LPN : Annual Report 2009 by Piyanat Kimhamanon

LPN and Operational Goals â&#x20AC;&#x153;Following a method of business operation that adheres to the creation of balance in all dimensions along with good corporate governance principals for sustainable growth and qualityâ&#x20AC;?

LPN and Operational Goals The Company’s business operation has attempted to adhere to operate a business that is sustainable and that has quality by creating a balance between quantitative and qualitative rewards for all groups of stakeholders as well as being responsible for the affects which the business has on all of those involved pursuant to principals of ethics and quality. In order for all parties involved to have a clear idea of the direction of the Company’s business, the Company has provided a vision that encompasses the direction and goals of the Company very clearly as well as declaring a mission to satisfy such vision very clearly so that the operations are successful whether in terms of quantity or quality. From the experience gained from surviving the financial crisis in 1997, the Company has the tools to develop and improve efficiency of its personnel in terms of qualifications and organizational performance (Core Competency) with various criteria that have been developed and later improved from its experience in surviving the crisis pursuant to the acronym “CLASSIC” which was later revised to be called the “Core Value” of the Company which is a belief held throughout all facets of the personnel of the Company so that the Company has a common guideline to achieve the Company’s goals in operating with effectiveness, stability and sustainability. Vision To maintain a leading position as a residential condominium developer by creating integrated value to promote the optimized quality of community resident’s life while sustaining shareholder and other stakeholder’s benefit under Good Corporate Governance standards. Mission Stakeholders

Retain market leadership in focus target and establish confidence with liquidity management for continuity growth and optimized profit margin in accordance with good Corporate Governance

Customers/Residents

Maintain value of integrated solutions of products, services and community management effectiveness for real pleasure of Living to the Trusted “Lumpini” Brand

Personnel

Enhance Staffs Happiness, career growth, security by Developing Competency via learning management, under Vibrant LPN Core Value and Change circumstance to the quality organization

Good Business Partnerships :

Enlarge collaborated mind to achieve corporate goals under Economic Crisis Situations

Society

Preserve environment and social responsibility thru out Organization on developing quality community

Values of the Organization C - L - A - S - S - I - C C L A S S I C

(Collaboration) (Lateral Thinking) (Alliances) (Speed) (Service Minded) (Integrity) (Cost Awareness)

Annual Report 2009 L.P.N. Development PLC.

â&#x20AC;&#x153;CLASSICâ&#x20AC;? The Value of the Organization Collaboration Meaning : Cooperating as one between the personnel for unity while working or in the activities of the Company with an attitude that is willing to help, assist and understand their role and that of others to accomplish the common goal. Lateral Thinking Meaning : New way of thinking that differs without being afraid of obstacles, in order to develop, change and be creative on a continual basis for implementation and evaluation that can be achieved, allowing the Company to develop with no limits Alliances Meaning : Emphasizing strategic allies in business for the long run by supporting each other and by going through good times and bad times together as one for common success. Speed Meaning : Focus, improvement, change development of work methods by thinking quickly, acting quickly, paying attention to detail, thinking carefully to finish tasks ahead of schedule or faster than before to overtake others, all of which have a direct and indirect affect on the Company. Service Minded Meaning : Providing services to customers with care and enthusiasm that is more than can be expected willingly, without discrimination, on an immediate basis with a smile, to create happiness and impression. Integrity Meaning : Doing anything honestly, without taking advantage of others and being responsible for what is said and done to create value for the Company. Cost Awareness Meaning : Awareness of how to manage capital expenditures in all jobs carefully with efficiency of operations and a sense of ownership in mind.

Annual Report 2009 L.P.N. Development PLC.

Message from the Chairman Dear Shareholders, As a result of major financial institutions crisis in the United States of America in 2008 which readily sent impacts worldwide and which continued up to 2009, so much so that many assessed that it would be extremely severe enough to cause another round of economic crisis, L.P.N. Development Public Company Limited in the past year of 2009 then managed its business very carefully based on the principle of attaching importance to all dimensions of our operations. We aimed to build up a sustainable growth in harmony with a change of the way of thinking and the operation process which hopefully would make a difference continuously, both in term of products and services. The idea was to create confidence of the customers in the “Lumpini” brand. This eventually led to words of mouth by our customers which duly catapulted the company’s operations to have grown beyond the target, while at the same time maintaining the benefits of all groups of vested interest. All of these had been carried out under the good governance principle, which means that we aim to administer and manage the business with transparency, and which has always been our important business pillar throughout. The fact that we have been rated a company with good corporate governance at very good level for the 6th successive year by the IOD, particularly in the category of attaching importance to the rights of shareholders, disclosure of information, and transparency, for which we have been assessed at excellent level, guarantees well the effective operations of our company. At the time we are committed to maintaining the operations standards and profits making so as to create suitable returns to all groups of stakeholders, we still attach importance to our responsibility to the environments and the society. And this has been expanded every year since the day the Company was founded. We do this by first developing quality residences for mid-range and lower mid-range target groups, and at the same time inspiring a good culture of harmony living among them to create a “Vibrant Community”, then by encouraging a participation among residences that would lead to public mind from all sectors concerned in order to jointly develop the environments and the society in our own community and communities nearby, by sharing to the society at large so as to bring smiles and happiness among members in the wider society, and by developing residential projects which respond to the needs of a large number of people, along with the development of quality of life, environments and society, as well as the good cultures within the communities. All of these, we believe, would help make the operations of the Company to achieve the stability and sustainable growth. In 2010, though there will still be some uncertainties all around, nevertheless, the need for quality residence remains the main factor of life, particularly in the target group of mid-range and lower mid-range earners, which has always been our target. This of course is likely to enable the Company to achieve its targets. However, real estate business is still plagued with many risk factors, whether it be fierce competition, increasing costs, economic and political unstabilities. Therefore, in this year of 2010, we will still adhere to the principle of keeping the balance of management and continuous growing returns. Also, this year is the last year of the Stage 3 Vision, which emphasizes on the quality development and the keeping of trust and belief among our customers in the brand that is widely accepted and highly regarded, which will eventually lead to words of mouth of good experiences, so that “Lumpini” will always be in the heart of those who need their first “home”, as is the intention of our business operations. Throughout the past two decades and 2 crises of LPN, not only has it given us strengths and experiences along the route of real estate business, but also acted as another learning chapter for us as to how we could share happiness to others, which, in turn, brings back more happiness to the heart of the giver. In the name of L.P.N. Development Public Company Limited, I would like to thank all of our customers, trading partners, staff, executives, and the Board of Directors, for this great participation, and, most importantly, a big thank you to all shareholders who have jointly created and shared such happiness to each other endlessly.

Pakorn Thavisin Chairman

Annual Report 2009 L.P.N. Development PLC.

Report of Responsibility of Board of Directors for Financial Reports

The Board of Directors is responsible for the combined financial statements of L.P.N. Development Public Company Limited and of its subsidiary companies, including financial information appearing in the Report Form 56-1, and the annual report. The said financial statements have been prepared according to the generally accepted accounting standards, by applying a suitable accounting policy which has been practiced regularly. Greatest care was taken and best estimations were made in the preparation of same, while and there have been disclosed important information adequately in the Notes to Financial Statements. The Board of Directors is well aware of the importance of the accuracy and the transparency of the financial statements. As such, it has arranged for a suitable and effective internal control system, a disclosure of important information sufficiently in the Notes to Financial Statements, together with explanations and analysis thereof, so as to ensure that the recording of accounting entries were made correctly and completely for the utmost benefits of the shareholders and investors in using the financial statements. In this instance, the Board of Directors has accordingly appointed an Audit Committee comprising 3 independent directors, 2 of whom have the knowledge and experience on accounting-finance, to review the accounting policy and the quality of financial reports as well as the internal control system. The opinions of the Audit Committee on this matter appear in the Report of Audit Committee as shown in the Report Form 56-1 and in the Annual Report. The Board of Directors is of an opinion that the internal control system of the company on the whole is at satisfactory level, and thus could create confidence reasonably to the reliability of the financial statements of the company and of its subsidiary companies as at 31st December 2009.

Pakorn Thavisin Chairman

Annual Report 2009 L.P.N. Development PLC.

Another Step towards Sustainable Development “Over the past 20 years the more than 50 LPN projects have built “homes” for city dwellers, becoming the brand in the hearts of more than 33,000 families, creating an experience of happiness that helps to develop the “Lumpini” brand to have value and be widely accepted.”

Summary of Financial Statements

Unit : Million Baht

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

2009 8,088.04 2,902.87 2,004.06 541.66 685.63

2008 8,846.49 3,781.48 1,403.97 681.92 709.99

2007 7,175.76 4,532.36 501.64 660.72 678.53

2006 5,969.80 3,485.15 276.16 837.75 617.67

2005 4,523.70 2,408.16 124.73 819.59 314.14

Liabilities and Shareholdersâ&#x20AC;&#x2122; Equity Short-term loans Long-term loans Total liabilities Issued and fully paid-up share capital Shareholdersâ&#x20AC;&#x2122; equity

761.49 259.00 2,819.13 1,468.17 5,268.91

2,063.69 530.67 4,362.02 1,474.59 4,484.48

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

1,033.89 230.00 2,657.43 1,475.70 3,312.37

234.97 340.00 1,532.26 1,475.70 2,991.44

Operational Result Revenues from sales Total revenues Cost of sales Gross profit from sales Net profit (Loss)

8,267.99 8,592.45 5,678.21 2,589.79 1,358.69

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

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

4,747.84 5,020.49 3,213.88 1,533.96 765.23

3,346.45 3,582.63 2,159.64 1,186.81 588.38

Financial Ratio * Book value per share * Net profit per share Diluted earning per share Net profit margin Return on Equity Return on Assets Dividend per share

Unit : Baht

3.59 0.93 15.81 27.86 16.05 **

* Weighted average shares ** Pending Approval from the Ordinary General Meeting of Shareholders in 2009 Note :

1) Information from Consolidated Financial Statements 2) To change par value from Baht 10.0 to Baht 1.0 in year of 2004

Annual Report 2009 L.P.N. Development PLC.

3.04 0.82 16.50 29.01 15.05 0.4115

2.59 0.63 13.60 25.99 14.11 0.32

2.24 0.52 15.24 24.28 14.58 0.26

2.20 0.43 16.42 22.14 13.17 0.22

Balance Sheet 8,846.49 8,088.04 7,175.76 5,969.80 4,523.70

5,268.91 4,484.48 3,826.96 3,312.37 2,991.44

4,362.02 3,348.80 2,657.43

2,819.13

1,532.26

Million Baht

Million Baht 2005 2006 2007 2008 2009

Million Baht

2005 2006 2007 2008 2009

Total assets

2005 2006 2007 2008 2009

Total liabilities

Shareholdersâ&#x20AC;&#x2122; equity

Income Statement 8,592.45

8,267.99

7,303.69 6,823.77

7,018.71 6,574.22

588

.38 765 .23 927 .74 1,2 05. 4 1,3 4 58. 69

31.

7 31.

32.

35.

3,582.63

3,346.45

31 34. 6

5,020.49

4,747.84

Million Baht

2005 2006 2007 2008 2009

Revenues from sales

Total revenues

% Gross Profit margin

Net profit (Loss)

14 24. 2

4 2.5

Baht

0.2

0.4

2 0.2 6 0.3 2 0.4 11

3 0.5 2 0.6 3 0.8

2 0.9

13. 1

7 14. 58 14. 11 15. 05 16. 05

22.

2.2

2.2 0

9 3.0

8 25. 99 29. 01 27. 86

3.5

Financial Ratio

Baht

2005 2006 2007 2008 2009

Book value per share

Net profit per share

Return on Equity

Return on Assets

Dividend per share

** Pending Approval from the Ordinary General Meeting of Shareholders in 2009

Annual Report 2009 L.P.N. Development PLC.

Consolidated of Income Statement / Balance Sheet 2009 Consolidated of Income Statement 2009 Sales (MB) Item Income Cost G/P (%)

Revenue (MB) 2008

2009 8,267.99 5,678.21 2,589.78 31.3

Rental & Service (MB) Item Income Cost G/P (%)

2009

7,223.29 8,513.27 Over from 2008

2008 7,018.71 4,826.17 2,192.54 31.2

EPS (Baht)

17.9%

2008 61.12 40.56 20.56 33.6

Gross Profit (MB) 2009 62.03 41.04 20.99 33.8

Management Fee (MB) Item Income Cost G/P (%)

2008 143.46 124.50 18.96 13.2

2008 0.82 Over from 2008

2008

2009

2,232.07 30.9%

2,673.02 31.4%

2008 612.75 8.5%

2008 1,205.44

2009 1,358.69

16.7% Over from 2008

16.0%

2009 804.79 9.5%

Other Income (MB) Item Income (%)

2008 80.41 1.1

2009 79.18 0.9

Consolidated of Balance Sheet 2009

Asset

Liability & Equity Liabilities (34.86%) 2,819.13 MB

Total Asset 8,088.04 MB

Other Asset 6,768.84 MB

Cash 1,319.20 MB

Debt Debt Interest Non Interest 1,024.64 1,794.49 MB MB (36.3%) (63.7%)

Equities (65.14%) 5,268.91 MB

Equities

D/E Ratio 0.54 : 1 Interest Bearing Debt 0.19 : 1

NET Positive CASH = 294.56 MB 10

Annual Report 2009 L.P.N. Development PLC.

13.4%

Net Profit (MB)

Expenses (MB) 2009 183.25 121.01 62.24 34.0

2009 0.93

12.7%

Summary of Performance in 2009 L.P.N. Development Public Co., Ltd. operates the real estate development business of residential condominiums, under the “Lumpini” brand, for consumers in the upper-middle to the lower-middle income segments, who desire quality residence in the metropolitan area.The Company adheres to the principle of operational balance in all dimensions, in concert with the Sufficiency Economy philosophy and good corporate governance. The year 2009 was a year with all around risk factors, especially from the crisis of large financial institutions in the U.S.A., including the domestic political situations. Even though many situations seemed to improve toward the year’s end, they are still fragile; in addition,oil prices continued to rise steadily-causing concerns over impacts on prices of construction materials. During the end of the year, small and medium operators which had been following the situation started to open projects continually, after a period of delay in development. Large developers-with advantages in investment funds, trust, and brands - all had been successful on sales and project openings since the beginning of the year.The reason was that the demands for residential housing still exist incessantly, while the supply had decreased noticably. Likewise, the Company’s operational results in various aspects are still growing continually-both sales and realized income; together with compliance with good corporate governance principles, for which the Company received ranking by the Institute of Thai Directors (IOD) as a company with very good governance (4 stars) for the 6th consecutive year. Also, a product of the Company-the 26 m2 condominium room, was rated as the Product of the Year 2009 by one newspaper media. Company performance in 2009 exceeded the established targets, due to the rush of customers to transfer rights during end of year period to retain tax benefits that would expire. Despite the economic downturn and high risk factors-especially liquidity and market confidence, the Company opened projects throughout last year. The first project, opened in February, was the Lumpini Place Ramindra-Laksi, which was a development of land on-hand to reduce risks and to observe market trend. That project was well-received, to an extent; and the Company was able to complete construction and delivered to customers in November-several months ahead of the delivery schedule, reflecting efficiency, quality and speed of construction by the Company’s allied contractors. After a careful situational assesment, the Company decided to open the next project in the 2nd Quarter: the Lumpini CondoTown Ramindra-Nawamin, the first high-rise building project under the “Lumpini CondoTown” brand, and a new product developed to satisfy the current market condition: a 25 m2 one-bedroom condominium. Then the Company opened the Lumpini Ville Ratburana-Riverview in the 3rd Quarter. And in the 4th Quarter, the Company opened 2 more projects: Lumpini Park-Pinklao, which was a specific brand where the project areas of more than 4 rais had been designed as recreational garden and activity areas under the “Suan Ruamjai Garden” that was completed before opening, another innovation and product value delivered to customers. Another project was the Lumpini Ville Latphrao-Chokchai 4. Both projects had produced as much as 4,000 million baht of sales to the Company. In regards to the customer dimension, the Company has upgraded customer management from building relationship to creating experiences, by establishing service standards encompassing all contact-points-which are considered part of the Service Value to instill customers’ confidence toward the “Lumpini” brand and a wider brand communication. Last year, the Company employed a brand communication consultant company to align all brand communications to ensure brand integrity and concrete results, especially the “Vibrant Community” strategy-which is intangible issue for the general public. The first phase of brand communication focused on ‘Happiness of Togetherness’ under the project name ‘30 Happy Days’, in which the Company and the consultant company invited 4 artists to share happiness of living in various “Lumpini” branded projects for 1 month, to share happiness in community and experiences through the www.30happydays.com website. In addition, residents were invited to reflect happiness through “Door Hangings,” the results of which surpassed expectation, with more than 2,000 pieces returned to the Company, helping to build morale of staff, especially cleaning staff and security personnel who received much praises. In 2009, the Company commands approximately 20% market share of residential condominiums completed and registered in Bangkok and metropolitan areas-a total number of which equals to about 33,000 registered residential condominiums units in 116 projects, a 28% increase from 2008. The Company has about 6,300 registered residential condominiums units in 7 projects, and 5 project openings- approx. 32% of new residential condominiums units in Bangkok and metropolitan areas last year. With respect to operational performance, the Company, subsidiaries, and associates had total revenues of Baht 8,513.27 million, a 17.85% increase from Baht 7,233.29 million in 2008, from realized revenues of 7 projects completed in 2009 and partially from projects completed in the prior year. Gross profit margin from sale improved from 31.24% to 31.32%, with a net profit margin of 15.81%. Revenues from rental and services, including management services, increased 19.89% from 2008. Consequently, the Company maintains steady growth rates, in spite of economic decline and surrounding risk factors. On the Company’s financial status as of December 31, 2009, the Company has total assets of Baht 8,088.04 million, an 8.57% decrease from Baht 8,846.49 million in 2008, resulting from current assets decrease of Baht 185.95 million in unbilled construction income and Baht 878.61 million in Land & Cost of Project under development. Total liabilities of the Company decreased from Baht 4,362.02 million Annual Report 2009 L.P.N. Development PLC.

in 2008 to only Baht 2,819.13 million in 2009-a decrease of Baht 1,542.89 million or 35.37%, because the Company has repaid long-term and short-term loans of Baht 1,573.87 million from completed construction projects and transferred to customers. In regards to the statement of cash flows as of December 31, 2009, the Company has cash, cash equivalents, and current investments of Baht 1,319.20 million in total. After deduction of Interest-bearing debts of Baht 1,024.31 million, the Company has Baht 294.89 million of excess liquidity; a reflection of Company’s financial strength. Debt-to-equity ratio decreased from 0.97 to 0.54, and Interest-bearing debts-to-equity decreased from 0.58 to 0.19, respectively. In accordance with the Board of Directors’ resolution to approve the treasury stock program on October 9, 2008, with the repurchased period from October 24, 2008 to April 23, 2009, as of January 15, 2009 the Company has repurchased 8,146,300 units totaling Baht 17,841,189 of treasury stocks, equal to 0.552% of paid-up capital at Baht 2.19 per-share averages, and the Company has sold those treasury stocks during December 3-11, 2009 at the average Baht 7.01 per share, for a total of Baht 57,103,415; the Company received Baht 39,262,226 profits from sale of treasury stocks. In response to the economic slowdown, the Company limits increase of personnel by improving internal process (Reprocess) continuously, allowing the Company to achieve or exceed targets with limited personnel resources. On responsibility to the environment and society, the Company implements continuously on both the In Process and the Out Process, including a variety of social activities, i.e. blood donation activities, increase of green zones within the project and surrounding community, waste-separation, 1-hour lights off campaign, campaign to reduce use of plastic bags. All activities emphasizes initiation from inside the organization, before expanding to other segments. For the year 2010, from many forecasts and company’s internal information, an economic recovery is anticipated. At the same time, some sectors still exhibit fragility and risks: trends of oil-prices affecting material costs and inflation, stringency of financial institutions, increasingly severe competition, tense political situations, including non-renewal of real estate business stimulation measures -which may result in market activities in March, but diminishes afterwards in the beginning of the 2nd Quarter. The Company Board of Directors has established business direction for 2010 by cautious growth, accompanied by risk management and close monitoring of situations. Growth rate has been set at 20% for realized revenues, which is expected at Baht 9,600 million from 6 completed projects-i.e. Lumpini Ville Bangkae, Lumpini Place Ratchada-Rama 9, Lumpini CondoTown Ramindra-Navamin, Lumpini CondoTown Bangkae, Lumpini Ville Ratburana-Riverview, and lastly, Lumpini Ville Latprao-ChokeChai 4 which was opened last November. These 6 projects have total value of approx. Baht 7,730 million. And at 2009 year end, the Company has a total unrealized installment income of approx. Baht 10,500 million, consisted of unrealized installment income for the year 2010 of Baht 7,200 million. The Company plans to sell the almost Baht 2,000 million inventory by the 3rd Quarter of this year, by more marketing activities and expenses. Of the rate of banks’ financing rejection-with which many are cocerned, the Company has established a business unit to provide services and help manage customers’ credits, in close cooperation with banks to reduce the rejection rates. In 2009, customers of the Company were rejected for financing applications at approx. 10-12% Regarding opening plans for new projects, the Company plans to open 6-8 new projects, totaling approx. Baht 13,000-15,000 million. Sales targeted is at approx. Baht 13,000 million-a 30% growth rate from 2009 sales of Baht 10,800 million, for revenue realization in 2010 and 2011. The Company has proceeded to purchase 2 plots of land, at Lumpini Place Ratchayothin, and Lumpini Place Rama 4-Kluaynamthai both of which are due to open at the same time on March 20, 2010. Other 2-3 plots of land are under consideration for projects to be opened in the first half of 2010 to be realized revenues in 2012. The Company believes that these business operations are consistent with the philosophy of Sufficiency Economy in all aspects: Modesty in expected growth rates and gross profits; Immunity by risk management; and Reason through development of quality urban residence, which is one of the four basic necessities of life, as well as the fact that the Company’s targeted customers do desire a true quality living. Under careful consideration for balance in all dimensions by utilizing internal and external information, in addition to experience in the past crisis, environmentally and socially responsible management directions, and concerns for equality of all stakeholders with open, transparent and verifiable principles will ensure success of the Company and achievement of objectives in 2010.

Annual Report 2009 L.P.N. Development PLC.

Building a “home” for the happiness of city dweller “Over the past 20 years the more than 50 LPN projects have built “homes” for city dwellers, becoming the brand in the hearts of more than 33,000 families, creating an experience of happiness that helps to develop the “Lumpini” brand to have value and be widely accepted.”

More than 50 LPNâ&#x20AC;&#x2122;s quality projects L.P.N. Mini Ofiice

P.S.T. Mini Office

P.S.T. Condoville Tower 1,2

Siphaya River View

Baan Lumpini Bang Bua Thong

Baan Lumpini 2 Bang Bua Thong

Lumpini Center Happyland

Lumpini Place Suanplu-Sathorn

Lumpini Residence Sathorn

Lumpini Place Narathiwat 24

Lumpini Place Rama 4-Sathorn

Lumpini Place Narathiwatratchanakarin

Lumpini Suite Sukhumvit 41

Lumpini Center Sukhumvit 77

Lumpini Ville Phahol-Suthisarn

Lumpini Center Nawamin

Lumpini Ville Sukhumvit 77

Lumpini Place Pinklao

L.P.N. Tower

Lumpini Tower

P.S.T. City Home

Lumpini Place Sathorn

Lumpini Center Latphrao 111

Lumpini Place Rama 3-Charoenkrung

Lumpini Ville Mary-Sathorn

Lumpini Place Rama 3-Riverview

Lumpini Place

Annual Report 2009 L.P.N. Development PLC.

Lumpini Place Pahol-Sapankwai

Lumpini Place Ratchada-Thapra

Lumpini Ville Ramkhamhaeng 44

Lumpini CondoTown Badindecha-Ramkhamhaeng

Lumpini Ville Prachachun-Pongphet

Lumpini Suite Pinklao

Lumpini Ville Ramkhamhaeng 26

Lumpini Rama 8

Lumpini Place Pinklao 2

Lumpini Ville Cultural Center

Lumpini Place Narathiwat-Chaophraya

Lumpini CondoTown Ramindra-Laksi

Lumpini Ville Ramindra-Laksi

Lumpini CondoTown Ratanathibet Lumpini Place Rama 9-Ratchada

Lumpini CondoTown Bangkhae

Lumpini CondoTown Ramindra-Nawamin

Lumpini Place Rama 4-Kluaynamthai

Lumpini Park Pinklao

Lumpini Place Ratchayothin

Lumpini Ville Bangkhae

Lumpini Place Ramindra-Laksi

Lumpini Ville Latphrao-Chokechai 4

Lumpini Ville Rajburana-Riverview

Joint Venture Projects in Grand Unity Development Co.,Ltd Lumpini Place WaterCliff

Lumpini Townhome Ratchada-Rama 3

Lumpini Suite Ratchada-Rama 3

Grand Heritage Thonglor

Grand Parkview Asoke

Annual Report 2009 L.P.N. Development PLC.

Parkview Viphavadi

Development of Condominium and the Brand

Developing “Lumpini Center” brand for the middle-low level target group

The “Lumpini Place” brand become widely popular as a civic living place with high quality

and the Company has developed “Lumpini Ville” as a brand for the middle level target group”

32 Projects 11,700 Units 30,000 People

while developing “Lumpini Suite” brand for the upper level target group

The birth of the “Lumpini” brand with “Lumpini Tower” on Rama 4 Road as the first project.

25 projects 9,200 units 23,000 people 17 projects 7,000 units 17,000 people

7 projects 3,000 units 7,000 people

1989-1998

1999-2003

2004

2005

Development of projects with numerous products

Birth of the City Condo

Development of Residential Medium Rise Condominium

Development of the Small Size Township

In the initial phases, several products were developed, including office buildings, condominium buildings, townhouses and mini offices. The company Lumpini Property Management Company Limited was established in 1992 to provide management services to the community, which gave rise to the strategy “Vibrant Community” which has made the “Lumpini Brand” strong until today.

Focus on development of residential condominiums as the Company’s strength as well as developing real estate by developing Lumpini Place Sathorn, a Condominium in the city with 8-9 floors and not many units and sales, construction and ownership registration that is fast becoming the model for “City Condos” today with designs for units” of LPN Design for 30 and 60 square meters which are designed for maximum use and benefit.

Revert back to development of buildings with 20 floors emphasizing the advantage of sales, construction and ownership transfer that is fast as a result of building technology allowing construction to the fast while retaining quality.

Began developing projects that are 5 times larger than city condos full of facilities for city living in the form of “Small Size Township” under turn-key management with Lumpini Ville at the Thailand Cultural Center being the initial project.

Annual Report 2009 L.P.N. Development PLC.

Development of the “Lumpini CondoTown” brand to accommodate the need of the city dwellers to have their primary residence

Discovering our identity and planning to communicate our brand more objectively along with modifying the logo and Vibrant Community slogan as well as all other products with the plan to communicate the brand on acontinual basis

Communicate the brand under the campaign “Happiness of Togetherness” for society within the organization for all project communities developed and the public to create knowledge, loyalty and to reemphasize the strength of the “Lumpini” brand being different while emphasizing the creating of good quality of living while also developing the special purpose brand “Lumpini Park” for quality society. 52 projects 33,500 units 100,000 people

44 projects 27,000 units 68,000 people 36 projects 16,000 units 40,000 people

2006

2007-2008

2009

“Development of the brand “Lumpini CondoTown” to serve the needs of the city dwellers

Discovering the identity of the “Lumpini” brand to set a strategy and develop a brand that is in the levels of city dwellers and is ready to grow sustainably and with stability

Development of a special purpose brand of quality living of city dwellers

Development of a new brand “Lumpini CondoTown” to serve the needs of the middle-upper levels for residences that are large, with this brand being the flagship of development of the Company up to present.

The Company considered and studied the brand identity with the good being to learn the true identity of the brand slowly as well as studying the meaning conveyed and the logo of the brand “Lumpini”, which was the source of the strategy “Vibrant Community” with the definition of “Real Pleasure of Living”.

Development of a special purpose brand “Lumpini Park” to satisfy the need for good quality living not only in locations that satisfy needs, but also add value with large gardens called “Suan Ruamjai Garden” so that customers have a place to do activities together and that consideres with the slogan “Vibrant Community”.

Annual Report 2009 L.P.N. Development PLC.

Brand Management of the “LUMPINI” brand A brand is an intangible asset that every company attaches importance to and is determined to build, uphold, and communicate to target groups. Amidst the ever-increasing, rigorous competition, the successful brands are those with a clear brand identity. Those brands often are committed to consumers on delivery of products or services that exceed expectations; with “corporate cultures or values” as an impetus for value creation, and business ethics as regulator. Massive budgets on advertising and PR to create short-term awareness merely for sales results-with no conscience of responsibility-may not meet with successes in this era of information and internet-technology society, in which consumers are knowledgeable and conscientious of their rights. The Company is fully aware of the importance of this, and has consequently adopted directions for brand development and management from business operations that create recognition and trust-the core foundation of allegiance and word-of-mouth testimonials. The Company eschews spending substantial advertising and PR expenses on promotions that are devoid of fundamentals; in addition to the establishment of “corporate values” to reinforce brand management. Throughout 20 years of business operation, the main factor for sustainable growth of the Company is consumers’ confidence toward the “Lumpini” brand, which comprises not only quality of products-i.e. locations of potentials, condominiums in ‘LPN Design’ concept, various project components, but also the quality of services, including customer service management and post-sale services-community management under the “Vibrant Community” strategy. All these play significant roles in differentiation, and characterize the Company’s forte towards wide acceptance and ‘word-of-mouth’ recommendations. “Vibrant Community”: the propelling strategy of “Lumpini” brand The Company aspires to create and deliver true happiness of living for all members of the “Lumpini” family, toward “a community wherein people can live together happily, with appropriate components; a quality living in a pleasant society and environment- as well as culture.” The Company has thus adopted an effective community management strategy under direct responsibility of Lumpini Property Management Co., Ltd., an affiliate founded by the Company in 1992 to provide comprehensive community management under the F-B-L-E-S guideline: (1) Facility Management Facility management -an important community’s component- is a major responsibility of community management. The managment is responsible for common assets, especially those crucial elements of condominium; i.e. engineering and security systems-on which the maintenance units are tasked with preventive maintenance to ensure that all systems function normally, for convenience and safety, and which may affect directly the lives and property of all common owners or residents; or wastewater treatment system, which affects environment directly. (2) Budgeting Management Management of juristic condominium’s budget is a not-for-profit objective, but management of budget in accordance with policies approved by the General joint owners’ Meetings: to manage funds to ensure stability and growth, improving the community’s financial strength while maintaining the building’s efficiency and residents’ quality of lives -including financial reports that are easy to understand, transparent, and can be examined. (3) Life Quality Management For community management, in addition to facility management and budget management, quality of life of joint owners is equally important. This includes cleanliness, condominium’s regulations for disciplined communal living and orderliness of community, as well as activities to encourage the good Thai cultures. Such activities help create a good mutual relationship among joint owners or community’s residents, by developing cooperation from residents of Company-developed community and residents of surrounding areas. The Company provides full support and participation in:- Main / Core activities: annual general meetings of joint owners, fire drills-including campaigning for volunteers in the Fire Team project, etc. - Relationship-building activities: arrangement for exchange of communal-living experiences with management and project’s residents, leading to improvement and development guidelines to ensure happiness from living in a shared society; along with activities for those interested in arts and music, and family days to provide opportunities for residents of various households to meet, discuss, get acquainted, and exchange ideas. - Activities to promote jobs and incomes: arrangement of a community marketplace in the project, e.g. “LPN Condo Residents Combating Economic Crisis” organized at Lumpini CondoTown Bodindecha-Ramkhamhaeng for merchandise exchange and trade, as well as a channel for job applications and vocational trainings. Also, community marketplaces in 3 other projects: Lumpini Ville Cultural Centre, Lumpini Sukhumvit 77, and P.S.T. Buildings; all of which received excellent responses from members.

Annual Report 2009 L.P.N. Development PLC.

- Activities to promote members’ well-being: health examination by leading hospitals, aerobic, Yoga, Marathon-running activitie-e.g. a Marathon in Honour of Her Majesty the Queen on the national Mother’s day, and the “Lumpini Community Game”-a sport competition among members of more than 50 projects initiated in 2009. - Cultural activities: merit-making ceremonies for the buildings; organization of various festivities, e.g. New Year’s day, Loy Krathong Day, Family Day, etc. - Religious activities: merit-making ceremonies, sermon-attendance, meditation, 9-temple merit-making activities, and Buddhist-tourism, etc. - Social and environmental activities: quarterly blood-donation campaigns among project members, a Children’s Day activity for Sethabutra Patronage School students-a neighbor of Lumpini Ville Latphrao-Chokechai 4, a Campaign to help the Rama 3 Rong Kaew Community destroyed in a fire accident, and merit-making activities at the Banglamung Boys Orphanage. Regarding environmental proceedings, members have increased green areas within the projects. (4) Environment Management Concern for the environment is another obligation the Company attaches importance on, by focusing on environmental impacts on oint owners and the surrounding society, by adhering to the “Green Clean Lean” principles. For instance, wastewater treament in accordance with government criteria and reuse for plant-watering in the project, waste management by waste-separation and recycle, energy preservation, maintenance of green-areas or replacement tree planting inside and outside condominium areas to improve the standard of life for community, city-residents, and Bangkok city. In order to reassure our commitment to environment management, the Company has established a unit tasked with direct responsibility to promote and foster conscience and to arrange activities to monitor environmental impacts from project developments -both during construction and afterwards. (5) Security Management The Company places great importance on stringent management of security. The Company established security units to manage security within the project, under strict security strategies and standards of personnel and equipments; e.g. closed-circuit cameras, security-warning and communication systems, including joint collaborative networks within community and concerned governmental agencies, for maximum security of community’s members.

Annual Report 2009 L.P.N. Development PLC.

Brand Communication In 2008 the Company, in cooperation with a brand-communication consultant company, planned the development and communication of the “Lumpini” brand to wide audience, the target of which is a clear recognition on the core identity of the brand. From results of study, the “Real Pleasure of Living” definition was created; and to ensure clarity of the corporate logo and “Lumpini” brand identity, the Company has revised company’s logo and the “Vibrant Community” logo as shown below:-

Corporate Logo

“Vibrant Community” logos

In 2008, for a broad communication to general public -to expand awareness and recall, the Company has established a strategic communication campaign on “Vibrant Community” through new media and channels that are effective in direct access to target groups, and low expenses: i.e. websites. For this, the Company has established the ‘www.30happydays.com’ website specifically, besides communication via social networks -e.g.Twitter, facebook, by inviting new-generation artists from 4 branches of works to share happiness of living in various “Lumpini” branded projects for 30 days in October, and convey their experiences and impressions through this website to retain the confidence and good understandings toward the “Lumpini” brand. Moreover, activities were arranged to enable internal communications between members and company staff, to convey experiences and impressions received from being a part of the “Lumpini” community; a basis of the expression “Happiness can be shared”- a sincere feeling from the “Lumpini” community.

Annual Report 2009 L.P.N. Development PLC.

Research and Development The Company knows the importance of research and development and has established a research and development department comprised of personnel with the knowledge and ability as well as experience from various professional backgrounds, who are under the supervision of the managing director. The research encompasses the entire system of Company operations from selecting locations, development of products and services and cost reduction. The Company has specified the role and duties of the research and development department as follows: Research 1. Research to obtain information to make decisions for presentation to the executives, including macro level information such as world economic, social and political conditions, competition, supply and demand and market needs, information for development of projects such as locations prime for development, appropriate prices for each location and information on the needs of customers all of which will be used to develop products that meet the needs of consumer behavior of consumers as much as possible. 2. Research to develop and improve the efficiency of the Company’s performance with the objective to satisfy the needs of customers and add value to products and services as well as develop the Company’s methods (Reprocess) to reduce capital costs, losses and to improve the speed of operations. 3. Research to find business opportunities that appear due to changes in business environment, society, demographics and consumer behavior to support the Company’s growth in the future. Development Development of Products The heart of development is using information to develop both products and service of value that meet the needs of consumers, while maintaining an advantage over competitors, leading to faith in the “Lumpini” brand. Throughout the past, the Company has developed importantly in developing products that are deemed benchmark in condominium units development in the city which has been copied by many entrepreneurs. This is because it meets the needs of residents in all respects, under the brand “LPN Design” beginning with condominium studio units of 30 square meters and units with 2 bedrooms of 60 square meters that have set a new standard of condominium living that meet Thai lifestyle requirements and are easy to maintain. At present the Company’s products have been being updated until lately, a one bedroom condominium unit of 26 square meters even though small, can satisfy lifestyles and the customer’s needs, while maintaining a sale price that satisfies the needs of the target group of customers even when capital costs are continually increasing. Finally, the Company’s 26 square meter condominium unit received the “Product of the Year” award in 2009 from one newspaper. Development of Service The Company’s identity not only involves the development of products to meet the needs of consumers, but also involves service as an important factor in making the “Lumpini” brand different, especially the after sales service called “Community Management”, which has become widely acclaimed and passed on widely. The development of “Community Management” of the Company is conducted by Lumpini Property Management Company Limited, which has been established for over 15 years and is responsible for managing communities in which all projects are located and developed by the Company with 5 main roles that are constantly developed, namely, F (Facility)-Management of the common area, B (Budget)-Management of budget, L (Life Quality)-Management of life quality, E (Environment)-Management of the environment, S (Security)-Management of safety. The main goal is to create a “Vibrant Community” in which the residents live together with happiness with the appropriate factors, have quality living conditions in a society and environment and culture that is beautiful. The LEED Standard and Development of the Company’s Products under the “LPN Green” Ideal 1. Sustainable Site Development - Selecting project locations that have dense populations in order to reduce the impact on the environment and to take advantage of the facilities and convenience of the surrounding area - Selecting locations on the main road with convenient transportation near expressways and public transport centers in order to reduce the impact on traffic and promotes residents to use public transport more often by providing a shuttle bus for use within the project that links up with public transport systems - Compensating prior open spaces with green areas and landscaping within the project

Annual Report 2009 L.P.N. Development PLC.

2. Water Efficiency - Use of water efficient bathroom equipment since some types of toilet bowls with dual flush mechanism can reduce water use by up to 50% - Use of treated waste water to water the plants in the project which is an efficient use of water and reduces the amount of water that flows out of the project into the public water systems - Installation of sprinkler systems that are efficient, such as drip systems to reduce water wastage - Campaign for residents to bathe using a shower head which conserves water each time 3. Energy Efficiency - Design of the condominium units with an awning and porch in order to reduce the amount of heat from sunlight that directly hits the unit - Design of lighting and air conditioning that is efficient and appropriate for use and to reduce electricity usage - Use of alternative energy sources such as solar power for lamps in the gardens - During management of the project after hand over, the manager of the building has the duty to use the energy in the building as efficiently as possible while being safe at the same time 4. Use of Material and Resources efficiently and appropriately - Selection of alternative materials that have been proven to be safe and environmentally friendly in place of materials from natural sources in order to reduce the affect on the environment such as using laminate wood floors instead of parquet floors with real wood - Design of dimensions of the building that coincide with the dimensions of materials used in construction to maximize the economic value and reduce waste of materials that would have to be discarded into the environment - The walls inside the units use stained glass instead of opaque walls to obtain natural sunlight while at the same time preserving privacy - Walls exposed to the East use insulated glass to reduce heat that comes with the sunlight in the afternoon which is the hottest part of the day - Design with a green wall for the parking lot to reduce the carbon dioxide and heat from getting into the residences and the surrounding area - Managing waste by separating garbage and garbage disposal appropriately both during construction and after residents have moved in 5. Creating an Indoor Environment Quality for Residents - Focus on efficiency of management of the community using the strategy F-B-L-E-S 1) Facility Management : Management of public utility systems and facilities within the project for maximum efficiency and appropriately for residents. 2) Budgeting Management : Management of finances and budgeting in a transparent manner within the project for maximum efficiency and to manage risk at the same time. 3) Life Quality Management : Building discipline and culture of living together mutually sharing for quality life of the community 4) Environment Management : Maintenance of the environment within the community as well as use of energy appropriately with regard to safety and conservation 5) Security Management : Management of security measures in various areas strictly for maximum efficiency beginning with designs and project planning, management and design of equipment and security measures and being strict with security personnel 6. Innovation in Design - Planning the layout of the building and project to coincide with the environment in consideration of sunlight and natural wind - Planning the layout and design to include open space inside the condominium units such as doors and windows that are appropriate for living - Reducing the time for construction through use of Semi Precast Concrete System It can be seen that the “LPN Green” ideal is not only a marketing tool for sale purposes but the form and the factors in the project coincide with LEED green building standards which clearly focus on the conscience of “Corporate Environmental and Social Responsibility (CESR)” while still considering the appropriateness and the possibility of other dimensions at the same time for sustainable development.

Annual Report 2009 L.P.N. Development PLC.

Happiness through Sharing “In addition to putting smiles on the faces of more than 100,000 members already, we believe that through our strength and the members of the “Lumpini” project everyone wil be able to spread the circle of happiness and smiles to society for a greater society that is happy and equipped for good quality of life”.

The Development of CESR

1989-1995 1996 Establishment of the Company and The birth of blood donation activities CESR Activities When the Company was established, in addition to developing projects, the Company emphasized CESR activities at the same time, starting with activities within the community, e.g. activities for world cleaning day at Lumpini Tower and P.S.T. Condoville, as well as assisting the public that was suffering from the massive flooding in Bangkok.

The Company joined forces with the Thai Red Cross to hold a blood donation drive for the first time at Lumpini Tower on the occasion of His Majesty’s 50th year on the throne which was the birth of this activity and has been held every year until today. The Company also emphasizes the education of the children of its construction workers that are working on construction sites as well.

1997-2000 Economic Crisis and Adapting for Survival

2001-2005 Economic Recovery and CESR Activities-Concise and Substantial

The economic crisis hit the world including Thailand and in addition to having to adapt to survive, the Company also engaged in activities that were beneficial to society and the environment on a continual basis, especially blood donation activities. In addition to having activities every 3 months at Lumpini Tower, the activities also took place at other projects such as P.S.T. Project in Rama 3. There was also the establishment of the cleaning service in 2000 to create jobs and income for underprivileged women in society so that they would have stable jobs with benefits and a better quality of life. At present, there are over 600 members of this project working in various projects that the Company has developed.

Once the economy started to recover, the Company pursued its policy towards the environment and towards society more concretely especially during its 15 th anniversary during 2003-2004 during which time the Company held the activity “15 years of bonds” which not only was beneficial to customers, staff and trading partners but also emphasized the importance of activities to society, namely: Awarding scholarships to undergraduate and graduate students at the Faculty of Architecture, Chulalongkorn University Donating money to the Thai Red Cross to purchase kidney dialysis machines to kidney patients with terminal stages of the disease Cooperating with the Lions Association of Thailand to build a tennis court in honor of His Majesty the King in Lumpini Park for the public Sponsored the SET charity concert. In addition, the Company also started the activity “Fun World, Making Children’s Dreams Come True” for underprivileged children in 2004 which has been going on up to the present day, as well as helping victims of the tsunami.

Annual Report 2009 L.P.N. Development PLC.

2006 Celebrations for His Majesty the King’s 60 years on the throne

2007 Vision of Quality (1st Year) establishing an agency that is directly responsible for developing a clear CESR policy.

2008-2009 Increasing the intensity of operations under the strategy “Vibrant Community” as well as building up a network of cooperation

The entire country came together to celebrate His Majesty the King’s 60th year on the throne and the Company cooperated with customers, staff and trade partners as well as government offices to celebrate the occasion through the following activities: Planting trees at Leam Pak Bia Cove Petchaburi, a royal project of His Majesty the King Printing a pocket book named “9 Khon 9 Khwam Dee for the King” in order to announce people who are the examples of motivation to do good Starting the “Do good on Thursday” to invite customers and the public that are interested to pray and listen to a sermon by monks from Suthasthepwararam temple at Lumpini Tower and this activity is still being held until present Promoting the ordainment of monk novices at Wat Tai School, the adjoining community next to Lumpini Sukhumvit 77 Organized the concert for the environment of Thailand to use the proceeds in the project for conservation of genetic local wood and agricultural products safe from pesticides by Pectchthanom School one of the projects supported by Her Majesty the Princess In addition, the Company also coordinated with the Huay Kwang District Office to develop the area under the expressway (Ekkamai-Ramintra) on New Petchburi with an area of 1.5 Rai that was overgrown and a risk for crime to commuters to and from the Khlong Tan railway station into “Huay Kwang Fitness Park” which is a safe place and can be used as a place to relax and exercise in the community.

The beginning of Vision of Quality to incorporate responsibility for the environment and society into the Company’s strategy by establishing an agency to manage activities that are substantial and clear starting from within the organization and outside the organization such as: Organizing the activity “Kaw Khwam Dee” to make executives and staff aware of their responsibility to the environment and society. Joined in the activity on Children’s Day in the community next to Lumpini Sukhumvit 77 On the occasion of His Majesty the King’s 80th birthday, the Company organized the activity “Kaw Khwam Dee for the King” such as making merit to monks, showing the movie “Born on December 5” and the exhibition “The King of Development” as well as selling wood products using the proceeds to help monks in the 3 southern border provinces Sponsored the activity “Year of Sufficiency” to help promote His Majesty the King’s philosophy of sufficient economics Organizing the competition to decorate the condominium unit with Room magazine to provide an opportunity to show the ideas of students and this activity has carried on until present

Maintained the policy according to the vision and strategy that shows responsibility to environment and society as well as building up a network of cooperation with customers, staff and trade partners pursuant to the project “From CESR Corporate to CESR Community” such as: Environmental ang Energy Side • Building relationships and surveying adjoining communities • Taking care of the environment in the adjoining community and in the project during construction as well as the sanitary concerns of construction workers and their families • Increasing the green area in the community being developed and the neighboring community as well as improving the scenery in the area around the community • Saving energy and campaigning for the members of the projects to save energy and turn off electricity when not in use • Separating garbage in cooperation with the government agencies and members of the project • Organizing the activity Say No to Plastic to reduce plastic bags Social Side • Building mud houses for the homeless in Chaiyaphum Province • Expanding the blood donation activities to the projects developed by the Company

Annual Report 2009 L.P.N. Development PLC.

The more than 50 projects in the “Lumpini” project are strong and develop sustainably not only because of the management through principals of the strategy “Vibrant Community” but also from the hearts of the members who are willing to create good culture while living together in the midst of modern living where people are further apart and lifestyles and living culture that match so that the more than 100,000 members of the “Lumpini” community join together as one under a good culture full of warmth, happiness and friendship in a spirit that is just like the old days”. Because the society in the community is strong, happy and self-reliant, creating a sense of involvement to pass on and share happiness to greater society is continually important goal, starting from small details such as the surrounding community and neighbors in each project that the Company develops and then expanding to larger circles. This is the source of the activities relating to corporate responsibility to society and the environment which is based on going good deeds which is based on customers, personnel, trading partners and allies and every time there is a joining of forces, good things come from hearts that are ready to share.

“If people’s needs are satisfied they will not be greedy. When people are not greedy they will not take advantage of others. If all countries think that what they do has to be sufficient, which means a moderacy and not being extreme and not being too greedy, people will find happiness” His Majesty the King Bhumipol Adulyadej, grating an audience to a group of people at Dusitalai on December 4, 1998.

In addition to His Majesty the King setting an example of doing good deeds to the citizens, His Majesty’s philosophy regarding sufficiency based economics is a guideline for the Company that is important in operating the business in accordance with such principals for sustainable growth in the future.

Annual Report 2009 L.P.N. Development PLC.

Performance of CESR Obligations Performance of CESR Obligations The real estate development business, especially large scale real estate projects, has a direct effect on the environment and society. Real estate projects that other developers deliver to customers usually cause problems for the environment and for society. For this reason, the Company has set a policy for operating its business according to the principal of creating a balance in managing efficiently and with quality in all dimensions for achieve Sustainable Development, whether in terms of finance, customers, internal procedures, personnel and responsibility to the environment and society which the Company has focused on in its strategic plan. The Company has also provided a guideline and a goal to deliver residential units that have quality and have the feeling of a home that is warm, safe and surrounded by a good atmosphere and society for customers. The Company has set forth its plan to operate with responsibility to the environment in two parts, namely, the In-Process and the OutProcess, starting by having a sense of responsibility itself within the organization and in the community in which the Company is developing, before expanding to greater society. Everyone has to be involved such as personnel, customers and trade partners according to the plan that provides that “A good environment and society has to begin with us. When we are ready then we can expand into the community that we develop and manage and finally we can expand to the neighboring community”. This ideal is adhered to throughout all parts of the organization and is the source of the policy to manage communities as a “Vibrant Community” to set an example for other real estate business developers. CESR In Process is comprised of the following: CESR within the organization includes: - Providing a good atmosphere and environment to work in that is appropriate and clean for personnel and promoting an atmosphere to exchange experiences and ideas leading to a learning organization. - The Company’s personnel management policy promotes good quality living by ensuring that personnel have a Work Life Balance while at the same time teaching work habits with Core Values of the organization that have been passed on from generation to generation continually. There are also activities within the organization to build good relationships between the board of directors of the Company and staff at all levels of the company to reduce the gap between them and so that personnel feel a sense of unity in engaging in various activities both involving the environment and society to teach people to be conscientious by starting a project called “Kaw Khwam Dee” ever since 2006, which is an activity inspired by His Majesty the King. Philosophy at the beginning of a project - Selection of a strategic location based on a high density population near a main road close to convenient facilities to develop a project that will reduce the affect on the environment from the development of a large scale project as well as being located close to public transportation hubs and the expressway which reduces the impact on traffic and direct use of energy. - Design of products under the philosophy “LPN Green” which, not only selects strategic locations but also allows the Company to focus on design and planning of the projects to reduce the impact on the environment under the idea “LPN Green” which coincides with the standards of a Green Building in the USA under the standard (LEED-The Leadership in Energy and Environmental Design) Market Strategy The Company has set a marketing strategy that is in line with the Company’s need to build a first home for the target group of customers in the mid to low-upper range pursuant to community management that focuses on quality living for residents. CESR during Construction The Company places special importance on the community surrounding the project since it will be affected by the development of the project by the Company directly. The Company has specified a team of high ranking executives to visit and talk to those affected while at the same time developing construction methods to prevent and reduce the impact on the surrounding community. The construction management team has the following duties: - Environmental concerns. Following the purchase of land, the Company sends a high ranking executive team to educate the surrounding community and the related government agencies to create understanding and good relations especially with houses that have a connected border with the project that are affected by the project. The Company has also made it a policy of the construction management team to pay attention to environmental and social concerns within the project during construction and with the construction workers temporary housing by having them strictly comply with measures to reduce the affects as per the environmental impact assessment, starting from being aware of the affect on the buildings and communities next door both in terms of noise, dust and traffic as well as cleanliness of the wheels of trucks that are transporting construction materials while entering the construction site to reduce dust and particles from dirt. Special attention is also paid

Annual Report 2009 L.P.N. Development PLC.

to construction management in line with the designs and to be on schedule and reporting on the implementation of preventive measures to reduce the impact of construction. All of the said activities are done by high level officers of the Company who are paying close attention to these facts for effectiveness and during the construction, the Company has arranged for high level executives and experts to conduct a survey asking about the impact of the construction of the project as well as explain the project. - Safety of those involved and workers, who have the risk of accidents and loss of life is important and the Company has set forth standards of operation that are strict in terms of safety and having Company officers take responsibility by directly providing advise on safety to prevent accidents from happening such as avoiding workers having to handle hazardous material, use of safety equipment while working, etc. In addition, there is also importance on sanitary conditions by providing places to live with an appropriate atmosphere for the workers while also considering ladies in the worker’s families and maintaining good health by arranging for exercise sessions every morning. Management of the Community after Handover Following handover of the project and of the units to customers the Company makes it the duty of the Company’s community management team to manage the community to have a good quality of life, environment and society for all of the 100,000 plus members of “Lumini” in more than 50 projects under the slogan “Vibrant Society”. So its not only a matter of maintaining the equipment and assets so that they are safe to use but it’s a matter of creating happiness a good society that is warm, safe and there is awareness of the environment in earnest and on a regular basis as follows: - Life Quality Management by promoting all members to comply with the rules of the community to have discipline in living together and for the sake of neatness in the community. There are also activities to promote good relationships among families and “Lumpini” member groups while inviting them to voice their ideas and to join in with the activities for the environment and for society both inside the project and in the greater society through the internal social network to create a society that is based on sharing and assistance in society such as joining together to increase the green area in the projects, donating things to help the less fortunate or people facing a crisis or even activities between the management juristic person of each project with the Company’s executives to develop the “Vibrant Community” on a sustainable basis such as organizing the “Family Day” activity in the projects or joining in cultural or traditional activities. The Company pushes to build a good understanding between people living together that need care, assistance, sharing and kindness to create friendship and healthy lifestyles. - Environment Management provides both the increase and management of the green area in projects and keeping things clean, waste management, waste water treatment and energy savings. In addition, the idea of Green Clean Lean is used as publicity to campaign for members of the community to join together to separate garbage and recycle it or reuse it or to take water from the treatment tank to water plants, use cloth bags instead of plastic bags and to reduce the use of electricity in buildings to conserve energy. - Security System Management means that there is security that the Company provides to manage security inside the projects with a standard while at the same time creating a network of involvement of the community and coordination with government agencies for the highest safety of the members of the community. The Company also focuses on improvement of the buildings and the environment of the housing that the Company has developed over the last 10 years such as painting the building, increasing the green area and improving the atmosphere to coincide with the lifestyles of those residing in the project such as Lumpini Tower, Lumpini Center Happyland, P.S.T. Condoville and P.S.T. City home. CESR Out Process is comprised of Social Activities such as: - Creating jobs for unprivileged women starting in 2000 when Thailand was going through the effects from the 1997 economic crisis and many underprivileged women had no jobs or income causing problems for families and social problems which the Company saw and the Company was in the business of real estate development which not only developed projects but also focused on the management of the community so the Company set up the cleaning management department to give a chance to underprivileged women without employment to work as cleaning staff in the various projects with appropriate compensation such as a salary that was higher than the average minimum wage, social security, a uniform, life insurance, scholarships for their children, emergency loans and other benefits to increase the knowledge and education and provide stability to their lives and the lives of their families while also giving prizes for excellent work and developing their work quality. Presently, the cleaning staff have a force of more than 600 persons, an increase from the date they began with 84 persons with an increase of about 100 persons per year according to the number of projects developed.

Annual Report 2009 L.P.N. Development PLC.

- Blood donation activities together with the blood service center of the Thai Red Cross, to have a blood drive on a continual basis every 3 months starting from 1996 for the last 13 years, when the first time it was organized in the lot in the entrance to the Lumpini Tower Building. On each blood drive, staff, customers of the project and the general public give blood but there are still patients who need blood in an increasing amount, so the Company expanded the blood drive to another project venue that could act as a center for blood donations and in 2007 it expanded to Lumpini Plaza Asoke and Lumpini Sukhumvit 77. In 2008 it was expanded to Parkview Viphavadi, Lumpini Ville Cultural Center and the P.S.T. projects. This past year, it was expanded to Lumpini Place Pinklao 2 and in 2009 the blood drive was held on a continual basis for the whole year a total of 7 times in 7 projects. A total of 3,339 bags of blood were donated and the Company hopes to increase the number of projects involved each year, hoping that volunteers from inside the community will join in and announce the activity as well as information about health to others. The Company also brought volunteers comprised of staff, customers and the public who donated blood on a continual basis to visit the Thai Red Cross blood donation center to learn about donating blood as well as the processes after donating blood so that they can pass on the information to others or answer questions of people who want to donate blood so that they will have more confidence.

Table showing wing the volume of blood donated from the L.P.N. L.P.NN. Development Devvelopment PCL mobile blood bank between 1996-2009 1996 Unit Lumpini Tower Lumpini Sukhumvit 77

Year Times/Year Volume of Blood (Units)

Times/Year Volume of Blood (Units)

Lumpini Plaza Asoke

Times/Year Volume of Blood (Units)

Parkview Viphavidi

Times/Year Volume of Blood (Units)

Lumpini Ville Culture Center

Times/Year Volume of Blood (Units)

P.S.T.

Times/Year Volume of Blood (Units)

Lumpini Place Pinklao

Times/Year Volume of Blood (Units)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Tiotal

2 303

4 4 4 7 680 1,313 1,369 1,285 1 4 7 133 492 372 1 4 7 150 511 503 4 7 311 316 4 7 312 296 4 7 429 371 7 196

55 8,153 12 997 12 1,164 11 627 11 608 4 429 7 196

Total

12,174

3 462

4 744

4 535

4 540

4 461

4 326

4 464

3 393

4 563

Annual Report 2009 L.P.N. Development PLC.

3,339

- Creating the “Vibrant Community to Help Agriculture” was a project to help farmers who were suffering from the production crisis and in 2009 the Company began an activity in conjunction with the Khannayao District Office to organize the activity “Vibrant Community to Help Agriculture” “Lychees to save the country’ held at Lumpini CondoTown Ramindra-Nawamin to help farmers because of low lychee prices including purchasing longan to be given to customers on the first day of sales of the Lumpini Ville Ratburana-Riverview and after that the Company used this idea for every opening of new projects or for activities organized by the Company to help farmers. - The project “Giving Life Back to Paper” came from cooperation between L.P.N. Development PCL and East Asiatic Thailand PCL and the Paper Ranger project to campaign for staff of the Company to use paper efficiently and to reuse paper by accepting a donation of paper that had been used on one page and turned into a notepad for the less fortunate students made by both company’s staff which took about 60 people to make one page and more than 300 notebooks were made and delivered to Pornpitayakhom School in Srikiew District, Nakon Ratchasima Province and the Company is confident that this activity will make staff aware of the value of used paper. - Volunteering to grow grass and donate a learning center and sport lot is another activity meant to build a network of friendship to help care for the environment and society. The Company cooperated with East Asiatic Thailand PCL to organize the activity “Books for Children” to be donated to the Mirror Foundation whereas more than 2,500 books were donated and the old community behind the old Minburi market where the Company sponsored an unspecified amount of money to clean up the landscape for those in the community and there were executives and staff from both companies who helped to improve the open air sports lot and purchase additional equipment as well as improving and increasing the green area behind the community library “Minburi Patronage Community” and donated second hand books to develop the place into a center of learning for Thai people and the community. - Volunteering to paint the walls of the Bangpakok temple which promotes the staff to have a spirit of volunteering for social benefit and in 2008 the Company invited executives and staff to improve the neglected land and paint the walls in the Bangpakok temple being a place for Buddhist followers to go since its located in the Bangpakok area near Lumpini Ville Ratburana-Riverview in line with the idea of “Vibrant Community” which involves developing the environment and the society in and out side of the project.

In cooperation with the Department of Highways, the flyover has been constructed and handed over for public pu interest

Activities related to Environmental Management include: - Increasing the green area in the community and the public area in the neighboring community near the construction site tocompensate for the open space that the company used to develop the project is another policy that the Company has focused on. The Company looks for public area in the neighboring community near the construction site first and tries to develop it jointly with the neighbors in the new community where the Company is developing the project to that there is cooperation on a lasting basis. In 2008, the Company developed and improved the green are in 8 projects namely: -Lumpini Center Happyland -Lumini Center Latphrao 111 -Lumpini Ville Mary-Sathorn -Lumpini Ville Phahon-Sutthisarn -Lumpini Place Narathiwatratchanakharin -Lumpini Place Suanplu-Sathorn -Lumpini Place Rama 4 -Siphaya River View

Annual Report 2009 L.P.N. Development PLC.

- “Separating boxes to reduce garbage” activity Since each day, people around the world consume box water, box milk, box juice and other beverages over 14,000 million liters and many of the boxes used are discarded even though all parts of the boxes are made of paper, plastic and foil aluminum that can be recycled 100%, so the Company started the project “separating boxes to reduce garbage” at the Lumpini Tower building as an activity organized by the Company, the box drink producers association and the Lumpini Tower juristic person in order to make people separate the box drinks as well as the right way to dispose of them to reduce garbage by placing them in reusable bins as well as making people aware of conserving the environment. The activity was held on June 12, 2009 and there were games and activities related to separating box drinks and exchanging gifts for those who brought box drinks to join in the activities. There was a good response from members in the building and there were a lot of boxes that were given to the box drinks producers club to be recycled namely, an estimated 166 boxes which reduced carbon dioxide up to 149.9 kilos. - “Donating Garbage to make Merit” activity Campaigning how to separate garbage correctly is another important policy of the Company and to promote this, the Company organized the activity “Donating Garbage to make Merit” so that garbage that can be recycled is separated from other garbage. It also shows information on the amount of garbage that can be recycled each month of residents compared to the number of people living in the project in order to prepare for the garbage bank and to develop methods of disposing of garbage in the future. If recycle garbage is separated from other types of garbage, it will reduce the amount of garbage that has to be disposed of and allows some materials to be reused, helping reduce global warming and adds value to the garbage. There have been campaigns in 4 projects namely, Lumpini Ville Sukhumvit 77, Lumpini Center Sukhumvit 77, Lumpini Center Latprao 111 and Lumpini Center Happyland by placing 4 recycle garbage cans namely for glass bottles, plastic bottles, paper and aluminum cans for 1 month starting on June 30, 2009. Proceeds from the sale of the garbage will be donated to foundations in the area. - “Separating Hazardous Waste” activity Special designed garbage bins for hazardous waste have been placed at 9 projects according to the standards set by the Department of Pollution Control to hold garbage from the activities of residents such as light bulbs, batteries, spray cans, flashlight batteries so that these types of garbage can be separated from others. There is not a lot of this type of garbage, but if it gets mixed with other garbage and is not properly disposed of it may be a hazard to the health of residents in the projects and become a burden on BMA. The disposal bins were given to the Company by the Office of Waste and Hazardous Material Disposal, Department of Pollution Control and the Division of Garbage, Hazardous Waste and Particles Collection, Environmental Office, BMA and the information on the waste collection of each type of garbage has to be recorded each month and be sent to the appropriate agency.

Annual Report 2009 L.P.N. Development PLC.

- “LPN Campaign to Turn Off the Lights” activity The Company invited all of its members to turn off the lights for 1 hour to reduce global warming together with the WWF (World Wildlife Foundation) that cooperated with BMA and 77 cities worldwide on March 28, 2009 during 8-9 pm. Members in more than 50 projects turned off their lights for 1 hour reducing electricity by 3,589 kilowatts, a decrease of 33% from March 21, 2009.

-“Say No Plastic” activity In light of the natural phenomenon today caused by global warming, the staff in the office and in all of the projects joined in the activity Say No Plastic to reduce the use of plastic bags which gives staff a chance to join in the responsibility to society and the environment. Throughout 2009 there was a reduction in the use of plastic in the amount of 9,196 bags, enough to fuel a car to fun 1,022 kilometers (the fuel it takes to make 9 plastic bags can make a car run 1 kilometer). In addition to campaigning in the projects, the Company joined with members of Lumpini Tower to reduce use of plastic bags from June 17 to August 2009 during which time 10,300 plastic bags were saved which could fuel a car to run up to 92,700 kilometers.

Annual Report 2009 L.P.N. Development PLC.

Operating the Business According to the “Suﬃciency Economy” Principles

Since the founding of the Company, L.P.N. Development Public Co., Ltd. has established guidelines for business direction by creating balance of interests for all parties involved, including ensuring that the Company grows from the inside accompanied by personnel development. After the economic crisis in 1997, the growth of the Company is based on the growth of development project that align with the strategy of the organization and the overall economy. Moreover, Company’s growth has been maintained in a consistent, sustainable manner. The Company has established a business strategy that focuses on developing residential condominiums within condensely populated areas, for the mid-range to bottom-range and top-range income target customers, who represent a major urban target group. Attention is also focused on managing communities that the Company has developed to ensure appropriate quality of life, with a good surrounding environment and in a happy society. The business policy of the Company can be seen to coincide with the Philosophy of ‘Sufficiency Economy’ of His Majesty the King, which can be explained as follows: ‘Sufficiency Economy’ Principles comprises 3 values and 2 conditions 3 values are: 1. Modesty 2. Reasonableness 3. Building immunity 2 conditions are: 1. Knowledge 2. Virtue

Philosophy of Sufficiency Economy Middle Path Modesty Reasonable- Good Immunity ness

Knowledge

Righteousness

Knowledgeable, Discreet, Careful

Integrity, Diligence, Wisdom, Sharing Leads to

Economy/Society/Environment/Cultures Balance/Ready to Face Changes 3 Values: 1. Modesty The Company’s business policy consists of: - Management of growth at appropriate levels, neither overly rapid nor too sluggish, by focusing on creating internal strength; to ensure sustainable growth under appropriate risk management. - Aim for profit from business operation that is sufficient; not exploiting or taking advantage of customers or society. - Concerned on effects of development projects on the environment and society, at the same time pursue all measures to reduce adverse affects in all ways possible. 2. Reasonableness - Development of residences for those who desire their own residences. - Raising the quality of living of the residents by managing the community after transfer of ownership of the residence to achieve maximum efficiency. - Create a balance of compensation and benefits for all parties involved. Annual Report 2009 L.P.N. Development PLC.

3. Building Immunity - Development of competence of personnel of knowledge, skills, and maturity. - Establishment strategies that is appropriate and cover all economic conditions, namely: Short-term strategy - Emphasis on development of products and services efficiencies. - Expand development projects to new locations. - Create differentiation in products and services by focusing on community management under the “Vibrant Community” notion. Medium-term Strategy - Dispersion of customer base by expanding non-condo products or projects. - Expanding revenue base of current customers by increasing capability and allies. - Expanding income from businesses of the group especially services, property management and real estate lease services. Long-term strategy - Increase the competencies of personnel and improve internal systems. - Increase the efficiency of community management focusing on potential for community management. - Adding value to the organization by building new innovations in products and services. Two Conditions: 1. Knowledge The Company has established in its People Perspective for the Company to be an organization of learning and sharing knowledge, starting within the Company and expanding the operating results to the community which the Company is managing, from the learning center in every condominium developed by the Company. 2. Virtue The Company has specified that “virtue” is one of the Company’s cultures. Good corporate governance is one of the important missions of the Company for the shareholders as part of good governance which is important for all levels in the Company to follow in operating the business. The Company has always followed these principals in its business operations, enabling the Company to achieve objectives, quality growth, and acceptance of customers, including business partners or affiliates of the Company. The Company will continue to embrace this policy direction, for stable, quality, and sustainable growth well into the future.

Annual Report 2009 L.P.N. Development PLC.

Becoming LPN today LPN has dedicated itself, built and relied on experience and expertise to develop its products and services continually allowing it to gain conďŹ dence and acceptance in wide circles

Company’s History L.P.N. Development PCL is a developer of condominiums with a long history of more than 2 decades in which time the Company has gone through important developments from adapting and developing on a continual basis including setting forth a vision to clearly lead the Company to its goals while its experience will help to clarify its business philosophy, while remaining focused on its intent to develop residences with high quality for residents, especially those with income in the mid-upper to mid-lower groups.

1992 Lumpini Property Management Co., Ltd. was established with a registered capital of 1,000,000 Baht with the Company holding 99.88% of the shares with the objective being to provide real estate management services, especially to buildings for the juristic persons of the condominiums which the Company and its subsidiaries had developed as after sales service in order to create faith in the quality of living of customers who purchased the Company’s products, as part of the policy to be different and as a competitive advantage.

1992

1996 Jointly invested in NTN Concrete Co., Ltd. a company engaged in construction materials business for 10,200,000 Baht or 1,020,000 shares equal to 51% of the registered capital or a par value of 10 Baht per share The Company executed a loan agreement for foreign capital from 5 of the leading banks from Singapore for a total of 20,000,000 USD with a maturity date of 3 years at an interest rate of SIBOR+1.20% for use in developing the LPN Sukhumvit Tower

1993 Increased the proportion of investment in Pornsanti Co., Ltd. to 99.99% of the paid-up capital of Baht 200 Million with 1,000 Baht par value of shares.

Annual Report 2009 L.P.N. Development PLC.

1996

1990 The company Pornsanti Co., Ltd. was established as the company that developed P.S.T. Condoville at an investment of 10,000,000 Baht being an investment ratio of 20% of the paid up capital, with the Company responsible for managing the project

1990

1990-1993 Expansion of capital and operations

1993

The Company was born from people from numerous backgrounds who all had the intention to develop real estate of high quality for Thai society. The Company was established on June 21, 1989 with a registered capital of 50 Million Baht and began developing the project “Lumpini Tower”, an office building with 37 Floors, the first of its kink on Rama 4 road, a place which has been the head office and remains until today.

1989

1989 The birth of the business

1994 Within 5 years of operating, the Company listed as a public company on June 21, 1994 registration No. BorMorJor.477. The Company was listed at the Stock Exchange of Thailand with the Securities named “LPN”. The Company issued ordinary shares to increase the capital and distributed 9.2 Million shares at 10 Baht par value to the public for offering value per share of 64 Baht which was subsequently increased to be 460 Million Baht on 4 November 1994. Entered into a joint-venture project with Elec & Eltek (Guangzhou) Real Estate Development Ltd., a real estate company in Hong Kong worth 12,720,000 Baht, equal to 10% of the paid-up capital.

1994

1994-1996 Becoming a public company

History

2001 The Company that created a legend in city center condominiums 2001 In November 2001, the Company agreed to enter into a joint venture agreement with Uni-Venture Public Company Limited, Sansiri Public Company Limited and Yaowawong Co., Ltd. setting up Grand Unity Co., Ltd. for the purpose of development of the WaterCliff Project the residential condominium in Rama III area, that had been postponed since 1997, due to the economic crisis. The said joint venture company developed the project under the new name “Lumpini Place WaterCliff” having L.P.N. Development Public Company Limited responsible for marketing, administration, sales and construction work of the whole project as well as negotiating with the original purchasers.

Annual Report 2009 L.P.N. Development PLC.

2001

1997 The Company suffered from the economic crisis and from affects from the currency exchange rate The service operations of Lumpini Property Management Co., Ltd. were expanded due to perceived opportunities in the market from the economic crisis and in order to maintain its staff so the company was developed to meet the needs of the market in areas such as security services, cleaning services air conditioning maintenance etc. Restructured its organization and developed its personnel in accordance with the economy at that time. Mr. Chamlong Ratanakul Sereroengrit resigned as CEO of the Company due to health reasons and Mr. Pong Sarasin also resigned due to business reasons so the board of directors invited Mr. Mora Bunyaphala to act as the CEO in his place.

1997

1998 Withdrew its investment from Elec & Eltek (Guangzhou) Real Estate Development Ltd., due to delays in the project as well as the economy and the Company earned around 3,390,000 Baht on the exchange rate.

1998

1999 On July 26, 1999 the Company appointed Cathay Asset Management Co., Ltd. as the consultant in respect of restructuring and increase of the Company’s capital by jointly formulating the negotiation on restructuring with each creditor and also planning for the Company’s increase of capital. Board of Directors of L.P.N. Development Public Company Limited had held the Extraordinary General Meeting of Shareholders No. 1/1999 on October 4, 1999 at the Company’s meeting room to consider an the increase of the Company’s capital from Baht 460,000,000 (Four Hundred Sixty Million Baht Only) to Baht 3,983,000,000 (Three Thousand Nine Hundred Eighty Three Million Baht Only) by the issuance of 352,300,000 (Three Hundred Fifty Two Million and Three Hundred Thousand) new ordinary shares, each of par value 10 Baht, making up the total amount of Baht 3,523,000,000 (Three Billion Five Hundred Twenty Three Million Baht Only) On November 15, 1999 the board of directors of the Company passed a unanimous decision to invest in the ordinary shares of NTN Concrete Co., Ltd. at a price of 0.01 Baht per share due to poor economic conditions making NTN Concrete Co., Ltd. unable to run its business of construction materials and was operating at loss with shareholder ratio at negative figure and NTN Concrete Co., Ltd. was no longer able to support the operations of the Company. The Company was successful at restructuring its debt with financial institutions in 1999 worth 3,132,610,000 Baht with a remaining overall debt of around 170 Million Baht compared with February 2000 so the Company was able to restructure its debt in the amount of around 3,305,930,000 Baht.

1999

1999 Completion of Restructuring ready for business

2002 Passed a resolution to decrease the registered capital from Baht 3,983,000,000 (Three Thousand Nine Hundred Eighty Three Million Baht Only) to Baht 460,000,000 (Four Hundred Sixty Million Baht Only) and later increase the capital by 75,000,000 Baht (Seventy Five Million Baht) for a total registered capital of in the amount of Baht 1,210,000,000 (One Billion Two Hundred Ten Million Baht Only) and amended the Affidavit of the Company as follows: Capital Increase of 750,000,000 Baht by issuing 75,000,000 new shares divided into: -27.6 million shares for the original purchasers at a ratio of 5 original shares equal to 3 new shares -29.9 million shares for debt to equity swap -17.5 million shares for the Krung Thai Bank (PCL) debt to equity swap 29,900,000 instruments divided into: -27,600,000 instruments for the original shareholders who exercised their right to reserve the original shares for the capital increase at the rate of 1 new share equal to 1 instrument -2,300,000 instruments for 35 directors and staff The Company appointed United Advisory Service Co., Ltd. as the Company’s capital increase consultant.

2002

2002 Adjustment of the registered capital for financial stability

Annual Report 2009 L.P.N. Development PLC.

2006 The Annual General Meeting of Shareholders in 2006 held on April 26, 2006 passed a resolution to reduce capital from 1,486,706,550 Baht to 1,475,698,768 Baht by striking ordinary shares remaining from the reserve held for exercising rights to swap debentures with 11,007,782 shares at 1 Baht per share and approved amendment of Article 4 of the Memorandum of Association of the Company to reflect the capital decrease.

2006

2004 The Annual General Shareholders’ Meeting of 2004 held on 7th April 2004 resolved to change the par value from Baht 10 to Baht 1, increasing the number of shares from 121,000,000 shares to 1,210,000,000 shares. In the said meeting it also resolved to register the increase of the Company’s Capital to be 276,706,550 shares (Two Hundred Seventy Six Million Seven Hundred Six Thousand Five Hundred Fifty Shares) at par value Baht 1 making a total registered capital of Baht 1,486,706,550 (One Billion Four Hundred Eighty Six Million Seven Hundred Six Thousand Five Hundred Fifty Baht Only) divided into 1,486,706,550 ordinary shares (One Billion Four Hundred Eighty Six Million Seven Hundred Six Thousand Five Hundred Fifty Shares) valued at Baht 1 (One Baht Only). The Company also increased its shareholding in Grand Unity Development Co., Ltd. from 25% to 33.33%.

2004

2003-2006 Capital Adjustment to support the expansion into professionalism

History

2008 Due to the sub-prime crisis in the USA and the political problems at the end of 2008, financial markets in Thailand were affected as was the SET and the SEC was trying to promote listed companies to buy back their own shares, so at the board of director’s meeting of L.P.N. Development PCL No. 6/2551 held on October 9, 2008, the buy back of the shares was passed at lower price than the market price since the shares were lower than the basic price and agreed to immediately purchase 200 Million Baht for approximately 62 Million shares equal to 4.20 of the registered and paid capital us 1,475,689,768 shares and the purchase was restricted to the SET between October 24, 2008 to April 23, 2009.

Annual Report 2009 L.P.N. Development PLC.

2009

2009 According to the board of directors of the Company proposed the purchase of the Company’s own treasury’s stocks in 2008 and the Company has purchased 8,146,300 shares at a average sale price is 2.19 Baht per share for a total of 17,840,397 Baht and sold the shares purchased during December 3-11 at an average price of 7.01 Baht per share for a total of 57,103,415 Baht and the Company earned a profit of a total of 39,262,226.

2008

2007 The Company amended its joint-venture policy with Grand Unity Development Co., Ltd. by reducing its shareholding from previously 33.33% to 20% of the registered and paid up capital and set up a company called Lumpini Project Management Services Co.,Ltd. to provide a more turn-key service to the real estate projects.

2007

2007-2009 From “Vibrant Community” to the 3rd stage vision to develop quality

Awards 2005 • The Company had its securities ranked in SET Index 100 of Stock Exchange of Thailand which was published on 18th April 2005, being an index used to calculate the price level of securities to promote diversification of investment into more medium sized companies using standards of the level of liquidity, distribution of shares, highest market value on average per day in the SET for the past 12 months and has been listed for no less than 6 months and has a free-float of more than 20%. • In October 2005 the P.S.T. City Home, a 29 floor condominium unit developed by the Company won 3rd place in a competition of residences of high quality in the category of the large scale building with the most greenery and shade, announced at the Yannawa District Office, pursuant to the Company’s policy to preserve the environment at all its projects. • The Company was ranked in 2005 to be 1 of 93 listed companies in the Stock Exchange of Thailand which was announced on April 18, 2005 awarded an appraisal of operational results for outstanding good governance in the Top Quartile group selected by the Thai Institution of Directors Association (IOD). This time was the 3rd year straight that the Company was honoured to be ranked in the Top Quartile group. 2006 • The Company was ranked by the Association of Promotion of Institutions of Company Directors of Thailand as a Company with level 4 performance that had performed according to standards of good governance focusing on disclosure of information to investors, shareholders and the general public in a transparent manner on a regular basis, with an average of 80-89 points from a total of 100 points. This year is the fourth year that the Company has been selected for good performance with good governance, guaranteeing the Company as a very good registered company under the Stock Exchange of Thailand. • The Company received a certificate from Phatreeya Benjaphonchai, director and manager of the Stock Exchange of Thailand on the occasion that the Company was 1 of 3 companies that was selected to win the SET Awards 2006 for Best Performance in Property & Construction which came from the desire for sustainable growth and continuous value for shareholders. The award is given based on financial status and performance excellence as well as policies concerning disclosure of information specified by the Stock Exchange of Thailand and stock liquidity. 2008 • The Company received the award from the Consumer Protection Board (CPB) as the “Real Estate Developer of the Year 2007-2008”, an award that the CPB organized for businesses with ethical practices and responsibility to society. • Forbes Asia magazine for the month of September 2008 selected the Company as one of “200 Best Under a Billion” from a survey of listed companies in the Asia Pacific region covering 24,155 companies with income of less than 1 Billion USD and a high performance. Only 7 companies in Thailand were on the list. • The Company was ranked by the Association of Promotion of Institutions of Company Directors of Thailand as a Company with level 4 performance for the 5th year in a row that had performed according to standards of good governance focusing on disclosure of information to investors, shareholders and the general public in a transparent manner on a regular basis. 2009 • The Company was ranked by the Association of Promotion of Institutions of Company Directors of Thailand as a Company with level 4 performance for the 6th year in a row that had performed according to standards of good governance focusing on disclosure of information to investors, shareholders and the general public in a transparent manner on a regular basis.

Annual Report 2009 L.P.N. Development PLC.

Investment Investment Structure

L.P.N. Development Public Company Limited Real Estate Development Service Registration Date: Type of shares : Number of shares : Paid-up shares : Par value : Registered Capital : Issued and paid-up capital :

June 21, 1989 Ordinary 1,475,698,768 shares 1,475,698,768 shares 1.00 Baht 1,475,698,768 Baht 1,475,698,768 Baht

Joint Venture Company Grand Unity Development Co., Ltd. Real Estate Development Service Registration Date : September 7, 2001 Type of shares : Ordinary Number of shares : 6,000,000 shares Par value : 10.00 Baht Registered Capital : 600.00 Million Baht Investment Proportion 20%

Subsidiary Company

Lumpini Project Management Services Co., Ltd. Complete Project Management Service Business Registration Date : December 11, 2007 Type of shares : Ordinary Number of shares : 10,000 shares Par value : 100.00 Baht Registered Capital : 1.00 Million Baht Investment Proportion 99.93 %

Lumpini Property Management Services Co., Ltd. Complete Community Service Business Registration Date : April 2, 1992 Type of shares : Ordinary Number of shares : 10,000 shares Par value : 100.00 Baht Registered Capital : 1.00 Million Baht Investment Proportion 99.88 %

Pornsanti Co., Ltd. Real Estate Development Service Registration Date : May 14, 1990 Type of shares : Ordinary Number of shares : 350,000 shares Par value : 1,000.00 Baht Registered Capital : 350.00 Million Baht Investment Proportion 99.99 %

Annual Report 2009 L.P.N. Development PLC.

Company Capital Unit : Million Baht Company Name

Date

Shares (%)

Equity Method

Investment Cost

350.00 1.00

30 Sept 1993 25 Jan 1992

99.99 99.88

206.612 0.998

1.00

14 Nov 2007

99.93

0.993

600.00

30 Nov 2001

20.00

118.31

121.72

Paid Capital

Subsidiary 1. Pornsanti Co., Ltd. 2. Lumpini Property Management Co., Ltd. 3. Lumpini Project Management Services Co., Ltd. Affiliated 1. Grand Unity Development Co., Ltd.

Securities The Company’s registered capital is 1,475,698,768 Baht, divided into a paid capital at 1,475,698,768 Baht which are ordinary shares value 1,475,698,768 Baht with a par valur at 1 Baht per share (One Baht only). The histories of holding the Company’s shares since the Company is established are as follows: Registration date of change in Memorandum of Association or change of paid capital as the case may be

Registered Capital changed Capital paid Capital Capital increase Increase (Decrease) (Million Baht) (decrease) (Million Baht) (Million Baht)

Reason to increase (decrease) capital

21 June 1989 23 August 1990 9 September 1992

50.00 100.00 200.00

50.00 50.00 100.00

28 December 1993

285.00 368.00

85.00 83.00

Increase capital to invest in Pornsanti Co., Ltd. 100% Increase capital to existing shareholders to expand the business

460.00

92.00

Allocate shares to shareholders in accordance to the rules to list in the Stock Exchange of Thailand

3,983.00

3,523.00

4 May 1994

Company capital registration to establish the Company Increase capital to expand the business Increase capital to expand the business

Proportion of increase (decrease) capital

Par Value (Baht)

1:1 1:1 1:1

10 10 10

40:17 4:1 25:01:00 92 Million

18.82 20 10 64

22 October 1999 15 May 2002

460.00

(3,523.00)

To operate the continual project to reduce debt and spare for the new investment in relation to real estate development business Decrease capital and number of shares that haven’t sold yet

Annual Report 2009 L.P.N. Development PLC.

Registration date of change in Memorandum of Association or change of paid capital as the case may be 16 May 2002

Registered Capital changed Capital paid Capital Capital increase Increase (Million Baht) (decrease) (Decrease) (Million Baht) (Million Baht) 1,210.00

750.00

946.82

Reason to increase (decrease) capital

Proportion of increase (decrease) capital

Par Value (Baht)

Increase registered capital by issue new ordinary shares in total of 75,000,000 shares as follows: - Allocate new ordinary shares to existing shareholders in the proportion of existing 5 shares to new ordinary 3 shares in total of 27.6 Million shares.

5:3

1:1

- Allocate new ordinary shares to existing shareholders warrants in total of 27.6 million shares - Allocate new ordinary shares for existing of Directors and Employees warrants - Allocate new ordinary shares to Krungthai Bank PCL. according to Rehabilitation Agreement in the amount of 17.5 million shares.

17 June 2002

1,210.00

276.00

29 January 2003

1,210.00

9.17

From exercising the warrants period of 27 January 2003

1:1

29 April 2003

1,210.00

0.27

From exercising the warrants period of 25 April 2003

1:1

30 July 2003

1,210.00

1.72

From exercising the warrants period of 25 July 2003

1:1

31 October 2003

1,210.00

2.61

From exercising the warrants period of 27 October 2003

1:1

29 January 2004

1,210.00

8.41

From exercising the warrants period of 26 January 2004

1:1

3 May 2004

1,210.00

6.68

From exercising the warrants period of 26 April 2004

1:1.10497

1.267

31 May 2004

1,486.00

236.70

4:1

- Allocate new ordinary shares to existing shareholders who hold title document in total of 40 million shares

1:1.10497

1.267

Registered capital increased by issuing 276,706,550 ordinary shares with a par value 1 Baht as follows: - Allocate new ordinary shares to existing shareholders in a proportion of 4 shares to 1 new ordinary shares in total of 236,706,550 shares

1,486.00

1.05

1,191.26

Changed the title document dated 26 July 2004

1:1.10497

1.267

1,486.00

14.34

1,205.60

Changed the title document dated 26 October 2004

1:1.10497

1.267

31 January 2005

1,486.00

99.86

1,305.46

Changed the title document dated 25January 2005

1:1.10497

1.267

28 June 2002

1,210.00

175.00

1:1

30 July 2004 4 November 2004

Rehabilitation by shareholding of Krungthai Bank PCL. with the amount of 17.5 million shares

1,486.00

21.55

1,327.01

Changed the title document dated 25 April 2005

1:1.11518

1.255

1 August 2005

1,486.00

15.80

1,342.81

Changed the title document dated 25 July 2005

1:1.11518

1.255

12 October 2005

1,486.00

132.89

1,475.70

Changed the title document dated 3 October 2005;

1:1.11518

1.255

15 May 2006

1,475.00

10.30

1,475.70

Decrease capital by reduce ordinary shares that left from the title documents

15 May 2005

Annual Report 2009 L.P.N. Development PLC.

Investment Policy in subsidiaries and affiliates The Company has the following investment policy in subsidiaries and affiliates: Subsidiaries The Company has invested in 3 subsidiaries with more than 99% shareholding divided according to the type of business as follows: 1. Lumpini Property Management Co., Ltd. Providing turn key community management services to the Company and projects developed by the group 2. Lumpini Project Management Services Co., Ltd. providing turn key services related to real estate business services to the Company and projects developed by the group 3. Pornsanti Co., Ltd. engaged in real estate development of all types exept for condominiums with the purpose of distributing risk and to unlock the potential of land that is unfit for development into a condominium Affiliates The Company has 1 affiliate, Grand Unity Development Co., Ltd. with 20% shareholding by the Company engaged in the business of real estate development though a joint venture from the economic crisis in 1997 to develop uncompleted projects in Bangkok. At present all types of projects are developed and there is a clear business goal.

Shareholders The top 10 shareholders and their amount of shareholding and percentage of shareholding as of the close of the share registry book as of 30 December 2009 was as follows:

Name of Majority Shareholders 1 Thai NDVR Co., Ltd. 2 Somers (U.K.) Limited 3 Chase Nominees Limited 1 4 Mr. Sumet Techakraisri 5 State Street Bank And Trust Company 6 Mr.Kenneth Rudy Kamon 7 Norbax Inc.,13 8 Morgan Stanley & Co. International Plc 9 Mrs. Yupa Techakraisri 10 Mr. Sompong Cholkadeedamrongkul Total

Annual Report 2009 L.P.N. Development PLC.

Number of Shares 357,979,922 92,405,200 90,018,903 75,914,393 73,849,800 37,010,000 33,383,100 26,583,600 26,040,499 24,073,700 837,259,117

Proportion (%) 24.26 6.26 6.10 5.14 5.00 2.51 2.26 1.80 1.76 1.63 56.74

The shareholding of the first 4 dirctors and executives of the Company is counted from the managing director and includes the manager of the accounts and finance department as of 30 December 2009 and includes shareholding of the spouse as follows. Name 1. 2. 3. 4. 5. 6. 7.

Mr. Pakorn Professor Siri Mr. Tawechai Mr. Amornsuk Mr. Thep Mr. Weerasak Mr. Vudhiphol Mrs. Tatsanee 8. Mr. Tirachai Mrs. Pratin 9. Mrs. Jongjit 10. Mr. Tikhamporn 11. Mrs. Yupa 12. Mr. Pichet 13. Mr. Kumpee 14. Mr. Opas 15. Mrs. Somsri 16. Mr. Sombat 17. Mr. Rungroj 18. Miss Suporn 19. Mrs. Rungthip 20. Miss Paverisa

Position

Number of shares 1,000,000 375,000 300,000 1,400,000 1,375,000 2,200,000 4,000,000 10,000,000 26,040,499 8,000,000 19,106,570 -

Chairman Vice Chairman Vice Chairman Chairman of Audit Committee Audit Committee Audit Committee Director Director Director Chief Executive Officer Executive Director Executive Director Executive Director Managing Director Deputy Managing Director Deputy Managing Director Assistant Managing Director Accounting Manager Finance Manager Internal Audit Manager

Thavisin Keiwalinsrit Chitasaranachai Noparumpa Roongtanapirom Wahawisal Suriyabhivadh Suriyabhivadh (Spouse) Panchasarp Panchasarp (Spouse) Thapanangkun Plengsrisuk Techakraisri Supakijjanusan Chongthurakit Sripayak Techakraisri Kittipokirattana Piloksiri Wongwaipairote Piyateerawong Vasithtrakul

73,797,069

Total

History of Dividend Payment Dividend Payment Policy The Company has a policy of paying dividends to shareholders at a rate of no less than 50% of the net profit for specific business financial statement. In 2009 the Company had profit and loss according to the profit and loss statement for specific business in the amount of 1.397.07 Million Baht with a net profit per share of 0.95 Baht and dividend payment at the rate of 0.50 Baht (50 Satang) per share pursuant to the resolution of the board of directors meeting no 1/2010 held on February 18, 2010 and at the time of preparing this Form 56-1 report the AGM of 2010 approved and the Company has paid interim dividends installment for 6 months ending 2nd trimester of 2009 at the rate of 0.16 Baht per share for the 1,475,698,768 ordinary shares of the Company minus the shares that were repurchased by the Company pursuant to the share repurchase program in the amount of 8,146,300 shares leaving the total number of shares entitled to receive dividend payment in the amount of 1,467,552,468 shares at a total amount of 234,808,394.88 Baht paid on 28 August 2009 Details of the Companyâ&#x20AC;&#x2122;s dividend payment history from 1994-2009 is as follows:

Year

Dividend (Baht/Share)

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

2.50 2.75 1.00 1.00 2.50 0.20 0.22 0.26 0.32 0.41 0.50

Annual Report 2009 L.P.N. Development PLC.

Investment in Land for new Projects In 2009, the Company continued to purchase land for new projects based on the direction of the condominium development which focuses on people with income in the mid-upper to low who need residences near their place of work within walking distance and the Company purchased 5 plots of land to develop the following projects: Summarize of land purchase 2009 Project

Transferred date

Land Area (Sq.M.)

Land Price (Baht/Sq. M.)

Land Value (Million Baht)

Appraisal Price (Million Baht)

Appraiser

Lumpini CondoTown Ramindra-Laksi

2 Mar 07

10,176.30

40,289.69

409,999,972

40,486.23

Lumpini Ville Ratburana-Riverview

30 Apr 09

2,075.00

35,042.03

72,712,212

42,000.00

Sims Property

Lumpini Park Pinklao

30 Apr 09

5,188.00

90,927.57

471,786,790

110,000.77

Sims Property

Lumpini Ville Latphrao-Chokechai 4

16 Oct 09

2,970.00

74,135.10

220,181,247

80,000.00

CIMB

Lumpini CondoTown Bangkhae

26 Oct 09

3,194.00

31,934.88

102,000,007

31,997.50

CIMB

Land Value (Million Baht)

Appraisal Price (Million Baht)

Appraiser

Summarize of land purchase 2010 Project

Lumpini Place Ratchayothin Lumpini Place Rama 4-Kluaynamthai

Transferred date

Land Area (Sq.M.)

Land Price (Baht/Sq. M.)

7 Jan 10

5,921.00

116,013.34

686,914,986

Appraising

28 Jan 10

1,704.00

150,000.00

255,600,000

Appraising

The Company has a policy to reduce risk from relevant legal requirements, so before the Company buys land, the Company does a feasibility study on the market, construction design and finance. If it is found to be appropriate and possible to develop a project, the Company will purchase the land but the Company does not have a policy to collect land for long term speculation.

Annual Report 2009 L.P.N. Development PLC.

Revenue from Business Structure of Revenue from Business Income structure of revenue from businesses in which the Company holds at least a 20% of shares

For the each year ended December 31, 2009, 2008, and 2007 unit : million baht

2009 Operated by

Products & Services

% of Company Shareholding

2008

2007

Revenue

8,390.54

97.65

7,143.60

97.81

6,650.43

97.46

L.P.N. Development Public Company Limited

Property Development

Pornsanti Company Limited

Property Development

99.99

17.94

0.21

15.21

0.21

47.91

0.70

Lumpini Property Management Company Limited

Administration & Services

99.88

178.31

2.08

141.84

1.94

125.43

1.84

Lumpini Project Management Services Company Limited

Administration & Services

99.93

5.66

0.06

3.04

0.04 -

Grand Unity Development Company Limited

Property Development

33.33, 20.00 *

Total

8,592.45

100.00

7,303.69

100.00

6,823.77

100.00

* The Company sold some the shares on 1st October 2007 and still has the investment proportion of 20%

Table Showing Details of Accumulated Accrued Amounts As At 31st December 2009 Accumulated Accrued Amounts Project

Installment Receivables: 1. Lumpini Center Happyland Building E 2. Lumpini Suite Pinklao 3. Lumpini Ville Ramkhamhaeng 26 4. Lumpini CondoTown Ramindra-Laksi 5. Lumpini Place Ramindra-Laksi 6. Lumpini Place Rama 8 7. P.S.T. City Home Total

Number

million Baht

1 1 2 1 1 1 1

0.105 0.085 0.031 0.028 0.077 0.092 0.165

0.583

Annual Report 2009 L.P.N. Development PLC.

Companyâ&#x20AC;&#x2122;s Revenues classified by Products and Service types: Last 3 years L.P.N. Development Public Co., Ltd. and subsidiaries has revenues from sale and services classified by project types; as follows:Revenues classified by main business of L.P.N. Development Public Co, Ltd. and subsidiaries 2009

2008

2007

Revenues classified by main business MB Real Estate Business for sale Residential condominiums Revenues from Sale Real Estate Development for Rental Office Buildings Residential condominiums Revenues from Rental Revenues from Management service Equity gain from investment in associates and subsidiaries * other revenues ** Total Revenues Rate of Growth Revenues from Sale Revenues from Rental Revenues from Management service Total Revenues

8,267.99 8,267.99

96.22 96.22

7,018.71 7,018.71

96.10 96.10

6,574.22 6,574.22

96.34 96.34

3.35 58.68 62.03 183.25

0.04 0.68 0.72 2.13

3.86 57.25 61.11 143.46

0.05 0.78 0.84 1.96

3.77 39.09 42.86 124.45

0.06 0.57 0.63 1.82

3.84 75.34 8,592.45 -

0.04 0.88 100.00 (%) 17.80 1.51 27.74 17.65

80.41 7,303.69 -

1.10 100.00 (%) 6.76 42.58 15.28 7.03

82.24 6,823.77 -

1.21 100.00 (%) 38.47 83.40 (9.66) 35.92

* Consolidated financial statements commenced in 1993. ** Other revenues comprised ownership transfer fees, confiscated contract deposits, contract change fees, interest received, commissions, parking fees, and others.

Revenues classified by main business of L.P.N. Development Public Co, Ltd. 2009

2008

2007

Revenues classified by main business MB Real Estate Business for sale Residential condominiums Revenues from Sale Real Estate Development for Rental Office Buildings Residential condominiums Revenues from Rental Revenues from Management Equity gain from investment in associates and subsidiaries * Dividends received * other revenues ** Total Revenues Rate of Growth Revenues from Sale Revenues from Rental Revenues from Management service Total Revenues

8,255.23 8,255.23

97.49 97.49

7,014.42 7,014.42

97.45 97.45

6,547.31 6,547.31

97.67 97.67

4.66 53.23 57.89 -

0.06 0.63 0.68 -

5.78 52.17 57.95 -

0.08 0.72 0.81 -

6.41 32.69 39.10 -

0.10 0.49 0.58 -

79.93 74.57 8,467.62 -

0.94 0.88 100.00 (%) 17.69 (0.10) 17.64

46.85 78.87 7,198.09 -

0.65 1.10 100.00 (%) 7.13 48.21 7.38

35.30 81.98 6,703.69 -

0.53 1.22 100.00 (%) 37.90 85.57 33.47

* In 2007 Accounting Standards was revised: Investments in subsidiaries and affiliates in separate financial statements are to be recorded using the Cost method (retroactively adjusted for 2006). ** Other revenues comprised ownership transfer fees, confiscated contract deposits, contract change fees, interest received, commissions, Parking fees, and others.

Annual Report 2009 L.P.N. Development PLC.

Organization chart

Board of Directors Nomination & Remuneration Committee

Audit Committee

Executive Committee

Managing Director Pornsanti Co.,Ltd.

Internal Audit

Business Development Division

Corporate Administration Division

Managing Director L.P.N. Development Public Company Limited

Managing Director Lumpini Property Management Co.,Ltd.

Deputy Managing Director

Branding & Marketing Division

Human Resources Office

Corporate Finance Division

Business Development Division

Sales Management Division

Community Management Support Division

Managing Director Lumpini Project Management Services Co.,Ltd.

Deputy Managing Director

Community Management Division

Community Finance Management Division

Annual Report 2009 L.P.N. Development PLC.

Project Management Division

Preventive & Maintenance Division

Backgrounds of Directors and Executives

Mr. Pakorn Thavisin Prof. Siri Keiwalinsrit

Name Age Position Education

: : : :

Mr. Pakorn Thavisin 70 years Chairman of the Board of Directors and Independent Director The Chartered Institute of Bankers, London Diploma from National Defence College (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 up to the present: 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 of Royal Orchid Hotel Public Company Limited. 2004-2007 - Director of Bank of Ayudhya Public Company Limited. Criminal Records in the past 10 years : None Shareholding in the Company (As at 30th December 2009) : None Name Age Position

: : : -

Prof. Siri Keiwalinsrit 80 years Vice Chairman and Independent Director. Honorary Doctorate Degree of Law, Chulalongkorn University. Barrister-at-Law, Council of Legal Education Thailand. Education LL.B., Thammasat University. Diploma from National Defense College (Class 25). Trainings Training course on Development in Faculty of Land Possession and Administration Work, 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 up to the present: Present - Vice Chairman and Independent Director, L.P.N. Development Public Co., Ltd. - Law Drafting Committee, Ministry of Labour and Social Welfare. - Law Drafting Committee, Group No. 7, Office of Juridical Council. - Advisor of Graduated Committee: Faculty of Law, Thammasat University. - 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. - Legal Counselor of the Legal Issues Consideration Committee, Department of Lands. - Advisory Committee to the Law Improvement and Development Committee, Department of Lands. Criminal Records in the past 10 years : None Shareholding in the Company (As at 30th December 2009) : None

Annual Report 2009 L.P.N. Development PLC.

Board of Directors Mr. Tawechai Chitasaranachai Mr. Amornsuk Noparumpa

Name : Mr. Tawechai Chitasaranachai Age : 71 years Position : Vice Chairman, Nomination & Remuneration Committee Member, and Independent Director. Education : Bachelor Degree in Engineering, Chemical Engineering Branch, 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 up to the present: Present - Vice Chairman, Nomination & Remuneration Committee Member, and Independent Director, L.P.N. Development Public Co., Ltd. - Director of Orathai International Co., Ltd. Criminal Records in the past 10 years : None Shareholding in the Company (As at 30th December 2009) : None

Name Age Position

: : : -

Mr. Amornsuk Noparumpa 64 years Director, Chairman of Audit Committee. Chairman of Nomination & Remuneration Committee, and Independent Director. Education Barrister-at-Law, Lincolnâ&#x20AC;&#x2122;s Inn, London. Barrister-at-Law, Council of Legal Education Thailand. LL.B. (High Honour), Thammasat University. Diploma from National Defense College (Class 399). Trainings Certification of Completion of Directors Certification Program (DCP 30/2003), 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 up to the present: Present - Director, Chairman of Audit Committee, Chairman of Nomination & Remuneration Committee, and Independent Director, L.P.N. Development Public Co., Ltd. - Director, Chairman of Audit Committee, Chairman of Nomination & Remuneration Committee of RCL Public Company Limited. - Director, Audit Committee, Personnel Selection, Compensation and Development Committee and Chief of Good Governance: Thai Airways Public Company Limited. 2007-2009 - Chairman of Siam Realty & Services Co., Ltd. - Senior Legal Advisor to Bank of Ayudhya Public Company Limited. - Chairman: Ayudhaya Securities Public Company Limited. 2003-2007 - Senior Executive Vice President of Bank of Ayudhya Public Company Limited. Criminal Records in the past 10 years : None 0.07 % Shareholding in the Company (As at 30th December 2009) :

Annual Report 2009 L.P.N. Development PLC.

Mr. Thep Roongtanapirom Mr. Weerasak Wahawisal

Name Age Position Education

: : : -

Mr. Thep Roongtanapirom 65 years Director, Audit Committee, Nomination & Remuneration Committee, and Independent Director. Master of Business Administration, Finance and Accounting, Columbia University, USA. Bachelor Degree in Accounting (Honour), Thammasat University. Bachelor Degree in Commerce (Honour), 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), The Thai Institute of Directors Association (IOD). - Capital Market Academy (CMA 04/2007). Work Experiences in the past 5 years up to the present: Present - Director, Audit Committee, Nomination & Remuneration Committee, Independent Director, L.P.N. Development Public Co., Ltd. - Audit Committee of RCL Public Company Limited. Criminal Records in the past 10 years : None 0.02 % Shareholding in the Company (As at 30th December 2009) :

Name Age Position Education

: : : -

Mr. Weerasak Wahawisal 53 years Director, Audit Committee, Nomination & Remuneration Committee, and Independent Director. Master of Accounting Sciences, University of Illinois, U.S.A. Master of Business Administration, Ohio University, U.S.A. Bachelor of Business Administration (Honour), Thammasat University. Trainings Director Accreditation Program (DAP 63/2007) and Director Certification Program (DCP 91/2007), The Thai Institute of Directors Association (IOD) Work Experiences in the past 5 years up to the present: Present - Director, Audit Committee, Nomination & Remuneration Committee, Independent Director, L.P.N. Development Public Co., Ltd. - Vice President of Accounting Department of RCL Public Company Limited. - SVP Credit & Risk Management, Hutchison CAT Wireless Multimedia. - Head of Finance Support, TA Orange Co. Ltd. Criminal Records in the past 10 years up to the present: : None None Shareholding in the Company (As at 30th December 2009) :

Annual Report 2009 L.P.N. Development PLC.

Board of Directors Mr. Vudhipol Suriyabhivadh Mr. Tirachai Panchasarp

Name Age Position Education

: : : -

Mr. Vudhipol Suriyabhivadh 65 years Director, Nomination & Remuneration Committee, and Independent Director. Bachelor of Commerce, Accounting Branch, 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 up to the present: Present - Director, Nomination & Remuneration Committee, and Independent Director L.P.N. Development Public Co., Ltd. - Chairman, Chairman of Audit Committee and Independent Director of Thai Agri Foods Public Company Limited. - Audit Committee, Remuneration Committee, and Independent Director of Thai Wah Food Products Public Company Limited. - Chairman of Audit and Risk Management Committee and Independent Director of Laguna Resort and Hotel Public Company Limited. - Chairman of Audit Committee and Independent Director of Bangkok Ranch Public Company Limited. Criminal Records in the past 10 years : None : 0.12 % Shareholding in the Company (As at 30th December 2009)

Name Age Position Education Trainings

: : : : :

Mr. Tirachai Panchasarp 71 years Director Secondary School, Darasamutr School, Chonburi. Director Accreditation Program (DAP 26/2004), and Finance for Non-Finance Directors (FND 14/2004), From the Thai Institute of Directors Association (IOD). Work Experiences in the past 5 years up to the present: Present : Director, L.P.N. Development Public Co., Ltd. Criminal Records in the past 10 years : None : 0.24 % Shareholding in the Company (As at 30th December 2009)

Annual Report 2009 L.P.N. Development PLC.

Mrs. Jongjit Thapanangkun Mr. Tikhamporn Plengsrisuk

Name Age Position Education

: : : :

Mrs. Jongjit Thapanangkun * 63 years Director Master Degree, Faculty of Economics, Ramkhamhaeng University. Bachelor Degree, Faculty 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 (FND14/2004), From the Thai Institute of Directors Association (IOD) Work Experiences in the past 5 years up to the present: Present - Director, L.P.N. Development Public Co., Ltd. - Director, Burapa Golf and Country Club Co., Ltd. Criminal Records in the past 10 years : None 0.27 % Shareholding in the Company (As at 30th December 2009) : * Mrs. Yupa Techakraisri, Mrs. Jongjit Thapanangkun and Mr. Kumpee Chongthurakij are family members.

Name Age Position

: Mr. Tikhamporn Plengsrisuk : 60 years : Director, Chairman of Executive Board, Chief Executive Officer, and Nomination & Remuneration Committee. Education : Bachelor Degree in 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 up to the present: Present - Director, Chairman of Executive Board, Chief Executive Officer, and Nomination & Remuneration Committee, L.P.N. Development Public Co., Ltd. - Director, Pornsanti Co., Ltd. - Director, Lumpini Property Management Co., Ltd. - Director, Lumpini Project Management Services Co., Ltd. Criminal Records in the past 10 years : None 0.68 % Shareholding in the Company (As at 30th December 2009) :

Annual Report 2009 L.P.N. Development PLC.

Board of Directors Mrs. Yupa Techakraisri Mr. Pichet Supakijjanusan

Name Age Position Education

: Mrs. Yupa Techakraisri * : 59 years : Director and Executive Director. - Bachelor Degree in Economics, Ramkhamhaeng University. - Certificate of Advanced Accounting, Pitman Examination Institute. Trainings : Certification of Completion of Directors Certification Program (DCP 32/2003), From the Thai Institute of Directors Association (IOD). Work Experiences in the past 5 years up to the present: Present - Director and Executive Director of L.P.N. Development Public Co., Ltd. - Director of Pornsanti Co., Ltd. - Director of Lumpini Property Management Co., Ltd. - Director of Lumpini Project Management Services Co., Ltd - Director of Sri Sam Ang Supplier Co., Ltd. - Director and Executive Director of T. Krungthai Industries Public Company Limited. - Director of Grand Unity Development Co., Ltd. Criminal Records in the past 10 years : None 1.76 % Shareholding in the Company (As at 30th December 2009) : * Mrs. Yupa Techakraisri, Mrs. Jongjit Thapanangkun and Mr. Kumpee Chongthurakij are family members.

Name Age Position Education Trainings

: : : : :

Mr. Pichet Supakijjanusan 60 years Director, Executive Director, and Nomination & Remuneration Committee. Bachelor Degree in Architecture, Chulalongkorn University. Certification of Completion of Directors Certification Program (DCP 27/2003), Director Accreditation Program (DAP 26/2004), Finance for Non-Finance Directors (FND14 /2004) and Audit Committee Program (ACP 21 /2007), From Thai Institute of Directors Association (IOD) Work Experiences in the past 5 years up to the present: Present - Director, Executive Director, and Nomination & Remuneration Committee, L.P.N. Development Public Co., Ltd. - Director of Pornsanti Co., Ltd. - Director of Lumpini Property Management Co., Ltd. - Director of Lumpini Project Management Services Co., Ltd - Audit Committee and Independent Director of Merchant Partner Securities Public Company Limited. - Advisor to the Grand Unity Development Co., Ltd. Criminal Records in the past 10 years : None th 0.54 % Shareholding in the Company (As at 30 December 2009) :

Annual Report 2009 L.P.N. Development PLC.

Mr. Kumpee Chongthurakij Mr. Opas Sripayak

Name Age Position Education Trainings

: : : : :

Mr. Kumpee Chongthurakij * 55 years Director and Executive Director. Bachelor Degree in Business Administration, Assumption University. Certification of Completion of Directors Certification Program (DCP48/2004), From Thai Institute of Directors Association (IOD). Work Experiences in the past 5 years up to the present: Present - Director and Executive Director, L.P.N. Development Public Co., Ltd. - Director of Pornsanti Co., Ltd. - Director of Lumpini Project Management Services Co., Ltd - Director of Lumpini Property Management Co., Ltd. - Director of T. Krungthai Industries Public Company Limited - Director of S.S.A. Industry Co., Ltd. - Director of Sri Sam Ang Supplier Co., Ltd. - Honorary Chairman of Footwear Industry Club: The Federation of Thai Industries. Criminal Records in the past 10 years : None : 1.30 % Shareholding in the Company (As at 30th December 2009) * Mrs. Yupa Techakraisri, Mrs. Jongjit Thapanangkun and Mr. Kumpee Chongthurakij are family members.

Name Age Position Education

Mr. Opas Sripayak 47 years Director, Executive Director, and Managing Director. Bachelor in Architecture, Silpakorn University. Mini M.B.A., Thammasat University. Trainings : Certification of Completion of Directors Certification Program (DCP 71/2006), From Thai Institute of Directors Association (IOD). Work Experiences in the past 5 years up to the present: Present : Director, Executive Director, and Managing Director, L.P.N. Development Public Co., Ltd. 2005 - Assistant Managing Director of Lumpini Property Management Co., Ltd. 2001-2004 - Research and Development Manager of Lumpini Property Management Co., Ltd. Criminal Records in the past 10 years : None : None Shareholding in the Company (on 30th December 2009)

: : : :

Annual Report 2009 L.P.N. Development PLC.

2010 and development in all dimensions â&#x20AC;&#x153;The goal is not only to focus on proďŹ t and rewards for stakeholders but the goal is also to emphasize giving quality of life to society within the organization, as well as being responsible to the environment and the surrounding society.â&#x20AC;?

Competitive Environment Competition In 2009, the condominium market severely shrunk especially in the first half of the year when it shrunk by 60% due to the economic crisis which affected the market ever since the end of 2008, together with unstable political scene and the decision by consumers to wait to see the price of real estate. In any case, the condominium market still held the highest market share of around 42% due to popularity among the young generation, the price of gasoline which although lower than last year, still could increase. Most of the new condominiums that opened were by large developers with financial strength with a good reputation in the market with consumers and financial institutions. All of the projects opened last year were a success in terms of sales and took a 70% share of the market. Table comparing new condominium projects that opened between 2004-2009 Type Houses Condominiums Town houses Others

2009 19% 42% 33% 6%

2008 17% 29% 47% 7%

2007 12% 62% 19% 8%

2006 18% 52% 23% 7%

2005

2004

31% 29% 29% 11%

40% 23% 8% 29%

งบการเงินรวม (บาท)

Source: AREA, Reserch and Development Department, L.P.N. Development PCL

Condominiums opened in 2009 had around 25,000 units, down from 2008 which saw 33,000 units, a 24% decrease. The average unit sold for around 3 Million Baht and above (for upper level units) or around 26% of the total units. Units costing around 1-3 Million Baht (mid level units) were equal to 64% of the total units and units costing below 1 Million Baht (low level units) were 10% of the total units, based on a total of 64 projects, which is down from 2008 when 92 projects opened. Condominium units with an average sale price of 1-3 Million Baht have the highest competition in the market whereas, the market for units below 1 Million Baht has the fewest number of developers. Among listed companies, only the Company is developing this market. Table comparing new condominium projects that opened between 2004-2009 Sale Price

2009

2008

2007

2006

2005

2004

High Mid Low

26% 64% 10%

19% 70% 11%

17% 55% 28%

30% 60% 10%

23% 72% 5%

60% 34% 6%

Source: AREA, Reserch and Development Department, L.P.N. Development PCL not including the national housing project

Annual Report 2009 L.P.N. Development PLC.

The approximate number of competitors of the Companyâ&#x20AC;&#x2122;s size in comparison to competitors Based on the latest information from December 2008 collected by the R&D Department of the Company, there were 43 new condominium developers with 64 new projects opened with around 25,000 units, with 22 developers developing high level condominiums with around 6,311 units and 25 developers developing mid level condominiums with around 15,644 units and 1 developer developing low level condominiums with 2,568 units. The developer with the highest market share was L.P.N. Development PCL, with a 32% market share.

New Condominium Projects 40%

80,000 32%

60,000

40,000

21%

30%

20% 16%

20,000 9% 3,680

10%

11% 9,738

7,840 3,747

3,471

0% 2005

2006 LPN

2007 others

2008 2009 , LPN s Share

Annual Report 2009 L.P.N. Development PLC.

Table comparing new condominiums that opened between 2004-2009 Units Opened Bangkok Metropolis LPN Market Share

2009 24,523 7,840 32%

2008

2007

2006

2005

2004

32,982 3,747

59,501 9,738

39,459 3,471

17,438 3,680

15,040 4,287

11%

16%

21%

29%

Source: AREA, Reserch and Development Depatment, L.P.N. Development PCL not including the national housing project

The Companyâ&#x20AC;&#x2122;s R&D Department collected information on the number of condominium units opened in 2009 showing a total of 33,309 units with the Company holding 20% of the market or 6,281 units. High grade condominium units comprised 6,469 units or 18%, mid grade units comprised 21,192 units or 65% and low grade units comprised 5,648 units or 17%. Table comparing condominiums registered between 2004-2009 New Units

2009

2008

2007

2006

2005

2004

Bangkok Metropolis LPN

33,309 6,281

26,124 8,009

16,222 3,050

14,807 3,333

11,617 2,389

7,567 1,176

Market Share

20%

31%

19%

23%

21%

16%

Source: AREA, Reserch and Development Depatment, L.P.N. Development PCL not including the national housing project

Annual Report 2009 L.P.N. Development PLC.

Summary of the Real Estate Market in 2009 2009 was the year for large developers with financial capacity and a good reputation among consumers, who succeeded in terms of unit sales in new projects especially listed developers who accounted for 76% of new projects. But based on the first half of the year, the market was down since at the end of 2008 and new condominium projects that opened fell up to 60% compared to the previous year. Most developers rushed to get rid of stock in hand in anticipation of the crisis. In any case, the affect such as lower price of real estate, uncompleted buildings, NPLs for financial institutions and unemployment did not increase as many had feared while at the same time the political situation improved and political violence that started in April ceased quickly. Government stimulus programs helped the confidence index of consumers. By the end of 2009 most large developers started opening new condominium projects in spite the â&#x20AC;&#x153;Dubai Worldâ&#x20AC;? crisis which did not affect the domestic real estate market directly and there were numerous registrations of ownership of real estate to take advantage of the tax benefits (300,000 Baht tax allowances) which ended at the end of last year. Real Estate Business Forecast for 2010 In 2010, sources including the Companyâ&#x20AC;&#x2122;s research indicate that the economy will recover. Unemployment decreased to 1.1% in November. Unemployment in 2010 should not exceed 2%. However, at the same time, many people are worried about the price of gasoline and its affect on the price of raw materials and inflation, financial institutions being strict with lending practices, fierce competition, political unrest, prolonged political protests and a decision not to extend the real estate stimulus measures that made the market active in March, may see a slow down in the second trimester. The Board of Directors of the Company have plans to grow carefully in 2010 while managing risks and closely monitoring the situation, predicting growth of the Company at 20%. In 2010, in light of various factors such as BOI promotion measures which drives the condominium market with a low sales price, gasoline prices and the popularity of condominiums with mid range prices and the slowing down of new projects to wait and see the situation by many developers in the previous year, all should be factors that allow a large number of condominiums to open in 2010, as long as there are no surprises with the economy and politics more than expected. High priced condominium units in 2010 should be in line with the number seen in 2007, when 50,000-60,000 units were launched and growth should be twice as high as in 2008. Registration of condominium units in 2010, based on information by the R&D Department of the Company, should be approximately 40,000 units which is an increase from 2009 of around 20% with 1-3 Million Baht units taking a 70% share of the market and mostly condominiums launched in 2007-2008 in the Sukhumvit, Ratchada-Rama 9, Paholyothin and Latphrao areas. The price of gasoline is another factor that will influence the growth of the real estate business in addition to competition, economic trouble, social and political problems. Presently, there is a good chance that gasoline prices will increase continually which will affect consumers and may cause inflation as well as affect the price of construction materials. However, gasoline also directly affects the condominium business since many consumers become interested in condominiums in town more than in houses or town houses. So this is an opportunity in 2010. In any case, developers have to be careful of competition, higher costs, economic and political turmoil which will be risks on an ongoing basis.

Annual Report 2009 L.P.N. Development PLC.

Risk Factors The Board of Directors of the Company have delegated the executive board to be responsible for the risk of operations in the Company being at acceptable levels and in line with ever-changing circumstances. The risks and management of those risks must be approved by the Board of Directors of the Company and are deemed one of the main factors in the business strategy and plan each year. There is also follow up, control and reporting to the Board of Directors on a regular basis so that it coincides with the strategy and plan set by the Board of Directors of the Company. The Companyâ&#x20AC;&#x2122;s risk management plan is comprised of the following: - Identifying Risk is a step in identifying the risk and related factors that exist both within the country and from overseas and are constantly changing as well as predicting new risks that may arise in the future using information from inside and outside the organization. - Evaluation of Risk and Management of Risk is the stage in which various methods that are appropriate and have the involvement of the Board of Directors of the Company to evaluate the risk efficiently encompassing the risk and the result of the risk while at the same time looking for ways to manage or reduce the risk using accepted methods. - Following Up and Controlling Risk is the stage of following up and reporting on compliance with the plan for managing the risk as approved by the Board of Directors of the Company each trimester. If there are any risks arising that were not foreseen and may affect the business severely, the executive board may revise the plan and goals of the business as well as report the same to the Board of Directors for approval. In 2010, the Company has divided the risks and ways to manage the risk in 4 areas: 1. Financial Risk Even though it appears that in 2010 the crisis will get better and many expect the economy in the country to expand after being in negative numbers for several trimesters, the Company is cautious because the economy in the country and globally is still fragile. Therefore, the Company has set a moderate growth rate, has not over invested and will off load stock in hand as well as avoid financial risk which may affect the business severely while identifying the essential financial risks and ways to manage them as follows: 1.1 The Companyâ&#x20AC;&#x2122;s liquidity Risk Management - managing liquidity (cash flow) of the Company to be appropriate providing that the unencumbered cash flow has to be no less than 500 Million Baht at all times to be confident of carrying on construction of various projects under development until completion using cash flow of the Company. It is the duty of the Company to manage the cash to ensure that the capital cost and interest are not too high so they become a burden on the operations and proceeds decrease to reduce the affect of management of the risk to be at appropriate levels. 1.2 The strict lending practices of financial institutions to individuals Risk Management - Increase sales efficiency by educating customers about financial criteria of the financial institutions who need credit such as matching the price of condominium units with income, what to do while paying the down payment through installments namely, not creating any further debt before the loan is approved, not defaulting on any payments. The Company believes that such management will Annual Report 2009 L.P.N. Development PLC.

help reduce the number of rejections for financing by the financial institutions. The sales department also has to keep on selling even though the project is closed to expand the sales base in case some sales are cancelled or the financial institution does not approve the loan. - Increase the efficiency of considering the credit application of customers who want to apply for a loan from financial institutions from the time when the customer wants to reserve the unit and help file the application to the financial institution coordinating between the Company, the customer and the financial institution to maintain or improve the credit rating of the customer to obtain financing from the financial institution. - Managing financial institutions to have the same direction and goals as the Company to reduce the number of rejections for loans as per the strategy of the Company, while also managing the general facility for the project and individual facilities for the benefit of all parties. 2. Strategic Risk Since the Company has a strategy of business being to focus on developing condominiums for customers having middle level income to upper-low level income who need good quality residences. These are the main customers and exist in abundance. This is a good business opportunity and can help the Company grow up to now. However, this is also the source of risk, because if the market changes and effects the “confidence” such as during the financial crisis in 1997 it may cause the Company to suffer in terms of sales and income so the Company has to provide for a way to manage this type of risk as follows: 2.1 Market Confidence Risk Management - Use a strategy of cost per unit to increase sales by relying on the advantage of the Company in managing the capital cost to have efficiency (Cost Leadership) while maintaining value and appropriate revenue - Consider expanding to new locations to develop projects to expand the customer base and cover areas that still need residences with quality at appropriate prices - Consider reducing the number of projects in each location using information from the Company regarding development as tool to make decisions especially for “ground braking projects” which Company uses as “flagships” to expand locations for development to increase the awareness of the “Lumpini” brand - Increase the strength of the management and communication of the “brand” so that it is recognized widely and will support the strategy of expanding to new locations to succeed in developing the Company’s projects successfully - Adapt the strategy of managing customers by improving the building of “relationships” to build “experiences” that will lead to value of the service and will directly affect the “confidence” in the “Lumpini” brand 2.2 Focus Strategy Risk Management - Develop non condominium projects by subsidiaries - Consider expanding to locations to develop projects in provinces where the economy is expanding and there is a need for quality residences at a reasonable price under the “Lumpini” brand

Annual Report 2009 L.P.N. Development PLC.

3. Business Environment Risk It is a well known fact that the business environment changes rapidly and has wide spread effects due to the abundance of information and the transfer of capital that happens fast, speculation by transnational funds, all of which add risk. If the Company is not careful and does not closely follow the situation, over investment and lack of financial discipline may cause the business to encounter problems which may be difficult to solve especially for organizations that are not flexible. In addition, the demand for social rights has become strong especially for developing large scale projects in densely populated areas which take a long time to complete and can not avoid affecting the neighboring community with dust and air pollution and noise . Thatâ&#x20AC;&#x2122;s why the Company has a policy to be responsible for the environment and society as one of its dimensions in the strategy of the Company and has provided the method to manage the business environment risk as follows: 3.1 Awareness of Social Rights and the Environment Risk Management - Focusing on the environment and the community around the project being developed starting with selection of the plot of land to develop which has to be appropriate both for economic reasons and social reasons, ready with public utilities, appropriate roads to handle the traffic after opening, having several entrance and exit points to reduce the bottle neck affect all of which will reduce the affect on the environment and the neighboring community according to the Companyâ&#x20AC;&#x2122;s policy to be responsible to the environment and to society. - Providing a team of executives to conduct exercises with the community next to the project to build a good relationship between the company and the community where there may be uncontrolled circumstances occur in order to look for a solution and reduce the affect immediately. 3.2 Political Instability Risk Management - Specify reasonable growth rates for the Company - Manage the Company being flexible and ready to adapt to circumstances at all times using Core Values as the engine - Follow and analyze the situation closely 4. Operational Risks In times of fragile economy and fierce competition, the efficiency of operations is important in making the company able to operate on a continual basis, including sales management and marketing, construction management, community management. If any area lacks efficiency, the business may not succeed so the Company has to provide a role and increase the strength of management of the risk in this area as follows: 4.1 Efficiency in managing marketing, sales and customer service Risk Management -Increase the efficiency of managing costs for marketing by looking for new ways to communicate to reach target groups directly - Improve efficiency of sales personnel and sales teams who are the heart of the sales volumes of the Company - Improve the hand over and registration of the unit to be faster

Annual Report 2009 L.P.N. Development PLC.

4.2 Efficiency in Community Management Risk Management - Responsibility towards customers of the Company following handover is the Company’s policy and strategy that is important to the Company and has been developed over time by the Company. In 2010 the Company has specified that the community management division should manage the budget of the juristic person in a transparent and accountable manner as well as managing security in the project so that customers are confident in the “Lumpini” brand. 4.3 Efficiency in Construction Management Risk Management - In 2010 the Company has delegated the construction management division to be even stricter in managing 2 things, firstly, managing the capital costs and secondly managing quality of the product. The goal for projects under construction is to reduce cost of construction such as hidden costs at least 1% while maintaining quality of the product of the Company using an index of the satisfaction of customers about the product which has to be no less than 70% both of which are monitored by the board of executives and the board of directors. 4.4 Efficiency of Cost Management Risk Management - The Company’s forte is cost management which is especially important in affecting the sales price and has allowed the Company to fix a sale price that is lower than its competitors. In 2010, the price of gasoline is expected to rise and effect the price of construction materials making the direct cost higher than expected. The Company has managed this risk by ordering essential materials such as steel, aluminum, glass in advance and agreed on a price that is reasonable for traders in the alliance which will help the Company reduce risk of high cost from the fluctuating cost of construction materials. 4.5 Operations by divisions within the organization Risk Management - In 2009 the Company improved its reprocessing method to be more efficient in handling the crisis. In 2010 the Company will be even more strict in its core operation reprocess from the beginning of the process until completion in order to skip steps or reduce the amount of overlap of each division and increase speed and efficiency of the organization in general. - To control the fixed costs of the company which generally are caused by personnel so the Company has hired a third party contractor to work in some areas that have a minor impact pursuant to standard operating and quality specified by the Company.

Annual Report 2009 L.P.N. Development PLC.

Forecast for the Companyâ&#x20AC;&#x2122;s Operations in 2010 For the year 2010, based on information from several forecasts and the Companyâ&#x20AC;&#x2122;s internal information, an economic revival is predicted, including the spending power and the consumer confidence index. At the same time there are many risk factors both in terms of political uncertainty, gasoline prices that are suppose to increase, causing construction materials to be more expensive and inflation, financial institutions being strict with lending practices, increasingly fierce competition, uncertain weather patterns and natural disasters worldwide and the government deciding not to extend measures that stimulated the real estate sector for a short period in March, the sector should become more quiet in the second trimester. The Board of Directors of the Company has therefore made plans for operations in 2010 to grow carefully while at the same time managing risk and monitoring the situation closely, setting the growth of the Company at an estimated 20%. Realized income for the Company this year from sales should be around 9.6 Billion Baht from 6 projects completed this year, namely, Lumpini Ville Bangkhae, Lumpini Place Rama 9-Ratchada, Lumpini CondoTown Ramindra-Nawamin, Lumpini CondoTown Bangkhae, Lumini Ville Ratburana-Riverview and Lumpini Ville Latphrao-Chokechai 4 opened for sale in November 2009. The total value of these 6 projects is 7.73 Billion Baht and at the end of 2009, the Company had sales that was unrealized income in the amount of 10.5 Billion Baht with 7.2 Billion Baht of unrealized income in 2010. The Company has a goal of clearing stock in hand worth around 1.995 Billion Baht at the end of 2009 within the 3rd trimester of 2010 by increasing sales activities and marketing expenses. In order to allay fears that the financial institutions will not grant credit, the Company has established a division to inspect the customers credit in cooperation with the financial institution to reduce the number of customers that are denied credit by financial institutions to be lower than the number in 2009 during which period around 10-12% of applications were denied. The Company has plans to open 6-8 new projects worth a total of 13-15 Billion Baht with a sales target of 13 Billion Baht or growth of around 30% from the previous year in which sales were equal to around 10.8 Billion Baht which will be the income of 2010 and 2011. The Company has already purchased 2 plots of land, namely Lumpini Place Ratchayothin and Lumpini Place Rama 4-Kluaynamthai, scheduled to open on March 20, 2010. Another 2-3 plots of land are being considered for development in the first half of the year as income for 2012. The Company is confident that it can survive under the philosophy of sufficiency economy by being moderate (setting growth targets and profit at appropriate levels), immunity levels (risk management) and being reasonable, such as building quality condominiums in the city which is one of the 4 basic needs of life and the fact that the Companyâ&#x20AC;&#x2122;s customers truly want quality living while at the same time considering a balance of all dimensions with care, under a system of risk management that is part of the business plan based on internal and external information and the experience from facing crisis and relying on methods of management that take into consideration responsibility for the environment and society, equality of all groups of stakeholders under principals of transparency, disclosure and accountability all of which will ensure that the Company grows on a continual basis.

Annual Report 2009 L.P.N. Development PLC.

L.P.N. Strategy Map 2010

Sales Value Growth Optimized Profit

Product Value

Financial Perspective Shareholders’ Sustainable Wealth

Customer Perspective Trusted Brand “Lumpini”

Corporate Governance

Service Value Vibrant Community

In Process

CESR Perspective Environment and Social Responsibility

Out Process

Internal Process Perspective Operation Effectiveness

Back Office

LPN Green

Front Line Reprocess

Core Values Training & Development

Reprocess People Perspective Quality Organization

Annual Report 2009 L.P.N. Development PLC.

Career Growth Work Life Balance

Adherence to principles of good corporate governance that is open and transparent

Audit Committee Report 2009 The Audit Committee of L.P.N. Development Public Company Limited comprises 3 independent directors, who are qualified, knowledgeable and experienced in organization management and finance, with Mr. Amornsuk Noparumpa as the Chairman of Audit Committee, Mr. Thep Roongtanapirom and Mr. Weerasak Wahawisal as Audit Committee, and Miss Paverisa Vasithtrakul as Secretary of Audit Committee. In 2009, the Audit Committee held a total of 4 meetings - all with the Audit Committee and Secretary in attendance, which included the Audit Committee internal meetings, specific meeting with the auditor, and joint meeting with the Management and auditor.The main issues of the meetings can be summarized as follows: 1) Reviews of Financial Statements. The Audit Committee reviewed the quarterly and annual financial statements of the year 2009, in joint meetings with the Management and auditor - who attended all meetings. Consideration were made on the financial statements of 3 subsidiary companies, namely Lumpini Property Management Co., Ltd., Lumpini Project Management Services Co., Ltd., and Pornsanti Co., Ltd., the views of the meetings on such subjects would be included in the financial statements of the parent company. In this respect, inquiry and explanation had been made to ensure that the information used in financial reports had been properly prepared in accordance with accounting standards and laws, as well as sufficiently disclosed in notes to financial statements to the satisfaction of all concerned, before approval of those financial statements. 2) Reviews of Risk Management. The Audit Committee continuously made recommendations on improvement of work system to reduce business, social, and environmental risks; besides giving risk management guidelines for sustainable development. The Audit Committee also attached greater importance to risk management, by monitoring the performance of the Executive Board by reading minutes of meeting of the Executive Board who held meetings once a week. 3) Reviews of Corporate Governance. The Audit Committee reviewed internal control system, through internal audit reports and quarterly financial reports, with consideration on asset management, resource utilization, error or waste reduction, leakage or fraud prevention, compliance with relevant rules and regulations. On this, the financial reports and internal audit reports present the same opinions that no significant shortcomings or issues were found, and that the Companyâ&#x20AC;&#x2122;s internal control is sufficient. Cooperation was also rendered to the Management very closely, by giving a policy to the Internal Audit Department to conduct specific examinations according to the requirement of the Management, so as to ensure that the operations of the Company be carried out transparently. 4) Governance of Internal Audit. The Audit Committee considered and approved the internal audit plan, and reviewed the operational performance of Audit Department, with emphasis on audit results that are critical for good corporate governance, and development of preventive audit and continuous value creation, to benefit all work units by improving efficiency and by monitoring the performance of the staff whose duties are to manage condominium building juristic persons to ensure that they carry out their works according to the instructions given by the condominium building juristic person boards, by reviewing the minutes of meeting of such condominium building juristic persons. In addition, the Audit Committee also considered the good deeds of the Head of Internal Audit Department. 5) Revision of Charter of Audit Committee had been continuously made so as to make it up-to-date according to the principle of good governance. 6) Appointment of Auditor for the Year 2010. The Audit Committee considered the performance of the certified public accountant in the previous year and agreed to propose DIA International Accounting Office as the auditor of the Company in 2010, including the auditing services, to the Board of Directors for approval in the Annual General Shareholders Meeting on 8th April 2010.

Annual Report 2009 L.P.N. Development PLC.

On behalf of the Audit Committee

Mr. Amornsuk Noparumpa Chairman of Audit Committee 29th January 2010

Report on Responsibility of Financial Statements Audit and Corporate Governance The Audit Committee stresses the importance of financial statements that have been prepared in accordance with generally-accepted principles, with sufficient and prompt disclosure of information, in which significant accounting transactions such as related transactions are transparent and verifiable; to ensure that the Company has adhered to the norms of business operation, for the benefit of users of financial statements or investors to be confident in reliability of financial information. The Audit Committee oversees corporate governance, by emphasis on 5 issues of internal controls, namely: 1) organization and environment excellence, e.g. a written code of business conducts and ethics, 2) appropriate risk management, e.g. establishment and implementation of risk reduction measures, 3) management controls, e.g. establishment of clear power of authorization, division of finance and accounting responsibilities for mutual check and balance, transactions with major shareholders regarded as transactions with external parties, 4) up-to-date information technology and communication systems, e.g. prompt and adequate information for decision support of the Company’s directors, 5) monitoring system, e.g. direct audit reports to The Audit Committee to ensure independence of and straightforward presentation by internal auditors. The Audit Committee is of an opinion that the Company has appropriate and sufficient internal control, which is a guideline that is quite favourable to the business operation with good corporate governance.

การปฏิบัติหน้าที่และความรับผิดชอบของคณะกรรมการ

Annual Report 2009 L.P.N. Development PLC.

Report of Nomination and Remuneration Committee The Nomination and Remuneration Committee is appointed by the Board of Directors, whereby it is specified that the proportion of independent directors shall be more than one-half of the total number of the committee members of 7 persons, whose term is 2 years, as follows: 1. Mr. Amornsuk Noparumpa Chairman of Audit Commitlee and Independent Director 2. Mr. Tawechai Chitasaranachai Vice Chairman and Independent Director 3. Mr. Thep Roongtanapirom Audit Committee and Independent Director 4. Mr. Weerasak Wahawisal Audit Committee and Independent Director 5. Mr. Vudhiphol Suriyabhivadh Independent Director 6. Mr. Tikhamporn Plengsrisuk Chief Executive Officer and Executive Chairman 7. Mr. Pichet Supakijjanusan Executive Director Mrs. Somsri Techakraisri is the secretary to the Nomination and Remuneration Committee. The Nomination and Remuneration Committee has the duties and responsibilities as stated in the charter of the Nomination and Remuneration Committee as follows: Nomination 1. Propose criteria and guidelines on selection of directors, sub-committee members, and executives. 2. Select, nominate, and propose qualified persons to assume the posts of directors, sub-committee members, and executives, to the Board of Directors for consideration. 3. Propose criteria and guidelines on assessment of the performances of the directors and the chief executive officer. Remuneration 1. Propose criteria and guidelines on fixing remuneration of directors, sub-committee members, executives, and staff of the company. 2. Consider revising policy and structure relating to remuneration of directors, sub-committee members, executives and staff of the company, so that it be in line with the situation of the labour market at the time for proposing to the Board of Directors. In 2009, the Nomination and Remuneration Committee held a total of 6 meetings to consider various matters according to the roles and duties and proposed same to the Board of Directors for consideration. The matters duly considered by the Committee can be summarized as follows: 1. Considered and concluded the results of Board self-assessment in 2008. 2. Considered the qualifications of the person holding the position of managing director of Lumpini Project Management Services Company Limited, which is a subsidiary company. 3. Considered revising the form of Board self-assessment, the form of cross assessment, the form of Board assessment, and the form of chief executive officer assessment, for use in the assessments of directors in 2009. 4. Considered criteria and guidelines on selection of directors, sub-committee members, and executives. 5. Considered mid-year bonus payment and annual bonus payment of staff for 2009. 6. Considered payment of remuneration of staff in 2010. 7. Considered the gratuities of 2009. 8. Considered the directorsâ&#x20AC;&#x2122; remuneration of 2010 9. Considered the gratuities of 2009 and the wages of the executive directors of 2010. 10. Considered the list of names and qualifications of directors who completed their office term for the nomination and re-appointment as directors. 72

Annual Report 2009 L.P.N. Development PLC.

In 2009, the Nomination and Remuneration Committee was committed to prescribing criteria and guidelines on operations according to its roles, duties and responsibilities, so as to create a criterion of the company to an extent that it may have its own customs and principle of practices which would only bring about clarity, transparency, and fairness according to the guidelines on good corporate governance, especially in the matter relating to directors assessment, whereupon it was prescribed that a director shall assess himself/herself and also be assessed by 3 fellow directors; criteria on selection of directors, sub-committee members, or executives, by compiling the guidelines on practices of same and making certain adjustments thereto so that they be a more complete standard. In considering the remuneration of the staff as well as various committees, the Nomination and Remuneration Committee did exercise its knowledge and experience on such consideration discreetly, fairly, and in conformity with the roles, duties, and burdens of those concerned in each position, whereby comparisons were made to the industrial data and the remuneration data from the Report of the Stock Exchange of Thailand based on the results of operations and the economic situation according to suitability.

(Mr. Amornsuk Noparumpa) Chairman of Nomination and Remuneration Committee 24th February 2009

Annual Report 2009 L.P.N. Development PLC.

Changes to the Management Structure 1994

- The Company was listed on the SET as a public company on June 21, 1994 with a board of directors comprising 16 persons as follows: 1. Mr. Chamlong Ratanakul Serirenglit Chairman of the Board of Directors 2. Mr. Phong Sarasin Vice Chairman of the Board of Directors 3. Mr. Pakorn Thavisin Vice Chairman of the Board of Directors 4. Mr. Tawechai Chitasaranachai Chairman of the Executive Board 5. Mr. Siri Keiwalinsrit Director 6. Mr. Mora Boonyaphala Director 7. Mr. Thep Roongtanapirom Director 8. Mr. Tirachai Panchasarp Director 9. Mrs. Jongjit Thapanangkun Director 10. Mr. Sirichai Charoensakwattana Director 11. Mr. Charles Yi Kwong Lee Director 12. Mr. Somkiat Tangthaworn Director 13. Ass. Pro. Dr. Somchai Phakaphasvivat Director 14. Mr. Tikhamporn Plengsrisuk Director 15. Mrs. Yupa Techakraisri Director 16. Mr. Pichet Supakijjanusan Director - Mr. Chamlong Ratanakul Serirenglit resigned as Chairman of the Board of Directors due to health reasons and Mr. Phong Sarasin resigned from the Board of Directors due to business reasons so the Board of Directors invited Mr. Mora Boonyaphala to act as Chairman of the Board of Directors

1997

1998

- Mr.Pakorn Thavisin resigned as an independent director due to economic conditions showed signs of causing a conflict of interest with the Company and Ass. Pro. Dr. Somchai Phakaphasvivat resigned from the Board of Directors due to busy schedule and the Board of Directors invited Mr. Vudhiphol Suriyabhivadh to be a director and independent director of the Company

2000

- The meeting of the Board of Directors of the Company on February 1, 2000 passed a unanimous resolution to appoint an audit committee comprised of the following: Chairman of Audit Committee Professor Siri Keiwalinsrit Audit Committee Mr. Vudhiphol Suriyabhivadh Audit Committee Mr. Thep Roongtanapirom Secretary to Audit Committee Mrs. Woranuch Jintaphitak as well as setting forth the scope, authority and responsibilities according to the provisions of the SET for corporate governance

2001

- The meeting of the Board of Directors passed a unanimous resolution to appoint the same audit committee that had been working for the extent of its 2 year term to one more term

2002

- The Board of Directors of the Company proposed for the meeting to appoint Mr.Pakorn Thavisin as the Vice Chairman of the Board of Directors

2004

- The Company supported the Board of Directors to undergo training at the IOD and the SET with the following topics 1. Director Certifification Program 2. Board Performance Evaluation 3. Finance for Non-Finance Directors 4. Director Accreditation Program 5. CEO Performance Evaluation 6. New COSO Enterprise Risk Management

Annual Report 2009 L.P.N. Development PLC.

2005

- Professor Mora Boonyaphala passed away on July 30, 2005 and the meeting of the Board of Directors no 4/2005 passed a resoltion to appoint Mr.Pakorn Thavisin as the Chairman of the Board of Directors from August 11, 2005 - The Board of Directors appointed Mr. Amornsuk Noparumpa as an independent director from December 22, 2005 - The Board of Directors appointed the same audit committee for a further term from February 1, 2006 - April 30, 2007 with the following persons 1. Professor Siri Keiwalinsrit Chairman of Audit Committee 2. Mr. Thep Roongtanapirom Audit Committee 3. Mr. Vudhiphol Suriyabhivadh Audit Committee 4. Mr. Amornsuk Noparumpa Audit Committee

2006

- Appointed Mr. Tikhamporn Plengsrisuk as the chairman of the executive board in place of Mr. Tawechai Chitasaranachai who resigned effective on January 1, 2006 - Appointed Professor Siri Keiwalinsrit and Mr. Tawechai Chitasaranachai as vice chairman of the Board of Directors effective from April 25, 2006 - Appointed Mr. Weerasak Wahawisal as a director effective from April 25, 2006 and appointed Mr. Amornsuk Noparumpa and Mr. Weerasak Wahawisal as audit committee directors in place of Professor Siri Keiwalinsrit and Mr. Vudhiphol Suriyabhivadh who resigned effective from April 25, 2006 until April 30, 2007 with the following 3 directors comprising the audit committee 1. Mr. Amornsuk Noparumpa Chairman of Audit Committee 2. Mr. Thep Roongtanapirom Audit Committee 3. Mr. Weerasak Wahawisal Audit Committee - Appointed Mr. Opas Sripayak as an executive director and the managing director effective as of April 25, 2006

2007

- The meeting of the Board of Directors no 5/2007 held on November 8, 2007 appointed a committee to consider the remuneration of the Board of Directors executives and personnel of the organization. - The annual general meeting of shareholders for 2007 was held on April 26, 2007 and invited the shareholders to visit Lumpini Place Narathiwat-Chaophraya following the meeting so that they could understand the business of the Company as well as to build a good relationship between the Company and shareholders - The Company supported the Board of Directors to undergo training at the IOD and the SET with the following topics 1. Director Certifification Program 2. Director Accreditation Program 3. Role of the Chairman Program - The Company held an orientation for new directors by presenting the overall status of the business, vision, obligations, strategies, risks and risk management as well as the regulations and governance policies and delegated the directors ethics,as well as taking them on a tour of the Company in order to obtain a better, in depth understanding of the operation of the business.

Annual Report 2009 L.P.N. Development PLC.

- The Company arranged for an evaluation of the performance of the Board of Directors to improve their performance in the following areas: 1. Readiness of the directors 2. Strategy Setting and Policy Making 3. Risk Management and Internal Control 4. Ensuring that there is no Conflict of Interest 5. Financial and Operational Reporting 6. Board of Directors Meetings 7. Others, namely, selection and appointment of directors, considering directors remuneration and evaluating the performance of the managing director. 2008

- The Board of Directors meeting no 3/2008 held on April 24, 2008 passed a resolution as follows: 1. Appoint the following directors 1. Mr.Pakorn Thavisin Chairman 2. Professor Siri Keiwalinsrit Vice Chairman 3. Mr. Amornsuk Noparumpa Director 4. Mr. Tikhamporn Plengsrisuk Chief Executive Officer 2. Appointed the Audit Committee for 2 year term from May 1, 2008 to April 30, 2010 with the following pesons 1. Mr. Amornsuk Noparumpa Chairman of Audit Committee 2. Mr. Thep Roongtanapirom Audit Committee 3. Mr. Weerasak Wahawisal Audit Committee - The Board of Directors of the company meeting no 7/2008 held on November 6, 2008 appointed a nomination and remuneration committee comprised of the following persons: 1. Mr. Amornsuk Noparumpa Chairman of the Nomination and Remuneration Committee 2. Mr. Tawechai Chitasaranachai 3. Mr. Thep Roongtanapirom 4. Mr. Weerasak Wahawisal 5. Mr. Vudhiphol Suriyabhivadh 6. Mr. Tikhamporn Plengsrisuk 7. Mr. Pichet Supakijjanusan

2009

- On March 12, 2009 the Board of Directors of the Company visited various projects to see the progress with construction and hand over to customers, namely: - Lumpini Place Pinklao 2 - Lumpini Suite Pinklao - Lumpini Rama 8 - The Board of Directors meeting no 2/2009 on April 28, 2009 resolved that: 1. Mr. Tawechai Chitasaranachai Vice Chairman of the Board of Directors and director on the Nomination and Remuneration Committee 2. Mr. Weerasak Wahawisal Audit Committee and director on the Nomination and Remuneration Committee 3. Mrs. Yupa Techakraisri Director 4. Mr. Opas Sripayak Director

Annual Report 2009 L.P.N. Development PLC.

- On October is, 2009 the Board of Director visited : 1. Lumpini Place Phahon-Saphankwai 2. Lumpini Place Ramindra-Laksi - In November 2009 the Board of Directors namely Mr. Amornsuk Noparumpa and Mr. Thep Rungthanaphirom attended training in Role of Compensation Committee (RCC 9/2009) with the IOD for 2009 with the topics 1. Evaluating the board of directors 2. Evaluating directors on the board of directors 3. Evaluating the CEO

Annual Report 2009 L.P.N. Development PLC.

Management Structure The management structure of L.P.N. Development PCL as of December 31, 2009 is comprised of 4 boards of directors namely: 1. The Board of Directors of the Company 2. The Audit Committee 3. The Executive Directors 4. The Nomination and Remuneration Committee Details are as follows: Board of Directors of L.P.N Development PCL pursuant to the Affidavit registered with the Ministry of Commerce is comprised of 14 directors who have experience and expertise. The 14 directors are as follows: - Independent Directors 7 persons (50%) - Non Executive Directors 2 persons (14.3%) - Executive Directors 5 persons (35.7%) The names of the directors on the Company’s board of directors is as follows: 1. Mr.Pakorn Thavisin Chairman and Independent Director 2. Professor Siri Keiwalinsrit Vice Chairman and Independent Director 3. Mr. Tawechai Chitasaranachai Vice Chairman and Independent Director 4. Mr. Amornsuk Noparumpa Independent Director 5. Mr. Thep Roongtanapirom Independent Director 6. Mr. Weerasak Wahawisal Independent Director 7. Mr. Vudhiphol Suriyabhivadh Independent Director 8. Mr. Tirachai Panchasarp Non-Executive Director 9. Mrs. Jongjit Thapanangkun Non-Executive Director 10. Mr. Tikhamporn Plengsrisuk Executive Director 11. Mr. Pichet Supakijjanusan Executive Director 12. Mrs. Yupa Techakraisri Executive Director 13. Mr. Kumpee Chongthurakit Executive Director 14. Mr. Opas Sripayak Executive Director Ms. Somsri Techakraisri is the secretary to the Board of Directors of the Company The Company has 7 independent directors who have qualifications according with the SEC and SET regulations. 1. Holding shares not exceeding one percent of the total number of voting rights of the Company, its parent company,subsidiary, affiliate, principal shareholder or controlling person of the Company, including the shares held by related persons of the independent director; 2. The director is not an executive director, employee, staff, or advisor who receives salary, or a controlling person of the Company,its parent company, subsidiary, affiliate, same-level subsidiary, principal shareholder or controlling person of the Company,unless the foregoing status has ended not less than two years prior to the date of appointment not being a person related by blood or registration under laws, such as father, mother, spouse, sibling, and child, including spouse of the children, executives, major shareholders, controlling persons, or persons to be nominated as executive or controling persons of True or its subsidiary; 3. The director does not have a direct or indirect interest with the Company, whether as professional, trade, business, financial or management of the Company, its subsidiary, affiliates or majority shareholders of the Company; 4. If necessary, in unusual circumstances which cannot be on regular basis and independent director may have a relationship while a director provided that it is approved by a unanimous resolution of the Board of Directors first and it is disclosed in the filing form in the annual report (Form 56-1) and in the annual report (Form 56-2) and if the same director is going to be elected for another term, it has to be diclosed in the agenda for the annual general meeting of shareholders for approval.

Annual Report2552 ÃÒÂ§Ò¹»ÃÐ¨Ó»‚ 2009ºÃÔL.P.N. ÉÑ· áÍÅ.¾Õ Development .àÍç¹.´ÕàÇÅÅÍ»àÁ¹· PLC. ¨Ó¡Ñ´ (ÁËÒª¹)

5. The director is independent to perform his duties and provide opinions and report as instructed by the Board of Directors independently without being under the control or being a representative of the Company or the majority shareholder or those involved with the majority shareholder of the Company. 6. The director is not a person who has been appointed as a representative of the Company’s director, major shareholder or shareholders who are related to the major shareholder; 7. Not having any characteristics which make him/her incapable of expressing independent opinions with regard to the Company’s business affairs. Authority and Responsibilities of the Board of Directors The Company has set forth the duties and responsibilities of the directors pursuant to principals of good corporate governance of the SET and policy regarding directors of listed companies as follows: 1. Compliance with provisions of law, objectives, articles of association and resolutions of the Board of Directors, honestly, with care and responsibly on a regular basis in the best interest of the shareholders equally. 2. Provide the vision, strategy, policy, direction of the Company’s operations and manage the implementation of the policy efficiently and effectively to add maximum value to the Company and shareholders. 3. Disclose information about shareholders, investors and stakeholders accurately, transparently and in a timely manner. 4. Provide internal control mechanisms and efficient audits. 5. Provide risk management that is efficient and is followed up regularly. 6. Provide management according to principals of good corporate governance and follow up regularly. 7. Provide a secretary of the company to assist with management of the business of the Board of Directors and to help the directors to comply with laws and regulations. 8. Provide business ethics guidelines for the directors, executives and staff as a guideline for operating within the Company. 9. The Board of Directors can obtain opinions from academics about business by hiring external advisors at the Company’s cost. 10. Provide the days, times and venues for the AGM and the agenda for the meeting, the date for closing the share registry and consider a summary of the business for proposal to the shareholders. In 2009, the Board of Directors held 6 scheduled meetings and one extraordinary meeting and had one meeting in the form of a tour of the Company’s project and there was one shareholder’s meeting. Election and Removal of Directors The Nomination and Remuneration Committee has the duty to select persons qualified to act as the Company’s directors by selecting people with the qualifications, experience and expertise of professionals, leaders with vision who have ethics and virtue and a transparent history and an ability to show their opinions independently. The committee proposes the appropriate person to the Board of Directors of the Company for approval prior to being proposed to the shareholders meeting for election. In the event a directors position is vacant, without the director’s expiry of the term, the committee will propose the appropriate candidate to the Board of Directors of the Company to be elected by the Board of Directors for the vacant position, pursuant to the articles of association of the Company. In the articles of association of the Company, Chapter 3 regarding board of directors Article 11 states that the shareholder’s meeting will elect the Board of Directors of the Company pursuant to the following criteria: “At each annual general meeting of shareholders of the Company, one out of three of the directors shall step down from office. If the number of directors cannot be divided by 3, then the number closest to one third will resign. Directors that must resign in the first or second year after the Company was registered shall draw lots. In later years, the director that has been in the position for the longest time shall resign from office. If there are directors who were in office for the longest period more than the required resignations, they shall draw lots. Directors that retire are eligible for reelection.

Annual Report 2009 L.P.N. Development PLC.

Audit Committee The board of directors appointed the audit committee with 3 directors as follows: 1. Mr. Amornsuk Noparumpa Chairman of Audit Committee 2. Mr. Thep Roongtanapirom Audit Committee 3. Mr. Weerasak Wahawisal Audit Committee Ms. Paweerisa Wasitrakul Secretary to the Audit Committee The audit committee is comprised of directors of the Company who are independent as per the SET announcement and the SEC with Mr. Thep Roongtanapirom and Mr. Weerasak Wahawisal who have expertise in accounting and finance. The Audit Committee holds numerous meetings and reports to the Board of Directors whereas in 2009 there were 4 meetings. The Audit Committee has the duty and obligation to be independent in supporting the performance of the Company in managing problems and conflicts and obtaining financial information for the public and the shareholders and the Board of Directors for internal auditing and communication with the Company financial auditors. In order to comply with Chapter 3/1 of the SEC Act (No.4) 2008, the Board of Directors meeting no 1/2008 held on February 19, 2009 passed a resolution to change the duties and obligations of the Audit Committee to be even more strict in line with the SEC announcement regarding qualifications and scope of operations of the Audit Committee 2008 Duties and Obligations of the Audit Committee 1) To ensure that the Company provides financial reports that are accurate and are adequately disclosed and that the Company implements internal controls and internal audits appropriately and that efficiently 2) To consider and appoint the auditor of the Company as well as to consider the auditorâ&#x20AC;&#x2122;s remuneration 3) To ensure that the Company complies with laws regarding securities and exchange or laws or the shareholders resolutions related to the business of the Company 4) To advise the executives to adjust the ways of operating or to reduce risk for more efficient operations 5) Advise on good corporate governance policies and follow up and report on the same 6) Provide the scope of internal auditing and consider reporting to the internal auditor 7) Advise the board of directors on appointment, transfer, removal and compensation as well as evaluation of the secretary of the Audit Committee 8) Provide an external advisor to assist in the Audit Committees work as deemed fit by the Board of Directors 9) To perform other duties as delegated by the Board of Directors of the Company and as the Audit Committee deems fit 3. Executive Committee The Company has 5 executive directors as follows: 1. Mr. Tikhamporn Plengsrisuk Chief Executive Officer 2. Mr. Pichet Supakijjanusan Executive Director 3. Mrs. Yupa Techakraisri Executive Director 4. Mr. Kumpee Chongthurakit Executive Director 5. Mr. Opas Sripayak Executive Director and Managing Director The Executive Committee was appointed with the approval of the Board of Directors comprised of 4 of the Companyâ&#x20AC;&#x2122;s executive directors with one of them being the top executive, selected from persons with knowledge and expertise and understanding of the role, duty and responsibility while understanding the work and the business of the Company very well. It and has the duty to oversee management of the business of the Company to be in accordance with the policy established by the Board of Directors with the best interests of the Company and the benefit of the shareholders. In 2009 it held 29 scheduled meetings and 2 extraordinary meetings for a total of 31 meetings.

Annual Report 2009 L.P.N. Development PLC.

The duties and obligations of the executive committee 1. To govern and operate the business of the Company 2. To set the policies, vision, mission and strategy of the Company’s and subsidiary’s business 3. Manage the business to achieve the goals that have been set 4. Consider the direction of investment and expansion of business base 5. Consider and mange the budget as approved by the Board of Directors 6. Consider and approve of investment in projects or activities outside of the business plan that has been approved by the Board of Directors in an amount not exceeding 10,000,000 Baht per transaction 7. To carry out the following transactions as delegated by the Board of Directors: 7.1) Registration of land sale-purchase transactions, land and buildings, buildings and condominiums 7.2) Registration of leases of land with buildings, buildings and condominiums 7.3) Registration of mortgages, enforcement of mortgages, release of mortgages of land, land with buildings, buildings and condominiums 7.4) Applying for measurement of land, land title deeds, division and combining of land 7.5) Registration of encumbrances on land 7.6) Registration of condominiums, juristic persons, appointment of condominium juristic persons, election/appointment of the committee of the condominium juristic person 7.7) Executing loans, contracts with banks and financial institutions and opening savings accounts 7.8) To appoint other persons to act on its behalf to enter into juristic acts related to the Company’s business as described in 7.1-7.8 above 8. Advise and/or recommend management to high ranking executives 9. Consider and/or specify persons to hold the position of high ranking executive of the Company or subsidiaries 10. Consider other issues as delegated by the Board of Directors of the Company 4. Nomination and Remuneration Committee The Nomination and Remuneration Committee is comprised of 7 persons including 5 independent directors and 2 executive directors as follows: 1. Mr. Amornsuk Noparumpa Chairman of Nomination and Remuneration Committee (Independent Director) 2. Mr. Tawechai Chitasaranachai Independent Director 3. Mr. Thep Roongtanapirom Independent Director 4. Mr. Weerasak Wahawisal Independent Director 5. Mr. Vudhiphol Suriyabhivadh Independent Director 6. Mr. Tikhamporn Plengsrisuk Chief Executive Officer and Executive Chairman 7. Mr. Pichet Supakijjanusan Executive Director Ms.Somsri Techakraisri is the secretary to the Nomination and Remuneration Committee. In 2009, there were a total of 6 meetings based on the following charters:

Annual Report 2009 L.P.N. Development PLC.

Criteria and Qualifications 1. The Board of Directors of the Company appointed the nomination and remuneration committee to have no more than 7 persons 2. The Nomination and Remuneration Committee should be comprised of mostly independent directors. The minority of the directors should be executives 3. The Nomination and Remuneration Committee should select 1 director that is independent as the chairman of the Nomination and Remuneration Committee 4. The Nomination and Remuneration Committee consider and propose persons to act as the secretary to the Nomination and Remuneration Committee Remark :The difinition of the committee in the charter is the Board of Directors of L.P.N. Development PCL Term and Compensation 1. The Nomination and Remuneration Committee has a term of 2 years with the first committee beginning from November 6, 2008 until April 30, 2010 2. Other than leaving the position through the expiry of the term, the Nomination and Remuneration Committee member may leave office upon (1) Death (2) Resignation (3) Lacking the qualifications or having characteristics that are forbidden under law for a public company and/or the SEC Act and/or as the SEC and SET provide (4) The Board of Directors passes a resolution to leave 3. The Nomination and Remuneration Committee can resign by submitting a resignation letter to the Chairman of the Board of Directors 4. In the event that a position is vacant due to a reason other than resignation due to expiry of term, the Board of Directors shall select a Company director on the board to hold the position on the nomination and remuneration committee in the vacant position for the remainder of the term of the vacant position 5. The Nomination and Remuneration Committee that has left the position may be reelected. 6. The Nomination and Remuneration Committee will receive compensation as provided by the shareholders meeting Duties and Responsibilities 1. Nomination 1.1 Propose guidelines for nomination of directors of the Company and for all sub committees as well as for high ranking executives 1.2 Select and propose the person with the appropriate qualifications for positions as directors of the Board of Directors of the Company, sub committees and high level executives for the Board of Directors to consider 1.3 Propose guidelines for remuneration of the directors of the Company and the CEO 2. Consideration of Remuneration 2.1 Propose guidelines for remuneration for the directors of the Company, sub committees and high ranking executives of the Company 2.2 Consider improving the policy and structure for managing the compensation of directors of the Company, sub committees and high level executives and personnel of the Company to coincide with labor markets at the time for the Board of Directors to consider Meetings 1. The Nomination and Remuneration Committee shall hold a meeting at least once a year 2. The meeting of the Nomination and Remuneration Committee shall have more than half the number of all directors present with more independent directors present in order to constitute a quorum 3. The resolution of the Nomination and Remuneration Committee shall be passed by a majority of those directors present at the meeting and a quorum is reached. Any director who has an interest in any agenda shall not vote on such agenda

Annual Report 2009 L.P.N. Development PLC.

Summary of Attendance to Meetings of the various Directors In 2009, the various directors met as per the details below: Board of Directors of the Company The Board of Directors of the Company has to meet no less than once per trimester and in 2009 the Board of Directors of the Company held 6 meetings with one meeting taking place as a visit to the project for a total of 7 meetings that were scheduled and one extraordinary meeting for a total of 8 meetings as well as attending the shareholders meeting, details are as follows:

No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Attend Board of Directorsâ&#x20AC;&#x2122; Meeting

List of Directors Mr. Pakorn Professor Siri Mr. Tawechai Mr. Amornsuk Mr. Thep Mr. Weerasak Mr. Vudhiphol Mr. Tirachai Mrs. Jongjit Mr. Tikhamporn Mrs. Yupa Mr. Pichet Mr. Kumpee Mr. Opas

Thavisin Keiwalinsrit Chitasaranachai Noparumpa Roongtanapirom Wahawisal Suriyabhivadh Panchasarp Thapanangkun Plengsrisuk Techakraisri Supakijjanusan Chongthurakit Sripayak

8/8 8/8 7/8 8/8 8/8 8/8 8/8 7/8 7/8 8/8 8/8 8/8 8/8 8/8

Shareholdersâ&#x20AC;&#x2122; Meeting (1 Meeting) 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1

Audit Committee In 2009, the Audit Committee held 4 scheduled meeting as follows:

No.

Name

Mr. Amornsuk

Noparumpa

2 3

Mr. Thep Mr. Weerasak

Roongtanapirom Wahawisal

Position

Number of Meetings attendance

Chairman of Audit Committee Audit Director Audit Director

Annual Report 2009 L.P.N. Development PLC.

4/4 4/4 4/4

Executive Committee In 2009, the Executives Committee held scheduled 28 meetings and 2 extraordinary meetings as follows:

No. 1 2 3 4 5

Name Mr. Tikhamporn Mr. Pichet Mrs. Yupa Mr. Kumpee Mr. Opas

Position Chief Executive Officer Executive Executive Executive Executive and Managing Director

Plengsrisuk Supakijjanusan Techakraisri Chongthurakit Sripayak

Number of Meetings attendance 30/31 31/31 29/31 31/31 31/31

Selection and Remuneration Committee In 2009, the Selection and Remuneration Committee held six scheduled meetings as follows:

No.

Name

Mr. Amornsuk

Noparumpa

2 3 4 5 6 7

Mr. Tawechai Mr. Thep Mr. Weerasak Mr. Vudhiphol Mr. Tikhamporn Mr. Pichet

Chitasaranachai Roongtanapirom Wahawisal Suriyabhivadh Plengsrisuk Supakijjanusan

Position Chairman of Nomination and Remuneration Committee Nomination and Remuneration Committee Director Nomination and Remuneration Committee Director Nomination and Remuneration Committee Director Nomination and Remuneration Committee Director Nomination and Remuneration Committee Director Nomination and Remuneration Committee Director

Annual Report 2009 L.P.N. Development PLC.

Number of Meetings attendance 6/6 6/6 5/6 6/6 6/6 5/6 6/6

In 2009, there was one non-executive directors meeting with details as follows: No.

Name

1 2 3 4

Mr. Pakorn Professor Siri Mr. Tawechai Mr. Amornsuk

Thavisin Keiwalinsrit Chitasaranachai Noparumpa

Mr. Thep

Roongtanapirom

6 7

Mr. Weerasak Mr. Vudhiphol

8 9

Mr. Tirachai Mrs. Jongjit

Position

Number of Meetings attendance 1/1 1/1 1/1 1/1

Wahawisal Suriyabhivadh

Chairman and Independent Director Vice Chairman and Independent Director Vice Chairman and Independent Director Chairman of Audit Committee and Chairman of Nomination and Remuneration Committee Audit Director, Nomination and Remuneration Committee Director and Independent Director Audit Director, Nomination and Remuneration Committee Director and Independent Director

Panchasarp Thapanangkun

Director Director

1/1 1/1

Annual Report 2009 L.P.N. Development PLC.

1/1 1/1 1/1

Nomination of Directors and Executives Methods for nomination of persons to be appointed The Nomination and Remuneration Committee has the duty to find people who have the qualifications to be directors by looking for qualified persons who have the experience, expertise and vision as well as virtue and ethics and a transparent background and can show their opinions independently As well as looking at their performance as a director in the past. The candidates are proposed to the meeting of the Board of Directors for consideration prior to being proposed to the shareholders meeting. However, if a directorship is vacant not because of the end of a term, a candidate may be selected that is appropriate and proposed to the Board of Directors of the company to be appointed in place of the vacancy in accordance with the articles of association of the Company. Nomination of persons to be executives For management level executives upwards, the managing director selects the candidates and submits them for approval from the executive committee Remuneration of Directors and Executives The Nomination and Remuneration Committee considers the remuneration that is appropriate and proposed it to the Board of Directors of the company for consideration based on the same industry with similar size as well as the expansion of business and the Company in 2 parts as follows: 1) Financial Remuneration is comprised of meeting allowance and pension 1.1) Directors remuneration in 2009 according to the right to compensation included transportation costs, entertainment allowance, per diems, meeting allowance and necessary expenses (Article 18, Chapter 3 of the articles of association). At the AGM for 2009 held on April 28, 2009, the meeting approved remuneration in the amount of 6,480,000 Baht and delegated the board of directors to use its discretion to consider allocating the compensation. In 2009 the board of directors of the Company used all of the 6,480,000 Baht

No. of Directors

Position

Remuneration for 2009 Baht/Year/ person Total (Baht)

Pension for 2008 paid in 2009 บาท/ ป/ คน รวมทัTotal ้งหมด(บาท) Baht/person (Baht)

Chairman of Directors

900,000

675,000

Vice Chairman of Directors

600,000

1,200,000

450,000

900,000

Chairman of Audit Committee

840,000

630,000

Director & Audit Director

720,000

1,440,000

540,000

1,080,000

Director (non executive)

300,000

900,000

225,000

675,000

Executive Director

300,000

1,200,000

225,000

900,000

3,660,000

6,480,000

2,745,000

4,860,000

Total

1.2) The compensation for executives is comprised of salary, bonus and provident fund. There are at total of 5 executives of the Company with compensation equal to a total of 14,101,158 Baht 2) Other remuneration (None)

Annual Report 2009 L.P.N. Development PLC.

Corporate Governance The Board of Directors of the Company focuses on good corporate governance and is aware that it can improve the capacity to compete in business. Therefore, the Board of Directors emphasizes management based on honesty, virtue and ethics under principals of good corporate governance which is a factor that influences the business to be transparent and efficient and effective stable and grow sustainably as well as adding value to the economy. The Board of Directors of the Company has announced its use of corporate ethics of the board of directors, ethics in business by the staff and operating in line with the philosophy of sufficiency economy as the role model for directors and staff so that everyone is ensured that they are complying with principals of good corporate governance which is shown in the Company’s website www.lpn.co.th details of which are as follows: Policy regarding good corporate governance The Board of Directors of the Company are aware of the importance of good corporate governance focusing on transparency in operating to create confidence for investors, shareholders and stakeholders with the following principals: 1.Treatment of shareholders and stakeholders equally and fairly 2.The Board of Directors dedicated to doing its duty carefully, transparently for the benefit of the organization, the shareholders and the stakeholders 3.The Company has set forth a code of ethics for business, the board of directors and for staff as a guideline for complying with principals of good corporate governance The guidelines for complying with principals of good corporate governance are as follows: Chapter 1: Rights of Shareholder The Company respects the basic rights of shareholders as the investors and owners of the company by treating all shareholders equally and all shareholders can learn about the operations policies or connected transactions in full through the Company’s website www.lpn. co.th both in English and in Thai or at the website www.set.or.th Shareholders can be confident that their rights are protected at all times for example: 1.Right to attend general meeting of shareholders 1 time per year at the appropriate time, date and place whereas the Company will send an invitation for the meeting together with documents relating to the meeting regarding the opinions of the Board of Directors on all agenda with the following details; - Information regarding persons proposed to be directors in place of directors that resigned according to their term - Information regarding persons proposed to be directors - Articles of Association regarding the shareholders meetings - The documents and evidence which the shareholders attending the meeting have to show, the method of authorizing a proxy, registration and voting in the shareholders meeting - A map of the location of the shareholders meeting - Proxy form B (the form that specifies the agenda for which the proxy is given in detail). The Company has made the proxy forms according to the announcement of the Ministry of Commerce which has 3 forms namely, Form A, Form B, and Form C and allows the shareholder to choose the type of proxy form required and it can be downloaded from the Company’s website so the shareholders can consider how they want to vote on the various agenda no less than 7 days in advance. The Company also advertises the meeting for no less than 3 consecutive days at least 3 days prior to the meeting. Registration for the meeting is simple and can be done in advance no less than 1 one hour prior to the meeting. 2.The Company has expanded the method of advertising the shareholder’s meeting and the related documents through the Company’s website www.set.or.th both in English and in Thai 30 days in advance so that shareholders have more time to decide on the important issues. 3.The Company has retained Thailand Securities Deposit Co., Ltd. (TSD) which is the registrar of the Company’s shares to send out the meeting invitation to all shareholders no less than 21 days prior to the meeting. The meeting allows shareholders to attend the meeting even after the meeting has started and allows shareholders to vote on agenda that are being considered and have not passed a resolution and are counted as a quorum for the meeting starting from the agenda being considered for solution when they enter the meeting.

Annual Report 2009 L.P.N. Development PLC.

4. Prior to the shareholders meeting the Chairman of the Board of Directors introduces all of the members of the Board of Directors and the auditor of the Company that is present at the meeting and advises the shareholders of the method of voting and the shareholders rights. The Chairman controls the meeting to be in accordance with the agenda announced in the invitation to the meeting, controls the time to ensure all issues in each agenda are considered and allows shareholders to voice their opinions and ask questions about the operation of the Company and its subsidiaries as well as recording the meeting in full and summarizing the resolutions and counting the votes transparently and fairly. 5. The Company discloses the top 10 shareholders of the Company as of the date of close of the share registry and suspension of trade prior to the annual general meeting of shareholders via the Company’s website www.set.or.th both in English and in Thai. 6. At the annual general meeting of shareholders in 2008, in the agenda of appointing new directors in place of directors resigning at the end of their term, the Company gave the shareholders the chance to vote on each director allowing the shareholders to vote on the director they wanted. 7. The Company introduced e-voting by Thailand Securities Deposit Co., Ltd. (TSD) in registering and counting the quorum for the meeting as well as passing resolutions on the agenda during the meeting. 8. The Board of Directors allows the shareholders to voice their opinions and recommendations during the meeting or pose questions on various agenda freely prior to passing the resolution. 9. The Company makes a report of the shareholders meeting following the meeting in detail and sends it to the Stock Exchange of Thailand and the Ministry of Commerce within 14 days and posts it on the Company’s website www.set.or.th both in English and in Thai. 10. Voting is made openly with voting ballots for each agenda for the shareholders to vote independently. For election of directors, the Company has allowed the voting to take place by the shareholders in person. 11. The Company pays dividends to all shareholders equally. 12. The Company has expanded the method of inviting shareholders to the shareholder’s meeting and the articles of association related to the meeting through the Company’s website www.set.or.th both in English and in Thai prior to receiving the document itself so that the shareholders have more chance to consider the information. 13. The meeting allows shareholders to attend the meeting even after the meeting has started and allows shareholders to vote on agenda that are being considered and have not passed a resolution and are counted as a quorum for the meeting starting from the agenda being considered for solution when they enter the meeting. Chapter 2: Equitable Treatment of Shareholders The Company does business based on principals of ethics and responsibility to society and all those involved. The Board of Directors operates with the highest interest of the shareholders considered equally, respecting the rights of shareholders ownership rights without favoring any particular group of shareholders. Therefore, shareholders can be confident that their rights will be protected and respected. The Board of Directors will protect the shareholders rights as follows: 1.The Company discloses sufficient information to the shareholders and on time regarding the operations, policy and information regarding connected transactions correctly and in full as well as discloses information necessary for shareholders to make decisions though the website of the Company www.set.or.th both in English and in Thai 2.The Company holds the shareholders meeting in accordance with the agenda announced in the invitation to the meeting and the Company does not add agenda that was not informed in advance. If additional agenda are proposed, the shareholders have to approve by no less than one third of the shareholders present at the meeting and entitled to vote. 3. At all shareholders meetings, the Company sends the invitation to the meeting together with documents with information regarding the meeting in full detail with the opinion of the Board of Directors on each agenda within the period prescribed by law as well as announcing the invitation and documents in advance so shareholders have more time to consider it, via the Company’s www.set.or.th both in English and in Thai. 4. If shareholders can’t attend the meeting, the Company prepares proxy forms according to the form of the Ministry of Commerce together with the invitation so that any shareholders that intend to appoint a proxy to attend the meeting by appointing one person or an independent director to attend the meeting to reserve the right of the shareholder. 5. The voting rights of shareholders is according to the amount of shares held, with one share equal to one vote. 6. The Company controls the use of insider information and prohibits the directors and executives from using essential inside information of the company and its subsidiaries that has not been disclosed to the public for their own benefit or that of the shareholders, including for purchase of securities of the company. Directors, executives and staff who have access to insider information must suspend purchase of securities of the company for one month prior to disclosure of the information to the public.

Annual Report 2009 L.P.N. Development PLC.

- if any director or executive purchases, sells, or receives transfer of securities of the Company he/she must announce it to the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand within 3 days from the date of the change and announce it to the Company Secretary as well as announce the shareholding of the company by the director or spouse as an ordinary agenda in the Board of Directors meeting held each trimester. - the Company has a clear way of monitoring and solving the problem of conflicts of interest. The Audit Committee has a duty according to its charter to audit compliance with the rules and articles of association of the company to be in accordance with the regulations of the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission and if the meeting passes a resolution that may be a conflict of interest or a connected transaction, the Company will disclose the value of the transaction, the name of the contracting party and the person connected, the reason and necessity for the transaction and other details both in Thai and English via the website of the Stock Exchange of Thailand www.set.or.th and the Companyâ&#x20AC;&#x2122;s website www.lpn.co.th Chapter 3: Role of Stakeholders The Company gives importance to the stakeholders and operates business with responsibility and fairness to all those involved focusing on developing the company to be stable, sustainable and able to create appropriate revenue for the shareholders and protect the interest and assets of the company with prudence of businessman. The Company also looks after the rights of the stakeholders by treating them equally as follows: Shareholders : The Company respects the basic rights of the shareholders under law and the articles of association of the company an treats the shareholders equally. The Company makes the shareholders confident that the information they receive is accurate and their profit is appropriate according to the policy of paying dividends of the company, there is control of connected transactions, protection against conflicts of interest, protection against use of insider information that is confidential and prohibits directors and executives who know inside information from using it for personal gain or from purchasing securities of the company especially within 1 month before disclosing the financial statements to the public. Customers : The Company values and acts with responsibility towards all customers at all times and takes responsibility for the quality and standards of its products as advertised or promised, keeps customer information confidential, maintains departments to hear complaints from customers in order to solve problems for customers in an expedient manner and builds a quality of life, bringing warmth to all members of the family and creating closer relations between customers through continuous activities. Trade Partners : The Company complies with the agreements and conditions of honest competition, equality and fairness, considering the highest interest of the company on the foundation of gaining fair compensation for both parties, keeping its promises with trade partners as well as building relations and understanding with each other, avoiding situations that may give rise to conflicts of interest by negotiating to solve problems amicably as well as not asking for or giving goods or services other than that agreed with customers. Competitors : The Company abides by the rules of fair competition through the use of friendly competition to support each other without damage to other businesses or to relationships with competitors. In the past the Company has never had any disputes with competitors. Creditors : The Company complies with the conditions of its trade agreements and loans pursuant to the agreement and obligations to creditors agreements in all respects honestly and to create confidence and trust with each other. Employees : The Company focuses on developing the potential and skills of staff at all levels building knowledge, expertise at their duties and development of their potential to become leaders as well as allowing staff to become involved in the direction of the operation with the same attitude supporting culture and a good work atmosphere, improving the environment to be safe for life, health and assets of the staff with various benefits such as annual health checks and provident fund as well as paying fair remuneration appropriate to the performance of each of the staff. Environment and Society : Focus on energy conservation, activities that support society for better life as well as conserving the environment to be sustainable which is a policy that is important and must coincide with the Companyâ&#x20AC;&#x2122;s business.

Annual Report 2009 L.P.N. Development PLC.

Chapter 4: Disclosure and Transparency The Company emphasizes the disclosure of information that is accurate, transparent and widespread through various media so that investors and those related can obtain information quickly and at the same time via the website of the Stock Exchange of Thailand www.set.or.th and the Company’s website www.lpn.co.th both in Thai and English and the Company has appointed a person in charge of disseminating information to investors and those involved as needed. In 2009, minority shareholders and general investors contacted the officers of the company and the Company considered it as an opportunity to build a good relationship and presently, minority shareholders and investors give great importance to information. The officers of the company maintain that they will disclose information equally. The Company is aware and is responsible for the reputation and accuracy of financial information and the Board of Directors discloses an accurate financial report in accordance with accounting standards and discloses information that affects or may affect the price of securities of the company or decisions to invest, complying with the laws, regulations and articles of association of the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission and other government agencies strictly and follows any changes continually to ensure that the laws and regulations are up to date and are security that the shareholders have confidence in the business operations. The Company has opened a way for shareholders, investors and the pubic to ask questions through our investor relations hotline with Mr. Suriya Suriyabhivadh who can give you information that you need via email address: IR@pln.co.th or telephone: 02-2855011 Chapter 5: Responsibilities of the Board of Directors The Board of Directors is comprised of persons with knowledge and ability with experience in areas such as engineering, architecture, economics, business management, law, accounting and finance and all of the directors have passed the course at the Thai Institute of Directors Association-IOD. This group of persons is important in providing the policies for the company together with the high level executives to plan for the short term and long term policy of the Company as well as financial planning risk management and the overall picture of the Company including monitoring and auditing and evaluating the performance of the Company as well as the performance of the high ranking executives of the Company to ensure compliance independently. The structure of management of the company is comprised of 4 sets of directors: 1. The Board of Directors 2. The Executive Directors 3. The Audit Committee 4. The Nomination and Remuneration Committee The Company has fixed and separated the powers of the Board of Directors and management at all levels. All material decisions must be made and approved by each Board of Directors to have checks and balances and for transparency and fairness to all involved. The Chairman of the Board of Directors is independent from the executives and does not hold a position in other committees. The CEO, in the capacity of the head of the executive Board of Directors is responsible to the Board of Directors for overseeing the business operations and the performance of the company to be in accordance with the policy of the Board of Directors to report on the performance of the Company on a monthly basis. The term of the director’s position At each AGM, one out of three directors have to resign. If the number of directors resigning cannot be divided by three, the number closest to one third shall resign. The directors of the company are appointed and removed by the shareholder’s meeting having a term of office according to the articles of association of the company. When their term expires, they may be reelected to the position again, unless the vacancy is not caused by the end of the term, in which case the selection and remuneration committee will find an appropriate candidate for proposal to the Board of Directors of the Company to appoint a director in place of the vacancy as per the Company’s articles of Association. The Company has not specified a ceiling on age and/or the number of terms that can be held consecutively and is confident that the age or number of terms is not an issue when compared to the valuable knowledge and ability and experience each person as and can use to benefit the Company. The number of companies in which each director can have a position The Company discloses details of the information of the positions held by each director in the company in the Form 56-1 (Annual Report). Presently there are 5 directors of the Company who are registered as directors for no more than 4 other companies. The Company is confident that it has no effect on carrying out their duties and in the past, the Company has received advice, recommendations and proposals regarding operations of business of the company that has been beneficial all along. 90

Annual Report 2009 L.P.N. Development PLC.

Sub-Committees The Companyâ&#x20AC;&#x2122;s Board of Directors has appointed the Board of Directors and several committees such as the executive committee and the nomination and remuneration committee to function specific tasks to present to the Board of Directors where as these committees have the duty to. 2. Role, duty and responsibility of the Board of Directors Leadership and Vision The Board of Directors has the duty to govern the Company according to the objectives and goals set forth for maximum benefit The Board of Directors has the duty to form the vision, mission, policy, goals, plans, budget and strategy of the business as well as control operations of the company according to the business plan and budget that has been set efficiently and effectively, with independence in voicing opinions and making decisions. The Board of Directors focuses on reporting on the financial statement because it reflects the operations in a true fashion and there is evaluation and setting measures to manage the Company to prevent and manage risk to acceptable levels. The Board of Directors intends to develop the business of the Company to be even more successful, stable and sustainable and able to turn profit for the shareholders in an appropriate manner. Separation of roles and duties of the board of directors The Company has specified and separated the authority of the Board of Directors of the Company and management in several levels that are clear. In considering and making decisions that are important they have to be approved by the Board of Directors of the Company and the relevant committee to act as a check and balance for transparency and fairness to all those involved. The Chairman of the Board of Directors of the Company is independent from other executives, management and does not have a position in any committee. Consolidation or separation of positions The chairman of the Board of Directors is not the same person as the Chief Executive Officer. The chairman of the Board of Directors is independent from the executives and has a separate duty to formulate policy to oversee and mange business. The chairman of the Board of Directors is the chairman of the meetings of the Board of Directors which formulates policy, business plans and strategy for executives to carry out and all directors of the company are free to propose agenda for the meeting and voice opinions on the performance of the company and carefully consider any conflicts of interest in the name of correctness, transparency and accountability. Meetings of the board of directors of the Company Attending meetings and doing activities together with the Company is the most essential function of the Board of Directors of the Company to acknowledge and make decisions on the business. The Company schedules the meetings of the Board of Directors of the Company in advance at least 6 times per year with the meeting agenda clearly specified and the invitation sent out at least 7 days in advance so that the Board of Directors has time to consider and study the information prior to the meeting. The Chairman of the Board of Directors of the Company and the CEO jointly fix the agenda of the meeting of the Board of Directors of the Company and allow all of the directors in the meeting to voice their opinions independently. The meeting will pass a resolution with majority vote with each director having one vote and interested directors not attending the meeting and/or abstaining from voting on that agenda. Meetings last around 4-5 hours.

Annual Report 2009 L.P.N. Development PLC.

The Company Secretary The Board of Directors is aware of the importance of the role and duty of the Company Secretary who assists and supports the operations of the company in accordance with the principals of good corporate governance and compliance with the regulations of the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission. The Board of Directors has appointed Ms. Somsri Techakraisri, the Deputy Managing Director as the Company Secretary coordinating with the directors of the company and the management overseeing legal work and supporting compliance with principals of good governance as well as compliance with articles of association and regulations of the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission as well as compliance with the resolutions of the Board of Directors and resolutions of the shareholders meeting. Self-Evaluation by the Board of Directors and by the CEO The CEO of the Company is aware of the importance of evaluation of the performance of the Board of Directors and the CEO for the purpose of using the evaluation to improve the performance of the Board of Directors and delegated the Selection and Remuneration Committee implement the evaluation The Nomination and Remuneration Committee arranged for the self evaluation of the directors divided into 3 parts: Part 1 Evaluation of the members of the Board of Directors (self evaluation) in various areas such as core competency, independence,preparedness, practice as a director, committee activities and development and organization Part 2 Evaluation of the individual members of the Board of Directors (evaluating directors) in various areas such as core competency, independence, preparedness, practice as a director, committee activities and development and organization Part 3 Evaluation of the entire Board of Directors in all areas such as structure and qualifications of the Board of Directors, role and duties and responsibilities of the Board of Directors, meetings of the Board of Directors, performing the functions of the Board of Directors, development of the Board of Directors and development of executives The stages of the evaluation are from December at which time the secretary of the selection and remuneration committee will collect the evaluation forms to be summarized and presented to the first meeting of the Board of Directors of the Company held in the following year. The results of the evaluations of the Board of Directors for 2009 were presented to the Board of Directors meeting no 1/2010 on February 18, 2010. Overall evaluation of the individual board members (self evaluation) was as follows: No. 1 2 3 4 5 6

Evaluation Subject Core Competency Independence Preparedness Practice as a director Committee Activities Development of Organization Average

Result (%) 81.55 79.91 76.79 83.04 81.75 82.65 81.43

Overall evaluation of Individual Board of Directorsâ&#x20AC;&#x2122; (evaluating directors) No. 1 2 3 4 5 6

Evaluation Subject Core Competency Independence Preparedness Practice as a director Committee Activities Development of Organization Average Annual Report 2009 L.P.N. Development PLC.

Result (%) 83.73 79.61 80.51 87.35 88.10 84.18 84.93

Board of Directors’ overall evaluation is as follows: No. 1 2 3 4 5 6

Evaluation Subject Board of Directors’ structure and qualifications Board of Directors’ role and responsibilities Board of Directors’ meeting Directors’ duties Management relationship Board of Directors’ development and executives’ development Average

Result (%) 95.23 94.33 96.12 95.57 98.07 92.83 95.10

In addition, the Nomination and Remuneration Committee allowed the Board of Directors to evaluate the CEO in areas such as strategic planning, leadership, financial performance, managing transactions, replacement planning, human resources management, communication and construction and relationships with the Board of Directors of the Company Chief Executive Officer overall evaluation No. 1 2 3 4 5 6 7 8

Evaluation Subject Strategy planning Leadership Financial performance Managing transactions Replacement planning Management of Human resources Communication Relationship with Board of Directors’ Overall average

Result (%) 89.00 86.00 83.33 91.67 66.67 69.33 89.33 89.00 82.63

Remuneration - Details appear in the nomination on remuneration of directors and executives Development of Directors and Executives The Board of Directors of the Company and the executives emphasize training for the benefit of their duties and therefore attended courses arranged by the Thai Institute of Directors Association (IOD) as recommended by the SEC which provides for directors of listed companies to undergo training at least for one course in Director Accreditation Program (DAP) and the Director Certification Program (DCP). In addition, the Board of Directors also emphasizes attending other courses provided by the IOD such as Role of Compensation Committee (RCC) and Company Secretary of the Thai companies registration association with the aim to promote those with potential to be leaders who are professional, knowledgeable and understand their role clearly in driving their organization towards good corporate governance. Orientation for new directors Since new directors joined, the Company held an orientation for new directors on the board so that they could do their jobs right away with the Company secretary coordinating as follows: 1) Coordinating to provide information about the Company regarding law and others such as the articles of association the organizational structure, the business ethics of the board of directors, etc 2) Arranged a meeting with the CEO of the Company, the Board of Directors committees and executives of the Company to learn about the Company. Annual Report 2009 L.P.N. Development PLC.

Use of Internal Information The Company controls the disclosure of internal information to outside parties according to the business ethics of the directors and the employee’s code of conduct. The employee’s code of conduct is contained in the employee’s handbook which is given to employees when they commence employment with the Company. It is the duty of the supervisor and human resources department to ensure that the employees comply with the rules that have been set forth. As for reporting on the change of shareholding of the Board of Directors to the Office of the Securities and Exchange Commission pursuant to Section 59 of the Securities and Exchange Act 1992, the Company has specified that all directors have the obligation to disclose any change in their shareholding in the Company immediately, through investor relations department, under the directors office, in order to prepare a report to the Office of the Securities and Exchange Commission and to record the change and summarize the shareholding of all the members of the Board of Directors for submission to the Board of Directors at each of their meetings. The Company has set up an information system by specifying the importance of information and the authorization of the persons who are allowed to review and revise such information in a clear manner, with the information division in charge of controlling the accuracy of information, in addition to having the internal audit division making inspections on a regular basis. Business Ethics The board of directors of the Company has business ethics for themselves and for the employees to comply with requirements of good corporate governance for the benefit of the Company, the shareholders, the directors, the staff and other stakeholders. Human Resources The Company has a vision to maintain its role as market leader in condominium development so human resources are important and the Company has a mission to create happiness, advancement and stability for staff by developing their potential towards a quality organization. This begins with the policy that the Company provides a chance for all to be involved in reporting both at the executive level and operations level whether looking for new ideas to improve the work methods to change the work environment to be more efficient in addition to planning and implementation according to the objectives. Personnel In light of the Company’s vision, namely, maintaining its position as leader in the condominium development business, the Company emphasizes human resource management and has a mission to promote the values of the organization to create happiness, stability and development of the personnel in a quality organization as follows: 1.Management The Company has a policy of human resources management that is unique both for front line personnel such as sales managers, project managers, brand and marketing managers and for back office personnel such as finance and accounting, legal, administrative which is in accordance with the strategy set by the Board of Directors of the Company with the CEO and chairman of the Board of Directors responsible and with the human resources division implementing the plan to achieve the goal of each division.

Annual Report 2009 L.P.N. Development PLC.

2. Core Value The Company has set Core Competency of the personnel which has been developed into the organizations value known as “CLASSIC” as a guideline to develop personnel in all areas as well as to be a guideline in taking on new staff to work in the organization: “CLASSIC” Collaboration Lateral Thinking Alliance Speed Service Minded Integrity Cost Awareness “CLASSIC” is important in supporting the vision and strategy of the organization to achieve the Company’s goals so it is emphasized by being communicated and through the exchange of knowledge about “CLASSIC” for personnel and executives continually with the high level executives being an example and setting the role for the personnel at all levels of the organization as follows:

Annual Report 2009 L.P.N. Development PLC.

CLASSIC

High-level Executives

Mid-level Executives

All Personnel

Ambassador

- Advises and Recommends Classic Agent - Creates belief in ‘CLASSIC’ with personnel - Communicates ideas, views and experience to CLASSIC Agent - Builds inspiration for CLASSIC Agent to become a CLASSIC Ambassador

Agent

- Has a good attitude and believes in the acronym CLASSIC - Is a good role model - Communicates ideas, views and experience to CLASSIC Member - Promotes CLASSIC Member to display CLASSIC behavior

Member

- Has a good attitude and believes in the acronym CLASSIC - Understands the meaning of and studies the CLASSIC manual at all times - Displays behavior that coincides with the meaning of the word in the CLASSIC manual - Adapts the CLASSI values when working at all times

In 2009, the Company organized various activities for all staff to realize the importance to be serious of values of the organization as follows: Awareness & Understanding • Kick off : CLASSIC Day : To stimulate the personnel to be aware of the importance and benefit of using CLASSIC as part of work as well as organizing activities to help personnel understand the 7 CLASSIC behaviors that can be clearly expected by the organization. • Executive Sharing : Passing on knowledge, views, experience from executive directors to personnel executives to transfer methods of procedure that reflect CLASSIC and coincide with the direction and the strategy of the organization • CLASSIC Story Board : An activity where personnel in each department write the behavior of colleagues that reflects CLASSIC to create understanding about the procedure fairly • LPN News Journal: CLASSIC Story Column: Passing on Stories or events that staff of personnel providing service using CLASSIC and impressing customers, common owners and writing to compliment personnel to be inspiration to other personnel Reward & Recognition • CLASSIC Story Card : An activity that the executives and the staff write compliments about their colleagues or subordinates who have behavior that reflects CLASSIC so that there is continuity Commitment • Company’s activities: having the staff and personnel volunteering to join various activities of the Company such as sales activities, title transfer and environmental activities show the cooperation and the involvement in the Company’s success. In addition, the Company has provided a CLASSIC Hand Book for all personnel to study, review and survey on their own as well as record their own behavior that reflects the value so that they can share their knowledge within their department as well as surveying the development of the “CLASSIC” behavior on a continual basis.

Annual Report 2009 L.P.N. Development PLC.

3. Succession Plan The Succession Plan in the organization is the main mission of the executives to make a plan and follow it to create continuity in management and to prepare persons to carry on with the policy and the business plan of the organization in the future. The Company has cooperated with advisors to prepare a project which searches for and develops successors based on important factors that will promote the strategy as the basis for selection of those with potential through evaluating and comparing specific target persons to be certain of the selection process, setting up a group of persons to be developed and setting forth a development plan and delegating the mission as a special case for follow up and evaluation of potential. There is also a mentor that is provided who is a high level executive to provide reverse data, recommendations and to follow up on the development. The plan to develop the successor is designed specifically to be appropriate for a certain individual by developing the strengths and supporting the weaknesses in the direction of the organization. Finding a successor is important and is sensitive both in terms of the target group and with colleagues and the organization focuses on internal personnel first to build bonds between personnel and the organization. 4. Care for Personnel The Company is aware of the importance of personnel being the people who are important in making the Company grow efficiently and sustainably and therefore look for ways to support the personnel so that they can work to the fullest of their efficiency and succeed at their work as follows: - Balance between work and life, health, preparation of the work place and availability of tools to work with The Company focuses on providing a balance between work, private life and society (Work Life Balance) to personnel so that they have balance and focus on the living conditions of the personnel by providing health insurance in the form of a benefit, life insurance coverage, accident insurance based on basic needs and lifestyle, health checkups and an employee committee that is elected from the personnel to advise and communicate the opinions about the benefits from the personnel to take care of and add value to the staff and ensure that they have the sufficient tools to perform their duties while providing work place that considers the well being and safety of working at all times and providing safety measures for the personnel that are ready for use at all times such as alarms, fire extinguishers and flashlights as well as providing emergency exits and organizing fire drills and fire prevention sessions both in theory and practice every year. - Ethics and Virtue In addition to proceeding according to plan, the Company also promotes ethics and virtue among personnel as well as providing an opportunity to join in activities to do good deeds in various forms on a continually on a voluntary basis to stimulate the conscience to do good and spread it to others. The activities between the personnel in various departments and executives is an activity arranged by the Company every continually to develop the relationship between them. In 2009 the Company let everyone who was born in the same month make merit together on their birthday, do good deeds and join in activities to create happiness for themselves and to build good relationships among each other. - Communication Since the heart of any business that has customers at its center is personnel who are the driving force, it is important for the organization to take care of its personnel so that they can work to their full capacity happily and have the desire to do their obligations and have a system of communication between the organization and executives that has quality through the organizations internal magazine which communicates the expectations and news in order to reduce the gap in communication between personnel while at the same time arranging activities for the executives to meet with personnel on a continual basis to build bonds between the personnel and the organization to be like a community with love, understanding, care for each other like a big family. Good bonds within the organization lead to the personnel expressing their care and attention to customers in general. - The Bond with the Organization The head of all the divisions at all levels have a role in listening to the opinions of the personnel about their work including about the organization, the atmosphere, their colleagues, management, balance and each year, the human resources department does a survey of the level of bond that the personnel has towards the organization, their satisfaction of their compensation, the condition of their employment, values, colleagues, bosses, the opportunity to learn, grow and report to the high level executives as well as propose a plan to develop the personnel so that they can work happily and with a good quality of life. Annual Report 2009 L.P.N. Development PLC.

5. Development and Training The Company has provided a course to develop the skills and ability that are important and necessary according to the area of responsibility as well as in consideration of the growth targets of the personnel. The development plan is divided into basic knowledge and specific knowledge and each topic involves training inside the organization according to the type of business and involves training outside of the organization so that the personnel have a chance to exchange their knowledge and experience with outsiders with emphasis on practical training, mock situations, group level sharing of ideas and follow up, while also providing theoretical knowledge. For the training inside the organization, the executive directors and the board of directors who are all senior persons with lots of experience act as speakers which allows a transfer of knowledge from those who understand the business in particular. Budget used for the development training.The Company has allocated budget appropriately and efficiently for the standard training and necessary training for the relevant positions as well as managing knowledge as a non-tangible asset that can be passed on to the next generation of personnel. 6. Number of Personnel The structure of human resources management of the Company and its affiliates is in the form of a central system in order to have unity and for the personnel to be in the same direction under the guidance of the CEO and chairman of the Board of Directors. Personnel in all of the group can transfer their responsibilities to grow all the time. In 2009, the Company planned for business growth cautiously, especially in terms of its number of personnel which was controlled not to grow to large in order to allow the personnel to change their thinking and work which promoted them to create novelties. This also allowed a control of the expansion of the Companyâ&#x20AC;&#x2122;s costs. The strict policy on increasing the number of staff was relaxed and a the end of 2009 the number of personnel in L.P.N. Development PCL, Lumpini Property Management Co., Ltd., Lumpini Project Management Services Co., Ltd. and Pornsanti Co., Ltd. totaling 4 companies had a total of 662 personnel in 2008 and in 2009 it increased to 701 personnel divided into the following areas: - Business Development - Brand and Marketing Management - Finance and Accounting -Sales Management -Community Management -Project Management -Administrative -Audit -Human Resources -Community Management Support -Juristic Person Finance and Accounting -Juristic Person Maintenance Total

34 persons 22 persons 79 persons 38 persons 179 persons 69 persons 38 persons 6 persons 17 persons 79 persons 34 persons 106 persons 701

The compensation for personnel in 2009 was as follows: 1. Compensation 350,031,672 2. Benefits and Fund Contributions 21,034,600 3. Training and Development 12,001,110 Total 383,067,382

Baht Baht Baht Baht

The Company paid compensation in the form of a year end bonus according to its performance in compensation for the effort and cooperation of all the personnel who helped the Companyâ&#x20AC;&#x2122;s business succeed according to its targeted principals of good corporate governance.

Annual Report 2009 L.P.N. Development PLC.

Business Code of Conduct and Ethics The Business Code of Conduct of the Board of Directors, L.P.N. Development Public Company Limited This Code of Conduct of the Board of Directors was established for the directors of the Company to adhere to as a management guideline so that it be in accordance with the principles of good corporate governance; and reflects the commitment of the directors to the standard of ethics for the benefit of the Company, the shareholders, the employees and other stakeholders. The Board of Directors of the Company sets a policy direction of organization management and lays down corporate governance to ensure efficient business operation and to achieve the Companyâ&#x20AC;&#x2122;s vision and mission objectives. In consideration of the confidence in business standards that L.P.N. Development PCL receives from its shareholders, the investors and the public, all directors of the Company must circumspectly and attentively comply with the provisions and intent of the law, as well as being good role models for employees, to incessantly uphold the long-standing reputation and good image of the Company. The Business Code of Conduct is as follows: 1. Honesty, Fairness and Integrity Directors must perform their duties with honesty and integrity, truthfulness and non-discrimination based on race, religion, sex, marital status or physical handicap. Directors must embrace truth and must not cause misunderstandings either directly or indirectly, must not make any false speech or action, and must not cause misunderstandings from omission of speech or action. 2. Independence Directors must make decisions and perform duties with independence without allowing concern on personal benefit, reward, monetary or non-monetary compensation to take precedence over independence in using factual, complete and rational information in their performance of duties. 3. Personal Transactions and Confidentiality Any personal transactions or business of directors must be separated from the business of the Company performed as a director. Directors must not use the name of the Company in personal transactions or business, and must not be involved in any activity which will cause disrepute to the Company; including non-disclosure of confidential information of customers, employees and the Companyâ&#x20AC;&#x2122;s business to third parties, except as consented by the Company. Directors must also not use information that is obtained as a director in an improper manner. 4. Disclosure of Interests Directors must disclose to the Company any interests from personal business or other businesses, as well as any matter that is or that may result in a conflict of interests with the Company. Any business with the Company by directors must be on an appropriate basis, in order to avoid any conflict of interests that may occur or that may be perceived to have occurred. 5. Legal Compliance Directors must comply with the provisions of law, rules and regulations concerning the operation of business, and shall not use any legal loophole for the benefit of the Company or for personal benefit illigitimately. 6. Equal Opportunity to Shareholders Directors must protect the rights of shareholders in accordance with the duty entrusted by the shareholders, and must also take into account the rights of the other stakeholders with the Company.

Annual Report 2009 L.P.N. Development PLC.

Performance of Duties and Responsibilities of Board of Directors 1. Duties to the Company 1.1 Devote time fully to the Company to perform duties as director and abide by the guidelines on good corporate governance and the Companyâ&#x20AC;&#x2122;s Business Code of Conduct. 1.2 Exercise independent discretion in supervising the business of the Company. 1.3 Be responsible to the shareholders, with due consideration of rights and interests of the other stakeholders, by adherence to ethics and legal compliance. 1.4 Recruit competent high-level executives who can fully devote themselves for the benefits of the Company. 1.5 Oversee that the Management report on key issues to the Company to ensure effective business operation. 1.6 Inform the Company in writing in the case that a director becomes an advising director in another company, organization or association. Above all, this must not directly conflict with the benefits of the Company and the performance of the directorâ&#x20AC;&#x2122;s duty. A director must not hold shares in any other entities that may be a conflict of interests or may cause business conflict with the Company. 2. Duties to Shareholders 2.1 Ensure that the Company has proper and suitable financial standing, management and administration, so as to create appropriate returns for the shareholders. 2.2 Ensure that the Company has disclosed information that is complete, correct, accurate, in time, standard, and transparent to the shareholders equally. 2.3 Ensure that the Company values and respects the rights of all shareholders equitably and equally. 2.4 Ensure that the Company explains the details of the Companyâ&#x20AC;&#x2122;s performance and financial status in compliant with information disclosure regulations. 2.5 Ensure that the Company attaches importance to suggestions of the shareholders, and implements the good suggestions for the benefit of the operations. 3. Duties to Employees 3.1 Treat all employees fairly, with no discrimination based on race, religion, nationality, sex, age, educational background or personal preferences. 3.2 Listen to the opinions or suggestions of the employees and consider implementing them for the benefit of the Company. 3.3 Must not violate, either directly or directly, the personal rights and freedom of the employees. 4. Duties to Other Stakeholders 4.1 Ensure that the Company complies with the provisions of applicable laws and regulations. 4.2 Ensure that the Company attaches importance to the impacts on other stakeholders, community, society and the environment. Circumspection in Performance of Duties 1. Attend all Board of Directors meetings. And in case of necessity, must inform the Company in advance when unable to attend. 2. Pursue information and knowledge on circumstances that affect the business of the Company. 3. Study relevant laws, rules and regulations that affect the performance of duties as a director of the Company. 4. Use sufficient time to carefully consider information in advance. 5. Consider and provide opinions independently. If a director disagrees with the meeting resolution of the Board of Directors, the said director may require that the difference of opinion be recorded in the minutes of the Board of Directors meeting.

100

Annual Report 2009 L.P.N. Development PLC.

6. Encourage communication between the Board of Directors and the auditor in order to ensure that the auditor’s work is independent and efficient with cooperation from the Management and Internal Audit Department. 7. Perform duties as directors in conformity with the provisions of the laws, regulations, rules and relevant stipulations, as well as business standards and ethics. 8. In case of any doubt, the Board of Directors may request additional information or explanation from the Management or the Company’s advisors. 9. Must not engage in any action that may cause skepticism of honesty, faithfulness and integrity by avoiding - by oneself and family members - demand, acceptance or consent to accepting money, articles, or any other benefits from related parties of the Company’s business - e.g. customers, contractors and trade partners; with the exception of customary occasions or festivity - provided that the value is not excessive or extraordinary. Conflict of Interest 1. Directors must not exercise the authority of their position to seek benefits for themselves or those close to them, either directly or indirectly. 2. Directors must inform the Company without delay any of the following cases: 2.1 Acceptance of invitation to be a director or an advisor of other company. 2.2 They or any of their family members are involved or is a shareholder in any business that may cause or that is in conflict with the interest of the Company. 2.3 They have a direct or indirect interest in any contract made with the Company, whereby the nature of the contract the name of the contractual parties and the interests in the contract must be specified. 2.4 Holding securities or debentures of the Company or any of its subsidiary company, whereby the number of securities and any changes must be specified. 3. Directors must endeavor to avoid conflicts of interest. In the event a conflict of interest arises, the directors must be excused from discussion and comments or from voting on that particular agenda, or from attending the meeting on that particular agenda, or from receiving meeting documents on that particular agenda in question, or must resign from the position of director if such a conflict of interest becomes a big issue. 4. Executive directors must exercise immense caution toward potential conflicts of interest between working in the capacity of the Management and that as a director entrusted by the shareholders. 5. Directors should not be involved in the trading of the Company’s shares for short-term profits. Use of Company Information 1. Must not use the information obtained as a director of the Company in any inappropriate manner. 2. Must not disclose information such as confidential business information, or information that may impact business operation to any third party. 3. Must not purchase or sell shares while in possession of information that, if disclosed to the public, would affect the price of the shares. 4. Protect confidential information of the Company, and take precautions not to let documents or information that is confidential be disclosed or be in the possession of third parties, which may cause damages to the Company. 5. Must not use inside information for personal benefit or for benefits of others, especially when such information, which has not been disclosed to the public, is critical to changes in price of securities. 6. Must not report any information that may affect the price of shares of the Company which has not been disclosed to the public including:

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6.1 Estimated profits 6.2 Issuance of new securities 6.3 Borrowings 6.4 Potential corporate takeovers 6.5 Significant changes in business operations 6.6 New investments projects 6.7 Problems related to liquidity Business Code of Conduct of Employees, L.P.N. Development Public Company Limited L.P.N. Development Public Company Limited is a company engaged in real estate development business that takes responsibility for all stakeholders involved, including shareholders, customers, trade partners, contract partners and employees, as well as the environment and society. All of the Company’s employees play a role in the Company’s success and achievement of the Company’s goals and vision. The Company is committed to instill in all employees of the Company the awareness of their responsibility that derive from the trust in business operation of the Company. In pursuit of business success, stability and sustainability, and trust from customers, shareholders and the general public, the Company has established the Business Code of Conduct of Employees as guideline for compliance by all employees. This Code of Conduct for employees was established as basic standards for employees on ethical conducts: a tool to remind employees to exercise caution, and to prevent employees from committing any breach of laws, rules or regulation which may cause damage to the reputation of the Company. The Company has assigned the Human Resources Department to monitor compliance with the Code of Conduct, in joint responsibility with each department head, to ensure that all employees comply with the provisions of the Code of Conduct. The Business Code of Conduct of Employees comprises 10 topics, with clear explanations, and is given to each employee to observe: 1. Scope 2. Compliance with laws and adherence to the Company’s rules 3. Reliability of information 4. Confidentiality of Information 5. Communication 6. Use of inside information for trading of securities 7. Harassment 8. Gambling, alcohol consumption and narcotics 9. Giving and accepting gifts and entertainment 10. Engaging in other jobs or outside activities In addition, the Company has established rules for performance and responsibility of the employees towards the Company, customers, shareholders, supervisors, colleagues, and their own duties; including conflict of interest and use of the Company information, as a guideline for working in harmony with each other.

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Annual Report 2009 L.P.N. Development PLC.

Internal Controls The Board of Directors of the Company have provided sufficient internal control mechanisms that are appropriate for the business to reduce or prevent risks that may cause damage to the assets of the Company, comprised of: Organizational Control and Environmental Measures The Board of Directors of the Company have set a business goal that is clear and that can be evaluated by considering the organizationâ&#x20AC;&#x2122;s ability to compete with a yearly plan with goals for performance using Key Performance Indicators (KPI) to consider the compensation for personnel. The Company has a clear, written structure of authority that is distributed to a board of directors, a board of executives, executives and personnel. The Company manages the business using a balanced scorecard which coincides with the principals of sufficiency economics while providing guidelines for ethical business practices for the Board of Directors of the Company and a code of conduct for the personnel and the core values of the Company, all in writing, so that the Board of Directors, executives and personnel can adhere to them honestly and transparently. In setting the business plan and policy of the Company, the Company considers fairness to customers first, for the long term benefit of the Company. Risk Assessment Measures The Company manages risk systematically, analyzing and evaluating the risk factors from external and internal sources which may affect the business, on a regular basis. Even though the Company has not appointed a committee to manage risk separately, the Board of Directors is responsible for considering risk to find ways to mitigate and manage risk efficiently and effectively according to the situation without interrupting the operations of the Company. The Company has printed a guideline for each department and has communicated with all personnel in the organization on how to manage risk together with the Board of Directors of the Company and there is follow up on a continual basis. Management Control Activities The Company divides the responsibility between the Board of Directors of the Company, the board of executives and the high ranking executives clearly providing the authority, duties and responsibilities for everyone, with a limit on spending authority for the executive branch and all levels clearly in writing with the executive board having a duty of inspection, follow up and review of all other departments. The audit committee audits the operations and evaluates the risk to the Company and reports to the Board of Directors of the Company at least once per trimester as well as setting the direction for management of the Company that is reported at least once per trimester as well. Information and Communication Measures ormatioThe Company communicates information to the Board of Directors so that it receives quality and sufficient information to make decisions and so that the Board of Directors obtains documents for their meetings at least within the time specified by law and in the minutes of meeting, the Board of Directors record all of the questions, opinions or remarks of the Board of Directors which can be audited. The Company has modern information technology equipment to support the organizationâ&#x20AC;&#x2122;s requirements efficiently and has developed its information technology equipment continually, having a information department that analyzes and inspects the system and a ensures that it is updated and easy to use, considering easy storage of information that is efficient, backed-up and kept safely. Various information is kept such as sales systems information, accounting-financial information, cost management and human resources information. All of the information in the organization is on line and connected for everyone which can prevent any mistakes and there is evaluation and follow up to make the system efficient and coincides with the Companyâ&#x20AC;&#x2122;s policy so that the information is accurate and fast to help the executives receive information that is on time and can comprise the decision making process when the situation becomes necessary.

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The Company has protective measures for hardware and software and information files including software to protect intrusion and to protect against viruses and a contract to maintain the software and to have a back-up system for information that is kept separately for efficiency and safety. Monitoring The Board of Directors of the Company has delegated the executive board to follow up and control the performance of the executive branch with joint meetings every week and reporting to the board of the directors each trimester to learn of any variance from the goals set and to provide a solution for the Board of Directors of the Company to consider and approve. The Company has set and evaluated the internal controls to be appropriate for the business of the Company on a regular basis as well as following up and evaluating regularly with reports provided to the Audit Committee.

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Annual Report 2009 L.P.N. Development PLC.

Connected Transactions Connected transactions between affiliated companies In 2008, the Companyâ&#x20AC;&#x2122;s affiliates and joint venture companies entered into purchase and sales agreements or employment agreements, under the same conditions and market price as with third parties at that time. Connected transactions as of December 31, 2008 are as follows: Connected transaction between the Company and Lumpini Property Management Co., Ltd. were as follows: Description

Contract Price

1. Management of sales and transfer of title 1.1 Management of sales for 18 projects 1.2 Revenue of 14 projects

0.50% of the Project value 1.50% of the Project value

2. Brand Promotion Cost 6 projects

0.30% of the Project value

3. Brokerage fee 4 Projects

1 month/ 1 year contract

4. Management of parking lots and fee collection 4.1 Administration and management of parking lot fee at 80% of Lumpini Tower and 20% of L.P.N. Tower 4.2 Parking lot fee collection for 2 Projects

72,000 Baht/month 3% of revenue

5. Community Management Cost for 8 Projects which are 5.1 Lumpini Ville Ramindra-Laksi (Jan 2009 - Feb 2009) 5.2 Lumpini Ville Prachachun-Phongphet (16 Jan 2009 - 30 Apr 2009) 5.3 Lumpini CondoTown Ratanathibet (16 Mar 2009 - 31 Oct 2009) 5.4 Lumpini Suite Pinklao (Apr 2009 - Jul 2009) 5.5 Lumpini Ville Ramkamhaeng 26 (May 2009 - Aug 2009) 5.6 Lumpini Place Rama 8 (Oct 2009 - Dec 2009) 5.7 Lumpini Suite Rama 8 (Nov 2009 - Dec 2009) 5.8 Lumpini Place Ramindra-Laksi (Nov 2009 - Dec 2009)

300,000 Baht/Month 250,000 Baht/Month 320,000 Baht/Month 250,000 Baht/Month 250,000 Baht/Month 300,000 Baht/Month 80,000 Baht/Month 200,000 Baht/Month

6. Administration and Management for Juristic Person registration 7 projects which are Lumpini Ville PrachachunPhongphet, Lumpini CondoTown Rattanathibet, Lumpini Suite Pinklao, Lumpini Ville Ramkamhaeng 26, Lumpini Place Rama 8. Lumpini Place Ramindra-Laksi 7. Condominium M&E Cost 7.1 Lumpini Suite Rama 8 7.2 Another 6 projects which are Lumpini Ville Prachachun-Pongphet, Lumpini CondoTown Rattanathibet, Lumpini Suite Pinklao. Lumpini Ville Ramkamhaeng 2, Lumpini Place, Rama 8, Lumpini Place Ramindra-Laksi

150,000 Baht/Project/Month

150,000 Baht/Month 200,000 Baht/Month

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105

Description

8. Cleaning Cost 8.1 Conference Room, 11th Floor, Lumpini Tower 8.2 Head Office, 36th Floor, Lumpini Tower 8.3 Parking Lot , Lumpini Tower 8.4 Parking Lot, L.P.N. Tower 8.5 Lumpini Residence Sathorn 8.6 Lumpini Plaza Asoke 8.7 Construction Office, Sales Office and Customer Services Office 9. Room rental management (Residential or office space) started since April 2008 including 4 projects which are L.P.N. Tower Building, Lumpini Center Happyland Building E, Lumpini Ville Mary-Sathorn, Lumpini CondoTown Bordindecha-Ramkamhaeng

Contract Price

12,500 Baht/Month 31,500 Baht/Month 20,000 Baht/Month 10,000 Baht/Month 55,000 Baht/Month 85,050 Baht/Month Based on the number of works

10 % of the monthly rental

10. Administration and Management of office unit (Lump sum payment)

169,344 Baht/Month

11. Administration and Management fee 11.1 Lumpini Residence Sathorn 11.2 Lumpini Plaza Asoke

95,000 Baht/Month 188,160 Baht/Month

12. Maintenance works of Lumpini Reseidence Sathorn

20,000 Baht/Month

13. Rental and service fees of office in Lumpini Tower, 36th Floor Zone D 13.1 January 2009 - September 2009 13.2 October 2009 - December 2009

21,000 Baht/Month 10,000 Baht/Month

14. Interest for Promissory Note 14.1 Interest rate at 1.675% 14.2 Interest rate at 1.333% 14.3 Interest rate at 0.967% 14.4 Interest rate at 0.916% 14.5 Interest rate at 0.750% 14.6 Interest rate at 0.717%

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Annual Report 2009 L.P.N. Development PLC.

14,226.03 Baht 43,459.45 Baht 11,127.12 Baht 11,293.15 Baht 20,342.47 Baht 170,115.62 Baht

Connected-transactions between the Company and Lumpini Property Management Co., Ltd. were as follows: Description

Contract Price

1. Project Construction Management for 14 projects

57,020,700.91 Baht/14 Projects

2. Project Management (Maintenance) (Lump sum payment)

435,514.02 Baht/Month

3. Rental and maintenance office (Lumpini Tower, 36th Floor, Zone E, F) 3.1 January 2009 - September 2009 3.2 October 2009 - December 2009

118,000 Baht/Month 5,000 Baht/Month

4. Interest for Promissory Note 4.1 Interest rate at 1.675% 4.2 Interest rate at 1.333% 4.3 Interest rate at 0.967% 4.4 Interest rate at 0.916% 4.5 Interest rate at 0.750% 4.6 Interest rate at 0.717%

83,933.56 Baht 73,808.03 Baht 27,420.40 Baht 25,974.24 Baht 46,787.67 Baht 94,427.91 Baht

Connected-transactions between the Company and Pornsanti Co., Ltd. were as follows: Description

Contract Price

1. Rental, maintenance and public utility cost (Lumpini Tower, 36th Floor, Zone C) January 2009-December 2009

1,500 Baht/Month

Connected-transactions between Pornsanti Co., Ltd. and Lumpini Project Management Services Co., Ltd. were as follows: Description

Contract Price

1. Room rental management service for 3 projects

10% of rental/month/room

2. Lease Procurement Services for 3 projects

1 month rental / 1 year lease

3. Sales management Townhome Ramindra-Laksi (January 2009 - March 2009) 4. Sales revenue for Commercial building Ramindra-Laksi

16,448.60 Baht/Month 2% of project value

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107

Connected Transactions between Pornsanti Co., Ltd. and Lumpini Project Management Services Co., Ltd. were as follows: Description 1. Project Construction Management 1.1 Townhome Ramindra-Laksi (4 months) 1.2 Commercial building Phahon-Sutthisarn (4 months) 1.3 Commercial building Phahon-Suttisarn (2 months) 1.4 Commerical building Pinklao (2 months)

Contract Price

46,728.97 Baht/Month 9,345.79 Baht/Month 9,345.79 Baht/Month 9,345.79 Baht/Month

Connected Transactions between Lumpini Property Management Co., Ltd. and Grand Unity Development Co., Ltd. were as follows: Description

Contract Price 150,000 Baht

1. Condominium M&E Cost (U-Sabuy) 2. Cleaning cost 2.1 Sales office 5 projects which are Park View Vibhavadee, U-Sabuy, U Delight Kluaynamthai, U Delight Huay Kwang, U Delight Jatujak 2.2 Juristic person office for 3 projects which are Park View Vibhavadee, U Sabuy, U Delight Kluaynamthai 3. Condominium management cost for 2 projects 3.1 Park View Vibhavadee 3.2 U Sabuy

Based on the number of works Based on the number of works

50,000 Baht/Month 85,000 Baht/Month

4. Management of sales 4.1 Park View Vibhavadee (2 months) 4.2 U Sabuy (3 months) 4.3 U Delight Huay Kwang

32,184 Baht/Month 150,318.33 Baht/Month 320,345.89 Baht

5. Brokerage fee for 2 projects 5.1 Park View Vibhavadee 5.2 U Sabuy

2% of transfer fee 1% of deposit amount

Connected Transactions between Lumpini Project Management Services Co., Ltd. and Grand Unity Development Co., Ltd. were as follows:

Description Management of sales

108

Contract Price 5,622,814.77 Baht

Annual Report 2009 L.P.N. Development PLC.

Connected Loans as at December 31, 2009

Lender

Borrower

Type of Loan

Lumpini Property Management Co, Ltd.

L.P.N. Development Public Company Limited

Promissory Note

Lumpini Project Management Services Co, Ltd.

L.P.N. Development Public Company Limited

Promissory Note

Amount (Million Baht)

Term

Interest Rate (%)

0.0

AT CALL

0.717

0.0

AT CALL

0.717

Necessity and Reason behind Connected Transactions The Company’s investment structure plan shows that the Company wholly owns all shares in all affiliated companies and one joint venture company, with clear plan to separate the scope of duties between the Company, the affiliated companies and the joint venture company to allow for management and administrative flexibility. The benefits in each company are combined as an overall financial statement so that conflicts of interest do not incur. Construction works and services require detail and quality, in order for customers and condominium residents to gain confidence and satisfaction. From past experience in this matter, the quality of the delivered works and the reputation of work teams in the affiliated companies is widely acceptable and in delegating the works to the affiliated companies, the Company is able to keep close control and supervision, and their agreed remuneration is the market price that is generally acceptable and fair. Related-transactions incurred shall be presented in the form of an annual business plan and must receive, the consideration of the Executive Directors and the Company’s Board of Directors approval of the budget. Associated parties must then take action via their individual departments and finally propose the transactions for approval by authorized persons by setting certain budget limits of approval for each particular position. Transactions will be audited by the internal audit department on a regular and proper basis. Trends for engaging in connected-transactions in the future Based on the reasons above, it is still necessary to engage in connected transactions for the maximum benefit of the organization in general. To maintain the value of the products and services according to the Company’s plan of which will lead to trust to the “Lumpini” brand with continually growth. Connected Transaction between interested party The Company encourages employee and those related to the Company to have their own residence by giving the discount as welfare for those employees that reserve the condominium in various projects as the policy below: 1. to buy-sell in the name of employee with the objective to own as a residence only 2. to get a discount when transfer, the discount will be announced to the whole company by project 3. to get other benefits as a customer

Annual Report 2009 L.P.N. Development PLC.

109

Lumpini Suite Pinklao Name 1. Siri, Narumon Keiwalinsrit

Unit Number

Number of Units

Total Sales

Discount on Transfer

A-0918, A-0919

4,076,000.00

70,694.00

Remarks Transferred June 2009 Transferred June 2009 Transferred June 2009

2. Wasapon

Suppakijjanusan

A-1627

2,108,000.00

1,807.00

3. Wasamon

Suppakijjanusan

A-1927

2,125,000.00

1,821.00

Subtotal

8,309,000.00

74,322.00

Unit Number

Number of Units

Total Sales

Discount on Transfer

Remarks

Lumpini Park Pinklao Name 1. Sun

Sukukawadee

A-0707

1,338,000.00

Not transferred yet

2. Chupan

Chongthurakit

B-1110, B-1111

3,107,000.00

Not transferred yet

Subtotal

4,445,000.00

Unit Number

Number of Units

Total Sales

Discount on Transfer

B-0818, B-0822

2,476,000.00

3,786.00

Lumpini Ville Ramkamhaeng 44 Name 1. Preecha

Techakraisri

2. Pairoj

Suppakijjanusan

B-1801

1,433,000.00

35,211.00

3. Suneeya

Suppakijjanusan

B-1906

1,538,000.00

29,881.00

Subtotal

5,447,000.00

68,878.00

Unit Number

Number of Units

Total Sales

Discount on Transfer

Remarks Transferred August 2008 Transferred August 2008 Transferred August 2008

Lumpini CondoTown Bodindecha-Ramkhamhaeng Name 1. Panphen

Saengchanpakdee

A3-0412

657,500.00

4,997.00

2. Anun

Piyatanti

A3-0411

685,500.00

4,997.00

3. Jarun

Kaysorn

A3-0513

820,000.00

161,232.00

Subtotal

2,163,000.00

171,226.00

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Annual Report 2009 L.P.N. Development PLC.

Remarks Transferred August 2008 Transferred August 2008 Transferred August 2008

Lumpini CondoTown Ramindra-Nawamin Name

Discount on Transfer

Remarks

8,414,000.00

Not transferred yet

3,088,000.00

Not transferred yet

B-0107

3,088,000.00

Not transferred yet

A-0807

857,000.00

Not transferred yet

Subtotal

15,447,000.00

Unit Number

Number of Units

Total Sales

Discount on Transfer

Remarks

B-1002

1,401,000.00

Not transferred yet

A-0912, A-0919, B-0908, B-1001

5,624,000.00

Not transferred yet

Subtotal

7,025,000.00

Unit Number

Number of Units

A-0107, A-0108, A-0109

Suppakijjanusan

B-0106

3. Peerudee Suppakijjanusan 4. Sun

1. Teerachai Panchasarp 2. Rojana

Sukukawadee

Total Sales

Lumpini Ville Lardprao-Chokchai 4 Name 1. Chupan

Chongthurakit

2. Wisarn

Suppakijjanusan

Lumpini Place Rama 9-Ratchada Phase 1 Name 1. Pairoj

Suppakijjanusan

Unit Number B-2003, B-2004

Number of Units

Total Sales

Discount on Transfer

Remarks Not transferred yet

4,272,000.00

Subtotal 4

4,272,000.00

Annual Report 2009 L.P.N. Development PLC.

111

Legal Disputes The Company did not have any legal disputes that were court cases that have a negative affect on the operations of the Company in a material manner.

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Annual Report 2009 L.P.N. Development PLC.

Money Report

Explanation and Analysis of the Management The overall performance of the Company L.P.N. Development PCL is engaged in the real estate business of condominium development for those with incomes in the mid-mid lower bracket who need quality residences using a “Balanced Scorecard” as the organization’s strategy to create a balance in all dimensions both in terms of finance, customers, internal process and personnel as well as sufficiency economy. In the past year, the Company’s performance grew continually under risk management, especially with a good liquidity that reflects the cash flow, cash and cash equivalents as well as a shareholder debt ratio. In regards to customers dimensions the Company has raised its level of customer managment from simply managing customers, to creating an experience for customers to add value to service. The Company also focuses on the policy to develop a “Vibrant Community” differentiating itself from its competitors while developing new products which were praised as the product of the year by the Weekly Manager magazine. The value of the products and service that the Company has developed creates confidence in the “Lumpini” brand. In addition, the Company also is improving its management of operations on a continual basis so that its is faster which is one of the strengths of the Company, in order to reduce costs and risks which was a success in the past year and will prove as the roots of growth continually. At the same time, the Company focuses on the environment and society especially in terms of the impact form the Company’s business in order to create stable and sustainable growth. The Company, its subsidiaries and joint ventures had a total income of 8.513 Billion Baht, an increase over the same period in 2008 when total income was 7.223 Billion Baht, an increase of 17.85% from projects that the Company completed and realized income in 2009 namely, Lumpini Ville Prachachuen-Phongpetch, Lumpini CondoTown Ratanathibet, Lumpini Suite Pinklao, Lumpini Ville Ramkhamhaeng 26, Lumpini Place Ramindra-Laksi, Lumpini Place Rama 8, Lumpini Suite Rama 8 and from projects that were completed in the previous year. The rate of initial profit from sales increased 31.24% to 31.32%. Income from rental and services and management services increased from 2008 by 19.89%.

Description

Total Sales 1. Realized 2. Revenue 3. Cost 4. G/P

(Unit) (MB) (Unit) (MB) (MB) (%)

1,204 1,656.80 1,648 1,977.75 1,368.44 30.81

2,636 2,884.56 1,671 2,225.30 1,513.63 31.98

2009 Q3 1,694 2,268.49 1,578 2,072.74 1,377.56 33.54

Q1-4

2,918 4,031.09 1,229 1,992.20 1,418.58 28.79

8,452 10,840.94 6,126 8,267.99 5,678.21 31.32

1,997 2,900.58 814 1,344.60 938.85 30.32

1,932 3,482.13 1,982 2,197.88 1,504.98 31.53

2008 Q3 994 1,605.24 2,250 2,065.11 1,417.98 31.34

Q1-4

764 1,077.20 1,332 1,411.12 964.35 31.66

5,687 9,065.14 6,378 7,018.71 4,826.16 31.24

Financial Status As for the financial status of the Company in 2009, the Company had total liabilities at the rate of 34.86% and shareholder ratio of 65.14% which reflects the Company’s strong financial base. The shareholders equity portion exceeded liabilities with a debt to investment ratio down 0.97 times in 2008 to 0.54 times. The average debt to equity ratio for 12 listed companies in real estate development on the SET was 0.93 times but when only considering interest to shareholders equity ratio it was equal to 0.19 times equal to 0.58 times in 2008.

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Annual Report 2009 L.P.N. Development PLC.

Information comparing performance of the Company against industry averages Item

Industry Average

L.P.N. Development PCL

9.81 1.03 16.83 0.93 10.08 18.79

8.29 0.13 15.81 0.54 16.80 25.79

1. Sales and management costs/total income (%) 2. Interest Payments/total income (%) 3. Net Profit/total income (%) 4. Debt Raio /Equity (times) 5. Rate of Return /total assets (%) 6. Rate of Return / equity (%)

Remark The industry average of 12 companies listed on the SET are Areeya Property PCL, Asian Property PCL, Lalin Property PCL, Land and Houses PCL, L.P.N. Development PCL, Prinsiri PCL, Prueksa Real Estate PCL, Quality House PCL, Sansiri PCL and Supalai PCL. Liquidity and Profitability The average rate of net profit to total income for 12 real estate developers listed on the Stock Exchange of Thailand specifically for the housing project and condominium sector in 2009 was at 16.83% while the Companyâ&#x20AC;&#x2122;s average was 15.81%, which is higher than the average. This shows that the Company has better management than the industry as a whole. When the cash flow in the financial statement as at December 31, 2009 is considered, there is cash on hand in the amount of 1.319 Billion Baht, down from the amount in the same period last year which was equal to 1.690 Billion Baht, or 21.98% due to partial repayment of a loan. It is expected that the cash reserves will be sufficient to operate in the future. Major changes and future trends The Company has followed its plan to develop projects on a continual basis from sales management, handover of the condominium units and transfer of ownership on time, so the Company has the highest liquidity to create continual growth that is stable. From 2009 to present, the Company has 6 projects under construction with 8,025 units at a total value of 10.67 Billion Baht and in the first trimester of 2010 the Company has plans to develop 3 new projects which will see the Company developing a total of 9 projects worth 15.73 Billion Baht. At the end of 2010 the Company will have realized profit from sales in the amount of 7.227 Billion Baht and in 2011 the Company expects to have realized profit from sales in the amount of 3.314 Billion Baht. The projects that are complete and will have realized profit in 2010 are as follows:

Project 1. Lumpini Place Rama 9 Phase 1 2. Lumpini Ville Bangkhae 3. Lumpini CondoTown Ramindra-Nawamin (Buildings A,B,C) 4. Lumpini CondoTown Bangkhae 5. Lumpini VIlle Ratburana-Riverview 6. Lumpini Ville Latphrao-Chokechai 4 Total

Units 1,165 271 1,833 795 1,028 1,026 6,118

Value (Million Baht)

Expected Completion Date

2,600.00 300.00 1,610.00 660.00 1,200.00 1,360.00 7,730.00

Annual Report 2009 L.P.N. Development PLC.

Quarter 2 Quarter 2 Quarter 3 Quarter 3 Quarter 4 Quarter 4

2010 2010 2010 2010 2010 2010

115

Accounting Policies 1. Cash and cash equivalents For the purposes of the statements of cash flows preparation, cash and cash equivalents include cash on hand and deposits at banks which are due within 3 months and without limitations on withdrawal. 2. Current investment Investment in bills of exchange and promissory notes is stated at cost method less provisions for impairment (if any). Investment in securities is stated at fair price. The difference from changes of values recorded as unrealized profits (loss) from revaluation of investment in the profit and loss statement. 3. Allowance for doubtful accounts The Company provides allowance for doubtful accounts in an amount equal to receivables estimated not to be collectable, by considering each installment receivable that is more than six month overdue, in accordance with revenue realization criteria. 4. Land and project cost Land and cost of project under construction are stated at the specific cost method or by the net realizable value - whichever is the lower. The project cost consists of: cost of land, development cost, construction cost, direct expenses of the project and related interest expenses. Recording of interest expenses as project cost ends when the project construction work has been completed or has been ceased. 5. Inventories Inventory cosists of untransferred, completed condominium units; stated at the specific cost method or by the net realizable value - whichever is the lower. Supplies are stated at cost on a first-in first-out (FIFO) method or the net realizable value - whichever is the lower. 6. Long-term investment - Investment of affiliates in consolidated financial statements are stated under equity method. - Investment in subsidiaries and affiliates in the separate financial statements are stated at cost less provision for impairment (if any). 7. Assets for rent Land are stated at cost; buildings and equipment which were not appraised, are stated at cost less accumulated depreciation. Depreciation is computed by using straight-line method as follows: Number of years Building and car parking area 40 Decorations and Office equipment 10 Computer 5 8. Land, buildings and equipments -- net/depreciation - Lands are stated at cost. - Building and equipment are stated at cost less accumulated depreciation. The depreciation is computed by using straight-line method as follows:

Building Decorations and Office equipment Computer and software development Vehicles

116

Annual Report 2009 L.P.N. Development PLC.

Number of years 40 10 5 5

9. Impairment of Assets The Company considered the impairment of land, building and equipment, investment capital, land and cost of pending projects and intangible assets when there are indications that the assets will be impaired; when the recoverable value is less than book values. The loss from such impairments will be recognized in the income statement. And The Company will reverse the impairment loss only when there are indications that such impairments no longer exist, or decreased. Recoverable value of asset means either the net selling price or value from utilization of that asset, whichever is the higher. Recoverable value is estimated from each individual item of assets or from each asset unit generating cash flow, depending on cases. 10. Assets under financial lease agreement The Company records assets under financial lease agreement as assets and liabilities in the Balance Sheet, at the amount equals to the fair value of the lease assets at the inception of the agreement. Interest expenses are recorded in each period over the term of agreement based on the outstanding balance of the liabilities under financial lease agreement during each period. 11. Income and Expenses Recognition 11.1 Revenue from sales of properties and condominiums: are recognized on the percentage of completed work based on the proportion of completed work to the total estimated costs. The Company recognizes revenue when sales contracts have been executed on not less than 40 percent of the project open for sale, and payment have exceeded 20 percent of each contract value, and the construction work have progressed no less than 10 percent of each construction project.By this, the Company will stop to recognize incomes when receivable is overdued in excess of 3 consecutive installments and the ratio of completed work exceeds the payment dued. 11.2 Income from rental and services related to land, building and equipment are recognized on an accrual basis. 11.3 Revenue from services are recognized as income when the services have been rendered. 11.4 Other income and expenses are recognized on an accrual basis. 11.5 The Company calculates cost from condominiums and properties sold, by recognizing as cost of sales based on the percentage of income recognition. 12. Corporate Income Tax The Company and its subsidiaries recorded all corporate income tax payable in each period as expenses for that period, and calculated income tax in accordance with conditions of the Revenue Code, by making calculation from the revenues realized on the installment dues for the project sales before 2007 and the revenues realized on the percentage of completion for the project sales in 2007 onwards. 13. Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles required the management to make some estimations and assumptions which affect the reported amounts in the financial statements and notes related thereto. Consequently, the actual results may differ from these estimates. Estimates and assumptions that may be susceptible to next yearâ&#x20AC;&#x2122;s accounting adjustment on assetsâ&#x20AC;&#x2122; value that is carried forward on the date of Balance Sheet is the Reserves for employees retirement benefit plan. The cost of employees pension plan is assessed by the Management. Estimation on this is rather uncertain, due to the longetivity of the plan (Note 3.17.2). Estimation on other matters were disclosed in each pespective sections of the financial statements. 14. Provision for liabilities The Company recognizes a provision for liabilities when an entity has a present legal or constructive obligation as a result of past events. Such an obligation is expected to cause an outflow of economically beneficial resources be required to settle the obligation and reliable estimates can be confidently made of the amount of the obligation. If some or all expenditure required to settle a provision is expected to be reimbursed when the Company settles the obligation, the Company will realize reimbursements as separate assets; but the amount realized should not exceed the amount of the provisions. Annual Report 2009 L.P.N. Development PLC.

117

15. Earnings per share - Basic earnings per share is calculated by dividing net profit (loss) for the period by the weighted average number of ordinary shares outstanding during the period, after deduction of stock buy-back / treasury stock. - Diluted earnings per share is calculated by dividing net profit (loss) for the period by the sum of the weighted average number of ordinary shares outstanding during the period and the weighted average number of ordinary shares that may need to be issued for conversion of all ordinary shares equivalents (warrants) into ordinary shares. 16. Treasury stock The Company records treasury stock at cost. 17. Employees’Benefits 17.1 Provident Fund The Company sets up provident fund, which is a joint contribution scheme under the defined contribution plan. Assets of provident fund is separated from the Company’s assets and is managed by an external fund manager. This provident fund receives money accrued from employees and contributions from the Company. The money contributed to provident fund is recorded as expenses in that period’s Profit and Loss statement. 17.2 Retirement benefit An obligation to provide retirement benefit to retired employees at the retirement age according to Labour Law and Company’s criteria; estimated from the employees 45 years of age and higher, with more than 10 years of work in the Company, at a percentage the Management determined. That estimate has been used from the quarter 4 of 2009. 18. Notification of Applying New Accounting Standards The Federation of Accounting Professions issued its Notices No.86/2008 and No.16/2009 pertinent to the Accounting Standards as published in the Government Gazette. 18.1 Accounting standards, financial report standards, and accounting practices that are effective in the current year. Accounting Principles (revised 2007) Accounting Standards No. 36 (revised 2007)) “Impairment of Assets”. Financial Report Standards No.5 (revised 2007) “Non-current Assets Held for Sale and Calcellations Thereof”(originally Accounting Standards No. 54). Accounting practices for recording leasehold rights. Accounting practices for combining businesses under a common control. The above Accounting standards, Financial report standards, and Accounting practices are applicable to financial statements for the accounting period that begins on or after 1 January 2009. The Company’s mamangement has considered that the Financial Report Standards No.5 (revised 2007), Accounting practices for recording leasehold rights, and the Accounting practices for combining businesses under a common control do not concern the Company business. With regards to the Accounting Principles (revised 2007) and the Accounting Standards No.36 (revised 2007), there is no significant impact on financial statements of the current period. 18.2 Accounting standards that are not yet effective in the current year Effective date st

No. 20 Accounting for Government Financial Support and Disclosure of Government support

1 Janaury 2011

No. 24 (revised 2007) Disclosure of Information Concerning Related Persons or Businesses

1 Janaury 2011

No. 40 Real Estate for Investment

1 Janaury 2011

The company’s management is in the process of assessing impact on financial statements in the year the 3 Accounting Standards become effective. The conclusion is not available at this time. 118

Annual Report 2009 L.P.N. Development PLC.

Report of Certiﬁed Public Accountant For the year 2008, the Auditor’s Report is as follows: (1) I have audited the accompanying consolidated and separate balance sheets as at December 31, 2008 and 2007, the related consolidated and separate statements of income, statements of changes in shareholders’ equity, and statements of cash flows for the years then ended of L.P.N. Development Public Company Limited and its subsidiaries, and of L.P.N. Development Public Company Limited respectively. The Company’s management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. (2) I have conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion. (3) In my opinion, the consolidated and the separate financial statements referred to the above present fairly, in all material respects, the consolidated and separate financial position as at December 31, 2008 and 2007 and the results of operations and cash flows for the years then ended of L.P.N. Development Public Company Limited and its subsidiaries and of L.P.N. Development Public Company Limited, respectively, in accordance with generally accepted accounting principles.

Office of DIA International Auditing Mrs. Suvimol Krittayakiern C.P.A. Registration No. 2982 19th February 2009

Annual Report 2009 L.P.N. Development PLC.

119

For the year 2009, the Auditor’s Report is as follows (1) I have audited the accompanying consolidated and separate balance sheets as at December 31, 2009, the related consolidated and separate statements of income, statements of changes in shareholders’ equity, and statements of cash flows for the years then ended of L.P.N. Development Public Company Limited and its subsidiaries, and of L.P.N. Development Public Company Limited respectively. The Company’s management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. The consolidated and separate financial statements for the year ended December 31, 2008 presented for comparison were audited by another auditor from the same office, who expressed opinion without conditions in the auditor’s report dated 19th February, 2009 (2) I have conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion. (3) In my opinion, the consolidated and the separate financial statements referred to the above present fairly, in all material respects, the consolidated and separate financial position as at December 31, 2009 and the results of operations and cash flows for the years then ended of L.P.N. Development Public Company Limited and its subsidiaries and of L.P.N. Development Public Company Limited, in accordance with generally accepted accounting principles.

Office of DIA International Auditing Mrs. Vilairath Rojnakarin C.P.A. Registration No. 3104 18th February 2010

120

Annual Report 2009 L.P.N. Development PLC.

Balance Sheets As At December 31, 2009 And 2008 Baht Consolidated financial statements Assets

Note

Current assets Cash and cash equivalents Current investments Trade accounts and notes receivable Accounts receivable-net Notes receivable Unbilled construction income Land and cost of project under construction Related parties receivables Inventories

3.1 3.2, 4 3.3, 5 3.11, 6 3.4, 7, 15 9.1 3.5, 8

2009 2008 2009 992,153,969.212008 327,045,165.02

2008

640,746,063.06 1,050,000,000.00

Separate financial statements 2009 2008 2009 890,595,113.182008 327,045,165.02

2008

576,099,768.85 1,050,000,000.00

582,737.00 518,804.73 32,370,455.84 2,902,872,692.86 1,295,375.74 2,004,062,298.53

1,021,187.20 439,751.42 218,324,918.10 3,781,477,154.54 1,042,816.30 1,403,971,692.02

417,737.00 518,804.73 32,370,455.84 2,876,961,515.83 70,000,162.64 1,995,094,641.54

808,187.20 439,751.42 218,324,918.10 3,777,820,014.71 73,343,031.32 1,396,354,369.30

249,342,326.95 20,000,000.00 20,851,272.40 20,175,435.94 12,786,270.97 6,584,056,805.19

83,577,284.35 14,582,022.51 12,888,151.93 20,058,705.70 7,228,129,747.13

249,342,326.95 20,000,000.00 19,760,964.01 9,957,578.67 6,492,064,465.41

83,577,284.35 12,442,550.25 13,264,487.55 7,202,474,363.05

118,311,873.96 541,661,983.25 685,628,551.59 80,504,052.43

70,470,397.70 681,921,048.23 709,989,215.31 86,777,852.66

330,332,084.11 420,435,265.67 599,363,884.89 66,961,993.78

286,332,084.11 538,151,276.51 620,970,250.82 72,675,140.79

28,367,108.01 49,513,545.54 1,503,987,114.78 8,088,043,919.97

27,245,238.73 20,000,000.00 21,961,377.26 1,618,365,129.89 8,846,494,877.02

20,431,263.97 46,986,753.54 1,484,511,245.96 7,976,575,711.37

20,431,263.97 20,000,000.00 20,363,091.26 1,578,923,107.46 8,781,397,470.51

Other current assets Advance payment to contractors Inventory deposit Accrued income Prepaid expenses Others

16.3

Total current assets Non-current assets Investment in subsidiaries and associates Land and cost of project held for development Assets for rent-net Property, plant and equipment - net

3.6, 9.2 3.4, 7, 15 3.7, 10, 15 3.8, 11, 15

Other non-current assets Withholding income tax Inventory deposit Others

Total Non-Current Assets Total Assets

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

Annual Report 2009 L.P.N. Development PLC.

121

As At December 31, 2009 And 2008 Baht Consolidated financial statements Liabilities And Shareholdersâ&#x20AC;&#x2122; Equity Current liabilities Overdrafts and short - term loans from financial institutions Refund down payment and notes payable Trade accounts and notes payable Current portion of long-term loans and liabilities Related parties payable Short-term loans from related parties Other current liabilities Advance received Retention Accrued income tax Others Total current liabilities Non-current liabilities Liabilities under financial lease agreement - net Long-term loans Other non-current liabilities Deposit for rent and service Provision for liabilities - employees benefit expenses Others Total non-current liabilities Total liabilities

2009

2008

2009

284,992,375.68 1,519,752.63 722,437,708.34

1,345,078,533.81 1,402,950.53 690,266,716.33

284,992,375.68 1,519,752.63 720,334,571.58

1,345,078,533.81 1,402,950.53 687,352,979.41

13, 14 9.3 9.4

476,501,572.81 -

718,608,409.63 -

475,611,489.03 16,124,911.35 -

716,589,992.57 26,319,881.99 69,000,000.00

529,827,162.56 112,278,950.26 235,451,314.06 147,835,114.89 2,510,843,951.23

626,974,082.05 93,799,677.65 224,483,274.98 111,280,422.72 3,811,894,067.70

527,827,162.56 111,953,475.21 228,578,639.96 115,468,572.35 2,482,410,950.35

626,296,082.05 93,799,677.65 214,223,716.84 80,965,937.25 3,861,029,752.10

3,816,713.38 259,000,000.00

6,759,053.52 530,672,345.00

3,288,846.04 259,000,000.00

5,384,449.68 530,672,345.00

11,891,868.10 30,000,000.00 3,581,968.71 308,290,550.19 2,819,134,501.42

11,227,528.18 1,466,721.05 550,125,647.75 4,362,019,715.45

10,960,859.68 30,000,000.00 1,111,148.71 304,360,854.43 2,786,771,804.78

10,217,100.14 1,120,401.05 547,394,295.87 4,408,424,047.97

Note

3.10, 13 14

3.17

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

122

Separate financial statements

Annual Report 2009 L.P.N. Development PLC.

2008

As At December 31, 2009 And 2008 Baht Consolidated financial statements LIABILITIES AND SHAREHOLDERS’ EQUITY

Note

2009

2008

Separate financial statements 2009

2008

Shareholders’ equity Share capital Authorized share capital 1,475,698,768 ordinary shares at Baht 1.00 each Issued and fully paid-up share capital 1,475,698,768 ordinary shares at Baht 1.00 each Premium on share capital Premium on treasury stock Retained earnings Appropriated Legal reserve Reserve for treasury stock Unappropriated Total shareholders’ equity of the parent Less Treasury stock Total shareholders’ equity - net Minority interest Total shareholders’ equity including minority interest Total liabilities and shareholders’ equity

19.1 19.2

3.16, 18

1,475,698,768.00

1,475,698,768.00 441,807,166.00 39,061,748.24

1,475,698,768.00 441,807,166.00 -

1,475,698,768.00 441,807,166.00 39,061,748.24

1,475,698,768.00 441,807,166.00 -

148,000,000.00 3,164,229,657.58 5,268,797,339.82 5,268,797,339.82 112,078.73 5,268,909,418.55 8,088,043,919.97

148,000,000.00 16,689,514.97 2,418,837,427.68 4,501,032,876.65 (16,689,514.97) 4,484,343,361.68 131,799.89 4,484,475,161.57 8,846,494,877.02

148,000,000.00 3,085,236,224.35 5,189,803,906.59 5,189,803,906.59 5,189,803,906.59 7,976,575,711.37

148,000,000.00 16,689,514.97 2,307,467,488.54 4,389,662,937.51 (16,689,514.97) 4,372,973,422.54 4,372,973,422.54 8,781,397,470.51

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

Annual Report 2009 L.P.N. Development PLC.

123

Statements Of Income For The Each Year Ended December 31, 2009 And 2008 Baht Consolidated financial statements Note Revenues Sales Rental and service business income Management business income Total revenues Cost Cost of sales Cost of rental and service business Cost of management business Total cost Gross profit Other income Interest income Share of gain on investment in associates Contract changing income Gain on sales of assets Dividend received Others Total other income Profit before expenses Selling expenses Administrative expenses Directorsâ&#x20AC;&#x2122; remuneration Management benefit expenses Share of loss on investment in associates Total expenses Profit before finance costs and income tax Finance costs Profit before income tax Income tax Net profit Attributable to Equity holders of the parent Minority interest Basic earnings per share Weighted average number of ordinary shares (share)

9.2

3.12

3.15

2008

2009

2008

8,267,992,930.08 62,026,713.72 183,251,971.45 8,513,271,615.25

7,018,707,430.85 61,114,993.01 143,464,477.41 7,223,286,901.27

8,255,225,728.35 57,893,571.57 8,313,119,299.92

7,014,418,284.62 57,948,848.13 7,072,367,132.75

(5,678,206,984.03) (41,037,188.52) (121,005,495.86) (5,840,249,668.41) 2,673,021,946.84

(4,826,169,232.07) (40,555,069.21) (124,497,272.29) (4,991,221,573.57) 2,232,065,327.70

(5,746,892,276.09) (47,117,373.51) (5,794,009,649.60) 2,519,109,650.32

(4,896,877,259.91) (47,307,005.65) (4,944,184,265.56) 2,128,182,867.19

15,304,795.26 3,841,476.26 25,520,628.35 24,931,208.02 9,579,474.17 79,177,582.06 2,752,199,528.90 (236,350,405.01) (475,665,563.94) (11,770,000.00) (69,893,072.09) (793,679,041.04) 1,958,520,487.86 (11,113,033.96) 1,947,407,453.90 (588,664,912.56) 1,358,742,541.34

11,686,792.35 32,570,314.47 9,667,867.55 26,481,706.29 80,406,680.66 2,312,472,008.36 (130,363,190.21) (393,605,643.46) (11,070,000.00) (60,942,777.89) (6,643,294.09) (602,624,905.65) 1,709,847,102.71 (10,124,275.92) 1,699,722,826.79 (494,211,604.38) 1,205,511,222.41

15,139,752.41 25,520,628.35 24,859,686.35 79,929,000.00 9,052,974.12 154,502,041.23 2,673,611,691.55 (383,319,535.21) (271,477,807.70) (11,770,000.00) (35,208,014.11) (701,775,357.02) 1,971,836,334.53 (11,037,443.25) 1,960,798,891.28 (569,731,122.87) 1,391,067,768.41

10,869,902.59 32,570,314.47 9,667,806.30 46,849,620.00 25,766,872.80 125,724,516.16 2,253,907,383.35 (351,742,671.88) (222,830,457.43) (11,070,000.00) (30,281,273.21) (615,924,402.52) 1,637,982,980.83 (9,929,083.90) 1,628,053,896.93 (454,188,661.07) 1,173,865,235.86

1,358,691,262.50 51,278.84 1,358,742,541.34 0.93 1,468,170,209

1,205,438,655.21 72,567.20 1,205,511,222.41 0.82 1,474,593,089

1,391,067,768.41 1,391,067,768.41 0.95 1,468,170,209

1,173,865,235.86 1,173,865,235.86 0.80 1,474,593,089

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

124

Separate financial statements

2009

Annual Report 2009 L.P.N. Development PLC.

Statements Of Changes In Shareholdersâ&#x20AC;&#x2122;Equity For The Each Year Ended December 31, 2009 And 2008 (Baht) Consolidated financial statements Equity holders of the parent Minority Issued and fully

Premium on

Reserve for

Premium on Treasury stock

Note

Beginning balance as at January 1, 2008

paid-up share capital common share

treasury stock

1,475,698,768.00 441,807,166.00

Treasury stock

Legal reserve

treasury stock

- 148,000,000.00

Total

Unappropriated Total

interest

3,826,845,777.92

109,612.69

retained earnings

1,761,339,843.92

(16,689,514.97)

Reserve for treasury stock

16,689,514.97

Net profit

(16,689,514.97)

1,205,438,655.21

3,826,955,390.61 (16,689,514.97) -

72,567.20

1,205,511,222.41

Interim dividend paid

(206,597,827.52)

(4,320.00)

(206,602,147.52)

Dividend paid

(324,653,728.96)

(46,060.00)

(324,699,788.96)

2,418,837,427.68

4,484,343,361.68

131,799.89

4,484,475,161.57

Beginning balance as at January 1, 2009

1,475,698,768.00

441,807,166.00

Treasury stock

(16,689,514.97) 148,000,000.00

16,689,514.97

Reserve for treasury stock

(16,689,514.97)

Premium on treasury stock

16,689,514.97

39,061,748.24

Net profit

16,689,514.97

39,061,748.24

1,358,691,262.50

51,278.84

Interim dividend paid

(231,609,767.04)

Dividend paid

(398,378,780.53)

(71,000.00)

(398,449,780.53)

3,164,229,657.58

5,268,797,339.82

112,078.73

5,268,909,418.55

Balance as at December 31, 2009

1,475,698,768.00 441,807,166.00

- 148,000,000.00

39,061,748.24

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

1,358,742,541.34

5,268,909,418.55 3,164,229,657.58

(Baht) Separate financial statements Issued and fully

Premium on

Note

Beginning balance as at January 1, 2008

Treasury stock paid-up share capital common share

treasury stock

1,475,698,768.00 441,807,166.00

Reserve for

Unappropriated

treasury stock

retained earnings

1,681,543,324.13

16,689,514.97

(16,689,514.97)

Legal reserve

148,000,000.00

Total

(16,689,514.97)

Treasury stock

3,747,049,258.13 (16,689,514.97)

Reserve for treasury stock Net profit

1,173,865,235.86

1,173,865,235.86 (206,597,827.52)

Interim dividend paid

(206,597,827.52)

Dividend paid

(324,653,728.96)

16,689,514.97

2,307,467,488.54

4,372,973,422.54

(16,689,514.97)

16,689,514.97

1,475,698,768.00

Beginning balance as at January 1, 2009

441,807,166.00

(16,689,514.97)

148,000,000.00

16,689,514.97

Treasury stock

16,689,514.97

Reserve for treasury stock 39,061,748.24

Premium on treasury stock

39,061,748.24

1,391,067,768.41

Net profit

1,391,067,768.41

Interim dividend paid

(231,609,767.04)

Dividend paid

(398,378,780.53)

3,085,236,224.35

5,189,803,906.59

Balance as at December 31, 2009

1,475,698,768.00 441,807,166.00

39,061,748.24

148,000,000.00

(Please see notes to the financial statements which formed an integral part of these statements) 3,164,229,657.58

Annual Report 2009 L.P.N. Development PLC.

125

Statements Of Cash Flows For The Each Year Ended December 31, 2009 And 2008 (Baht)

Consolidated financial statements 2009

2008

Separate financial statements 2009

2008

Cash flows from operating activities Profit before income tax Items to reconcile net income to net cash flows from operating activities Dividend received Depreciation of assets Loss (Gain) on valuation of investment Loss (Gain) on sales of investment Loss on impairment of assets Loss on devaluation of inventory Reversed allowance for devaluation of inventory Loss (Gain) on sales of assets Loss on write off assets Share of (gain) loss on investments in associates Loss on amortized withholding income tax Interest expenses Profit from operation before changes in operating assets and liabilities Operating assets (increase) decrease Investment in securities for trading Trade accounts and notes receivable Unbilled construction income Related parties receivable Inventories Land and cost of project held for development Advance payment to contractors Other current assets Other non-current assets Operating assets (increase) decrease

1,947,407,453.90

1,699,722,826.79

1,960,798,891.28

1,628,053,896.93

34,162,522.55 (5,494,710.50) (3,198,441.93) 24,380,711.81 1,268,000.00 (19,010,295.23) (24,940,639.12) 572,150.74

36,857,646.03 19,698,042.72 (9,562,939.66) 63,822.69

(79,929,000.00) 25,484,967.74 (5,494,710.50) (3,198,441.93) 24,380,711.81 (19,010,295.23) (24,859,686.35) 544,962.70

(46,849,620.00) 26,782,669.51 19,698,042.72 (9,681,886.92) 63,822.69

(3,841,476.26) 719,265.50 11,113,033.96

6,643,294.09 3,413,564.87 10,124,275.92

11,037,443.25

9,929,083.90

1,963,137,575.42

1,766,960,533.45

1,889,754,842.77

1,627,996,008.83

(318,352,012.59) 359,396.89 185,954,462.26 (252,559.44) (632,613,247.00) 1,085,450,471.55 (165,765,042.60) (26,241,973.47) (16,429,122.93) 112,110,372.67

(410,494.67) (117,953,322.14) (1,042,816.30) (985,138,273.81) 833,392,642.47 (62,955,406.17) (9,107,155.28) (1,944,028.20) (345,158,854.10)

(318,352,012.59) 311,396.89 185,954,462.26 3,342,868.68 (629,597,190.56) 1,085,324,319.15 (165,765,042.60) (24,011,050.67) (15,024,616.93) 122,183,133.63

(460,494.67) (117,953,322.14) (328,774.07) (989,266,291.38) 886,013,699.38 (62,955,406.17) (3,166,687.70) (5,352,093.07) (293,469,369.82)

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

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Annual Report 2009 L.P.N. Development PLC.

For The Each Year Ended December 31, 2009 And 2008 (Baht)

Consolidated financial statements 2009

2008

Separate financial statements 2009

2008

Operating liabilities increase (decrease) Trade accounts and notes payable Refund down payment and notes payable Related parties payable Other current liabilities Other non-current liabilities Operating liabilities increase (decrease) Cash generated (paid) from operation Interest paid Income tax paid Net cash provided by (used in) operating activities Cash flows from investing activities Investment in bill of exchange Proceeds from matured promissory notes and bill of exchange (Increase) Decrease in current portion of long-term loans to related parties Investment in subsidiaries and associates Dividend received Purchase of fixed assets Purchase of assets for rent Sale of fixed assets Sale of assets for rent Net cash provided by (used in) investing activities

28,336,336.59 116,802.10 (40,821,077.76) 32,779,587.58 20,411,648.51 2,095,659,596.60 (90,739,235.37) (579,538,008.26) 1,425,382,352.97

136,237,382.74 774,954.19 (12,427,423.29) 509,841.57 125,094,755.21 1,546,896,434.56 (113,995,663.42) (496,767,342.37) 936,133,428.77

29,146,936.75 116,802.10 (10,194,970.64) (44,520,609.88) 30,734,507.20 5,282,665.53 2,017,220,641.93 (91,224,231.37) (555,376,199.75) 1,370,620,210.81

137,002,107.89 774,954.19 3,441,371.41 (15,127,000.57) 1,204,539.70 127,295,972.62 1,461,822,611.63 (114,902,579.29) (456,987,991.41) 889,932,040.93

(300,000,000.00) 1,350,000,000.00

(1,050,000,000.00) -

(300,000,000.00) 1,350,000,000.00

(1,050,000,000.00) -

(44,000,000.00) (14,521,877.23) (3,326,945.80) 282,098.13 89,294,709.00 1,077,727,984.10

12,000,000.00 (66,000,000.00) (11,394,539.06) (750,622.98) 2,002,372.89 27,077,000.00 (1,087,065,789.15)

(44,000,000.00) 79,929,000.00 (9,592,180.22) (3,326,945.80) 168,140.19 89,294,709.00 1,162,472,723.17

12,000,000.00 (66,000,000.00) 46,849,620.00 (8,849,549.78) (750,622.98) 1,326,379.44 27,077,000.00 (1,038,347,173.32)

Annual Report 2009 L.P.N. Development PLC.

127

For The Each Year Ended December 31, 2009 And 2008 Baht Consolidated financial statements 2009

2008

Separate financial statements 2009

2008

(69,000,000.00) 5,913,841.87 â&#x20AC;&#x153; 1,264,000,000.00 (2,330,000,000.00) 2,851,200,000.00 (3,363,592,345.00) â&#x20AC;&#x153; (2,881,802.16) (1,199,399.95) 17,888,914.92 39,061,748.24 (629,988,547.57) (2,218,597,589.65) 314,495,344.33 576,099,768.85 890,595,113.18

69,000,000.00 23,793,501.65 2,207,990,000.00 (1,327,990,000.00) 2,476,820,000.00 (2,489,427,655.00) (2,734,070.52) (16,689,514.97) (531,220,276.48) 409,541,984.68 261,126,852.29 314,972,916.56 576,099,768.85

Cash flows from financing activities Proceeds from short-term loans from related parties Proceeds from (Payments for) bank overdraft Proceeds from short-term loans from financial institutions Payments for short-term loans to financial institutions Proceeds from long-term loans Repayments for long-term loans Payments for liabilities under financial lease agreement Treasury stock - ordinary shares Resale of ordinary shares Premium on treasury stock Dividend paid Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents as at January 1 Cash and cash equivalents as at December 31

5,913,841.87 1,264,000,000.00 (2,330,000,000.00) 2,851,200,000.00 (3,363,592,345.00) (4,915,643.43) (1,199,399.95) 17,888,914.92 39,061,748.24 (630,059,547.57) (2,151,702,430.92) 351,407,906.15 640,746,063.06 992,153,969.21

Supplemental disclosures of cash flows information see note 21 (Please see notes to the financial statements which formed an integral part of these statements)

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Annual Report 2009 L.P.N. Development PLC.

23,190,778.28 2,207,990,000.00 (1,327,990,000.00) 2,476,820,000.00 (2,489,427,655.00) (5,766,219.51) (16,689,514.97) (531,270,656.48) 336,856,732.32 185,924,371.94 454,821,691.12 640,746,063.06

Notes To Financial Statements As At December 31, 2009 And 2008 1. Company’s operation L.P.N. Development Public Company Limited has been listed in the Stock Exchange of Thailand since on June 21, 1994. Type of business is Real Estate. The Company’s location and staff expenses are as follows : - Location : 1168/109, 36th Flr., Lumpini Tower, Rama IV Rd., Sathorn, Bangkok. 2. Basis of preparation of the financial statements 2.1 The financial statements have been prepared in conformity with generally accepted accounting principles enunciated under the Accounting Professions Act B.E. 2547 and presented in accordance with the notification of the Department of Business Development by Ministry of Commerce date January 30, 2009 regarding the condensed form should be included in the financial statements B.E. 2552 and the regulations of the Securities and Exchange Commission regarding the preparation and presentation of financial reporting under the Securities and Exchange Act B.E. 2535. 2.2 The financial statements have been prepared under the historical cost convention, except as transaction disclosed in related accounting policy. 2.3 The consolidated financial statements for the year ended December 31, 2009 and 2008 consist of the financial statement of L.P.N. Development Public Company Limited and its subsidiaries. The Company held in its subsidiaries shares capital as follows:อัตราการถือหุน Percentage

Type of business

Relationship

Pornsanti Co., Ltd.

99.99

Real Estate

Shareholding/Command by director

Lumpini Property Management Co., Ltd.

99.88

Service

Shareholding/Command by director

Lumpini Project Management Services Co., Ltd.

99.93

Service

Shareholding/Command by director

2.4 Transaction with related companies Inter-company transactions have been eliminated in the consolidated financial statements. 2.5 The consolidated financial statements have been presented the financial position and results of operation of L.P.N. Development Public Company Limited and its subsidiaries companies.The usefulness of transaction of consolidated financial statements for other purposes may be limited due to the difference business of those consolidated companies. 3. Significant Accounting Policies 3.1 Cash and cash equivalents For the purposes of the statements of cash flows preparation, cash and cash equivalents include cash on hand and at banks which are due within 3 months and without restriction on withdrawal. 3.2 Current investment - Investments in bill of exchange and promissory note are stated at cost less provision for impairment (if any). - Investments in securities for trading are stated at their fair value. Changes in value of investment are recorded as unreal ized gain(loss) on revaluation of investments in statements of income.

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3.3 Allowance for doubtful accounts The Company provides the allowance for doubtful accounts equal to the estimated loss of installment receivables by considering each receivable that is past due more than six month periods and based on income recognition standards. 3.4 Land and project cost Land and cost of project under development are shown by the lower of specific method or net realizable value. The project cost consists of : cost of land, development cost, construction cost, miscellaneous expenses of the project and interest expenses. Interest expenses will be stopped to recognize as cost whenever the construction project have been completed or ceased. 3.5 Inventories - Untransferred condominium are valued at the lower of cost by using specific method or net realizable value. - Supplies are valued at the lower of cost on a first - in first - out (FIFO) method or net realizable value. 3.6 Long-term investment - Investment in associates in the consolidated financial statements are stated under equity method. - Investment in subsidiaries and associates in the separate financial statements are stated at cost less provision for impairment (if any). 3.7 Assets for rent - Land are valued at cost, building and equipment which were not reappraised, are stated at cost less accumulated depreciation. The depreciation is computed on straight-line method as follows : Number of years

Office building and car parking Office decoration and equipments Computer

40 10 5

3.8 Property, plants and equipments-net/depreciation - Lands are valued at cost. - Building and equipment are valued at cost less accumulated depreciation. The depreciation is computed on straight-line method as follows : Number of years จำนวนป

Building Office decoration and equipments Computer and RMS System Vehicles

40 10 5 5

3.9 Impairment of Assets The Company has considered the impairment of land, building and equipment, investing capital, land and cost of undevelopment projects and intangible assets whenever events or changes indicate that the carrying amount of assets exceeds its recoverable value.The impairment loss will be recognized in statements of income. The Company will reverse the impairment loss whenever there is no longer impairment or reduction in impairment. Recoverable value of asset is either the net selling price or value from utilization of that asset, whichever is higher. The impairment will be estimated from each item of assets or each asset unit generating cash flow, whichever is practical.

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Annual Report 2009 L.P.N. Development PLC.

3.10 Assets under financial lease agreement The Company records assets under financial lease agreement as assets and liabilities in an amount equal to the fair value of the lease assets at the inception of the agreement. Interest expenses are recorded to each period over the term of agreement based on the outstanding balance of the liabilities under financial lease agreement during each period. 3.11 Income and Expenses Recognition 3.11.1 Revenue from sales of properties and condominiums are recognized on the percentage of completed work which is based on the proportion of actual costs to the total estimated costs. The Company recognizes revenue when sales contracts have been executed not less than 40 percent of the area opened for sales and collection received exceeds 20 percent of each contract value, and the progress of completed construction work is more than 10 percent. The Company will stop to recognize such income whenever the overdue payment exceeding 3 consecutive installments and the percentage of completed work is over the installment due. 3.11.2 Rental and services income relating to land, building and equipment are recognized on an accrual basis. 3.11.3 Revenue from services are recognized as income when the services are rendered. 3.11.4 Other income and expenses are recognized on an accrual basis. 3.11.5 Cost of condominiums and properties sold are recognized as cost of sales based on the percentage of income recognition. 3.12 Income tax The Company and subsidiaries recorded corporate income tax to be paid as expenses in each period based on the condition described in the Revenue Code. Corporate income tax is computed from revenues recognized on the installment due for the project sales before 2007 and revenue recognized on the percentage of completion for the project sales in 2007 onwards. 3.13 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles required the management to make several estimation and assumption which affect the reported amounts in the financial statements and notes related thereto. Consequent actual results may differ from these estimates. The significant estimates and assumptions may have a risk of causing an adjustment to the carrying amount of assets in the next financial period related to provision for defined retirement benefit plan and cost of defined retirement benefit plan in the balance sheet date.These estimates are subject to significant uncertainty since the nature of these plans is long-term (note 3.17.2). Other estimates are further described in the corresponding disclosures. 3.14 Provision for liabilities The Company recognizes a provision for liabilities when an entity has a present legal or constructive obligation as a result of a past event. It is probable that an outflow of economic benefits resources will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. If some or all the expenditure is required to settle a provision, is expected to be reimbursed when it is virtually certain that reimbursement will be received if the Company settles the obligation. The amount recognized should not exceed the amount of the provision. 3.15 Earnings per share - Basic earnings per share is determined by dividing net profit (loss) for the year by the weighted average number of ordinary shares issued during the year after deduction with treasury stock. - Diluted earnings per share is calculated by dividing net profit (loss) for the year by the sum of the weighted average number of ordinary shares issued during the year and the weighted average number of ordinary shares to be issued for conversion of all diluted potential ordinary shares (warrants) into ordinary shares.

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3.16 Treasury stock The Company records treasury stock at cost. 3.17 Employees benefit 3.17.1 Employees benefit The Company has established provident fund under the defined contribution plan. The fund’s assets are separated entities which are administered by the outsider fund manager. The Company and employees made contribution into such provident fund. The Company’s contribution to the provident fund were recorded as expenses in statements of income in the period in which they are incurred. 3.17.2 Retirement benefit This obligation is to provide retirement benefit to retired employees under the defined retirement plan, determined by the labor law and the Company’s regulation.The Company will record provision for liabilities by considering the employees who are 45 years old and length of their services for 10 years onwards at the rate estimated by the management. The estimates are commenced to provide in the forth quarter of 2009. 3.18 New Accounting Standards Issuance In accordance with the notification No.86/2551 and No. 16/2552 issued by the Federation of Accounting Professions, pertaining to the Accounting Standards announced in the Government Gazette, required to adopt the revised Accounting Standards as following: 3.18.1 Accounting standards, financial reporting standard and accounting treatment guidance which are effective for the current year Framework for Preparation and Presentation of Financial Statements (revised 2007) TAS 36 (revised 2007) Impairment of Assets TFRS 5 (revised 2007) Non-current Assets Held for Sale and Discontinued Operations (Formerly TAS No. 54) Accounting Treatment Guidance for Leasehold right Accounting Treatment Guidance for Business Combination under Common Control These accounting standards, financial reporting standard and accounting treatment guidance became effective for the financial statements for the period beginning on or after January 1, 2009. The Company’ s management has assessed the effect of these standards and believes that TFRS 5 (revised 2007) and Accounting Treatment Guidance for Business Combination under Common Control are not relevant to the Company’s business, while Framework for Preparation and Presentation of Financial Statements (revised 2007), TAS 36 (revised 2007) and Accounting Treatment Guidance for leasehold right will not have any material impact on the financial statements for the current period. 3.18.2 Accounting standards which are not effective for the current year Effective date No. 20 Accounting for Government Grants and Disclosure of Government Assistance

January 1, 2012

No. 24 (Revised 2007) Related Party Disclosures

January 1, 2011

No. 40 Investment Property January 1, 2011 The management of the Company is still evaluating the effect of these three accounting standards and has not been able to reach a conclusion as to their effect to the financial statements for the year in which they are initially applied.

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Annual Report 2009 L.P.N. Development PLC.

4. Current investment As at December 31, 2009 and 2008 are as follows :Consolidated financial statements (Baht) 2009

Interest Rate

Promissory note Bill of exchange Securities for trading - open end fund in debt and equity securities of SCB Total

2.50% - 3.80% 2.75% - 4.00%

Separate financial statements (Baht)

2008

2009

2008

480,000,000.00 570,000,000.00

327,045,165.02 327,045,165.02

1,050,000,000.00

327,045,165.02 327,045,165.02

1,050,000,000.00

5. Trade accounts receivable-net As at December 31, 2009 and 2008 are as follows :-

Consolidated financial statements (Baht) 2009

Contract value (December 31, 2009 : 89.76% December 31, 2008 : 85.64% from project sale) Less Transferred contract value Balance of untransferred contract value Installment due Less Received payment Accrued installment receivable Less Unrealized installment income Transfer to related company receivable Accounts receivable Less Allowance for doubtful accounts Trade accounts receivable - net

Separate financial statements (Baht)

2008

2009

2008

34,835,474,316.69

26,008,701,338.31

34,775,968,316.69

25,993,851,338.31

(24,160,048,354.69)

(16,282,214,743.98)

(24,147,542,354.69)

(16,272,214,743.98)

10,675,425,962.00 201,889,981.91 (100,831,926.32) 101,058,055.59 (30,475,318.59) (70,000,000.00) 582,737.00 582,737.00

9,726,486,594.33 479,222,402.41 (390,048,474.21) 89,173,928.20 (18,095,433.00) (70,000,000.00) 1,078,495.20 (57,308.00) 1,021,187.20

10,628,425,962.00 188,059,981.91 (99,166,926.32) 88,893,055.59 (18,475,318.59) (70,000,000.00) 417,737.00 417,737.00

9,721,636,594.33 477,392,402.41 (388,431,474.21) 88,960,928.20 (18,095,433.00) (70,000,000.00) 865,495.20 (57,308.00) 808,187.20

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As at December 31, 2009 and 2008 trade accounts receivable were classified by aging as follows :-

Consolidated financial statements (Baht)

Overdue 1 - 3 months Overdue 4 - 6 months Overdue 7 - 12 months Overdue 12 months Total Less Unrealized installment income Trade accounts receivable Less Allowance for doubtful accounts Trade accounts receivable - net

Separate financial statements (Baht)

2009

2008

2009

2008

26,245,266.59 1,786,000.00 2,415,289.00 611,500.00 31,058,055.59

17,761,052.00 894,268.20 238,400.00 280,208.00 19,173,928.20

14,245,266.59 1,786,000.00 2,415,289.00 446,500.00 18,893,055.59

17,761,052.00 894,268.20 238,400.00 67,208.00 18,960,928.20

(30,475,318.59) 582,737.00 582,737.00

(18,095,433.00) 1,078,495.20 (57,308.00) 1,021,187.20

(18,475,318.59) 417,737.00 417,737.00

(18,095,433.00) 865,495.20 (57,308.00) 808,187.20

6. Installment receivable/Unrealized revenue As at December 31, 2009 and 2008 are as follows :-

Consolidated financial statements (Baht)

134

Separate financial statements (Baht)

2009

2008

2009

2008

Installment due-net Less Realized income under percentage of completion Total This disclosure consist of: Unbilled construction income

201,889,981.91

479,222,402.41

188,059,981.91

477,392,402.41

(208,117,956.00) (6,227,974.09)

(683,784,727.35) (204,562,324.94)

(206,287,959.00) (18,227,977.09)

(681,954,727.35) (204,562,324.94)

36,703,295.68

222,657,757.94

36,703,295.68

222,657,757.94

Less Unrealized installment income Total Unbilled construction income Less Allowance for doubtful accounts Unbilled construction income - net

(30,475,318.59) 6,227,977.09 36,703,295.68 (4,332,839.84) 32,370,455.84

(18,095,433.00) 204,562,324.94 222,657,757.94 (4,332,839.84) 218,324,918.10

(18,475,318.59) 18,227,977.09 36,703,295.68 (4,332,839.84) 32,370,455.84

(18,095,433.00) 204,562,324.94 222,657,757.94 (4,332,839.84) 218,324,918.10

Annual Report 2009 L.P.N. Development PLC.

7. Land and cost of project under construction, and land and cost of project under development As at December 31, 2009 and 2008 are as follows :-

Consolidated financial statements (Baht) 2008 Land Construction and design Other expenses Interest expenses Total Less Cost of sales - accumulated Transfer to loss on impairment of assets Transfer to inventories Transfer to lease assets, office Total transfer Total Less Land and cost of project under construction Land and cost of project under development - net

2,987,659,884.78 2,114,059,293.98 81,824,774.95 309,553,491.47 5,493,097,445.18 1,232,692.32 391,833,602.41 595,052,947.68 41,580,000.00 1,029,699,242.41 4,463,398,202.77 3,781,477,154.54 681,921,048.23

Increase (Decrease)

2009

1,084,215,652.35 4,111,593,275.11 90,787,629.62 82,729,566.59 5,369,326,123.67 40,657,904.95 4,380,711.81 6,343,151,033.57 6,388,189,650.33 (1,018,863,526.66) (878,604,461.68) (140,259,064.98)

4,071,875,537.13 6,225,652,569.09 172,612,404.57 392,283,058.06 10,862,423,568.85 41,890,597.27 396,214,314.22 6,938,203,981.25 41,580,000.00 7,417,888,892.74 3,444,534,676.11 2,902,872,692.86 541,661,983.25

Separate financial statements (Baht) 2008 Land Construction and design Other expenses Interest expenses Total Less Cost of sales - accumulated Transfer to loss on impairment of assets Transfer to inventories Transfer to lease assets, office Total transfer Total Less Land and cost of project under construction Land and cost of project under development - net

2,841,587,096.52 2,112,344,970.69 81,794,974.95 309,553,491.47 5,345,280,533.63 1,232,692.32 391,833,602.41 594,662,947.68 41,580,000.00 1,029,309,242.41 4,315,971,291.22 3,777,820,014.71 538,151,276.51

Increase (Decrease)

2009

1,083,704,575.18 4,100,091,780.29 90,787,629.62 82,729,566.59 5,357,313,551.68 37,252,971.23 4,380,711.81 6,334,254,378.36 6,375,888,061.40 (1,018,574,509.72) (900,858,498.88) (117,716,010.84)

3,925,291,671.70 6,212,436,750.98 172,582,604.57 392,283,058.06 10,702,594,085.31 38,485,663.55 396,214,314.22 6,928,917,326.04 41,580,000.00 7,405,197,303.81 3,297,396,781.50 2,876,961,515.83 420,435,265.67

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135

Land and cost of project under development consits of :

Consolidated financial statements (Baht)

Land Cost of construction and design Other expenses Total Less Provision for impairment of assets Land and cost of project under development - net

2008

Increase (Decrease)

2009

990,382,893.37 80,632,752.58 2,739,004.69 1,073,754,650.64 (391,833,602.41) 681,921,048.23

(135,713,838.61) (158,590.62) (5,923.94) (135,878,353.17) (4,380,711.81) (140,259,064.98)

854,669,054.76 80,474,161.96 2,733,080.75 937,876,297.47 (396,214,314.22) 541,661,983.25

งบการเงิ น (บาท) (Baht) Separate financial statements 2008 Land Cost of construction and design Other expenses Less Inter-company transaction Land and cost of project under development - net

846,912,382.94 80,363,291.29 2,709,204.69 (391,833,602.41) 538,151,276.51

Increase (Decrease)

2009

(113,329,375.09) (5,923.94) (4,380,711.81) (117,716,010.84)

733,583,007.85 80,363,291.29 2,703,280.75 (396,214,314.22) 420,435,265.67

- As at December 31, 2009 and 2008, the Company transferred land and cost of project under development with one year construction period by presenting in current assets amounted to Baht 2,902.87 million (The company only : Baht 2,876.96 million) and Baht 3,781.48 million (The company only Baht 3,777.82 million), respectively. - Part of cost of sales arose from the recording on the percentage of income recognition in each period which accumulated from each project’s income recognition and will be transferred on the closing of construction project in the next period. - As at December 31, 2009, the Company has recorded provision for devaluation of land deposit amount of Baht 20 million and land project under development amount of Baht 4.38 million, totally Baht 24.38 million since such land is under the controversy and the Court had ordered for execution which the Company recognized loss on such provision in the 2009 statements of income in whole amount. - As at December 31, 2009 and 2008, the remaining project in progress are ten projects and eleven projects, respectively. - As at December 31, 2009, the Company has made covenant with PORNSANTI Company Limited, a subsidiary to sell its land in the price of Baht 15.00 million for redevelopment project purpose. Such land had the cost of Baht 6.27 million. The Company had received deposit for land in the amount of Baht 1.00 million which was presented as related parties payables. - As at December 31, 2009 and 2008, land and cost of project under construction, and land held for development amounted to Baht 2,506.98 million and Baht 3,981.15 million, respectively were mortgaged as collateral against overdrafts and shortterm loans from financial institution as stated in notes to financial statements no. 12, and loans from commercial bank and financial institutions as mentioned in notes to financial statements no. 14 and 15.

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Annual Report 2009 L.P.N. Development PLC.

8. Inventories As at December 31, 2009 and 2008 are as follows :Consolidated financial statements (Baht)

Condominium Supplies Total Less Provision for devaluation of goods Grand total

Separate financial statements (Baht)

2009

2008

2009

2008

2,005,988,723.30 29,322.72 2,006,018,046.02 (1,955,747.49) 2,004,062,298.53

1,423,600,412.02 69,322.72 1,423,669,734.74 (19,698,042.72) 1,403,971,692.02

1,995,782,389.03 1,995,782,389.03 (687,747.49) 1,995,094,641.54

1,416,052,412.02 1,416,052,412.02 (19,698,042.72) 1,396,354,369.30

- As at December 31, 2008, inventories amount of Baht 635.60 million, was mortgaged as collateral for overdrafts and short-term loans from financial institutions as stated in note 12 and loans from commercial bank and financial institutions as stated in note 14 and 15. - As at December 31, 2009 and 2008, the Company recorded the devaluation of inventories in the form of condominium total amount of Baht 1.96 million and Baht 19.70 million, respectively (the Company only : Baht 0.69 million and Baht 19.70 million).

9. Transaction with related companies Company 1. Pornsanti Co., Ltd.

Description Loans from the Company

Pricing policy Due in 2007, at the interest rate of 4.84 - 5.28% per annum

Buy of land from the Company

Base on agreement which close to the independent appraiserâ&#x20AC;&#x2122;s appraisal value

2. Lumpini Property Managment Co.,Ltd. Construction management services and sales, Base on agreement assets management system for rent to the Company and associates Loans to the Company

Due at call, at the interest rate of 0.717 - 2.633% per annum

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Company 3. Grand Unity Development Co., Ltd. And Subsidiaries Grand U Living CO., LTD. (associates)

4. Lumpini Project Management Services Co., Ltd.

Description

Pricing policy

Loans from the Company

Due at call, at the interest rate of 5 - 9.5% per annum

Construction management services and sales, dealer business derived from the Companyâ&#x20AC;&#x2122;s subsidiaries

Collect service fee base on agreement

Construction management services and sales to the Company

Collect service fee base on agreement

Loans to the Company

Due at call, at the interest rate of 0.717 - 2.633% per annum

9.1 Receivables - related parties Consolidated financial statements (Baht)

Grand Unity Development Co., Ltd. And Subsidiaries Grand U Living Co., Ltd. (Associates) Total

2008

Increase

Decrease

2009

1,042,816.30 1,042,816.30

10,494,733.22 10,494,733.22

10,242,173.78 10,242,173.78

1,295,375.74 1,295,375.74

Separate financial statements (Baht) LUMPINI PROPERTY MANAGEMENT CO., LTD. LUMPINI PROJECT MANAGEMENT SERVICES CO., LTD. PORNSANTI CO., LTD. GRAND UNITY DEVELOPMENT CO., LTD. AND SUBSIDIARIES GRAND U LIVING CO., LTD. (associates) Total

2008

Increase

Decrease

2009

342,400.00 73,000,000.00

30,593,176.45 51,819,784.38 61,008.00

30,935,576.45 51,819,784.38 3,061,008.00

70,000,000.00

631.32 73,343,031.32

2,208.77 82,476,177.60

2,677.45 85,819,046.28

162.64 70,000,162.64

In 2008, the Company has sold its land to PORNSANTI CO., LTD. for using as its project in the amount of Baht 129.20 million by receiving the payment amount of Baht 59.20 million, the remaining is Baht 70.00 million.

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9.2 Investment in subsidiaries and associates Percentage of ownership

Consolidated financial

Separate financial

statements (Baht) Equity Method

statements (Baht) Cost Method

Dividend (Baht)

As at December 31, 2009 Subsidiaries Pornsanti Co., Ltd. Less Provision for impairment of investment Net Lumpini Property Management Co., Ltd. Lumpini Project Management Services Co., Ltd. Associates : Grand Unity Development Co., Ltd. And Subsidiaries Grand U Living Co., Ltd. (Associates) Total

99.99

99.88

318,037,237.15 (111,425,191.36) 206,612,045.79 998,800.00

29,964,000.00

99.93

999,300.00

49,965,000.00

20.00

118,311,873.96 118,311,873.96

121,721,938.32 330,332,084.11

79,929,000.00

Consolidated financial

Separate financial

Percentage of ownership Subsidiaries Pornsanti Co., Ltd. Less Provision for impairment of investment Net Lumpini Property Management Co., Ltd. Lumpini Project Management Services Co., Ltd. Associates : Grand Unity Development Co., Ltd. And Subsidiaries Grand U Living Co., Ltd. (Associates) Total

99.99

statements (Baht) statements (Baht) Equity Method Cost Method As at December 31, 2008

Dividend (Baht)

99.88

318,037,237.15 (111,425,191.36) 206,612,045.79 998,800.00

35,057,880.00

99.93

999,300.00

11,791,740.00

20.00

70,470,397.70 70,470,397.70

77,721,938.32 286,332,084.11

46,849,620.00

The financial statements of associates which were brought into computation of investment, had equity gain in 2009 amount of Baht 19,266,025.40, were taken from the financial statements prepared by the management but were not reviewed by the auditor. In 2009, the Company has made payment for increase share capital of Grand Unity Development Co., Ltd. which called for payment at Baht 4.00 per share, total amount of Baht 44.00 million. In 2008, the Company has purchased the increase share capital of Grand Unity Development Co., Ltd. for 11 million shares at the paid - up shares of Baht 6.00 each, amounting to Baht 66.00 million. Hence, the Company purchased such increase share under the existing shareholding proportion.

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9.3 Payable to related parties Separate financial statements (Baht)

Pornsanti Co., Ltd. Lumpini Property Management Co., Ltd. Lumpini Project Management Services Co., Ltd. Total

2008

Increase

ลดลง Decrease

2009

2,700.00 8,557,225.76 17,759,956.23 26,319,881.99

1,018,000.00 174,931,616.35 62,563,787.23 238,513,403.58

18,000.00 175,753,735.76 72,936,638.46 248,708,374.22

1,002,700.00 7,735,106.35 7,387,105.00 16,124,911.35

9.4 Short-term loans from related parties Separate financial statements (Baht) Lumpini Property Management Co., Ltd. Lumpini Project Management Services Co., Ltd.

2008

Increase

10,000,000.00 59,000,000.00 69,000,000.00

85,000,000.00 33,000,000.00 118,000,000.00 238,513,403.58

9.5 Sale - land

Decrease 95,000,000.00 92,000,000.00 187,000,000.00 48,708,374.22

Consolidated financial statements (Baht) 2009 Pornsanti Co., Ltd. Total

2008 -

2009

Separate financial statements (Baht) 2009

2008 129,200,000.00 129,200,000.00

9.6 Transaction with related parties Consolidated financial statements (Baht) 2009 9.6.1 Cost of sales Lumpini Project Management Services Co., Ltd. Lumpini Property Management Co., Ltd. Total 9.6.2 Cost of rental and service business Lumpini Property Management Co., Ltd. Total 9.6.3 Operating expenses Lumpini Project Management Services Co., Ltd. Lumpini Property Management Co., Ltd. Total 9.6.4 Revenue of rental and service business Lumpini Project Management Services Co., Ltd. Lumpini Property Management Co., Ltd. Pornsanti Co., Ltd. 9.6.5 Interest expenses Lumpini Project Management Services Co., Ltd. Lumpini Property Management Co., Ltd. Total

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Annual Report 2009 L.P.N. Development PLC.

2008

Separate financial statements (Baht) 2009

2008

62,563,787.23 15,422,556.85 77,986,344.08

64,339,648.25 12,571,999.22 “ 76,911,647.47

9,293,441.28 9,293,441.28

9,994,565.44 “ 9,994,565.44

150,215,618.22 “ 150,215,618.22

144,283,447.12 85,710,028.21 “ 229,993,475.33

1,077,000.00 219,000.00 18,000.00 1,314,000.00

849,000.00 1,062,000.00 13,500.00 1,924,500.00

35,433.73 12,456.99 47,890.72

13,345.34 118,304.67 13131,650.01

9.6 Transaction with related parties Consolidated financial statements (Baht) 2009 9.6.6 Interest income Grand Unity Development Co., Ltd. And Subsidiaries Grand U Living Co., Ltd. (Associates) Total 9.6.7 Management business income Grand Unity Development Co., Ltd. And Subsidiaries Grand U Living Co., Ltd. (associates) Total 9.6.8 Gain on sales of land Pornsanti Co., Ltd. Total

2008

Separate financial statements (Baht) 2009

2008

277,377.05 277,377.05

4,869,709.68 4,869,709.68

3,230,617.18 3,230,617.18

5,710,853.77 5,710,853.77

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141

10 Assets for rent - net As at December 31, 2009 and 2008 are as follows :Consolidated financial statements (Baht) 2008

Increase

Decrease

153,862,341.62 613,764,377.55 35,890,410.72 803,517,129.89

2,801,478.51 2,801,478.51

(11,872,449.83) (51,278,551.74) (63,151,001.57)

11,054,209.12 38,813,004.43 525,467.29 50,392,680.84

153,044,100.91 601,298,830.24 39,217,356.52 793,560,287.67

81,777,371.69 11,750,542.89 93,527,914.58 709,989,215.31

14,425,236.10 1,790,365.43 16,215,601.53

(1,811,780.03) 1,811,780.03

94,390,827.76 13,540,908.32 107,931,736.08 685,628,551.59 16,215,601.53 16,611,766.05

Transfer in (out)-net

2009

Cost Land - cost Building - cost Office decoration and equipments Total Accumulated depreciation Building - cost Office decoration and equipments Total Assets for rent-net Depreciation as at December 31, 2009 Depreciation as at December 31, 2008

Separate financial statements (Baht) 2008

Increase

Decrease

Transfer in (out)-net

2009

142,863,719.82 510,686,585.05 31,856,659.75 685,406,964.62

2,801,478.51 2,801,478.51

(11,872,449.83) (51,278,551.74) (63,151,001.57)

11,054,209.12 38,813,004.43 525,467.29 50,392,680.84

142,045,479.11 498,221,037.74 35,183,605.55 675,450,122.40

56,540,308.04 7,896,405.76 64,436,713.80 620,970,250.82

11,850,518.15 1,610,785.59 13,461,303.74

(1,811,780.03) (1,811,780.03)

66,579,046.16 9,507,191.35 76,086,237.51 599,363,884.89 13,461,303.74 13,767,046.02

As at December 31, 2009 and 2008, the Company has transferred inventories in the amount of Baht 49.87 million and Baht 65.32 million, respectively to be assets for lease. As at December 31, 2009 and 2008, land and building for lease of Baht 333.34 million and Baht 341.02 million, respectively (the Company only : Baht 321.96 million and Baht 329.20 million, respectively) were mortgaged as collateral for overdrafts and short-term loans from commercial bank and financial institution as stated in note 12,14 and 15. As at December 31, 2009 and 2008, the Company has assets for rent which were fully depreciated, but still being operated at the cost value amounting to Baht 7.43 million and Baht 4.71 million, respectively (the Company only : Baht 3.40 million and Baht 3.37 million).

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Annual Report 2009 L.P.N. Development PLC.

11. Property, plants and equipments - net As at December 31, 2009 and 2008 are as follows :Baht Consolidated financial statements 2008

Increase

Decrease

Transfer in (out)

2009

34,428,993.00 12,238,989.38 49,815,536.21 19,994,385.73 38,893,954.92 28,506,020.00 2,272,276.17 2,517,500.00 188,667,655.41

2,031,191.90 4,789,129.15 972,458.83 3,678,910.24 609,616.33 642,852.34 3,478,724.11 16,202,882.90

(7,681,658.41) (179,525.74) (3,570,000.00) (11,431,184.15)

(379,909.71) 4,480,824.17 148,550.00 (42,056.08) (5,251,982.99) (1,044,574.61)

34,428,993.00 14,270,181.28 46,543,097.24 25,447,668.73 42,541,889.42 24,936,020.00 2,881,892.50 600,796.26 744,241.12 192,394,779.55

6,894,196.48 3,296,310.06 34,852,782.55 13,435,824.30 29,069,604.54 13,001,139.73 1,339,945.09 101,889,802.75 86,777,852.66

761,993.80 1,214,754.42 (3,840,448.68) 2,583,095.21 3,375,010.84 (171,785.88) 4,514,818.58 5,151,045.01(3,569,997.00) 346,203.16 (7,582,231.56) 17,946,921.02 77,852.66

(363,765.09) (363,765.09)

7,656,190.28 4,511,064.48 33,231,663.99 16,810,835.14 33,412,637.24 14,582,187.74 1,686,148.25 111,890,727.12 80,504,052.43 17,946,921.02 20,245,879.98

Cost Land and building Office decoration Office equipments RMS System Computer Vehicles Tools Office decoration on proceed System under development Total Accumulated depreciation Land and building Office decoration Office equipments RMS System Computer Vehicles Toolsŕ¸&#x2021; Total Net Depreciation as at December 31, 2009 Depreciation as at December 31, 2008

Annual Report 2009 L.P.N. Development PLC.

143

Separate financial statements (Baht) 2008

Increase

Decrease

Transfer in (out)

2009

31,744,128.49 12,238,989.38 39,892,846.98 19,994,385.73 18,746,318.03 16,211,020.00â&#x20AC;&#x153; 120,000.00 138,947,688.61

717,829.90 3,522,261.87 411,443.83 2,421,739.13 642,852.34 3,063,958.82 10,780,085.89

(7,611,186.45) (31,525.74) (1,190,000.00) (8,832,712.19)

31,744,128.49 12,956,819.28 35,803,922.40 22,438,457.13 21,136,531.42 15,021,020.00 600,796.26 532,722.43 140,234,397.41

4,209,331.97 3,296,310.06 26,774,803.03 13,435,824.30 13,707,035.43 4,849,243.03 66,272,547.82â&#x20AC;&#x153; 72,675,140.79

761,993.80 1,187,754.25 1,776,057.57 3,081,988.56 2,157,043.75 3,058,826.07 12,023,664.00

(3,810,022.31) (23,786.88) (1,189,999.00) (5,023,808.19)

2,032,627.57 (42,056.08) (2,651,236.39) (660,664.90) -

Cost Land and building Office decoration Office equipments RMS System Computer Vehicles Office decoration on proceed System under development Total Accumulated depreciation Land and building Office decoration Office equipments RMS System Computer Vehicles Total Net Depreciation as at December 31, 2009 Depreciation as at December 31, 2008

4,971,325.77 4,484,064.31 24,740,838.29 16,517,812.86 15,840,292.30 6,718,070.10 73,272,403.63 66,961,993.78 12,023,664.00 13,015,623.49

As at December 31, 2009 and 2008, land and building of Baht 28.81 million and Baht 29.94 million, respectively were mortgaged as collateral against overdrafts and short-term and long-term loans from commercial bank and financial institution as stated in note 12, 14 and 15. As at December 31, 2009 and 2008, the Company has fixed assets which were fully depreciated, but still being operated at the cost value amounting to Baht 54.91 million and Baht 43.07 million (the Company only : Baht 36.16 million and Baht 33.22 million), respectively.

12. Bank overdraft and short - term loans from financial institutions As at December 31, 2009 and 2008 are as follows :Consolidated financial statements (Baht) Bank overdrafts Short-term loans from financial institutions Total

2009 30,992,375.68 254,000,000.00 284,992,375.68

2008 25,078,533.81 1,320,000,000.00 1,345,078,533.81

Separate financial statements (Baht) 2009

2008

30,992,375.68 254,000,000.00 284,992,375.68

25,078,533.81 1,320,000,000.00 1,345,078,533.81

- Overdraft and short - term loans from financial institutions were guaranteed by land and cost of project under construction as stated in note 7, inventory as stated in note 8, land and building for lease as stated in note 10, and land and building as stated in note 11 and 15.

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Annual Report 2009 L.P.N. Development PLC.

13. Liabilities under financial lease agreement Details of leased assets under financial lease are as follows :

Consolidated financial statements (Baht) Vehicles Photocopier Total Less Accumulated depreciation Net book value

Separate financial statements (Baht)

2009

2008

2009

2008

24,630,000.00 1,615,047.10 26,245,047.10 14,681,818.81 11,563,228.29

28,200,000.00 594,706.33 28,794,706.33 13,115,379.76 15,679,326.57

14,715,000.00 932,447.10 15,647,447.10 6,721,836.55 8,925,610.55

15,905,000.00 405,206.33 16,310,206.33 4,908,969.35 11,401,236.98

“

The minimum amounts to be paid under financial lease agreement are as follows : 2552

Consolidated financial statements (Baht) Within 1 year Over 1 year less than 3 years Over 3 years less than 5 years Total Less Future interest to be paid Present value of liabilities under financial lease agreement

Separate financial statements (Baht)

2009

2008

2009

2008

3,872,223.41 3,671,996.32 394,643.82 7,938,863.55 (620,577.36) 7,318,286.195

5,932,064.00 6,166,913.25 527,016.00 12,625,993.25 (978,530.10) 11,647,463.15

2,915,970.83 3,270,554.16 200,023.66 6,386,548.65 (486,213.58) 5,900,335.07

3,316,896.00 5,261,327.75 500,052.00 9,078,275.75 (823,833.50) 8,254,442.25

Liabilities under financial lease agreement excluding future interest are as follows :

(บาท) (Baht) Consolidatedงบการเงิ financialนรวม statements Liabilities under financial lease agreement Less Liabilities under financial lease agreement due within 1 year Liabilities under financial lease agreement - net

14. Long-term loans

2009

2008

7,318,286.19 (3,501,572.81) 3,816,713.38 14,681,818.81 11,563,228.29

11,647,463.15 (4,888,409.63) 6,759,053.52 14,681,818.81 11,563,228.29

Consolidated financial statements (Baht) Loans from financial institutions Less Current portion of long-term loans Net

Separate financial statements (Baht) 2009 5,900,335.07 (2,611,489.03) 3,288,846.04 14,681,818.81 11,563,228.29

2008 8,254,442.25 (2,869,992.57) 5,384,449.68 “14,681,818.81 11,563,228.29

Separate financial statements (Baht)

2009

2008

2009

2008

732,000,000.00 (473,000,000.00) 259,000,000.00 14,681,818.81 11,563,228.29

1,244,392,345.00 (713,720,000.00) 530,672,345.00 14,681,818.81 11,563,228.29

732,000,000.00 (473,000,000.00) 259,000,000.00 14,681,818.81 11,563,228.29

1,244,392,345.00 (713,720,000.00) 530,672,345.00 “14,681,818.81 11,563,228.29

As at December 31, 2009 and 2008, the Company has withdrawn loans amount of Baht 732.00 million and Baht 1,244.39 million, respectively from the financial institution and interest rate was charged at market rate. The payment will be made on the closing project date. Long-term loans was guaranteed by land and cost of project under construction as mentioned in note 7, inventory as stated in note 8, land and building for lease as stated in note 10, and land and building as stated in note 11 and 15.

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145

15. Pledged securities As at December 31, 2009 and 2008, land and cost of project under construction, and land held for development amounted to Baht 2,506.98 million and Baht 3,981.15 million as stated in note 7, inventory as at December 31, 2008 amounted to Baht 635.60 million as stated in note 8, land - building for lease amounted to Baht 333.34 million and Baht 341.02 million, respectively (the Company only : Baht 321.96 million and Baht 329.20 million) as stated in note 10 and land - office building amounted to Baht 28.81 million and Baht 29.94 million, respectively as stated in note 11, were mortgaged as collateral against loans from commercial banks and financial institutions of Baht 4,204.00 million as stated in note 12 and 14. 16. Contingent liabilities and obligation 16.1 As at December 31, 2009 and 2008, the Company and subsidiaries have contingent liabilities from bank issuance of letter of guarantee as follows : 16.1.1 Letter of guarantee issued to Revenue Department amounting to Baht 17.21 million caused by the Company and its subsidiaries were assessed taxation in previous years amounting to Baht 27.57 million (The company only Baht 7.41 million). From the appeal to the Revenue Department were granted to reduce penalties and surcharges from the tax assessment for the amount of Baht 17.21 million (The company only : Baht 2.62 million). But the Company has not recorded such amount as liabilities since the Company won the case from prosecution to the Tax Court but it is not finalized because the Revenue Department appealed this case to the Suprem Court. The Supreme Court has quash the judgment of the Tax Court and retroactively file of a trial to the Tax Court. At present, the case still pending the appeal to the Tax Court. 16.1.2 Letter of guarantee issued by bank to government agency and state enterprise amounting to Baht 5.85 million and Baht 5.68 million, respectively (the Company only : Baht 2.72 million and Baht 2.56 million). 16.1.3 Subsidiary has guaranteed loan to other person with bank amounting to Baht 1.01 million. 16.1.4 The Company was sued by its contractor for the breach of contract and claim for compensation amounting to Baht 46.67 million. The Company has recorded its construction cost in amounting to Baht 30.45 million and also made counter - claim to contractor for compensation in amounting to Baht 261.48 million. As at December 31, 2003, the Court of the first instance had decided the Company to pay to the contractor amounting to Baht 29.85 million and the contractor paid to the Company amounting to Baht 3 million. The net payment was Baht 26.85 million together with interest charge at the rate of 7.5 % per annum amounting to Baht 12.36 million totally Baht 39.21 million.The difference of Baht 8.76 million, was not recorded in these financial statements since the Company has filed the appeal in order to relieve the execution and the Court received the collateral and allowed to relieve the execution in the appeal. The Company is awaiting for the decision of the Appeal Court and the result of case will give the advantage to the Company. 16.2 As at December 31, 2009 and 2008, the Company had the obligation under the agreement with the contractor which has to complete the construction work for approximately Baht 1,370.70 million and Baht 1,227.71 million (the Company only : Baht 1,370.36 million and Baht 1,227.51 million), respectively. 16.3 According to the Board of directors’ meeting No. 28/2009 held on December 22, 2009, passed the resolution to pay land cost under the covenant in the amount of Baht 695.92 (the Company only, Baht 680.92 million) and the Company had paid deposit for land amount of Baht 21.00 million (the Company only, Baht 20 million). Thus, the Company has obligation on remaining payment for land cost amount of Baht 674.92 million (the Company only, Baht 660.92 million). 17. Dividend Paid For the year 2009 According to the Board of directors’ meeting No. 4/2009 held on August 6, 2009, passed a resolution to pay interim dividend from the six-month operation results of 2009 at Baht 0.16 per share for the total 1,447.56 million shares amounting to Baht 231.61 million.The Company had paid the interim dividend during this period. According to the shareholders’ general meeting for the year No. 1/2009 held on April 28, 2009, passed a resolution to pay dividend from the operation results of 2008 at Baht 0.4115 per share for the total 1,475.70 million shares amounting to Baht 605.04 million by deducting the interim dividend payment amounting to Baht 206.60 million.The remaining amount should be paid in this period amounting to Baht 398.44 million and the Company has already paid in this period. 146

Annual Report 2009 L.P.N. Development PLC.

For the year 2008 According to the Board of directors’ meeting No. 5/2008 held on August 7, 2008, passed a resolution to pay interim dividend from the six-month operation results of 2008 at Baht 0.14 per share for the total 1,475.70 million shares amounting to Baht 206.60 million. The Company had paid the dividend during the period. According to the shareholders’ general meeting for the year No. 1/2008 held on April 24, 2008, passed a resolution to pay dividend from the operation results of 2007 at Baht 0.32 per share for the total 1,475.70 million shares amounting to Baht 472.22 million by deducting the interim dividend payment amounting to Baht 147.57 million. The remaining amount should be paid in this period amounting to Baht 324.65 million and the Company has already paid during the period. 18. Treasury stock According to the Board of Directors’ meeting no. 6/2008 held on October 9, 2008 passed to approve the treasury stock program for the purpose of financial management not exceed 62 million shares equal to 4.20 percent of total paid-up capital,with the maximum amount not exceeding Baht 200 million. The repurchased period in the Stock Exchange of Thailand will be started from October 24, 2008 to April 23, 2009. The period of repurchase will be exercised within 3 years commencing from the end of treasury stock repurchase period (six months). The Company’s treasury stock had no a right on the meeting for voting and get the dividend. If the treasury stock could not be sold in the exercise period from the repurchasing date that the Company will reduce the paid-up share capital by write-off the registered treasury stock which was not sold. As at December 31, 2008, the Company has treasury stock for 7.5963 million shares at cost of Baht 16.69 million. In 2009, the Company has purchased treasury stock for the another 0.55 million shares at cost of Baht 1.20 million, total treasury stock is 8.1463 million shares at total cost of Baht 17.89 million which was already sold in 2009. 19. Retained earnings 19.1 Legal reserve According to the Public Company Limited Act B.E.2535, the Company is required to set aside a legal reserve at lease 5% of annual net profit after deducting deficit brought forward (if any) until the legal reserve reaches 10% of authorized share capital. Such legal reserve is not available for dividend distribution. 19.2 Reserve for treasury stock As at December 31, 2008, the Company appropriated retained earnings amount of Baht 16.69 million as reserve for treasury stock in accordance with guidance of the Judicial Committee and the Federation of Accounting Professions in the caption “treasury stock under Section 66/1(2)” and as at December 31, 2009, the Company has cancelled such provision in whole“ amount since the total treasury stock were sold in 2009. 20. Financial instruments Financial risk management and policies The Company and its subsidiary companies are exposed to risk from changes in market interest rates and from non-performance of contractual obligations by counterparties. The Company and its subsidiary companies do not hold or issue derivative instruments for speculative or trading purposes. Interest rate risk The interest rate risk is a result of future movements in market interest rates that will affect the results of the Company’s and its subsidiary companies’ operation and their cash flows. The Company’s and its subsidiary companies’ exposure to interest rate risk primarily related to their massive of deposits with financial institutions, bank overdrafts and loans. According to their management, the Company and its subsidiary companies do not use derivative financial instruments to hedge such risk since there is no domestic market for such activity. Credit risk The Company and its subsidiary companies are exposed to credit risk primarily with respect to accounts receivable and unbilled receivables. However, since the Company and its subsidiary companies do not transfer to rights of assets until the total amount of the contract value has been paid, they do not anticipate material losses from their debt collection. Annual Report 2009 L.P.N. Development PLC.

147

Fair value of financial instruments The Company and its subsidiaries used the following methods and assumptions in estimating fair value of financial instruments as disclosed herein : - Cash and cash at banks and short-term investments are stated at fair value based on the amount in balance sheets. - Trade accounts and notes receivable with their maturities less than 90 days from the end of the period and defaulted receivable are stated at fair value based on the amount in balance sheets. - Loan to, is stated at fair value based on the amount in balance sheets. - Bank overdraft, trade accounts and notes payable due less than 90 days are presented at fair value based on the amount in the balance sheets. - Accrued interest payable is stated at fair value based on the amount in balance sheets. - Long-term loan with floating rate of interest had the carrying value of loan equal to its fair value. 21. Additional disclosure of cash flows information 21.1 Cash and cash equivalents Cash and cash equivalents consist of cash on hand and at banks in the balance sheets as follows:

2009 Cash on hand and at banks

Consolidated (Baht) 2008

992,153,969.21

640,746,063.06

2009

Separated (Baht) 2008

890,595,113.18

576,099,768.85

21.2 Assets under financial lease agreement As at December 31, 2009, the Company has hired purchase assets amount of Baht 1.02 million (the Company only :Baht 0.53 million) which recorded as liabilities under financial lease agreement in total amount. As at December 31, 2008, the Company has hired purchase assets amount of Baht 8.40 million by making payment amount of Baht 2.10 million and the remaining is recorded as liabilities under financial lease agreement in whole amount. 21.3 Assets for lease As at December 31, 2009 and 2008, the Company has transferred inventories in the form of condominiums and office building to be assets for lease in the amount of Baht 49.87 million and Baht 65.32 million, respectively. 21.4 Land and cost of project under construction As at December 31, 2009, the Company has transferred a project of land under construction amount of Baht 11.60 million as assets held for surrender. As at December 31, 2008, the Company has sold its land to a subsidiary in the amount of Baht 3.00 million which recorded as related parties receivable in whole amount. 21.5 Land held for development As at December 31, 2009, the Company has transferred land and cost of project under development amount of Baht 149.58 million (the Company only : Baht 113.34 million) to be land and cost of project under construction. During the year, the Company received the payment for land deposit from a subsidiary in the amount of Baht 1.00 million which was recorded as related parties receivable in whole amount. As at December 31, 2008, the Company has sold its land to a subsidiary in the amount of Baht 126.20 million by receiving the payment amount of Baht 56.20 million, the remaining is recorded as related parties receivable in whole amount.

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Annual Report 2009 L.P.N. Development PLC.

22. Segment information As at December 31, 2009, it consists of : Million Baht Parent Company Business type

Net sales Cost of sales Gross profit Other income Share of gain on investment in associates Selling expenses Administrative expenses Directorsâ&#x20AC;&#x2122; remuneration Management benefit expenses Profit (loss) before finance costs and income tax Finance costs - interest expenses Profit (loss) before income tax Income tax Net profit (loss)

Real Rent estate & Service Others

Subsidiaries Total

8,255.23 (5,746.89) 2,508.34 -

57.89 (47.12) 10.77 -

- 8,313.12 - (5,794.01) - 2,519.11 154.50 154.50 (383.32) (383.32) (271.48) (271.48) (11.77) (11.77) (35.21) (35.21)

2,508.34

10.77

(547.28)

1,971.83

Total

Real Service & Rent estate Manage- & Service Others ment 12.45 (9.56) 2.89 -

420.94 (121.01) 299.93 -

5.45 (3.34) 2.11 -

1.38 (0.54) (208.59) (34.68)

2.89

299.93

2.11

(242.43)

(11.04)

(0.12)

2,508.34

10.77

(558.32)

1,960.79

2.89

299.93

2.11

(242.55)

2,508.34

- (569.73) 10.77 (1,128.05)

(569.73) 1,391.06

2.89

299.93

2.11

(18.93) (261.48)

Total Eliminate

8,751.96 (238.69) 8,513.27 (5,927.92) 87.67 (5,840.25) 2,824.04 (151.02) 2,673.02 155.88 (80.55) 75.33 3.84 3.84 (383.86) 147.51 (236.35) (480.07) 4.40 (475.67) (11.77) - (11.77) (69.89) - (69.89) 2,034.33 (75.82) 1,958.51 0.05 (11.11) (11.16) 2,023.17 (75.77) 1,947.40 - (588.66) (588.66) 1,434.51 (75.77) 1,358.74

1,358.69 0.05 1,358.74

Attributable to Equity holders of the parent Minority interest Fixed assets as at December 31, 2009

Total

66.96

13.54

80.50

Inter - company transactions are income from service, rental and interest income from subsidiaries. Transaction with related companies are in the normal course of business.

Annual Report 2009 L.P.N. Development PLC.

149

As at December 31, 2008, it consists of : Million Baht Parent Company Business type

Real Rent estate & Service Others

Net sales Cost of sales Gross profit Other income Selling expenses Administrative expenses Directorsâ&#x20AC;&#x2122; remuneration Management benefit expenses Share of loss on investment in associates Profit (loss) before finance costs and income tax Finance costs - interest expenses Profit (loss) before income tax Income tax Net profit (loss)

7,014.42 (4,896.88) 2,117.54 2,117.54 2,117.54 2,117.54

57.95 (47.31) 10.64 10.64 10.64 10.64

Subsidiaries

Total

Real Service & Rent estate Manage- & Service Others ment

Total

- 7,072.37 - (4,944.19) - 2,128.18 125.73 125.73 (351.74) (351.74) (222.83) (222.83) (11.07) (11.07) (30.28) (30.28) (490.19) 1,637.99 (9.93) (9.93) (500.12) 1,628.06 (454.19) (454.19) (954.31) 1,173.87

10.00 (6.48) 3.52 3.52 3.52 3.52

459.76 (124.50) 335.26 335.26 335.26 335.26

5.09 (3.36) 1.73 1.73 1.73 1.73

Total Eliminate Total

- 7,547.22 - (5,078.53) - 2,468.69 128.49 2.76 (0.91) (352.65) (180.69) (403.52) (11.07) (30.66) (60.94) (209.50) 1,769.00 (10.26) (0.33) (209.83) 1,758.74 (40.02) (494.21) (249.85) 1,264.53

(323.93) 7,223.29 87.31 (4,991.22) (236.62) 2,232.07 (48.08) 80.41 222.29 (130.36) 9.91 (393.61) - (11.07) - (60.94) (6.64) (6.64) (59.14) 1,709.86 0.12 (10.14) (59.02) 1,699.72 - (494.21) (59.02) 1,205.51

Attributable to Equity holders of the parent Minority interest

1,205.44 0.07 1,205.51

Fixed assets as at December 31, 2008

72.68

14.10

86.78

Inter - company transactions are income from service, rental and interest income from subsidiaries. Transaction with related companies are in the normal course of business.

23. Expenses analyzed by nature Significant expenses analyzed by nature are as follows : Consolidated financial statements (Baht)

Purchase of land and payment for construction during the year Changes in construction project and land held for development Changes in inventories Allowance for devaluation of inventories Reversed allowance for devaluation of inventories Salaries, wages and other employees benefit expenses Specific Business Tax and transference fee Depreciation and amortization

150

Separate financial statements (Baht)

2009

2008

5,260,822,584.32

5,139,812,385.71

5,327,058,038.61

5,092,095,457.98

1,018,863,526.66 (582,468,831.72) 1,268,000.00 19,010,295.23

729,682,862.32 (920,067,929.73) -

1,018,574,509.72 (579,729,977.01) 19,010,295.23

854,201,811.34 (926,161,923.18) -

415,664,142.75 9,213,275.44 34,734,673.29

322,559,764.75 45,401,825.27 36,921,468.72

151,929,001.39 9,199,301.44 26,029,930.44

75,340,969.22 45,390,479.27 26,846,492.20

Annual Report 2009 L.P.N. Development PLC.

2009

2008

24. Provident Fund The Company has a provident fund for employees. The fund consists of voluntary contributions by employees based on monthly salary at the rate of 2-4%, the Company’s contribution of an additional 3-7% of the employee’s basic salary which was paid in to TFB Submunkong Registered Provident Fund No. 24/1997 on January 28, 1997 and Welfare Development Registered Provident Fund No.23/1993 on February 26, 1993 in accordance with the Provident Fund Act B.E. 2530 and including the benefits received from investment of the fund. The Company and subsidiaries paid the contribution to provident fund as following : Consolidated financial statements (Baht) 2009 2008 Contribution to provident fund

7.64

6.64

Separate financial statements (Baht) 2009 2008 2.47

1.65

25. Directors’ remuneration payment According to the shareholders’ general meeting for the year 2009 held on April 28, 2009, passed to pay remuneration to directors whose strength in their duty, not exceed Baht 11.34 million per annum but excluding the remuneration or welfare pay to the directors who is employee of the Company. The allocation of such remuneration is the responsibility of the Board of directors which effective in every year until the resolution is changed. Thus, the Company has recorded this amount in expenses account. 26. Management Benefit Expenses Benefit expenses paid to the management includes a chief executive officer, the next four executive levels immediately below that chief executive officer and all persons in positions comparable to these fourth executive levels consist of salaries, consulting fee, bonus, meeting allowance, fuel and telephone expenses for the period of the year ended December 31, 2009 and 2008 amount to Baht 69.89 million and Baht 60.94 million, respectively (Baht 35.21 million and Baht 30.28 million for the Company only). 27. Capital Management The objective of capital management of the Company and subsidiaries is to prepare the financial structure to be properly appropriated and maintain the continuity of operation capability. As at December 31, 2009 and 2008, the Company and subsidiaries have debt to equity ratio as summarized below : Consolidated financial statements (Baht) 2009 2008 Debt to equity ratio

0.54

0.97

Separate financial statements (Baht) 2009 2008 0.54

1.01

28. Approval of financial statements These financial statements were authorized for issue by the Board of directors of the Company on February 18, 2010.

Annual Report 2009 L.P.N. Development PLC.

151

Auditor’s Remuneration Audit Fee The Auditor’s remuneration for the previous year was 850,000 Baht. The Auditor’s office, persons or activities in connection with the auditor or its office, cost 350,000 Baht in the previous financial year. Non-audit free None

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Annual Report 2009 L.P.N. Development PLC.

Appendix

General Information Listed Company Company

Office address

Company Registration No. Phone Fax Call Center Website Investor Relations

: : : : : :

L.P.N. Development Public Company Limited Property Development 1168/109 Lumpini Tower, 36th Floor, Rama 4 Road, Thungmahamek, Sathorn, Bangkok 10120 0107537002303 (PCL. No. 447) (02) 285-5011-6 (02) 679-8699 (02) 689-6888 www.lpn.co.th (02) 285-5011 Ext. 147 E-mail: ir@lpn.co.th

Subsidiaries Company

154

Company

Office address

Company Registration No. Phone Fax

: : :

Company

Office address

Company Registration No. Phone Fax

: : :

Company

Office address

Company Registration No. Phone Fax

: : :

Lumpini Property Management Co., Ltd. Community Management Services 1168/109 Lumpini Tower, 36th Floor, Rama 4 Road, Thungmahamek, Sathorn, Bangkok 10120 0105535058865 (02) 285-5011-6 (02) 679-8699 Lumpini Project Management Services Co., Ltd. Construction Management Services 1168/109 Lumpini Tower, 36th Floor, Rama 4 Road, Thungmahamek, Sathorn, Bangkok 10120 0105550127691 (02) 285-5011-6 (02) 679-8699 Pornsanti Company Limited Real Estate Development for non condominium projects 1168/109 Lumpini Tower, 36th Floor, Rama 4 Road, Thungmahamek, Sathorn, Bangkok 10120 0105533054218 (Old No. 5421/2533) (02) 285-5011-6 (02) 679-8699

Annual Report 2009 L.P.N. Development PLC.

Affiliated Company

Office address

Company Registration No. Phone Fax

: : :

Company Office address

: :

Company Registration No. Phone Fax

: : :

Company Office address

: :

Auditor

Phone Fax

: :

Company

Office address

Phone Fax Call Center Website

: : : :

Grand Unity Development Co., Ltd. Property Development 888/224 Mahatun Plaza, 2nd Floor Ploenchit Road, Lumpini, Pathumwan, Bangkok 0105544087228 (02) 100-7171 (02) 253-3863

Legal Counselor Sermsak Vecha & Associates Law Office 399/365-368 Chokechairuammitr Condominium Building, 12th Floor, Vibhavadee-Rangsit Road, Ladyao, Chatuchak, Bangkok 4760/2525 (02) 691-5541-5 (02) 691-5545

Auditor Office of DIA International Auditing 316/32 Sukhumvit Soi 22, Sukhumvit Road, Klongtoey, Bangkok Mrs. Wilairat Rojnakarintr C.P.A. Thailand No. 3104 (02) 259-5300 (02) 260-1553

Share Registrar Thailand Securities Depository Company Limited for Depositors 62 Stock Exchange of Thailand Building Ratchadapisek Road, Klongtoey, Bangkok (02) 229-2800 (02) 359-1259 (02) 229-2888 www.tsd.co.th

Annual Report 2009 L.P.N. Development PLC.

155

Business Operations and Products Products and Services The Company, its subsidiaries and affiliates are engaged in 2 types of business, being the development business and providing service that is, development of real estate and providing full scale real estate services details of which are as follows: The real estate development business In the beginning, L.P.N. Development PCL and its subsidiaries conducted the real estate development business for sale and lease. Most of the projects developed in the beginning were high rise buildings or large size buildings located in the heart of the city. Since the economic crisis in 1997, the Company has adjusted its business policy and strategy to focus on developing condominiums for those in the upper-mid to lower-mid range as its main target group (Focus Strategy), including the creation of differentiation of goods and services (Differentiate Strategy). The Company has developed condominiums under the LPN Design that focuses on utility for urban living, which is different from products found in general. The Company has also developed a style of management of the community that focuses on the quality of life of its residents. This strategy has created confidence and loyalty among the Company’s customers. In addition, the Company has adopted a strategy of low cost management (Cost Leadership Strategy) as a strong point to gain an advantage among competitors and bring success to the Company. This can be seen from the sales volume of each project which sell out very rapidly. Today, the Company has distinguished its products into clear categories to cover all groups of customers under the following names and product brands: “Lumpini Suite and Lumpini Place”

The brand that has been developed to satisfy the needs of residents who are working as upper mid level managers have the capacity to pay around 20,000 Baht per month. Their financial status is good and their spending power for convenience and happiness in life. The locations of these projects are in densely populated areas possibly in the center of the city or in the CBD which is convenient for travelling through the main public transport system with lots of facilities that are needed for living on a daily basis with design that indicates the quality of life of the residents: Needs Real Pleasure in their living

: :

“Complete happiness, social status” “Perfection, class”

“Lumpini Ville”

This brand has been designed and developed for people in their working life at entry level management who are no older than 35 years of age who need convenience of commuting and residences that are private with the capacity to spend 10,000 Baht a month on accommodation, having sufficient money to spend on a daily basis with no much burden, mostly young people who want to reward themselves. Therefore, the locations of these projects are in densely populated areas, near work places, shopping centers so the brand “Lumpini Ville” is a choice for the young people who want to be themselves while at the same time being close to family. Needs : “Rewarding yourself and those close to you” Real Pleasure in their living : “Need to reward your life” “Lumpini Center” and “Lumpini CondoTown”

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Annual Report 2009 L.P.N. Development PLC.

This brand focuses on building residences that are moderately priced for quality living for those who have just started to work, those who are independent professionals and are able to pay 5,000 Baht per month with the projects located on the border between the center of the city and the outskirts that are densely populated for residents who live in the 5 kilometer radius from where they work. This is a large group that has residential requirements so the Company has located “Lumpini CondoTown” as the “Flag Ship” of the Company’s condominium development so that it is the first residence of customers that has quality and is the start of a warm family for those starting families. Needs : “A chance at life” Real Pleasure in their living : “Beginning of better life and happiness” “Lumpini Park”

This is a special purpose brand that has been developed as another valuable brand with large parks for relaxing under the name “Community Park” with space for activities together whether with family of friends which provides improved living conditions for those in large scale condominium buildings. After handover, the Company has a policy of after sales service to take care of its customers on a continual basis with the Company’s subsidiary, Lumpini Property Management Company Limited responsible for managing the community and providing other services to add to the convenience of each community and to help maintain or raise the standard of living of the residents in all respects. This service includes building management, community management, purchase and sale service, transfer, exchange, construction, fixtures, repairs and maintenance, as well as security and cleaning and including overseeing the condition of living and the quality of the community. In addition, the value of the service will be increased by caring for the environment and adding to a Vibrant Community managed according to the Company’s strategy. As a result of the efficiency in management of the community, the Company has been chosen by the co-owners of the project to appoint the Company to manage the condominium on a continual basis every year, which clearly highlights the responsibility that the Company takes in providing a quality life and shows the loyalty of customers toward the Company which is a result of the physical and emotional dedication and perseverance of every member of the organization. Real Estate Services The Company has established a subsidiary, Lumpini Property Management Co., Ltd., 99.88% owned by the Company. From 1997 onwards, the Company has delegated Lumpini Property Management Co., Ltd. to be responsible for managing real estate starting from managing projects such as in marketing, sales, rental, transfer, construction services as well as managing projects that the Company has developed under the policy “after sales services”. In order to support future growth, at the end of 2007, the Company set up another subsidiary which was 99.93% owned by the Company in order to separate project management services to Lumpini Project Management Services Co., Ltd. in order to support the growth in the future. Each company has the following scope of responsibility: Marketing and Sales Services Lumpini Property Management Co., Ltd., scope includes surveying the market, consumer needs, analysis of competition, sales prices, marketing strategy, sales planning, preparation of documents for juristic acts, debt payment, ownership transfer and public utilities for customers. The results of their operations are reported on a weekly basis to high level executives and in all of their activities, there is a real estate team to coordinate the entire process. Following handover, if a customer wants to sell or lease their units to obtain a return on their investment, the Company has a service to find a buyer or tenant as part of its full scale service as an agent/broker. In addition to finding a buyer or tenant, all the documents are prepared for the relevant juristic act, advice and coordinating with loan division of the financial institution all the way up to registration of ownership in the event of a sale. In the case of leasing the Company will advise and coordinate how to decorate the room until the room is handed over to the tenant. The Company also provides rent management services for the duration of the lease agreement which shows the full scale service and is in accordance with the policy of adding value and after sales service to the Company’s customers.

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Project Management Lumpini Project Management Services Co., Ltd. manages development of the projects that the Company and its subsidiaries develop, starting from improving the land after acquisition and planning for project management according to the financial, marketing, sales, construction plans including hand over of the units focusing on quality and efficiency under the strategy “Q-C-S-E-S” as follows: 1. Quality / Inspecting the quality prior to handover by an inspection team that includes inspecting the condition of the interior of the units and the structure of the projects so that it is complete and safe for residence 2. Cost / Management of the costs to be appropriate according to the development plan by providing stages for working with efficiency and use of work techniques that are appropriate together with working with allies to control the construction budget to not exceed the allocated budget. 3. Schedule / In terms of the construction period, based on the experience of working with allies, the Company is able to develop the project using process innovation whereas the company develops prefabricated systems that are manufactured from the factory and are ready for installation which allows the construction to be completed before schedule or at the latest, on the date agreed with the customers in all projects. 4. Environment / Focus is on reducing the impact on the environment and the community nearby by strictly complying with the mesures in the EIA that was approved by the Office for Policy and Planning for Natural Resources and Environment while at the same time taking care of and improving the atmosphere around the project on a continual basis. 5. Safety / The Company focuses on safety both inside and outside of the project while under construction as well as the welfare of the workers by providing them with sanitary conditions and understanding of the work and looking after their living conditions in terms of safety of workers and personnel to look after their safety. There is also a department that has the responsibility to look after customers after hand over of their unit to repair or fix any defects that arose during construction or from the raw materials and any improvements within the unit, especially for projects that are complete for a while so that the general condition of the project retains its value in the long run. Community Management Community management is one of the Company’s main policies to create a differentiation in the service which is the strategy to create confidence and trust in the Company all along. The Company has delegated its subsidiary Lumpini Project Management Services Co., Ltd.to be responsible for community management with a role and duties that are as described above in the topic management of the band and products. Rental Management At present, the Company has one rental property that is entirely commercial being the Grand Parkview Asoke, developed by Grand Unity Development Co., Ltd. as well as some units for commercial use in condominium buildings in order to support the Company’s policy of total solution service within the community to facilitate the daily life of residents which not only adds value to the project but also creates income on a regular basis from rent for the Company expanding the base and reducing weaknesses in terms of the source of income of the Company so that there is not only income from one source. Parking Management Services Lumpini Project Management Co., Ltd. is responsible for management of parking in large commercial buildings with a lot of vehicles which is one of the Company’s assets in order to provide service of management, rental, income collection and maintenance to facilitate customers and visitors safely and systematically.

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Marketing and Competition Marketing the Products and Services Marketing Strategy In addition to its ability to compete, the Company also focuses on marketing strategy which is sub-divided into a strategy for each project which is different, beginning from: - Research to provide the plan and the direction of project’s development, specify the location, target group of customers through surveys and collection of information for accuracy of the product being released into the market - Specification of the sale price which is not just the competitor’s sale price in the market in the surrounding area that dictates the price but also the cost of the project both directly and indirectly which is the important factor which causes the Company to be able to set the price appropriately while also maintaining its return on the investment made at a level that is expected even in the face of fierce competition - Communicating the marketing is something the Company focuses on such as advertising and announcing directly to target groups which are scattered around the project both who are customers who have visited the project using large billboards and small signs to advertise and sending direct mail offering special privileges to stimulate reserving the units when they are open for sale. The Company has been successful and been able to reduce costs from marketing to be around 1% of the overall sales income. - Management of the customer experience which coordinates with the departments that have direct contact with customers to design a system that offers customers an impressive experience and also takes responsibility for satisfying the recommendations and complaints by coordinating with the responsible agency directly to improve, rectify the situation to build a good relationship between the customers and the Company, including organizing activities on a continual basis to reflect the commitment to take care of customers. All of these factors add to the confidence in the brand’s products and is talked about which can be seen from sales figures of new projects. - The image of the organization comes from the conscientious of responsibility to the customer and the intent to develop into a brand with quality products and services on a continual and stable basis causing each project in the past to succeed in sales since the customers are confident in the operations and image of the organization. Marketing The Company has provided for marketing, communicating marketing and marketing activities, especially during the opening of the project which is when customers are most interested and visit the project, details of which are as follows: - Direct mail invitations are sent to the Company’s customer base to attend openings every time a new project opens, offering privileges to be used as discounts on opening day. This is organized by a special department in the Company. Interested customers can contact sales staff or visit the project and its mock up that the Company provides as per details in the invitation letter. - Advertising through various media focusing on the surrounding area around the project as well as inside department stores, on the internet, sms, billboards and magazines, selecting media based on efficiency and capacity to reach target groups of customers - Setting up a booth to announce the project in shopping centers near the new project and in the city center or at home and condo fairs which are held every year to obtain customers that coincide with the Company’s target group. - The internet is used to satisfy changing needs of society and technology and the Company has looked for new business marketing opportunities at all times and the internet is a new market which is widely accepted by consumers today as being the media which can access consumers 24 hours per day at low cost compared to other media and the Company has developed its own website www.lpn.co.th in order to allow target group customers to be able to access information and updates about the projects - Special privileges fro customers who purchase units when the project opens such as special prices, free furniture, free kitchen or air conditioner.

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Customers Customer Groups according to the type of product and service 1. Customers that purchase real estate The customers in this group are individual purchasers who purchase the units for residential purposes. Presently, there are more than 100,000 of these types of customers in the Company’s group. A part of these customers come from recommendations from the confidence in the “Lumpini” brand (Trusted Brand). The R&D Department has divided its customers according to their purpose and behavior into 5 groups as follows - Customers who purchase their first residence are people who just started working and require a residence that has quality to be their own at a reasonable price - Customers who purchase their second home are people who need to live in the CBD or work area to avoid high costs and time lost in commuting - Customers who purchase to have a family are people who do business in the area and want to live in the same area in order to expand their family in the future. - Customers who purchase for their children are people who purchase in preparation for children about to go to school at prestigious places that are not far from the project that is being developed - Customers who purchase as an investment are people who want to invest in assets for the long run and may purchase for rent since the projects developed by the Company are located in prime areas and rental rates are higher than interest rates. 2. Customers that rent real estate Customers that rent real estate can be divided into 2 groups, namely - Customers that rent for residential purposes This group is mainly high level employees that are both Thai nationals and foreign nationals who have rather high income and want to reside near to their place of work. - Customers who rent for commercial purposes This group is mainly people who are engaged in commerce at the Grand Parkview Asoke and at commercial units in the various projects, since the Company is trying to develop total solution services to customers as well as expanding its source of income in addition to sales 3. Real Estate Service Customers The customers who purchase real estate services are those who purchase community services provided by Lumpini Property Management Co., Ltd. and is only provided to projects developed by the Company to build a good image and to be a strategy to differentiate the service. Target Group of Customers The target group of customers of the Company are those requiring residences in locations that are densely populated and that are located close to public transport or the expressway making it easy to commute, lots of facilities, with mid-upper low level incomes or around 15,000-50,000 Baht per family in the 25-45 year age bracket which includes most of the population who have spending power and are currently living in rental houses, flats, apartments or with their father and mother and who want to separate to make a new family as per the lifestyles of city dwellers. Sales and Sales Opportunities The Company uses direct sales using sales teams comprised of sales staff who have sales experience, understanding of the product and services of the Company and can provide information and advise to comprise the decision to purchase in each project. There are also extra sales staff who are staff of the Company and subsidiaries who have a supporting function such as accounting and financial staff and administrative staff. These staff have received training about the Company’s products and basic sales techniques to assist with sales when the project opens to support the main sales staff at the project opening so that customers can see the real project and atmosphere, the mock up and the Company’s products that the customer will receive upon hand over. They are ready to provide information on making the decision and can answer questions. The Company also focuses on Office Presentation which is the main sales channel the Company uses as well as decorating the mock up and Site Presentation to impress the customer and make the customer confident. The Company has also built its main sales office in the heart of the CBD to facilitate customers and target group to be able to visit the mock up and reserve a unit and pay the installments as well as any other transactions the same as if they were at the sales office at the project. 160

Annual Report 2009 L.P.N. Development PLC.

The status and potential in competition From the beginning, the Company has tried to find new markets with little or no competition (Blue Ocean Strategy) which is the main strategy for competition to maintain return on investment and distributes the customer base in a wide area for a chance to grow in the future, namely, by expanding to locations away from crowded areas around business centers to areas that are densely populated and are on the border between inner city Bangkok and middle Bangkok while at the same time expanding its target group from those with upper mid income to those with mid lower income which encompasses most of the population in Bangkok Metropolis that have a need to find living space but can’t find it from other developers. In addition to looking for new markets by expanding to new locations to develop and expanding the target group of customers the Company is also increasing its ability to compete in order to maintain its market share as follows: - Cost Leadership, which is the strength of the Company, starting from the board of executives which include architects, engineers with in depth experience and understanding of capital costs as well as strategic partners working with the Company for a long time creating an understanding of the direction of the Company and seeing the same goal of efficient construction which would lead to development on a continual basis and become a novelty which is unique to the Company. - Differentiation to build satisfaction for customers. The Company chooses to build product differentiation by designing products with “LPN Design” which focuses on building condominium units that are smaller but with functions that satisfy the lifestyle needs of residents in full, need less maintenance, have good air flow which has been designed by the R&D Department on a continual basis and become an example for many Companies and has created services differentiation. The Company has emphasized turn key service for maximum satisfaction of customers focusing on after sales services including community management under the strategy “Vibrant Community” that offers quality living for residents. Provision of Products and Services Procuring Products and Services The main product of the Company is condominium projects aimed at customers having income in the mid-upper to mid-lower bracket who need residences that have quality and reasonable price and are safe and have public utilities and are in locations that are close to public transport or the expressway for convenient travel. In order to coincide with competition, laws and costs that are changing, the Company has plans to develop projects and the various stages as follows: 1.1 Survey the market demands in various areas both in Bangkok and the Surrounding Area as well as in the provinces that are developing economically for use as information in specifying the target locations for expanding the customer base and the area to be developed, focusing on customers with income in the mid-upper to mid-lower bracket with prices between 700,000-2,000,000 Baht as well as surveying the market, competitors, demand, supply, economic and social conditions at that time. 1.2 Analysis of the project, set marketing goals, consider procurement of land and its location, its form, size, surrounding atmosphere, applicable regulations that will affect the project and competitors in order to decide on the size of the project and stages in developing the project as well as the product value, based on the return on investment to coincide with the appropriateness of the location and type of development of the project. 1.3 Laying the plan and designing the project to be appropriate with the studies conducted by selecting an architect and project advisor that has quality and understands the Company’s policy since the designers that are architects and engineers are at the top of the project and have a direct influence on the cost, especially indirect costs such as the ratio of sale area to land which shows efficiency of design. Indirect costs control is one of the areas where the Company shows its cost leadership strategy. 1.4 Provide the project development plan and project financing as well as sales management and marketing plan as well as the community management plan following hand over 1.5 Preparing the personnel and the number of staff necessary to manage the project which is done by subsidiaries from setting the sales team, construction team, ownership transfer team and hand over team as well as the community management team. 1.6 Sales and marketing management includes: - Sales planning which includes setting the sale price, setting the plans for customers together with providing customers with housing loans during ownership transfer considering the financial institutions that will give the highest benefit to customers while at the same time setting sales targets and training sales staff. - Marketing planning which includes planning for advertising to the target group and making the sales documents as well as setting the time and method for opening sales Annual Report 2009 L.P.N. Development PLC.

161

1.7 Construction management has the following essential stages - Coordinating and providing information on the project to the surrounding neighborhoods and government agencies especially nearby communities that may be affected and be wary of new projects being developed - Procuring the EIA report for approval by the Office of Environmental Policy and Planning and applying for the building permit from the relevant government agencies - Planning for the construction and selecting a contractor to do the construction to complete the project in 18 months (Economy of Speed) from the date of sales begins. The Company has developed construction and technology methods by using precast materials with a subsidiary as construction manager for all stages as per the duties and roles delegated. - Reports on the progress of the construction on a regular basis 1.8 Evaluate and follow up on sales and revenue of the project with a report made for the information and as a case study from the Company for use with other projects 1.9 Management of the community after hand over pursuant to the obligation and responsibility and strategy for “Vibrant Community”. Production Capacity and Volume The Company does not have the direct capacity to produce or volume of production but hires contractors that are allies and have a good reputation and have experience that is appropriate with the project and is responsible for construction with subsidiary company managing the construction closely using a tender system to gauge the best price on a general contractor basis for all the materials and labor costs, in order to reduce the risk of fluctuation in price of construction materials. In addition, the Company has a policy that in tendering, there is no single main contractor, but the tender is for various areas according to the work, namely piling work, structural work, roofing work, glass and aluminum work, electrical work and ME works in order to reduce risk and indirect costs and each contractor must coordinate with each other for speed and quality of construction which must be handed over to customers by the main contractor and the subsidiary and in some cases the Company may purchase materials directly, such as lifts which have a high number and require the supplier to install directly. The entire procedure described above can be done efficiently both in terms of cost and length of time under the strategy of using allies that are strong and can be trusted by the Company which is one of the reasons why the Company has a competitive advantage. Raw Materials As mentioned above, the Company does not have any capacity to produce anything directly and has to depend on contractors in its alliance who are reliable and have experience to build the project to be in charge of construction and are hired to provide materials and labor in order to reduce the risk of fluctuating costs of construction materials. For these reasons, the Company has no necessity to procure raw materials itself. But, the land on which the projects are located are also a raw material that is the most important for development of the project as per the saying “real estate is all about location, location, location”. So the Company has set a guideline to consider acquiring land to develop as follows: The location of the land is in a densely populated location near main roads with all public utilities near places of work or large communities, near public transport or the expressway with convenient entrance and exit and that is not in any land that will be expropriated or have any legal issues or problems with any state project The width of the land and its shape has to coincide with the Building Control Act for maximum benefit and has to coincide with the regulations of land use under town planning regulations The price of the land has to be within a price range that is no more than 30% of the project cost so that the Company can maintain the sales price and return on the investment according to the policy and strategy of competition by the Company. Looking for land by advertising in the newspaper to contact the owner directly without using an agent or offering to purchase from a financial institution or the AMC and the Company has a team that is directly responsible for finding and inspecting the qualifications of the land directly and the Company has disclosed this information to the SET when land is acquired for transparency and the land is valued by an independent appraiser again allowing all of the land purchased by the Company to be lower than the appraised price.

162

Annual Report 2009 L.P.N. Development PLC.

Projectsâ&#x20AC;&#x2122; information

Details of Completed Projects: L.P.N. DEVELOPMENT PUBLIC CO., LTD. No.

Project

Number Number of Bldg. of J.P.

Type of Project

Land size of Project

Number of units

Value (MB)

Duration Open for sale Develop and Construct

Lumpini Tower

Office building; 38 storey

2-3-33 Rai

113

2,118.00

Apr. 1989

1989-1992

L.P.N. Tower

Office building; 19 storey

1-2-42 Rai

564.00

Mar. 1990

1989-1992

Lumpini Place

Residential Condominium; 19 storey

1-3-26 Rai

408.00

Jul. 1991

1991-1994

L.P.N. Mini Office

Office building; 7 storey

90 Sq. Wa

29.00

1994

1994-1994

Baan Lumpini Bang Bua Thong

Commercial Building and Townhouse

36-1-31.2 Rai

704

725.00

Oct. 1994

1994-1996

Siphraya Riverview

Residential Condominium; 31 storey

2-0-16.6 Rai

310

1,100.00

Jan. 1994

1994-1998

Baan Lumpini 2 Bang Bua Thong

Commercial Building

2-1-84.9 Rai

97.00

Jan. 1997

1997-1999

Lumpini Center

Commercial Building; 3.75 storey

1-1-81.2 Rai

62.00

May. 1999

1999-2000

Lumpini Center, Buildings A-H

Residential Condominium; 7 and 8 storey

12-2-26 Rai

1,765

857.00

May. 1999

1999-2000

Lumpini Place Sathorn, Buildings A-D

Residential Condominium; 9 storey

3-2-52.6 Rai

603

726.00

Mar. 2001

2001-2002

Lumpini Residence Sathorn

Service Apartments; 9 storey

199 Sq. Wa

95.00

2002-2003

Lumpini Center Latphrao 111, Buildings A-G

Residential Condominium; 8 storey

6-2-17 Rai

856

663.00

Aug. 2002

2002-2004

Lumpini Place Suanplu-Sathorn

Residential Condominium; 9 storey

2-2-22.5 Rai

281

372.00

Sep. 2002

2002-2003

Lumpini Place Rama 4-Sathorn

Residential Condominium; 9 storey

2-0-38 Rai

231

405.00

May. 2002

2002-2003

Lumpini Place Narathiwat 24

Residential Condominium; 9 storey

2-0-25 Rai

190

353.00

Jan. 2003

2002-2003

Lumpini Ville Mary-Sathorn

Residential Condominium; 9 storey

2-3-65 Rai

300

457.00

May. 2003

2003-2004

Lumpini Place Rama 3-Charoenkrung

Residential Condominium; 9 storey

2-3-79 Rai

312

485.00

Mar. 2003

2003-2004

Lumpini Place Narathiwatratchanakarin

Residential Condominium; 9 storey

2-2-11.2 Rai

233

481.00

Jun. 2003

2003-2004

Lumpini Suite Sukhumvit 41

Residential Condominium; 9 storey

1-2-78 Rai

159

486.00

Jul. 2003

2003-2004

Lumpini Place Rama 3-Riverview

Residential Condominium; 19 storey

3-0-65.1 Rai

497

1,031.00

Mar. 2004

2004-2005

Lumpini Center Sukhumvit 77

Residential Condominium; 9 storey

6-2-30.2 Rai

872

898.00

Jan. 2004

2004-2005

Lumpini Ville Phahol-Suthisarn

Residential Condominium; 21 storey

5-0-76.9 Rai

861

1,408.00

Jul. 2004

2004-2005

Lumpini Center Nawamin

Residential Condominium; 8 storey

3-2-65.7 Rai

442

389.00

Jan. 2005

2005-2006

Lumpini Ville Sukhumvit 77

Residential Condominium; 23 storey

4-3-29.8 Rai

987

1,561.00

Dec. 2004

2004-2006

Lumpini Place Pinklao

Residential Condominium; 22 storey

3-0-33 Rai

580

1,107.00

Mar. 2005

2005-2006

Lumpini Ville Cultural Center

Residential Condominium; 8 storey

12-2-63 Rai

1,324

1,956.00

Mar. 2005

2005-2006

Lumpini Place Narathiwat-Chaophraya

Residential Condominium; 29 storey

9-0-72 Rai

1,306

3,598.00

Jun. 2005

2005-2007

Lumpini Place Pahon-Sapankwai

Residential Condominium; 29 storey

7-1-68 Rai

1,093

2,237.00

Jan. 2006

2006-2007

Lumpini Place Pinklao 2

Residential Condominium; 26 storey

3-3-83.3 Rai

651

1,138.00

Sep. 2006

2006-2007

Lumpini Place Ratchada-Thapra

Residential Condominium; 29 and 4 storey

6-2-26 Rai

898

1,650.00

May. 2006

2006-2008

Lumpini Ville Ramkhamhaeng 44

Residential Condominium; 23 storey

4-2-56 Rai

827

1,304.00

Jul. 2006

2006-2008

Lumpini CondoTown Badindecha-Ramkhamhaeng

Residential Condominium; 8 storey

32-3-28 Rai

3,445

3,074.00

Sep. 2007

2007-2008

Lumpini CondoTown Ramindra-Laksi

Residential Condominium; 8 storey

13-0-40 Rai

1,568

1,272.00

Apr. 2007

2007-2008

Lumpini Ville Ramindra-Laksi

Residential Condominium; 14 storey

7-2-58.3 Rai

1,271

1,388.00

Jun. 2007

2007-2008

Lumpini Ville Prachachun-Pongphet

Residential Condominium; 19 storey

7-3-83.8 Rai

958

1,360.00

Sep. 2007

2007-2009

Lumpini CondoTown Ratanathibet

Residential Condominium; 8 storey

19-0-59.1 Rai

1,944

1,796.00

Dec. 2007

2007-2009

Lumpini Suite Pinklao

Residential Condominium; 21 storey

3-1-67.0 Rai

547

1,353.00

Nov. 2007

2007-2009

Lumpini Ville Ramkhamhaeng 26

Residential Condominium; 8 storey

10-2-74.0 Rai

998

1,388.00

Feb. 2008

2008-2009

Lumpini Place Rama 8

Residential Condominium; 13 storey

9-3-4.4 Rai

1,131

1,956.00

Mar. 2008

2008-2009

Lumpini Suite Rama 8

Residential Condominium; 12 storey

1-3-55.9 Rai

182

518.00

Mar. 2008

2008-2009

Lumpini Place Ramindra-Laksi

Residential Condominium; 14 storey

4-1-96.3 Rai

516

925.00

Feb. 2009

2009-2009

Annual Report 2009 L.P.N. Development PLC.

163

Details of Completed Projects: Pornsanti Co., Ltd. No.

Project

Number Number of Bldg. of J.P.

Type of Project

Land size of Project

Number of units

Value (MB)

Duration Develop and Open for sale Construct

P.S.T. Condoville Tower 1,2

Residential Condominium; 22 storey

6-2-78.7 Rai

1,548

1,944.00

1991

1990-1994

P.S.T. Mini Office

Office-Residential Building; 7 storey

4-1-35 Rai

131.00

1992

1992-1993

P.S.T. City Home

Residential Condominium; 29 storey

4-1-34.2 Rai

764

1,480.00

Apr. 1994

1994-1999

Commercial Building Cultural Center

Commercial Building

0-1-50 Rai

41.00

Mar. 2007

2007-2007

Commercial Building Nawamin

Commercial Building

34.3 Sq. Wa

12.00

Jun. 2008

2007-2007

Details of Completed Joint-Venture Projects: Grand Unity Development Co., Ltd. No.

Project

Number Number of Bldg. of J.P.

Type of Project

Lumpini Place WaterCliff

Residential Condominium; 36 storey

Lumpini Townhome Ratchada-Rama 3

Lumpini Suite Ratchada-Rama 3

4 5

Land size of Project

Duration

Number of units

Value (MB)

4-0-40.4 Rai

617

1,426.00

Mar. 2002

Develop and Construct 2002-2004

Open for sale

Townhouse; 4.5 storey

2-2-2.5 Rai

280.00

Nov. 2002

2002-2004

Residential Condominium; 9 storey

386 Sq. Wa

250.00

Sep. 2003

2003-2004

Grand Heritage Thonglor

Residential Condominium; 8 storey

1-0-1 Rai

350.00

Apr. 2004

2004-2005

Grand Parkview Asoke

Residential Condominium; 34 storey

3-1-98 Rai

483

1,631.00

Jun. 2004

2004-2006

Parkview Viphavadi 1-3

Residential Condominium; 8 storey

7-3-25 Rai

959

1,000.00

May. 2004

2004-2007

Parkview Viphavadi 4

Residential Condominium; 8 storey

0-3-14 Rai

64.00

Mar. 2008

2008-2008

Details of Current Projects No. 1 2

information as of 31 December 2009

Project

Type of Project

Number Number Land size of Bldg. of J.P. of Project

Number of units

Value (MB)

271

300.00

Lumpini Vil e Bangkhae

Residential Condominium; 22 storey

2-0-38 Rai

Lumpini Place Rama 9-Ratchada

Residential Condominium; 25 and

15-1-0 Rai

1,165

(phase 1)

30 storey

Duration Develop and Construct Dec. 2008 2008-2010

Open for sale

Project Progress Sale

Construction

80%

40%

2,600.00

Jun. 2008

2008-2010

83%

56%

2,568

2,250.00

Jun. 2009

2009-2010

*88%

Lumpini CondoTown Ramindra-Nawamin Residential Condominium; 25 storey

14-2-

Residential Condominium; 29 and

5-0-75 Rai

1,028

1,200.00

Jul. 2009

2009-2010

58%

93.3 Rai Lumpini Vil e Ratburana-Riverview

31 storey 5

Lumpini Vil e Latphrao-Chokechai 4

Residential Condominium; 18 storey

7-1-0 Rai

1,026

1,360.00

Nov. 2009

2009-2010

100%

Lumpini Park Pinklao

Residential Condominium; 30 storey

12-1-87 Rai

2,702

3,600.00

Nov. 2009

2009-2011

90%

Lumpini CondoTown Bangkhae

Residential Condominium; 8 storey

7-3-94 Rai

790

600.00

Jan. 2010

2010-2010

*Sale Progress of LUMPINI CONDOTOWN Ramintra-Nawamin computed from Buildings A,B,C

164

Annual Report 2009 L.P.N. Development PLC.

Details of Projects Not-Yet-Transferred / To-be-Transferred Project

1 2 3 4 5 6 7 8 9 10 11 12 13 14

2011

Lumpini Park Pinklao Lumpini Ville Ladprao-Chokchai 4 Lumpini Ville Ratburana-Riverview Lumpini CondoTown Ramindra-Nawamin Lumpini Ville Bangkae Lumpini Place Rama 9-Ratchada (Phase 1) Lumpini Place Ramindra-Laksi Lumpini Suite Rama 8 Lumpini Place Rama 8 Lumpini Ville Ramkhamhaeng 26 Lumpini CondoTown Rattanatibet Lumpini Suite Pinklao Lumpini Ville Prachachuan-Pongphet others

2010

2009

Before 2009

*information as of 31 December 2009

Expected Income Realized in Number of units Value (MB) 2010 2011 3,314.00 2,380 3,314.00 1,206 1,360.00 1,360.00 718.00 718.00 597 1,438 1,303.00 1,303.00 239.00 239.00 215 962 2,347.00 2,347.00 381.00 381.00 220 155.00 155.00 68 531.00 531.00 295 42.00 42.00 27 86.00 86.00 90 5.00 5.00 1 10.00 10.00 6 79.00 79.00 66 7,571 10,570.00 7,256.00 3,314.00

Annual Report 2009 L.P.N. Development PLC.

on Transfer process

Project Completion

under construction

No.

165

Assets used in business operations Significant Descriptions of Fixed Assets Land and buildings Assets

Location

Project Area พื้นที่โครงการ

L.P.N. Development Public Co., Ltd. A. Assets for rent Lumpini Tower L.P.N. Tower Siphraya Riverview Lumpini Center Phase 4 (Bldg. E1,2) Lumpini Place Sathorn, Buildings C-D Lumpini Place Sathorn, Buildings E Lumpini Plaza Asoke Lumpini Ville Mary-sathorn Lumpini Ville Sukhumvit 77 Lumpini Place Pinklao Lumpini Place Pinklao 2 Lumpini Suite Pinklao Lumpini Ville Cultural Center Lumpini Place Narathiwat-Chaophraya Lumpini Place Pahol-Sapankwai Lumpini Place Ratchada-Thapra Lumpini CondoTown Badindecha-Ramkhamhaeng Lumpini Ville Ramkhamhaeng 26 Lumpini CondoTown Ramindra-Laksi Lumpini Ville Prachachuan-Phongphet Lumpini CondoTown Ratanathibet Total assets for rent B. Office Assets Lumpini Tower Total Office Assets C. Assets for sale Siphraya Riverview Lumpini Place Rama 3-Charoenkrung Lumpini Suite Pinklao Lumpini Place Ratchada-Thapra Lumpini Place Ratchada-Thapra Bldg.C Lumpini Ville Ramkhamhaeng 44 Lumpini CondoTown Badindecha-Ramkhamhaeng Lumpini Ville Ramkhamhaeng 26 Lumpini CondoTown Ramindra-Laksi Lumpini Ville Ramindra-Laksi Lumpini Place Ramindra-Laksi Lumpini Ville Prachachuan-Phongphet Lumpini CondoTown Ratanathibet Lumpini Suite Rama 8 Lumpini Place Rama 8 Total assets for sale

166

Rama 4 Road Ratchadapisek Road Yotha Road Happy Land 1 Road Narathiwatrajchanakharin Road Narathiwatrajchanakharin Road Ratchadapisek Road Sathorn Road Soi Sukhumvit 77 Boromrajchonanee Road Boromrajchonanee Road Boromrajchonanee Road Pracha U-thit Road Rama 3 Road Pradipat Road Ratchadapisek Road Ramkhanhaeng Road Ramkhanhaeng Road Ramindra Road Prachachuan Road Rattanatibet Road

Rama 4 Road

Yotha Road Rama 3 Road Boromratchachonnanee Road Ratchadapisek Road Ratchadapisek Road Ramkhanhaeng Road Ramkhanhaeng Road Ramkhanhaeng Road Ramindra Road Ramindra Road Ramindra Road Prachachuan Road Rattanatibet Road Rama 8 Road Rama 8 Road

มูลคาตามBook value บัญชี (MB) (ลานบาท)

Appraised value (MB)

3,945.02 799.56 4,344.73 149.20 184.14 2,238.55 12,633.60 44.92 176.81 65.74 311.13 310.69 443.19 927.29 120.52 172.50 820.65 32.11 150.27 152.50 190.30

sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m ตร.ม.

59.36 18.82 14.64 2.12 7.35 89.24 258.14 1.94 5.79 3.29 13.28 17.03 18.77 40.33 4.99 5.25 22.12 0.88 4.53 5.09 5.89 598.85

86.87 30.20 14.69 3.84 9.90 113.64 304.70 2.01 8.98 5.18 20.22 24.89 26.60 60.27 7.84 10.20 31.63 1.77 5.88 8.32 7.81 785.44

1,340.58

sq. m

35.12 35.12

35.65 35.65

64.71 60.42 382.25 1,619.69 30.71 128.58 3,730.02 4,199.84 564.21 334.49 11,374.43 304.00 22,124.74 3,445.24 20,177.87

sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m sq. m

2.94 2.81 16.74 50.66 0.84 3.61 76.80 114.93 11.70 8.32 398.60 8.64 458.35 144.53 695.62 1,995.09

2.94 2.81 24.55 80.57 0.84 5.48 122.68 194.27 18.71 12.05 552.08 12.29 795.87 195.54 995.56 3,016.24

Annual Report 2009 L.P.N. Development PLC.

Appraiser

Obligations ภาระผูกพัน

*Agency, market price SCIB , BAY SCIB Agency For Real Estate market price market price market price SCIB market price KBANK **T.A. Management market price market price market price market price market price market price market price market price market price market price market price market price market price market price

*Agency, market price

SCIB , BAY

book value book value market price market price market price market price market price market price market price market price market price market price market price market price market price

Assets

Location

D. Property Under Development Boromratchachonnanee Road Lumpini Park Pinklao Rama 9 Road Lumpini Place Rama 9 Rama 9 Road Lumpini Place Rama 9 (Phase 2) Sukhapiban 1 Road Lumpini Vil e Bangkhae Sukhapiban 1 Road Lumpini CondoTown Bangkhae Rajburana Road Lumpini Vil e Ratburana-Riverview Ramindra Road Lumpini CondoTown Ramindra-Nawamin Bldg. A, B Ramindra Road Lumpini CondoTown Ramindra-Nawamin Bldg. C Ramintdra Road Lumpini CondoTown Ramindra-Nawamin Bldg. D Latphrao Road Lumpini Vil e Latphrao-Chokechai 4 Total property under development E. Property to be developed Bang Bua Thong Baan Lumpini Bang Bua Thong 3 Narathiwatrajchanakharin Road Lumpini Place Sathorn Narathiwatrajchanakharin Road Lumpini Place Sathorn Boromrajchonanee Road Pinklao Project Total property to be developed Total Assets of L.P.N. Development Public Co., Ltd. (1) Pornsanti Co., Ltd. A. Assets for rent Soi Naksuwan P.S.T. Condoville Tower 1 Soi Naksuwan P.S.T. Condoville Tower 2 Soi Naksuwan P.S.T. City Home Total assets for rent B. Assets for sale Ramintra Road Town Home Project; Ramindra-Laksi Total assets for sale C. Property under development Paholyothin Road Commercial Building Phahon-Suthisarn 1 Paholyothin Road Commercial Building Phahon-Suthisarn 2 Pinklao Road Commercial Building Pinklao Total property under development D. Property to be developed Lad Prao Road Commercial Building Ratchada-Latphrao Total property to be developed Total Assets of Pornsanti Co., Ltd. (2) Total Assets of the Company (1) + (2)

Project Area พื้นที่โครงการ

Book มูลคาตาม value บัญชี(MB) (ลานบาท)

Appraised value (MB)

Appraiser

Obligations ภาระผูกพัน

KBANK KBANK ACL SCIB BBL BBL BBL CIMB

12 - 3 - 88.60 Rai 7 - 1 - 68.13 Rai 7 - 3 - 18.87 Rai 2 - 0- 38 Rai 7 - 3 - 94 Rai 5 - 0 - 75 Rai 6 - 1 - 51.58 Rai 3 - 3 - 67.69 Rai 4 - 1 - 74.63 Rai 7 - 1 - 70 Rai

507.55 1,132.16 394.81 97.75 102.99 137.74 131.00 70.18 68.01 234.79 2,876.98

570.75 1,493.94 394.81 103.34 102.99 137.74 162.16 81.33 74.53 237.60 3,359.19

Sims Property market price book value market price book value book value market price market price Sims Property UK

11,466.60 sq. Wa 996.40 sq. Wa 73.00 sq. Wa 103.00 sq. Wa

165.09 241.72 7.36 6.27 420.44 5,926.48

154.20 241.72 7.36 6.27 409.55 7,606.07

Salman (FarEast) book value book value book value

SCIB SCIB -

278.45 sq. m 136.71 sq. m 11,637.89 sq. m

0.89 4.70 81.52 87.11

2.20 6.39 98.50 107.09

market price market price S&P

SCIB

16.50 q. Wa

2.74 2.74

book value

49.40 sq. Wa 187.10 sq. Wa 130.00 sq. Wa

10.13 28.94 0.50 39.57

book value book value book value

1,682.50 sq. Wa

126.77 126.77 256.19 6,182.67

126.77 126.77 276.17 7,882.24

book value

*Agency For Real Estate,Market Price **T.A. Management Corporation (1999)

Annual Report 2009 L.P.N. Development PLC.

167

Corporate Loans Loans of L.P.N. Development Public Company Limited and Its Subsidiary Companies As At 31st December 2009

Item No.

Institution

Outstanding Proportion Rate of Interest Category Extent Amount % Average of Loan (Million Baht) (Million Baht)

Loans from 6 financial institutions Loan

Total

4,204.00

986.00

23.45

4,204.00

986.00

23.45

Financial Institutions in Contacts As at 31st December 2009 (Unit: Million Baht) Item No.

Financial Institution

Amount

Deposits at 10 financial institutions

992.15

Total

992.15

รวม

168

Annual Report 2009 L.P.N. Development PLC.

4.42%

Collateral Land and buildings.

Address of Projects Office Building Lumpini Tower 1168/109 Rama 4 Road, Thungmahamek, Sathorn, Bangkok 10120 Tel. (02) 285-5011-6 Fax: (02) 679-8699 L.P.N. Tower 216 Nang Linchi Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 285-4225-6 Fax: (02) 285-4089 Residential Condominium Lumpini Place 111 Soi Kraisri, Sri Bumpen Road, Thungmahamek, Sathorn, Bangkok 10120 Tel. (02) 671-1368-70 Fax: (02) 249-1793 Siphaya River View 108 Yotha Road, Talad noi, Samphanthawong, Bangkok 10100 Tel. (02) 639-5002-4 Fax : (02) 639-5004 P.S.T. Condoville Tower 1 118 Soi Nak Suwan, Nonsee Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 681-3112-3 Fax : (02) 681-3113 P.S.T. Condoville Tower 2 120 Soi Nonsee 14 , Nonsee Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 681-3523-5 Fax : (02) 681-3524 P.S.T. City Home 128 Soi Nonsee 14, Nonsee Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 681-3501,(02) 681-3505 Fax : (02) 681-3509

Lumpini Suite Rama 8 1 Arun Amarin Soi 53, Arun Amarin Road, Bangyeekan Bangplad,Bangkok 10700 Tel. (02) 497-2004 Fax: (02) 434-2005 “Lumpini Place” Residential Condominium Lumpini Place Sathorn 124 Narathiwat Ratchanakarin Road, Thungwatdon, Sathorn, Bangkok 10120 Tel. (02) 287-4567 Fax : (02) 287-4257 Lumpini Place Suanplu-Sathorn 435 Suanplu Soi 8, Sathorn 3 Road, Sathorn, Bangkok 10120 Tel. (02) 286-1585 Fax : (02) 286-1850 Lumpini Place Rama 4-Sathorn 164 Soi Sri Bumpen, Rama 4 Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 350-2895 Fax : (02) 350-2897 Lumpini Place Narathiwat 24 253, 255 Sathupradit Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 211-4351 Fax : (02) 211-4375 Lumpini Place Rama 3-Charoenkrung 101 Rama 3 Road, Bangkhorlaem, Bangkok 10120 Tel. (02) 291-8632, (02) 291-9333 Fax : (02) 291-8607 Lumpini Place Narathiwatratchanakarin 471 A Building, G floor, Narathiwat Ratchanakarin Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 294-6877 Fax : (02) 294-6876

“Lumpini Suite” Luxury Residential Condominium Lumpini Suite Sukhumvit 41 28 Sukhumvit Soi 41, Sukhumvit Road, North-Klongton, Wattana, Bangkok 10110 Tel. (02) 285-5011-6 Fax : (02) 285-5017 Lumpini Suite Pinklao 1 Bharomratchachonnanee Road, Bangyeekhan, Bangplad, Bangkok 10700 Tel. (02) 497-077-8 Fax : (02) 467-0779

Lumpini Place Rama 3-River view 297 Rama 3 Road, Bangkhorlaem, Bangkok 10120 Tel. (02) 291-9915, (02) 291-9918 Fax : (02) 291-9923 Lumpini Place Pinklao 28 Bharomratchachonnanee Road, Bangbumru, Bangplad, Bangkok 10700 Tel. (02) 458-3111-2 Fax : (02) 458-3113

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Lumpini Place Narathiwat-Chaophraya 78 Rama 3 Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 293-1111 Fax : (02) 293-1234

Lumpini Ville Sukhumvit 77 615 On-Nuch Road 3-5, Suanluang, Bangkok 10250 Tel. (02) 332-3004-5 Fax : (02) 332-3805

Lumpini Place Phahon-Saphankwai 171 Pradipat Road, Samsennai, Phayathai, Bangkok 10400 Tel. (02) 279-1010 Fax (02) 279-1180

Lumpini Ville Cultural Center 601 C Floor ,Pracha U-thit Road, Samsennok, Huaykwang, Bangkok 10310 Tel. (02) 274-4212 Fax : (02) 274-4210-11 EXT 5134

Lumpini Place Ratchada-Thapra 18 Ratchadapisek Road (Thapra-Taksin), Bukkhalo, Thonburi, Bangkok 10600 Tel. (02) 466-1144 EXT 333, (02) 460-2250 Fax : (02 466-1145 Lumpini Place Pinklao 2 89 Bharomratchachonnanee Road, Arun-Amarin, Bangkok-Noi, Bangkok 10700 Tel. (02) 433-2551, (02) 433-4444 Fax : (02) 433-2552 Lumpini Place Rama 8 B Building 3 Arun Amari Soi 53. Arun Amari Road, Bangyeekan, Bangplad, Bangkok 10700 Tel. (02) 497-5000, Fax : (02) 497-5001

Lumpini Ville Ramkhamhaeng 44 11 Ramkhamhaeng Soi 44, Ramkhamhaeng Road, Huamak, Bangkapi, Bangkok 10240 Tel. (02) 370-4444 Fax : (02) 370-4443 Lumpini Ville Ramindra-Laksi 2 Ramindra Road, Anusawari, Bangkhen, Bangkok 10220 Tel. (02) 197-9383-4 Fax : (02) 197-9090 Lumpini Ville Prachachuen-Phongphet 93 Moo 9 Prachachuen Road, Bangkan, Nonthaburi 11000 Tel. (02) 149-3000 Fax : (02) 149-3001

C Building 5 Arun Amari Soi 53. Arun Amari Road, Bangyeekan, Bangplad, Bangkok 10700 Tel. (02) 497-5200, Fax : (02) 497-5201

Lumpini Ville Ramkhamhaeng 26 59/1179, Krungthep Kreetha Ramkhamhaeng 26, Huamak, Bangkapi, Bangkok 10240 Tel. (02) 300-0500 Fax : (02) 300-0504

Lumpini Place Rama 9-Ratchada Rama 9 Road, Huai Kwang, Huai Kwang, Bangkok 10310 Sale Office : (02) 248-1555 Fax : (02) 248-8222 Call Center : (02) 689-6888

Lumpini Ville Bangkae Sukapiban Road, Bangkhae, Pasicharoen, Bangkok, 10160 Tel: (02) 413-4455 Fax :(02) 413-4446

Lumpini Place Ramindra-Laksi 20 Ramindra Road, Anusauwaree Bangkhen, Bangkok, 10220 Tel. (02) 190-7174, Fax : (02) 190-7070 “Lumpini Ville” Residential Condominium Lumpini Ville Mary-Sathorn 88 Soi 27. Chan Road, Sathorn, Bangkok 10120 Tel. (02) 212-4515 Fax : (02) 212-4375 Lumpini Ville Phahon-Suthisarn 23 Suthisarnvinijchai Road, Samsennai, Phayathai, Bangkok 10140 Tel. (02) 278-4125 Fax :(02) 278-4128

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“Lumpini Center” Residential Condominium Lumpini Center Happyland A, B, C, F, G, H Building 556/1, 560/1, 568/1, 432/1, 582/1, 580/1 Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. (02) 374-7270-1 Fax: (02) 374-7270 D2 Building 335/1 Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. (02) 374-6301 Fax: (02) 377-3072 E Building 557 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. (02) 377-9395-6 Fax: (02) 378-4370

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Lumpini Center Latphrao 111 A, B, C, D Building 58, 60, 62, 64 Latphrao 111, Latphrao Road, Klongchun, Bangkapi, Bangkok 10240 Tel. (02) 370-2698, (02) 370-2530 Fax: (02) 370-2606 E,F,G Building 3041, 3033 Soi Latphrao 111 Road, Klongchun, Bangkapi, Bangkok 10240 Tel. (02) 374-8394-5 Fax: (02) 374-8395

Joint Venture Project Lumpini Place WaterCliff 1, 2 427, 421 Sathupradit Road, Chongnonsee, Yannawa, Bangkok 10100 Tel. (02) 673-5596-7, (02) 673-6360-1 Fax: (02) 673-5595, (02) 673-6362 Lumpini Suite Ratchada-Rama 3 441 Sathupradit Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 212-7909 Fax: (02) 212-7908

Lumpini Center Sukhumvit 77 A, B, C, D, E Building 567, 573, 577, 591, 595 Soi On-Nuch 3-5, Sukhumvit 77 Road, Suanluang, Bangkok 10250 Tel. (02) 332-3803-4 Fax: (02) 332-3805

Lumpini Townhome Ratchada-Rama 3 431 Sathupradit Road, Chongnonsee, Yannawa, Bangkok 10120 Tel. (02) 211-9221 Fax: (02) 673-5595

Lumpini Center Nawamin 821 Soi Happyland 1, Klongchun, Bangkapi, Bangkok 10240 Tel. (02) 184-6118 Fax: (02) 3184-6248

Grand Heritage Thonglor 21 Soi Akapat (Thonglor 13), Sukhumvit 55 Road, North-Klongton, Wattana, Bangkok 10110 Tel. (02) 390-0910 Fax: (02) 390-0911

“Lumpini CondoTown” Residential Condominium Lumpini CondoTown Bodindecha-Ramkhamhaeng Ramkhamhaeng 43/1 Sai Wangthonglang, Bangkok 10310 Tel. (02) 192-7291 Fax: (02) 192-7279 Lumpini CondoTown Ramindra-Laksi Ramindra Road, Anusawari, Bangkhen, Bangkok 10220 Tel. (02) 197-9222 Fax: (02) 197-9221 Lumpini CondoTown Ratanathibet 141 Ratanathibet Road, Amphur Muang, Nonthaburi 11000 Tel. (02) 149-5000 Fax: (02) 149-5002

Grand Parkview Asoke 189 Sukhumvit 21 Road, North-Klongtoey, Wattana, Bangkok 10110 Tel. (02) 261-3218-9 Fax: (02) 258-0506 Parkview Viphavadi 1, Kamphaengphet Road 6 , seegun, Donmuang, Bangkok 10210 Tel. (02) 573-3401-3 Fax: (02) 573-3401 Other Department Brokerage Business Department Tel. (02) 287-3388 Fax : (02) 287-3377

Townhouse Baan Lumpini Bang Bua Thong Phase 1,2 222 Talingchan-Bang Bua Thong Road, Bang Bua Thong, Nonthaburi 11110 Head Office Tel. (02) 285-5011-6, (02) 923-4527-8 Service Apartment Lumpini Residence Sathorn 222 Narathiwat Ratchanakarin Road, Thungwatdon, Sathorn, Bangkok 10120 Tel. (02) 287-3330 Fax: (02) 287-3444 Annual Report 2009 L.P.N. Development PLC.

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