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02 CONTENT

FINANCIAL HIGHLIGHTS

3

MESSAGE FROM THE PRESIDENT & CEO

5

NATURAL PARK PUBLIC COMPANY LIMITED

7

General Information Subsidiaries and Associated Companies Investment Structure of the Company NATURE OF BUSINESS OPERATION

16

CURRENT PORTFOLIO

18

REVENUE STRUCTURE

26

BUSINESS OPERATION IN EACH BUSINESS GROUP

28

RISK FACTORS

37

LITIGATIONS

38

CAPITAL STRUCTURE

43

MANAGEMENT

44

Organization Chart Management Structure Selection of Directors and Management Managements Remuneration Corporate Governance Supervising the Use of Inside Information Human Resources Internal Control CONNECTED TRANSACTIONS

55

EXPLANATIONS AND ANALYSIS OF OPERATIONAL PERFORMANCE AND FINANCIAL STATUS

56

Operational Performance Financial Status Audit Fee FINANCIAL STATEMENTS

59

Report of The Board of Directors’ Responsibilities for Financial Statements Financial Statements Natural Park Public Company Limited and Its Subsidiaries Companies ATTACHMENT

Details of the Directors and Management Details of the Directors in Subsidiary Companies

NATURAL PARK PUBLIC COMPANY LIMITED

CONTENT

114


03 FINANCIAL

HILIGHTS (Million Baht)

Financial Hilights (Million Baht)

2010

2009

2008

Total Assets

3,006.34

3,496.00

3,343.35

Total Liabilities

2,352.57

3,380.15

3,296.08

60,430.92

46,784.98

12,086.18

Shareholders Equity

653.77

115.85

47.27

Total Income

834.66

522.41

302.60

Total Cost and Expenses

595.07

1,018.24

2,104.44

Net Loss

239.59

(495.83)

(1,801.84)

Registered and Paid-up Capital

(Million Baht)

Financial Ratio

2010

2009

2008

Net Loss Per Share (Baht/Share)

0.005

(0.01)

(0.16)

Return on Equity (%)

62.26

(607.93)

(274.87)

Return on Assets (%)

7.37

(14.50)

(48.19)

Debt to Equity Ratio (times)

3.60

29.18

69.73

Million Baht

2010

2009

2008

4500

3500

3006.34

Million Baht

2010

2009

2008

Million Baht

4500

1200

3500

900

2010

2009

2008

653.77

2500

2500

1500

1500

2352.57

300

0

0

0

Assets

Million Baht

600

2010

2009

Liabilities 2008

Million Baht

2010

2009

Equity 2008

Million Baht

2500

1000

2000

500

600

1500

0

300

1000

0

0

1200

900

834.66

Revenue

2010

2009

2008

239.59

2000

595.07

3000

Express

Net profit

NATURAL PARK PUBLIC COMPANY LIMITED

FINANCIAL HILIGHTS


05 MESSAGE FROM THE

PRESIDENT & CEO The year 2010 witnessed the strongest financial status of Natural Park Public Company Limited (“N-PARK”) during the past several years. The operating performance ended on 31 December 2010 revealed that the Company had the total revenue of Baht 834.66 million, and the net profit of Baht 239.59 million. The shareholders’ equity continually rose from Baht 47.27 million in 2008 to Baht 115.85 million in 2009, and Baht 653.77 million in 2010. The healthier financial status was the fruit of the Company’s effort to solve the problems through efficient decrease in expenses and strategic management of assets to suit the business situation. This financial strength resulted from the extensive support of all shareholders over the past period. N-PARK could efficiently handle the economic fluctuations and struggled to overcome all obstacles, especially the prolonged legal cases. The Company finally succeeded in settling some legal cases. N-PARK has successfully obtained strategic partners from both a group of investors from Bahrain and the Crown Property Bureau to invest in Siam Kempinski Hotel and Kempinski Residences Siam Project, the 5-star hotel and serviced apartment situated adjacent to the Siam Paragon Shopping Complex. The project construction is now completed and the grand opening ceremony was held in September 2010. The average occupancy rate of the hotel is high when compared to other major five star hotels. Furthermore, the Company was successful in offering the total 13,645,942,787 shares left from the previous capital increase in 2009 to the existing shareholders at the price of Baht 0.01 per share, which was much lower than the market price, resulting in the increase in working capital in the amount of Baht 136.46 million. This was considered the Company’s major achievement which helped rebuild the confidence among investors, and strengthen its financial status in terms of revenue and capital. The Company is still seeking suitable business partners to invest in other projects as the fundamental basis to increase the potential for the next phases of business development amidst the economic expansion in Thailand and the region. In 2011, the Thai economy is expected to continually grow from the previous year. However, there are several factors that the Company has to keep a close watch on, particularly the pressure from the inflation which tends to rise and the fluctuations of capital movements. In the fast-changing and dramatically fluctuating situation, N-PARK strategically develops and maintains its businesses and financial stability to benefit all related parties to the maximum in accordance with the Company’s policies. On behalf of Natural Park Company Limited, I wish to express my heartfelt gratitude to all shareholders for a great deal of confidence and generous support for the operations of the Board of Directors and the management team. I also would like to thank all clients, business partners, governing authorities, financial institutions, and all staff members who have devoted themselves by working untiringly and with utmost determination throughout 2010.

Mr. Sermsin Samalapa President & CEO Natural Park Public Company Limited

NATURAL PARK PUBLIC COMPANY LIMITED

MESSAGE FROM PRESIDENT & CEO


07 GENERAL

INFORMATION GENERAL INFORMATION

Company

Natural Park Public Company Limited

Company Registration Number

0107537000459

Nature of Business

Real estate development for rent, service and sale

HEAD OFFICE AND BRANCH OFFICE Location

88 and 88/8 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

Telephone

0-2259-4800-11

Fax

0-2260-5078

Website

http://www.naturalpark.co.th http://www.nparkfactandinfo.com

Shares Offered

Ordinary shares of 60,430,920,000 shares with par value of Baht 1 per share

AUDITOR OF THE COMPANY Auditor Name

Jadesada Hungsapruek, Certified Public Accountant No. 3759 and/or Ms. Wilomsri Jongudomsombut Certified Public Accountant No. 3899 and/or Ms. Kannika Wipanurat Certified Public Accountant No. 7305

Office Name

Karin Audit Company Limited

Location

6th Floor, Room B1, Boonmitr Building, 139 Silom Road, Bangrak, Bangkok

Telephone

0-2634-2484-6

Fax

0-2634-2668

No

Company Name

Office Location

Paid-up Capital

Registered Capital

Shares Offered

100.00%

170,000,000

170,000,000

1,700,000

100

Shareholding

Par Value

1

Natural Hotel Panwa Co., Ltd.

5/3 M.8 Yon Bay, Khao-Khard Road, Tambol Wichit, Amphur Mung, Phuket

2

Natural Hotel Sukhumvit Co., Ltd.

555/5 Sukhumvit 63 Klongton Nua, Wattana, Bangkok

67.88%

41,352,750

150,000,000

1,500,000

100

3

Natural Hotel Chaopraya Co., Ltd.

88 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

99.30%

100,000

100,000

1,000

100

4

Natural Park Ville Co., Ltd.

88 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

100.00%

43,000,000

43,000,000

430,000

100

5

Natural Real Estate Co., Ltd.

88 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

100.00%

132,000,000

132,000,000

1,320,000

100

6

Park Opera Co., Ltd.

88 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

100.00%

22,555,000

50,000,000

5,000,000

10

7

Natural Project Chaopraya Co., Ltd.

88 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

99.94%

1,000,000

1,000,000

10,000

100

8

Richee Property Management Co., Ltd.

88 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

99.94%

1,000,000

1,000,000

10,000

100

9

Park Gourmet Co., Ltd.

88 Soi Klang (Sukhumvit 49), Sukhumvit Road, Klongton Nua, Wattana, Bangkok

100.00%

25,000,000

50,000,000

500,000

100

10

Kyoto Resorts YK

Kishimoto Building 2-1 Marunouchi, 2-chome, Chiyoda-ku, Tokyo, Japan

66.70%

50,000,000 Yen

50,000,000 Yen

1,000

11

Park Cuisine Co., Ltd.

61 Langsuan, Lumpinee, Pathumwan, Bangkok

38.00%

272,367,120

272,367,120

27,236,712

10

12

Kempin Siam Co., Ltd.

989 Siam Tower 10 Floor, Rama I Road, Pathumwan, Bangkok

35.00%

2,140,000,000

2,140,000,000

21,400,000

100

13

UOB Apartment Property Fund One

5th Floor Bangkok City Tower, 179/6-10 South Sathorn Road, Thungmahamek, Sathorn, Bangkok

27.06%

828,750,000

828,750,000

85,000,000

9.75

14

Syntec Construction Pcl.

555/7-11 Sukhumvit 63 Klongton Nua, Wattana, Bangkok

11.88%

1,600,000,000

1,600,000,000

1,600,000,000

50,000 Yen

1

NATURAL PARK PUBLIC COMPANY LIMITED

GENERAL INFORMATION


08 GENERAL

INFORMATION Natural Park Public Company Limited was established on 23 June 1988 to conduct the business of full-range real estate development for lease, service, sale, and management. The Company was listed in the Stock Exchange of Thailand on 15 February 1993 and registered its conversion to a public company on 3 February 1994. Real estate, like all business sectors in Thailand, felt the pinch of the 1997 financial crisis. Consequentially, the Company in 2000 filed the petition for business reorganization with the Central Bankruptcy Court pursuant to the Bankruptcy Act B.E. 2483 (1940). The Central Bankruptcy Court passed a business reorganization order on 2 May 2000. After the Company has successfully undergone the organization plan, the Central Bankruptcy Court order the business organization revoked on 13 February 2003. As such, the Company has experienced both upturn and downturn in the industry. In 2006, N-PARK has successfully restored investor confidence as evidenced from over Baht 8,000 million in fund raised from new shareholders both at home and abroad as well as receiving a permission to trade in the Stock Exchange of Thailand on 23 July 2003. Since 2003, the Company has employed its “Buy-Develop-Sell” strategic approach to generate appropriate profits through business cycles. In addition, letting out its real estate has yielded solid incomes, enabling the Company to handle the fluctuations in the market and to maximize benefits and returns for itself and its shareholders. The Company’s current registered capital is Baht 60,430.92 million. At present, the Company operates in real estate development for rent including the Natural Park Apartment, Siam Kempinski Hotel and Kempinski Residences Siam. N-PARK is also developing many high potential projects and seeking business partners possessing strengths in terms of capital and project management in order to ensure efficient development with maximized profits, for example AmanResorts Bangkok Hotel, – a five-star hotel project right on the Chaophraya River.

Strengthening Company’s Credit Stability and Maintaining the Most Benefits of Shareholders during 2009 - 2010 As a result of the continual effort to strengthen N-PARK’s credit stability and the good support of the shareholders, during the years 2009-2010 N-PARK was able to end the most important bankruptcy cases which prolonged for several years and also reached the agreement to sell its assets at satisfactory price. This was favorable for the Company’s financial status in 2010, especially increase in the shareholders’ equity and the net profit. Since 2007, the management has put its best effort to strengthen the Company’s credit stability through 5 major ways: (1) seeking solutions for the bankruptcy cases in the past, (2) negotiation with creditors, (3) capital increase, (4) finding strategic partners in each investment project, and (5) sale of assets. The results of our effort are as follows.

Settlement of Major Bankruptcy Cases On 3 February 2009, the Company entered into a compromise agreement with Thai Ocean Life Insurance Company Limited (“OCEAN”) to end the civil and bankruptcy cases on condition that the Company would pay the principal of Baht 200 million. The payment was made by installments to lower the Company’s debt reserves, bringing about stronger financial status and settlement of the long-drawn-out cases.

NATURAL PARK PUBLIC COMPANY LIMITED

GENERAL INFORMATION


09 GENERAL

INFORMATION Later on 14 October 2009, the Company completed the payment in the total amount of Baht 200 million. Therefore, on 15 February 2010, OCEAN filed a petition with the Supreme Court for withdrawal of the appeal of the bankruptcy case which was under the hearing of the Supreme Court. Moreover, Bangkok Commercial Asset Management Company Limited, one of the creditors that were paid under the rehabilitation plan, submitted the petition requesting the withdrawal of the case filed against the Company. On 15 November 2010, the Southern Bangkok Civil Court granted permission to withdraw the case as the other debtors fully repaid the debt according the rehabilitation plan, and the Plaintiff did not desire to proceed with the case against the Company as the guarantor anymore. Withdraw of the case will lower the Company’s debt burden in the future. The Plaintiff had filed a lawsuit against the Company as the guarantor, claiming for the payment of Baht 135.31 million together with interest of 15% p.a. on the principal of Baht 47.09 million.

Reduced Interest Burden from the Judgment of the Court of Appeal ACL Bank Public Company Limited, one of the creditors under the rehabilitation plan, filed the case against the Company to the Southern Bangkok Civil Court on the ground of loan guarantee in the total amount of Baht 769.72 million for the principal and the interest. On 6 July 2007, the Southern Bangkok Civil Court ordered the Company to pay the principal of Baht 247.50 million and interest of 21% p.a. counting from 1 September 1996 onwards until the debt was fully repaid. Nonetheless, the total interest calculated to the filing date shall not exceed Baht 522.22 million. Subsequently, on 15 August 2007, the Company appealed the judgment of the Southern Bangkok Civil Court to the Court of Appeal. On 5 November 2010, the Court of Appeal amended the judgment of the Court of First Instance, stating that the Defendant shall pay the interest of 15.5% p.a., taking retrospective effect for 5 years from the date of filing (17 August 2006), and the interest in the amount of Baht 651,821.92 that the Defendant already paid to the Plaintiff shall be deducted. The judgment substantially reduced the Company’s interest burden from the rate of 21% p.a. from 1 September 1996 to the rate of 15.5% p.a. from 17 August 2001 (5 year retroactive effect from the date of suing). However, the Company is in the process of lodging an appeal against the judgment of the Court of Appeal to the Supreme Court. Remark: On 6 January 2011, the Company submitted an appeal against the judgment of the Court of Appeal to the Supreme Court. There are also other cases related to the Company’s rehabilitation in the past as follows. - Sathorn Asset Management Company Limited which was paid for a whole amount of debt under the

rehabilitation plan filed the civil case for the ground of loans and guarantee amount.

- Bangkok Commercial Asset Management Company Limited (right user for Nakornthon Bank Public Company

Limited), which was paid for the debt according to the rehabilitation plan, submitted the petition requesting the

court to retry the civil case.

NATURAL PARK PUBLIC COMPANY LIMITED

GENERAL INFORMATION


10 GENERAL

INFORMATION - The official receiver of Mahanakorn Trust Public Company Limited, one of the creditors which were paid for the

debt under the rehabilitation plan, filed a request for new trial of the civil case to the Civil Court.

- The official receiver of a bankrupt financial institution (Thananakorn Finance and Security Public Company

Limited) notified the Company to repay the interest of debentures.

Details of these cases appear in “Litigations” of this Annual Report. Agreement on Sale of Assets

Natural Hotel Panwa Company Limited (“Natural Hotel Panwa”), a subsidiary of Natural Park Public Company Limited, issued to Lehman Brothers Commercial Corporation Asia Limited (“Lehman”) the secured floating rate debentures with the total initial amount of Baht 860.52 million (860,522 debentures at a par value of Baht 1,000), and redemption due within 3 years commencing from the date of issuance (due on 19 December 2009), in order to develop and renovate the Novotel Beach Resort Panwa Phuket Hotel. Up until now, Natural Hotel Panwa received cash of Baht 575.22 million for the debentures issued to Lehman. As for the remaining undrawn amount of Baht 285.30 million, the subsidiary company requested to withdraw, which was in accordance with the agreement. However, as generally known, Lehman faced financial crisis and became insolvent. The subsidiary company made several demands but Lehman did not respond and denied the payment. Later Lehman Brothers Commercial Corporation Asia LimitedLater, ( “Lehman”) faced financial crunch and became insolvent. The Hong Kong High Court handed down liquidation order to Lehman, rendering Lehman unable to repay the remaining undrawn amount of the debentures that Natural Hotel Panwa issued to Lehman. Natural Hotel Panwa could not complete the construction of the Novotel Beach Resort Panwa Phuket hotel within the set deadline, as a result. Natural Hotel Panwa on 27 April 2009 filed a lawsuit against Lehman to the Bangkok Southern Civil Court. Natural Hotel Panwa filed a lawsuit against Lehman to the Bangkok Southern Civil Court requesting the Court to order Lehman to pay the remaining undrawn amount as previously agreed upon for the project to go on. Moreover, Natural Hotel Panwa claimed for damages from the default on agreement in the amount of Baht 327.37 million together with default interest of 7.5% p.a. Natural Hotel Panwa was offered by Ton Vassana Company Limited (“Purchaser”) to buy all assets related to the Novotel Beach Resort Panwa Phuket Hotel project, which include 17 pieces of land covering a total area of 11-0-99 rai, buildings on the land, and other assets related to the Novotel Beach Resort Panwa Phuket Hotel at the price of Baht 870 million. This transaction shall be under the condition that the Purchaser shall pay the price of the assets on the Closing Date by cash in the amount of Baht 200 million to Natural Hotel Panwa. The remaining amount of Baht 670 million shall be for the repayment of principal, accrued interest, and other outstanding amounts according to the debenture certificates Nos. 09360302000001 and 09360301000001 for Natural Hotel Panwa. However, completion of the sale and purchase transaction shall subject to Lehman’s approval and consent, allowing Natural Hotel Panwa Company Limited to sell the assets related to the Novotel Beach Resort Panwa Phuket Hotel (mortgaged as security of debenture). Upon completion of the sale of such assets, Natural Hotel Panwa shall submit to the Southern Bangkok Civil Court the petition requesting the withdrawal of the civil case filed against Lehman.

NATURAL PARK PUBLIC COMPANY LIMITED

GENERAL INFORMATION


11 GENERAL

INFORMATION Selling the Novotel Beach Resort Panwa Phuket Hotel to Ton Vassana Company Limited at the price higher than the book value will benefit the Company in many ways. The Company will immediately recognize the gains on sale of assets, lessen the debt burden, and reduce legal fees on lawsuit against Lehman. Also, the sale of assets will bring about higher working capital and stronger financial status. The amount gained from the sale of assets will be used as the working capital and will be employed to invest in and develop the existing real estate projects. The Meeting of the Company’s Board of Directors on 19 March 2010 and the Extraordinary General Meeting of Shareholders of Natural Hotel Panwa on 24 March 2010 approved Natural Hotel Panwa to sell all assets related to the Novotel Beach Resort Panwa Phuket Hotel project at the total price of Baht 870 million. And on 25 March 2010, Natural Hotel Panwa already completed the sales transaction.

Offer of the Capital-Increase Shares from the Previous Issuance to the Existing Shareholders under the Resolution of the 2009 Annual Ordinary General Meeting of Shareholders Whereas, the 2009 Annual Ordinary General Meeting of Shareholders of Natural Park Public Company Limited (“the Company”) on 30 April 2009 approved amendment to allocation and offering of the Company’s 13,645,942,787 ordinary shares at a par value of Baht 1, amounting to Baht 13,645,942,787 to the existing shareholders. Such shares, which are outstanding from the previous issuance of capital-increase ordinary shares to investors with specific characteristic or institutional investors on 12-13 and 16-18 February 2009, were offered to the existing shareholders at the proportion of 4 existing shares to 1 new share (the fraction of the shares shall be discarded) at the price of Baht 0.01 which is Baht 0.99 lower than the par value. The Company’s Board of Directors was authorized to determine the subscription period, requirements, and other conditions regarding the share allocation and offering, as deemed appropriate and as per relevant laws and regulations. The Board of Directors Meeting No. 7/2553 dated 26 October 2010 passed a resolution to determine the period and venue for subscription of capital-increase ordinary shares and receipt of payments as well as the date of determining a list of shareholders by means of closing a share registration book. The allocation and offering of 13,645,942,787 capitalincrease ordinary shares at a par value of Baht 1 to the Company’s existing shareholders whose names appear on the date of determining a list of shareholders by means of closing a registration book on 16 November 2010 at the proportion of 4 existing shares to 1 new share at the price of Baht 0.01 which is Baht 0.99 lower than the par value. The subscription period was fixed for Monday 29 November 2010 to Friday 3 December 2010. The offering was a success with all shares subscribed and the Company’s working capital increased by Baht 136.46 million. As a result of the progress in strengthening the Company’s credit stability, its financial status in 2010 was improved, especially the shareholders’ equity which amounted to Baht 653.64 million. The Company enjoyed the increased net profit from the sale of the Novotel Beach Resort Panwa Phuket Hotel in the amount of Baht 250.52 million, and the decrease in the estimated liabilities in the amount of Baht 386.23 million from the ACL Bank Public Company Limited after the Court of Appeal ordered the Company to pay lower interest.

NATURAL PARK PUBLIC COMPANY LIMITED

GENERAL INFORMATION


12 SUBSIDIARIES AND

ASSOCIATED COMPANIES As of 31 December 2010, the Company’s investments in subsidiaries and associated companies amounted to Baht 974.36 million or 28.90 of total assets (the Company’s only financial statements) are as follows.

NATURAL HOTEL PANWA CO., LTD.

NATURAL HOTEL SUKHUMVIT CO., LTD.

Paid-up Capital

Baht 170,000,000

Paid-up Capital

Baht 41,352,750

Percentage of Holding

100.00

Percentage of Holding

67.88

Type of Business

Hotel

Type of Business

Hotel

Investment Detail

Currently not operated

Investment Detail

Currently not operated

Note

Natural Hotel Sukhumvit Co., Ltd. is held 64.90 % by the Company and 2.98% through Syntec Construction Public Company Limited.

NATURAL HOTEL CHAO PRAYA CO., LTD.

NATURAL PARK VILLE CO., LTD.

Paid-up Capital

Baht 100,000

Paid-up Capital

Baht 43,000,000

Percentage of Holding

99.30

Percentage of Holding

100.00

Type of Business

Holding Company

Type of Business

Property Management

Investment Detail

Currently not operated

Investment Detail

Currently not operated

NATURAL REAL ESTATE CO., LTD.

PARK OPERA CO., LTD.

Paid-up Capital

Baht 33,000,000

Paid-up Capital

Baht 22,555,000

Percentage of Holding

100.00

Percentage of Holding

100.00

Type of Business

Property Development

Type of Business

Property Development

Investment Detail

Currently not operated

Investment Detail

Currently not operated

NATURAL PARK PUBLIC COMPANY LIMITED

SUBSIDIARIES AND ASSOCIATED COMPANIES


13 SUBSIDIARIES AND

ASSOCIATED COMPANIES NATURAL PROJECT CHAO PRAYA CO., LTD.

NATURAL VENTURE CO., LTD.

Paid-up Capital

Baht 1,000,000

Paid-up Capital

Baht 100,000

Percentage of Holding

99.94

Percentage of Holding

100.00

Type of Business

Property Development

Type of Business

Holding Company

Investment Detail

Currently not operated

Investment Detail

Currently not operated

Note

Dissolved and in the process of liquidation

RICHEE PROPERTY MANAGEMENT CO., LTD.

PARK GOURMET CO., LTD.

Paid-up Capital

Baht 1,000,000

Paid-up Capital

Baht 25,000,000

Percentage of Holding

99.94

Percentage of Holding

100.00

Type of Business

Property Development

Type of Business

Restaurant

Investment Detail

Currently not operated

Investment Detail

Currently not operated

KYOTO RESORTS YK

PARK CUISINE CO., LTD.

Paid-up Capital

Yen 50,000,000

Paid-up Capital

Baht 272,367,120

Percentage of Holding

66.67

Percentage of Holding

38.00

Type of Business

Hotel

Type of Business

Restaurant

Investment Detail

Investment in Aman Niwa Hotel, Kyoto

Investment Detail

Investment in LENÔTRE

KEMPIN SIAM CO., LTD. (NATURAL HOTEL SIAM CO., LTD.)

UOB APARTMENT PROPERTY FUND ONE

Baht 2,140,000,000

Paid-up Capital

Baht 828,750,000

Percentage of Holding

35

Percentage of Holding

27.06

Type of Business

Hotel and Serviced Apartment

Type of Business

Property Fund

Investment in Siam Kempinski Hotel and Residences

Investment Detail

Investment in Natural Ville Executive Residences

Paid-up Capital

Investment Detail

NATURAL PARK PUBLIC COMPANY LIMITED

SUBSIDIARIES AND ASSOCIATED COMPANIES


14 INVESTMENT STRUCTURE

OF THE COMPANY As of 31 December 2010, the Company’s investments in subsidiaries and associated companies are as follows.

N-PARK Group of Companies

Property Development(2)

Hotel

Restaurant

99.94%

Kyoto 66.67%

PC

38.00%

NRE

100.00%

NHP 100.00%

PG

100.00%

PO

100.00%

KS

NPC

Holding Company

Management NPV

100.00%

NV NHC

100.00%

1

Transportation BMCL

2.68%

Construction SYNTEC11.88%

99.30%

35.00%

RPM

99.94%

NHSK 67.88%

SIRI

4.26%

JV

Note:

(1) Natural Park Public Company Limited has invested directly in the Natural Park Apartment Project (Sukhumvit 49)

(2) Property Development includes real estate for rent & related services and real estate for sale.

NATURAL PARK PUBLIC COMPANY LIMITED

INVESTMENT STRUCTURE OF THE COMPANY

Property Fund UOBAPF 27.06%


15 INVESTMENT STRUCTURE

OF THE COMPANY N-PARK’s investment in subsidiary and associated companies

Details

Ks

: Kempin Siam co.,Ltd.

Siam Kempinski Hotel and Kempinski Residences Siam

Kyoto

: Kyoto Resorts YK

Owner of land in Kyoto, Japan

NHC

: Natural Hotel Chao Praya Co., Ltd.

Currently not operated

NHP

: Natural Hotel Panwa Co., Ltd.

Currently not operated

NHSK

: Natural Hotel Sukhumvit Co., Ltd.

Currently not operated

NPC

: Natural Project Chao Praya Co., Ltd.

Currently not operated

NRE

: Natural Real Estate Co., Ltd.

Currently not operated

NPV

: Natural Park Ville Co., Ltd.

Currently not operated

NV

: Natural Venture Co., Ltd.

Dissolved and in the process of liquidation

PO

: Park Opera Co., Ltd.

Currently not operated

PC

: Park Cuisine Co., Ltd.

Investment in LENÔTRE restaurant

PG

: Park Gourmet Co., Ltd.

Currently not operated

RPM

: Richee Property Management Co., Ltd.

Currently not operated

UOBAPF

: UOB Apartment Property Fund I (Leasehold)

Natural Ville Executive Residences

N-PARK’s investments in available-for-sale securities

Details

BMCL

: Bangkok Metro Public Company Limited

The M.R.T.

SYNTEC

: Syntec Construction Public Company Limited

Construction

SIRI

: Sansiri Public Company Limited

Property Development

Joint Venture JV

: Joint Venture of the Natural Park Public Company Limited, Amanresort Services Limited and Silverlink Holding Limited

Details AmanResort Bangkok Hotel

NATURAL PARK PUBLIC COMPANY LIMITED

INVESTMENT STRUCTURE OF THE COMPANY


16

NATURE OF

BUSINESS OPERATION

“BUY-DEVELOP-SELL” Approach for Real Estate

NATURAL PARK PUBLIC COMPANY LIMITED

NATURE OF BUSINESS OPERATION


17 NATURE OF

BUSINESS OPERATION The real estate companies in the new age of business are now facing more dynamic and significant changes than ever before, arising from both local and international factors, e.g. impacts from fluctuation of capital movements and interest rates, as well as advanced information system which enables faster communications. The Company’s vision thus stresses the importance of business improvement and adaptation to respond to the present situation. Since 2003 Natural Park Public Company Limited has operated in the real estate business with the “Buy-Develop-Sell” strategy through the steps of buying/investing, building/developing, and generating profits that suit the business cycle. The end result is the highest potential for returns. At the same time, the Company has maintained its rental real estate projects which are located in highly profitable areas as a source of solid incomes to cope with the economic fluctuation that may arise. There are three main steps to the “Buy-Develop-Sell” strategy. “Buy” is the first step of investing in real estate whether they are land banks, in-progress projects, NPL projects, or completed projects, as well as marketable securities and those that correspond with the Company’s business direction. For the “Buy” step, the management is required to have good knowledge and anticipation of the business cycle, the government policies, and the expansion direction of the infrastructure systems, e.g. electric railway network, land development strategies, etc. In depth study and analysis are also required for selecting the right location, finding the potential of individual property, mobilizing funds, or seeking financial support from both local and foreign financial institutions. The second step “Develop” implies the value adding to the individual property. This step requires analysis of consumer demand or development of the projects which suit a specific location. Opting to build a condominium, an apartment for rent, an office building, a shopping complex, or a hotel for tourists to accommodate the needs of consumers requires the in-depth market study. Seeking of local and foreign business partners with strong and stable financial status is also significant for the “Develop” step to support business expansion, project development, and marketing based on organizational competency and expertise. These strategic partners may take over the business if it is necessary or attractive conditions are offered. “Sell” is the last step which strategically seeks the highest return or cash flow for the Company. World leading real estate investors would consider profit-based more than asset-based. If selling an asset yields higher profit than the benefit received from owning it, then the option to sell would be most beneficial to the Company. The profit obtained from the sale of an asset can be used to further develop other high potential projects or to invest by engaging in the “Buy” step again. In this final step, the management must have the ability to seek buyers or world leading investors, and the ability to enhance reputation and credibility in real estate value adding which is in high demand in the market. The Company can use the flexible selling strategies in order to generate short-term cash flow, build confidence in the Company’s status, and strengthen the shareholders’ equity, as well as to gain capital for projects with high potential to generate profits in the future as shown in the operation performance of the Company during 2007 2010. This reflected the flexibility of the aforementioned policy which enables the use of “Sell” to effectively handle the fluctuation of business conditions. In order to achieve the “Buy-Develop-Sell” strategy, Natural Park has applied its business strengths which include experience and expertise of teamwork; domestic and foreign partners who are ready to support the development of various projects and in every phase; and, last but not least, continued support from shareholders who have confidence in this business strategy. As a result of the strategies to invest in potential projects in advance, during 2007 2010 Natural Park is able to regain its financial stability, build confidence in the Company’s status, and achieve the development of potential projects which are now operational and become the Company’s major sources of income.

NATURAL PARK PUBLIC COMPANY LIMITED

NATURE OF BUSINESS OPERATION


18 CURRENT

PORTFOLIO

NATURAL PARK PUBLIC COMPANY LIMITED

CURRENT PORTFOLIO


CURRENT PORTFOLIO The Company is focusing on developing its business in accordance to its Buy-Develop-Sell strategic approach by developing and enhancing 3 real estate projects, two of which have been opened for operation, namely, The Natural Park Apartment and Siam Kempinski Hotel and Kempinski Residences Siam. The 1 remaining projects are currently under development including AmanResort Bangkok Hotel.


20 CURRENT

PORTFOLIO

The Natural Park Apartment The Grade-A five star apartment is situated in the best and most popular expatriated residential area in Bangkok, Sukhumvit Road. Besides the very convenient transportation to Central Business Districts via BTS, MRT underground train, extensive expressways, and main Sukhumvit road, there are many facilities around such as international schools, hospitals and department stores. The project design are exceptional especially its landscape design and development. It composed of exceptional surrounding for customers’ relaxation including 3-rai natural garden, waterfall, fish pond, and stream which all that make the Natural Park Apartment distinguished from other projects in Sukhumvit area. The full range facilities are including swimming pool, sauna, kids’ playground, basketball field, tennis court, and many activity rooms, and 24 hours security to guarantee the safety living in our project.

Project Characteristics Project

The Natural Park Apartment

Location

88 Sukhumvit Soi 49, Sukhumvit Rd., Klongton Nua, Wattana, Bangkok

Type of Project

Luxurious apartment for rent

Number of Units

Three 15-storey residential buildings with a total of 81 units

Occupancy Rate

Approximately 63%

Present Status

Operated

NATURAL PARK PUBLIC COMPANY LIMITED

CURRENT PORTFOLIO


22 CURRENT

PORTFOLIO

Siam Kempinski Hotel and Kempinski Residences Siam A 5-star hotel project covering an area of 18 rai is located in the heart of the business district adjacent to the Siam Paragon, the largest shopping mall in the region. Trips to all Bangkok major areas can be made easily by the BTS sky train. The hotel has been beautifully designed and decorated in the Contemporary Thai style and fully equipped with all hotel facilities in accordance with the 5-star international standard. The project consists of 303 hotel rooms and 98 serviced apartment rooms covering the total area of about 88,000 square meters.

Project Characteristics Project

Siam Kempinski Hotel and Kempinski Residences Siam

Location

Adjacent to the Siam Paragon Shopping Center, Bangkok

Type of Project

Hotel and serviced apartment

Number of Rooms

303 Hotel rooms and 98 serviced apartment rooms (As at December 2010, the operating rooms consisted of 192 rooms in the Hotel and 54 apartments in the Residences

Occupancy Rate

Approximately 50.2% during July-December 2010 (after soft opening)

Present Status

Operates since 3rd quarter of 2010 onwards

Project Progress

100% completed of the Structural work 100% completed of Architectural work 95% completed of M&E work 100% completed of Interior work

NATURAL PARK PUBLIC COMPANY LIMITED

CURRENT PORTFOLIO


24 CURRENT

PORTFOLIO

The AmanResort Bangkok Hotel A luxurious 5 star hotel project located in Soi Charoen Krung 36 on the Chao Praya Riverside consists of 35 luxurious rooms occupying a total area of 12,300 square meters. The design has been made under the Heritage Development concept focusing on the harmony between the ancient custom house (Rong Pasee Roi Chak Sam) with its history dated back to more than 100 years and the new buildings which have carefully been designed to enhance the magnificence of the ancient site. The hotel is to be managed by Amanresorts Group which is a 5-star hotel management group recognized worldwide.

Project Characteristics Project

AmanResort Bangkok Hotel

Location

On the Chao Praya Riverside, Soi Charoenkrung 36, Bangrak, Bangkok

Type of Project

Five-Star Boutique hotel

Number of Rooms

35 rooms

Present Status

The project is on hold awaiting site handover

Project Completion

Within 2 years after site handover

NATURAL PARK PUBLIC COMPANY LIMITED

CURRENT PORTFOLIO


26 REVENUE

STRUCTURE Business Group

Operated By

% Shareholding of the Company

2010 Revenue (Million Baht)

2009

%

Revenue (Million Baht)

2008

%

Revenue (Million Baht)

%

Rental and Service - The Natural Park Apartment

Natural Park Pcl.

100.00%

69.62

8.34%

82.51

15.79%

97.83

32.33%

- Other Services

Natural Park Ville Co.,Ltd.

100.00%

-

0.00%

-

0.00%

0.30

0.10%

- Novotel Beach Resort Panwa Phuket Hotel

Natural Hotel Panwa Co., Ltd.

100.00%

20.73

2.48%

56.37

10.79%

59.23

19.57%

Management Fee Income

Natural Park Pcl.

100.00%

-

0.00%

10.63

2.03%

50.76

16.77%

Hotel Business

Other Revenues - Interest income

1.27

0.15%

1.07

0.20%

3.77

1.25%

- Dividend income

38.32

4.59%

18.82

3.60%

14.43

4.77%

- Gain on exchange rate

10.09

1.21%

0.77

0.15%

59.42

19.64%

- Gain on cancellation agreement

47.71

5.72%

-

0.00%

-

0.00%

- Gain on disposal of fixed assets

250.52

30.01%

-

0.00%

1.45

0.48%

- Gain on debt restructuring

-

- Gain on reversal of allowance for investment in related companies

-

0.00%

155.31

29.73%

-

0.00%

- Gain on reversal of provision for liabilities

386.23

46.27%

33.39

6.39%

-

0.00%

- Reversal of accrued interest expenses

-

0.00%

-

0.00%

11.76

3.89%

10.17

1.22%

2.34

0.45%

3.65

1.21%

834.66

100.00%

522.41

100.00%

302.60

100.00%

- Others Total Revenues

Note:

The Company has sold Novotel Beach Resort Panwa Phuket in March 2010

NATURAL PARK PUBLIC COMPANY LIMITED

REVENUE STRUCTURE

161.20

-


27 REVENUE

STRUCTURE

2010 Rental and Service

8.34 % 2.48 % 0.00 %

Hotel Business Management Fee Income 89.18 %

Other Revenues

2009

15.79 %

Rental and Service 10.79 %

Hotel Business

2.03 %

Management Fee Income 71.38 %

Other Revenues

2008 Rental and Service

32.43 % 31.22 %

Hotel Business Management Fee Income Other Revenues

19.57 % 16.77 %

NATURAL PARK PUBLIC COMPANY LIMITED

REVENUE STRUCTURE


28 BUSINESS OPERATION

IN EACH BUSINESS GROUP The Company focuses on developing properties for rent and other related services as they generate stable income and reduce fluctuation caused by the fall of the real estate business cycle. The company’s projects of this segment include serviced apartment for rent. The projects emphasizes on location, design and international standard service. Developed properties for rent and related services that are currently under operation are as follows:

Real Estate Development for Rent and Service Group With confidence in the increasing and potential of Thailand tourism, the Company has operated a development business and has developed hotel project focusing on the project that located in the heart of Bangkok to accommodate international business and leisure tourists. The hotel project currently operated by the Company’s associated company is as follows:

THE NATURAL PARK APARTMENT PROJECT Projects Features Project title

The Natural Park Apartment

Location

88 Soi Sukhumvit 49, Sukhumvit Road, Klongton Nua, Wattana, Bangkok

Type of projects

Luxurious apartment for rent

Number of units

Three 15-storey residential buildings with a total of 81 units

Occupancy rate

Approximately 63% throughout the year 2010

Marketing and Competition Status Competition Strategy The Natural Park Apartment project is located in the heart of Sukhumvit area, the center of business and modernity in the city of Bangkok where Thais and foreigners with high income and high standard of living reside. The strategically strong and advantageous point of the Natural Park Apartment project is its location. Being in the central business district, the project is surrounded by various facilities, five-star department stores, and entertainment complex for recreation, in addition to the very convenient transportation systems, e.g. BTS sky train, MRT underground train, expressways, and Airport Link, which truly respond to the metropolitan lifestyle in this capital. Sukhumvit area is thus the most attractive and pleasant place of living. The exquisitely designed rooms are spacious with multiple bedrooms, separate working room, and large balconies for enjoying the pleasant view of extensive gardens. Finely decorated in an Oriental Contemporary style, all apartment units are fully furnished and equipped with all facilities to express great care to residents. A proportionally separated maid’s room and kitchen room are available in each unit to meet the needs for privacy and lifestyles of the project’s major target clients. Realizing the importance of family living atmosphere, we intentionally offer larger rooms surrounded by generous outdoor spaces where family members can do activities together and feel like they are really at home. Regular maintenance and improvement are also provided to keep the project in good condition.

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


29 BUSINESS OPERATION

IN EACH BUSINESS GROUP Additionally, the Natural Park Apartment project is furnished with complete central facilities under five-star residential standard to respond to lifestyles of our clients who love physical exercise and recreational activities with their family members. The central facilities are offered with emphasis on the major target clients and their family members, including large swimming pool with Jacuzzi pool, playground, tennis court, basketball court, squash room, fitness center which houses Jacuzzi and sauna, and banquet room. The project’s highlight is a more than 3-rai garden where large fish pond, manmade waterfalls, and stream are found. Its largest natural garden in Sukhumvit area with open landscape is the prominent and unique point of this residential project. All residents will enjoy in this peaceful garden and feel relaxed after their tiring days. The Company also lays great emphasis on friendly and impressive services so that all residents feel comfortable like staying at home. Various activities ranging from Thai and international seasonal and festival events to special activities are arranged to build up a good relationship between the project and the residents, promoting good quality of life, and elevating the residents’ happiness.

Sales and Distribution Channels The Company’s distribution channels can be divided into the following proportion:

Distribution Channels

Proportion (in percentage)

1. Selling through agencies

90

2. Direct selling to clients

10

Total

100

Competition Status and Growth Trend Year 2010 witnesses the total 11,151 units of expatriate rental apartments in Bangkok, increasing by 4.5% year-on-year, and high occupancy rate of up to 91%. During the first half of the year 2010, the accumulated supply of rental apartment slightly drops by 0.34% due to renovation while the overall demand increases by only 2%. For the Grade A and Grade B rooms, the average occupancy rate grows by 2-4%. The rental rate for the Grade A rooms declines by 5% whereas that for the Grade B rooms shows a slight increase. A supply of 15 new projects with 1,490 units in aggregate will result in a total of 12,641 apartment units. Newlydeveloped projects are mainly located in the inner Bangkok on Sukhumvit Road (Soi Sukhumvit 1-71) to respond to the continued demand for residences in this area. The average occupancy rate remains stable with a slight increase of 1% whereas the average rental rate in 2010 remains unchanged from the year 2009. Major challenge of this market is the volume of new serviced apartments targeting both long-stay expatriates and short-stay businessmen and tourists. The apartment has to compete against serviced apartments

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


30 BUSINESS OPERATION

IN EACH BUSINESS GROUP and small condominium units for rent in the long-stay market. The influx of new supply of serviced apartments will continue to exert a downward pressure on both rental rates and occupancy. The average rental rate for the Grade A rooms in Sukhumvit area in 2010 is at Baht 430 per square meter, lower by 5%. Silom-Sathorn area’s rental rate drops by 4.3% on average to Baht 404 per square meter. The average rental rate for the Grade B rooms reduces by 1.2% from the previous year to Baht 341 per square meter. The market trend of apartments for rent is anticipated to remain stable for a short period because the sign of economic recovery has emerged since the fourth quarter of 2010 and the continual appreciation of Thai Baht. These are favorable to the employment and economic situation, benefiting the apartment business in 2011 as a whole. Sources: 1. Summary Property Focus in the First Half of 2010 by Plus Property 2. The Thai Property Market Trends in 2010 by CBRE

Products and Services Provision Throughout the past operational period, the Company always places great emphasis on development of its products and services to provide the best for our customers. Our products are prominent and different from competitors in several aspects: the specially designed landscape of the common areas, e.g. spacious garden and large swimming pool; space planning in each apartment unit; and selection of top quality materials. We regularly take enormous care of and renovate all apartment rooms, equipment and facilities to maintain them in good condition. The Company continually looks for new facilities and services and improves the quality of services to satisfy the clients to the maximum by adjusting recreational activities and internal environment. We also give importance to the development of service personnel quality to increase the clients’ satisfaction. All above are aimed to maintain high standard of the Natural Park Apartment project as a leader in five-star apartment business.

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


31 BUSINESS OPERATION

IN EACH BUSINESS GROUP Hotel Business Group With confidence in the increasing and potential of Thailand tourism, the Company has operated a development business and has developed hotel project focusing on the project that located in the heart of Bangkok to accommodate international business and leisure tourists. The hotel project currently operated by the Company’s associated company is as follows:

SIAM KEMPINSKI HOTEL AND KEMPINSKI RESIDENCES SIAM Projects Features Address

991/9 Rama I Road, Pathumwan, 10330, Bangkok

Type of Project

Five-star hotel, City resort style

Number of Rooms

Integrated lifestyle complex consisting 303 hotel rooms and 98 units of long stay Residences offering full services and facilities. As at December 2010, the operating rooms consisted of 192 rooms in the Hotel and 54 apartments in the Residences

Occupancy rate:

Approximately 50.2% during July-December 2010 (after soft opening)

Marketing and Competition Status2010 Competition Strategy Siam Kempinski Hotel and Kempinski Residences Siam is located in one of the most prominent areas in the city, connected to a premium shopping and entertainment complex and also in close proximity to the central business district of the city. Transportation services are convenient with both Sky Train and the underground railway system close by. The property is positioned as a lifestyle complex rather than just a hotel and apartments due to its uniqueness of design and personalised service. It was designed as an-urban resort with extensive gardens, multiple swimming pools and is the only hotel in Bangkok that offered rooms with direct pool access. The main strength of our competitors would be their long presence in the city and product superiority may not be enough. A distinct and individual brand identity for Siam Kempinski Hotel and Kempinski Residences Siam is important in the market place against the competition. The property design and product combines Kempinski’s trademark of European sophistication and refinement with the finest traditions of Thai hospitality and therefore the approach for the property would be communicating the differentiation. As part of Europe’s oldest luxury hotel group, the company has built its reputation on the belief that exclusivity and individuality are key elements of true luxury. Kempinski is a hotel management company and they transport management know-how into the different regions, where the highest level service training provided to all employees in order to achieve efficient and consistent service. During the first year of operation, Siam Kempinski Hotel and Kempinski Residences Siam will leverage on the brand distribution, utilizing our property’s position as one of the global flagship hotel to generate marketing opportunities and awareness, thus focusing on product and experiences. The aim is to create a multi-distribution channel for both direct/indirect bookings, from on and offline distribution channels. Loyalty programs such as GHA Discovery will also

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


32 BUSINESS OPERATION

IN EACH BUSINESS GROUP drive repeat business, with the intention to bring new business/customers to the property and eventually to Thailand. Working closely with our network of Regional Sales Offices in China, Global Sales Offices across Europe and the Middle-East identifying both leisure and corporate accounts that are currently not featuring the property to develop and strengthen relationship to make certain that the hotel is included in key leisure brochures and corporate program where customers are able to view and book easily. Due to the location of the property within the shopping district, the primary market source currently are coming from Asia, with a good mix of leisure and growing demand from corporate accounts. The demand for suites and pool access rooms assist in driving higher average room rate during high seasons and regional long weekends.

Distribution Channels Siam Kempinski Hotel and Kempinski Residences Siam’s 2010 booking source can be categories into the following:

BOOKING CHANNELS

Proportion (in percentage)

Direct Bookings (call / fax / email)

73

Bookings via Kempisnk.com

25

GDS Distribution

2

Competition Status and Growth Trend

The market condition is currently in the early stages of recovery after the Red Shirt protesters’ siege on the city that finally ended in May 2010. Leisure, corporate and incentive travellers are trickling back to Bangkok / Thailand but the volume is predicted to be lower than the previous years and with demand being low rates will reflect a decline. Average Daily Rate (ADR) decreased by 8% year on year to THB 4,898 in Q3 2010 and Revenue Per Available Room (RevPar) was THB2,406 in Q3 2010, which is an increase from THB2,373 in the same period last year. The recovery in numbers was from the Asian leisure segment, where both corporate and meetings & incentive market remains weak due to the on-going travel warnings. Increasing competition and a large future supply of hotels in Bangkok that will come between 2011 / 2013 is another growing concern. There are approximately 10,000 new keys schedule to be added by the end of 2013, bringing the total hotel supply to 38,005 according to CB Richard Ellis and this represents a 36% increase on current figures. The pressure on occupancy and rates that have already suffered from numerous events will continue to increase further from these developments

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


33 BUSINESS OPERATION

IN EACH BUSINESS GROUP Subsequently, hotels also face the rapid appreciation of the Thai baht which has resulted in increased room rates in terms of USD despite the decline in ADR. The appreciation decreased some numbers from European and North American leisure long haul due to the higher cost. Some travellers are reducing to one trip a year instead of two or alternatively shortening their entire stay.

Products and Services Provision The Siam Kempinski Hotel and Kempinski Residences Siam offers 303 hotel rooms, featuring two innovative restaurants (Brasserie Europa & Sra Bua by Kiin Kiin), a lobby lounge (T Lounge), destination bar (1897 Bar), Executive Lounge and Kempisnki the Spa. The elegant & grand Chadra Ballroom, which can accommodate 1200 pax for standing cocktail, 6 multi-functional meeting rooms and 1 Executive Boardroom, which are all located on one single floor, level 2 of the Garden Wing. Meanwhile, Kempinski Residences Siam will add on 98 units of long stay full service Residences, comprising studio (Deluxe), One Bedroom and Two Bedroom Residences and a unit of 3 bedrooms Penthouse. All units are located at the Royal Wing, which has its own private entrance, restaurant (Bistro), business centre, roof top pool and gym. Both hotel and residences are unique in contemporary design, combining traditional Thai and modern art. The property soft-opened on July 22nd 2010,with limited number of rooms and facilities and subsequently grand open on September 27th 2010. The rooms are new and every detail will be unique and incomparable to the current available inventory in the city. Despite both hotel and residence being integrated, the two products have diversed approach and requirements. It is necessary to look at them separately, since the markets are. The hotel will be competing with major five star brands in the city and the residences will be segmented in the in a different market as it will be priced differently. The actual product quality will be dissimilar where the hotel rooms being marginally superior then the residences. Wedding banquets and social events for most affluent Thais especially receptions at five star hotels are important. This will assist filling up the meeting space during the weekends. Besides locals, Bangkok is also gaining popularity as a wedding destination for foreigners such as those from India.

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


34 BUSINESS OPERATION

IN EACH BUSINESS GROUP Restaurant Business Group Apart from the development of the real estate projects that the Company has been operating and managing in various forms such as the apartment for rent and hotel projects, the Company has seen the importance of adding value to its properties by investing in a restaurant business operated by the Company’s associate as follows:

LENÔTRE Projects Features

2010

Project

LENÔTRE

Location

- CAFE LENÔTRE, Ground Floor, Natural Ville Executive Residences, Lang Suan Road - LENÔTRE Boutique, Ground Floor, the Siam Paragon Department Store French patisserie and restaurant

Type of projects

Marketing and Competition Status2010 Competition Strategies LENÔTRE is the brand of well-known bakery shop and French cuisine in France since 1957. LENÔTRE’s business rapidly increased in France until 1985 when the Accor, a world-class hotel and services management group, becomes the restaurant’s major shareholder and expands LENÔTRE’s business into various forms of services in connection to the bakery shops and French cuisine, luxurious restaurants, culinary schools, and catering business. LENÔTRE’s business is well-recognized by customers around the world and now there are more than 30 branches worldwide such as Germany, Morocco, the United States of America, Saudi Arabia, Kuwait, Tunisia, Japan, South Korea, and Thailand. LENÔTRE business started in Thailand in 2004 by Park Cuisine Company Limited (the Company’s associate) who was granted a sole license to produce and sell LENÔTRE products in Thailand. The Company opened 2 branches and also expanded business to catering service business. One of the key competitive strategies to the tremendous success and worldwide recognition of LENÔTRE branches in Thailand and around the world is the unique image of real French taste pastry and food which have been passed on by the founder - Mr. Gaston LENÔTRE - who gives importance to “quality, creativity, and enthusiasm”. Also “knowledge transfer” is emphasized as all LENÔTRE staff are trained by professional chefs in LENÔTRE France. The quality of LENÔTRE’s products in Thailand has been enhanced in terms of technology, research, and the best quality materials which may not be found in the country. All well-trained staff of LENÔTRE restaurants in Thailand and around the world have the same knowledge and skill in making quality bakery and cuisine of the same taste as LENÔTRE in France. Moreover, the Company focuses on medium to high profile customers both Thais and expatriates with good taste and modern lifestyle, especially those who appreciate art of cuisine, and love best product quality. Therefore, LENÔTRE cuisine and pastry outlets which fulfill the comfortable and metropolitan way of life are rapidly well-known among these target customers.

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


35 BUSINESS OPERATION

IN EACH BUSINESS GROUP Despite over 50 years of professional expertise in bakery and cuisine business, LENÔTRE remains the well-recognized brand with long-time history by reasons of its professional management, focus on the highest quality products and services through careful creation and material selection processes, continuous development, and selective target customers. These factors have brought LENÔTRE Thailand to have more competitive advantages over its competitors in the market.

Sales and Distribution Channels LENÔTRE has chosen to distribute its products by selecting strategic locations in the city center or in the leading shopping center and department store. The Company’s direct sales channel is through the 3 forms of 2 branches of LENÔTRE restaurants: CAFE LENÔTRE, LENÔTRE Boutique and Catering Services. The Company has also chosen to provide different services in different branches in accordance to the location and the lifestyle of the customers in order that the products and services of LENÔTRE could access the customers and respond to the needs of the target customer group. The 3 forms of services are as follows: 1. CAFE LENÔTRE : Dine-In style CAFE LENÔTRE is located at the Natural Ville Executive Residence, on Lang Suan Road. CAFE LENÔTRE is the first branded name restaurant in Thailand which provides contemporary French cuisine and bakery, as well as other quality products imported from France, e.g. chocolate, coffee, tea and jam, in a restaurant with contemporary decoration to create a warm and relaxing atmosphere. 2. LENÔTRE Boutique : a combination of Takeaway and Café LENÔTRE Boutique is located on the Ground Floor of the Siam Paragon Department Store. Both takeaway and Dine-In services are provided in the open and comfortable style restaurants. 3. Catering Service LENÔTRE is a long-time expert in outside catering in France and in other countries around the world for more than 30 years. LENÔTRE has been selected to provide catering services in many world-class events such as the 1998 World Cup in France. Aware of the growth of catering business in Thailand, the Company has officially launched the catering business “LENÔTRE Exclusive Catering” on 8 October 2008. LENÔTRE catering offers special services in the form of design of food and beverage or Fashion Food Catering to respond to the customers who have modern and quality lifestyle. The taste and catering concept will be customized differently by the events and clients’ needs. Besides, the Company will place more emphasis on the catering service as no additional investment is required and it has enough capacity to compete with other leading hotels. Throughout this year, LENÔTRE Thailand has expanded its distribution channels by selling products to Pink Café, Sofitel Silom Hotel, Mayfair Bangkok Marriott Executive Apartments, Sofitel Hua-Hin Hotel, Dean & Deluca and Twin Palms Phuket Hotel.

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


36 BUSINESS OPERATION

IN EACH BUSINESS GROUP Competition Situation and Growth Trend In 2010, overall bakery market has grown with the opportunity for more expansion. This can be seen in the growth of stores from both present and new competitors entering the market to serve the new generation of consumers that focus on fast and convenient products. The marketing environment also a major stimulate, for example, the foreign bakery like Crispy Cream has significant impact on awareness and interest to enter into the donut business. Also, the bakery business investment is not high and fast payback. Although fierce competition and recovery from the political unrest still impact negatively to the business, the Company still believes that the business value of the bakery market will grow continually, particularly the catering business. This is because of the changing habit of consumers who tend to organize parties at homes, companies, or offices which are more private and cheaper when compared to the parties in hotels. The events to launch new products by PR companies also contribute to the growth of the catering business. The growth of LENÔTRE Exclusive Catering Service in Thailand is well recognized by high profile customers both private and corporation. The demand is continuously increasing although the Company has not advertised. Most of the customers who are impressed with our food design and taste spread positive word of mouth to other customers, making it more recognized among target customers who appreciate art to living and eating. In addition, the product for sale through shops, cafes and hotels has expanded significantly. The Company has Sofitel Group as major drive in purchasing LENÔTRE products.

Products and Services Provision In terms of products, LENÔTRE emphasizes the production and import of good quality products with well selected materials under international standard both from inside and outside the country. The Company has invested in the tools, equipment and professional level technology to be used together with modern knowledge from LENÔTRE France not only on how to maintain the quality of the materials in order to use the materials to the highest efficiency but also to help reduce the cost of the business and to make the best quality products. Concerning the service and management, the Company has entered into an agreement with the Accor Group in the middle of 2006 to take over the management of all LENÔTRE restaurants in Thailand. The management and the staff development and training as well as the network of Accor will significantly help distribute the goods and add the distribution channels to LENÔTRE in the future.

NATURAL PARK PUBLIC COMPANY LIMITED

BUSINESS OPERATION IN EACH BUSINESS GROUP


37 RISK

FACTORS Operational Risk Natural Park Public Company Limited’s apartment business has been affected by the tougher competition, leading to lower occupancy rate. Political situation especially the rally in Ratchaprasong area in 2010 has impacted the hotel industry, delaying the opening of the Company’s projects. Nonetheless, with the expertise and experience in management of 5-star hotel construction, Siam Kempinski Hotel and Kempinski Residences Siam could be opened in September 2010 when tourism business started to recuperate. The sign of economic recovery in the fourth quarter of 2010 was expected to have positive effect on the apartment business in 2011. Moreover, the Company’s projects are in good locations in the central Bangkok. The cost of construction materials to develop and renovate the Company’s projects is likely to increase, and the interest rates are higher. The cases which are currently under the hearing of relevant courts may affect the Company’s seeking of funds to develop new projects (See Litigation Risk).

Financial Risk As at 31 December 2010, the Company’s total current assets were Baht 329.17 million and the total current liabilities were Baht 2,244.01 million. Besides, the Company had liabilities which may incur from legal proceedings, a large amount of estimated liabilities, and negative operating cash flow. Consequently, the auditor noted that these factors significantly indicate the uncertainty of the Company’s and its subsidiary’s continual operations even though in 2010 the Company had the net profit of Baht 239.59 million (the equity attributable to equity holders of the parent) Nevertheless, the Company has acknowledged these problems and puts its best effort to find solutions. In March 2010, the Company solved the problem regarding the debentures issued to the USA-based Lehman Brothers by selling the Novotel Beach Resort Panwa Phuket project in the total amount of Baht 870 million. This resulted in the Company’s recognition of the profit from selling the assets, decreased burden of debentures, and reduced expenses in relation to legal proceedings against Lehman Brothers, and increase in working capital. In addition, at the end of 2010, the Company totally gained Baht 136.46 million from selling 13,645,942,787 capital-increase shares at a par value of Baht 0.01).

Dividend Payment Risk As at 31 December 2010, the Company had a total deficit of Baht 8,224.10 million. Consequently, the Company cannot pay dividends to all shareholders in pursuant to law and the shareholders have the risk of not receiving dividends according to the dividend payment policy of the Company.

Litigation Risk The Company was sued in several cases, most of which involve its business rehabilitation. This is considered the major problem the Company is now facing, and has affected the financial risk as aforementioned. Last year, judgments of some cases have positive effects on the Company and subsequently reduced the estimated liabilities. However, as at 31 December 2010, the Company recorded Baht 900.64 million as the estimated liabilities as a result of court judgments involving the rehabilitation process: 1) payment to ACL Bank Public Company Limited; 2) payment to Sathorn Asset Management Company Limited; 3) payment to Nakornthon Bank Public Company Limited via Bangkok Commercial Asset Management Public Company Limited (subrogee); 4) the case between the Company and the official receiver of Thananakorn Finance and Security Public Company Limited; and 5) payment to Mahanakorn Trust Public Company Limited. The mentioned cases are currently under the hearing of the Supreme Court and the Court of Appeal. Other cases are being heard by the relevant courts, and are not final yet. The details appear in Litigations section.

NATURAL PARK PUBLIC COMPANY LIMITED

RISK FACTORS


38 LITIGATIONS As at 31 December 2010, the Company’s litigation issues as follow: a) The Company has the significant litigation issues related to the business reorganization in the past as follow: 1. On 17 August 2006, ACL Bank Public Company Limited has filed the civil case against the Company to the Southern Bangkok Civil Court for the ground of loan guarantee. On 6 July 2007, the Southern Bangkok Civil Court ordered the Compandscvy to pay principal of Baht 247.5 million and interest of 21% p.a. from 1 September

1996 onwards. Nonetheless, total interest calculated to the filing date will not exceed Baht 522.2 million. But in the case that the plaintiff receives debt repayment though the enforcement of this case will be reduced

accordingly. The Company has recorded provision for liability from the Court’s adjudication.

Subsequently on 15 August 2007, the Company has appealed the judgment of the Southern Bangkok Civil Court on problem in utilizing unjust right in court, withheld information by the creditor and problem in enforcing the civil case which should not affect the assets that came from business rehabilitation for the overall economy as a public company, etc. On 5 November 2010, the Appeal Court ordered to adjust the judgment of the court of first instance to order the defendant to pay interest 15.5% p.a. form the date of filing the lawsuit (17 August 2006) backwards 5 years and deduct the interest paid to the plaintiff amount of Baht 651,821.92 and such interest rate will be used form the date of filing the lawsuit until fully paid to the plaintiff. The Company, thus, recorded “the gain on reversal of provision for liabilities” amount to Baht 386.23 million in the statement of income for the year ended 31 December 2010. On 6 January 2011, the Company has filed to the Supreme Court. The case is presently under the consideration of the Supreme Court.

2. On 2 March 2007, Sathorn Asset Management Company Limited which was paid for a whole amount of debt has filed the civil case (Sathorn Asset Management Co., Ltd. (plaintiff) and the Company (defendant 1), Expert Management Co., Ltd. (defendant 3) and Manor Management Service Co., Ltd. (defendant 4)) against the Company to the Southern Bangkok Civil Court for the ground of AVAL, loan by promissory note and guarantee amount in the amount of Baht 199.09 million between that was before the Company entered into the business reorganization. On 4 March 2009, the Southern Bangkok Civil Court ordered the defendant 1 to pay Baht 170,180,901.38

including interest of 12% p.a. on the principal amount of Baht 100,000,000 from 3 May 2000 onwards until fully paid. The defendant 3 and defendant 4 are jointly responsible with defendant 1 amount of Baht 79,801,369.88 including interest of 12% p.a. on the principal amount of Baht 50,000,000 from 3 May 2000 onwards until fully paid. The amount that defendant 1 paid to plaintiff on 21 September 2001 of Baht 22,912,102.95, 7 March 2003 of Baht 5,000, 10 June 2003 of Baht 11,936.66, 31 July 2003 of Baht 618,339.73, 25 September 2003 of Baht 741,070.90 and 25 February 2004 of Baht 49,253,929.10 will be deducted from the amount that defendant 1, 3 and 4 is obligated to pay by deducting it as payment of interest first then deducting it from the principal amount. The case is presently under the consideration of the Appeal Court. However, the Company has

recorded the provision for liability from the Court’s adjudication.

3. Bangkok Commercial Asset Management Co., Ltd. (right user for Nakornthon Bank Pcl. (plaintiff)) submitted the petition requesting the court to retrial for the civil case which file against the Company on 24 October 1997

NATURAL PARK PUBLIC COMPANY LIMITED

LITIGATIONS


39 LITIGATIONS to the Southern Bangkok Civil Court for the ground of plaint in the amount of Baht 49.71 million and interest charges at 23% per annum of amount of principle Baht 41.25 million calculated from the date of filing suit to payment date. On May 29, 2009, the Southern Bangkok Civil Court adjudicated that the Company (2nd defendant) jointly takes the guilty with the 1st defendant and 3rd defendant by making repayment of Baht 41.82 millions plus interest in the rate of 16.5% per annum of the principle of Baht 41.25 millions commenced from November 1, 1996 until it is completely repayable. It is noted that the amount that the plaintiff receives debt repayment from the 2nd defendant (amount of Baht 1.04 millions) in accordance with the entity rehabilitated plan of the 2nd defendant is deducted out of the principle balance that will have to repay. The Company, thus, recorded “the gain on reversal of provision for liabilities” amount to Baht 33.39 million in the statement of income for year ended on 31 December 2009. This results from the interest rate as the sentence less than the plaint. The case is presently under the consideration of the Appeal Court. 4. On 27 October 2005, the official receiver of Thananakorn Finance and Security Public Company Limited has notified to the Company to repay the interest of debenture in the amount of Baht 31.91 million which the

Financial Sector Restructuring Authority had auctioned to other persons. The Company submitted the objection

against the official receiver’s order to the Central Bankruptcy Court. On 22 December 2009, the Central

Bankruptcy Court issued the order to amend the order of the official receiver that the Company has to repay

the default interest at the rate of 7.5% per annum of the principle, the unpaid interest, in the amount of Baht 31.91

million commenced from 19 January 2000 until it is completely repayable to the official receiver of such

financial institution. Apart from the amendment, the order will be retained as the official receiver’s order. On

10 March 2010, the Company submitted an appeal. Subsequently on 22 March 2010, the official receiver has

appealed to the Central Bankruptcy Court by pleading the Supreme Court to change the Central Bankruptcy

Court’s order. The Supreme Court has accepted the appeal on 25 March 2010. On 11 June 2010, the Company

has resolve appealed to the Central Bankruptcy Court by pleading the Supreme Court to return the Central Bankruptcy Court’s order and order to dismiss the official receiver’ s order to discharges the company out of the debtor. However, the Company has recorded the provision for liability from the Central Bankruptcy Court’s order. 5. An official receiver of Mahanakorn Trust Public Co., Ltd. filed a request for new trial of the civil case to the Civil Court. On 29 September 1998, the plaintiff requested the Company to repay debt amount of Baht 126.76 million

together with interest of 5% p.a. from the principal of Baht 120.51 million from the date of filing the lawsuit until the date that the debt has been fully repaid. On 27 August 2010, the Civil Court ordered the defendant to pay Baht 123,756,306.12 less the repaid amount in the bankruptcy case of the Central Bankruptcy Court of Baht 27,614.69 and Baht 1,420,020.27 and Baht 91,860,200.21. The remaining amount is Baht 33,448,407.95. Also, including interest of 5% p.a. on the principal amount of Baht 120,513,278.08 from the suing date (29 September

1998) to 27 December 2002 and interest of 5% p.a. on the principal amount of Baht 120,485,663.39 from 28 December 2002 to 1 August 2003 and interest of 5% p.a. on the principal amount to Baht 119,065,643.12 from 2 August 2003 to 23 September 2003 and interest of 5% p.a. on the principal amount to Baht 27,205,442.91 from 24 September 2003 onwards until fully paid. And on 25 November 2010, the Company had appeal

NATURAL PARK PUBLIC COMPANY LIMITED

LITIGATIONS


40 LITIGATIONS against the judgment of the Southern Bangkok Civil Court with the Appeal Court. The case is presently under the consideration of the Appeal Court. However, the Company has recorded the provision for liability from the Court’s adjudication. 6. On 9 December 2004, Ocean Life Insurance Co., Ltd. (plaintiff) has filed the petition against the Company, other

companies and involved person for violations of the Securities and Exchange Act B.E. 2535 and the Bankruptcy

Act B.E. 2483. Currently, the Court temporality discharges the case out of table of contents since the Company

can agree with the plaintiff and gathered appointment is given in order to listen to the compensation

result on 30 October 2009. On 30 October 2009, the plaintiff declared that the Company already repaid the full amount of debt to the plaintiff. Subsequently on 15 February 2010, the plaintiff filed the petition to withdraw the case and to request the Court discharges the case out of the table of contents. And discharges the case out of the table of contents.

7. On 12 October 2005, the Central Bankruptcy Court dismissed the bankruptcy case as a result of the Company was not insolvent and not bankrupt which Ocean Life Insurance Co., Ltd. (plaintiff) had filed the bankruptcy case for the ground of debentures in the amount of Baht 200 million on 28 March 2000, the plaintiff had

appealed the judgment of Central Bankruptcy Court to the Supreme Court. On 28 October 2009, the Company filed a declaration to the Supreme Court that the Company already repaid the full amount of debt to the plaintiff.

Subsequently, on 15 February 2010, the plaintiff filed the petition to withdraw the appeal to the Supreme Court and the Company does not object the appeal withdrawal. The case is presently pending orders of the Supreme Court.

8. On 26 August 2004, Siam Commercial Bank Public Company Limited has filed petition to request the new hearing in the civil case that prosecuted the Company (defendant no. 2) on December 26, 1997 to the South Bangkok Civil Court in the loan cause of lawsuit in amount of Baht 87.80 million. Presently, the plaintiff requests to wait for Supreme Court adjudication in part of defendant no. 1 (borrower) and defendant no. 3 (guarantor). When the Supreme Court adjudicates, the plaintiff will declare in order to bring the case in part belonged to the Company to newly consider again. The lawyer of the Company still may not express opinion in the case since (1) Defendant no. 1 and defendant no. 3 have filed explanation of the original treatise to object adjudication of the Appeal Court to the Supreme Court. Moreover, presently, the case is under the consideration of the Supreme Court. (2) The defendant no. 1, the Central Bankruptcy Court has ordered the definite wealth protection. The plaintiff has filed the petition to receive debt repayment. Moreover, it is not obvious that how much the plaintiff received debt repayment from the benefit of wealth in the bankruptcy case of the defendant no. 1. However, the amount that the plaintiff received debt affects the responsibility of other defendants in the case which including the Company. (3) The defendant no. 4 has filed the petition to withdraw the explanation of the original treatise by providing the cause that it has repaid debt to be satisfied by the plaintiff. It is not obvious that how much the defendant no. 4 has repaid debt to the plaintiff. However, the amount that the plaintiff received affects the responsibility of other defendants in the case including the Company. As a result, the Company may not know the obvious damage for the time beings.

NATURAL PARK PUBLIC COMPANY LIMITED

LITIGATIONS


41 LITIGATIONS 9. On 29 November 2005, the official receiver of Finance One Limited has notified the Company to repay the interest of debenture in the amount of Baht 2.31 million as the ground of debenture. The Company submitted the objection against the official receiver’s order to the Central Bankruptcy Court. On 25 December 2007, the Central Bankruptcy Court ordered the dismissal the Company from the debtor’s list of such financial institution. On 22 February 2008, the official receiver appealed to the order of the Central Bankruptcy Court and on 2 April 2008, the Company filed a plea. The case is presently under the consideration of the Supreme Court. 10. On 30 September 2009, Bangkok Commercial Asset Management Co., Ltd. has filed a lawsuit against the Company (defendant 1) and others three defendants as the guarantors of Natural Place Tower Company

Limited (Debtor) with the Southern Bangkok Civil Court claiming for outstanding at Baht 135.31 million together with interest of 15% p.a. on the principle of Baht 47.09 million from the date of filing of the complaint until the date that the debt has been fully repaid. And on 15 November 2010, the Southern Bangkok Civil Court ordered the plaintiff to withdraw a lawsuit against the Company. This is due to other defendants has fulfilled the restructuring

agreement, thus, the plaintiff do not wish to file any lawsuit against the Company as a guarantor.

b) Other litigation cases 1. On 21 May 2008, a subsidiary, Natural Project Chao Phraya Company Limited, was sued by a company,

regarding on non-perform with the agreement and default in repayment on the outstanding balance of Baht 46.49

date with Prakanong Provincial Court. The Company was also sued as a co-defendant. On 30 December 2010,

million with interest of 7.5% p.a. of principle Baht 40.2 million calculated from the date of filing suit to payment the Prakanong Provincial Court has dismissed the case.

NATURAL PARK PUBLIC COMPANY LIMITED

LITIGATIONS


42 CAPITAL

STRUCTURE

NATURAL PARK PUBLIC COMPANY LIMITED

CAPITAL STRUCTURE


43 CAPITAL

STRUCTURE Company’s Securities 1. Common Shares As at 31 December 2010, the Company’s registered capital detail is as follows: Registered Capital

Baht 60,430,920,000

Paid-Up Registered Capital

Baht 60,430,920,000

Number of Issued Common Shares

60,430,920,000

Shares

Par Value

1.00

Per Share

2. Shareholders The first 10 shareholders and the number and percentage of shares held as at 16 November 2010 (the latest date of the closing of the Share Register Book).

Shareholders

No. of Shares Held

% of Shares Compared to Paid-up Capital

1. Mr. Komol Jungrungruengkij

3,041,599,500

6.50

2. Ms. Sermsin Samalapa

2,250,000,000

4.81

3. Ms. Sitthinaree Larpthananukoon

1,834,219,500

3.92

4. Mr. Thongchai Jiraalongkorn

1,668,213,470

3.57

5. E-Street Properties Limited

1,085,453,356

2.32

6. Mr. Somkiet Chatsakulwilai

1,082,900,000

2.31

7. Mr. Taweechat Chulangkul

1,000,000,043

2.14

8. Mr. Charus asavathiratham

961,760,000

2.06

9. Mr. Kriengsak Thiennukul

875,250,000

1.87

10. Ms. Yuppayao Boonsom

847,152,750

1.81

Others

32,138,428,594

68.69

Total

46,784,977,213

100.00

Note :

In accordance with the report acquisition and disposal of securities (From 246-2), as at 23/3/11 Mr. Sermsin Samalapa sold 3,090,342,360 shares or 5.11% to 1) General Public amount 90,342,360 shares and to 2) Eminent Shine International Limited amount 3,000,000,000 shares, thus, 23/3/11 Mr. Sermsin Samalapa no longer hold shares in the company.

3. Dividend Policy The Company’s dividend policy is to pay to shareholders not less than 30 percent of net profit as stated in the Company Only financial statements after deduction of reserves as determined in the Memorandum of Association of the Company and by law. Nonetheless, the dividend payment will incorporate the following factors such as the performance and financial position of the Company, liquidity of the Company in business expansion and other factors related to managing the Company. Also, the dividend payment has to be approved by the Shareholders and the Board of Directors of the Company. NATURAL PARK PUBLIC COMPANY LIMITED

CAPITAL STRUCTURE


44 MANAGEMENT ORGANIZATION CHART

BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

AUDIT COMMITTEE

PRESIDENT & CEO

INTERNAL AUDIT

PRESIDENT OFFICE

EXECUTIVE SECRETARY

CORPORATE STRATEGIC PLANNING

PROPERTY DEVELOPMENT& MANAGEMENT

OPERATION SUPPORT

FINANCE & CONTROLLING

PROPERTY MANAGEMENT

HUMAN RESOURCES

STRATEGIC & FINANCIAL PLANNING

MANAGEMENT

PROPERTY DEVELOPMENT

LEGAL

ACCOUNTING

PROJECT DESIGN COORDINATION

INFORMATION TECHNOLOGY

FINANCE

DESIGN RESEARCH & INFORMATION

CORPORATE COMMUNICATIONS

PURCHASING

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT

CONSTRUCTION & PROJECT MANAGEMENT


45 MANAGEMENT 1. Management Structure

2010

As of 31 December 2010, details on the Board of Directors and other officers were as follow: The Board of Directors consisted of 7 members: 1) Mr. Chaiwat Atsawintarangkun

Director and Chairman of Audit Committee

2) Mr. Thavisakdi Tanta-Nanta

Director and Audit Committee

3) Mr. Chattavut Peechapol

Director and Audit Committee

2) Mr. Sakthip Krairiksh

Director and Audit Committee

4) Mr. Sermsin Samalapa

President and Chief Executive Officer

5) Mr. Paisarn Tangyuenyong

Director and Executive Officer

6) Mr. Weerawat Wattanatchariya

Director and Executive Officer

The Audit Committee consisted of 3 members: 1) Mr. Chaiwat Atsawintarangkun

Chairman of Audit Committee

2) Mr. Thavisakdi Tanta-Nanta

Audit Committee

3) Mr. Chattavut Peechapol

Audit Committee

The Executive Committee consisted of 3 members: 1) Mr. Sermsin Samalapa

President and Chief Executive Officer

2) Mr. Paisarn Tangyuenyong

Executive Officer

3) Mr. Weerawat Wattanatchariya

Executive Officer

Management 1) Ms. Urai Loal

Executive Vice President

2) Ms. Nuttapun Giramethakul

Senior Vice President

3) Mr. Pisit Rojanavanich

Senior Vice President

The Company’s Secretary 1) Ms. Kaemakorn Vachiravarakarn

Note:

1. During year 2010, The Board of Director has appointed Mr. Chattavut Peechapol to be Director and Audit Committee and Mr. Sakthip Krairiksh has resigned as Audit Committee but still being as Independent Director of the company. 2. On 23 March 2011, Mr. Sermsin Samalapa has resigned as Director and President of the company. Also, Mr. Paisarn Tangyuenyong has resigned as Director and appointed Mr. Nakorn Laksanakarn to be Director and President of the company. 3. On 23 March 2011, The Board of Director has appointed Ms. Supaporn Assawarungpaisarn as The Company’s Secretary replace of Ms. Kaemakorn Vachiravarakarn 4. Ms. Urai Loal and Mr. Pisit Rojanavanich had resigned as Early Retirement on 28 February 2011.

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


46 MANAGEMENT Summary of Directors held the position in Board of Directors and Sub-Committee

Name

Director

Audit Com mittee

Independent Director

The Executive Committee and Authorized Director

Mr. Chaiwat

Atsawintarangkun

Mr. Thavisakdi

Tanta-Nanta

Mr. Chattavut

Peechapol

Mr. Sakthip

Krairiksh

Mr. Sermsin

Samalapa

Mr. Paisarn

Tangyuenyong

Mr. Weerawat

Wattanatchariya

All directors have attended the training from Thai Institute of Directors as shown in the Details of the Directors and Management (attachment). In addition, Mr. Chaiwat Atsawintarangkun, who is holding the position of Chairman of the Audit Committee, also has vast knowledge and experience in reviewing financial statements. All independent directors have no business relationship or any professional services with the Company, the parents company, subsidiaries, associated companies or any jurisdictions which may have direct conflict of interest. Besides, all independent directors are not holding any positions as independent directors in the parents company, subsidiaries, or other subsidiaries in the same level.

Management, Duties and Authorities of the Directors of the Company Duties and Authorities of the Board of Directors 1) Directors shall perform their duties in compliance with the law, objectives as well the Company’s articles of association and resolutions from shareholders meetings. 2) Directors are prohibited from engaging, or becoming partners or directors, in any juristic person with the same status as the Company, of which the business is in the same nature as and in competition with the business of the Company, unless a shareholders meeting has been notified thereof prior to passing a resolution for his/her appointment. 3) A director shall notify the Company without delay when he/she has an interest in any contract made with the Company or when the number of the Company shares held by the said director increases or decreases. 4) The Board of Directors shall appoint the Chairman and members of the Company’s Audit Committee. 5) The Board of Directors shall have the power to nominate authorized directors who have the power to affix their signatures, together with the Company seal, to bind the Company. Duties and Authorities of the Executive Committee 1) Determining policies, directions, strategies and key management structure, which conform to the economic condition and competition, and proposing to the Board of Directors for approval.

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


47 MANAGEMENT 2) Developing business plans, budget and authority of the management and proposing to the Board of Directors for approval. 3) Examining, and monitoring the implementation of the defined policies and management guideline in achieving the operation efficiently. 4) Monitoring the performance of the Company’s operation to be in accordance with the approved business plan. 5) Considering and screening any project investments of the Company before proposing to the Board of Directors for approval. 6) Opening deposit accounts with the financial institutions. 7) Conducting financial transactions with the financial institutions such as borrowing, pledge, mortgage, guarantee and other businesses including buying, selling and registering for the ownership of land. These transactions must be in accordance with the objective of the Company and beneficial to the operation at an amount not exceeding Baht 100 million. 8) Conducting any other affairs occasionally assigned by the Board of Directors. The Board of Directors has delegated the authority to the Executive Committee to whatever operations fall within the duties and authorities of the Executive Committee. This said delegation is not in form of the delegation or sub-delegation which involves the case that the Executive Committee or a persons assigned by the Executive Committee can approve transactions having a conflict of interest or having interest in or a conflict of interest otherwise (as defined by a notification of the Office of the Securities and Exchange Commission and/or the Stock Exchange of Thailand) with the Company or its subsidiaries. Duties and Authorities of the Audit Committee The scope of duties and responsibilities of the Audit Committee shall be as listed below, and the Audit Committee shall report directly to the Board of Directors. 1) Review and ensure that the Company’s financial reports are accurate, reliable, and with sufficient disclosure of information. 2) Review and ensure that Company has appropriate and efficient internal control and audit systems. 3) Review and ensure that the Company complied with the law governing Securities and Securities Exchange, as well as regulations of the Stock Exchange of Thailand. 4) Review, select and nominate for appointment the Company Auditor and recommend the auditor’s remuneration 5) Ensure that there is no conflict of interest, as well as complete and accurate disclosure of Company information in the case of connected transactions that may lead to conflicts of interest. 6) Perform other duties assigned by the Board of Directors and agreed by the Audit Committee. 7) Prepare the Audit Committee’s report and disclosed in the Company’s Annual Report. Duties and Authorities of the President & CEO The President & CEO shall supervise, manage, operate, and carry out day-to-day business for the interest of the Company in line with the Objectives and Articles of Association of the Company. He/She shall also comply with the regulations, resolutions, policies, plans, and budgets set forth by the Board of Directors within the scope of relevant laws and the authority defined by the Board of Directors. NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


48 MANAGEMENT The CEO shall approve any business operation as long as it does not involve the case of the CEO or any individual having a conflict of interest as defined by a notification of the Office of the Securities and Exchange Commission and/or the Stock Exchange of Thailand, or having interest in or a conflict of interest otherwise with the Company or its subsidiaries. In 2010, the Board of Directors convened 8 meetings as follow:

Name of Directors

Frequency of the meetings’ participation

Mr. Chaiwat

Atsawintarangkun

7/8

Mr. Thavisakdi

Tanta-Nanta

8/8

Mr. Chattavut

Peechapol

2/3

Mr. Sakthip

Krairiksh

5/8

Mr. Sermsin

Samalapa

8/8

Mr. Paisarn

Tangyuenyong

8/8

Mr. Weerawat

Wattanatchariya

8/8

2. Selection of Directors and Management The Board of Directors comprises not less than five directors elected at a shareholders’ meeting to manage the business of the Company. No less than half of the directors shall reside in the Kingdom of Thailand and the directors shall have the qualifications as required by law. The shareholders meeting shall elect directors according to the following rules and procedures. 1) A shareholders shall have one vote per one share. 2) To elect members of the Board of Directors voting may be carried out individually or simultaneously for all candidates to be elected at that meeting, whichever the meeting deems appropriate. In voting for directors, individually or simultaneously, each candidate shall receive the votes from each shareholder voting for him/her according to the total number of shares held by that shareholder (as specified in 1). That is, each shareholder shall allot all of his/her votes to only one candidate. 3) The candidates shall be ranked in the descending order from the highest number of votes, and shall be appointed in that order for the number of directors required at that meeting. In the case of a tie vote in the last position to be filled, which will result in the number of elected directors exceeding the number required, the chairperson of the meeting shall have a casting vote. At every annual ordinary general shareholders’ meeting, one-third of the directors shall retire. If the number of directors is not a multiple of three, the number of directors closest to one-third shall retire. Directors retiring from office in the first and second years after the registration of the Company shall be selected by drawing lots. In subsequent years, the directors who have held office the longest time shall retire. Directors retiring by rotation may be reelected.

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


49 MANAGEMENT In the case for selection of Audit Committee, the selection procedures and principles are as follows: 1) The Board of Directors will consider from a list of qualified outside-persons generally accepted by the business sector and appropriate academic realm and nominated by the Chairman for appointment, or proposed for appointment at the shareholders’ meeting, which ever is the case. 2) Shareholders shall select the candidates which will be approved by the majority vote of the shareholders participating in the meeting and having voting rights to vote for the approval.

3. Managements Remuneration

2010

1.1 Financial Remuneration a. Compensation for the Board of Directors In 2010, the Company paid compensations for all directors in the total amount of Baht 2,000,000 as follows:

Amount (Baht)

Name Mr. Chaiwat

Atsawintarangkun

Director and Chairman of Audit Committee

500,000

Mr. Thavisakdi

Tanta-Nanta

Director and Audit Committee

520,000

Mr. Chattavut

Peechapol

Director and Audit Committee

220,000

Mr. Sakthip

Krairiksh

Director and Audit Committee

280,000

Mr. Sermsin

Samalapa

President and Chief Executive Officer

160,000

Mr. Paisarn

Tangyuenyong

Director and Executive Officer

160,000

Mr. Weerawat

Wattanatchariya

Director and Audit Committee

160,000

Total

2,000,000

Nevertheless, all independent directors are not holding any positions as independent directors in the parents company, subsidiaries, or other subsidiaries in the same level. Therefore, the independent directors do not have any remunerations from the parents company, subsidiaries, or other subsidiaries in the same level. b. Total Compensations and Numbers of the Executive Committee and Managements. In 2010 salaries of the Executive Committee and Management, which include the first four persons down from president and every person at the same level of the fourth person equal to 6 persons, amounted Baht 22,260,077

1.2 Other Remuneration - None -

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


50 MANAGEMENT 4. Coporate Governance The Board of Directors gives precedence to the Principles of Good Corporate Governance and has appointed every executive committee and employee to follow which cover the following major principles: 1) Treat the shareholders and other related parties equally and be fair to all parties. 2) The Company’s Board of Directors and Executive Directors are willing to protect and eliminate all types of

dishonest actions and shall not conduct any action, manage or organize anything that could lessen the profits of the Company or to benefit any person or juristic person for their own or other person’s interest.

3) The Company’s Board of Directors and Executive Directors are free to make any decision or take any action which including the building of satisfaction in the rightfulness of the decision made by the Board of Directors and the Executive Directors of the Company. 4) Operate the business transparently in order to be accountability and to ensure all sufficient information are disclosed to all related parties which including the responsibility in the decision and action made by

themselves and to be able to clarify or explain the decision that has been made.

5) Operate the business by taking all risks into consideration and establish an appropriate risk control and management. 6) Set up moral and ethical policy for the Committees, Executives and employees to follow. In the year 2010, the Company has been following the Principles of Good Corporate Governance for Listed Companies 2006 as set forth by the Stock Exchange of Thailand as follows: 1. Rights of Shareholders The Company shall schedule the shareholders general meeting to be held once a year within 4 months after the end of the Company’s accounting year. In urgent cases when important decision has to be made which affect or related to the benefits of the shareholders or related to any condition, regulations or law where approval from the shareholders are required, the Company shall call for an extraordinary meeting case by case. The Board of Directors shall direct and monitor the shareholders’ meeting to be in accordance with the Company’s regulations, legal provision and policies of the Board of Directors of the Stock Exchange of Thailand re: the Appropriate Practices for Listed Companies for Organizing Shareholders’ Meeting as well as the Guideline on Holding a Shareholders’ Meeting of the Office of Securities and Exchange Commission in order to support the equal and fair treatment to the every shareholders. In 2010, the Company invited all shareholders to exercise the right to propose the matters which would benefit the Company to be included in the agenda of the Annual Ordinary General Meeting of Shareholders for the year 2010, and to nominate in advance the candidates to be considered for the director position in accordance with the rules and methods stipulated by the Company. This announcement was posted on the Company’s website from 8 February 2010 to 2 March 2010. However, no shareholder proposed any additional agenda items or nominated any candidates to be considered for the director position. In 2010, the Company organized only one shareholders’ meeting, i.e. the Annual Ordinary General Meeting of Shareholders for the year 2010 on 26 April 2010, where the shareholders considered and voted on different matters as specified by related laws.

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


51 MANAGEMENT The Company has arranged to send meeting invitation letter, power of attorney and the meeting documents at least 7 days or 14 days (in some cases) prior to the meeting days which was sufficient for the shareholders to study all the information prior to the meeting. All the documents were sent to every shareholder under the collection of the name under Section 225 of Securities and Stock Exchange of Thailand Act B.E. 2535 by closing method of the shareholder’s register book. Moreover, the Company also posted the information on the Company’s website, www.naturalpark.co.th in advance in order that the shareholders will have sufficient time to study the information on the shareholders’ meeting. 2. Equitable Treatment of Shareholders The Board of Directors has set procedures to keep and prevent the use of inside information by the Directors and the Executives for their own or other interests that could cause damages to the shareholders as a whole as detailed in the Guidance on the Use of Inside Information as well as appointing the Board of Directors and the Executive to disclose all information related to their own benefits and loss and of their related parties in order to consider any possible conflict of interest. Additionally, the Board of Directors has given an opportunity to the shareholders who were unable to attend the meeting to be able to vote by proxy. The Company has nominated 1 independent committee to be an alternative proxy for the shareholders. 3. Role of Stakeholders The Board of Directors has taken into consideration the rights of the stakeholders related to the Company such as the customers, employees, partners, shareholders and debtors. The Company has disclosed sufficient information for the truth and invariable credibility and timely in order that all the stakeholders are equally informed of all the information. Additionally, the Company has also treated the stakeholders fairly and has not taken any advantage of or applied the double standard to any stakeholders and shall establish fair and straightforward procedures. Moreover, the Company always supports all the activities in which they are beneficial to community, society and environment. In 2010, the Company made donations to support many organizations such as the blood donation project with Thai Red Cross every quarter; donations to temples in various provinces totally 8 temples; and donations to schools such as library and home for babies totally 4 homes. 4. Disclosure and Transparency The Company’s Board of Director has disclosed accurate and complete information on all important issues related to the Company including the financial report and other non-financial information as set forth by the Office of Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). Besides the broadcasting of the information through SET’s channels, the Company has also disclosed information on the Company’s website, www.naturalpark.co.th which including the Company’s Annual Report where there were information on the Corporate Governance Policy, report on the Board of Directors’ responsibility on the financial report, report of the auditor and the financial statement in accordance to the general certified accounting standard which has been audited by licensed auditor and the Board of Directors’ and Executives’ remuneration. Additionally, investors and all stakeholders can build up clarity and comprehension in the overall image of the bankruptcy cases through a website, www.nparkfactandinfo.com. The Company also established a department to take responsibility on the disclosure of information on the Company’s operation to all interested parties and investors.

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


52 MANAGEMENT 5. Responsibilities of the Board

5.1 Board Structure

The Board of Directors has set a proportionate number of the non-management directors to the management directors to be more than half of the total numbers of the Company’s directors. There are 7 directors which consisted of 4 nonmanagement director (including auditing committees) and 3 Executive Directors which will create balance between the directing and the managing.

5.2 Committees

The Board of Directors has set up different groups of committee with specific role and duty to study and screen the affairs before proposing to the Board of Directors such as Executive Committee and Audit Committee. However, other sub-committee can be added as appropriate in accordance to the Managing Structure in which the composition of members, duty and responsibility boundary has been disclosed.

5.3 Roles and Responsibilities of the Board

The Board of Directors shall be responsible for the setting of vision and mission of the Company as well as direct and oversee to ensure the operational units are following the strategy in accordance to the vision and mission along with direct and oversee the risk management and the Company’s internal control by clearly set forth and separate the role and responsibility between the Board of Director and the Operational Unit and between the Board of Director and the shareholders. Moreover, the Board of Directors and the Executives shall conduct their affair without constitute any conflict of interest of themselves against the Company’s in order to ensure the management be conducted efficiently. As such, the Board of Directors shall establish procedures on the management of the business and the Company’s business ethics in written.

5.4 Board Meetings

The Board of Directors shall hold a regular meeting at least once every three month and may hold a special meeting when necessary by scheduling the meeting in advance and setting clear agenda and the delivering of the meeting documents prior to the meeting prescribed in the Company’s regulations in order that the Board of Directors will have sufficient time to study the information before the meeting. Besides, the Executive Directors shall hold regular meeting every month and may hold a special meeting when necessary by scheduling the meeting in advance, setting a clear agenda and delivering the meeting documents to the Executive Directors prior to the meeting in order that the Executive Directors will have sufficient time to study the information before the meeting. In 2010, the Executive Directors held 8 meetings and quorums had presented in each meeting. There were also resolution on important subjects or issues as well as the recording of the meeting in written, the storage of meeting report that has been approved by the Board of Directors to be accountability by the committee and other related parties.

5.5 Board of Self Assessment

The Board of Directors shall conduct self assessment to consider the board’s performance and to improve as well as to evaluate the sufficiency of the internal controlling system in accordance to the evaluation form of the SET.

5.6 Remuneration

The Board’s remuneration shall be approved by the shareholders’ meeting. Consequently, details on the Board of Directors and the Executive Directors’ remuneration has been disclosed under the topic of Executive’s Remuneration

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


53 MANAGEMENT

5.7 Board and Management Training

The Company’s Board of Directors has been participating in the training and development program continuously. Additionally, when there are any changes in the Board of Directors, the Operational Unit has prepared information and documents as well as giving advice on the training program to benefit the conducting of duty as a Director.

5. Supervising The Use Of Inside Information The Company has policies to supervise its employees on the usage and exposure of inside information to external parties or to their own benefit. The policies for controlling the management team and employees are as followed. a. The Company specifies that its management has the obligation to report any conflict of interests occurring from the exposure of inside information for their personal benefits. b. The management has the obligation to report the entire securities holding, when there is any purchasing, selling or transferring of securities, to the Office of the Securities and Exchange Commission. This is an important measure to control the use of inside information. Additionally, if the management or the employees do not comply with such policy concerning the purchasing and selling of securities using inside information, that individual will be given verbal warning, written warning, suspension and discharge with compensation according to law or detach without compensation, respectively, depending on the degree of wrongdoing. c. The Company specifies the measure to prevent the use of inside information of every level of employees. The Company shall retain the information and document that must not be disclose to public. The use of inside information by the employees will be within the assigned scope of authorities and responsibilities.

6. Human Resources

Note:

Company

Number (Staff)

Year 2009 (thousand Baht)

1. Natural Park Public Company Limited

140

79,817

2. Natural Park Public Company Limited and its subsidiaries

140

86,991

Detail of Compensation Salary, Overtime, Diligent Fee and Upcountry Allowance Salary, Overtime, Diligent Fee and Upcountry Allowance

During 2010, Natural Hotel Panwa Company Limited (Subsidiary) sold Novotel Beach Resort Panwa Phuket Hotel and transferred the subsidiary’s employee to the purchaser

7. Internal Control The Board of Directors has assigned the Audit Committee to assess and monitor all internal control system to become more effective and efficient. The Board of Directors agreed in accordance with the Audit Committee’s internal control system assessment, which detail specifies in the Audit Committee Report below.

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


54 MANAGEMENT Report of the Audit Committee The Audit Committee of Natural Park Public Company Limited comprises 3 independent directors: Mr. Chaiwat Atsawintarangkun as Chairman of Audit Committee, Mr. Thavisakdi Tanta-Nanta and Mr. Chattavut Peechapol as Audit Committee Members. Mr. Chattavut Peechapol is the Audit Committee Member since 30 June 2010 in place of Mr. Sakthip Krairiksh who resigned the position. Besides, at least a member of the Audit Committee has knowledge and experience in reviewing the financial statements. The Audit Committee has performed work under the scope of duties and responsibilities as approved by the Company’s Board of Directors in compliance with the requirements stipulated by the Office of the Securities and Exchange Commission, and the Stock Exchange of Thailand. In 2010, the Audit Committee had five meetings with the executives and the auditor to review the quarterly and annual financial statements of the Company and its subsidiaries for the year ended 31 December 2010, and to listen to the auditor’s explanations on the auditor’s report, financial statements audit result, and recommendations about relevant accounting standards. The Audit Committee together with the Company’s Board of Directors have also considered and approved the financial statements. The Audit Committee viewed that the financial statements of the Company and its subsidiaries reveal the financial status and operational results in conformity with the generally accepted accounting principles and also disclose significant information in the Notes to Financial Statements. Consequently, the Audit Committee agreed to present to the Board of Directors in order to propose the financial statements of the Company and its subsidiaries for the year ended 31 December 2010 to the shareholders’ meeting for further consideration and approval. In respect to internal control system, the Audit Committee suggested the Company to find ways to further improve its internal control system. After following up the operating result according to the suggestions and practical guidelines which are efficient and effective, the Audit Committee opined that the Company’s internal control system is suitable and there is no flaw in the internal control system that will materially affects the operation of the Company. The Company has performed business in compliance with related laws and regulations. Moreover, the Audit Committee considered and proposed Mr. Jadesada Hungsapruek, Public Account No. 3759; and/or Ms. Wimolsri Jongudomsombat, Certified Public Account No. 3899; and/or Ms. Kannika Wiphanurat, Certified Public Account No. 7305, the auditors from Karin Audit Company Limited as the Company’s auditor for the year ended 2011, and considered relevant auditor fee to propose to the shareholders for approval.

On Behalf of the Audit Committee

(Chaiwat Atsawintarangkun) Chairman of Audit Committee

NATURAL PARK PUBLIC COMPANY LIMITED

MANAGEMENT


55 CONNECT

TRANSACTIONS The Company’s connected transactions under the Securities and Exchange Act (No. 4) B.E. 2551 and the Notification of the Office of the Board of Governors of the Stock Exchange of Thailand are as listed below. Nature of Connected Transactions Details are in the Notes to Financial Statements as of 31 December 2010, Related Parties Transactions. Related Persons -N.A.Necessity and Reasons for Connected Transactions Connected transactions from a normal course of business between the Company and subsidiaries, associates and related companies are based on a normal business necessary to the operation of the Company such as borrowing and management. Procedures for Approval of Transactions Pursuant to Section 89/12 (1) inserted in Chapter 3/1 Governance of Publicly Traded Company in the Securities and Exchange Act (No. 4) B.E. 2551 which has come into effect since 31 August 2008, a director, an executive or a related person may enter into any transaction with any company or any subsidiary only after obtaining approval from the shareholders’ meeting, unless such transaction is categorized as a transaction with the same commercial terms as those an ordinary person would agree with any unrelated counterparty under the similar circumstances, on the basis of commercial negotiation and without any dependent interest resulted from the status of the director, executive or related person, as the case may be, provided further that the said commercial terms have been approved by the board of directors or in compliance with the principle approved by the board of directors. As a result, for the benefits and appropriateness of the Company’s business operation, the Board of Directors’ Meeting No. 6/2551 on 14 August 2008 approved that executive directors may enter into transactions between the Company or subsidiaries and directors, executives or a related persons if such transaction has the same commercial terms as those an ordinary person would agree with any unrelated counterparty under the similar circumstances, on the basis of commercial negotiation and without any dependent interest resulted from the status of the director, executive or related person. As for connected transactions of other manners, they shall be in compliance with the Securities and Exchange Act (No. 4) B.E. 2551 and the Notification of the Office of the Board of Governors of the Stock Exchange of Thailand. The Company shall propose to the Board of Directors together with the Audit Committee to consider approving the transactions, or propose to the shareholders’ meeting for approval as the case may be. Policies or Future Trend of Connected Transactions The Company’s policy for the connected transactions is only for normal course of business and for the benefits of the Company with a fair price and terms. However, in case that the Company or subsidiaries (which held directly or indirectly by the Company more than 50% of the paid-up capital) has connected transactions, the Company shall comply with the Securities and Exchange Act (No. 4) B.E. 2551 and the Notification of the Office of the Board of Governors of the Stock Exchange of Thailand in that regard.

NATURAL PARK PUBLIC COMPANY LIMITED

CONNECT TRANSACTIONS


56 EXPLANATION AND ANALYSIS OF OPERATIONAL PERFORMANCE AND FINANCIAL STATUS 1. Operational Performance Operating performance for the year ended 31 December 2010, the Company has total revenue of Baht 834.66 million increased by Baht 312.25 million or 59.77% as compared to the total revenue for the year 2009 of Baht 522.41 million. This was because during the year 2010 the Company incurred gain from the sale of assets amount of Baht 250.52 million, the majority of it came from the sale of Novotel Beach Resort Panwa Phuket Hotel in March 2010. Also, the Company incurred gain on reversal of provision for liabilities related to ACL Bank Public Co., Ltd.’s case amount of Baht 386.23 million after the appeal court ordered to reduce the interest burden that will be reduced from 21% p.a. calculated from 1 September 1996 to 15.5% p.a. calculated from 17 August 2001 (from the date of filing the lawsuit backwards 5 years). In addition, the Company has gain on cancellation of Siam Opera project amount of Baht 47.71 million from write off the assets and liabilities related to lease agreement. In term of expenses, the Company has total expenses (included minority interest) of Baht 595.07 million or decreased by Baht 423.17 million or 41.56 percent as compared to the total expenses for the year 2009 of Baht 1,018.24 million. In the year 2010, the Company was able to reduce the administrative expenses by Baht 65.89 million, decrease in the provision for liabilities of Baht 339.99 million and finance costs of Baht 63.54 million. Although the Company is able to reverse the provision for liabilities as mentioned previously, the Company still has to set allowance for the provision of liabilities from lawsuit related to past business rehabilitation totaling Baht 147.47 million, which consisted of Mahanakorn Trust Public Co., Ltd.’s case of Baht 73.40 million in accordance with the court’s judgment on 27 August 2010 that ordered the Company to repay debt and the interest from other cases of Baht 74.07 million. Therefore, after deducting expenses from revenue with details as explained above, the year 2010 resulted in the net profit of Baht 239.59 million as compared to the net loss of Baht 495.83 million in the year 2009.

2. Financial Status Assets As at 31 December 2010, the Company’s total assets were Baht 3,006.34 million, compared with 2009 of Baht 3,496 million, decreased by Baht 489.66 million or 14%. This is due to the Company has sold Novotel Beach Resort Panwa Phuket and cancelled the leasehold right of Siam Opera project. However, the Company’s cash and cash equivalents increased by Baht138.89 million. Liabilities As at 31 December 2010, the Company liabilities totaled Baht 2,352.57 million, compared with 2009 of Baht 3,380.15 million, decreased by Baht 1,027.59 million or 30.40%. Although in 2010 the Company loan from bank increased by Baht 98.37 million, the Company had reduced debt burden from debenture amount of Baht 575.22 million and accrued interest expenses after sold Novotel Beach Resort Panwa Phuket project. Also, the write-off of liabilities related to lease agreement of Siam Opera made financial lease decreased by Baht 133.78 million as mentioned previously. The provision of liabilities also reduced by Baht 248.21 millionfrom the reversal. In addition, in the past year, the Company has repaid debt to Krung Thai Bank Public Company Limited in accordance with the restructuring agreement.

NATURAL PARK PUBLIC COMPANY LIMITED

EXPLANATION AND ANALYSIS OF OPERATIONAL PERFORMANCE AND FINANCIAL STATUS


57 EXPLANATION AND ANALYSIS OF OPERATIONAL PERFORMANCE AND FINANCIAL STATUS Capital Structure and Shareholders’ Equity As at 31 December 2010, the Company registered capital was Baht 60,430.92 million same as previous year. But in the end of year 2010, the Company had sold the remaining capital increase shares of 13,645.94 million shares, par value 1 Baht per share, amount of Baht 13,645.94 million at the selling price of 0.01 Baht per share. As a result, at the end of year 2010, the Company has a paid-up capital of Baht 60,430.92 million as compared to Baht 46,784.98 million in the year 2009. As at 31 December 2010, the Company shareholders’ equity was Baht 653.77 million as compared to 2009 of Baht 115.85 million, it increased by Baht 537.92 million or 464.32%. The financial status of the Company has strengthened significantly as compared to previous year. The increase in shareholders’ equity was due to the net profit for the year 2010, capital increase and unrealized gain on available for sales securities. Liquidity The Company’s cash and cash equivalent (cash and cash at financial institutions) brought forward from 2009 was Baht 97.38 million. During the year 2010, net cash flow increased by Baht 138.89 million, hence, resulted in net cash of Baht 236.27 million at year-end 2010. In the year 2010, the major items for cash receive and payment include, cash increase from bank loan of Baht 100 million, capital increase shares of Baht 136.46 million and sales of investments and assets totaling Baht 244.26 million. The Company utilized the cash received from the mentioned items (except capital increase) for working capital of Baht 36.74 million, invested in capital increase shares of Kempin Siam Co., Ltd. (Siam Kempinski Hotel) amount of Baht 210 million and debt repayment to Krung Thai Bank Public Company Limited of Baht 51.05 million.

3. Audit Fee 3.1 Audit Fee In the previous accounting period, the Company and its subsidiaries paid audit fee to the auditor of the Company and its subsidiaries as follows: - Audit fee for companies residing in Thailand in the amount of Baht 3,300,000 - Audit fee for companies residing in foreign countries in the amount of Yen 1,600,000 3.2 Non-audit Fee - None -

NATURAL PARK PUBLIC COMPANY LIMITED

EXPLANATION AND ANALYSIS OF OPERATIONAL PERFORMANCE AND FINANCIAL STATUS


58

NATURAL PARK PUBLIC COMPANY LIMITED


59 REPORT OF THE BOARD OF DIRECTORS’ RESPONSIBILITIES FOR FINANCIAL STATEMENTS The Board of Directors is responsible for the financial statements of Natural Park Public Company Limited and its subsidiaries which have been prepared in accordance with generally accepted accounting standards in Thailand. The appropriate accounting policies are pursued and applied consistently with adequate disclosure of important information in the Notes to Financial Statements. The Board of Directors has prepared the internal control system in order to prevent any dishonest or irregular activities. Also this is to ensure connected transactions which may cause conflict of interest are really commercial transactions which are reasonably conducted in normal business practices and will make the most benefits. The opinion of the Audit Committee is reported in the Report of the Audit Committee in this annual report. Therefore, the Board of Directors considered the overall internal control system of the Company and its subsidiaries was at satisfactory level and believed the financial statements of the Company and its subsidiaries as of 31 December 2009 have been prepared in accordance with generally accepted accounting standards and related laws and regulations. The auditor had a qualified opinion as the financial statements of 2 associated companies have been prepared by the management of the associated companies and have not been reviewed by other auditor. The scope of limitation for any review on those statements is caused by circumstance since the Company has not yet received the audited financial statements. In addition, the auditor emphasized that the Company has uncertainty about legal disputes which are under the court hearing. These matters indicate the existence of a significant uncertainty about the Company’s and subsidiaries’ ability to continue its operation as a going concern. However, the Company’s Board of Directors has realized the problems and has tried to find solutions to improve the Company’s financial status. In 2010, the Company has sold capital increase shares amount of Baht 136.46 million. In addition, the Company solved problem regarding the debenture issued to the Lehman Brothers Group by sold Novotel Beach Resort Panwa Phuket totaling Baht 870 million, thus, the Company recognized profit from the sale of assets, reduced debt burden, reduced expenses related to the court cases and increased working capital. Nonetheless, the Company is seeking solutions for the problems by taking into account the benefits of shareholders and the Company.

(Mr. Sermsin Samalapa)

(Mr. Paisarn Tangyuenyong)

President and CEO

Director

NATURAL PARK PUBLIC COMPANY LIMITED

REPORT OF THE BOARD OF DIRECTORS’ RESPONSIBILITIES FOR FINANCIAL STATEMENTS


60 FINANCIAL STATEMENTS NATURAL PARK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES COMPANIES Auditor’s Report To the Shareholders and Board of Directors of Natural Park Public Company Limited 1) I have audited the accompanying consolidated balance sheets of Natural Park Public Company Limited and its subsidiaries as at 31 December 2010 and 2009, and the related consolidated statements of income, the changes in shareholders’ equity and cash flows for the years then ended. I have also audited the balance sheets of Natural Park Public Company Limited as at 31 December 2010 and 2009, and the related statements of income, the changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of information presented presentation. My responsibility is to express an opinion on these financial statements based on my audit. 2) Except as discussed in the third and forth paragraph, I conducted my audit in accordance with the generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that my audit provides a reasonable basis for my opinion. 3) Investment in associate was accounted for under the equity method of Baht 518 million and the share of net loss for the years of Baht 125 million which was calculated on the basis of financial information for the year ended 31 December 2010 of an associate provided by the Fund Manager. The financial information has not yet been audited by the auditor. The scope of limitation for any review on those statements is caused by circumstance since the Company has not yet received the audited financial statements. 4) Investment in associate was accounted for under the equity method of Baht 183 million and Baht 204 million respectively, and the share of net loss for the years of Baht 15.04 million and Baht 15.34 million respectively, which was calculated on the basis of financial information for the year ended 31 December 2010 and 2009 of an Apartment Property Fund (Leasehold) provided by the Fund Manager. The financial information has not yet been audited by the auditor. The scope of limitation for any review on those statements is caused by circumstance since the Company has not yet received the audited financial statements. 5) In my opinion, exception for the effect of any adjustment that might be required to the financial statements for the years ended 31 December 2010 and 2009 of the matter discussed in the third and forth paragraphs, the accompanying consolidated financial statements and the company financial statement referred to above present fairly, in all material respects, the financial positions as at 31 December 2010 and 2009, and the consolidated and company’s results of their operations and their cash flows for the years then ended of Natural Park Public Company Limited and its subsidiaries and Natural Park Public Company Limited in accordance with generally accepted accounting principles.

NATURAL PARK PUBLIC COMPANY LIMITED

FINANCIAL STATEMENTS


61 FINANCIAL STATEMENTS NATURAL PARK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES COMPANIES 6) Without additional qualifying my opinion, I draw the attention to the following notes to financial statements: 6.1) As discussed in Note 29, the Company has litigation issues and the cases are presently under the hearing of the Court. 6.2) As discussed in Note 32, the Company has more suffered recurring loss and the Company’s ability to perform on the debt restructuring agreement (Note 17, 19), as shown in the balance sheet, the Company’s current liabilities exceeded its current assets as at 31 December 2010 and 2009 by Baht 1,224.96 million and 1,594.94 million, respectively the company and subsidiary have contingent liabilities from litigating (Note 29) and provision for liabilities from litigation (Note 19). These matters indicate the existence of a significant uncertainty about the Company’s and subsidiaries’ ability to continue its operation as a going concern. The accompanying consolidated financial statements and the Company financial statements have been prepared assuming that the Company and subsidiaries will continue their operations as a going concern.

Jadesada Hungsapruek Certified Public Accountant (Thailand) No. 3759 Karin Audit Company Limited Bangkok 22 February 2011

NATURAL PARK PUBLIC COMPANY LIMITED

FINANCIAL STATEMENTS


62 BALANCE SHEET Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

(Unit : Baht)

Consolidated Notes

Separate

2010

2009

2010

2009

236,268,640

97,376,901

207,804,003

55,629,070

6,952,613

10,473,719

2,688,030

1,779,724

ASSETS Current Assets Cash and cash equivalents Trade accounts receivable - net

6

Amounts due from related parties - net

5

134,208

65,789,408

225,979

65,881,178

Short - term loans to related parties and interest receivable - net

5

53,213,425

-

629,324,612

560,855,337

Inventories

7

-

1,087,364

-

-

Other current assets - net

8

Total Current Assets

32,601,016

61,912,179

15,655,050

32,828,624

329,169,902

236,639,571

855,697,674

716,973,933

Non - Current Assets

Pledged deposits at financial institutions long term

9

47,860,757

47,495,572

19,574

19,793

Investments in subsidiaries - net

10

-

-

41,717,078

3,529,833

Investments in associates - net

10

701,750,587

637,315,670

932,640,367

769,000,000

Investments in related companies - net

11

784,487,432

678,616,869

784,487,432

678,616869

118,825

88,834

118,825

88,834

Property, plant and equipment - net

12

251,103,898

849,292,115

139,521,745

160,770,239

Leasehold rights of land and buildings - net

13

111,942,850

247,119,532

-

-

Other non - current assets - net

14

Other long - term investments - net

Total Non - Current Assets Total Assets

The accompanying notes are an integral part of these financial statements

NATURAL PARK PUBLIC COMPANY LIMITED

BALANCE SHEET

779,905,330

799,435,189

616,839,869

616,837,869

2,677,169,679

3,259,363,781

2,515,344,890

2,228,863,437

3,006,339,581

3,496,003,352

3,371,042,564

2,945,837,370


63 BALANCE SHEET Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 (Unit : Baht)

Consolidated Notes

Separate

2010

2009

2010

2009

LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Trade accounts payable

15

77,085,258

82,863,154

22,606,614

18,101,958

Current portion due within one year

22

25,200,000

-

25,200,000

-

5

13,120,979

13,120,979

44,741,375

18,887,443

Short - term loans from related companies and interest payable Short - term loans from others

16

102,031,995

99,770,217

-

-

Liabilities under debt restructuring

17

1,060,673,566

1,098,128,609

1,060,673,566

1,098,128,609

Current portion of debentures

18

-

575,222,665

-

-

Current portion of finance leases payable

21

-

37,053,480

-

-

14,682,933

19,495,991

14,682,933

19,495,991

Deposits and advances received from customers Provision for liabilities

19

900,639,027

1,148,846,277

900,639,027

1,140,296,277

Other current liabilities

20

50,582,025

161,223,520

12,109,992

17,007,217

2,244,015,783

3,235,724,892

2,080,653,507

2,311,917,495

Total Current Liabilities Non - Current Liabilities

Finance leases payable - net

21

-

133,784,283

-

-

Long term loans - net

22

73,167,123

-

73,167,123

-

Other non-current liabilities

35,384,241

10,646,061

32,984,242

8,246,061

108,551,364

144,430,344

106,151,365

8,246,061

2,352,567,147

3,380,155,236

2,186,804,872

2,320,163,556

23

60,430,920,000

60,430,920,000

60,430,920,000

60,430,920,000

23

60,430,920,000

46,784,977,213

60,430,920,000

46,784,977,213

(51,688,713,440)

(38,179,230,081)

(51,688,713,440)

(38,179,230,081)

(4,582,756)

(3,647,369)

-

-

Total Non - Current Liabilities Total Liabilities Shareholders’ Equity Share capital Registered 60,430,920,000 ordinary shares of Baht 1 each Share capital Issued and paid - up 60,430,920,000 ordinary shares of Baht 1 each (2009 : 46,784,977,213 ordinary shares of Baht 1 each)

Discount on ordinary shares Translation of financial statement differences Unrealised loss on available - for - sales securities Deficit Total equity attributable to Company’s shareholders Minority interest - equity attributable to minority shareholders Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity

140,123,379

(19,231,605)

140,123,379

(19,231,605)

(8,224,103,203)

(8,463,691,063)

(7,698,092,247)

(7,960,841,713)

653,643,980

119,177,095

1,184,237,692

625,673,814

128,454

(3,328,979)

-

-

653,772,434

115,848,116

1,184,237,692

625,673,814

3,006,339,581

3,496,003,352

3,371,042,564

2,945,837,370

The accompanying notes are an integral part of these financial statements

NATURAL PARK PUBLIC COMPANY LIMITED

BALANCE SHEET


64 STATEMENT OF INCOME Natural Park Public Company Limited and Its Subsidiaries

For the years ended 31 December 2010 and 2009 (Unit : Baht)

Consolidated Notes

Separate

2010

2009

2010

2009

69,618,209

82,507,460

69,618,209

82,507,460

20,732,763

56,373,734

-

-

-

10,630,091

-

10,630,091

90,350,972

149,511,285

69,618,209

93,137,551

51,381,120

58,963,341

51,381,120

58,886,343

Revenues Revenue from rental and services Revenue from hotel business Management fee income

5

Total Revenues Cost of services

Cost of rental and services Cost of hotel business Total Cost of services Gross margin Other income

5,24

Profit before Expenses

8,621,972

33,145,589

-

-

60,003,092

92,108,930

51,381,120

58,886,343

30,347,880

57,402,355

18,237,089

34,251,208

744,304,059

372,895,032

655,256,598

482,112,398

774,651,939

430,297,387

673,493,687

516,363,606

5,194,371

7,798,020

4,087,783

2,684,509

144,381,156

212,463,767

130,600,035

146,974,050

27,260,077

30,802,866

24,260,077

24,448,200

Expenses

Selling expenses Administrative expenses

5

Management benefit expenses Provision for liabilities

19

147,472,448

487,461,978

146,572,448

485,661,978

Loss on disposal of investments

11

7,368,480

7,421,520

7,368,480

7,421,520

-

-

42,996,720

5,259,461

14

-

-

-

105,888,000

331,676,532

745,948,151

355,885,543

778,337,718

442,975,407

(315,650,764)

317,608,144

(261,974,112)

(60,049,330)

(123,588,187)

(54,858,678)

(81,135,705)

Loss on impairment of investments Loss on impairment of land awaiting development Total Expenses Profit (loss) before finance costs and income tax Finance costs

5

Share of loss from investments in associates Profit (loss) before income tax Income tax Net Profit ( loss) for the years

(139,815,082)

(60,410,271)

-

-

243,110,995

(499,649,222)

262,749,466

(343,109,817)

(65,702)

(66,180)

-

-

243,045,293

(499,715,402)

262,749,466

(343,109,817)

239,587,860

(495,831,342)

262,749,466

(343,109,817)

Attributable to :

Equity holders of the parent Minority interests

3,457,433

(3,884,060)

-

-

243,045,293

(499,715,402)

262,749,466

(343,109,817)

0.0050

(0.0118)

0.0055

(0.0082)

47,495,313,961

42,031,717,869

47,495,313,961

42,031,717,869

Basic Profit (loss) per share attributable to the equity holders of the parent

Equity holders of the parent

23

Weighted average number of ordinary shares (Shares)

The accompanying notes are an integral part of these financial statements

NATURAL PARK PUBLIC COMPANY LIMITED

STATEMENT OF INCOME


(Unit : Baht)

Consolidated

Notes

Issued and paid-up share capital

Discount on ordinary shares

Translation of financial statement differences

Unrealised gain (loss)

Minority interest

Deficit

on available-for-sale securities

Total

12,086,184,000

(3,827,424,800)

(6,851,221)

(237,331,370)

(7,967,859,721)

555,081

47,271,969

- Gain (loss) recognized in shareholders' equity

-

-

-

210,749,122

-

-

210,749,122 7,350,643

Balance as at 1 January 2009 Available - for - sale securities

- The portion transferred to profit or loss from sales

-

-

-

7,350,643

-

-

Translation of financial statement differences Total revenues (expenses) recognized in shareholders’ equity Net loss for the year

-

-

3,203,852

-

-

-

3,203,852

-

-

3,203,852

218,099,765

-

-

221,303,617

-

-

-

-

(495,831,342)

(3,884,060)

(499,715,402)

Total revenues (expenses) recognized for the year

-

-

3,203,852

218,099,765

(495,831,342)

(3,884,060)

(278,411,785)

Increase (decrease) in oridinary shares

23

34,698,793,213

-

-

-

-

-

34,698,793,213

Discount on ordinary shares

23

-

(34,351,805,281)

-

-

-

-

(34,351,805,281)

46,784,977,213

(38,179,230,081)

(3,647,369)

(19,231,605)

(8,463,691,063)

(3,328,979)

115,848,116

- Gain (loss) recognized in shareholders' equity

-

-

-

151,986,504

-

-

151,986,504

- The portion transferred to profit or loss from sales

Balance as at 31 December 2009 Available - for - sale securities

-

-

-

7,368,480

-

-

7,368,480

Translation of financial statement differences

-

-

(935,387)

-

-

-

(935,387)

Total revenues (expenses) recognized in shareholders' equity Net profit for the year

-

-

(935,387)

159,354,984

-

-

158,419,597

-

-

-

-

239,587,860

3,457,433

243,045,293

Total revenues (expenses) recognized for the year

-

-

(935,387)

159,354,984

239,587,860

3,457,433

401,464,890

Increase (decrease) in oridinary shares

23

13,645,942,787

-

-

-

-

-

13,645,942,787

Discount on ordinary shares

23

-

(13,509,483,359)

-

-

-

-

(13,509,483,359)

60,430,920,000

(51,688,713,440)

(4,582,756)

140,123,379

(8,224,103,203)

128,454

653,772,434

Balance as at 31 December 2010

The accompanying notes are an integral part of these financial statements

STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY Natural Park Public Company Limited and Its Subsidiaries

For the years ended 31 December 2010 and 2009

NATURAL PARK PUBLIC COMPANY LIMITED

STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY

65


NATURAL PARK PUBLIC COMPANY LIMITED

66

STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY

STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY Natural Park Public Company Limited and Its Subsidiaries

For the years ended 31 December 2010 and 2009 (Unit : Baht)

Saparate

Notes

Issued and paid-up share capital

Unrealised gain (loss) on available-for-sale securities

Discount on ordinary shares

Deficit

Total

12,086,184,000

(3,827,424,800)

(237,331,370)

(7,617,731,896)

403,695,934

- Gain (loss) recognized in shareholders' equity

-

-

210,749,122

-

210,749,122

- The portion transferred to profit or loss from sales

Balance as at 1 January 2009 Available - for - sale securities

-

-

7,350,643

-

7,350,643

Total revenues (expenses) recognized in shareholders' equity

-

-

218,099,765

-

218,099,765

Net loss for the year

-

-

-

(343,109,817)

(343,109,817)

Total revenues (expenses) recognized for the year

-

-

218,099,765

(343,109,817)

(125,010,052)

34,698,793,213

-

-

-

34,698,793,213

Increase (decrease) in oridinary shares

23

Discount on ordinary shares

23

-

(34,351,805,281)

-

-

(34,351,805,281)

46,784,977,213

(38,179,230,081)

(19,231,605)

(7,960,841,713)

625,673,814

- Gain (loss) recognized in shareholders' equity

-

-

151,986,504

-

151,986,504

- The portion transferred to profit or loss from sales

Balance as at 31 December 2009 Available - for - sale securities

-

-

7,368,480

-

7,368,480

Total revenues (expenses) recognized in shareholders' equity

-

-

159,354,984

-

159,354,984

Net profit for the year

-

-

-

262,749,466

262,749,466

Total revenues (expenses) recognized for the year

-

-

159,354,984

262,749,466

422,104,450

Increase (decrease) in oridinary shares

23

13,645,942,787

-

-

-

13,645,942,787

Discount on ordinary shares

23

-

(13,509,483,359)

-

-

(13,509,483,359)

60,430,920,000

(51,688,713,440)

140,123,379

(7,698,092,247)

1,184,237,692

Balance as at 31 December 2010

The accompanying notes are an integral part of these financial statements


67 STATEMENT OF CASH FLOWS Natural Park Public Company Limited and Its Subsidiaries

For the years ended 31 December 2010 and 2009 (Unit : Baht)

Consolidated

Separate

2010

2009

2010

2009

243,045,293

(499,715,402)

267,749,466

(343,109,817)

31,471,866

39,631,203

22,376,830

23,493,030

-

(168,187,245)

-

-

-

(25,296,961)

(3,730,235)

(82,198)

250,415

24,379,863

(32,413)

-

-

-

(13,331,130)

Cash flows from operating activities: Net profit (loss) for the years Adjustments to reconcile net loss for the year to net cash provided by (used in) operating activities: Depreciation and amortisation Impairment loss on investment in subsidiaries (Reversal) Gain on reversal of allowance for doubtful debt for short - term loans to related parties and interest receivable Doubtful accounts (Reversal) Gain on reversal of allowance for doubful debt amount due from related party (Gain) loss on disposal of fixed assets Unrealised (gain) loss on exchange rate Gain on reversal of provision for liabilities Gain on restructuring debt Gain on cancellation agreement

-

(249,905,953)

-

216,866

-

(1,371,897)

15,221,120

(5,275,742)

15,253,460

(386,229,698)

-

(386,229,698)

-

-

(161,199,452)

-

(161,199,452)

(47,708,300)

-

-

-

Impairment loss of assets

1,144,184

9,073,065

-

-

Loss on disposal of investments in related company

7,368,480

7,421,520

7,368,480

7,421,520

Impairment loss on investment in subsidiaries and associates

-

-

40,609,633

5,259,462

Impairment loss on investment in related parties (Reversal)

-

(155,309,563)

-

(155,309,563)

Impairment loss on land awaiting for development

-

-

-

105,888,000

Provision for liabilities

147,472,448

454,068,881

146,572,448

452,268,881

Dividends received

(38,319,228)

(18,820,498)

(38,319,228)

(24,267,298)

Interest income

(1,265,290)

(1,066,720)

(29,452,654)

(90,873,994)

Interest expenses

60,049,330

123,588,186

54,858,678

81,135,704

139,815,082

60,410,271

-

-

(94,515,881)

(126,446,974)

(93,629,264)

(101,133,845)

Share of net loss from investments in associates Profit (loss) from operating activities before changes in operating assets and liabilities (Increase) decrease in operating assets: Trade accounts receivable Amounts due from related parties Inventories Other current assets Other non - current assets

3,603,304

2,204,083

(912,209)

1,446,597

65,655,200

(11,348,208)

65,655,200

(11,349,873)

37,778

143,363

-

-

61,688,319

(19,712,891)

19,897,617

(24,825,875)

-

1,123,967

(2,000)

(8,307)

Increase (decrease) in operating liabilities: Trade accounts payable

(28,511,085)

399,083

4,632,488

(1,523,994)

(4,813,057)

(3,299,678)

(4,813,057)

(3,199,678)

(17,896,456)

7,641,052

(4,997,838)

1,048,312

(14,751,878)

(149,296,203)

(14,169,063)

(139,546,663)

Cash paid for interest expenses

(10,576,094)

(59,015,647)

(10,576,094)

(54,777,872)

Cash paid for corporate income tax

(11,412,380)

(2,791,938)

(2,724,042)

(2,038,989)

(36,740,352)

(211,103,788)

(27,469,199)

(196,363,524)

Deposits and advance received from customers Other current liabilities Cash provided by (used in) operating activities

Net cash provided by (used in) operating activities

The accompanying notes are an integral part of these financial statements

NATURAL PARK PUBLIC COMPANY LIMITED

STATEMENT OF CASH FLOWS


68 STATEMENT OF CASH FLOWS Natural Park Public Company Limited and Its Subsidiaries

For the years ended 31 December 2010 and 2009 (Unit : Baht)

Consolidated

Separate

2010

2009

2010

2009

(365,184)

(533,072)

218

133,597

(52,500,000)

-

(40,976,408)

30,943,950

(210,000,000)

-

(210,000,000)

-

38,319,228

24,266,898

38,319,228

24,267,298

Cash flows from investing activities (Increase) decrease in pledged deposits at financial institutions - long term (Increase) decrease in short - term loans to related parties and interest receivable Acquisition of investment Dividends received Cash received from interest Cash received from disposal of investments in related company Cash paid for land awaiting development

551,865

1,066,720

8,028,697

240,959

46,085,948

5,943,254

46,085,948

5,943,254

-

-

-

(1,852,840)

5,750,000

-

5,750,000

-

Cash received from disposal of assets

198,170,319

-

111,699

-

Acquisition of building and equipment

(34,154,431)

(26,918,159)

(1,449,596)

(10,278,596)

(8,142,255)

3,825,641

(154,130,214)

49,397,622

100,000,000

-

100,000,000

-

-

-

162,000,000

102,000,000

Cash received from decrease in share capital of associate

Net cash provided by (used in) investing activities Cash flows from financing activities Cash received from long term loans Increase in short - term loans from related companies and interest payable Cash received from issuance ordinary shares

136,459,428

346,987,932

136,459,428

346,987,932

Cash paid for liabilities under debt restructuring and related

(51,052,205)

(239,000,000)

(51,052,205)

(239,000,000) -

expenses Cash paid for long term loans

(1,632,877)

-

(1,632,877)

Decrease from related companies

-

-

(12,000,000)

-

Decrease in short-term loans from others

-

(30,670,000)

-

(30,670,000)

Net cash provided by (used in) financing activities

183,774,346

77,317,932

333,774,346

179,317,932

Net increase (decrease) in cash and cash equivalents

138,891,739

(129,960,215)

152,174,933

32,352,030

97,376,901

227,337,116

55,629,070

23,277,040

236,268,640

97,376,901

207,804,003

55,629,070

(859,899,483)

Cash and cash equivalents - beginning of the years Cash and cash equivalents - end of the years Non - cash transactions - Decrease in current portion of long - term loans

-

(859,899,483)

-

- Decrease in other current liabilities

-

(264,267,345)

-

(264,267,345)

- Increase in liabilities under debt restructuring

-

1,124,166,828

-

1,124,166,828

- As discussed in note 13, the subsidiary has cancled the leasehold agreement so the subsidiary write off the assets and liabilities relate to leasehold agreement and recognize the gain on cancellation agreement as follow: Decrease in leasehold right of building

(126,611,251)

-

-

-

170,837,763

-

-

-

Decrease in current assets

(8,874,462)

-

-

-

Decrease in current liabilities

12,356,250

-

-

-

(47,708,300)

-

-

-

Decrease in liabilities under finance lease

Gain on cancellation agreement

- As discussed in note 12, the subsidiary has sold of its assets related to hotel business by tranfer of the liabilities of debentures and accured interest and by cash receipt. - In the year 2010, the Company had off set between the full amount of repayment of the decrease in share capital of a subsidiary amounted Baht 130 million and the loan from such subsidiary. (See note 10). - In the year 2009, the Company had off set between the full amount of repayment of the decrease in share capital of a subsidiary amounted Baht 99 million and the loan from such subsidiary. (See note 10). - In the year 2009, the Company had purchase the land awaiting for development from a subsidiary amount of Baht 717 million. The Company paid a partial of land awaiting development price amount of Baht 715.15 million to the subsidiary by off set with the whole amount of debt which the subsidiary has to repay to the Company. (See note 14).

The accompanying notes are an integral part of these financial statements

NATURAL PARK PUBLIC COMPANY LIMITED

STATEMENT OF CASH FLOWS


69 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

1. GENERAL INFORMATION Natural Park Public Company Limited (“the Company�) was incorporated as a public company and domiciled in Thailand and was registered in the Stock Exchange of Thailand. The address of its registered office is 88 Soi Sukhumvit 49, Sukhumvit Road, Klongton Nua, Wattana, Bangkok. The principal business of the Company is real estate development.

2. BASIS OF FINANCIAL STATEMENT AND CONSOLIDATION PREPARATION The accompanying financial statements are prepared in Thai Baht and in Thai language in conformity with generally accepted accounting principles in Thailand. The accompanying financial statements are intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in Thailand. For the convenience of the reader, an English translation of financial statements has been prepared from the statutory Thai language financial statements which are issued for domestic reporting purposes. The preparation of financial statements in conformity with TAS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

Adoption of new accounting standards During the current year, the Federation of Accounting Professions issued a number of revised and new accounting standards as listed below. a) Accounting standards that are effective for fiscal years beginning on or after 1 January 2011 (except Framework for the Preparation and Presentation of Financial Statements, which is immediately effective): Framework for the Preparation and Presentation of Financial Statements (revised 2009) TAS 1 (revised 2009)

Presentation of Financial Statements

TAS 2 (revised 2009)

Inventories

TAS 7 (revised 2009)

Statement of Cash Flows

TAS 8 (revised 2009)

Accounting Policies, Changes in Accounting Estimates and Errors

TAS 10 (revised 2009)

Events after the Reporting Period

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


70 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 TAS 11 (revised 2009)

Construction Contracts

TAS 16 (revised 2009)

Property, Plant and Equipment

TAS 17 (revised 2009)

Leases

TAS 18 (revised 2009)

Revenue

TAS 19

Employee Benefits

TAS 23 (revised 2009)

Borrowing Costs

TAS 24 (revised 2009)

Related Party Disclosures

TAS 26

Accounting and Reporting by Retirement Benefit Plans

TAS 27 (revised 2009)

Consolidated and Separate Financial Statements

TAS 28 (revised 2009)

Investments in Associates

TAS 29

Financial Reporting in Hyperinflationary Economies

TAS 31 (revised 2009)

Interests in Joint Ventures

TAS 33 (revised 2009)

Earnings per Share

TAS 34 (revised 2009)

Interim Financial Reporting

TAS 36 (revised 2009)

Impairment of Assets

TAS 37 (revised 2009)

Provisions, Contingent Liabilities and Contingent Assets

TAS 38 (revised 2009)

Intangible Assets

TAS 40 (revised 2009)

Investment Property

TFRS 2

Share-Based Payment

TFRS 3 (revised 2009)

Business Combinations

TFRS 5 (revised 2009)

Non-current Assets Held for Sale and Discontinued Operations

TFRS 6

Exploration for and Evaluation of Mineral Resources

TFRIC 15

Agreements for the Construction of Real Estate

b) Accounting standards that are effective for fiscal years beginning on or after 1 January 2013: TAS 12

Income Taxes

TAS 20 (revised 2009)

Accounting for Government Grants and Disclosure of Government Assistance

TAS 21 (revised 2009)

The Effects of Changes in Foreign Exchange Rates

The Company’s management believes that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied, except for the following accounting standards which management expects the impact on the financial statements in the year when they are adopted.

TAS 19 Employee Benefits This accounting standard requires employee benefits to be recognized as expense in the period in which the service is performed by the employee. In particular, an entity has to evaluate and make a provision for post-employment benefits using actuarial techniques. Currently, the Company and the subsidiary account for such employee benefits when they are incurred.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


71 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

The management is still evaluating the effect of such accounting standard 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. The percentages of shareholding of the Company in the subsidiaries included in the consolidated financial statements were as follows: Percentage of shareholding 2010

2009

Nature of business

Park Opera Company Limited*

100.0

100.0

Theatre

Natural Real Estate Company Limited*

100.0

100.0

General business

Natural Venture Company Limited

100.0

100.0

Investment holding (Dissolved)

Natural Park Ville Company Limited*

100.0

100.0

Rental of assets

Richee Property Management Company Limited*

99.9

99.9

General business

Natural Project Chao Phraya Company Limited*

100.0

100.0

Property development (Temporarily dormant)

Natural Hotel Sukhumvit Company Limited*

64.9

64.9

Hotel owner

Park Gourmet Company Limited*

100.0

100.0

Restaurant (Temporarily dormant)

Natural Hotel Panwa Company Limited**

100.0

100.0

Hotel owner

Natural Hotel Chao Phraya Company Limited*

100.0

100.0

Investment holding

Kyoto Resorts YK Company Limited#

67.0

67.0

Hotel owner

The Joint Venture of Natural Park Public Company Limited, Amanresorts Services Ltd. and Silverlink Holdings Ltd. *

100.0

100.0

Hotel owner

Subsidiaries directly held by the Company

*

Currently no income from operations

**

Since the second quarter of 2010, no income form operations

#

Reviewed by other auditors

All significant intercompany transactions between the Company and subsidiaries included in the consolidated financial statements have been eliminated.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


72 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

Total assets and total revenues of 1 subsidiary included in the consolidated financial statements for the years ended 31 December 2010 and 2009, audited by other auditor, were as follows:

(Unit : Million Baht)

Total assets included in the consolidated balance sheet 2010

2009 315

1 subsidiary

308

(Unit : Million Baht)

Total revenues included in the consolidated statement of income 2010

2009 11

1 subsidiary

2

Total investment in associate and share of net loss of 1 associate included in the consolidated financial statements for the years ended 31 December 2010 and 2009, prepared by management which was not audited by auditor, were as follows:

(Unit : Million Baht)

Total investment in associated included in the consolidated balance sheet 2010

2009 518

1 associate

433

(Unit : Million Baht)

Total assets included in the consolidated balance sheet 2010

1 associate

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT

2009 (125)

(37)


73 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

Total investment in associate and share of net loss included in the consolidated financial statements for the years ended 31 December 2010 and 2009, prepared by management which was not audited by auditor, were as follows:

(Unit : Million Baht)

Total investment in associated included in the consolidated balance sheet 2010

2009 183

1 associate

204

(Unit : Million Baht)

Total share of net gain (loss) included in the consolidated statement of income 2010

1 associate

2009 (15)

(15)

3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. The significant accounting judgments and estimates are as follows:

3.1 Finance leases/ Operating leases

The Company and subsidiaries have entered into lease agreements for the rental of motor vehicles. The Company and subsidiaries have determined, based on an evaluation of the terms and conditions of the arrangements, that the lessor retains all the significant risk and rewards of ownership of these properties, and so accounts for the contracts as operating leases.

3.2 Allowance for doubtful accounts

Allowances for doubtful accounts are intended to adjust the value of receivables for probable credit losses. The management uses judgment to establish reserves for estimated losses for each outstanding debtor. The allowances for doubtful accounts are determined through a combination of specific reviews, collection experience, and analysis of debtor aging, taking into account changes in the current economic conditions. However, the use of different estimates and assumptions could affect the amounts of allowances for receivable losses and adjustments to the allowances may therefore be required in the future.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


74 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 3.3 Impairment of investments

The Company and subsidiaries treat investments as impaired when there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgment. 3.4 Depreciation In calculating depreciation of plant and equipment, the management estimates useful lives and salvage values of the plant and equipment and reviews estimated useful lives and salvage values if there are any changes.

4. SIGNIFICANT ACCOUNTING POLICIES The consolidated and Company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued by the Institute of Certified Accountants and Auditors of Thailand and approved under the law by the Board of Supervision of Auditing Practice appointed by the Minister of Commerce, and the financial reporting requirements of the Securities and Exchange Commission. Significant accounting policies adopted by the Company and the subsidiary companies are summarized below: 4.1 Revenue Recognition 4.1.1 Rental and services income are recognized as revenue on accrual basis at the amount as fixed under the related lease agreement. 4.1.2 Revenues from hotel operations, mainly comprise revenues from room sales, food and beverages sales and auxiliary activities, and represent the invoiced value (excluding value added tax) of goods supplied and services rendered after deducting discounts. 4.1.3 Revenues from services and commission are recognized when services are rendered. 4.1.4 Revenues from restaurant represent the invoiced value after deducting discounts and allowances (excluding value added tax) of goods supplied and services rendered. 4.1.5 Interest income is recognized as revenue on a time proportion basis. 4.2 Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash at banks and deposits at financial institutions with an original maturity of three months or less and not subject to restriction. 4.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realizable value. Allowance for doubtful accounts is provided to cover the estimated losses that may be incurred in the collection. The allowance is based on collection experience and current

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


75 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

status of receivables outstanding at the balance sheet date. Bad debts will be written off for the accounts considered uncollectible. 4.4 Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the weighted average method. Net realizable value is the estimate of the selling price in the ordinary course of business less the cost of completion. 4.5 Investments Current investment consists of investment in debt instrument and is accounted for by using amortized cost method. Investments in the subsidiary and associated companies as recorded in the Company’s book is accounted for cost method and investment in associated company in the consolidated financial statements is accounted for under equity method. Under this method, the investment is recorded at cost and for each subsequent year the investment is adjusted to incorporate the Company’s proportionate share of the operating results in the subsidiary. However, the Company will record additional loss on its investments in associated company only upto an amount equal to the commitments and guarantees it has. Investments in available-for-sale securities are determined at fair value. The change in value of securities is recorded as a separate item in shareholders’ equity until securities are sold, the change shall be included in determining earnings. Fair value of marketable securities is based on the latest bid prices of the last working day of year quoted by the Stock Exchange of Thailand. Investments in non-marketable equity securities, which the Company holds as other investment, are valued at cost. Weighted average method is used for computation of cost of investments. 4.6 Joint venture Cost method is applied in the separate financial statements. 4.7 Investment in property fund Investment in the units of a property is treated by the Company as investment in an associated company and recorded as cost method in the Company’s book and equity method in the consolidated financial statement. The financial statements of the property fund are prepared under accounting policies which differ from those of the Company in some respects. However, for the purpose of recording the Company’s interest in the equity of the property fund, the Company has not adjusted the property fund’s financial statements to state then under the same accounting policies as applied by the Company because the amount is immaterial to financial statements.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


76 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 4.8 Land held for future development

Land held for future development is stated at cost less provision for impairment (if any). Cost comprises cost of land and other related acquisition costs incurred. Where the carrying amount of the land is greater than its estimated recoverable amount, a provision for impairment is made to reduce the carrying amount to the recoverable amount. 4.9 Property, plant and equipment Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and provision for impairment (if any). Depreciation is calculated on the straight line method to write off the cost or the revalued amount of each asset, except for land which is considered to have an indefinite life, to its residual value over the estimated useful life as follows:

Building on leasehold land, building improvements

Remaining lease period

and leasehold rights 5-40 years

Building, land and building improvement

20 years

Integral fixed plant

5-10 years

Furniture, fixture and equipment Hotel operating equipment

The remaining quantity from physical count

Vehicles

5 years

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Estimated recoverable amount is the higher of the anticipated discounted cash flows from the continuing use of the asset and the amount obtainable from the sale of the asset less any costs of disposal. Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into account in determining profit/loss from operations. Expenditures for additions, renewals and improvements, which result in substantial increase in an asset’s current replacement value, are capitalized. Repair and maintenance costs are recognized as an expense when incurred. 4.10 Leasehold rights of land and building Leasehold rights of land and building are stated at cost less accumulated amortization. Amortization of leasehold right is calculated by reference to its cost on a straight-line basis over the period of lease. 4.11 Capitalization of borrowing costs The Company and its subsidiaries capitalize interest cost and other financial charges relating to the construction and supply costs as part of the project costs. The capitalization of the borrowing cost will be discontinued when the construction

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


77 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

is completed and ready for intended use, or when construction is suspended and until active development resumes. A subsidiary record interest as expense the management did not adjust the effect of non – uniform accounting policy due to immaterial difference. 4.12 Accounting for leases - where a company is the lessee Leases of assets which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased equipment or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance charges, are included in other long – term payables. The interest element of the finance cost is charged to the statement of income over the lease period. The equipment acquired under the finance leases is depreciated over the shorter of the useful life of the assets or the lease term. Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the statements of income over the lease periods. 4.13 Currency translation Transactions denominated in foreign currencies are translated into Baht at the rates of exchange ruling on the transaction dates. Realized gains and losses on exchange are recognized as income or expenses in the statements of income as incurred. Monetary assets and liabilities at the balance sheet date denominated in foreign currencies are translated into Baht at the rates of exchange ruling on the balance sheet date. Unrealized gains and losses on exchange are recognized in the statements of income as incurred. The assets and liabilities of foreign entities are translated to Baht at the exchange rate ruling at the balance sheet date. The revenues and expenses of these foreign entities are translated to Baht at the monthly average exchange rates of the transactions incurred. 4.14 Financial instruments The Company and subsidiary have no policy to speculate in or engage in the trading of any financial derivative instruments. Financial instruments carried on the balance sheet include bank balances, investments, trade receivables, trade creditors, loans and debentures. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. 4.15 Basic profit (loss) per share Basic profit (loss) per share determined by dividing the net loss for the year by the weighted average number of ordinary shares in issue during the year.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


78 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 4.16 Use of accounting estimates

Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates for certain accounting transactions, affecting amounts reported in the financial statements and notes related thereto. Subsequent actual results may differ from these estimates. 4.17 Corporate income tax The Company and subsidiaries calculates corporate income tax according to Revenue Code and records corporate income tax on the accrual basis. The Company does not recognize deferred tax in respect of temporary differences in the future periods. A foreign subsidiary recognizes income tax by deferred tax method. The Company’s management has considered the effect from using the different accounting policy that it has no any significant. So, the Company did not any adjust such effect.

5. RELATED PARTY TRANSACTIONS The Company had significant business transactions with subsidiaries (which have already been eliminated from the consolidated financial statements), associates and related parties which are related by way of shareholding or common shareholders or common directors. Such transactions, which have been concluded on the terms and basis as shown in the respective agreements or as determined by the Company and the respective parties, have been summarized below: (Unit : Thousand Baht) For the years ended 31 December

Consolidated

Separate

2010

2009

2010

2009

-

-

28,631

90,633

-

-

-

6

713

-

713

-

-

10,630

-

10,630

-

-

-

5,447

38,315

18,816

38,315

18,816

-

-

105

59

-

-

5,905

2,793

130

-

130

94

a) Income (1) Subsidiaries Interest income Other income (2) Associates Interest income Management fee income Dividend income (3) Related company Dividend income b) Expenses (1) Subsidiaries Administrative expenses Interest expenses (2) Associates Administrative expenses

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


79 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

Management fee income The Company had entered into a project management agreement with a related company - Kempin Siam Company Limited (formerly “Natural Hotel Siam Company Limited”). The Company recognized income for the year ended 31 December 2009 of Baht 10.63 million. The significant balances of assets and liabilities with its related parties were as follows:

(Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

-

-

92

92

6

65,661

6

65,661

The Natural Place Tower Limited* Sathorn Office Park Company Limited* Others

69,190

69,190

69,190

69,190

3,686

3,686

3,686

3,686

133

133

133

133

Total

73,015

138,670

73,107

138,762

(72,881)

(72,881)

(72,881)

(72,881)

134

65,789

226

65,881

-

-

157

52

50

10

50

10

Syntec Construction Public Company Limited

15,429

15,429

-

-

Total

15,479

15,439

207

62

a) Amounts due from related parties - net (1) Subsidiaries Kyoto Resorts YK Company Limited (2) Associates Kempin Siam Company Limited (formerly “Natural Hotel Siam Company Limited”) (3) Related companies

Less : Allowance for doubtful accounts Net * See Note 5 C.3 (Progress on follow up loans)

b) Trade accounts payable – related parties (1) Subsidiaries Natural Hotel Panwa Company Limited (2) Associates Park Cuisine Company Limited (3) Related company

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


80 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 c) Short-term loans to related parties and interest receivable – net

The movements of short-term loans to related parties and interest receivable for years ended 31 December 2010 and 2009 were as follows: (Unit : Thousand Baht)

Consolidated

Opening net book amount Increase Decrease / reclassification Foreign currency translation

Separate

2010

2009

2010

2009

13,711,335

13,711,335

14,686,853

15,344,289

53,213

1,916

99,597

104,285

-

(1,916)

(36,841)

(753,732)

-

-

4,792

(7,989)

13,764,548

13,711,335

14,754,401

14,686,853

Loans

6,802,503

6,750,003

7,676,674

7,630,906

Interest receivable

6,962,045

6,961,332

7,077,727

7,055,947

13,764,548

13,711,335

14,754,401

14,686,853

(13,711,335)

(13,711,335)

(14,125,076)

(14,125,998)

53,213

-

629,325

560,855

Closing net book amount Consisted of :

Total Less : Allowance for doubtful accounts Net

The movements of allowance for doubtful accounts for years ended 31 December 2010 and 2009 were as follows:

(Unit : Thousand Baht)

Consolidated

Opening net book amount

Separate

2010

2009

2010

2009

(13,711,335)

(13,711,335)

(14,125,998)

(14,129,728)

Increase

-

-

(27,775)

(26,200)

Transfer out

-

-

28,697

29,930

(13,711,335)

(13,711,335)

(14,125,076)

(14,125,998)

Closing net book amount

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


81 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 (Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

Park Opera Company Limited

-

-

223,583

224,083

Natural Park Ville Company Limited

-

-

80,577

83,477

Richee Property Management Company Limited

-

-

15,115

15,115

Kyoto Resorts YK Company Limited

-

-

244,778

232,377

Natural Hotel Panwa Company Limited

-

-

-

25,297

Natural Hotel Chao Phraya Company Limited

-

-

955

955

Park Gourmet Company Limited

-

-

215

203

The Joint Venture of Natural Park Public Company Limited, Amanresorts Services Ltd. And Silverlink Holdings Ltd.

-

-

424,630

394,011

Total

-

-

989,853

975,518

Less : Allowance for doubtful accounts

-

-

(413,741)

(414,663)

-

-

576,112

560,855

Kempin Siam Company Limited (formerly “Natural Hotel Siam Company Limited”)

53,213

-

53,213

-

Sathorn Office Park Company Limited

53,213

-

53,213

-

1,797,731

1,797,731

1,797,731

1,797,731

64,645

64,645

64,645

64,645

Chatnarong Company Limited

2,034,416

2,034,416

2,034,416

2,034,416

M&C Property Service Company Limited

7,189,040

7,189,040

7,189,040

7,189,040

757,768

757,768

757,768

757,768

Short-term loans to related parties and interest receivable consisted of the following: (1) Subsidiaries

Net (2) Associates

(3) Related companies The Natural Place Tower Limited Sathorn Office Park Company Limited

Nom Anant Company Limited Panya Holding Company Limited Total Less : Allowance for doubtful accounts Short-term loans to related companies - net Short-term loans to related parties and interest receivable – net

1,867,735

1,867,735

1,867,735

1,867,735

13,711,335

13,711,335

13,711,335

13,711,335

(13,711,335)

(13,711,335)

(13,711,335)

(13,711,335)

-

-

-

-

53,213

-

629,325

560,855

The Company discontinued recognition of interest income from short – term loans to subsidiaries and related companies which have insufficient financial resources and may default to repayment of such loans and interest receivable. The Company made fully allowances for all short-term loans to related companies. At present, the Company is closely monitoring to collect its loans and taking into the legal actions to receive them.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


82 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

(4) The progress on follow up short-term loans to related companies and interest receivable were as follows: The Company filed a suit to Sathorn Office Park Company Limited for debt repayment on 24 April 2006 and later on 12 December 2007 the Court ordered the defendant to pay principal of Baht 47.8 million, interest of Baht 6.4 million according to the debt acknowledgement letter, interest of 7.5% p.a. on Baht 47.8 million calculated from the date filing suit to payment date and management fee of Baht 3.7 million with interest of 7.5% p.a. calculated from the date of filing suit to payment date. On 1 September 2009, the Company filed the request to check about ownership with the Department of Lands – Bangkok. The Company found that Sathorn office Park Company Limited has the condominium ownership in the Natural Place Suite Ngamdupli totaling 11 units which has been freezed by the Revenue Department. The Natural Place Tower Company Limited was sued by the Revenue Department in the Bankruptcy case. On 4 June 2007, the Central Bankruptcy Court ordered the Natural Place Tower Company Limited to be under absolute receivership, the Company is filing a claim in such case. M & C Property Service Company Limited was sued by ACL Bank Public Company Limited in the Bankruptcy case. On 12 February 2008, the Central Bankruptcy Court ordered M & C Property Service Company Limited to be under absolute receivership, the Company is filing a claim in such case. Nom Anan Company Limited (Nom Anan) was sued by Thai Assets Management (TAMC) in the Bankruptcy case. On 31 July 2009, TAMC requested the Court to issue the order of control property of Nom Anan and order Nom Anan to be bankrupt. Furthermore, TAMC requested the Court to appoint an official receiver to control business and collect property of Nom Anan for repayment debt to TAMC and other creditors. The Central Bankruptcy Court ordered Nom Anan Company Limited (Nom Anan) to be under absolute receivership. Currently, the case is in the consideration of the Supreme Court. On 9 January 2009, the Company sued Panya Holding Company Limited requesting the court to dismiss the completeness of liquidation and order new liquidation process because the Company has not yet received loan repayment from Panya Holding Company Limited. On 1 July 2009, the Meanburi Province Court ordered to cancel the completeness of liquidation and order new liquidation process. On 14 December 2009, the Company filed the petition to the Central Bankruptcy Court for requesting the Court to order Panya Holding Company Limited to be under absolute receivership and bankrupt. On 12 February 2010, the Central Bankruptcy Court ordered Panya Holding Company Limited to be under absolute receivership and had announce in Gazette on 20 July 2010. On 1 September 2010, the Company filed a claim in such case. As for other companies, the Company is closely monitoring the progress for the most benefit of the Company. Nonetheless, the Company is not the only creditor, thus, in the case that other creditors enforce loan repayment for the overall benefit of the creditor, such as bankruptcy lawsuit or the debtor request for enforcement under the rehabilitation plan. The Company has to file for debt repayment according to the related laws. Therefore, there is no need to file for civil lawsuit, which will cause the Company to bear extra expenses. Also, to minimize timing risk, the Company has given notification to the debtors and have the debtors acknowledge their debt or other proof of evidence of debt by affirming the debt burden that will maximize the benefit of the Company. For the debtors that ignored the Company’s notification, the Company will file civil lawsuit if possible.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


83 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

d) Short-term loans from related companies and interest payable The movements of short-term loans from related companies and interest payable for the years ended 31 December 2010 and 2009 were as follows: (Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

13,121

13,121

18,887

13,121

Increase

-

-

167,905

105,792

Decrease

-

-

(142,051)

(100,026)

13,121

13,121

44,741

18,887

-

-

30,720

5,618

13,121

13,121

14,021

13,269

13,121

13,121

44,741

18,887

Opening net book amount

Closing net book amount Consisted of the folowing : Loans Interest payable Total

(Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

Natural Real Estate Company Limited (See Note 10) (Interest at 5.50% per annum)

-

-

6,075

5,766

Natural Hotel Sukhumvit Company Limited (See Note 10) (Interest at 6.25%per annum)

-

-

1,013

-

Natural Hotel Panwa Company Limited (See Note 10) (Interest at 6.25%, MLR-2 per annum)

-

-

24,532

-

Total short-term loans from subsidiaries

-

-

31,620

5,766

Kempin Siam Company Limited (formerly “Natural Hotel Siam Company Limited�) (Interest at 6.00% per annum)

13,121

13,121

13,121

13,121

Total short-term loans from associate

13,121

13,121

13,121

13,121

13,121

13,121

44,741

18,887

Short-term loans to related parties and interest receivable consisted of the following: (1) Subsidiaries

(2) Associates

Total short-term loans from related companies and interest payable

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


84 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 e) Guarantees

As at 31 December 2009, the Company has contingent liabilities in respect of debentures guarantees given on behalf of a subsidiary, Natural Hotel Panwa Company Limited (See Note 18).

The Company has not charge guarantees fee to above company.

6. TRADE ACCOUNTS RECEIVABLE - NET As at 31 December 2010 and 2009, the balances of accounts receivable, as classified by aging, were as follows:

(Unit : Thousand Baht)

Consolidated

Not more than 3 months Overdue 3 – 6 months Overdue 6 - 12 months Overdue more than 12 months Total Less : Allowance for doubtful accounts Trade accounts receivable – net

Separate

2010

2009

2010

2009

2,196

6,198

2,196

1,394

79

688

79

10

994

188

37

-

24,234

24,265

19,649

19,645

27,503

31,339

21,961

21,049

(20,550)

(20,865)

(19,273)

(19,269)

6,953

10,474

2,688

1,780

The allowance for doubtful accounts has been set up from the balance of accrued rental income outstanding for more than one year, after deducting deposits and advances received from customers.

7. INVENTORIES

(Unit : Thousand Baht)

Consolidated 2010

2009

Food

-

59

Beverage

-

313

Finished goods

-

147

Supplies

-

568

Total

-

1,087

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


85 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

8. OTHER CURRENT ASSETS - NET

(Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

247,266

247,370

247,266

245,126

Prepaid lawyer fee

3,600

25,000

3,600

25,000

Vat receivable

7,272

18,046

846

693

Advances to subcontractors

Others Total Less : Allowance for doubtful accounts Net

34,904

31,991

23,591

21,658

293,042

322,407

275,303

292,477

(260,441)

(260,495)

(259,648)

(259,648)

32,601

61,912

15,655

32,829

9. PLEDGED DEPOSITS AT FINANCIAL INSTITUTIONS – LONG TERM As at 31 December 2010 and 2009, the Company and its subsidiaries have used deposits at financial institution as a guarantee for interest payment and utilities.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


86 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

10. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES – NET a) The details of investments in subsidiaries and associates can be summarized as follows:

Consolidated as at 31 December 2010

Paid-up share capital Thousand Baht

Percentage of ownership (including indirectly held) %

Cost method Thousand Baht

Allowance for change in valuation of investments Thousand Baht

2,140,000

35.00

749,000

(230,890)

Park Cuisine Company Limited

272,367

38.00

103,499

(103,499)

-

-

UOB Apartment Property Fund One (leasehold)

828,750

27.06

224,250

19,333

(59,943)

183,640

1,076,749

(315,056)

(59,943)

701,750

Equity method Thousand Baht

Dividends Thousand Baht

Investment in associates Kempin Siam Company Limited (formerly “Natural Hotel Siam Company Limited”)

Total investment in associates

-

518,110

Consolidated as at 31 December 2009

Paid-up share capital Thousand Baht

Percentage of ownership (including indirectly held) %

Cost method Thousand Baht

Allowance for change in valuation of investments Thousand Baht

1,540,000

35.00

539,000

(106,118)

Park Cuisine Company Limited

272,367

38.00

103,499

(103,499)

-

-

UOB Apartment Property Fund One (leasehold)

850,000

27.06

230,000

34,377

(59,943)

204,434

872,499

(175,240)

(59,943)

637,316

Equity method Thousand Baht

Dividends Thousand Baht

Investment in associates Kempin Siam Company Limited (formerly “Natural Hotel Siam Company Limited”)

Total investment in associates

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT

-

432,882


87 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

Separate as at 31 December 2010

Separate as at 31 December 2009

Paid-up share capital Thousand Baht

Percentage of ownership (including indirectly held) %

Cost method Thousand Baht

Paid-up share capital Thousand Baht

Percentage of ownership (including indirectly held) %

Cost method Thousand Baht

Park Opera Company Limited

22,555

100.00

22,555

22,555

100.00

22,555

Natural Real Estate Company Limited

33,000

100.00

33,000

33,000

100.00

33,000

Investment in subsidiaries

Natural Venture Company Limited

100

100.00

100

100

100.00

100

43,000

100.00

243,340

43,000

100.00

243,340

Richee Property Management Company Limited

1,000

99.9

999

1,000

99.9

999

Natural Project Chao Phraya Company Limited

1,000

100.00

999

1,000

100.00

999

41,353

64.9

26,841

41,353

64.9

26,841

Natural Park Ville Company Limited

Natural Hotel Sukhumvit Company Limited Park Gourmet Company Limited Natural Hotel Panwa Company Limited Kyoto Resorts YK Company Limited

25,000

100.00

25,000

25,000

100.00

25,000

170,000

100.00

170,000

300,000

100.00

300,000

Yen 50 million

67.00

11,409

Yen 50 million

67.00

11,409

100

100.00

100

100

100.00

100

Natural Hotel Chao Phraya Company Limited The Joint Venture of Natural Park Public Company Limited, Amanresorts Services Ltd. and Silverlink Holdings Ltd

-

Total investments in subsidiaries Less : Allowance for impairment of investments Investments in subsidiaries – net

-

534,343

664,343

(492,626)

(660,813)

41,717

3,530

Investment in associates Kempin Siam Company Limited (formerly “Natural Hotel Siam) Park Cuisine Company Limited UOB Apartment Property Fund One (leasehold)

2,140,000

35.00

272,367

38.00

103,499

272,367

38.00

103,499

828,750

27.06

224,250

850,000

27.06

230,000

Total investment in associates Less : Allowance for impairment on Investments Investments in associates – net

749,000

1,540,000

35.00

539,000

1,076,7499

872,499

(144,109)

(103,499)

932,640

769,000

The Company has partially pledged its shares of investment in associates with a local bank as partial collateral for the liabilities under debt restructuring (See Note 17).

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


88 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

b) The significant transactions of the investment in subsidiaries and associates for years ended 31 December 2010 and 2009 as follows: b.1) Investments in Natural Real Estate Company Limited The ordinary shareholder’s meetings of a subsidiary (Natural Real Estate Company Limited) for the year 2009, on 29 April 2009, had a special resolution to decrease the Company’s registered share capital from Baht 132 million (ordinary shares 1.32 million shares with a par value of Baht 100 per share) to Baht 33 million (ordinary shares 0.33 million shares with a par value of Baht 100 per share) and the purpose of decrease in registered share capital amount of Baht 99 million is to repay such money to the Company. The subsidiary registered the share decrease with the Ministry of Commerce on 22 July 2009 and the decrease in share capital of the subsidiary did not effect to change in percentage of shareholding. And on 22 July 2009, the company received a share capital refund amount of Baht 99 million by offset between the full amount of and the loan from such subsidiary (See note 5). b.2) Investments in Natural Hotel Panwa Company Limited On 25 March 2010, the Company had sold assets to other company as discussed in Note 12. Therefore, the Company reversed impairment of investment in subsidiary amount of Baht 170.57 million in the separate income statement for the year ended 31 December 2010. The ordinary shareholder’s meetings of a subsidiary (Natural Hotel Panwa Company Limited) for the year 2010, on 28 April 2010, had a special resolution to decrease the Company’s registered share capital from Baht 300 million (ordinary shares 3 million shares with a par value of Baht 100 per share) to Baht 170 million (ordinary shares 1.7 million shares with a par value of Baht 100 per share) and the purpose of decrease in registered share capital amount of Baht 130 million is to repay such money to the Company. The subsidiary registered the decrease in share capital with the Ministry of Commerce on 17 November 2010. b.3) Investments in UOB Apartment Property Fund One (leasehold) On 12 May 2010, the Company has received money from the first capital reduction of the UOB Apartment Property Fund One (leasehold) amount of Baht 5.75 million or Baht 0.25 per unit. b.4) Investments in Kempin Siam Company Limited (formerly “Natural Hotel Siam Company Limited”) On 30 March 2010, the Company paid in 2,100,000 ordinary shares of Kempin Siam Company Limited, an associate in which the Company holds a 35% included indirect held, with a par value of Baht 100 each, at a price of Baht 210 million, in order to maintain its proportionate shareholding in that company following a capital increase.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


89 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

11. INVESTMENTS IN RELATED COMPANIES - NET

(Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

-

87,345

-

87,345

Bangkok Metro Public Company Limited (Percentage of shares held 2.68%)

430,085

430,085

430,085

430,085

Syntec Construction Public Company Limited (Percentage of shares held 11.88%)

195,129

195,129

195,129

195,129

Sansiri Public Company Limited (Percentage of shares held 4.26% and the warrants of 31,360,615 units in 2009)

352,860

392,256

352,860

392,256

Total aggregate cost

978,074

1,104,815

978,074

1,104,815

(333,800)

(407,087)

(333,800)

(407,087)

140,213

(19,111)

140,213

(19,111)

784,487

678,617

784,487

678,617

Available-for-sale securities Aggregate cost Finansa Public Company Limited (Percentage of shares held 1.69% in 2009)

Less : Allowance for impairment on investment Less : Unrealized gain (loss) on available-for-sale securities Investment in related companies – net

The Company has partially pledged its shares of investment in a related company – Bangkok Metro Public Company Limited of 320.26 million shares with a group of Banks as partial collateral for the said related company’s long term loan from such group of bank. The Company has pledged its shares of investment in related companies with a local bank as partial collateral for the Company’s liability under restructuring debt (See Note 17).

a) The significant changes in investments in related companies for the nine-month period ended 30 September 2010 is as follows: a.1) Investment in Finansa Public Company Limited During the first quarter of 2010, the Company sold 2,091,800 shares in Finansa Public Company Limited in totaling amount of Baht 8.44 million. Loss on disposal of investment was included in the consolidated and the Separate financial statement of Baht 5.62 million. a.2) Investment in Sansiri Public Company Limited On 20 January 2010, the Company has received warrants (SIRI-W1) amounting 31,360,615 units for a right to purchase ordinary shares of Sansiri Public Company Limited at the price Baht 5.20 per share. The warrants will expire on 20 January 2015.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


90 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

During the year of 2010, the Company sold warrant of 31,360,615 units in totaling amount of Baht 37.59 million. Loss on disposal of investment was included in the consolidated and the Separate financial statement of Baht 1.75 million.

b) The disclosure movement of available-for-sales securities, as required by the Securities and Exchange Commission, for the years ended 31 December 2010 and 2009 was as follows:

(Unit : Thousand Baht)

Consolidated

Net book amount as at 1 January Disposal

2010

2009

678,617

318,604

(126,741)

(82,787)

Reverse impairment loss on investment from sale

73,287

69,423

Reverse unrealized loss on available-for-sale securities from sale

(7,368)

(7,422)

166,692

380,799

784,487

678,617

Change in fair value Net book amount as at 31 December

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


91 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

12. PROPERTY, PLANT AND EQUIPMENT – NET

(Unit : Thousand Baht)

Consolidated Building, Land and Building improvement

Integral fixed plant

Furniture fixture and equipment

Hotel operating equipment

256,277

329,740

272,593

118,921

4,873

6,728

564,158

1,553,290

-

(214,249)

(182,983)

(113,506)

-

(6,453)

-

(517,191)

-

-

-

-

(1,300)

-

-

(1,300)

-

-

-

-

-

-

(185,507)

(185,507)

256,277

115,491

89,610

5,415

3,573

275

378,651

849,292

256,277

115,491

89,610

5,415

3,573

275

378,651

849,292

-

-

1,124

510

432

-

32,088

34,154

(253,768)

(98,383)

(1,729)

(55,678)

(5,305)

(2,747)

(299,661)

(717,271)

-

50,861

1,411

52,425

-

2,640

-

107,337

Allowance for operating equipment loss transferred out out

-

-

-

-

1,300

-

-

1,300

Decrease from translation of financial statement

-

-

-

-

-

1

500

501

Depreciation charge

-

(9,266)

(13,351)

(1,424)

-

(169)

-

(24,210)

2,509

58,703

77,065

1,248

-

-

111,578

251,103

Land

Construction in progress

Vehicle

Total

As at 31 December 2009 Cost Less Accumulated depreciation Allowance for operating equipment loss Allowance for impairment loss Net book amount For the year ended 31 December 2010 Opening net book amount Additions Disposals Depreciation for the assets transferred out

Closing net book amount As at 31 December 2010 Cost Less Accumulated depreciation Allowance for impairment loss Net book amount

2,509

231,356

271,988

63,753

-

3,982

297,085

870,673

-

(172,653)

(194,923)

(62,505)

-

(3,982)

-

(434,063)

-

-

-

-

-

-

(185,507)

(185,507)

2,509

58,703

77,065

1,248

-

-

111,578

251,103

As at 31 December 2010 and 2009, the gross carrying amount of the fully depreciated plant and equipment in the consolidated and separate’s financial statements that are still in use are Baht 135.95 million and Baht 162.21 million, respectively.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


92 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

(Unit : Thousand Baht)

Separate Building, Land and Building improvement

Land

Integral fixed plant

Furniture fixture and equipment

Vehicle

Total

As at 31 December 2009 Cost Less Accumulated depreciation Net book amount

2,509

230,773

272,593

41,995

34

547,904

-

(163,881)

(182,982)

(40,237)

(34)

(387,134)

2,509

66,892

89,611

1,758

-

160,770

2,509

66,892

89,611

2,595

-

160,770

-

-

1,124

326

-

1,450

-

-

(1,729)

(1,845)

-

(3,574)

For the year ended 31 December 2010 Opening net book amount Additions Disposals Depreciation for the assets transferred out Depreciation charge Closing net book amount

-

-

4,863

2,232

-

7,095

-

(8,188)

(16,804)

(1,227)

-

(26,219)

2,509

58,704

77,065

1,244

-

139,522

As at 31 December 2010 Cost Less Accumulated depreciation Net book amount

2,509

230,773

271,988

40,476

34

545,780

-

(172,069)

(194,923)

(39,232)

(34)

(406,258)

2,509

58,704

77,065

1,244

-

139,522

As at 31 December 2010 and 2009, the gross carrying amount of the fully depreciated plant and equipment that are still in use are Baht 108.27 million and Baht 100.48 million, respectively. The Company and its subsidiaries have mortgaged certain plots of land and construction thereon, buildings on leasehold land and land awaiting development with certain financial institutions as security against liabilities under debt restructuring (Note 17), debentures (Note 18), and long-term loan (Note 22). Since the first quarter of 2009, the subsidiary has stopped capitalize interest on debentures relating to hotel construction. This is because the progress of hotel construction was suspended since the subsidiary was unable to drawdown the remaining unused credit facility for its construction from Lehman Brothers Commercial Corporation Asia Limited as discussed in Note 18. The Company is filing to the Court to emergency protect in order to operate the business of a subsidiary and the Company will develop the project to complete. At present, the hotel building construction is almost completed. However, the Management of the Company expected that the assets will not impair due to the offer price from outsider, non related parties, is higher than net book value at 31 December 2009. On 25 March 2010, the subsidiary (Natural Hotel Panwa – “Seller”) has entered into a sales transaction of all assets related to Novotel Beach Resort Panwa Phuket (consisted inventories, property, plant and equipment, other assets and transfer of debenture and related accrued intetest) to Ton Vassana Company Limited (“Buyer”) at the price of Baht 870 million (Included Vat Baht 0.85 million). At present, such debentures have been cancelled. The subsidiary had withdrawn the lawsuit against Lehman with the Southern Civil Court (See note 18). And during the second quarter of 2010, the subsidiary had already transferred the licenses and not operate the hotel business behalf of buyer. As well as transfer of

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


93 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

employees of the hotel business. Thus, the subsidiary has recognized the gain on sale of assets of Baht 245.52 million (net of selling expenses of Baht 19.85 million) in the consolidate for the year ended 31 December 2010. Summary of the significant transactions in cash flows of discontinuing business accounts for the year ended 31 December 2009 as the following;

(Unit : Thousand Baht)

31 December 2009

Cash flows from operating activities

6,468

Cash flows from investing activities

(9,674)

Cash flows from financing activities

(222)

Net

(3,428)

Cash and cash equivalents - beginning of the year

35,340

Cash and cash equivalents - end of the year

31,912

13. LEASEHOLD RIGHTS OF LAND AND BUILDINGS – NET The movements of leasehold rights of land and buildings for the years ended 31 December 2010 and 2009 was as follows:

(Unit : Thousand Baht)

Consolidated 2010

2009

247,119

260,157

(4,164)

(4,164)

Impairment

-

(8,193)

Transfer out

(131,244)

-

232

(681)

111,943

247,119

Opening net book amount Amortization during the year

Currency translation Closing net book amount

On 23 June 2010 the subsidiary has a written contract canceled the lease agreement and deliver to area, deposit and all remuneration paid in advance. And the party company forfeited the guarantee and hold those funds for any the subsidiary paid before due to breach agreement. So the subsidiary write off the assets and liabilities relate to lease agreement and the subsidiary has gain on cancellation agreement of Baht 47.71 million.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


94 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 14. OTHER NON-CURRENT ASSETS

(Unit : Thousand Baht)

Consolidated

Separate

2010

2009

Land awaiting for development

769,266

768,033

717,000

717,000

Less Allowance for impairment

-

-

(105,888)

(105,888)

769,266

768,033

611,112

611,112

10,639

31,402

5,728

5,726

779,905

779,435

616,840

616,838

Land awaiting development - Net Others Total

2010

2009

As the Consolidated financial statement, as at 31 December 2010 and 2009, land awaiting development amount of Baht 487.85 million, the former it owned by a subsidiary (Natural Project Chao Phraya Company Limited), has been mortgaged with a bank as security against liabilities under debt restructuring. Furthermore, the Company has to transfer such land awaiting development to repay debt to the bank as the condition under the debt restructuring agreement (See Note 17). On 14 August 2009, the Company entered into a sale and purchase agreement to purchase the land awaiting development and construction from the subsidiary amount of Baht 717 million, which the Company must transfer the land awaiting development and construction to repay debt to the bank. The appraisal value of such land awaiting development amount to Baht 611.11 million. The Company paid land awaiting development and construction price amount of Baht 715.15 million to the subsidiary by off set with the whole amount of debt which the subsidiary has to repay to the Company (See Note 5) and already paid the remaining land awaiting development price amount of Baht 1.85 million to the subsidiary. Presently, the subsidiary already transferred the land awaiting development and construction ownership directly to the bank. However, due to certain condition in the debt restructuring agreement with the bank, the Company must buy back the land awaiting development within 2 years. Therefore, for the accounting concept, such transferring the land ownership was not true sale. The Company, thus, presented the land awaiting development under “other non-current assets” in the balance sheet as at 31 December 2009 and recorded “loss on impairment of land awaiting development” amount of Baht 105.89 million in the separate income statement for the year ended 31 December 2009. On 30 August 2010, the Company entered into a Memorandum of Understanding (MOU) with a private company to cooperate in developing a project on Bangkrajao land. The private company will study financial feasibility and obtain building permit. The building permit must be obtained within 1 March 2011. The private company will be responsible for funding the expenses of the project costs and will be reimbursable form the project cash flows in the case the building permit is obtained. But in the case that the building permit is not obtained within 1 March 2011, the project will be deemed as having failed and the private company will not be entitled to claim to cost back from the Company. If the building permit is obtained, the private company and the Company will enter into a joint venture agreement by no later than 1 March 2011. The term of this MOU is a period of 8 months from the date of execution. This MOU may be terminated by 1) There are

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


95 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

other contracts/agreements superseding by both parties and 2) Mutual consent of the parties. Either party may terminate this MOU upon 14 days written notice to the other. On 20 December 2010, the Company entered into a sale agreement to sell all land awaiting development amount of Baht 10.01 million to a juristic person. The selling price was equal to the appraisal value using comparative market price method. The Company already received the money from a juristic person. The Company, thus, recorded “gain on sales of asset” amount of Baht 4.60 million in the consolidated for the year ended 31 December 2010.

15. TRADE ACCOUNTS PAYABLE

(Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

- Non related parties

61,606

67,424

22,400

18,040

- Related parties (See Note 5)

15,479

15,439

207

62

77,085

82,869

22,607

18,102

Trade accounts payable

Total

16. SHORT – TERM LOAN FROM OTHERS

(Unit : Thousand Baht)

Consolidated

Separate

2010

2009

2010

2009

102,032

99,770

-

-

102,032

99,770

-

-

Short - term loans from overseas Company

Total

Short - term loans from overseas company A subsidiary (Kyoto Resorts YK Company Limited) has unsecured short - term loans from an overseas company which is a shareholder of such subsidiary, bearing interest at the rate of 0.25% and 6.00% per annum, due for repayment depend on the demand of the lender.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


96 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 17. LIABILITIES UNDER DEBT RESTRUCTURING

As at 31 December 2010, Liabilities under debt restructuring are as follows:

(Unit : Thousand Baht)

Consolidated

Separate

1 January 2010

Additional

Repayment

31 December 2010

1,098,129

23,706

(61,161)

1,060,674

Loans from financial institutions

On 3 April 2009 the Company has signed an agreement for restructuring debt with the bank which is in accordance with the resolution of the Board of Directors Meeting No. 6/2009 on 3 April 2009. Thereon, on 28 August 2009 the Company and the Bank entered into an additional memorandum to change the conditions as the debt restructuring agreement. The Bank has agreed to extend the repayment period for 2 years from the month that the Company has signed the restructuring agreement and the interest rate is at MLR p.a. The condition of the debt restructuring can be concluded as follows: 1. The Company must transfer land and construction totaling 292 title deeds (Bangkrajao project), which morgaged with the Bank and owned by Natural Project Chaopraya Company Limited (subsidiary), to

repay principal within 31 August 2009 (the former: within 30 days from the date that the Company has signed the restructuring agreement). The transfer price is equals to Baht 422.88 million. However, the Company must buy back the land at the transfer price plus carrying cost at the rate of MLR p.a. within 2 years. However, since such land and property ownership transfer constitutes determination that the Company has to buy back such land; as a result, it is not the true sale. Therefore, the Company does not record the land and property transfer for liability burden reduction.

2. The remaining principal of Baht 437.02 million, the Company will repay by monthly installment of Baht 1,000,000 per month for 24 months. In addition, the Company will sell ordinary shares of Sansiri Public Company Limited (“SIRI�) of 62,721,231 shares, Syntec Construction Public Company Limited of 190,000,000 shares and UOB Apartment Property Fund One (leasehold) of 23,000,000 units that pledged with the Bank to repay debt. 3. The interest of MLR p.a. that incurred from the principal in No. 2, is not due until the Company has fully repay the principle. 4. On the land transfer date, the Company has to pay accrued interest at MLR+2 p.a. amount not exceeding Baht 30 million (net from the land transfer expense). The excess amount will not be due and will be paid when the Company has sell shares in No. 2.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


97 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

5. The bank will hair-cut the default accrued interest, which is calculated at 74.59% of the excess portion of MLR+2 p.a. until when the Company repay debt as follows;

1) To transfer the land for repayment the principle amount of Baht 422.87 million

2) To repay additional principle not less than Baht 218.51 million

For the remaining amount of the default accrued interest, which is the excess portion of MLR+2 p.a., the Bank will hair-cut it when the Company complete to repay debt. (The former: on the land transfer date, the Bank will immediately hair-cut the default accrued interest, which is the excess portion of MLR+2 p.a., at the amount equivalent to the land transfer expense. For the remaining amount, the Bank will hair-cut when the Company has fully repay debt.) However, as for the selling of ordinary shares of SIRI, SYNTEC and UOBAPF as mentioned in No. 2, it is to be under the resolution of the Extraordinary General Meeting of Shareholders No. 1/2009 on 2 February 2009. On 31 August 2009 the Company transferred the land to repay debt amount of Baht 422.87 million (See Note 14) and currently, the company has paid the debt under the compromise agreement to the bank totaling 21 installments which is amount of Baht 61.16 million in accordance with the debt restructuring agreement. The Company has pledged the following ordinary shares of associates and related companies to secure long-term loans from financial institutions follows:

(Unit : Thousand Baht)

No. of ordinary shares

Par value per share

(Million Shares)

(Baht)

Associates UOB Apartment Property Fund One (leasehold)

23

9.75

190

1

62.72

4.28

Other related companies Syntec Construction Public Company Limited Sansiri Public Company Limited

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


98 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 18. DEBENTURES

On 21 December 2006, a subsidiary, (Natural Hotel Panwa Limited), issued secured floating rate debentures with total initial amounts of Baht 860.52 million (860,522 debentures with par value of 1,000 Baht per share) redemption due within 3 years commencing from the date of issued (December 2009). The due for payment interest start from 15 September 2007, 15 March 2008 and on every month thereafter.

No of issue shares (Thousand Baht)

Debenture A*

254,000

Interest rate (% per annum)

Proceed from debentures as at 31 December 2010 (Thousand Baht)

Proceed from debentures as at 31 December 2009 (Thousand Baht)

-

254,000

THBFIX Plus 3.3% per

Collateral

1) Mortgage a

annum (announce

subsidiary land and

on monthly basis by

construction under

debenture holders’

hotel development

representative)

Debenture B

606,522

THBFIX Plus 5.3% per

-

321,223

2) All ordinary shares

annum (announce

of subsidiary which

on monthly basis by

held by the Company.

debenture holders’ representative) 860,522

-

575,223

The conditions of issuance of the debentures include certain restrictions and covenants, such as the retain valuation of collateral and maintain total valuation of unredeemed debenture under 75% of the subsidiary’s asset. Moreover the subsidiary has a commitment to pay additional fee as follows:

The Portion of Debentures (Baht)

- Unpaid balances of debentures for construction - Unpaid balances of debentures for financing cost

* Debenture A has right to receive interest and repayment principal before debenture B.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT

Fee Rate (% per annum) 0.75% THBFIX Plus 5.3%


99 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

Movement of debentures for the years ended 31 December 2010 and 2009:

(Unit : Thousand Baht)

Consolidated

Opening balance as at 1 January Increase Closing balance as at 31 December

2010

2009

575,223

575,223

(575,223)

-

-

575,223

The operations of the subsidiary have been affected by the bankruptcy process of Lehman Brothers Group in the U.S.A. Lehman Brothers Group is a major debenture holder of the subsidiary’s debentures to support its hotel construction project. On 27 April 2009, the subsidiary company has prosecuted the group of Lehman to the Bangkok Southern Civil Court to claim for debenture fee plus damage fee from the default of contract in amount of Baht 327.37 millions with interest at the default rate 7.5% per annum commenced from the prosecuted date forwards and forbid that the Layman group to accuse to exercise the right or enforcement according to any right on behalf of it in accordance with the contract of shares subscription, contract of various security including right according to right determination of debentures. Moreover, the Company has filed the petition that the Court orders the temporary protection until the Court will constitute the verdict or until the Layman group will repay the shares fee in accordance with the contract as per the event that the subsidiary company withdraws and various damaged fee until completely and done by 1) The whole subsidiary company’s debentures are consigned. 2) The order is sent to the registrar of security deposit center to cease any change of registration related to the debentures of subsidiary company. 3) Other company’s directors existing constitute any acting power for the entity of subsidiary company in any operation that the representative of the Layman group has to give the consent or jointly sign the signature and 4) The order is sent to the Company Partnership Registrar of Department of Commercial Registration, Ministry of Commerce that the transaction of registration is rectified in accordance with the request of registration of subsidiary company which presently, it is under the consideration of the Court. Subsequently on 25 March 2010, the subsidiary had withdrawn the lawsuit against Lehman with the Bangkok Southern Civil Court with no intention to either sue or prosecute Lehman. The Bangkok Southern Civil Court then ordered the case to be withdrawn and discharge the case from the directories. As discuss in Note 12, the Buyer of all assets related to Novotel Beach Resort Panwa Phuket has assumed all liability to repay the principal, accrued interest and other amounts outstanding instead of the subsidiary.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


100 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 19. PROVISION FOR LIABILITIES

Movements on provision for liabilities for the years ended 31 December 2010 were as follows:

(Unit : Thousand Baht)

Consolidated 1 January 2010

Additional

Decrease

31 December 2010

Provision for liabilities from litigation Case 1

741,400

51,976

(386,230)

407,146

Case 2

212,693

12,000

-

224,693

Case 3

130,454

6,806

-

137,260

Case 4

55,749

2,393

-

58,142

Case 5 Provision for liabilities from default rental charge

-

73,398

-

73,398

8,550

900

(9,450)

-

1,148,846

147,473

(395,680)

900,639

(Unit : Thousand Baht)

Separate 1 January 2010

Additional

Decrease

31 December 2010

Provision for liabilities from litigation Case 1

741,400

51,976

(386,230)

407,146

Case 2

212,693

12,000

-

224,693

Case 3

130,454

6,806

-

137,260

Case 4

55,749

2,393

-

58,142

Case 5

-

73,398

-

73,398

1,140,296

146,573

(386,230)

900,639

a) Provision for liabilities from litigation 1) On 17 August 2006, a financial institution under the rehabilitation plan has filed the civil case against the Company to the Southern Bangkok Civil Court for the ground of loan guarantee. On 6 July 2007, the Southern Bangkok Civil Court ordered the Company to pay principal of Baht 247.5 million and interest of 21% p.a. from 1 September 1996 onwards. Nonetheless, total interest calculated to the filing date will not exceed Baht 522.2 million. But in the case that the plaintiff receives debt repayment though the enforcement of this case will be reduced accordingly. The Company has recorded provision for liability from the Court’s adjudication.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


101 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

Subsequently on 15 August 2007, the Company has appealed the judgment of the Southern Bangkok Civil Court on problem in utilizing unjust right in court, withheld information by the creditor and problem in enforcing the civil case which should not affect the assets that came from business rehabilitation for the overall economy as a public company, etc. On 5 November 2010, the Appeal Court ordered to adjust the judgment of the court of first instance to order the defendant to pay interest 15.5% p.a. form the date of filing the lawsuit (17 August 2006) backwards 5 years and deduct the interest paid to the plaintiff amount of Baht 651,821.92 and such interest rate will be used form the date of filing the lawsuit until fully paid to the plaintiff. The Company, thus, recorded “the gain on reversal of provision for liabilities” amount to Baht 386.23 million in the statement of income for the year ended 31 December 2010. On 6 January 2011, the Company has filed to the Supreme Court. The case is presently under the consideration of the Supreme Court. 2) On 2 March 2007, an asset management company which was paid for a whole amount of debt has filed the civil case (Sathorn Asset Management Co., Ltd. (plaintiff) and the Company (defendant 1), Expert Management Co., Ltd. (defendant 3) and Manor Management Service Co., Ltd. (defendant 4)) against the Company to the Southern Bangkok Civil Court for the ground of AVAL, loan by promissory note and guarantee amount in the amount of Baht 199.09 million between that was before the Company entered into the business reorganization. On 4 March 2009, the Southern Bangkok Civil Court ordered the defendant 1 to pay Baht 170,180,901.38 including interest of 12% p.a. on the principal amount of Baht 100,000,000 from 3 May 2000 onwards until fully paid. The defendant 3 and defendant 4 are jointly responsible with defendant 1 amount of Baht 79,801,369.88 including interest of 12% p.a. on the principal amount of Baht 50,000,000 from 3 May 2000 onwards until fully paid. The amount that defendant 1 paid to plaintiff on 21 September 2001 of Baht 22,912,102.95, 7 March 2003 of Baht 5,000, 10 June 2003 of Baht 11,936.66, 31 July 2003 of Baht 618,339.73, 25 September 2003 of Baht 741,070.90 and 25 February 2004 of Baht 49,253,929.10 will be deducted from the amount that defendant 1, 3 and 4 is obligated to pay by deducting it as payment of interest first then deducting it from the principal amount. The case is presently under the consideration of the Appeal Court. However, the Company has recorded the provision for liability from the Court’s adjudication. 3) An asset management company (Right user for a financial institution) which was paid for debt according to the rehabilitation plan, submitted the petition requesting the court to retrial for the civil case which file against the Company on 24 October 1997 to the Southern Bangkok Civil Court for the ground of plaint in the amount of Baht 49.71 million and interest charges at 23% per annum of amount of principle Baht 41.25 million calculated from the date of filing suit to payment date. On May 29, 2009, the Southern Bangkok Civil Court adjudicated that the Company (2nd defendant) jointly takes the guilty with the 1st defendant and 3rd defendant by making repayment of Baht 41.82 millions plus interest in the rate of 16.5% per annum of the principle of Baht 41.25 millions commenced from November 1, 1996 until it is completely repayable. It is noted that the amount that the plaintiff receives debt repayment from the 2nd defendant (amount of Baht 1.04 millions) in accordance with the entity rehabilitated plan of the 2nd defendant is deducted out of the principle balance that will have to repay. The Company, thus, recorded “the gain on reversal of provision for liabilities” amount to Baht 33.39 million in the statement of income for year ended on 31 December 2009. This results from the interest rate as the sentence less than the plaint. The case is presently under the consideration of the Appeal Court. 4) On 27 October 2005, the official receiver of a financial institution has notified to the Company to repay the interest of debenture in the amount of Baht 31.91 million which the Financial Sector Restructuring Authority had auctioned to other persons. The Company submitted the objection against the official receiver’s order to the Central Bankruptcy Court. On 22 December

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


102 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

2009, the Central Bankruptcy Court issued the order to amend the order of the official receiver that the Company has to repay the default interest at the rate of 7.5% per annum of the principle, the unpaid interest, in the amount of Baht 31.91 million commenced from 19 January 2000 until it is completely repayable to the official receiver of such financial institution. Apart from the amendment, the order will be retained as the official receiver’s order. On 10 March 2010, the Company submitted an appeal. Subsequently on 22 March 2010, the official receiver has appealed to the Central Bankruptcy Court by pleading the Supreme Court to change the Central Bankruptcy Court’s order. The Supreme Court has accepted the appeal on 25 March 2010. On 11 June 2010, the Company has resolve appealed to the Central Bankruptcy Court by pleading the Supreme Court to return the Central Bankruptcy Court’s order and order to dismiss the official receiver’ s order to discharges the company out of the debtor. However, the Company has recorded the provision for liability from the Central Bankruptcy Court’s order. 5) An official receiver of an investment & securities company, another former creditor in the business rehabilitation plan and was paid according to the business rehabilitation plan, filed a request for new trial of the civil case to the Civil Court. On 29 September 1998, the plaintiff requested the Company to repay debt amount of Baht 126.76 million together with interest of 5% p.a. from the principal of Baht 120.51 million from the date of filing the lawsuit until the date that the debt has been fully repaid. On 27 August 2010, the Civil Court ordered the defendant to pay Baht 123,756,306.12 less the repaid amount in the bankruptcy case of the Central Bankruptcy Court of Baht 27,614.69 and Baht 1,420,020.27 and Baht 91,860,200.21. The remaining amount is Baht 33,448,407.95. Also, including interest of 5% p.a. on the principal amount of Baht 120,513,278.08 from the suing date (29 September 1998) to 27 December 2002 and interest of 5% p.a. on the principal amount of Baht 120,485,663.39 from 28 December 2002 to 1 August 2003 and interest of 5% p.a. on the principal amount to Baht 119,065,643.12 from 2 August 2003 to 23 September 2003 and interest of 5% p.a. on the principal amount to Baht 27,205,442.91 from 24 September 2003 onwards until fully paid. And on 25 November 2010, the Company had appeal against the judgment of the Southern Bangkok Civil Court with the Appeal Court. The case is presently under the consideration of the Appeal Court. However, the Company has recorded the provision for liability from the Court’s adjudication.

b) Provision for liabilities from default rental charge The Subsidiary, Park Opera Company Limited, defaulted to repayment of rental charge under the lease agreement at the “Siam Paragon Trade Center” (Note 21) since the Company has encountered the crisis in confidence. As defaulted payment, the subsidiary recorded provision for liabilities at the rate of 18% per annum of defaulted rental charge and the lesser shall have the right to cancel such agreement. And as discuss in Note 13, the subsidiary has canceled the lease agreement then, the Company write off the these liabilities.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


103 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

20. OTHER CURRENT LIABILITIES

(Unit : Thousand Baht)

Consolidated

Interest payable Accrued expenses Account Payable revenue department Advance Others Total

Separate

2010

2009

2010

2009

5,446

58,740

42

-

23,398

58,710

10,873

11,817

8,527

-

-

-

465

2,750

-

-

12,746

41,024

1,195

5,190

50,582

161,224

12,110

17,007

On 3 April 2009, the Company transferred the interest payable amount of Baht 264.27 million to the account “Debt under restructuring” (Note 17).

21. LIABILITIES UNDER FINANCE LEASE – NET

(Unit : Thousand Baht)

Consolidated 2010

2009

Finance lease payable

-

170,837

Less : Current portion of finance lease payable

-

(37,053)

-

133,784

Finance lease payable – net

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


104 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

A subsidiary, Park Opera Company Limited, entered into the rental agreement at the “Siam Paragon Trade Center” with a company which is financial lease by using interest rate at 6% per annum for calculation. Annual rental fees will be paid under this contract as follows:

(Unit : Million Baht) Rental rate per annum

Years 1-3

9.00

Years 4-6

12.00

Years 7-9

13.20

Years 10-12

14.52

Years 13-15

15.97

Years 16-18

17.57

Years 19-21

19.33

Years 22-23

21.26

And as discuss in Note 13, the subsidiary has canceled the lease agreement then, the subsidiary write off the these liabilities.

22. LONG TERM LOANS - NET

(Unit : Thousand Baht)

Consolidated and Separate

Long-term loans from a local bank Less : Current portion due within one year Net

2010

2009

98,367

-

(25,200)

-

73,167

-

On 18 November 2010, the Company entered in to a loan agreement for operation with Islamic Bank of Thailand amount of Baht 100 million. The Company shall monthly repay the installment at Baht 2.10 million per month (the principal and profit) since December 2010, and shall pay standard profit rate for prime corporate customer (as contract’s date the rate at 6.75% per annum plus 1% per annum). The Company has pledged follow: 22.1 Mortgage the buildings on leasehold land amount of 100 million. 22.2 Authorized to sublease land to the bank. 22.3 The Company has agreed to refrain from any action that would cause the commitment relating to buildings on the mortgage. Under a loan agreement for operation, the company must comply with the strict conditions of the agreement such as does not decreasing in the company’s registered share capital or to merge with another entity or does not pay any dividend etc.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


105 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

23. SHARE CAPITAL AND LOSS PER SHARE Share capital 23.1 On 2 February 2009, the shareholder’s extraordinary meeting No. 1/2009 resolved to approve to issue new 48,344,736,000 ordinary shares at par value 1 Baht per share, in proportion to the shares held by each shareholders at the ratio of 4 existing shares to 1 new share (If there is any fraction of common shares as computed from the said allotment, it will be disregarded). The offering price is Baht 0.01 per share which is discounted from par value at Baht 0.99 per share. The Company completely registered the change of the paid-up capital from the existing amount of Baht 12,086,184,000 to Baht 46,784,977,213 with the Department of Business Development, Ministry of Commerce, on 24 February 2009. 23.2 On 30 April 2009, the Annual Ordinary General Meeting of Shareholders for the year 2009 approved the change of the allotment and offering of ordinary shares of 13,645,942,787 shares with par value of Baht 1 per share totaling Baht 13,645,942,787. The ordinary shares being allotted and offered are the remaining

ordinary shares from the previous capital increase offered to existing shareholders, where the resolution of the Extraordinary General Meeting of Shareholders No. 1/2009 determined that such remaining ordinary shares shall be allotted and offered to the existing shareholders of the Company in proportion to the shares held by each shareholders at the ratio of 4 existing shares to 1 new share (if there is any fraction of common shares as computed from the said allotment, it will be disregarded) at the offering price of Baht 0.01 per share with discount on share Baht 0.99 per share. The Company completely registered the change of the paid-up

capital from the existing amount of Baht 46,784,977,213 to Baht 60,430,920,000 with the Department of Business Development, Ministry of Commerce, on 13 December 2010.

23.3 Profit (loss) per share Profit (loss) per share (basic) Profit (loss) per share for the years ended 31 December 2010 and 2009 are calculated by dividing the net profit (loss) for the year attributable to common shareholders by the number of ordinary shares outstanding at the end of the year calculated as follows:

(Thousand Baht/Thousand shares)

Consolidated

Profit (loss) attributable to equity holders of the Company (basic) Number of ordinary shares outstanding at January 1, Effect of shares issued on Weighted average number of ordinary shares outstanding Basic profit (loss) per share (Baht : share)

Separate

2010

2009

2010

2009

239,588

(495,831)

262,749

(343,110)

46,784,977

12,086,184

46,784,977

12,086,184

710,337

29,945,534

710,337

29,945,534

47,495,314

42,031,718

47,495,314

42,031,718

0.0050

(0.0118)

0.0055

(0.0082)

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


106 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 24. OTHER INCOME

For the years ended 31 December

Consolidated

Separate

2010

2009

2010

2009

1,265

1,067

29,453

90,874

Dividend income

38,319

18,821

38,319

24,267

Gain on exchange rate

10,094

766

5,276

-

Gain on cancellation agreement

47,708

-

-

-

Gain on disposal of fixed assets

Interest income

250,523

-

-

-

Gain on reversal of allowance for investment in related companies

-

155,309

-

155,309

Gain on reversal of bad debt

-

-

Allowance for doubtful debt – amounts due from related parties

-

-

-

13,331

Impairment loss on investment in subsidiaries

-

-

170,574

-

Allowance for doubtful debt – loans to

-

-

25,297

-

386,230

33,393

386,230

33,393

10,165

2,340

108

9

744,304

372,895

655,257

482,112

Gain on reversal of provision for liabilities Others

3,730

25. FINANCIAL INFORMATION BY SEGMENT The Company and subsidiaries’ main business is property development for rental, which consists of service apartment and office building for rent, hotel and others related business. On 25 March 2010, the subsidiary has sale assets of hotel business which can analyze profit (loss) of the segment with the sale of assets that presents under the financial information by segment. The financial information by segment of rental and service business, hotel business and others business in the consolidated financial statements for the years ended 31 December 2010 and 2009 are as follows:

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


107 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 (Unit : Million Baht) For the years ended 31 December

Consolidated Rental and service business

Revenues Operating profit (loss)

Hotel business

Other business

Total

2010

2009

2010

2009

2010

2009

2010

2009

70

83

20

56

-

10

90

149

19

24

11

25

-

10

30

59

744

373

(5)

(8)

(144)

(212)

Other income Selling expenses Administrative expenses Management benefit expenses Provision for liabilities Loss on disposal investment Profit (loss) before finance costs and income tax Finance costs Share of loss from investments in associates Net profit (loss)

(27)

(31)

(148)

(488)

(7)

(7)

443

(314)

(60)

(124)

(140)

(61)

243

(499)

240

(499)

3

-

243

(499)

Attributable to : Equity holders of the parent Minority interests

(Unit : Million Baht)

Consolidated Rental and service business

Property, plant and equipment - net Construction in progress Leasehold rights – net Land awaiting development Other assets Total assets

Hotel business

2010

2009

140 -

Other business

Total

2010

2009

2010

2009

2010

2009

161

-

311

-

-

140

472

-

112

379

-

-

112

379

-

-

112

116

-

131

112

247

488

488

281

275

-

5

769

768

1,739

1,472

104

123

30

35

1,873

1,630

2,367

2,121

609

1,204

30

171

3,006

3,496

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


108 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 26. EXPENSES BY NATURE

Significant expenses by nature for the years ended 31 December 2010 and 2009 are as follows

(Unit : Thousand Baht) For the years ended 31 December

Consolidated

Separate

2010

2009

2010

2009

Salary and wages and other employee benefits

86,991

107,318

79,817

84,731

Cost of rental and services

26,730

33,205

26,730

33,205

Cost of hotel business Depreciation and amortization Provision for liabilities Impairment loss on investment in subsidiaries and as sociates Impairment loss on assets Impairment loss on land awaiting development Loss on disposal of investments Doubtful debts (reversal)

1,861

2,834

-

-

31,472

39,631

22,377

23,493

147,473

487,462

146,577

485,663

-

-

40,609

5,259

1,144

9,073

-

-

-

-

-

105,888

7,368

7,422

7,368

7,422

(82)

250

24,380

(32)

27. CAPITAL MANAGEMENT The primary objectives of the Company’s and its subsidiaries’ capital management are to maintain their abilities to continue as a going concern and to maintain an appropriate capital structure.

28. COMMITMENTS 28.1 As at 31 December 2010, the Company had outstanding commitments under lease agreements covering the land where certain buildings belonging to the Company are situated. Under the lease agreements, the lease period is 30 years commencing from 1 March 1988 and the Company is committed to pay future rental at the rate specified in the agreements totalling Baht 8.85 million. (As at 31 December 2009: Baht 9.91 million) 28.2 As at 31 December 2009, a subsidiary, Park Opera Company Limited, has outstanding commitments of Baht 18.52 million and USD 0.46 million under consultant and building design agreements. 28.3 As at 31 December 2009, a subsidiary, Natural Hotel Panwa Company Limited, has outstanding commitments

under building design and decoration agreement amounting to Baht 158.45 million and USD 0.04 million.

28.4 As at 31 December 2010, a subsidiary, the Joint Venture of Natural Park Public Company Limited, Amanresorts

Services Ltd. and Silverlink Holdings Ltd. (“the Joint Venture”), had outstanding commitments as follows:

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


109 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

a) On 10 May 2005, the Joint Venture has entered into the agreement related to the Ratchaphatsadu land at Rong Pasee Roi Chak Sam Development Project with the Treasury Department, Ministry of Finance. The Joint Venture will invest to develop the Ratchaphatsadu land to construct the hotel and constructions and transfer the ownership right to the Treasury Department, whereby the Joint Venture will be entitled to the right to manage the constructed hotel for 30 years commencing from the date of the execution of the agreements. The Joint Venture paid the management fee to the Treasury Department in the amount of Baht 125 million on the date of entering into the agreements. In addition, the annual rental fees will be paid as follows:

Years

Years 1 – 11 Years 12 – 16

Rental rate per annum Million Baht 3.30 30.00

Years 17 – 20

40.00

Years 21 – 30

100.00

The Joint Venture has complied with the agreement related to the Ratchaphatsadu land at Rong Pasee Roi Chak Sam Development Project with the Treasury Department, Ministry of Finance. However there is problem regarding delivery of construction site by the Treasury Department. The Treasury Department has been informed from the Joint Venture about the problem regarding delivery of construction site. The Joint Venture has submitted letters asking for approval from Treasury Department for postponed “project management period” and “rental period” on the agreement on 10 May 2005 related to the Ratchaphatsadu land at Rong Pasee Roi Chak Sam Development Project from 20 November 2005 until the date which Treasury Department can deliver the construction site to the Joint Venture for further construction. On the other hand, on 4 January 2010 the Company issued a request letter to the deputy minister of finance to reconsider. And on 3 May 2010 the Company issued 2nd request letter to deputy minister of finance to reconsider. b) Commitment of Baht 9.46 million, EURO 0.68 Million under agreement for Civil and Structural, Mechanical and Electrical and Architectural Services. (As at 31 December 2009: Baht 8.26 million, EURO 0.68 Million) 28.5 As at 31 December 2010, an associate had significant outstanding commitments as follows: a) On 5 November 2003, the associate entered into an agreement with other company to sublease land for the development and construction of the hotel and serviced apartment. On entering into the sublease agreement, the associate made a payment of Baht 500 million for leasehold right and agreed to pay a monthly rental to the sub-lessor. The sublease agreement is for a period of 28 years and 2 months up to 18 January 2032 and is renewable after the termination date for a period of 3 years, up to 1 January 2035. Upon termination, the ownership of the building of the hotel and serviced apartment shall be as stipulated in the agreement.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


110 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

b) The associate entered into several service agreements with respect to the operation of the hotel and service apartment. As at 31 December 2010, the associate is committed to pay the following service fees required under the agreements :

Amount (Million Baht)

Payable within : 2011

15.40

2012 - 2015

13.10

c) As at 31 December 2009, Commitment of Baht 654.63 million and USD 0.35 million under Technical Assistance, Design and Structural Agreements. d) As at 31 December 2009, Commitment of Baht 46.98 million under agreement for Civil and Structural, Mechanical and Electrical and Architectural services with a public company limited.

29. LITIGATION ISSUES a) The Company has the significant litigation issues in accordance to the business reorganization in the past as follow:

29.1 A shareholder (the plaintiff), which was firstly the Company’s debenture holder and been paid for debt, has filed the petition below: 29.1.1 On 9 December 2004, the plaintiff has filed the petition against the Company, other companies and involved person for violations of the Securities and Exchange Act B.E. 2535 and the Bankruptcy Act B.E. 2483. Currently, the Court temporality discharges the case out of table of contents since the Company can agree with the plaintiff and gathered appointment is given in order to listen to the compensation result on 30 October 2009. On 30 October 2009, the plaintiff declared that the Company already repaid the full amount of debt to the plaintiff. Subsequently on 15 February 2010, the plaintiff filed the petition to withdraw the case and to request the Court discharges the case out of the table of contents. And discharges the case out of the table of contents. 29.1.2 On 12 October 2005, the Central Bankruptcy Court dismissed the bankruptcy case as a result of the Company was not insolvent and not bankrupt which the plaintiff had filed the bankruptcy case for the ground of debentures in the amount of Baht 200 million on 28 March 2000, the plaintiff had appealed the judgment of Central Bankruptcy Court to the Supreme Court. On 28 October 2009, the Company filed a declaration to the Supreme Court that the Company already repaid the full amount of debt to the plaintiff. Subsequently, on 15 February 2010, the plaintiff filed the petition to withdraw the appeal to the Supreme Court and the Company does not object the appeal withdrawal. The case is presently pending orders of the Supreme Court.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


111 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

29.2 On August 26, 2004, a financial institute which received debt repayment according to rehabilitated plan has filed petition to request the new hearing in the civil case that prosecuted the Company (defendant no. 2) on December 26, 1997 to the South Bangkok Civil Court in the loan cause of lawsuit in amount of Baht 87.80 million. Presently, the plaintiff requests to wait for Supreme Court adjudication in part of defendant no. 1 (borrower) and defendant no. 3 (guarantor). When the Supreme Court adjudicates, the plaintiff will declare in order to bring the case in part belonged to the Company to newly consider again. The lawyer of the Company still may not express opinion in the case since (1) Defendant no. 1 and defendant no. 3 have filed explanation of the original treatise to object adjudication of the Appeal Court to the Supreme Court. Moreover, presently, the case is under the consideration of the Supreme Court. (2) The defendant no. 1, the Central Bankruptcy Court has ordered the definite wealth protection. The plaintiff has filed the petition to

receive debt repayment. Moreover, it is not obvious that how much the plaintiff received debt repayment from the benefit of wealth in the bankruptcy case of the defendant no. 1. However, the amount that the plaintiff received debt affects the responsibility of other defendants in the case which including the Company. (3) The defendant no. 4 has filed the petition to withdraw the explanation of the original treatise by providing the cause that it has repaid debt to be satisfied by the plaintiff. It is not obvious that how much the defendant no. 4 has repaid debt to the plaintiff. However, the amount that the plaintiff received affects the responsibility of other defendants in the case including the Company. As a result, the Company may not know the obvious damage for the time beings.

29.3 On 29 November 2005, the official receiver of a financial institution has notified the Company to repay the interest of debenture in the amount of Baht 2.31 million as the ground of debenture. The Company submitted the objection against the official receiver’s order to the Central Bankruptcy Court. On 25 December 2007, the Central Bankruptcy Court ordered the dismissal the Company from the debtor’s list of such financial institution.

On 22 February 2008, the official receiver appealed to the order of the Central Bankruptcy Court and on 2 April 2008, the Company filed a plea. The case is presently under the consideration of the Supreme Court.

29.4 On 30 September 2009, a financial institution (Plaintiff), who received debt repayment according to

rehabilitated plan, has filed a lawsuit against the Company (defendant 1) and others three defendants as the guarantors of Natural Place Tower Company Limited (Debtor) with the Southern Bangkok Civil Court claiming for outstanding at Baht 135.31 million together with interest of 15% p.a. on the principle of Baht 47.09 million from the date of filing of the complaint until the date that the debt has been fully repaid. And on 15 November 2010, the Southern Bangkok Civil Court ordered the plaintiff to withdraw a lawsuit against the Company. This is due to other defendants has fulfilled the restructuring agreement, thus, the plaintiff do not wish to file any lawsuit against the Company as a guarantor.

b) On 21 May 2008, a subsidiary, Natural Project Chao Phraya Company Limited, was sued by a company, regarding on non-perform with the agreement and default in repayment on the outstanding balance of Baht 46.49 million with interest of 7.5% p.a. of principle Baht 40.2 million calculated from the date of filing suit to payment date with Prakanong Provincial Court. The Company was also sued as a co-defendant. On 30 December 2010, the Prakanong Provincial Court has dismissed the case.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


112 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009 30. FINANCIAL INSTRUMENTS

The Company and its subsidiary companies do not hold or issue derivative instruments for speculative or trading purposes. 30.1 Interest rate risk The interest rate risk is the risk that future movements in market interest rates will affect the results of the Company and its subsidiaries’ operations and their cash flows. The Company and its subsidiaries exposure to interest rate risk relate primarily to their deposits with/loan from financial institutions, promissory notes and debentures. The Company and its subsidiaries do not use derivative financial instruments to hedge such risk.

(Unit : Thousand Baht)

Book value as at 31 December 2010 Consolidated

Separate Interest rate

2010

2009

2010

2009

2010

2009

Deposits at financial institutions

20

235,470

235,490

207,101

20

207,121

0.125%, 0.25%, 0.5%, 0.75%

Short-term loans to subsidiaries

-

-

-

-

576,111

576,111

0.25%, 0.58%, 6.25%, 7%, 7.75%

Short-term loans to associates companies

-

53,213

53,213

-

53,213

53,213

4%

Promissory notes – Short - term loans from related companies

-

-

-

-

31,620

31,620

5.50%, 6.25%, MLR-2

Promissory notes – Short-term loans

-

102,032

102,032

-

102,032

102,032

0.25%, 6%

Bank overdraft – Short -term loans

-

-

-

-

402,172

402,172

MLR, SPL+1

Long-term loans

-

-

-

-

73,167

73,167

SPL+1

30.2 Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable from the hotel, space rental, and property development businesses. The Maximum exposure to credit risk is limited to the carrying amounts of receivables as stated in the balance sheet. However, due to the large number and diversity of the entities comprising the Company and its subsidiaries’ customer base, the Company and its subsidiaries do not anticipate material losses from debt collection. 30.3 Foreign currency risk The Company and subsidiary companies’ exposure to foreign currency risk relates principally to their receivables, payables, loans which are denominated in foreign currencies. In addition to these transactional exposures, the Company

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATEMENT


113 NOTES TO FINANCIAL STATEMENTS Natural Park Public Company Limited and Its Subsidiaries

As at 31 December 2010 and 2009

is also exposed to the effect of foreign exchange movements on its investments in foreign subsidiary companies, which currently are not hedged by any derivative financial instrument. The following is a summary of significant unhedged foreign currency-denominated assets and liabilities as at 31 December 2010: (Unit : Thousand)

Consolidated

Separate

2010

2009

2010

2009

US dollars

-

444

-

25

Euro

-

45

-

2

Yen

-

-

667,368

-

HK dollars

-

60

-

60

SG dollars

-

97

-

-

Foreign currency

30.4 Fair value Since the majority of the financial assets are short-term and that the loans carry interest at rates close to current market rates, the management believes that the fair value of financial assets and liabilities does not materially differ from their carrying value.

31. GOING CONCERN OF THE COMPANY The Company has more suffered recurring loss and the Company’s ability to perform on the debt restructuring agreement (Note 17,19), as shown in the balance sheet, the Company’s current liabilities exceeded its current assets as at 31 December 2010 and 2009 by Baht 1,244.96 million Baht 1,594.94 million, respectively the company and subsidiary have contingent liabilities form litigating (Note 29) and provision for liabilities from litigation (Note 19). These matters indicate the existence of a significant uncertainty about the Company’s and subsidiaries’ ability to continue its operation as a going concern. The accompanying consolidated financial statements and the Company financial statements have been prepared as suming that the Company and subsidiaries will continue their operations as a going concern.

32. SUBSEQUENT EVENTS – EMPLOYEE VOLUNTEER TERMINATION PROJECT In February 2011, the Company has a employees voluntarily termination project which compensation expense for this project the Company is still evaluating.

33. APPROVAL OF THE FINANCIAL STATEMENTS The financial statements were approved for issue by the Management of the company.

NATURAL PARK PUBLIC COMPANY LIMITED

NOTES TO FINANCIAL STATMENTS


114

NATURAL PARK PUBLIC COMPANY LIMITED

DETAIL’S OF ALL DIRECTORS AND MANAGEMENT OF THE COMPANY

ATTACHMENT DETAILS OF ALL DIRECTORS

AND MANAGEMENT OF THE COMPANY

Name-Surname Current Position (The Company) 1. Mr. Chaiwat Atsawintarangkun

Age (Years)

60

- Chairman of the Audit Committee - Independent Director

Educational Qualification

Percentage of Securities holding As of 31/12/10

Relationship with the management

-

-

- Master of Education (Curriculum and Teaching Methodology), Beijing Languages and Cultural University - Master of Business Administration, Thammasat University

- Independent Director

Chairman of the Audit Committee Chairman of the Audit Committee

Companies’ name Merchant Partners Securities Limited Natural Park Public Company Limited

2005-Present

Audit Committee

Eastern Printing Public Company Limited

2005-Present

Director

Boathouse Hua Hin Company Limited

2004-Present

Chairman of the Audit Committee

Krungthai Car Rent and Lease Public Company Limited

2004-Present

Director

Andaman Long Beach Resort Company Limited

- Participated in the Directors Accreditation Program (DAP), Director Certification Program (DCP), Audit Committee Program (ACP) from Institute of Directors

77

2007-Present 2005-Present

Position

- Bechelor of Arts in Chinese Languages (Trade & Economics), Beijing Languages and Cultural University - Bechelor of Science in Business Administration, Ramkhamhaeng University

- Audit Committee

Duration

- Thai Barrister-at-Law

- L.L.B. Literature of Law, Ramkhamhaeng University

2. Mr. Thavisakdi Tanta-Nanta

Professional Experience for last 5 years

- LL.B., Thammasart University - Participated in the Directors Accreditation Program (DAP) from Institute of Directors

-

-

2003-Present

Director

Krabi Southern Beach Company Limited

2003-Present

Director

Chiangmai Hot Spring Company Limited

2003-Present

Director

Syntec Construction Public Company Limited

2002-Present

Director

Great China Millennium (Thailand) Company Limited

2000-Present

Director

Bright Lilly (Thailand) Company Limited

1997-Present

Director

Prospect Consulting Company Limited

1996-Present

Director

Francium Development Company Limited

2003 - Present

Director

Natural Park Public Company Limited

2005 - Present

Director

PAE (Thailand) Public Company Limited

1995-1997

Senior Vice President, Planning and Managing

Thai Airways Public Company Limited

1993-1995

General Manager

Thai Airways Public Company Limited, Office of People' s Republic of China

1990-1993

Sales and Marketing Manager

Thai Airways Public Company Limited, Head office

1981-1990

General Manager

Thai Airways Public Company Limited, Office of The Kingdom of Saudi Arabia, Gulf and Oman

1978-1981

General Manager

Thai Airways Public Company Limited, Office of Republic of

1974-1978

Sales Manager

Thai Airways Public Company Limited, Kingdom of Nepal

China (Taiwan)


Name-Surname Current Position (The Company) 3. Mr. Chattavut Peechapol

Age (Years)

39

- Audit Committee - Independent Director

Educational Qualification

- MBA, Information Technology for Business Transformation Massachusetts Institute of Technology, Sloan School of Management, USA

Percentage of Securities holding As of 31/12/10

Relationship with the management

-

-

Professional Experience for last 5 years Duration 2010-Present 2001-Present 2000-2004

- Bachelor of Engineering (Computer Engineering), Chulalongkorn University

Position

Companies’ name

Audit Committee Managing Partner

Natural Park Public Company Limited Boston Network Company Limited

Vice President

Thailand.com

- Participated in the Directors Accreditation Program (DAP) from Institute of Directors 4. Mr. Sakthip Krairiksh

64

- Audit Committee - Independent Director

- BA, Political Science, Boston University, USA - Participated in the Directors Accreditation Program (DAP) from Institute of Directors

-

-

2010-Present 2007-2010 2003-2006

Independent Director

Natural Park Public Company Limited

Audit Committee

Natural Park Public Company Limited

Independent Director

Natural Park Public Company Limited

Audit Committee

SMC Motors Public Company Limited

2004-Present

Independent Director

Thai Beverage Public Company Limited

2006-Present

Chairman of the University Council;

2005-Present

Rajmongkol University 2004-2007

Permanent Secretary of the Ministry of Tourism and Sports

2004-2006

Chairman

2001-2004

Ambassador to the United States of America

The International Engineering Public Company Limited

1999-2001

Ambassador to Japan

ATTACHMENT DETAILS OF ALL DIRECTORS

AND MANAGEMENT OF THE COMPANY NATURAL PARK PUBLIC COMPANY LIMITED

DETAIL’S OF ALL DIRECTORS AND MANAGEMENT OF THE COMPANY

115


116

NATURAL PARK PUBLIC COMPANY LIMITED

DETAIL’S OF ALL DIRECTORS AND MANAGEMENT OF THE COMPANY

ATTACHMENT DETAILS OF ALL DIRECTORS

AND MANAGEMENT OF THE COMPANY

Name-Surname Current Position (The Company) 5. Mr. Sermsin Samalapa - Chief Executive Officer (Authorized Director) - President of the Executive Committee

Age (Years)

43

Educational Qualification

- Effective Strategies for Media Companies, Executive Education Harvard Business School, Harvard University Cambridge, MA, USA - Master of Science in Real Estate Development, Sloan School of Management and Center for Real Estate Massachusetts Institute of Technology (MIT), USA - Bachelor of Architecture, Chulalongkorn University Participated in the Directors Accreditation Program (DAP) from Institute of Directors

Percentage of Securities holding As of 31/12/10

Relationship with the management

5.11%

-

Professional Experience for last 5 years Duration

Position

Companies’ name

2010 - Present

Director

Nation Multimedia Group Public Company Limited

2010 - Present

Chairman

South-East Asia University

2003 - Present

President and Chief Executive Officer

Natural Park Public Company Limited and its subsidaries

Present

Director

Kempin Siam Company Limited

Present

Director

Natural Hotel Sukhumvit Company Limited

Present

Director

Natural Hotel Panwa Company Limited

Present

Director

Natural Hotel Chaopraya Company Limited

Present

Director

Natural Park Ville Company Limited

Present

Director

Natural Real Estate Company Limited

Present

Director

Park Opera Company Limited

Present

Director

Natural Project Chaopraya Company Limited

Present

Director

Richee Property Management Company Limited

Present

Director

Park Cuisine Company Limited

Present

Director

Park Gourmet Company Limited

2006 - Present

Director

Amphawa Restaurant Company Limited

2004 - Present

Director

Media Expertise International (Thailand) Company Limited

Chairman

Pacific Assets Public Company Limited

1999-2002

Managing Director

Thai Portal Company Limited

1997-2002

Lecturer of Real Estate Finance, Faculty Chulalongkorn University

2003-2005

of Commerce and Accountancy


Name-Surname Current Position (The Company) 6. Mr. Paisarn Tangyuengyong

Age (Years)

47

- Director (Authorized Director)

- Master and Bechelor of Science, Mechanical Engineering, University of Wisconsin, Madison, USA

Percentage of Securities holding As of 31/12/10

Relationship with the management

-

-

- Participated in the Directors Accreditation Program (DAP) from Institute of Directors

- Executive Committee

7. Mr. Weerawat Wattanatchariya

Educational Qualification

42

- Director (Authorized Director) - Executive Committee

- J.L. Kellogg Graduate School of Management, Northwestern University, USA - Bachelor of Science, Electrical Engineering, Chulalongkorn University - Participated in the Directors Accreditation Program (DAP) from Institute of Directors

-

-

Professional Experience for last 5 years Duration 2003-Present

Position

Companies’ name

Executive Officer (Construction)

Natural Park Public Company Limited

Present

Director

Natural Hotel Sukhumvit Company Limited

Present

Director

Natural Hotel Panwa Company Limited

Present

Director

Natural Hotel Chaopraya Company Limited

Present

Director

Natural Park Ville Company Limited

Present

Director

Natural Real Estate Company Limited

Present

Director

Park Opera Company Limited

Present

Director

Natural Project Chaopraya Company Limited

Present

Director

Richee Property Management Company Limited

Present

Director

Park Cuisine Company Limited

Present

Director

Park Gourmet Company Limited

2003-2010

Director

Kempin Siam Company Limited

2003-2010

Director

Syntec Construction Public Company Limited

2003-2005

Director

Pacific Assets Public Company Limited

2007-Present

Executive Officer

Natural Park Public Company Limited

Present

Director

Natural Hotel Sukhumvit Company Limited

Present

Director

Natural Hotel Panwa Company Limited

Present

Director

Natural Hotel Chaopraya Company Limited

Present

Director

Natural Park Ville Company Limited

Present

Director

Natural Real Estate Company Limited

Present

Director

Park Opera Company Limited

Present

Director

Natural Project Chaopraya Company Limited

Present

Director

Richee Property Management Company Limited

Present

Director

Park Gourmet Company Limited

2006-Present

Director

Amphawa Restaurants Company Limited

2000-2007

Director

Business Commercial Networks Company Limited

ATTACHMENT DETAILS OF ALL DIRECTORS

AND MANAGEMENT OF THE COMPANY NATURAL PARK PUBLIC COMPANY LIMITED

DETAIL’S OF ALL DIRECTORS AND MANAGEMENT OF THE COMPANY

117


118

NATURAL PARK PUBLIC COMPANY LIMITED

DETAIL’S OF ALL DIRECTORS AND MANAGEMENT OF THE COMPANY

ATTACHMENT DETAILS OF ALL DIRECTORS

AND MANAGEMENT OF THE COMPANY

Name-Surname Current Position (The Company) 8. Ms.Urai Loal

Age (Years)

Educational Qualification

52

- Master of Business Administration, Thammasat University

Percentage of Securities holding As of 31/12/10

Relationship with the management

-

-

- Certificate in Auditing

- Management

Professional Experience for last 5 years Duration

Position

Companies’ name

2001-2011

Executive Vice President

Natural Park Public Company Limited

1988-2001

Deputy Managing Director

Natural Park Public Company Limited

- Bachelor of Accounting, Thammasat University 9. Ms. Nuttapun

Giramethakul

47

10. Mr. Pisit Rojanavanich - Management

- Bachelor of Accounting, Thammasat University

-

-

- Bechelorr of Accounting, Chulalongkorn University

- Management

55

- Master of Science, Architecture Studies, Building System Massachusetts Institute of Technology (MIT), USA - Bachelor of Architecture, Chulalongkorn University

2001-Present 1991-2001

-

-

Senior Vice President

Natural Park Public Company Limited

Head of Accounting Department

Natural Park Public Company Limited

2004-2011

Senior Vice President

Natural Park Public Company Limited

1996-2003

Senior Project Manager

Natural Park Public Company Limited

NOTE : 1) On 23 March 2011, Mr. Sermsin Samalapa has resigned as Director and President of the company. Also, Mr. Paisarn Tangyuenyong has resigned

as Director and appointed Mr. Nakorn Laksanakarn to be Director and President of the company. 2) Ms. Urai Loal and Mr. Pisit Rojanavanich had resigned as Early Retirement on 28 February 2011.


Subsidiaries Company Name of Companies

Name of Directors

1. Mr. Chaiwat

Company

Natural Park Pcl.

1

2

3

4

5

6

7

8

9

10

Natural Hotel Sukhumvit Co., Ltd.

Natural Hotel Sukhumvit Co., Ltd.

Natural Hotel Chaopraya Co., Ltd.

Natural Park Ville Co., Ltd.

Natural Real Estate Co., Ltd.

Park Opera Co., Ltd.

Natural Project Chaopraya Co., Ltd.

Richee Property Management Co., Ltd.

Park Gourmet Co., Ltd.

Kyoto Resorts YK

Atsawintarangkun

xx

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2. Mr. Chattavut

Peechapol

///

3. Mr. Thavisakdi

Tanta-Nanta

///

-

-

-

-

-

-

-

-

-

4. Mr. Sakthip

Krairiksh

////

-

-

-

-

-

-

-

-

-

-

5. Mr. Sermsin

Samalapa

//

/

/

/

/

/

/

/

/

/

-

6. Mr. Paisarn

Tangyuenyong

//

/

/

/

/

/

/

/

/

/

-

7. Mr. Weerawat

Wattanatchariya

//

/

-

/

/

/

/

/

/

/

-

8. Ms. Urai

Loal

-

-

-

-

-

-

-

-

-

-

-

9. Ms. Nuttapun

Giramethakul

-

-

-

-

-

-

-

-

-

-

-

Rojanavanich

-

-

-

-

-

-

-

-

-

-

-

10. Mr. Pisit

NOTE : xx = Chairman of Audit Committee

/ = Director

// = Executive Director

/// = Independent Director and Audit Committee

//// = Independent Director

1) Natural Venture Co., Ltd. is in the dissolution and liquidation process.

2) On 23 March 2011, Mr. Sermsin Samalapa has resigned as Director and President of the company. Also, Mr. Paisarn Tangyuenyong has resigned

as Director and appointed Mr. Nakorn Laksanakarn to be Director and President of the company. 3) Ms. Urai Loal and Mr. Pisit Rojanavanich had resigned as Early Retirement on 28 February 2011.

ATTACHMENT DETAILS OF THE DIRECTORS AND MANAGEMENT IN SUBSIDIARY

ASSOCIATED AND RELATED COMPANIES

NATURAL PARK PUBLIC COMPANY LIMITED DETAILS OF THE DIRECTORS AND MANAGEMENT IN SUBSIDIARY ASSOCIATED AND RELATED COMPANIES

119


120

NATURAL PARK PUBLIC COMPANY LIMITED DETAILS OF THE DIRECTORS AND MANAGEMENT IN SUBSIDIARY ASSOCIATED AND RELATED COMPANIES

ATTACHMENT DETAILS OF THE DIRECTORS AND MANAGEMENT IN SUBSIDIARY

ASSOCIATED AND RELATED COMPANIES

Associated Companies Name of Companies

Name of Directors

1. Mr. Chaiwat

1

2

3

UOB Apartment Property Fund 1 (Leasehold)

Kempin Siam Co., Ltd.

Park Cuisine Co., Ltd.

Atsawintarangkun

-

-

-

2. Mr. Chattavut

Peechapol

-

-

-

3. Mr. Thavisakdi

Tanta-Nanta

-

-

-

4. Mr. Sakthip

Krairiksh

-

/

-

5. Mr. Sermsin

Samalapa

-

/

/

6. Mr. Paisarn

Tangyuenyong

-

-

/

7. Mr. Weerawat

Wattanatchariya

-

-

-

8. Ms. Urai

Loal

-

-

-

9. Ms. Nuttapun

Giramethakul

-

-

-

Rojanavanich

-

-

-

10. Mr. Pisit

NOTE : xx = Chairman of Audit Committee

/ = Director

// = Executive Director

/// = Independent Director and Audit Committee

1) On 23 March 2011, Mr. Sermsin Samalapa has resigned as Director and President of the company. Also, Mr. Paisarn Tangyuenyong has resigned as Director and appointed Mr. Nakorn Laksanakarn to be Director and President of the company. 2) Ms. Urai Loal and Mr. Pisit Rojanavanich had resigned as Early Retirement on 28 February 2011.

//// = Independent Director


STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY

ATTECHMENT

ASSOCIATED AND RELATED COMPANIES

DETAILS OF THE DIRECTORS AND MANAGEMENT IN SUBSIDIARY

ATTACHMENT

122


N park 10