CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED...

Central Plaza Hotel Public Company Limited and its Subsidiaries

Notes to the interim financial statements

For the three-month period ended 31 March 2010 (Unaudited)

11

These notes form an integral part of the financial statements. The interim financial statements were authorised for issue by the audit committee on 6 May 2010.

1 General information

Central Plaza Hotel Public Company Limited, the “Company”, is incorporated in Thailand and has its registered office at 1695 Phaholyothin Road, Chatuchak, Bangkok, Thailand.

The Company was listed on the Stock Exchange of Thailand on 10 January 1990.

The principal businesses of the Company are hotel business. Details of the Company’s subsidiaries

and jointly-controlled entities as at 31 March 2010 and 31 December 2009 were as follows:

Type of Country of

business incorporation Ownership interest (%)

31 March 31 December

2010 2009

Direct subsidiaries

Investment in subsidiaries

Central Samui Beach Resort Co., Ltd. Hotel Thailand 100.0 100.0

Central Karon Village Co., Ltd. Hotel Thailand 100.0 100.0

Central Krabi Bay Resort Co., Ltd. Hotel Thailand 100.0 100.0

Central Hua Hin Beach Resort Co., Ltd. Hotel Thailand 63.9 63.9

Central World Hotel Co., Ltd. Hotel Thailand 100.0 100.0

Central Koh Kood Hotel Co., Ltd. Hotel Thailand 100.0 100.0

Central Hotel Management Co., Ltd. Holding Thailand 100.0 100.0

company

Central Restaurants Group Co., Ltd. Food and Thailand 100.0 100.0

beverage

Triplenine Decor Co., Ltd. Dormant Thailand 100.0 100.0

company

Central Samui Hotel Management Co., Ltd. Hotel Thailand 100.0 100.0

Centara International Management Co., Ltd. Holding Thailand 100.0 100.0

company

and hotel

management

S.P. Realty Lanta Beach Co., Ltd. Not operate yet Thailand 100.0 100.0

S.P. Realty Hadfarang Resort Co., Ltd. Not operate yet Thailand 100.0 100.0

S.P. Realty Pattaya Beach Co., Ltd. Not operate yet Thailand 100.0 100.0

Cenvaree Healthy Spa Co., Ltd. Not operate yet Thailand 100.0 -

Central Bangkok Convention & Exhibition

Co., Ltd. Not operate yet Thailand 100.0 -

Investment in property fund

Thai Pattana Fund 2 Property fund Thailand 23.83 23.83

Indirect subsidiaries

Investment in subsidiaries

Central Sukhontha Hotel Co., Ltd. Hotel Thailand 100.0 100.0

Central Samui Village Co., Ltd. Hotel Thailand 100.0 100.0

Central Mae Sot Hill Hotel Co., Ltd. Hotel Thailand 98.4 98.4

B - R (Thailand) Co., Ltd. Food and Thailand 100.0 100.0

beverage

Central Laundry Services Co., Ltd. Dormant Thailand 100.0 100.0

company




12

Type of Country of

business incorporation Ownership interest (%)

31 March 31 December

2010 2009

Investment in property fund

Thai Pattana Fund 2 Property fund Thailand 0.09 0.09

Jointly-controlled entities

Karon Phuket Hotel Co., Ltd. Hotel Thailand 50.0 * 50.0 *

Kata Phuket Hotel Co., Ltd. Hotel Thailand 50.0 50.0

* By direct and indirect shareholding

2 Basis of preparation of the financial statements

The interim financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation of the financial statements has been prepared for the convenience of readers not conversant with the Thai language.

The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standards No. 34 Interim Financial Reporting including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”), applicable rules and regulations of the Securities and Exchange Commission and with generally accepted accounting principles in Thailand.

The interim financial statements are prepared to provide an update on the financial statements for the year ended 31 December 2009. They focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements for the year ended 31 December 2009. The interim financial statements are presented in Thai Baht, rounded to the nearest thousand unless otherwise stated.

Accounting policies and methods of computation applied in the interim financial statements for the three-month period ended 31 March 2010 are consistent with those applied in the financial statements for the year ended 31 December 2009.

3 Seasonal operations

The Group’s businesses are not affected significantly by seasonal or cyclical factors during the financial year.




13

4 Related party transactions and balances

Related parties are those parties linked to the Group and the Company as shareholders or by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices.

Relationships with related parties that control or jointly control the Company or are being controlled or jointly controlled by the Company or have transactions with the Group were as follows:

Name of entities

Country of

incorporation /

nationality

Nature of relationships

Karon Phuket Hotel Co., Ltd. Thailand Jointly controlled entity, 50% direct and

indirect shareholding

Kata Phuket Hotel Co., Ltd. Thailand Jointly controlled entity, 50% shareholding Centara Hotels & Resorts Thailand Associate, 25% shareholding Leasehold Property Fund Thai Pattana Fund 2 Thailand Subsidiary, 23.92% direct and indirect

shareholding

Thai Business Fund 4 Thailand Related party Regent Maldives Pvt. Ltd. Maldives Associate, 25% shareholding Central Department Store Thailand Related party, common shareholders and Co., Ltd. directors

Harng Central Department Thailand Related party, common shareholders and Store Co., Ltd. directors Central International Thailand Related party, common shareholders and Development Co., Ltd. directors Central Pattana Public Thailand Related party, common shareholders and

Company Limited directors Power Buy Co., Ltd. Thailand Related party, common shareholders and

directors Central World Co., Ltd. Thailand Related party, common directors AAPC (Thailand) Co., Ltd. Thailand Related party, shareholder of a subsidiary




14

The pricing policies for particular types of transactions are explained further below:

Transactions Pricing policies

Interest income and interest expense Bank interest rate Management fee income Contractually agreed prices Dividend income Dividend announcement Management fee expense Contractually agreed prices Rental income and rental expense Market price and contractually agreed prices Loss from guarantee provision Contractually agreed prices Electricity expense Market price

Significant transactions for the three-month periods ended 31 March 2010 and 2009 with related parties were as follows:

Consolidated Separate

financial statements financial statements

2010 2009 2010 2009 (in thousand Baht)

Subsidiaries Rental income - - 1,185 1,185 Interest income - - 28,375 54,612 Management fee income - - 44,789 41,070 Dividend income 77,281 44,705 Interest expense - - 11,920 18,744 Other expenses - - 463 455

Rental expense - - 29,456 29,432 Jointly-controlled entities Management fee income 14,256 13,294 14,256 13,294 Interest income 607 607 607 607 Other income 587 587 - - Associates

Dividend income 29,064 18,820 29,064 18,820 Interest income 5,366 1,136 - - Management fee income 6,821 - - - Rental expense 90,000 90,000 - - Loss on guarantee provision 11,980 - 6,010 - Other related parties

Rental income 3,570 3,570 - - Management fee income 2,152 - 2,152 - Other income 5,434 5,856 - - Rental expense 26,147 26,313 19,586 20,042 Electricity expense 10,159 10,668 10,159 10,668 Management fee expense 11,585 11,346 1,185 1,426 Other service expenses 2,188 2,312 - -




15

Balances as at 31 March 2010 and 31 December 2009 with related parties were as follows: Receivables from related parties Consolidated Separate


31

March

31

December

31

March

31

December

2010 2009 2010 2009

(in thousand Baht) Subsidiaries - - 55,236 77,995 Other related parties 47,081 35,412 12,381 16,577

47,081 35,412 67,617 94,572

Loans to related parties Consolidated Separate


Interest rate

31

March

31

December

31

March

31

December

2010 2009 2010 2009 2010 2009

(% per annum) (in thousand Baht)

Short-term loans

Subsidiaries

Central Krabi Bay Resort

Co., Ltd. 4.75 4.75 - - 217,200 217,200

Central World Hotel Co., Ltd. 4.75 4.75 - - 382,500 382,500

Centara International

Management Co., Ltd. 4.75 4.75 - - 176,500 165,200

Jointly-controlled entity Kata Phuket Hotel Co., Ltd. 6.0 6.0 41,000 41,000 41,000 41,000

Associate

Regent Maldives Pvt. Ltd. 10.0 10.0 166,396 167,495 - -

Short-term loans to

related parties

207,396 208,495 817,200 805,900

Long-term loans

Subsidiaries

Central Krabi Bay Resort

Co., Ltd. 4.75 4.75 - - 367,800 419,800

Central World Hotel Co., Ltd. 4.75 4.75 - - 1,792,500 821,500

Triplenine Decor Co., Ltd. - - - - 81,176 81,176

Centara International

Management Co., Ltd. 4.75 4.75 - - 61,000 57,300

Associate

Regent Maldives Pvt. Ltd. 10.0 10.0 57,484 58,136 - -

Long-term loans to

related parties

57,484 58,136 2,302,476 1,379,776




16

Movements during the three-month periods ended 31 March 2010 and 2009 of loans to related parties were as follows: Loans to related parties Consolidated Separate financial statements financial statements 2010 2009 2010 2009 (in thousand Baht) Subsidiary At 1 January - - 2,144,676 4,302,176

Increase - - 1,140,000 213,500 Decrease - - (206,000) (169,500)

At 31 March - - , 3,078,676 4,346,176

Jointly-controlled entity At 1 January 41,000 41,000 41,000 41,000 At 31 March 41,000 41,000 41,000 41,000

Associate At 1 January 225,631 52,208 - - Unrealised gain (loss) on exchange (1,751) 879 - -

At 31 March 223,880 53,087 - -

Total loans to related parties At 1 January 266,631 93,208 2,185,676 4,343,176 Increase - - 1,140,000 213,500 Decrease - - (206,000) (169,500) Unrealised gain (loss) on exchange (1,751) 879 - -

At 31 March 264,880 94,087 3,119,676 4,387,176

Payables to related parties Consolidated Separate financial statements financial statements 31

March 31

December 31

March 31

December 2010 2009 2010 2009 (in thousand Baht)

Subsidiaries - - 7,732 6,908 Other related parties 9,249 6,004 69 180 Total 9,249 6,004 7,801 7,088




17

Short-term loans from Consolidated Separate

related parties financial statements financial statements

Interest rate

31

March

31

December

31

March

31

December

2010 2009 2010 2009 2010 2009

(% per annum) (in thousand Baht)

Subsidiaries

Central Samui Beach Resort

Co., Ltd. 4.75 4.75 - - 454,000 617,500

Central Karon Village

Co., Ltd. 4.75 4.75 - - 32,500 19,500

Central Hua Hin Beach

Resort Co., Ltd. 3.00 3.00 - - 225,000 120,000

Central Hotel Management

Co., Ltd. 4.75 4.75 - - 349,000 330,500

Total - - 1,060,500 1,087,500

Movements of short-term loans from related parties during the three-month periods ended 31 March 2010 and 2009 were as follows: Consolidated Separate financial statements financial statements 2010 2009 2010 2009 (in thousand Baht) At 1 January - - 1,087,500 1,523,000 Increase - - 153,500 235,000 Decrease - - (180,500) (275,500) At 31 March - - 1,060,500 1,482,500

Provision for guarantee payment

Consolidated Separate financial statements financial statements

31 March

31 December

31 March

31 December

2010 2009 2010 2009 (in thousand Baht) Short-term provision for guarantee payment 90,580 88,930 45,440 44,620 Long-term provision for guarantee payment 28,582 106,874 14,344 53,616 Total 119,162 195,804 59,784 98,236

Liability under consignment agreement

The outstanding amount due to Thai Pattana Fund 2 matured as follows:

Separate financial statements 31 March 2010 31 December 2009

Amount Deferred Amount Deferred

due expenses Net due expenses Net

(in thousand Baht) Within one year 81,500 (5,661) 75,839 81,500 (5,661) 75,839

After one year but

within five years 244,500 (15,429) 229,071 285,250 (16,845) 268,405

Total 326,000 (21,090) 304,910 366,750 (22,506) 344,244




18

Long-term lease agreements In 2009, the Company entered into a sub-lease agreement with Central International Development Co., Ltd. (“sub-lessor”) for the sub-leasing of Sofitel Centara Grand Bangkok Hotel’s building (formerly Central Plaza Ladprao Hotel) and hotel building improvements including durable goods for a period of 20 years. The lease will be expired on 18 December 2028. The Company was required to pay the sub-lessor of Baht 2,556 million for the sub-leasing right and annual rent for the whole lease term. During 2009, the Company recorded sub-leasing right and annual rent of Baht

361 million as leasehold right in the consolidated and separate balance sheets. In addition, the Company was required to pay durable goods rental fee totalling Baht 31 million for the whole lease term. The Company recorded durable goods rental fee as asset under finance lease. Leased assets, which the Company has renovated, improved or constructed, altered, added, maintained or rebuilt, will be transferred to SRT as soon as the said activities are completed. In addition, the Company has to return leased durable goods according to the list in the lease agreement in a manner which appropriate to their condition and useful lives to SRT at the end of the lease agreement. Central Restaurants Group Co., Ltd. (“CRG”) had long-term lease and service agreements with related companies for periods of 3 to 30 years up to 2026. According to the terms of the agreements, CRG has to pay monthly rental and service charges at fixed rates or at certain percentages of gross sales as follows:

Consolidated financial statements

31 March 31 December 2010 2009 (in thousand Baht)

Operating lease and service commitments

Within one year 255,760 273,715

After one year but within five years 203,501 241,710

After five years 16,868 17,757

Total 476,129 533,182

As at 31 March 2010 and 31 December 2009, the Company has commitments under agreements with related parties as follows: - As at 31 March 2010, the Company was contingently liable as guarantor to local banks for

overdraft line, letter of credit line and other guarantees for certain subsidiaries totaling Baht 103 million (31 December 2009: Baht 103 million).

- The Company provided guarantee in respect to Central World Hotel Co., Ltd. (“CWH”) loans

to a financial institution in the amount not less than Baht 2,350 million. In June 2009, CWH had drawn down the loan totalling Baht 2,300 million. As at 31 March

2010, the said loan had remaining balance as amounted Baht 1,300 million. - As at 31 March 2010, Central Restaurants Group Co., Ltd. had provided guarantees to a

financial institution for bank overdraft and long-term loan facility of a subsidiary totalling Baht 40 million (31 December 2009: Baht 40 million).

- As at 31 March 2010, Central Samui Beach Resort Co., Ltd. had provided guarantees to a

financial institution for bank overdraft of a subsidiary totalling Baht/15/million (31/December/2009: Baht/15 million).




19

5 Trade accounts receivable Aging analyses for trade accounts receivable were as follows: Consolidated Separate

financial statements financial statements 31

March 31

December 31

March 31

December 2010 2009 2010 2009 (in thousand Baht) Within credit terms 221,891 218,612 67,221 64,383 Overdue:

Less than 3 months 78,853 79,616 24,158 14,308 3-6 months 8,440 7,287 3,887 1,437 6-12 months 8,249 3,243 96 423 Over 12 months 1,374 5,911 583 1,155

318,807 314,669 95,945 81,706 Less allowance for doubtful accounts (4,904) (4,711) (433) (433) Net 313,903 309,958 95,512 81,273

2010 2009 2010 2009 (in thousand Baht) Bad and doubtful debt expenses for the three-month period ended 31 March 193 49 - 43

The normal credit term granted by the Group ranges from 15 to 30 days.

6 Investments in subsidiaries

Separate financial statements

2010 2009 (in thousand Baht) Subsidiaries At 1 January 4,203,160 3,980,205 Subscription receivables 2,000 -

Cash refund for unit holders in property fund (9,710) (9,710)

At 31 March 4,195,450 3,970,495

On 22 February 2010, the Company invested in Cenvaree Healthy Spa Co., Ltd. of 10,000 ordinary shares with a par value of Baht 100 per share (call-up of Baht 100 per share), totalling Baht 1 million. Total shares invested represent 100% ownership. The Company paid full amount of subscription receivable for investment in this subsidiary on 2 April 2010. On 22 February 2010, the Company invested in Central Bangkok Convention & Exhibition Co., Ltd. of 10,000 ordinary shares with a par value of Baht 100 per share (call-up of Baht 100 per share), totalling Baht 1 million. Total shares invested represent 100% ownership. The Company paid full amount of subscription receivable for investment in this subsidiary on 2 April 2010.




20

Investments in subsidiaries as at 31 March 2010 and 31 December 2009, and dividend income from those investments for the three-month periods ended 31 March 2010

and 2009 were as follows:


Ownership interest Paid-up capital Cost method Impairment At cost - net Dividend income

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

March

2009

(%) (in thousand Baht)

Subsidiaries

Central Samui Beach Resort Co., Ltd. 100.0 100.0 250,000 250,000 394,383 394,383 - - 394,383 394,383 - -

Central Karon Village Co., Ltd. 100.0 100.0 150,000 150,000 189,000 189,000 - - 189,000 189,000 - -

Central Krabi Bay Resort Co., Ltd. 100.0 100.0 500,000 500,000 500,000 500,000 - - 500,000 500,000 - -

Central World Hotel Co., Ltd. 100.0 100.0 1,000,000 1,000,000 1,000,000 1,000,000 - - 1,000,000 1,000,000 - -

Central Koh Kood Hotel Co., Ltd. 100.0 100.0 120,000 120,000 120,000 120,000 - - 120,000 120,000 - -

Central Hua Hin Beach Resort

Co., Ltd. 63.9 63.9 185,000 185,000 198,906 198,906 - - 198,906 198,906 - -

Central Hotel Management Co., Ltd. 100.0 100.0 1,000,000 1,000,000 999,999 999,999 (210,000) (210,000) 789,999 789,999 - -

Central Restaurants Group Co., Ltd. 100.0 100.0 620,000 620,000 669,607 669,607 - - 669,607 669,607 30,000 -

Triplenine Decor Co., Ltd. 100.0 100.0 250 250 250 250 - - 250 250 - -

Central Samui Hotel Management

Co., Ltd. 100.0 100.0 1,250 1,250 1,250 1,250 - - 1,250 1,250 - -

Centara International Management

Co., Ltd. 100.0 100.0 150,000 150,000 150,000 150,000 - - 150,000 150,000 - -

S.P. Realty Lanta Beach Co., Ltd. 100.0 100.0 250 250 250 250 - - 250 250 - -

S.P. Realty Hadfarang Resort

Co., Ltd. 100.0 100.0 22,125 22,125 22,125 22,125

- - 22,125 22,125 - -

S.P. Realty Pattaya Beach Co., Ltd. 100.0 100.0 80,000 80,000 80,000 80,000 - - 80,000 80,000 - -

Cenvaree Healthy Spa Co., Ltd. 100.0 - 1,000 - 1,000 - - - 1,000 - - -

Central Bangkok Convention &

Exhibition Co., Ltd. 100.0 - 1,000 - 1,000 -

- - 1,000 - - -

4,080,875 4,078,875 4,327,770 4,325,770 (210,000) (210,000) 4,117,770 4,115,770 30,000 -




21


Ownership interest Paid-up capital Cost method Impairment At cost - net Dividend income

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

March

2009


Property funds

Thai Pattana Fund 2 23.83 23.83 815,000 815,000 77,680 87,390 - - 77,680 87,390 47,281 44,705

815,000 815,000 77,680 87,390 - - 77,680 87,390 47,281 44,705

Total 4,895,875 4,893,875 4,405,450 4,413,160 (210,000) (210,000) 4,195,450 4,203,160 77,281 44,705




22

7 Investments in associates and jointly-controlled entities

Consolidated Separate financial statements financial statements

2010 2009 2010 2009 (in thousand Baht) At 1 January 1,171,513 1,087,658 1,050,103 1,049,009 Share of net profits of investments - equity method 23,383 37,001 - - Acquisitions - 185 - 185 Cash refund for unit holders

in property fund (4,898) - (4,898) - Dividend income (29,064) (18,820) - -

At 31 March 1,160,934 1,106,024 1,045,205 1,049,194




23

Investments in associates and jointly-controlled entities as at 31 March 2010 and 31 December 2009, and dividend income from those investments for the three-month

periods ended 31 March 2010 and 2009 were as follows:


Ownership

interest Paid-up capital Cost method Equity method Impairment At equity - net Dividend income

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

March

2009


Associates

Centara Hotels & Resorts 25.3 25.3 3,200,000 3,200,000 805,205 810,103 921,906 932,268 - - 921,906 932,268 29,064 18,820

Leasehold Property Fund

Regent Maldives Pvt. Ltd. 25.0 25.0 484,935 484,935 120,985 120,985 65,564 86,409 - - 65,564 86,409 - -

3,684,935 3,684,935 926,190 931,088 987,470 1,018,677 - - 987,470 1,018,677 29,064 18,820

Jointly - controlled entities

Karon Phuket Hotel Co., Ltd. 50.0 50.0 520,000 520,000 260,000 260,000 105,374 89,536 - - 105,374 89,536 - -

Kata Phuket Hotel Co., Ltd. 50.0 50.0 120,000 120,000 60,000 60,000 68,090 63,300 - - 68,090 63,300 - -

640,000 640,000 320,000 320,000 173,464 152,836 - - 173,464 152,836 - -

Total 4,324,935 4,324,935 1,246,190 1,251,088 1,160,934 1,171,513 - - 1,160,934 1,171,513 29,064 18,820




24


Ownership

interest Paid-up capital Cost method Impairment At cost - net

Market price of

Listed securities Dividend income

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

December

2009

31

March

2010

31

March

2009


Associates

Centara Hotels & Resorts 25.3 25.3 3,200,000 3,200,000 805,205 810,103 - - 805,205 810,103 664,967 640,639 29,064 18,820

Leasehold Property Fund

Regent Maldives Pvt. Ltd. 25.0 25.0 484,935 484,935 - - - - - - - -

3,684,935 3,684,935 805,205 810,103 - - 805,205 810,103 29,064 18,820

Jointly - controlled entities

Karon Phuket Hotel Co., Ltd. 34.6 34.6 520,000 520,000 180,000 180,000 - - 180,000 180,000 - -

Kata Phuket Hotel Co., Ltd. 50.0 50.0 120,000 120,000 60,000 60,000 - - 60,000 60,000 - -

640,000 640,000 240,000 240,000 - - 240,000 240,000 - -

Total 4,324,935 4,324,935 1,045,205 1,050,103 - - 1,045,205 1,050,103 29,064 18,820




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8 Property, plant and equipment

Acquisitions, disposals and transfers of property, plant and equipment during the three-month periods ended 31 March 2010 and 2009 were as follows:


2010 2009

Acquisitions and

transfers in - at cost

Disposal and

transfers out

- net book value

Acquisitions and


Disposal and

transfers out

- net book value

(in thousand Baht) Land improvement 165 - 518 - Building and improvement 50,041 222 29,884 1,678 Machinery and equipment 12,671 531 42,125 - Furniture, fixtures and office equipment 19,697 264 63,213 16,208

Hotel operating equipment 8,089 5,214 2,709 4,801 Leasehold improvements - - 29 - Vehicles 4,172 426 1,551 112 Assets under construction 336,470 117,967 504,696 9,541

Total 431,305 124,624 644,725 32,340


2010 2009

Acquisitions and


Disposal and

transfers out

- net book value

Acquisitions and


Disposal and

transfers out

- net book value

(in thousand Baht) Building and improvement 143 - - - Machinery and equipment 1,499 - 566 189 Furniture, fixtures and office equipment 1,877 147 39,725 32 Hotel operating equipment 4,135 923 2 931

Leasehold improvements - - 29 - Vehicles 59 - 1,503 - Assets under construction 174,868 102,535 358,044 -

Total 182,581 103,605 399,869 1,152




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9 Assets under financial lease agreement

Acquisitions, disposals and transfers of assets under financial lease during the three-month periods ended 31 March 2010 and 2009 were as follows:


2010 2009

Acquisitions and


Disposal and

transfers out

- net book value

Acquisitions and


Disposal and

transfers out

- net book value

(in thousand Baht) Building and improvement 8,915 - - - Machinery and equipment 835 - - 27,973 Furniture, fixtures and office equipment - - 16,722 -

Total 9,750 - 16,722 27,973

10 Debentures

Consolidated/Separated

financial statements

Interest rate Maturity date 31 March 31 December (%) 2010 2009 (in thousand Baht)

No. 1/2552, set 1 4.00 29 July 2011 1,000,000 1,000,000 No. 1/2552, set 2 4.55 29 July 2012 600,000 600,000 No. 2/2552 4.45 24 July 2012 1,000,000 1,000,000 No. 1/2553 3.50 30 September 2013 1,000,000 -

3,600,000 2,600,000 Less deferred expense in issuing debentures (3,862) (4,184)

Net 3,596,138 2,595,816

Less debentures due within one year - -

Debentures due after one year 3,596,138 2,595,816

The debentures are in the name of specific holders, unsubordinated and without collateral.

The debenture deed contains certain restriction and conditions relating to financial ratios, payment of dividends, decrease in paid up share capital, pledge, mortgage, and disposal of assets, which are material in business operations.




27

11 Provision for guarantee payment

Provision for guarantee payment represented guarantee under the building lease agreement which the Company and a subsidiary guarantee lease fee income of Centara Hotels & Resorts Leasehold Property Fund. Balances as at 31 March 2010 and 31 December 2009 of provision for guarantee payment were as follows: Consolidated Separate financial statements financial statements

31

March 2010

31

December 2009

31

March 2010

31

December 2009

(in thousand Baht) Short-term provision for guarantee payment 90,580 88,930 45,440 44,620 Long-term provision for guarantee payment 28,582 106,874 14,344 53,616 Total 119,162 195,804 59,784 98,236

Movements during the three-month periods ended 31 March 2010 and 2009 of provision for guarantee payment were as follows: Consolidated Separate financial statements financial statements

2010 2009 2010 2009 (in thousand Baht) At 1 January 195,804 78,740 98,236 39,500 Increase 11,980 - 6,010 - Decrease (88,622) (38,936) (44,462) (19,534) At 31 March 119,162 39,804 59,784 19,966

12 Segment information

Segment information is presented in respect of the Company and its subsidiaries’s business

segments. The primary format, business segments, is based on the Company and its subsidiaries’s

management and internal reporting structure.

Business segments

The Company and its subsidiaries comprise the following main business segments:

Segment 1 Hotel Segment 2 Food and ice-cream Geographic segments

Management considers that the Company and its subsidiaries operates in a single geographic area,

namely in Thailand, and have, therefore, only one major geographic segment.




28

Revenue and results, based on business segments, in the consolidated financial statements for three-month periods ended 31 March 2010 and 2009 were as follows:

Food and

Hotel ice-cream Total Continuing Eliminations Total

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 (in million Baht) Revenue 1,275 1,010 1,205 1,117 2,480 2,127 (16) (19) 2,464 2,108 Interest income 48 77 - - 48 77 (42) (75) 6 2 Other income 163 139 7 7 170 1 146 (90) (74) 80 72

Total revenue 1,486 1,226 1,212 1,124 2,698 2,350 (148) (168) 2,550 2,182

Cost of sale 457 365 603 583 1,060 948 (16) (19) 1,044 929 Administrative expenses 211 172 388 394 599 566 (62) (45) 537 521 Other expenses 533 416 116 123 649 539 (27) (27) 622 512

Total expenses 1,201 953 1,107 1,100 2,308 2,053 (105) (91) 2,203 1,962

Share profit from investments 23 37 - - 23 37 - - 23 37

Profit before finance cost

and income tax expense 308 310 105 24 413 334 (43) (77) 370 257

Finance cost (117) (120) (1) (2) (118) (122) 43 75 (75) (47) Income tax expense (37) (36) (30) (8) (67) (44) - - (67) (44)

Profit for the period 154 154 74 14 228 168 - (2) 228 166




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13 Basic earnings per share

The calculations of basic earnings per share for the three-month periods ended 31 March 2010 and 2009 were based on the profit for the periods attributable to equity holders of the Company and the number of ordinary shares outstanding during the periods as follows:

14 Changes in accounting policy

Accounting treatment for payment made under operating lease

In the second quarter of 2009, the Group changed the accounting treatment for payment made under operating lease from straight-line basis over the term of the lease to another systematic basis, which is straight-line adjusted by constant compound growth rate. The management believed that this method is more representative of the pattern of benefits to the Group over the term of the lease agreement. The Group, accordingly, changed its accounting treatment from the commencement

date of the agreements. The effects from change in accounting policy as mentioned above were as follows:

Consolidated financial

statements (in thousand Baht)

Leasehold rights (prepaid rental expense) Balance at 1 January 2009 before change in accounting policy

324,231

Decrease in rental expense 2,804

Reverse accrued rental expense with leasehold rights (25,985)

Balance at 1 January 2009

after change in accounting policy

301,050

Other current liabilities Balance at 1 January 2009 before change in accounting policy

1,277,210

Reverse accrued rental expense with leasehold rights (25,985)



1,251,225

Retained earnings Balance at 1 January 2009 before change in accounting policy

1,656,529 Decrease in rental expense 2,804



1,659,333

Consolidated


Separate


2010 2009 2010 2009 (in million Baht / million shares) Profit attributable to equity holders of

the Company 206 145 130 76

Number of ordinary shares outstanding 1,350 1,350 1,350 1,350

Basic earnings per share (in Baht) 0.15 0.11 0.10 0.06




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Consolidated financial

statements

Separate financial

statements (in thousand Baht)

Profit for the period ended 31 March 2009 Profit for the period before change in accounting policy

125,064

61,195

Decrease in rental expense 19,939 14,689

Profit for the period after

change in accounting policy

145,003

75,884

Increase in earnings per share (Baht) 0.01 0.01

15 Commitments with non-related parties

Consolidated Separate


31 March 31 December 31 March 31 December

2010 2009 2010 2009 (in thousand Baht) Capital commitments

Contracted but not provided

- Hotel construction 1,088,146 1,165,762 332,227 393,775

Operating lease and service commitments

of Central Restaurants Group Co., Ltd. Within one year 77,616 81,709 - - After one year but within five years 46,368 58,204 - -

After five years 3,703 4,037 - -

Total 127,687 143,950 - -

Interest rate swap contract

On 22 February 2010, the Company has entered into an interest rate swap contract which effective from 25 February 2010 to 30 September 2013 and the details of the contract are as follows:

Conditions under

previous contract

Conditions under

interest rate swap contract

Interest rate

Fixed interest rate 3.50% per annum

Float interest rate MLR - 3%

Term of interest payment Quarterly Monthly




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16 Events after the reporting period

Proposed of dividend payment At the annual general meeting of the shareholders of the Company held on 26 April 2010, the shareholders approved the distribution of dividends at Baht 0.05 per share, totalling Baht 67.5 million. At the annual general meeting of the shareholders of a subsidiary held on/1/April/2010,/the shareholders approved the appropriation of dividends of Baht 40 per share, totalling Baht 74

million. Political demonstration Due to ongoing political demonstration in Bangkok which affected a subsidiary and certain branches of another subsidiary located in such area until the demonstration ceases. However, the Group is unable to determine the negative impact to the financial statements since the

demonstration is still ongoing at this moment. Management service agreement On 27 April 2010, Central Restaurants Group Co., Ltd. (“CRG”), which is a subsidiary, entered into a management service agreement in order to manage 6 branches of a restaurant named “The Terrace” for a related company for a period of 3 years starting from 1 May 2010. The

agreement is automatically renewable for 3 years each. The management fee is specified in the agreement. Service license transfer agreement On 27 April 2010, CRG entered into service license transfer agreement from a related company for “The Terrace”, which effective from 1 May 2010. CRG has a right to operate restaurants in Thailand and other countries under the service license. The service license transfer fee is specified

in the agreement.

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