthy construction period is likely to pose a risk on the business operation. The construction and the operational process must be completed in a timely manner within a planned timeframe to reduce costs and risks for customers. • Environment : Awareness of the impacts from the construction on the community and environment Impacts on neighbouring communities e.g. dust, noise and waste water must be taken into account during the construction process starting from the foundation pile work to minimize the impacts on the environment. The Company also ensures the good quality of environment around temporary housing of construction workers to enhance appropriate hygiene and quality of life without drugs and gambling. • Safety : Safety and hygiene of workers at the construction site. The Company gives importance to the safety of the construction workers and related persons. Strict safety measures and regulations are in place. There are safety officers in all departments. The trainings to provide knowledge and understanding about safety to construction workers are also regularly organized. The Company specifies in the annual business plan to develop the projects in accordance with the design standard of LEED as follows: • Sustainable Site The location of the project should be close to public transportation system and convenient facilities. The project will be designed to have more green space than that required by law, use the color that reduces the reflected heat and allocate parking spaces for bicycles and shuttle bus to reduce car use. • Water Efficiency The Company designs the water delay system and rainwater storing system, uses the treated waste water in the common area and uses water-conserving sanitary ware. • Energy and Atmosphere The building is designed to have a vent in the north and opaque walls in the east and west to minimize the heat from the sun in the building. Energy efficient air conditioners are installed using non-CFC air conditioner gas. The common area is designed to be open to allow the natural breeze and reduce the use of air conditioners. • Material and Resource The Company opts for the use of substitute materials rather than natural materials such as wood, reuses the materials and uses recyclable materials. • Quality of Indoor Environment It is focused on the air quality and quality of living. In terms of air quality, the Company uses interior paint which has a special quality to break apart particles of dust and toxins. • Innovation in Design The Company develops new innovations in design to improve the value of the product such as LPN Design, Suan Ruam Jai and semi-prefabrication construction system.

Services Value

Various services are provided to customers of the Company from the time they express their interests in buying a product, sign a buy-sell agreement and make a down payment in installments until the product is delivered. After they move in, the Company also provides services in community management to enhance a good quality of life for the residents. The Department responsible for providing services to customers during each process before the handover of condominium units to customers is the Customer Relations Management Department which later on has been evolved into the Customer Experience Management Department to manage the experiences of customers via all the touch points to create positive customer experiences. The touch points which have direct contact with customers refer to the employees, sale officers, Construction Department, Customer Relations Department, Finance Department as well as security officers and housekeepers. The Company has regularly organized various trainings to promote service mindedness among staff at the touch points. After the condominium units are handed over and the customers start moving in, the other value of services that the Company deliver to customers is the community management following the “Vibrant Community” strategy which aims to create a community with great quality of life, society and environment and to carry on the gracious Thai culture for the happiness of the residents. The Company has long-time experiences in managing condominiums and communities and thus applies the information on the behaviour and livelihood of condominium residents in the development of a community management method to achieve the concept of “Vibrant Community” for the true happiness of living. The elements of the community management method are as follows: • F – Facility Management To manage each components of the project which comprise common facilities, buildings and system work and ensure effective preventive maintenance. • B – Budgeting Management To manage the budget in terms of income and expenses in a transparent and efficient manner. • L – Life Quality Management To manage the quality of life in compliance with the regulations of the community, communicate to the residents for mutual understandings and run activities to promote peaceful co-existence and care and share culture. • E – Environment Management To ensure that the environment in the project is managed properly i.e. green space and cleanliness of the project, the waste management is efficiently done and the facilities expenses from the common area of the community are reduced. • S – Security Management To manage the safety of the community by installing security equipments and systems, ensuring appropriate safety measures in the buildings especially in terms of managing the security officers to be responsible and ensuring effective monitoring process. • P - People Management To take care of the quality of life of the residents and develop the capacity of all parties involved. The value of products and services of the Company results in the trust and loyalty in “Lumpini” brand, both of which are crucial to the sustainable development of the Company.

36 Annual Report 2011 L.P.N. Development Public Company Limited

Business Alliances One of the success factors of real estate projects is the involvement of a network of different business operators. Even though the Company is a large organization that has been able to maintain its stability throughout the years, a network of other supporting business operators is still considered to be of significance to drive forward the business of the Company such as architects, engineers, consultants, constructors, construction material dealers, transportation companies and security guard companies. The long-term relationship between the Company and the above business operators, some of which had survived the economic crisis of 1997 together, brings about trust and confidence in each other. The Company gives very much importance to such relationship which has been fostered during a reasonable period of time. The business operators are “alliances” of the Company. They may not be employees within the organization but the Company takes an interest in their growth and success as if they are one of our own. Sustainability Principle and Collaboration with Business Alliances

The sustainability principle and collaboration with business alliances has been developed from long-term relationship and friendship between the Company and the business alliances. The joint business operation or any agreements would not focus only on the profit generation of the company but would be done on the foundation of fairness to achieve the common goal of delivering quality condominium units to joint owners at the reasonable price. The Company adheres to the following practices in its business operation with the alliances: Achieving growth together

The steady growth of the Company is partly derived from excellent support of our operationally capable business alliances. The Company is aware of the above correlation and has continuously been supporting them to develop their organization in terms of the working system, business operation and capacity of employees. It is to pass on the knowledge of the organization to the business alliances. For example, the Company does not have the policy to only exchange operational knowledge and ideas with the business alliances but also to support them to achieve business growth rate similar to that of the Company. Working in unison

The business alliances are treated in the same manner as the employees of the Company. The Company provides assistance to ease their financial problems and guidance on the organization of human resources development activities as well as regularly communicate with the business alliances, listen to their needs and respect them as a “true friend” would. The above two practices allow the Company to deliver quality products with low costs which are in accordance with the strategy of striving to be the leading organization in cost management in the market. The underlying concept of the “alliances” is one of the values that help the organization to develop in a sustainable manner. LPN Green Building Standard Task Force

In 2011, the executives of the Company approved the establishment of the Green Building Standard Task Force which is the collaboration between Design Department, Construction Department, business alliances and green building consultants to seek a way to develop the product to be social and environmental friendly. The establishment of such task force is under the vision to develop the academic ability of the business alliances which will help increase the quality of the construction work in a longer term.

Employees Vision and goals set by high-ranking executives are needed as guidance for the operation of the Company. In order for such vision and goals to be realized, it would depend on the employees which are the most crucial mechanisms at the heart of the organization. One of the factors that enable the Company to perform and be accepted by all sectors is the cooperation from all the staff, especially during the economic crisis of 1997. The Company would not have survived the crisis at the time if it had not been because of the collaboration and commitment of all the employees. Employees are the most valuable resources of the Company. Therefore, human resources management is essential in all departments, not only in Human Resources Department itself. The Company abides by the following principles of human resources management in order to be a value organization: • Develop the knowledge of employees of all levels in terms of attitude, skills and knowledge by organizing regular trainings, analyzing case studies and sharing knowledge and experiences. • Identify core competencies of employees as a standard required in the employees who would play an important role in driving the organization forward to achieve the vision and goals. Such core competencies would be developed into values and culture of the organization as well. • Promote work-life balance to encourage the employees not to overwork and to spend time with their families by setting appropriate working hours per week and encouraging all employees to take annual leave. • Support career path of employees and allowing employees from any level to grow within the organization and become a high-ranking executive of the Company. There have been many examples of those employees who have grown from junior positions to be executives of the Company. Developing Internal Personnel, Creating Opportunity to Grow

Mr. Tamrongpol Daengbubpa

“From an officer to Manager in the Maintenance Department” “The main factor that helps me to grow is the opportunity to learn from the executives as well as team work and self-development.”

Mr. Tamrongpol started working in the Company when he was still a vocational student. He was committed, determined and had constantly made an attempt to improve his work and learned from the working experiences of others. He made use of his free time after work to further his study at the high vocational level and later on for the Bachelor’s degree in engineering and Master’s degree in business management. Mr. Pichet Suppakijjanusan has been like a mentor who always provides guidance and professional advice to him. Mr. Tamrongpol has grown from the position of a technician to be a manager in building management, manager of maintenance section and is currently the Manager of the Maintenance Department.

38 Annual Report 2011 L.P.N. Development Public Company Limited

Mr. Kittithep Kerdmolee “From a messenger to Cleanliness Management Team Leader” “LPN is my family and my school. I can say that I love LPN more than anything because in my every day and time, there is only LPN.”

Mr. Kittithep started working at the Company when there was less than ten employees altogether. He was the second employee with 002 as his personnel code and was working as a messenger because of his limited educational background. He started off as an inexperienced staff but was fortunate that Ms. Somsri Techakraisri, who was the first employee of the Company, has always been his mentor teaching him about life and work. On many occasions, the executives of the Company demonstrated their trust in him by asking him to deposit large amount of money into a bank account. Until now, he has been grateful and would like to thank all the executives and the Company for giving him the opportunity and trust and developing him to upgrade himself from being a messenger to the Manager of Cleanliness Management Department who is responsible for over one thousand housekeepers. Ms. Kanokwan Bangklang

“From a studious housekeeper to a manager of a parking lot” “LPN is my second home. I love LPN as I do to my own home. I will grow together with LPN.”

LPN provides the opportunity for Ms. Kanokwan and her family to enjoy a better standard of living. Ms. Kanokwan graduated Pratom six and started working as a housekeeper. She had been a hard worker with the intention to provide highest education for her children. After a certain period of time, Ms. Piyanuch Naweenawakhun, Deputy Managing Director, assigned her to be in charge of the management of the parking lot of Lumpini Tower and L.P.N. Tower and upgraded her from being a housekeeper to be an employee of the Company. Ms. Kanokwan has gone through various changes all for the better and has been sponsored a scholarship from Mr. Tikhamporn Plengsrisuk to further her study as well. Ms. Manit Tidtipana “The housekeeper who never gives up and is given

an opportunity from the Company to create stability for her family.” “When an opportunity comes to us, we must never let it go. We must take it, learn and adapt ourselves. The success is within our reach.”

Ms. Manit had been struggle for the survival of her family for years. She neither had work nor money to support her children’s education (three kids, two of which are twins) and had to come find work in Bangkok. After working as a housekeeper for a year, she was promoted to be the head of the housekeepers of the Company. Ms. Aroonrat Sinkacharoen, Deputy Managing Director, supported her in terms of providing guidance and opportunity to grow while Mr. Tikhamporn Plengsrisuk, Chief Executive Director and Chief Executive Officer granted her scholarship to develop her education and knowledge. At present, she was promoted to be a Cleanliness Management Officer to take care of a larger number of the housekeeping team. Because of the opportunity given to her by the Company, Ms. Manit is now the pround owner of three LPN condominium units and a car. She is also able to fulfill her children’s dream. All of them graduated from university and have stable job. Her eldest son is a police officer, her daughter is a nurse and her youngest son is also working. As for herself, she finally has the opportunity to graduate a Bachelor’s degree. Sustainability Principle and Human Resources Management

It is accepted that the Company has gone through various crisis throughout the years and developed itself to be a value organization and an institution which carries on the value and culture of the organization and is well-adjusted to changing economic situations, society and technology. Owing to the capacity of the employees and the awareness-raising about such values, the Company is able to achieve substantial sustainability growth.

LPN and Environmental Sustainability

40 Annual Report 2011 L.P.N. Development Public Company Limited

LPN and Social and Environmental Responsibilities The property development business, especially the development of large-scale projects, has a direct impact on the environment and society. Real estate developed by business operators of poor quality usually causes a great number of environmental and social problems. The Company, therefore, gives very much importance to environmental and social responsibilities which are included in the business plan of the Company both in process and after process. Environmental and social awareness is also raised among staff in all departments and cascaded to residents of “Lumpini” community. The Corporate Social Responsibility to Community Social Responsibility guideline has been established as well as the operational budget which is proportional to the sale of the Company. The Corporate Environmental and Social Responsibility activity of the Company aims to create the sustainability of the Company and has an emphasis on a sense of responsibility starting from within the organization and communities developed by the Company before expanding to the society at large. This requires participation of all stakeholders such as employees, customers and trade partners as the saying goes: “Good environment and society must start from you. When you are ready, you can expand it to communities you develop and manage and finally to neighboring communities.” Such concept leads to a performance guideline for all departments of the organization and is the origin of the community management policy that the Company commits to develop all projects to be the “Vibrant Community” to set an example for other real estate business operators. In Process Environmental and Social Responsibility

includes

1. Environmental and Social Management within the Organization 1.1 Provide appropriate and hygienic working environment and atmosphere to employees and promote the experiences and knowledge sharing in order to become an organization of learning. 1.2 Establish a human resources management policy which promotes quality of life by enhancing work-life balance of staff and promoting working methods under core values and culture of the organization which has been cascaded from generation to generation. Internal activities to build good relationship between the Board of Directors and staff in all departments to reduce gaps are organized. The Company also encourages staff to participate in various environmental and social activities in order to raise awareness of doing goods for the society. “The Steps of Goodness” project has been initiated at the end of 2006 and inspired by the royal duties of His Majesty the King for the happiness of the people. 2. CESR Concept at the beginning of a project development 2.1 Select strategic locations which are highly populated on a main road and near convenient facilities to develop a project to reduce environmental impacts from large scale project development. The locations must also be close to public transportation system and express ways which will directly help ease the traffic and reduce energy usage. 2.2 Design products under “LPN Green” concept which is in line with Green Building Standard of the US (LEED - The Leadership in Energy and Environmental Design) to reduce environmental impacts. 3. Marketing Strategy The Company identified a marketing strategy which is consistent with the Company’s policy to create the first home for the target group of the middle to lower-middle level with community management strategy which aims to build a good quality of life for the residents. Moreover, the products are offered for sale to the customers in a transparent manner. The conditions for buying and selling are fair with no hidden agendas. The business alliances of the Company are being treated with fairness and not taken advantage of. The Company is more likely to compete with ourselves.

42 Annual Report 2011 L.P.N. Development Public Company Limited

4. Environmental and Social Responsibility Activities during the Construction The Company specially emphasizes the significance of surrounding communities which are directly affected by the impacts of projects development. High ranking executives of the Company will visit the site and make enquires about the impacts on a regular basis as well as develop a construction process to prevent and reduce possible impacts to nearby communities. This is included in the roles and responsibilities of the Construction Department as follows: 4.1 Environmental Concerns : Following a purchase of a land, high ranking executives of the Company will visit the community to provide information to neighboring communities and related governmental agencies so as to enhance understanding and good relationships with the communities, especially to houses or buildings adjacent to the project which will be directly affected by the development of the project. In addition, it is stated in the work plan of the project site that importance must be given to environmental and social activities within the project and construction workersâ&#x20AC;&#x2122; temporary housing during the construction. The ways to reduce impacts stated in the Environmental Impact Assessment report must be strictly followed by being aware of and preventing the impacts to nearby buildings or communities in terms of noise, dust and traffic, ensuring the cleanliness of the wheels of trucks that are transporting construction materials while leaving the construction site to reduce dust and particles, controlling the construction to follow the design and timeline and reporting the result of the compliance with measures to prevent and reduce impacts of the construction, all of which will be monitored by high ranking officers of the Company to ensure the effectiveness of the policy. Moreover, during the construction process, the Company will send a team of staff and experts to survey the site by preparing a questionnaire to monitor and review the impacts of the construction as well as to explain the details of the project construction. 4.2 Safety of related persons and construction workers : Construction workers have high risks of accidents and loss of life in the performance of their duty. The Company has established a strict performance standard in terms of safety and assigned security officers to provide recommendations on safety to prevent any accidents e.g. avoiding having a contact with hazardous materials or using safety equipments at work, etc. Furthermore, the Company gives importance to their occupational health by arranging housing for construction workers in an appropriate environment and cares for the quality of life of all family members of the construction workers and encourages them to be healthy by exercising every morning. 4.3 Improvement of the Construction Workersâ&#x20AC;&#x2122; Quality of Life : L.P.N. Development Public Co., Ltd. has organized various activities to promote good quality of life of the construction workers of the Company such as Five S Activities to ensure an appropriate and hygienic environment within the temporary housing of the construction workers, health check-up activities e.g. test for addictive substances use, lung x-ray, dental check-up, first aid training, fire drill, garbage-for-egg activity and free haircut. In 2011, the activities were organized in six projects, namely, Lumpini Place Ratchayothin, Lumpini Place Rama 9-Ratchada Phase 2, Lumpini Park Pinklao, Lumpini Park Riverside-Rama 3, Lumpini Ville Lasalle-Bearing and Lumpini Ville Pibulsongkram-Riverview.

5. Community Management after Handover After the handover of the project and condominium units to customers, it will be the responsibility of the Community Management Department of the Company to manage the community and provide good quality of life, environment and society to more than 120,000 members from 80 projects of “Lumpini” society under “Vibrant Community” strategy. It does not include only the maintenance of equipments and properties to be ready and safe but also the creation of happiness and good society which is warm and safe. The importance is given to the environment within the project by: 5.1 Creating a good quality of life by encouraging the members to comply with rules of the community for the discipline of living together and order in the community. Also, the Company supports the organization of activities to build relationship in the family and between various groups of “Lumpini” members and encourage all members to voice their opinions and participate in environmental and social activities both within the project and outside. This has been done through internal society network to create sharing living culture such as helping each other to increase green space in the project, participating in donation activity to help the underprivileged or those who suffer from natural disasters or even taking part in policy planning with the Joint Owners Committee and executives of the Company to sustainably develop “Vibrant Community” strategy. Other activities include the organization of “Family Day” activity in the project or various cultural and traditional events. Additionally, the Company determines to create understanding about the culture of living together with the emphasis on caring, sharing and being kind to each other to bring about friendship and true happiness of living. 5.2 Managing the environment by increasing and taking care of green space in the project, keeping clean, managing waste, treating waste water and conserving energy. Apart from that, the Company promotes Green Clean Lean concept and runs a campaign for the residents of the community to take serious action e.g. to segregate waste to be recycled or reused, use treated water to water plants in the project, use cloth bag instead of plastic one and reduce electricity usage in the building to conserve energy. 5.3 Managing security system within the project by the security agency established by the Company. The security management complies with a good security standard. The Company also encourages the participation of members of the communities as well as coordinates with related governmental agencies to entail the utmost safety of the members of communities. The Company also gives importance to the renovation of building and environment of condominiums which have been developed for more than 10 years by repainting the building, increasing green space and improving the surroundings which are related to the quality of life of the residents of the projects, for example, Lumpini Tower, Lumpini Center Happyland, P.S.T. Condoville and P.S.T. City Home.

44 Annual Report 2011 L.P.N. Development Public Company Limited

After Process Environmental and Social Responsibility

The after process environmental and social responsibility activities of the Company includes the organization of events both internally and in collaboration with the government sector, “Lumpini” communities or neighboring communities in order to raise environmental and social awareness to the society at large. The majority of the activities are continuous for long-term impact. The activities organized can be divided into the following categories: 1. Activity in collaboration with governmental agencies or organizations. 2. Activity in collaboration with “Lumpini” society. 3. Activity to raise environmental awareness. 4. Activity to provide assistance to the underprivileged. 5. Activity in collaboration with neighboring communities. 1. Activity in collaboration with governmental agencies or organizations 1.1 Blood Donation Activity The Company has been collaborating with Blood Donation Center of the Thai Red Cross Society for more than 15 years to provide venues and convenience for employees, customers and the general public to donate blood for those in need. In 2011, 26 blood donation activities were organized in seven projects with the total of 2,984 blood units received or equivalent to around 1,044,400 CC of blood which was used to help 11,936 patients (350-45- CC or 1 unit of blood can help save 4 patients). The volume of blood donated from L.P.N. Development Public Co., Ltd. mobile unit between 2001 and 2011

Project

Year

Lumpini Time/Year Tower Blood Volume (Unit)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

4 4 4 4 4 4 4 4 4 4 4 461 326 464 393 563 680 1,313 1,368 1,285 1,297 1,338

61 12,072

The volume of blood donated from L.P.N. Development Public Co., Ltd. mobile unit between 2007 and 2011

Project Lumpini Tower Lumpini Sukhumvit 77 Lumpini Plaza Asoke Parkview Vibhavadi*

Year Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit

2007 4 1,313 1 133 1 150 -

2008 4 1,369 4 492 4 511 4 311

2009 4 1,285 4 372 4 503 4 316

2010 4 1,297 4 339 4 431 3 155

2011 4 1,338 4 294 3 142

Total 20 6,602 17 1,630 13 1,595 14 924

The volume of blood donated from L.P.N. Development Public Co., Ltd. mobile unit between 2007 and 2011

Project Lumpini Ville Cultural Center P.S.T. Lumpini Place Pinklao Lumpini Rama 8 Lumpini Condotown Bodindecha-Ramkhamhaeng Lumpini Ramindra-Laksi*

Year Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit Time/Year Blood Volume/Unit

2007 -

2008 4 312 4 429 -

2009 4 296 4 371 4 196 -

2010 4 198 4 339 4 153 4 132 4 311 4 214 Total

2011 4 241 4 325 4 397 3 247 2,984

Total 16 1,047 16 1,464 8 349 4 132 8 708 7 461 14,912

Note: *Blood donation activity was seized by the Thai Red Cross at Lumpini Ramindra-Laksi and Parkview Vibhavadi according to the flood situation.

1.2 LPN Showcase Blood Donation Activity in the Blood Donor Recruitment Coordinator Training National Blood Service Center, Thai Red Cross Society organized the annual training on blood donor recruitment on 16 February 2011 at Richmond Balloon 1, Richmond Hotel, Nonthaburi province to equip the coordinators with the knowledge and understanding about blood and blood donation, blood donor recruitment, blood donor selection and health care for blood donors. Those who wish to donate blood must be in good health which is a foundation of a safe and sustainable blood supply. The training for the coordinator of the mobile blood donation unit is thus considered to be key to the success of the blood recruitment work. In the training, of all 200 nominated organizations (governmental, educational, private and local), LPN was selected as one of the ten organizations that effectively and successfully arranged blood donation activities to showcase its blood donation activities. The purpose was to set an example to other mobile donation units and to foster a network of organizations that ran blood donation activities.

46 Annual Report 2011 L.P.N. Development Public Company Limited

1.3 Support for the Publication of PR Materials in Collaboration with National Blood Service Center and Fundraising Bureau, Thai Red Cross Society LPN supported the publication of a campaign poster, “44 Thai Alphabets on Blood Donation You Should Know” to promote blood donation activities. The posters were printed and distributed to blood donation units in the network of the Thai Red Cross Society nationwide to provide the knowledge and understanding on blood donation to blood donors so that they would become regular donors. In addition, the Company supported the development, improvement and maintenance of the website of the Fundraising Bureau, Thai Red Cross Society, to be another channel for promoting and disseminating information about the activities of the Bureau which was accessible to all blood donors. The website could help save costs of the Bureau and raise fund for various activities of the Thai Red Cross Society. “Blood Donation Booklet” was produced for the second consecutive year with the improvement on the format and the content to be more upto-date. The booklet provides knowledge about how to prepare oneself before donating blood. The 2011 blood donation calendar was also published to inform the potential donors of the date, time and venue of the activity in advance. This was another way of providing convenience to the donors. 1.4 Support for World Blood Donor Day 2011 National Blood Service Center in collaboration with Committee of Blood Donor Recruitment and Promotion, Thai Red Cross Society organized World Blood Donor Day 2011 on Sunday 12 June 2011 at the National Blood Service Center to thank all the blood donors. The slogan of the event in 2011 was “More Blood, More Life.” The activities included blood, eyes and organs donation, concert and performance of superstars and the giveaway of t-shirts with the slogan on it to blood donors. The Company sponsored the production of 1,000 t-shirts for giveaway.

• The Certificate. • Ms. Somsri Techakraisri, Deputy Managing Director, L.P.N., was the representative of the Company to receive the certificate for being a sponsor of the organization of World Blood Donor Day 2011 from Mr. Phan Wannamethee, Secretary General of the Thai Red Cross Society.

1.5 Earth Hour Activity The Company in collaboration with Bangkok Metropolitan Administration invited residents of the projects and employees to turn off the light for 1 hour together with other 82 countries around the world during 20.30-21.30h on Saturday 26 March 2011 under the “Earth Hour” campaign which had been implemented since 2008. The campaign was to reduce green house gases emission from energy usage which is the main cause of climate change. 69 Lumpini projects participated in the campaign by turning off the light for 1 hour which helped save 5,126.39 kilowatt of electricity or equaled to 3.42 tons of carbon dioxide and saved 18,000 THB in the electricity bills. Moreover, the Company continued the campaign by inviting residents of Lumpini projects to turn off lights when not in use on every Saturday, resulting in reduced electricity usage in the buildings. 1.6 Environmental Improvement and Increase of Green Space Activity The Company collaborated with various agencies to improve the environment and increase green space of neighboring areas of the projects developed by the Company. In 2011, the Company coordinated with Bangkok Metropolitan Administration, District offices and local organizations to develop and improve the environment and increase green space as follows:

1. Built a vertical garden at Ratchada-Rama 3 intersection. 2. Improved the scenery around Serithai Road. 3. Improved the scenery around Klongtoey Market intersection. 4. Improved the landscape and built a vertical garden around Sikarin intersection. 5. Improved the playground of Ban Prakhun Child Development Center, Korpai community. 6. Improved the scenery around Tungmahamek police station. 7. Built a vertical garden on the street aisle in front of Q House building on Sathorn Road.

Furthermore, the Company was one of the 34 organizations from the private sector in Bangkok area that supported the “84 Streets for the King” project. Bangkok Metropolitan Administration collaborated with the private sector to improve the street aisles and build vertical gardens on 84 streets around Bangkok. Ten districts in south Bangkok area were the piloted districts. The activity was consistent with the “Bangkok, the City of Heaven” concept and was to celebrate H.M. the King’s seventh cycle birthday anniversary. On 29 June 2011, Mr. Sompong Kwanampaipan, Assistant Managing Director, attended the press conference of the project which was organized at Bangkok Arts and Cultural Center and presided over by M.R. Sukhumbhand Paripatra, Governor of Bangkok.

48 Annual Report 2011 L.P.N. Development Public Company Limited

2. Activity in Collaboration with “Lumpini’ Community 2.1 Activity to Improve and Increase Green Space The activities to improve and increase green space within “Lumpini” community have been carried on to demonstrate the Company’s policy to add value to products delivered to the customers. This also helps increase the overall value of the properties of the customers and enhances the quality of life of the residents of “Lumpini” community under “Vibrant Community” strategy. In 2011, the Company coordinated with Lumpini community to improve and develop green space in 4 projects as follows: 1. Lumpini Place Rama 4 2. Lumpini Suite Sukhumvit 41 3. Lumpini Place Rama 3-Riverview 4. Lumpini Place Soi Kraisri 2.2 Waste Management Activity Appropriate and hygienic waste management in each project is another activity focused by the Company in order to create good living environment. At present, waste problems are one of the important problems impacting the environment and sanitation of the community. In order to manage waste properly, the Company has been providing knowledge and raising awareness about waste to encourage the residents to segregate waste since 2008. The Company started by surveying the waste management system in each project and replacing the waste bins in all projects to be of the same standard in 2010. It was found that there was a variety of waste bins used in each project which differed both in terms of size and color. The standard waste bins provided on each floor of the building would be divided into two types i.e. general waste (blue bin) and kitchen waste (green bin). On the ground floor of each project, the bins for each type of hazardous waste would be provided. 2.2.1 Waste Segregation for Recycling in Lumpini Communities The Company had piloted a project to segregate waste in seven projects i.e. Lumpini Center Happy Land Building D and E, Lumpini Center Ladprao 111 Building A,B,C,D,E,F and G and Lumpini Center Nawamin. Initially, the information about waste was selected in each project and the waste segregation procedure was proposed to the juristic persons of all pilot projects in order to prepare the details of the activity. The implementation plan was then presented to the juristic persons committee of each project for comments and recommendations. Finally, the waste bins to be used for each type of waste would be concluded and produced. The promotional materials of the activity was also produced and distributed to the residents. 2.2.2 “Separate Boxes Reduce Waste” Activity “Separate Boxes Reduce Waste” activity has been running from June 2009 in Lumpini Tower. As a result of the success of the activity, in 2011, the Company has also implemented the activity in all new projects in order to encourage the residents to segregate waste which was reusable and recyclable to reduce the amount of waste. It was also to raise environmental awareness among the residents. The activity was positively received by the joint owners as well as the residents in all projects.

2.2.3 Hazardous Waste Segregation Activity At present, it is more likely for the hazardous waste to be released into the environment. The waste such as empty spray can, batteries, light bulbs and expired medicines was usually disposed together with other types of waste and not managed properly. Without proper management, it could affect the health of the people as well as the quality of the environment. In this regard, Bangkok Metropolitan Administration aims to promote hazardous waste segregation in the communities by educating the people about the problems, danger and impacts of household hazardous waste on environment and health. The measures concerning hazardous waste were also in place to minimize contamination with general waste e.g. collection, transportation and disposal of hazardous waste from communities. The private sector was also encouraged to take part in managing hazardous waste. The Company provided standardized waste bins for hazardous waste from Pollution Control Department to all projects developed and managed by the Company. Waste bins for five types of hazardous waste were provided and promoted in all projects i.e. container for chemical substances, circular fluorescent light bulbs, mobile phone battery, battery and linear fluorescent light bulbs. In 2010 and 2011, the Company was able to collect 20,656 pieces of hazardous waste for Bangkok Metropolitan Administration for appropriate disposal. The Company also provided the information of the amount of such waste to the Garbage, Hazardous Waste and Waste Management Section, Environmental Office, Bangkok Metropolitan Administration to be used to develop waste management in Bangkok which is the very fast growing city. 2.3 Education Promotion Activity in Lumpini Communities 2.3.1 Library Development Project with TK Park The Company has signed an MoU with TK Park to collaborate on â&#x20AC;&#x153;Vibrant Community, Learning Center in the Neighborhoodâ&#x20AC;? project to develop and support learning in children, youth and general public as well as to support the pass on of knowledge on the management of library or learning center. This posed an opportunity for an exchange of knowledge and experiences for the benefits of both organizations and the public at large. The training was organized by TK Park focusing on books management, librarian skills, the development of a living library, the technique for organizing reading promotion activity and library usage in children and adults and attended by more than 140 staff of the Company. The knowledge learned would be used to develop the library of various projects of the Company. At a later stage, the libraries would also be equipped with computers and educational games to coincide with the living library concept. In addition, TK Park gave special discount for membership application to the joint owners, residents and the staff and their children so as to promote the habit of reading among children, youth and general public. They would be given a gift card and could apply for membership free of charge at TK Park on 8th Floor, Central World, from October 2011 to September 2012. Such activity to promote education does not only aim to elevate the quality of life of the residents in the Vibrant Community but is also consistent with the policy of Bangkok Metropolitan Administration to promote Bangkok as the World Book Capital in 2013. This was proposed to UNESCO on 29 April 2011 in Paris, France.

50 Annual Report 2011 L.P.N. Development Public Company Limited

The activity plan of the campaign to promote Bangkok as the World Book Capital started in 2011-2012 and comprised five strategies as follows: • Strategy 1 Shift the paradigm in the society by producing various media for each target groups and distributing PR materials. • Strategy 2 Manage and implement the policy by establishing clear and continuous policy and identify both short and long term workplan to promote reading. • Strategy 3 Build strong participation by establishing Bangkok Read for Life coordination center and implementing activities to promote participation of organizations in the network. • Strategy 4 Make books available in all areas by improving the existing reading space and expanding new reading space. • Strategy 5 Implement various activities to answer to all target groups e.g. readers’ road activity and Bangkok Read for Life activity. 2.3.2 Story On Tour Project The Story On Tour project was the play telling a story of a pig that loses its ears to promote co-existence and kindness in the society. The story also taught about doing goods and being nice to friends. The activities included story-telling and reading, hand puppet show, play and storybook making. The purpose of the project was to promote children’s education, build the reading habit, develop language skills, build imaginations and promote the use of library in the condominium. It was also a way to strengthen the bond within the family as the activity allows parents and children to spend time together. The Story On Tour project had been organized in ten projects, namely, Lumpini Ville Prachachun-Pongphet, Lumpini Ville Ramkhamhaeng 44, Lumpini Ville Cultural Center, Lumpini Place RatchadaThapra, Lumpini Place Phahon-Saphankhwai, Lumpini Ville Sukhumvit 77, Lumpini Place Narathiwat-Chaophraya, Lumpini Ramindra-Laksi, Lumpini Center Ladprao 111 and Lumpini Park Pinklao, and attended by 711 participants, 373 of which were children and 338 were adults. 2.3.3 “Super Storyteller” and “Mini Writer” Projects The Company organized drawing and storytelling competition in the library which was part of the Story On Tour project aiming to promote reading and develop self-confidence of youth. After adding more storybooks to all libraries of all projects, the Company had selected children aged 6-12 years who won the competition to participate in a camp at TK Park to develop their drawing skills and learn many techniques about drawing and storytelling. The drawings acquired from the camp would enter a competition for a scholarship as an incentive for the participants. 3. Activity to Raise Environmental Awareness 3.1 The Second “Lively Family Camp for Environmental Conservation with LPN” The “Lively Family Camp for Environmental Conservation with LPN” was held for the second consecutive year at Lumpini Park. The camp was opened for family members of the residents to learn about the ecological system, environmental resources management and waste management through one-day “family camp.” The objective was to raise environmental awareness, encourage behavioral change to be more environmental friendly and realize the value of natural resources and build a close relationship within and among families for a happy society.

3.2 Green Day for Kids with LPN Activity Green Day for Kids with LPN was held at Suan Ruam Jai at Lumpini Park Pinklao with the objective to provide a venue for Lumpini families to participate in creative activities together and build a relationship within and among families for a happy society. Most of the activities focused on children to encourage them to take care of the environment of the community, learn about the norms of co-existence in the society, learn to take care of public property and raise awareness about the responsibilities towards the environment in the community. The activities in the LPN Go Green Workshop included creating new inventions to reduce the impacts of global warming, creating nice decoration items or accessories and playing games. The games were designed to be fun, build imagination and stimulate IQ and divided into various stations e.g. disposing troublesome waste, relationship bonding, guessing the names of trees in Suan Ruam Jai to teach about the types of trees and how to care for them and snake ladder game to raise awareness about the regulations of residential condominiums. On the day, a storytelling activity from the Story On Tour project was also organized in the library of the project to promote the habit of reading to children.

3.3 Cleaning Activity at Jomtien Beach The Company organized a cleaning activity at Jomtien Beach to collect garbage on the beach. Lunch was also provided for children at Ban Prakhun Child Development Center, Korpai community, Banglamung district, Chonburi province. The activity was participated by 20 the staff of the Company and joint owners from Lumpini Ville Prachachun-Phongphet. 4. Activity to Provide Assistance to the Underprivileged As a result of the economic fluctuation, political instability and higher unemployment rate, the Company had implemented a careerbuilding project to provide assistance to the unemployed and the underprivileged. The objective was to help generate income and create a good quality of life for the residents of Lumpini community and to build a positive relationship between the officers and the residents as well as among the residents themselves in order for them to make better use of their free time and to promote a culture of living together. The seven piloted projects were Happy Land projects (Building B, C, D, E, F, G, H), Ladprao projects (A, B, C, D, E, F, G), Lumpini Center Nawamin and Lumpini CondoTown Bodindecha-Ramkhamhaeng. 5. Activity in collaboration with neighboring communities. 5.1 Cleaning and Painting Activity at Tong Bon Temple The Company collaborated with Yannawa District in the organization of the â&#x20AC;&#x153;Cleaning and Painting Activity at Tong Bon Templeâ&#x20AC;? (adjacent to Lumpini Park Riverside-Rama 3) to improve the scenery in the temple and to make merits for H.R.H. Princess Sirindhorn on the occasion of the 56th birthday on 2nd April 2011. Around 80 volunteers and executives from both organizations participated in the activity.

52 Annual Report 2011 L.P.N. Development Public Company Limited

5.2 Merit Making Activity at Tong Bon Temple The Company and business alliances together made a merit to monks at Tong Bon Temple (adjacent to Lumpini Park Riverside-Rama 3) to support the construction of a multi-purpose pavilion to serve as Dharma school and Sunday Buddhist school. The activity was held on Tuesday 17 May 2011 which was a Vesak Day. Mr. Sompong Kwanampaipan, Assistant Managing Director of Lumpini Project Management Service Co., Ltd. (LPS) was the representative of the Company to offer the collected amount of 266,611 THB to the abbot of Tong Bon Temple.

5.3 Activity to Build a Playground, Improve a Library and Renovate a Building for Wat Mai Kratoom Lom School Wat Mai Kratoom Lom School is the school under Bangkok Metropolitan Administration and is located in Nongchok district. At present, there are 140 students from kindergarten to Pratom 6 level. Since the school lacked facilities and infrastructures necessary for students, the Company offered to sponsor the construction of a playground, the development and improvement of the library by building book shelves and donating five computers to the library and the renovation of a building by fixing the ceiling to be as good as new. 5.4 Merit Making Activity to Sponsor the Renovation of Kiat Pradit Temple The Company, joint owners of Lumpini Ville Ratburana-Riverview and business alliances arranged a merit making activity to raise fund for the renovation of Kiat Pradit Temple (near Lumpini Ville Ratburana-Riverview) which was being renovated but lacked financial support. The ceremony was held on 15 October 2011 and presided over by Mr. Charan Kesorn, Managing Director of Lumpini Property Management Co., Ltd. On 16 October 2011, Ms. Yupa Techakraisri, Executive Director of L.P.N. Development Public Co., Ltd., Mr. Charan Kesorn, Managing Director of Lumpini Property Management Co., Ltd. and Mr. Somsak Metatan, Chairman of Condominium Juristic Person Committee of Lumpini Ville Ratburana-Riverview, joint owners and staff of the Company offered robes and the donation of 395,000.00 THB to the temple. 5.5 Activity to Repair Playground Equipments and Aerobic Area of Ban Prakhun Child Development Center, Korpai Community In 2011, the Company has expanded the project development to Pattaya, Chonburi province and explored community surrounding the development site for possible assistance that could be provided to the community to suit their needs. Korpai community is in the neighborhood of Lumpini CondoTown North Pattaya-Sukhumvit and the majority of the community members are elderly people and children. The community is in need of a financial resource to repair the playground equipments and aerobic area. Therefore, the Company offered financial aid to the community to repair the playground equipments and aerobic area to serve as a common area for the community members to meet up, relax and exercise.

5.6 Lumpini Helps, Suayai Smiles Project During the flood situation in 2011, Suayai Community located in Rachadapisek soi 36 which was nearby Lumini Place Ratchayothin was heavily flooded for an extended period of time. The Company was aware of the situation via the Foundation for Slum Child Care under the royal patronage of HRH Princess Kalyani Vadhana which was the community assistance center during the time. The Foundation packed up donated goods and distributed survival bags to the communities affected by the flood, as a consequence, basic necessities of the Foundation itself had become scarce. After the water receded, the Company contacted the Foundation to urgently provided assistance to the communities. The survey had been done to acquire the information of the real needs of the community. It was found that the community was a densely populated area of wooden housing residing by no less than 1,000 residents. The majority of the community members was daily employees who suffered a great deal from unemployment during the flood. The Foundation surveyed and compiled the list of those who were affected by the flood and needed urgent help. The Company then prepared the necessities for the affected, donated other goods to the Foundation for its use, raised fund from business alliances, staff and joint owners of various projects and organized mental health recovery activities for the community members e.g. free haircut and free lunch. The activity could not have been successful without the collaboration of the business alliances, the Company’s staff, other private companies and “Ruam Jai Pai Duay Kan” group which consisted of the representatives of joint owners from Lumpini Place Ratchayothin, Lumpini Place Ratchada-Thapra, Lumpini Ville Prachachun-Phongphet, P.S.T. City Home, Lumpini Suite Pinklao, U-Delight Huay Kwang, Lumpini CondoTown Bodindecha-Ramkhamhaeng and Lumpini Ville Ladprao-Chokchai 4. The total of 321,466.50 THB was raised. Moreover, the Company focuses on the social responsibility in terms of labor directly and indirectly as well as fair business operation as follows: Labor The operation of the Company involves directly and indirectly with labor through affiliated companies and business alliances who provide services to the Company, especially construction and security services. The Company has established the following policies for operation: Direct Labor Lumpini Property Management Co., Ltd. which is an affiliated company is the provider of cleaning services in the projects managed by the Company. The employees of the Company and affiliated companies are divided into 2 groups as follows: Group 1: Full-time Employee The Company emphasizes the importance of human resources management which is included in the mission and strategic map of the Company with an aim to develop the Company to be a quality organization. Group 2: Daily Employee The majority of daily employees are women who come to look for work in Bangkok. This group of women does not have a chance to compete in the labor market for the lack of knowledge and skills. The Company thus assigns an affiliated company to run an addon business to provide cleaning services to communities managed by the Company and hire women who were exploited in terms of labor. These women will be trained to increase their personal and professional knowledge and skills. At present, there are more than 800 women hired by the Company. The other policy for such business operation is to return the profits of operation to all daily employees in terms of wage (which is 20% higher than the minimum wage) and welfares. The Company also supports the education of the employees or their children who lack financial resources as well as their well-beings and good quality of life for a better future.

54 Annual Report 2011 L.P.N. Development Public Company Limited

Indirect Labor The Company has to hire external companies (construction contractors) to construct buildings developed by the Company. Such group of companies has done businesses with the Company for a long period of time and developed into being an “alliance” that has gone through the economic crisis in 1997 together. This allows the Company to establish a guideline to manage construction work and provide trainings for workers of the alliance. The Company strictly abides by law in the management of labor, especially in terms of creating a good quality of life for the workers, providing welfares, safety, healthcare and good environment of the construction site. The Company also takes care of the surroundings of the workers’ temporary housing and lays ground rules for the workers e.g. workers must avoid gambling and drugs. Fair Business Operation In order to ensure balanced and fair gain of the Company, the main strategy, vision, mission and strategic map are developed from the balanced scorecard system which entails balanced and fair interests and benefits for all stakeholders as follows: Benefits for Customers The Company has developed products with affordable prices especially for customers in the lower-middle income range. “Vibrant Community” strategy will help enhance the quality of life of the customers who are residents in the community as well. Benefits for Trade Partners The Company has allied with trade partners for a long period of time, especially those who had gone through the economic crisis together. The business alliances of the Company are like an affiliated organization that achieves development and growth together with the Company. The profits from the operation will also be the win-win situation for both parties. Benefits for Employees The Company focuses on the importance of human resources management and development as well as career advancement of employees. The Company is a learning organization in which the majority of high ranking executives are internal staff who have grown from mid-manager level. The importance is given to work-life balance also. As for remuneration for employees, the Company has decided the bonus for employees based on sales volume of the organization in order to encourage all employees to participate and take responsibility in the performance of the Company.

Social Enterprise At present, the problem of labor exploitation is of grave concern and is urgently needed to be solved by the collaboration of both government and private sector, especially that of underprivileged female workers who are uneducated and illegible, some of whom are abused by the employers in terms of wages. Moreover, some female workers are abandoned by their husbands and are single mothers taking care of their children alone so they have no other options but to work in exploitative organizations and are prone to other social problems such as gambling and drug. The real estate business of the Company involves around various types of services especially cleaning services. The Company has established a unit to provide cleaning services to the communities managed by the Company with the intention to provide an opportunity for underprivileged women in the society to be professionally trained with the focus on cleaning services in â&#x20AC;&#x153;Lumpiniâ&#x20AC;? communities. It is also to enhance the quality of life of underprivileged women and their families to be able to live in the society with pride and happiness. All the staff in this line of work are equally treated in the same manner as the staff in other departments and are entitled to receive the welfare and bonus. The wage paid is 10% higher than the minimum wage. Last but not least, they are supported in terms of scholarship paid from the budget of the Company for them and their children to continue their studies. There are currently around 800 staffs in the department. One of the KPIs of this department is the happiness of employees. The result is very satisfactory as evident in the survey of the satisfaction of cleanliness services provided to communities and the uplifted quality of life and happiness of staff. In 2011, the Company started to study the social enterprise concept to add on to the operational direction of the department. The status of this line of work is approved by the Board of Directors of the Company to be upgraded to the establishment of Lumpini Property Service and Care Co., Ltd. to manage the work separately and pave the way for the Company to be a social enterprise. More trainings and services will be provided to generate profit and better quality of life for staff while also working to benefit the society in return in a scheme which is to be decided in the future.

56 Annual Report 2011 L.P.N. Development Public Company Limited

Sustainability of Vibrant Community Delivery and sustain the value of products and services under “care and share” culture in order to be a “Vibrant Community.”

58 Annual Report 2011 L.P.N. Development Public Company Limited

70 Quality Projects in the “Vibrant Community”

60 Annual Report 2011 L.P.N. Development Public Company Limited

62 Annual Report 2011 L.P.N. Development Public Company Limited

Development of Condominium, Brand and Vibrant Community

Initiation of City Condo “Lumpini Place” brand is widely accepted as an urban residence with high quality.

Develop “Lumpini Center” for lower-middle target group “Lumpini” brand originated from Lumpini Tower Project on Rama 4 Road

5 Projects 1,800 Units

1989-1996

7 Projects 2,900 Units

1997-1999

“Lumpini Ville” is developed as a brand for the middle class target group. “Lumpini Suite” is developed as a brand for the upper-middle class target group.

18 Projects 7,000 Units

2000-2003

Enhance the capacity of development

25 Projects 9,200 Units

2004

The beginning of “LPN”

Economic Crisis in 1997 LPN entered the debt restructuring process while continuing to develop projects.

Initiation of City Condo and the focus on the development of residential condominiums.

Development of Medium Rise Condominium

In the initial phases, various types of products were developed such as i.e. condominiums, office buildings, residential buildings, townhouses and mini offices. Lumpini Property Management Co., Ltd. was established in 1992 to provide services after the project handover to residents by taking into consideration the quality of life of the residents in the projects. The success of the development of the projects leaded to the registration in the Stock Exchange of Thailand in 1994. During this period, the Company did not give much importance to building the brand.

During the major economic crisis of the country, the floating of Thai Baht and the closure of 56 financial institutions resulting in more than 3,000 million THB debt of the Company. The Company needed to enter the debt restructuring process with the financial institutions. However, LPN still continued to develop residential condominium projects and reguarly ran marketing activities.

The Company focused on the development of residential condominiums as there were potential and needs in the market. City Condo which was no more than nine stories high was developed. The emphasis was on the sale, construction and ownership transfer, all of which were to be done within one year. Also, “LPN Design” condominium units of 30 and 60 sq.m. has also been widely accepted for its maximum functionalities. Grand Unity Development Co., Ltd. was founded to develop incomplete projects from the time of the economic crisis in order to reduce the problems of incomplete buildings in Bangkok. A new record was added as the Company was able to close the sale of “Lumpini Suite Sukhumvit 41” within only three hours.

The Company reverted back to develop buildings of around 20 stories high and highlighted the strengths in terms of speed of the project development which is within one year and the building management after handover under “Vibrant Community” strategy.

64 Annual Report 2011 L.P.N. Development Public Company Limited

Develop “Lumpini CondoTown” brand to accommodate the need of city dwellers to buy their first home. This is the continuous development of Lumpini Center brand and Small Size Township Start developing not only condominium projects but also small size community.

32 Projects 11,700 Units

2005

36 Projects 16,000 Units

2006

The Company has continuSearch for the Company’s ously been communicating the brand under identity and plan to “Happiness of Togetherness” communicate the brand and “Happiness of Caring” more objectively. The logo campaigns to the society of the organization, the within the organization, Vibrant Community logo communities of all projects as well as logos of all devel oped as well as the public other products are modified. in order to create awareness, A plan to communicate and re-emphasize the strength the brand has also of “Lumpini” brand which is been in place. unique. It is also to give importance to the creation of a good quality of life. “Lumpini Park” brand has also been specially developed for quality society.

44 Projects 27,000 Units

2007-2008

61 Projects 40,000 Units

2009-2010

Extend the location for project development to other provinces and develop the new brand, “Lumpini Park Beach” and “Lumpini Megacity” in accordance with the vision of the Company to develop urban residences to deliver the value of the products and services to the residents.

70 Projects 50,000 Units 100,000 People

2011

Development of Small Size Township Focus on lowermiddle target group and initiate “Vibrant Community” strategy emphasizing the care for the quality of life of the residents.

Development of “Lumpini CondoTown” brand to accommodate the need of city dwellers to buy their first home.

Search for the identity of “Lumpini” brand to establish a strategy and develop a brand to impress city dwellers and be ready to grow sustainably with stability.

Development of “Lumpini Park” brand for a good quality of life of city dwellers and a “Vibrant Community’ in Suan Ruam Jai..

Development of “Lumpini Park Beach” to introduce a good quality of life to the people of Pattaya and development of “Lumpini Megacity” which is a continuation from “Lumpini CondoTown” brand.

Projects which are 5 times larger than city condos were developed and equipped with full facilities suitable for city living under the concept of “Smalll Size Township” with full management. Lumpini Ville Cultural Center was the pilot project with the emphasis on specially large community management.

The new brand, “Lumpini CondoTown” was developed to respond to the needs of the large lower-middle class target group. The brand was the flagship of the development of the Company’s projects up to the present days. The development of ‘Vibrant Community’ has also been intensified to satisfy such target group.

The Company analyzed and studied the brand identity with an aim to learn the true identity of the brand. The logo of “Lumpini” brand as well as the meaning it conveyed were also studied and became the origin of the “Vibrant Community” strategy with the definition of “Real Pleasure of Living”.

“Lumpini Park” brand was specially developed to create a good quality of life. Apart from locating in a great location, there was also a huge garden in a project under the name of “Suan Ruam Jai” so that customers have a venue in which they can organize activities together. This is to be consistent with the creation of “Vibrant Communty”.

This is the first time that the Company develop recreational condominium under the new brand, “Lumpini Park Beach” which combines the atmosphere in Suan Ruam Jai with the liveliness of the seaside atmosphere. Jomtien Beach is the first location selected for development. Also, “Lumpini Megacity” is developed as a model of large-scale high-rise project with the focus on convenience of the residents under the concept of “Small Size Township.”

Management of “Lumpini” Logo and Brand Logo and brand are intangible assets which all companies aim to create, maintain and communicate to their target groups. Amidst severe competitive situation in the market, most of the successful brands have clear identity and usually commit to exceed customers’ expectations in the delivery of products or services. The “organizational culture or value” is the main drive to create value and business ethics. Huge budget for investment in advertisement and public relations to promote a brand in a short-term period in hope to increase sale volume without any sense of responsibility no longer helps a company to achieve its target, especially now that consumers understand and are more aware of their rights. The Company realizes the fact and thus establishes a guideline to build and manage brand based on hands-on experience in order to create brand awareness and trust which will entail brand bonding and referral. The Company refrains from investing huge budget in advertisement to create brand awareness and identifies “Core Values” of the organization which support the strengthening of brand management guideline. Throughout the 22 years of operation, the factor which plays an important role in creating sustainable growth of the Company is consumers’ trust in “Lumpini” brand, resulting from products value from strategic location, condominium units under LPN Design concept, various aspects of the projects, as well as value of services which are gradually developed by the Company. Also, customers’ experiences management and after sale service such as community management under “Vibrant Community” strategy are also significant factors that help create the uniqueness and strength of the brand which are widely accepted. “Vibrant Community” Strategy to Drive “Lumpini” Brand

The Company is committed to create and deliver the real pleasure of living to all members of “Lumpini” family in order to be the “community where residents can happily live together in the perfect components of great environment, society and culture.” The Company has established an efficient strategy for community management. Lumpini Property Management Co., Ltd., an affiliated company founded in 1992, is directly responsible for full community management services under the F-B-L-E-S-P guideline which consists of:

Facility Management

Common facility management is one of the important components of a community and thus is the main task of community management. Community Management Department will be responsible for ensuring highest efficiency of common properties i.e. architectural components, convenient facilities and various systems in the buildings such as elevators, electricity generators, electricity system and sanitation system. The Maintenance Department will take preventive measures to ensure that all systems are working as normal for the convenience and safety of lives and properties of joint owners or all residents. Waste water treatment system will also be maintained as it can directly impact the environment. Budgeting Management

Facility Management Budgeting Management Life Quality Management Environment Management Security Management People Management

The management of condominium juristic persons’ budget does not aim to seek profit but to comply with the policy approved by the Annual General Meeting of Joint Owners to manage the budget to increase the financial stability of the community while maintaining the efficiency of the building as well as quality of life of joint owners or all residents of the community. Financial report which is easy to understand, transparent and auditable will also be prepared. Furthermore, the Community Management Department will be responsible for the management of common properties which are approved by the Annual General Meeting of Joint Owners to generate extra income. This will help relax the burden on the expenses of the common area or help increase the amount of money in the fund.

66 Annual Report 2011 L.P.N. Development Public Company Limited

Life Quality Management

Community Management does not only include the management of common properties and budget but also the quality of life of joint owners in terms of hygiene, compliance with regulations of the condominium as a discipline of living together and order within the community. Various activities to promote Thai cultures are organized to build good relationship among residents or joint owners of the community. The Company also encourages corporation between residents of community developed by the Company and residents of neighboring communities. Activities supported by the Company are as follows: • Main activities such as Annual General Meeting of Joint Owners and fire drill activities. • Relationship building activities such as parties in the garden and New Year party to create an awareness of co-existence in the society. • Activities to promote healthy of the community members such as “Lumpini Community Sports Fair.” • Cultural activities such as celebrations on various occasions e.g. New Year, Songkran and Loy Kratong Day. • Sharing activities such as blood donation and donation of money and goods to provide assistance to deprived communities and people.

Security Management

The Company is very strict with the security management system and establishes a Security Department to manage safety within the project. The strategy is to maintain security standard for the safety of responsible officers and equipments such as closed circuit television, alarm system and communication system. The Company also builds a network with the participation of the communities and related governmental agencies for the highest safety of community members.

Environment Management

People Management

The Company gives very much importance to the environment and focuses on environmental aspects that will have impacts on joint owners and communities surrounding the project by adhering to “Green Clean Lean” principles such as waste water treatment to meet the standard required by the government and to reuse waste water to water plants in the project, waste management by waste segregation for easy disposal or recycling, energy conservation, maintenance of green space or tree planting within the condominiums and in neighboring areas to increase green space in the community and Bangkok. All the activities above are done to upgrade the quality of life of urban residents.

The Company emphasizes the care for the quality of life and capacity development of all the parties involved such as employees and officers responsible for community management. The management of common area and the services provided to joint owners are done to satisfy the customers and related members. Moreover, the Company focuses on team work of all the officers who are responsible for managing all aspects of the community. Capable staff will partly play a role in supporting F-B-L-E-S-P concept to be of higher quality. The way to increase the knowledge and understanding in community management of Juristic Persons Committee, especially the Chairman of the Juristic Persons Committee who plays a very significant role in managing the community is also planned.

In order to emphasize the importance of environmental management, the Company establishes a department to be directly responsible for supporting and raising environmental awareness and organizing activities to restore the surrounding environment which is affected by the development of the project both before and after construction.

Brand Communication In 2008, the Company and a consultant company in brand communication jointly planned the development and communication of “Lumpini” brand to the wider public with an aim to create awareness of the true identity of the brand. From the study by in-depth interview of all parties involved e.g. executives, employees, customers and trade partners, it is agreed in unison and concluded that “Lumpini” brand is the “Real Pleasure of Living” in “Vibrant Community.” In order to enhance the clarity of the brand as well as the identity of “Lumpini” brand, the Company has improved and developed the Company’s and “Vibrant Community” logos as can be seen below:

Former Company’s Logo

New Company’s Logo

(has been in use since 2008)

2009 30 happy days

Former Vibrant Community Logo

2010 Happiness Of Caring

Vibrant Community Logo

(has been in use since 2008)

2011 ClubLumpini

In 2009, the Company initiated “30 Happy Days” campaign to communicate “Vibrant Community” strategy by inviting four young people to try living in “Lumpini” society to prove that the saying “they say…living here is happy” is true. The campaign was communicated through www.30happydays.com website which was low-cost but highly effective in reaching the target group. Other channels of communication also included social networks i.e. Twitter and Facebook. It turned out that the target group of young people was very interested in the campaign which helped create awareness, understanding and confidence in “Lumpini” brand. In 2010, the Company maintained the policy to create awareness and confidence in the brand by making a short film out of true stories of four people living in “Lumpini” society in the “Happiness of Caring” campaign. The film was shown on www. HappinessOfCaring.com. Both campaigns above were awarded Certificate of Excellence 2010 in the category of Interactive and Digital Media (Web-site Design) from Bangkok Art Directors Association (BAD Award). In 2011, the Company continued to communicate and deliver the value of the brand through various channels including online media which was accessible to the target group of young people such as www.facebook.com/clublumpini. During the flood crisis at the end of the year, the Company made use of such media to communicate to members of various communities to give information about the situation and the preparedness plan of the Company in order to create a common understanding among all the residents. Also, online media was used to mobilize resources and assistances to create the unity of the communities and mutual understanding as well as to lessen concerns of the community and external society. In the past year, the Company also focused on delivering the value of the brand through the value of products and services which would entail sustainable development in the future.

68 Annual Report 2011 L.P.N. Development Public Company Limited

Research and Development The Company realizes the importance of research and development and has established a Research and Development Department in 1995 which comprises those with knowledge, capabilities and experiences from various professional backgrounds. The Department is under the supervision of the Managing Director. The research encompasses the entire operational system of the Company from selection of locations for development and development of products and services to costs reduction. The roles and responsibilities of the Research and Development Department are as follows: to maintain the level of sale price to be appealing to the target Research group even when the costs have been increasing every year. 1. Research to obtain information for executive decision The 26 sq.m. unit of the Company was awarded “Product of making. Research topics range from macro level information the Year” award in 2009 from a newspaper. Most recently, the such as economic, social and political situations, competition Company has developed a 22 sq. m. residential condominium in the market, demand and supply, market needs and unit to respond to the needs of the lower-middle target group information for the development of each project e.g. suitable whose budget for the purchase of a residence is not more than location for development, suitable price range for each location one million THB. to the information on customers’ needs to be used to develop 2. Development of Service the products that are able to meet the needs of consumers as much as possible. The identity of the Company is not only the development of 2. Research to develop and improve efficiency of the operation of products to answer to the needs of the consumers but also the the Company with an aim to satisfy the needs of customers and service which creates the uniqueness of the “Lumpini” brand. add values to products and services as well as to reprocess Specifically, the “community management” service has been in order to reduce costs and wastes and improve the speed widely accepted and referred to. The “community management” of operations. of the Company is under the responsibility of Lumpini Property 3. Research to seek for new business opportunities which arise Management Co., Ltd. which has been founded for more than from changes in the environment, society, demographics 16 years and is responsible for managing the communities in all and consumers’ behavior to support the expansion of the projects developed by the Company. The main objective is to Company in the future. create a “Vibrant Community” in which the residents live happily together with appropriate components and good quality of life Development within great society, environment and culture. 1. Development of Products

The product development of the Company focuses on increasing the value which responds to the needs of consumers while maintaining the upper hand over competitors, leading to the trust in “Lumpini” brand. Throughout the years, the Company has significantly achieved the development in product development. It could be said that condominiums of the Company are the model of urban residential condominiums development which has been copied by many other business operators. It is because the Company’s condominiums are able to answer to all the needs of the residents under “LPN Design” concept i.e. 30 sq.m. studio unit and 60 sq.m. two-bedroom unit. This creates the new standard of condominium living as it is consistent with Thai lifestyle and is easy to maintain. At present, main products of the Company have continuously been developed. Though the 26 sq.m. one-bedroom units are small but are able to satisfy the lifestyle and needs of customers. The Company has been able

Development of the Company’s Product under “LPN Green” Concept and LEED Standard Apart from the development of the above products and services, the Company has also given importance to environmental impacts resulting from projects development. The Company has thus established a design and development guideline under “LPN Green” concept which consists of Green Design, Green Material & Equipment, Green Energy and Green Community Management, which has already been promoted to the public and is well-received in terms of sale volume. LPN Green concept communicated to the society and consumers is in accordance with Green Building Standards. Various institutions are attempting to establish “Green Building Institution” and are during the process of identifying the standards and assessment system for green buildings. Green building standards of many other countries are used as examples and will be adapted to be in line with the conditions and various situations in Thailand.

LPN Green and LEED Green Building Standard

Sustainable Site Development

Water Efficiency

Energy Efficiency

Select project locations that have dense population to reduce environmental impacts and take advantage of the facilities and convenience of the neighborhood.

Use water efficient sanitary ware. Some types of toilet bowls i.e. the dual flush one is able to reduce the water used by 50%

Design the condominium with awning and porch to reduce the heat from sunlight that directly enters the units.

Locate on main roads with convenient transportation i.e. near express ways and have public transportations to reduce the impacts on traffic and encourage the residents to use public transportation more by providing a shuttle bus to connect to the main public transportation system.

Run a campaign to encourage the residents to take a shower rather than a bath in order to directly reduce the use of water.

Compensate previous open space with green area and landscapes in the project.

Use the treated waste water to water plants in the project. This is to increase the efficiency of water use and reduce the amount of water released from the project into public water systems. Install efficient plant watering system i.e. sprinkler system to conserve water.

70 Annual Report 2011 L.P.N. Development Public Company Limited

Design the lighting and air conditioning system to be efficient and suitable to reduce electricity use. Use renewable energy i.e. solar power for lamps in the gardens. During the management of the project and after the handover, the Community Management Department is responsible for managing energy usage in the condominium to be as efficient as possible while also being safe at the same time.

Material and Resources

Indoor Environment Quality

Innovation In Design

Use alternative materials which are proved to be safe and environmental friendly to replace natural materials to reduce the impact on the environment such as using laminate floor instead of real wood parquet floor.

Focus on the efficiency of sustainable community management using the F-B-L-E-S-P strategy:

Plan the layout of the building and project to be consistent with the environment to allow natural light and wind.

Facility Management : Manage public utility systems and facilities within the project for maximum efficiency and appropriateness for residence.

Plan the layout and design to include open space inside condominium units such as doors and windows which are appropriate for living.

Budgeting Management : Manage finances and budget in a transparent manner for maximum benefits while also managing risks in parallel.

Shorten the construction period through the use of semi-prefabrication system.

Design the dimensions of the buildings to be consistent with the dimensions of construction materials to maximize the economic value and reduce waste of materials that would have to be discarded back to the environment. Use stained glass instead of opaque walls as walls within the units to obtain natural sunlight while preserving the privacy of the residents.

Life Quality Management : Promote discipline and culture of living together, caring for each other and sharing for good quality of life in the community.

Use insulated glass for windows outside on the east side to reduce heat which comes with sunlight in the afternoon which is the hottest time of the day.

Environment Management : Conserve the environment in the community as well as use the energy appropriately while taking into account safety and energy conservation.

Have a Green Wall in the parking lot to reduce carbon dioxide and prevent heat from spreading into the residence and surrounding areas. Manage waste by segregating waste and disposing waste appropriately both during the construction and after residents have moved in.

Security Management : Manage the security system and various measures strictly for maximum efficiency, beginning with the design of the project, the management and design of safety equipments and security system and being strict with security personnel. People Management : Give importance to the care for the quality of life and capacity development of all the parties involved.

It can be seen that LPN Green concept is not only the marketing tools to achieve sale purposes but the aspects of the concept are also similar to the Green Building Standards of LEED which clearly demonstrates the corporate environmental and social responsibility of the Company. However, the appropriateness and possibility of other dimensions will also be considered at the same time to entail sustainable development.

Innovation Development of LPN The innovation of the real estate business is hardly developed in terms of technology of the product but the process of property development or so-called process innovation which would enhance the values of the products or services of the organization. The Company has defined the term â&#x20AC;&#x153;innovationâ&#x20AC;? as follows: 1. The innovation should promote the vision and strategy of the Company. 2. The innovation must promote the values of products and services. During the past few years, the Company has been promoting and supporting the development of new innovations in all departments. The details are being summarized as follows: Project Development and Design Process

- LPN Design: 26 sq.m. condominium unit which is able to fully respond to the lifestyle of city dwellers living in a small condominium unit. - LPN Green: The Green Building idea has been developed and improved to be in line with the strategy of the Company and comprises the followings: - Green Design - Green Medicating Management - Green Construction Process - Green Community Management - Mixed Target Community: The projects are developed to serve the needs of mixed target groups of working people and retirees. Marketing and Sale Process

Recently, the products of the Company are in high demand in the market. For some projects, customers have been forming a long queue in front of the project since the night before the sale opening day in order to reserve to buy condominium units. Such difficulties have not been neglected. The Marketing and Sale Department has come up with tag issuance and draw system on the sale opening day so that it would be more convenient for the customers as they would not have to queue up like they did before. This is the obvious example of the creation of service value to customers. Construction Process

The construction process in the real estate business sector usually has impacts on the environment, especially when the company or the constructor does not have any awareness on the environmental impacts from construction process such as dust, noise, safety, construction site hygiene and the quality of life of the construction workers. The Company has required all constructors to ensure minimal impacts on the environment and surrounding communities as well as promoting the safety around the construction site and the quality of life of construction workers, all of which are included in the operational strategy of the Construction Department (QCSES Strategy). As for the construction process, the Company has invented the semi-prefabrication construction system which combines exterior ready-made wall panels with interior wall panels rendering system to shorten the construction period and reduce wall cracks problems after the handover of the units. Furthermore, the Company encourages all constructors to invent a construction system or equipment as well as process to add value to the construction work. An innovation competition has been organized annually as an incentive for the Construction Department and constructors to create new innovations in construction work.

72 Annual Report 2011 L.P.N. Development Public Company Limited

Condominium Ownership Transfer Process

The product development strategy of the Company focuses on the development of condominium for lower-middle class, resulting in an annual increase in the number of condominium units of the Company. In the previous year, the Company had handed more than 10,000 condominium units over to customers but this was only done sporadically. The department which is responsible for the ownership transfer of condominium units, therefore, adjusts the ownership transfer system with the involvement of various departments both internally and externally (e.g. customers, banks, government offices), enabling the Company to transfer the ownership of 2,500 units within the period of one month (20 working days) only. This is considered to be the innovation which helps increase the effectiveness of the business operation of the Company. Community Management Process

Regarding the responsibilities towards customers in the real estate business sector, it is common to assume that such responsibilities will come to an end after the condominium units are handed over to the customers. However, the policy of the Company is not only to take responsibility for the buildings we have developed but also the quality of life, society and environment which the customers are moving into. The “Vibrant Community” strategy has thus been developed as an innovation for outstanding services which build the customers’ trust in the Company. The “Vibrant Community” strategy has constantly been developed and various product innovations such as “Suan Ruam Jai” and “Living Library” play a significant role in allowing the Company to achieve the “Vibrant Community” objectives. The management of community to enhance the true happiness of the residents is developed from the viewpoint of the Community Management Department of the Company. In order to respond to the true needs of the residents and promote knowledge sharing, the meeting of the community managers and chairpersons of all juristic persons has been organized annually for mutual understanding between the two sides. This is the service innovation which enables the Company to improve and develop the community management system to better serve the needs of the residents.

Suan Ruam Jai Suan Ruam Jai: The Sense of Co-Existence in the Community The rapid expansion of the city has deprived Bangkok of a vital green space. The residential area nearby the public park has also become nonexistent. The Company has thus come up with the idea to create a green space within the projects to encourage the residents of the projects to participate in various activities and have a chance to get to know each other and meet their neighbors. Suan Ruam Jai is not only a park in a project for recreational purposes but also a venue for the residents to organize activities in the community such as exercises, recreational activities and activities to promote well-being of the residents like aerobic, yoga and dharmma in the park. Other activities include parties and music in the park. The areas in Suan Ruam Jai can be divided as follows:

Welcome Area : The entrance at the front of the park.

Active Area :

The area for exercising which is designed to respond to various age groups. There are a playground, a sports area, a jogging track and outdoor exercising equipments.

Passive Area :

The recreational area for relaxing activities like reading books.

As a part of the “Vibrant Community” idea of the Company, Suan Ruam Jai serves as a center of the residents within the project and a platform for them to get acquainted with each other. More importantly, it will promote the sense of co-existence, sharing and care within the community as well as surrounding communities in the neighborhood. Suan Ruam Jai is not only the important element of the “Vibrant Community” but also another “value” of the products and services delivered to the society by the Company. At Suan Ruam Jai, strangers become friends, friends become families, and families become communities. The members of such communities will eventually drive forward the realization of the true “Vibrant Community.”

74 Annual Report 2011 L.P.N. Development Public Company Limited

Community Activities for Better Quality of Life Apart from intending to deliver quality home to the residents, the Company also prioritizes the delivery of a good quality of life to the community members which is consistent with the mission to create and deliver the value of products and services to develop quality community within the “care and share” culture in order to be the “Vibrant Community.” Various activities includes: 1. Main Activities

For example, the organization of Annual General Meeting of Joint Owners, fire drill activities and campaign to encourage members to volunteer in Fire Team project. 2. Relationship Building Activities

For example, activities to introduce new residents to each other and discuss issues together, activities to support artworks and craft, parties in the garden, New Year party as well as field trips to enhance happiness and good relationships among the residents. 3. Health Promotion Activities

For example, “Lumpini Community Sports Fair” which has been continued from 2009, Walk-Run Activities in Honor of His Majesty the King and exercises for various age groups e.g. aerobic and yoga.

4. Cultural Activities

For example, celebrations on various occasions e.g. New Year, Songkran, Family Day, Loy Kratong Day, annual merit making and merit making on Buddhist Holy Day. This is to carry on Thai traditions and cultures and for good fortune of the residents. Also, the Company has organized “Dharmma Delivery” activity under the topic of “Vibrant Community: How should the residents behave?” to promote peaceful living in the community. 5. Sharing Activities

For example, donation of money and goods for various foundations and charities to help deprived communities and people and campaign to encourage the residents to donate blood every three months. Moreover, members in the community also co-establish various environmental and social clubs, namely, “Vibrant Community: Lumpini Sampan” club, “Gathering of Kind People, Lumpini Volunteer” club, “Lumpini Volunteer BodindechaRamkhamhaeng” club and “Lumpini Walk-Run for Health” club and organized various activities all through 2011 as follows:

76 Annual Report 2011 L.P.N. Development Public Company Limited

No.

Club Vibrant Community: Lumpini Sampan

Activities • Restored and plant coral reefs in Rayong province. 1 • Granted scholarships to students in Samutsongkram province. • Catered lunch for disable children in Ratchaburi province. Gathering of Kind People, Lumpini Volunteer • Organized activities at a home for elderly persons 2 in Kanchanaburi province. • Organized activities for children at Baan Rasbamrung school, Lumpini Volunteer Bodindecha3 Ramkhamhaeng Supanburi province. • Organized an elephant conservation activity at the Elephant’s World, Kanchanaburi province. • Organized a walk-run activity on 12 August. Lumpini Walk-Run for Health 4 • Organized Bangkok Post walk-run activity. • Donated houses to the victims of the flood in Lopburi province. Joint activities of all the four clubs 5 • Collected donations for the victims of the tsunami in Japan. • Collected donations and goods for the victims of the flood in the south of Thailand. • Collected donations and goods for the victims of the flood all over the country. Information of Community Activities in 2011

Types of Activities Share&Care Total (Projects) Total (Times)

Total (Projects) Total (Times)

Participation

Goods Blood Club R SA Annual General Fire Merit Coffee Culture/ Dharmma Waste Donation Donation CESR Meeting Drill Making Corner Religion Delivery Segregation 12

Relationship Building Field Entertainment Community Art and Health and Aerobic Trip and Party Market Craft Sports and Yoga 14

407

285

Total 833 698

LPN and the Flood Crisis Thai people all over the country had experienced the flood crisis which was one of the worst natural disasters in the previous year from September to December 2011. The flooding in many provinces in the northern part of Thailand had expanded to Bangkok, affecting the Company as well as other organizations seriously. The Company did not only have to be accountable for more than 1,500 employees, 600 of whom were affected by the flood, but had to take responsibilities as a property developer to take care of the projects which still were being developed and around 80 communities with 50,000 families also. The preparation to cope with the flood situation to ensure that Lumpini communities scattered around Bangkok and peripheral area would get through the crisis was indeed the heavy burden. The Company had to mobilize resources to plan, make preparations and adjust the emergency plan to be applicable with the real situation in the area. The operational processes during the flood crisis were as follows: Making Preparation : Prior to the flood situation in Bangkok, the Company and the Community Management Department had prepared an implementation plan to protect crucial areas along with common area of each project and established a measure to cope with the flooding. The Company had discussed with Juristic Persons Committees and joint owners in various projects for mutual understanding of the plan and had gone through the preparation processes for two months in advance. Adjusting the Plan : During the flood crisis in Bangkok, the Company had set up an ad-hoc special team called the â&#x20AC;&#x153;Water Roomâ&#x20AC;? to handle the flood situation which was becoming more severe. The staff of all levels in the Company had collaborated with Juristic Persons Committees, volunteers in the communities and business alliances to build flood defense barriers and discuss the solutions to the situation on a daily basis for 24 hours a day for a period of many months. The communities were not left to deal with the situation alone. The Company has learned a great deal from the experiences during such crisis which lead to the planning and establishment of flood prevention measures in the projects. The knowledge has also been cascaded to other Lumpini communities affected by the flood. Restoring the Communities : After the flood, the Company started improving the scenery and recovering the communities from damages immediately to restore the happiness of the residents and the beauty of their home to be as good as new. At the same time, the Company works on the flood preparedness plan in case of a recurrence and looks into the possibilities of flood insurance for condominiums.

78 Annual Report 2011 L.P.N. Development Public Company Limited

After the crisis had ended, there were many impressive stories to be told which reflected the true identity of the Company, the employees and the members of “Lumpini” communities as follows: The Company The impression of the Company on its employees

The Company realizes the value of the employees and the business alliances which are a part of LPN Team, all of whom demonstrate a unity in their action, are committed, take responsibilities in their duties and sacrifice their personal comfort throughout this difficult period. The impression of the employees on the Company

The employees realize the care and kindness offered to all by the Company. All staff of all levels are supported and provided with full assistance to help them get through the crisis.

Lumpini Communities The impression of the Company on the customers

The image of the collaboration and the unity of action of the joint owners, Juristic Persons Committees and volunteers in the Lumpini communities reflect the participation, care, sacrifice and kindness of the community members. Everybody has been helping each other as they do to their own family members. This is the reflection of the care and share spirit of the members of the “Vibrant Community” which is the greatest reward for the hard work of the Company. The impression of the customers on the Company

Many customers have expressed their admiration and thankfulness towards the sacrifice and commitment of the staff and business alliances in the protection of the communities as well as the assistance and convenience provided to the residence during the flood via messages, letters, kind words and smiles all through the time of the crisis. These are the precious award of the commitment of the Company. The Company has found and experienced the true meaning of the word “Vibrant Community” from the crisis through the communities in which the members are fully aware of the public consciousness, the participation, the care and unselfishness. The story of the cooperation in the Vibrant Community has been elaborated in a special report on the flood situation titled “Reach Out.” The Company feels honored and proud to play a role in helping the members of “Lumpini” communities through the crisis and determines to continue delivering a “Vibrant Community” to the society for the better quality of living of the people.

80 Annual Report 2011 L.P.N. Development Public Company Limited

Achieving Sustainability through Experiences Promote knowledge, capacity and integrity to achieve steady growth as a â&#x20AC;&#x153;value organizationâ&#x20AC;?

Company History L.P.N. Development Public Co., Ltd. is a developer of residential condominiums with a long history of more than two decades in which time the Company has developed significantly as a result of continuous improvement and development including the establishment of a clear vision to drive the Company to achieve its goal in each period and promote the business operation concept of the Company to the wider public, especially the intention to deliver appropriate quality of life for urban living by building the first quality home for those in the middle and lower-middle income groups. 1989 : Starting the Business

The Company was founded by the people from various professions and backgrounds who were united in their commitment to develop real estate of high quality for the Thai society. The Company was established on 21 June1989 with a registered capital of 50 million THB and started by developing “Lumpini Tower” project, a 37-story high office building on Rama 4 Road which was the first of its kind and has also been the head office of the Company since.

1990-1993 : Expanding the Investments and Operations

• 1990

The Company jointly invested 10,000,000 THB in Pornsanti Co., Ltd., the developer of P.S.T. Condoville, equaling 20% of the paid up capital of 50 million THB and was responsible for the management of the project. • 1992

Lumpini Property Management Co., Ltd. was registered with a registered capital of 1million THB with the Company holding 99.88% of the shares with an aim to provide real estate management services, especially community management for condominium juristic persons of various projects developed by the Company and subsidiary companies as after sale service to create confidence in the good quality of life of customers who purchased the Company’s products. This was part of a policy to be different and strengthen the competitiveness of the Company. • 1993

The Company increased the proportion of investment in Pornsanti Co., Ltd. to 99.99% of the paid up capital of 200 million THB with 1,000 THB par value per share.

Expanding the Investments

82 Annual Report 2011 L.P.N. Development Public Company Limited

1994-1996 : Becoming a Public Company

1997-1998 : The economic crisis

• 1994

• 1997

Within five years of the operation, the Company had registered to become a public company on 21 June 1994, registration No. BorMorJor 477. The Company was listed in the Stock Exchange of Thailand with the Securities named “LPN”. The Company issued 9,200,000 million ordinary shares to the public at 10 THB par value and offered the sale price of 64 THB per share. The Company had subsequently increased the capital to be 460,000,000 THB on 4 November 1994. The Company jointly invested 12,720,000 THB equaling 10% of the paid up capital in Elec & Elteck (Guangzhou) Real Estate Development Ltd. which was a real estate developer in Hong Kong. • 1996

The Company jointly invested in N.T.N. Concrete Co., Ltd. which was a company engaged in construction materials business at the amount of 10,020,000 THB or 1,020,000 shares equaling 51% of the paid up capital or a par value of 10 THB per share. The Company executed loan agreements for foreign capital with five leading banks from Singapore at the total amount of 20,000,000 SGD with a maturity date of three years at an interest rate of SIBOR + 1.20% for use in developing L.P.N. Sukhumvit Tower project.

The Company suffered from the economic crisis, the affect from the currency exchange rate and the fact that financial institutions froze the construction loan. There were three projects being constructed at the time and the customers stopped paying the installments resulting in a large amount of debts that the Company was unable to pay off. Therefore, the Company had to stop paying interests to financial institutions and adjust construction plans by continuing the construction of the project which was nearly complete only. The plan was well-supported by the business alliances of the Company. The service operations of Lumpini Property Management Co., Ltd. were expanded due to the opportunities in the market arising from the economic downturn and in order to maintain its staff. The Company had developed various services to meet the needs of the market in areas such as security services, cleaning services, air conditioning maintenance, etc. The organization was restructured and the capacity of human resources was strengthened in response to the economic situation at the time. Mr. Chamlong Ratanakul Sereroenngrit resigned from his position as Chairman of the Board of Directors because of health problems and Mr. Pong Sarasin resigned from his position as director due to other businesses engagement. The Board of Directors had thus invited Mr. Mora Boonyapala to take up the position of the Chairman of the Board of Directors in his place. • 1998

The Company withdrew its investment from Elec & Eltek (Guangzhoou) Real Estate Development Ltd. due to delays in the project as well as the economic situation at the time which affected the liquidity of the Company. The withdrawal earned the Company around 3,390,000 THB profit from the exchange rate.

เพิ่มทุน จดทะเบียน 1999 : Successful Debt Restructuring - Being Ready for Business Operation

2001 : Creating a Legend of City Center Condominiums

•1999

• 2001

On 26 July 1999, the Company had appointed Cathay Asset Management Co., Ltd. as the consultant for debt restructuring and increased the Company’s capital by jointly established a guideline for negotiation on debt restructuring with all creditors. The Company also planned to increase the registered capital of the Company. The Board of Directors of L.P.N. Development Public Co., Ltd. had organized the Extraordinary General Meeting of Shareholders Ref. 1/1999 on 4 October 1999 at the Company’s meeting room to consider an increase of the Company’s capital from 460,000,000 THB to 3,983,000,000 THB by issuing 352,300,000 new ordinary shares, each of par value 10 THB, making up the total amount of 3,523,000,000 THB. The Board of Director’s Meeting on 15 November 1999 unanimously resolved to sell the investment in shares of N.T.N. Concrete Co., Ltd. at the price of 0.01 THB per share as a result of the economic downturn making N.T.N. Concrete Co., Ltd., which was in the construction materials business, operate at a loss and shareholders’ equity was negative. Also, N.T.N. Concrete Co., Ltd. was unable to support the operation of the Company.

The Company initiated the development of City Condo while other developers halted the development of new projects. The first project was Lumpini Place Sathorn which was wellreceived and became the model of the development of city condo for other developers. In November 2001, the Company agreed to enter into a joint venture with Uni-Venture public Co., ltd., Sansiri Public Co., Ltd. and Yaowawong Co., Ltd. Grand Unity Development Co., Ltd. was set up to develop incomplete project i.e. Water Cliff project, a residential condominium project on Ratchada -Rama 3 Road which had been halted due to the economic crisis. The said joint venture had restored and developed new project under the new name of “Lumpini Place Water Cliff” with L.P.N. Development Public Co., Ltd. being responsible for managing the marketing, sale and construction work of the whole project as well as negotiating with the original buyers.

The Company successfully restructured its debt with financial institutions in 1999 at the amount of 3,132,610,000 THB and the remaining overall debt of around 170 million THB was successfully restructured in February 2000, therefore, the Company was able to restructure its debt at the total amount of 3,305,930,000 THB.

84 Annual Report 2011 L.P.N. Development Public Company Limited

2002 : Adjusting the Registered Capital for Financial Stability

2003-2004: Increasing the Capital for Financial Strength

• 2002

The Company was accepted as a leader in the property development business in the category of medium-end residential condominium as a result of the success of the development of residences especially city condo in the heart of the city at the price of around one million THB.

The Company paid off the all the debts following the debt restructuring plan and became a company that was “free from debt but had valuable staff whom the Company maintained and built during the crisis to become the most valuable asset that carried on the true identity of LPN until nowadays.” All the projects of city condo of the Company were highly successful. The Company also jointly invested with the business alliances to develop incomplete projects. The Company approved to decrease the registered capital from 3,983,000,000 THB to 460,000,000 THB which was the decrease in the shares that had not yet been put for sale and later increased the registered capital by 750,000,000 THB, totaling the registered capital to be 1,210,000,000 THB and amended the Memorandum of Association of the Company accordingly. The capital increase of 750,000,000 THB was the issuance of 75,000,000 ordinary shares which could be divided as follows: 2,.600,000 shares for the original shareholders at the ratio of five original shares for three new shares; 29,900,000 shares for conversion of warrants to ordinary shares 17,500,000 shares for conversion of debt to capital for Krung Thai Bank Public Co., Ltd. 29,900,000 warrants divided into: 1. 27,600,000 warrants for the original shareholders who exercised their right to reserve the original shares for the capital increase at the ratio of one new share per one warrant. 2. 2,300,000 warrants for no more 35 directors and employees of the Company.

• 2004

The Annual General Meeting of Shareholders in 2004 which was held on 7 April 2004 resolved to change the par value from 10 THB to 1 THB, increasing the number of shares of the Company from 121,000,000 to 1,210,000. The Meeting also approved to increase the registered capital of the Company by 276,706,550 shares at par value 1 THB, totaling the registered capital to be 1,486,706,550 THB which could be divided into 1,486,706,550 ordinary shares at par value of 1 THB. The Company also increased its shareholding in Grand Unity Development Co., Ltd. from 25% to 33.33%. 2005-2006 : Becoming the Leader in Residential Condominium Development

The Annual General Meeting of Shareholders in 2006 which was held on 25 April 2006 resolved to approve the decrease of the registered capital from 1,486,706,550 THB to 1,475,698,768 THB by striking ordinary shares remaining from the reserve held for the conversion of warrants of 11,007,782 shares at the price of 1 THB per share and approved to amend Article 4 in the Memorandum of Association of the Company to reflect the capital decrease.

The Company appointed United Advisory Service Co., Ltd. as the Company’s capital increase consultant.

2007-2009: From “Vibrant Community” to the Third Stage Vision for Qualitative Development

• 2007

The Company amended its joint-venture policy with Grand Unity Development Co., Ltd. by reducing its shareholding from 33.33% to 20% of the registered and paid up capital and set up Lumpini Project Management Service Co., Ltd. to provide construction management services to real estate projects. • 2008

As a result of the sub-prime crisis in the USA and the political situation in Thailand at the end of 2008, financial market in Thailand was affected and the Stock Exchange of Thailand was fluctuated. The Stock Exchange of Thailand and Securities Exchange Commission encouraged listed companies in the Stock Exchange of Thailand to buy back their own shares to ensure confidence among the investors. Therefore, the Board of Directors Meeting of L.P.N. Development Public Co., Ltd., Ref. 6.2008 which was held on 9 October 2008 had resolved to approve to buy back the Company’s shares as the share price in the market at the time was lower than the basic price. The budget of 200,000,00 THB was prepared to buy back approximately 62 million shares equalling 4.20% of 1,475,698,768 shares. The purchase was restricted to the Stock Exchange of Thailand from 24 October 2008 to 23 April 2009. • 2009

According to the resolution of the Board of Directors to buy back the Company’s treasury stocks in 2008, the Company had purchased the total of 8,146,300 shares at the average price of 2.19 THB per share at the total amount of 17,840,397 THB and sold those shares between 3 and 11 December 2009 at the average price of 7.01 THB per share at the total amount of 57,103,415 THB. The Company earned a profit from treasury stocks at the total amount of 39,262,226 THB.

86 Annual Report 2011 L.P.N. Development Public Company Limited

2011: Strengthening Corporate Social and Environmental Responsibilities and Implementing Concrete Sustainability Policy

The Company had separated the Cleaning Department from Lumpini Property Management Co., Ltd. (LPP) in order to set up Lumpini Property Service and Care Co., Ltd. (LPC) to provide cleaning services to create jobs, income and better quality of life for underprivileged women with the registered capital of 1,000,000 THB. The long-term goal of the company is to operate in the same manner as a social enterprise.

Awards 2005

2006

2008

2009

The company had its securities ranked in SET Index 100 of the Stock Exchange of Thailand from the notice of the Stock Exchange of Thailand dated 18 April 2005. The index is used to calculate the price level of securities to promote more investments into medium sized companies. The criteria used are the level of liquidity and distribution of shares with the highest market value on average per day in the Stock Exchange of Thailand during the past 12 months. Also, the company has to be listed for no less than 6 months and has a free-float of more than 20%. In October 2005, P.S.T. City Home which is the 29-story residential condominium of the Company won third place in Maek Mai Ming Muang competition organized by Yannawa District Office in the category of large scale building for its pleasant and green surroundings. The competition supported the policy to emphasise the importance of the creation of good environment in all projects. In 2005, the Company was ranked to be 1 of 93 listed companies in the Stock Exchange of Thailand in the Top Quartile group for its outstanding performance in good governance by the Thai Institute of Directors (IOD). This had been the third consecutive year that the Company was honored to be ranked in the Top Quartile group. The Company was ranked by the Thai Institute of Directors (IOD) as a Company with Level 4 performance in the area of corporate governance for its performance which was in accordance with the standards of good governance with the emphasis on the disclosure of information to investors, shareholders and the general public in a transparent manner and on a regular basis. The average score of the Company was 80-89 from the total of 100. This was the fourth year that the good corporate governance of the Company had been monitored and the Company was assured by the National Corporate Governance Committee as a very good registered company in the Stock Exchange of Thailand. The company was praised by Ms. Patareeya Benjapolchai, Managing Director of Stock Exchange of Thailand on the occasion that the Company was one of the three companies nominated for SET Awards 2006 for Best Performance in the Property & Construction category as a result of the Company’s commitment to create sustainable growth and returns to shareholders. The award was given on the basis of financial status, operational performance, compliance with the regulations of the Stock Exchange of Thailand on the disclosure of information and liquidity. The Company was awarded the “Real Estate Developer of the Year 2007 - 2008” from the Office of the Consumer Protection Board (CPD), the Prime Minister’s Office. The award was organized by CPD with an aim to promote ethical practices and social responsibility among real estate developers. Forbes Asia magazine, the September 2008 issue, had selected the Company to be one of the “200 Best Under A Billion” companies. This was the survey of the total of 24,155 listed companies in the Asia Pacific Region with the income of less than one billion USD and continuous outstanding performance. Of all the 200 companies awarded, only seven companies were from Thailand. The Company was ranked by the Thai Institute of Directors (IOD) as a Company with Level 4 performance in the area of corporate governance for the fifth consecutive year for its performance which was in accordance with the standards of good governance with the emphasis on the disclosure of information to investors, shareholders and the general public in a transparent manner and on a regular basis. The Company was ranked by the Thai Institute of Directors (IOD) as a Company with Level 4 performance in the area of corporate governance for the sixth consecutive year for its performance which was in accordance with the standards of good governance with the emphasis on the disclosure of information to investors, shareholders and the general public in a transparent manner and on a regular basis.

88 Annual Report 2011 L.P.N. Development Public Company Limited

2010

2011

The Company was ranked by the Thai Institute of Directors (IOD) as a Company with Level 5 in the area of corporate governance for its performance which was in accordance with the standards of good governance with the emphasis on the disclosure of information to investors, shareholders and the general public in a transparent manner and on a regular basis. The Company was awarded the “Real Estate Developer of the Year 2007 - 2008” from the Office of the Consumer Protection Board (CPD), the Prime Minister’s Office for the second consecutive year. The award was organized by CPD with an aim to promote ethical practices and social responsibility among real estate developers. Mr. Tikhamporn Plengsrisuk, Chief Executive Officer and Chairman of Executive was nominated for SET Awards 2010 in the category of Best CEO Awards by the Securities Exchange Commission, the Stock Exchange of Thailand and the Thai Institute of Directors. “30 Happy Days” and “Happiness of Caring” which were marketing communication campaigns of the Company were awarded a Certificate of Excellence 2010 in the category of Interactive and Digital Media (Website Design) from Bangkok Art Directors Association (BAD Award). The Company was ranked by the Thai Institute of Directors (IOD) as a Company with Level 5 for the second consecutive year. It was one of the 42 companies assessed by the IOD following the new criteria of the operation on the basis of good governance focusing on the disclosure of information to investors, shareholders and the general public in a transparent manner. The Company was awarded Thailand’s Most Innovative Companies 2011: In Search of Sustainable Innovation organized by the Faculty of Commerce and Accounting, Chulalongkorn University and Bangkok Business Newspaper. All the listed companies in the Stock Exchange of Thailand must go through selection process and be assessed by businessmen from various industries in order to be chosen as most innovative companies. Of all the listed companies, LPN was one of the five companies in the Non-Service category that received the award. LPN was selected from the Stock Exchange of Thailand as one of the 30 companies in SET High Dividend 30 Index (SETHD). To be eligible for inclusion in the SETHD index, companies must pay dividend for the last three consecutive years and the annual dividend payout ratio in such period must be greater than 85%. Moreover, the stock of the companies must not fall into any one of the following conditions: be delisted or slated to be delisted according to the Regulation of the Stock Exchange of Thailand; be undergoing voluntary delisting or be currently suspended from trading for an extended period of time. The result of the quality assessment of the Company was at the excellent level from the Annual General Meeting of Shareholders 2011. The assessment was done by the Thai Investors Association.

Thailand’s Most Innovative Companies 2011 89

Organization Chart

90 Annual Report 2011 L.P.N. Development Public Company Limited

Board of Directors

Mr. Pakorn Thavisin

Prof. Siri Keiwalinsrit

Mr. Tawechai Chitasaranachai

Mr. Amornsuk Noparumpa

Mr. Thep Roongtanapirom

Mr. Weerasak Wahawisal

Mr. Vudhiphol Suriyabhivadh

Mr. Tirachai Panchasarp

Mrs. Jongjit Thapanangkun

92 Annual Report 2011 L.P.N. Development Public Company Limited

Mr. Tikhamporn Plengsrisuk

Mr. Pichet Supakijjanusan

Mr. Kumpee Chongthurakit

Mr. Opas Sripayak

Mrs. Yupa Techakraisri

Mr. Pakorn Thavisin Age : 72 years Position : Chairman of the Board of Directors and Independent Director Education : • The Chartered Institute of Bankers, London • Diploma from the National Defence College of Thailand (Class 311) Trainings : • Certification of Completion of Directors Certification Program (DCP 0/2000) and Certification of Attendance of Role of the Chairman Program (RCP 16/2007) from the Thai Institute of Directors Association (IOD) Work experiences in the past 5 years Present : • Chairman of the Board of Directors and Independent Director, L.P.N. Development Public Co., Ltd. • Chairman of Colgate-Palmolive (Thailand) Co., Ltd. • Chairman of Audit Committee and Independent Director, Royal Orchid Hotel Public Co., Ltd. • Chairman of the Board of Directors, Sakornkamol Co., Ltd. • Chairman of the Board of Directors, Kasukhon Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : None Prof. Siri Keiwalinsrit Age : Position : Education : Trainings :

82 years Vice Chairman of the Board of Directors and Independent Director • Honorary Doctorate Degree of Law, Chulalongkorn University • Barrister-at-Law, Council of Legal Education Thailand • LL.B. Thammasart University • Training course on Development in Land Possession and Administration, Cambridge University, England • Audit Committee Program (ACP 7/2005), Director Accreditation Program (DAP 25/2004) and Finance for Non-Finance Directors (Class 14/2004), from the Thai Institute of Directors Association (IOD) Work Experiences in the past 5 years • Vice Chairman of the Board of Directors and Independent Director, L.P.N. Development Public Co., Ltd. Present : • Law Drafting Committee, Ministry of Labour and Social Welfare • Law Drafting Committee, Group No. 7, Office of Juridical Council • Qualified Committee Member of National Land Management Committee, Ministry of Natural Resources and Environment • Advisor to the Promotion of Safety and Occupational Health Committee, Safety and Occupational health Promotion Association • Advisor to the Asset Assessment Committee, Asset Assessment Association • Advisor to the Legal Issues Consideration Committee, Department of Lands • Advisory Committee to the Law Improvement and Development Committee, Department of Lands Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : None

94 Annual Report 2011 L.P.N. Development Public Company Limited

Mr. Tawechai Chitasaranachai Age : Position :

73 year Vice Chairman of the Board of Directors, Nomination and Remuneration Committee Member and Independent Director Education : • Bachelor of Engineering, Major in Chemical Engineering, Tienjin University, Tienjin, China Trainings : • Director Accreditation Program (DAP 26/2004) from the Thai Institute of Directors Association (IOD) Work experiences in the past 5 years Present : • Vice Chairman of the Board of Directors, Nomination and Remuneration Committee Member and Independent Director, L.P.N. Development Public Co., Ltd. • Director of Orathai International Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : None Mr. Amornsuk Noparumpa 66 years Age : Position : Director, Chairman of Audit Committee, Chairman and Nomination and Remuneration Committee and Independent Director Education : • Barrister-at-Law, Lincoln’s Inn, London • Barrister-at-Law, Council of Legal Education Thailand • LL.B. (Honours), Thammasat University • Diploma from the National Defence College of Thailand (Class 399) • Certification of Completion of Directors Certification Program (DCP 30/2003), Trainings : Audit Committee Program (ACP 23/2008) and Role of Compensation Committee (RCC 9/2009) from the Thai Institute of Directors Association (IOD) • Curriculum in Security Psychology, Class 31 • Curriculum in Advanced Management, Class 7 Work experiences in the past 5 years • Director, Chairman of Audit Committee, Chairman and Nomination and Present : Remuneration Committee and Independent Director, L.P.N. Development Public Co., Ltd. • Director, Chairman of Audit Committee and Nomination and Remuneration Committee Member, RCL Public Co., Ltd. • Chairman of Ethics Committee, Department of Probation, Ministry of Justice • Advisor to the Executive Directors Committee, Thai Airways International Public Co., Ltd. 2008 - 2009 : • Director, Executive Director and Nomination, Remuneration and Human Resources Development Committee, Thai Airways International Public Co., Ltd. 2007 - 2009 : • Chairman of the Board of Directors, Siam Realty and Services Co., Ltd. • Senior Advisor, Bank of Ayudhaya Public Co., Ltd. • Chairman of the Board of Directors, Ayudhaya Securities Public Co., Ltd. 2003 - 2007 : • Vice President, Bank of Ayudhaya Public Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : None

Mr. Thep Roongtanapirom Age : Position :

67 years Director, Audit Committee Member, Nomination and Remuneration Committee Member and Independent Director Education : • Master of Business Administration, Major in Finance and Accounting, Columbia University, USA • Bachelor of Commerce (Honours), Thammasat University • Bachelor of Accounting (Honours), Thammasat University Trainings : • Certification of Completion of Directors Certification Program (DCP 20/2002), Audit Committee Program (ACP 8/2005), Chartered Director Class (CDC03/2008) and Role of Compensation Committee (RCC 9/2009) from the Thai Institute of Directors Association (IOD) • Capital Market Academy (CMA 04/2007) Work experiences in the past 5 years • Director, Audit Committee Member, Nomination and Remuneration Committee Present : Member and Independent Director, L.P.N. Development Public Co., Ltd. • Audit Committee Member, RCL Public Co. Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : 0.03% Mr. Weerasak Wahawisal 55 years Director, Audit Committee Member, Nomination and Remuneration Committee Member and Independent Director Education : • Master of Accounting Sciences, University of Illinois, U.S.A. • Master of Business Administration, Ohio University, U.S.A. • Bachelor of Business Administration (Honors), Thammasat University • Director Accreditation Program (DAP 63/2007) and Trainings : Director Certification Program (DCP 91/2007) from the Thai Institute of Directors Association (IOD) Work experiences in the past 5 years • Director, Audit Committee Member, Nomination and Remuneration Committee Present : Member and Independent Director, L.P.N. Development Public Co., Ltd. • Director of Accounting Department, RCL Public Co., Ltd. • SVP Credit & Risk Management Hutchison • CAT Wireless Multimedia Head of Finance Support, TA Orange Co.Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : None Age : Position :

96 Annual Report 2011 L.P.N. Development Public Company Limited

Mr. Vudhiphol Suriyabhivadh Age : Position : Education :

67 years Director, Nomination and Remuneration Committee Member and Independent Director • Bachelor of Commerce (Accounting) University of New South Wales, Australia • LL.B., Sukhothai Thammathirat University • Diploma, Management Course, IMD, Lausanne, Switzerland Trainings : • Certification of Completion of Directors Certification Program (DCP 36/2003) and Audit Committee Program (ACP 7/2005) from the Thai Institute of Directors Association (IOD) Work experiences in the past 5 years Present : • Director, Nomination and Remuneration Committee Member and Independent Director, L.P.N. Development Public Co., Ltd. • Audit Committee Member, Nomination and Remuneration Committee Member and Independent Director, Thai Wah Food Products Public Co., Ltd. • Chairman of Audit and Risk Management Committee and Independent Director, Laguna Resort and Hotel Public Co., Ltd. • Chairman of Audit Committee and Independent Director, Bangkok Ranch Public Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (including the spouse’s) (as of 31 December 2011) : 0.14% Mr. Tirachai Panchasarp Age : 73 years Position : Director Education : • Secondary School Certificate, Darasamutr School, Chonburi Trainings : • Director Accreditation Program (DAP 26/2004) and Finance for Non-Finance Directors (FND 14/2004) from the Thai Institute of Directors Association (IOD) Work experience in the past 5 years Present : • Director, L.P.N. Development Public Co. Ltd. Criminal records during the past 10 years : None Shareholding in the Company (including the spouse’s) (as of 31 December 2011) : None

Mrs. Jongjit Thapanangkun Age : 65 years Position : Director Education : • Master of Economics, Ramkhamhaeng University • Bachelor of Economics, Ramkhamhaeng University Trainings : • Certificate English of Proficiency AUA Language Institute, Diamond Grading Gemological Institute of America, Director Accreditation Program (DAP 4/2003) and Finance for Non-Finance Directors (FND 14/2004) from the Thai Institute of Directors Association Work experiences in the past 5 years Present : • Director, L.P.N. Development Public Co. Ltd. • Director, Burapa Golf and Country Club Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : 0.27% *Mrs. Yupa Techakraisri, Mrs. Jongjit Thapanangkun and Mr. Kumpee Chongthurakij are siblings. Mr. Tikhamporn Plengsrisuk 62 years Age : Position : Director, Chief Executive Officer, Chairman of Executive Committee and Nomination and Remuneration Committee Member Education : • Bachelor of Engineering, Chulalongkorn University Trainings : • Certification of Completion of Directors Certification Program (DCP 23/2002) from the Thai Institute of Directors Association (IOD) Work experiences in the past 5 years • Director, Chief Executive Officer, Chairman of Executive Committee and Present : Nomination and Remuneration Committee Member, L.P.N. Development Public Co., Ltd. • Director, Pornsanti Co., Ltd. • Director, Lumpini Property Management Co., Ltd. • Director, Lumpini Project management Service Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : 0.68%

98 Annual Report 2011 L.P.N. Development Public Company Limited

Mr. Pichet Supakijjanusan Age : 62 years Position : Director, Executive Director and Nomination and Remuneration Committee Member Education : Bachelor of Architecture, Chulalongkorn University Trainings : • Certification of Completion of Directors Certification Program (DCP 27/2003), Finance for Non-Finance Directors (FND 14/2003) and Audit Committee Program (ACP 21/2008) from the Thai Institute of Directors Association (IOD) Work experience in the past 5 years Present : • Director, Executive Director and Nomination and Remuneration Committee Member, L.P.N. Development Public Co., Ltd. • Director, Pornsanti Co., Ltd. • Director, Lumpini Project management Service Co., Ltd. • Director, Lumpini Property Management Co., Ltd. • Advisor to Grand Unity Development Co., Ltd. 2007 - 2010 : • Director, Audit Committee Member and Independent Director, Merchant Partner Securities Public Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : 0.54% Mrs. Yupa Techakraisri Age : 61 years Position : Director and Executive Director Education : • Bachelor of Economics, Ramkhamhaeng University • Certificate of Advanced Accounting, Pitman Examination Institute • Certification of Completion of Directors Certification Program (DCP 32/2003) Trainings : from the Thai Institute of Directors Association (IOD) Work experiences in the past 5 years • Director and Executive Director, L.P.N. Development Public Co., Ltd. Present : • Director, Pornsanti Co., Ltd. • Director, Lumpini Property Management Co., Ltd. • Director, Lumpini Project management Service Co., Ltd. • Director, Sri Sam Ang Supplier Co., Ltd. • Director and Executive Director, T. Krungthai Industries Public Co., Ltd. • Director, Grand Unity Development Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : 1.76%

Mr. Kumpee Chongthurakij Age : Position : Education : Trainings :

57 years Director and Executive Director • Bachelor of Business Administration, Assumption University • Director Accreditation Program (DAP 4/2003) and Certification of Completion of Directors Certification Program (DCP 48/2004) from the Thai Institute of Directors Association (IOD) Work experiences in the past 5 years Present : • Director and Executive Director, L.P.N. Development Public Co., Ltd. • Director, Pornsanti Co., Ltd. • Director, Lumpini Project management Service Co., Ltd. • Director, Lumpini Property Management Co., Ltd. • Director T. Krungthai Industries Public Co., Ltd. • Director, S.S.A. Industries Co., Ltd • Director, Sri Sam Ang Supplier Co., Ltd. • Honorary Chairman of Footwear Industry Club, the Federation of Thai Industries Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : 1.29% *Mrs. Yupa Techakraisri, Mrs. Jongjit Thapanangkun and Mr. Kumpee Chongthurakij are siblings. Mr. Opas Sripayak Age : Position : Education : Trainings :

49 years Director, Executive Director and Managing Director • Bachelor of Architecture, Silpakorn University • Mini M.B.A., Thammasat University • Finance for Non-Finance Directors (FND 24/2005) and Certification of Completion of Directors Certification Program (DCP 71/2006) from the Thai Institute of Directors Association (IOD) Work experience in the past 5 years Present : • Director, Executive Director and Managing Director L.P.N. Development Public Co., Ltd. • Director, Lumpini Property Service and Care Co., Ltd. • Assistant Managing Director, Lumpini Property Management Co., Ltd. 2005 : 2001 - 2004 : • Manager, Research and Development Department, Lumpini Property Management Co., Ltd. Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : None

100 Annual Report 2011 L.P.N. Development Public Company Limited

Miss Somsri Techakraisri Age : 50 years Position : Deputy Managing Director Education : • LL.B., Thammasat University • Mini M.B.A., Thammasat University Trainings : • Certification of Completion of Directors Certification Program (DCP 70/2006) from Thai Institute of Directors Association (IOD) • Foundation Programme for Company Secretaries from Thai Listed Companies Association Work experiences in the past 5 years Present : • Deputy Managing Director, L.P.N. Development Public Co., Ltd. • Managing Director, Pornsanti Co., Ltd. • Secretary, L.P.N. Development Public Co., Ltd. • Director, Lumpini Property Service and Care Criminal records during the past 10 years : None Shareholding in the Company (as of 31 December 2011) : None

101

Investment The operation and investment of subsidiary and associated companies

The Company has the policy to separate the operation of the companies according to the investments in subsidiary and associated companies as follows: Subsidiary Companies The Company invests in four subsidiary companies and holds more than 99% of shares as follows: 1. Lumpini Property Management Co., Ltd. Provides full community management services to projects developed by the Company, subsidiary companies and associated company. 2. Lumpini Project Management Service Co., Ltd. Provides full construction services to projects developed by the Company, subsidiary companies and associated company. 3. Pornsanti Co., Ltd. Develop property that is not residential condominium with an aim to distribute investment risks and increase the capacity for development of the Company in lands that are not suitable for residential condominium development. 4. Lumpini Property Service and Care Co., Ltd. Provide cleaning services with an aim to develop to be a social enterprise to create jobs for underprivileged women which is regarded as one of the responsiblies for the society and environment. Associated Company The Company has only one associated company which is Grand Unity Development Co., Ltd., a property development company, in which the Company holds 20% of shares. The Company has jointly invested in the company since after the economic crisis in 1997 to develop a number of incomplete projects in Bangkok. Nowadays, the company has been developed in all aspects and has a target in the shareholding structure of the company group.

102 Annual Report 2011 L.P.N. Development Public Company Limited

Goal of Subsidiary Companies

Subsidiary Companies

Goal

Lumpini Project Management Service Co., Ltd.

To strengthen the integrated project development of LPN by collaborating with business alliances to build confidence in project development for the achievement of the target budget, timeframe and values of LPN.

Lumpini Property Management Co., Ltd.

To maintain the reputation and values of projects and communities being developed by LPN by professional community management team.

Pornsanti Co., Ltd.

To increase the opportunity for property development while also sustaining the benefits and satisfying values for LPN.

Lumpini Property Service and Care Co., Ltd.

To provide training and jobs for underprivileged women to enhance their quality of life and dignity via the development of vibrant community of LPN.

Investment Structure of the Company

Company Subsidiary Companies 1. Pornsanti Co., Ltd. 2. Lumpini Property Management Co., Ltd. 3. Lumpini Project Management Service Co., Ltd. 4. Lumpini Property Service and Care Co., Ltd. Associated Company 1. Grand Unity Development Co., Ltd.

Paid-up Capital (Million THB)

Date

Share (%)

Equity Method (Million THB)

Investment Cost (Million THB)

350.00

30 Sep 93

99.99

361.612

1.00

25 Mar 92

99.88

0.9988

1.00

14 Nov 07

99.93

0.9993

1.00

28 Mar 11

99.95

0.9995

600.00

30 Nov 01

20.00

211.188

121.722

103

Securities

The Companyâ&#x20AC;&#x2122;s registered capital is 1,475,698,768 THB which is a paid-up capital of 1,475,698,768 THB with ordinary shares value 1,475,698,768 THB with a par value of 1 THB (One Baht Only). In 2008, the Board of Directors of the Company Ref. 5/2008 on 9 October 2008 resolved to approve the Company to buyback treasury stocks. The period for the purchase was from 24 October 2008 to 23 April 2009. The objectives are as follows: 1. To pay attention to share price when the buying/selling price is lower than the book value. 2. To ensure the confidence of investors and shareholders as the purchase demonstrates the maintaining of the stability of the price of the Companyâ&#x20AC;&#x2122;s shares. 3. To demonstrate the financial stability of the Company and build confidence among shareholders in the turnover of the Company. 4. To increase the Return on Equity (ROE) as well as the net earnings per share (EPS). On this occasion, the Company bought back the total of 8,146,300 shares at the average price of 2.19 THB per share, totaling 17,841,198 THB and sold back the above treasury stock during 3-11 December 2009 at the average price of 7.01 THB per share, totaling 57,103,415 THB. The earnings from the sale of the treasury stock was at the total amount of 39,262,226 THB. Shareholders

As of the record date on 18 August 2011 and the compilation of the list in accordance with the book closing method on 19 August 2011 in Section 225 of the Securities and Exchange Act, the shareholders of the Company are categorized as follows: 1) Top ten major shareholders

No. Shareholders

No. of Shares Proportion (%) (Million Shares)

1 Thai NDVR Co.,Ltd. 2 Mr. Sumet Techakraisri 3 Chase Nominees Limited 15 4 HSBC (Singapore) Nominees PTE LTD 5 State Street Bank and Trust Company 6 Somers (U.K.) Limited 7 Mr. Kenneth Rudy Kamon 8 Chase Nominees Limited 1 9 Nortrust Nominees Ltd. 10 Krungsri Dividend Stock LTF TOTAL

104 Annual Report 2011 L.P.N. Development Public Company Limited

324.94 75.04 62.21 50.56 49.05 40.69 37.71 34.77 31.12 27.63 733.72

22.02 5.09 4.22 3.43 3.32 2.76 2.56 2.36 2.11 1.87 49.72