THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS AMARIN PLAZA PUBLIC COMPANY LIMITED ) REVIEW REPORT AND CONSOLIDATED

Transcription

1 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS AMARIN PLAZA PUBLIC COMPANY LIMITED ) REVIEW REPORT AND CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED 30 SEPTEMBER 2005

2 Review Report of Independent Auditor To The Board of Directors and Shareholders of The Erawan Group Public Company Limited (Formerly known as Amarin Plaza Public Company Limited ) I have reviewed the accompanying consolidated balance sheet of The Erawan Group Public Company Limited and its subsidiaries as at 30 September 2005, the related consolidated statements of earnings for the three-month and nine-month periods ended 30 September 2005 and 2004, and the statements of changes in shareholders equity and cash flows for the nine-month periods ended 30 September 2005 and 2004, and the separate financial statements of The Erawan Group Public Company Limited for the same periods. These financial statements are the responsibility of the Company s management as to their correctness and the completeness of the presentation. My responsibility is to issue a report on these financial statements based on my reviews. I conducted my reviews in accordance with the auditing standard applicable to review engagements. This standard requires that I plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. I have not performed an audit and, accordingly, I do not express an audit opinion. Based on my reviews, nothing has come to my attention that causes me to believe that the accompanying financial statements are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. I have previously audited the consolidated financial statements of The Erawan Group Public Company Limited and its subsidiaries and the separate financial statements of The Erawan Group Public Company Limited for the year ended 31 December 2004, in accordance with generally accepted auditing standards under my report dated 15 February 2005 and expressed an unqualified opinion on those statements. The balance sheet as at 31 December 2004, as presented herein for comparative purposes, formed an integral part of the financial statements which I audited and reported on. I have not performed any other audit procedures subsequent to the date of that report. Ernst & Young Office Limited Rungnapa Lertsuwankul Certified Public Accountant (Thailand) No. 3516

3 Bangkok: 10 November

4 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS AMARIN PLAZA PUBLIC COMPANY LIMITED ) NOTES TO INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED 30 SEPTEMBER GENERAL INFORMATION 1.1 The change of the Company and its subsidiaries name During the period, the Company and certain subsidiaries have registered with the Ministry of Commerce for the change of their name as follows: - Date of registration with Former name New name the Ministry of Commerce Amarin Plaza Public Company Limited The Erawan Group Public Company 14 June 2005 Limited Amarin Development Limited Erawan Ratchaprasong Company Limited 30 June 2005 Makasan Real Estate Company Limited Erawan Ploenchit Company Limited 14 June 2005 Mahadlekluang Real Estate Company Limited Erawan Rajdamri Company Limited 30 June 2005 Erawan Japanese Restaurant Company Limited Erawan Naka Company Limited 30 June 2005 Rimnam Chaophaya Company Limited Erawan Chaophraya Company Limited 30 June 2005 Nakaburi Company Limited Erawan Phuket Company Limited 30 June 2005 Aman Zen Company Limited Erawan Samui Company Limited 1 September Going concern assumption As of 30 September 2005, certain subsidiaries have incurred losses from their operations and have significant deficits. The management is considering measures to restructure the operations and believe that these will resolve the problems being faced. Nevertheless, there remain significant uncertainties which may give rise to doubt as to the ability of the subsidiaries to continue as a going concern and whether the realisation of assets and settlement of liabilities will occur in the ordinary course of business. However, the financial statements of the subsidiaries as included in the consolidated financial statements have been prepared on the going-concern basis

5 1.3 Basis for the preparation of interim financial statements These interim financial statements are prepared in accordance with Accounting Standards Pronouncement No. 41 Interim financial statements, with the Company choosing to present condensed interim financial statements. However, additional line items are presented in the balance sheets, the statements of earnings, changes in shareholders equity, and cash flows, to bring them into line with the full format used in the annual financial statements. The interim financial statements are intended to provide information additional to that included in the latest annual financial statements. Accordingly, they focus on new activities, events, and circumstances so as not to duplicate information previously reported. These interim financial statements should therefore be read in conjunction with the latest annual financial statements. 1.4 Basis of consolidation These consolidated financial statements include the financial statements of The Erawan Group Public Company Limited and its subsidiaries and have been prepared on the same basis as that applied for the consolidated financial statements for the year ended 31 December 2004, with no changes in the shareholding structure of subsidiaries during the current period except that the Company acquired an additional investment in ordinary shares and preference shares of Erawan Samui Company Limited. As a result of this transaction, the Company now holds an 99.99% equity interest in such company

6 The percentage of total assets and total revenues of the subsidiaries included in the consolidated financial statements are as follows: - Subsidiary s total assets Subsidiary s total revenues as a percentage as a percentage to the consolidated total to the consolidated total For the three-month For the nine-month 30 September 31 December periods ended 30 September periods ended 30 September Subsidiary companies % % % % % % Erawan Hotel Public Company Limited Erawan Ratchaprasong Company Limited Erawan Ploenchit Company Limited Erawan Rajdamri Company Limited Hatawan Company Limited Ploenchit Real Estate Company Limited Erawan Naka Company Limited Erawan Chaophraya Company Limited Erawan Phuket Company Limited Erawan Samui Company Limited Significant accounting policies The interim financial statements are prepared using the same accounting policies and methods of computation as were used for the financial statements for the year ended 31 December 2004, with the following additional accounting policy: - Current investment Investments in securities held for trading are determined at fair value. Gains or losses arising from changes in the value of securities are included in determining earnings. The fair value of units trust is determined from their net asset value. The weighted average method is used for computation of the cost of investments

7 2. CURRENT INVESTMENT CONSOLIDATED 30 September December 2004 Cost Fair value Cost Fair value Current investment Trading security - Unit trust 42,029 42, Unrealised gain on changes in the value of investment ,029 42, TRADE ACCOUNTS RECEIVABLE The aging of the outstanding balance of accounts receivable as at 30 September 2005 and 31 December 2004 are as follows: - CONSOLIDATED THE COMPANY ONLY 30 September 31 December 30 September 31 December Less than 3 months 108,433 84, , months 1,330 1, months 1,233 4,243-1,428 More than 12 months 7,135 7, Total 118,131 96, ,932 Less: allowance for doubtful accounts (4,373) (6,371) (427) (386) Trade accounts receivable - net 113,758 90, ,

8 The trade accounts receivable classified by types of business are as follows: CONSOLIDATED THE COMPANY ONLY 30 September 31 December 30 September 31 December Accounts receivable - Hotel 90,445 70, Accounts receivable - Rental 27,686 26, ,932 Accounts receivable from sales Total 118,131 96, ,932 Less: allowance for doubtful accounts (4,373) (6,371) (427) (386) Trade accounts receivable - net 113,758 90, , RELATED PARTY TRANSACTIONS During the periods, the Company had significant business transactions with its subsidiary, associated and related parties (related by way of common shareholders and/or common directors and/or management). Such transactions, which have been concluded on the terms and bases determined by the Company and those companies, are summarised below: - (Unit: Million Baht) CONSOLIDATED For the three-month For the nine-month periods ended periods ended 30 September 30 September Pricing policy Transactions with related companies: - Rental and service income Baht (2004: Baht ) per square meter per month depending on location Utilities income Cost method Management fees %, 10% of gross operating profit of hotel business Royalty fees %, 1.75%, 1.5%, 2.5% of total revenues of hotel business Land rental Baht 11 million per annum

9 (Unit: Million Baht) CONSOLIDATED For the three-month For the nine-month periods ended periods ended 30 September 30 September Pricing policy Commission fees %, 5% of revenues from member guests of hotel business Service fees Certain amounts per year per available room plus 1% of room revenues Service fees % of total revenues of hotel business Insurance expenses Fair price under the best condition (Unit: Million Baht) THE COMPANY ONLY For the three-month For the nine-month periods ended periods ended 30 September 30 September Pricing policy Transactions with subsidiary companies: - Interest income At the rates of %, MLR and MLR + 0.5% per annum Dividend income Baht 6.35 per share, Baht 6.40 per share, and Baht per share (2004: Baht 1 per share and Baht 10 per share) Rental and service fees Baht 250 per square meter per month Utilities expenses Cost method Interest expenses At the rates of % and MLR per annum Transactions with related companies: - Rental and service income Baht 235 per square meter per month - 6 -

10 The outstanding balances of the above transactions have been separately shown in the balance sheets as follows: - CONSOLIDATED THE COMPANY ONLY 30 September 31 December 30 September 31 December Trade accounts receivable - related parties: - Kiatnakin Bank Public Co., Ltd. 5, Minor Corporation Public Co., Ltd Esmido Fashions Co., Ltd Armin Systems Ltd Mitr Phol Sugar Co., Ltd Chai Talay Hotel Co., Ltd JW Marriott Phuket Resort and Spa 1,930 1, Marriott Hotels (Thailand) Co., Ltd. 2, Other companies 7,181 6, ,438 8, Prepaid expenses - related parties: - Erawan Ratchaprasong Co., Ltd , The Syndicate of Thai Hotels & Tourists Enterprises Ltd. 8,168 5, ,168 5,415 1, THE COMPANY ONLY 30 September 31 December Interest policy Short-term loans to a subsidiary company: - Erawan Hotel Public Co., Ltd. 84,082 34,695 At the rates of % per annum (31 December 2004: at the rate of 4.25% per annum) - 7 -

11 THE COMPANY ONLY 30 September 31 December Interest policy Long-term loans to and interest receivable from subsidiary companies: - Erawan Ratchaprasong Co., Ltd. 719, ,169 At the rates of % per annum (31 December 2004: at the rate of MLR per annum) Erawan Ploenchit Co., Ltd. 289, ,162 At the rates of % per annum (31 December 2004: at the rate of MLR per annum) Hatawan Co., Ltd. 3,639 3,458 At the rates of % per annum (31 December 2004: at the rates of MLR, MLR + 0.5% per annum) Erawan Rajdamri Co., Ltd. 6, ,513 At the rates of % per annum (31 December 2004: at the rate of MLR per annum) Erawan Samui Co., Ltd. 196,347 - At the rates of % per annum 1,215, ,302 During the period, the movement transactions of short-term loans/long-term loans to and interest receivable from subsidiaries are as follows: - 31 December 30 September 2004 Increase Decrease 2005 THE COMPANY ONLY Erawan Hotel Public Co., Ltd. 34, ,409 (123,022) 84,082 Erawan Ratchaprasong Co., Ltd. 670,169 79,718 (30,558) 719,329 Erawan Ploenchit Co., Ltd. 179, ,921 (316,385) 289,698 Hatawan Co., Ltd. 3, ,639 Erawan Rajdamri Co., Ltd. 120,513 21,245 (135,546) 6,212 Erawan Samui Co., Ltd ,850 (21,503) 196, , ,915 (503,992) 1,215,

12 CONSOLIDATED THE COMPANY ONLY 30 September 31 December 30 September 31 December Trade accounts payable - subsidiary companies: - Erawan Ratchaprasong Co., Ltd ,164 Erawan Ploenchit Co., Ltd Ploenchit Real Estate Co., Ltd Erawan Hotel Public Co., Ltd ,295 Other payable - related parties: - Erawan Ratchaprasong Co., Ltd , Ploenchit Real Estate Co., Ltd Marriott Worldwide Corporation Group of Companies 16,958 15, Grand Hyatt Hotel Group of Companies 15,719 13, ,677 29,302 1, CONSOLIDATED AND THE COMPANY ONLY 30 September 31 December Interest policy Short-term loans from related party: - Related person 80,374 - At the rate of 3.65% per annum THE COMPANY ONLY 30 September 31 December Interest policy Long-term loans from a subsidiary company: - Ploenchit Real Estate Co., Ltd ,391 At the rate of MLR per annum - 9 -

13 During the period, the movement transactions of short-term loans from related party, short-term loans and long-term loans from a subsidiary company are as follows: - CONSOLIDATED AND THE COMPANY ONLY 31 December 2004 Increase Decrease 30 September 2005 Short-term loans from related party - 80,374-80,374 THE COMPANY ONLY 31 December 2004 Increase Decrease 30 September 2005 Short-term loans from a subsidiary company: - Erawan Hotel Public Co., Ltd ,644 (112,644) - Long-term loans from a subsidiary company: - Ploenchit Real Estate Co., Ltd. 808, ,785 (1,283,176) - 5. INVENTORIES CONSOLIDATED 30 September 31 December Inventories classified by types of business are as follows: - - Hotel business 41,447 34,055 Less: Allowance for slow-moving and obsolete inventories (500) (1,178) 40,947 32,

14 6. INVESTMENTS IN SUBSIDIARY COMPANIES THE COMPANY ONLY As at 30 September 2005 Percentage Nature of Type of Paid up owned by Investment Company s name business relation capital the Company Cost method Equity method Dividend Million Baht Percent Provision for loss on Cost Net investment investment Subsidiary companies Held by The Erawan Group Public Company Limited Erawan Ploenchit Co., Ltd. Office building Common shareholders 2, ,798, , (included equity in Erawan Phuket rental/hotel and common directors Co., Ltd.) Erawan Hotel Public Company Hotel Common shareholders ,710 1,851, ,533 Limited and common directors Hatawan Co., Ltd. Land owner Common shareholders , , and common directors Erawan Rajdamri Co., Ltd. Residential Common shareholders , , (included equity in Erawan building rental and common directors Chaophraya Co., Ltd.) Erawan Ratchaprasong Co., Ltd. Office building Common shareholders , , (included equity in Erawan Naka rental and common directors Co., Ltd.) Ploenchit Real Estate Co., Ltd. Hotel Common shareholders ,173,750 5, ,251 and common directors Erawan Samui Co., Ltd. Hotel Common shareholders , , and common directors 4,815,860 3,240, ,

15 THE COMPANY ONLY As at 31 December 2004 Percentage Nature of Type of Paid up owned by Investment Company s name business relation capital the Company Cost method Equity method Dividend Million Baht Percent Provision for loss on Cost Net investment investment Subsidiary companies Held by The Erawan Group Public Company Limited Erawan Ploenchit Co., Ltd. Office building Common shareholders 1, ,548,461 - (124,447) - rental and common directors Erawan Hotel Public Company Limited Hotel Common shareholders ,710 2,144,170-58,667 and common directors Hatawan Co., Ltd. Land owner Common shareholders , , and common directors Erawan Rajdamri Co., Ltd. (included Residential Common shareholders , , equity in Erawan Chaophraya Co., Ltd.) building rental and common directors Erawan Ratchaprasong Co., Ltd. (included Office building Common shareholders , , equity in Erawan Naka Co., Ltd.) rental and common directors Ploenchit Real Estate Co., Ltd. Hotel Common shareholders ,912,500 1,031, ,000 (included equity in Erawan Phuket Co., Ltd.) and common directors 5,007,752 4,112,293 (124,447) 208,667 On 7 March 2005, the Annual General Meeting No. 1/2548 of the shareholders of Ploenchit Real Estate Co., Ltd. approved the payment of a dividend of Baht per share to the shareholders of 15,000,000 ordinary shares, or a total of Baht million, in respect of the 2004 earnings. The dividend was paid on 9 March In addition, on 1 June 2005, Meeting No. 2/2548 of the Board of Directors of the subsidiary approved the payment of an interim dividend of Baht 6.40 per share to the shareholders of 15,000,000 ordinary shares, of a total of Baht 96 million, in respect of the January to May 2005 earnings. The dividend was paid on 24 June

16 On 24 March 2005, the Annual General Meeting No. 1/2548 of the shareholders of Erawan Hotel Public Company Limited approved the payment of a dividend of Baht 6.35 per share to the shareholders of 79,666,667 ordinary shares, or a total of Baht million, in respect of the 2004 earnings and the subsidiary s unappropriated retained earnings. The dividend was paid on 20 April On 15 June 2005, the Company entered into an agreement to purchase 11,999,994 shares (comprising 7,319,994 ordinary shares and 4,680,000 preference shares) in Erawan Samui Co., Ltd., which operates the hotel business named Renaissance Koh Samui Resort & Spa (formerly known as Buriraya Resort and Spa Samui ), for a total of Baht million. The Company made partial payment of the shares of Baht million on 4 July 2005 and Baht 3.08 million on 8 September As a result of this transaction, the Company s interest in the equity of the above company is 99.99%. On 12 July 2005, the Extraordinary General Meeting No. 1/2548 of the shareholders of Ploenchit Real Estate Co., Ltd., a subsidiary, approved the disposal and transfer of all of its business as at 31 July 2005 to Erawan Ploenchit Co., Ltd., another subsidiary. On 1 August 2005, the subsidiary transferred all assets, employees and liabilities held on 31 July 2005 and ceased all of its operations. It subsequently registered its dissolution on 5 September In addition, on 1 August 2005 Meeting No. 4/2548 of the Board of Directors of the subsidiary approved the return of share capital to the shareholders prior to liquidation at the rate of Baht per share, a total of Baht million, and such amount was paid on same date. The Company therefore transferred Retained earnings - legal reserve of such subsidiary to Retained earnings - unappropriated in the consolidated financial statements, since there are no longer restrictions on the utilisation of such earnings. Moreover, on 31 October 2005 the subsidiary additional paid the return of share capital at the rate of Baht 0.35 per share, a total of Baht 5.25 million. A resolution of the Extraordinary General Meeting No. 4/2548 of the shareholders of Erawan Ploenchit Co., Ltd., a subsidiary, held on 26 July 2005, authorised a plan to increase that subsidiary s share capital from Baht 1, million to Baht 2, million through the issue of 25 million additional ordinary shares, with a par value of Baht 10 each. The Company purchased all Baht 250 million of these additional shares, resulting in an increase in the Company s shareholding in that company from 99.72% to 99.75%

17 On 1 September 2005, a resolution of the Extraordinary General Meeting of the shareholders of Erawan Rajdamri Company Limited, another subsidiary, authorised a plan to increase that subsidiary s share capital from Baht 30 million to Baht 160 million through the issue of 1.30 million additional ordinary shares, with a par value of Baht 100 each. The Company purchased all of the additional shares, to maintain its existing shareholding. 7. INVESTMENTS IN ASSOCIATED COMPANIES CONSOLIDATED Nature of Type of Paid up Percentage owned Investment Company s name business relation capital by the Company Cost method Equity method Million Baht September December September December September December Percent Percent Held by Erawan Ratchaprasong Co., Ltd. Tourianse Overseas (Thailand) Ltd. Restaurant Common shareholders Rajprasong Development Common shareholders Co., Ltd. Service and common directors During the current period, the subsidiary (Erawan Ratchaprasong Co., Ltd.) did not record its shares in the operating result of investments in associated companies because it found that the amount was immaterial. 8. PROPERTY, PLANT AND EQUIPMENT / LAND AWAITING DEVELOPMENT A part of Fixed assets consists of motor vehicles of the Company and three subsidiaries of which are under hire purchase and finance lease agreements. Their net book value as at 30 September 2005 is Baht 65.0 million (the Company only: Baht 6.8 million) (31 December 2004: Baht 25.5 million (the Company only: Baht 6.8 million))

18 The subsidiaries have mortgaged most of their land awaiting development, leasehold rights, and the constructions of subsidiaries thereon, with banks to secure the loans and pledged certain of their machinery and equipment and transferred the related beneficiary rights under insurance policies to the bank to secure the loans. The insurance benefits on the leased building are assigned to the lessor. 9. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS CONSOLIDATED THE COMPANY ONLY 30 September 31 December 30 September 31 December Bank overdrafts 3,647 3, Short-term loans from financial institutions 781, , , ,448 Total 785, , , ,448 As at 30 September 2005, short-term loans of the Company and its subsidiaries comprise Baht 238 million in bills of exchange which were purchased by a financial institution at discounts of % per annum on the face value and are payable in December 2005 and Baht 544 million in loans from a local bank which carry interest rates of % per annum and mature in November The subsidiaries have mortgaged most of their freehold and leasehold land, and the constructions thereon, with banks to secure bank overdrafts and short-term loans of the Company and its subsidiaries. Besides, bank overdrafts and short-term loans of the Company are guaranteed by a subsidiary

19 10. LONG-TERM LOANS During the period, the subsidiaries made normal long-term loan repayments in accordance with the conditions stipulated in the loan agreements. On 18 April 2005, a subsidiary entered into a memorandum of understanding with three banks to amend the conditions of the loan agreements in order to replace a short-term loan of Baht 700 million with a short-term loan facility of Baht 200 million and a long-term loan facility of Baht 500 million. In April 2005, the subsidiary drew down the whole amount of the long-term loan facility. The loans are repayable in semi-annual installments of Baht 25 million from June 2005 to June 2006, with the remainder of the loans then to be repaid within December The loans carry interest at the rate of MLR percent per annum. In July 2005, the new subsidiary (Erawan Samui Co., Ltd.) had the outstanding long-term loans of approximately Baht million. Such subsidiary entered into the additional loan agreements with a bank under which it obtained a Baht 22.5 million in September All of the subsidiary s loans carry interest at the one-year fixed deposit rate plus 3% per annum and are repayable in quarterly installments from March 2006 to December The long-term loans are secured by the mortgage of most of the land, leasehold rights and buildings thereon belonging to the subsidiaries and the pledging of certain machinery and equipment of the subsidiaries, with part of the balance secured by the guarantee of the Company. Other security was provided by the subsidiaries assignment of rights and benefits under insurance policies to the lenders. Most loan agreements contain certain covenants and restrictions imposed by the lenders regarding, among other things, the proportion of shareholding of the major shareholders, changes in management, guarantees to loans or aval to promissory notes of any other persons or other companies, dividend payments, merger or consolidation with any other companies, and the maintenance of certain financial ratios

20 11. UNSECURED DEBENTURES On 9 May 2005, the Company issued 0.3 million unsubordinated, unsecured, unregistered debentures, with a debentureholders representative. The debentures, which have a face value is Baht 1,000 each, are to be offered by private placement to no more than 10 investors, at an offer price of Baht 1,000 per unit, or a total of Baht 300 million. They have a tenor of 2 years and 320 days from the issue date, maturing on 25 March 2008, and the coupon rate is fixed at 5.2 percent per annum. The debentures impose certain restrictions on the Company relating to, among other things, the reduction of paid-up share capital, dividend payment, and the maintenance of certain financial ratios. 12. DEFERRED INCOME CONSOLIDATED 30 September December 2004 Leasehold rights of land and building - third parties 299, ,934 Less: Accumulated amortisation (195,288) (187,460) Net book value 104, ,474 Amortised to income for the period 7,828 10, INCOME TAX No corporate income tax of the Company was payable on net earnings for the three-month and nine-month periods ended 30 September 2005 and 2004 since tax loss brought forward from previous years exceed net earnings for these periods. Corporate income tax of the subsidiaries has been calculated at the rate of 30 percent on net earnings, after adding back certain expenses which are disallowable for the tax purposes, and deducting dividend income, which is exempted from income tax under Section 65 bis (10) of the Revenue Code and tax loss brought forward from previous years

21 14. DIVIDEND PAYMENT On 19 April 2005, the Annual General Meeting No.1/2548 of the shareholders of the Company approved the payment of a dividend of Baht 0.06 per share to the shareholders of the 1,453,048,008 shares, or a total of Baht million, in respect of the 2004 earnings. The dividend was paid on 18 May EMPLOYEE STOCK OPTION PLAN (ESOP) On 4 November 2004, the Extraordinary Meeting of shareholders No. 1/2547 approved the employee stock option plan. Under the plan, the Company is to offer 66,652,400 ordinary shares with a par value of Baht 1 each, equivalent to 4.59% of the total paid-up shares, to its directors and its employees and/or its subsidiaries. The plan is to cover a period of not more than 5 years from the date it is approved by the Securities and Exchange Commission (SEC). Directors and employees who are granted options under can exercise one-quarter of the total options granted during each of four exercise period. The stipulated exercise periods and exercise prices are as follows: - Period Exercise periods Exercise prices 1 1 June December Baht per share 2 1 June December Baht per share 3 1 June December Baht per share 4 1 June December Baht per share Following the final exercise period, any remaining options will be deemed to have expired and no further exercise will be possible. In December 2004, the Company requested the SEC approve the allocation of shares in accordance with such plan and on 7 April 2005, SEC granted approval for the offer. There is no disclosure of diluted earnings per share in the financial statements for the three-month and nine-month periods ended 30 September 2005 as the exercise price of the stock options exceeded the fair value of the Company's ordinary shares

22 16. PROVIDENT FUND During the three-month and nine-month periods ended 30 September 2005, the Company and its subsidiaries have contributed amounted to Baht 3.7 million and Baht 11.0 million respectively (the Company only: Baht 0.3 million and Baht 1.0 million respectively) (2004: Baht 3.5 million and Baht 10.4 million respectively (the Company only: Baht 0.4 million and Baht 0.9 million respectively)) to the provident fund. 17. COMMITMENTS As at 30 September 2005, the Company and its subsidiaries had the following outstanding commitments and contingent liabilities: - Commitments with related parties 17.1 The Company has entered into lease agreements with a subsidiary to lease building space and equipment for a period of 26 years and 7 months commencing as from 1 May The total rental fee under the lease agreements is approximately Baht 2.8 million per annum The Company and its subsidiary have commitments of approximately Baht 4.5 million (the Company only: Baht 4.5 million) (31 December 2004: Baht 8.3 million (the Company only: Baht 6.9 million)) to another subsidiary in respect of the lease of space and related services agreements. Commitments with third parties 17.3 The Company has issued letters of guarantees to banks to secure loans granted to three subsidiaries totalling approximately Baht 18.7 million (31 December 2004: Baht 19.6 million) The Company has commitments of approximately Baht 7.7 million (31 December 2004: Baht 7.8 million) in respect of sub-lease agreements with third parties

23 17.5 The Company and the subsidiaries have commitments of approximately Baht 79.1 million and USD 0.2 million (31 December 2004: Baht 83.5 million) the Company only: Baht 1.9 million (31 December 2004: Baht 8.1 million) in respect of maintenance service agreements The subsidiaries have commitments of approximately Baht million and USD 0.02 million (31 December 2004: Baht million and USD 0.06 million) in respect of interior design agreements, the renovation, SPA service and the purchase of hotel equipment The subsidiaries have commitments totaling approximately Baht 32.9 million (31 December 2004: Baht 38.2 million) arising from outstanding bank guarantees issued by banks on behalf of the Company and the subsidiaries in respect of certain performance bonds required in the ordinary course of their business On 30 March 2005, a subsidiary entered into an agreement to purchase and to sell land and buildings at a price of Baht 21 million. The subsidiary paid a deposit of Baht 2.1 million on the date the agreement was executed and, providing the seller is able to comply with the conditions stipulated in the agreement, the subsidiary is committed to pay the remaining of Baht 18.9 million within November However, the subsidiary has already made the remaining repayment on 26 October Furthermore, the ownership of land and building is transferred to the subsidiary on same date On 5 April 2005, a subsidiary entered into an agreement to purchase and to sell land and buildings at a price of Baht 637 million. The subsidiary paid a deposit of Baht 100 million on the date the agreement was executed and paid additional deposit of Baht 12 million in July 2005, providing the seller is able to comply with the conditions stipulated in the agreement, the subsidiary is committed to pay the remaining of Baht 525 million within December However, if the seller is unable to comply with the agreement, the subsidiary has the right to refund the deposit and charge a penalty of double the amount of the deposit

24 18. LITIGATION During the period, a subsidiary (Ploenchit Real Estate Co., Ltd.) and related counterparties have been sued for compensation totalling Baht 6.9 million by an employee of the subsidiary, for injuries sustained through the negligence of the counterparty, who is responsible for lift maintenance. The case is in the process of being heard by the court and the outcome is not yet known. 19. LONG-TERM AGREEMENTS On 4 July 2005, two subsidiaries entered into management agreements with Marriott Group (Marriott), to appoint the Marriott to manage the subsidiaries hotel as a standardised Courtyard by Marriott and Renaissance by Marriott hotel. Under the terms of the agreements, the subsidiaries are committed to pay remuneration to Marriott in accordance with the rates, terms and basis specified in the agreements. The terms of the hotel management agreements is to be for thirty years, counting from commencement of hotel operations, and is to be extendible for a further period of at least 10 years, dependent upon the fulfillment of certain conditions specified in the agreements. 20. CASH FLOW - PURCHASE OF A SUBSIDIARY COMPANY On 4 July 2005, the Company acquired an investment in Erawan Samui Co., Ltd. that had net assets value as follows: - Cash and deposits at financial institutions 810 Trade accounts receivable 10,865 Inventories 9,534 Property, plant and equipment - net 577,793 Leasehold rights - net 2,861 Other assets 8,338 Total assets 610,

25 Bank overdrafts 21,967 Trade accounts payable 3,697 Accounts payable - construction 29,344 Short-term loans from directors 122,476 Long-term loans 349,500 Accrued expenses 5,193 Other liabilities 20,688 Total liabilities 552,865 Net assets value 57,336 Net assets value equity attributable to the Company s shareholders 57,336 Value of land and building which over NBV 109,522 Purchase price 166,858 Less: Cash on hand of subsidiary company (810) Cash flows on acquisition of subsidiary company 166, 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 relates primarily to their deposits with banks and financial institutions, bank overdrafts and loans. The Company and its subsidiaries do not use derivative financial instruments to hedge such risk

26 (Unit: Million Baht) CONSOLIDATED 30 September 2005 Floating rate Fixed rate Non-interest Total Financial assets/liabilities Cash and cash equivalents Pledged fixed deposits at financial institution Bank overdrafts and short-term loans from financial institutions Long-term loans , ,314.0 Unsecured debentures The fixed interest rates on financial instruments held as of 30 September 2005 and the period of time from the balance sheet date to their maturity dates are as follows: - (Unit: Million Baht) CONSOLIDATED 30 September 2005 Within Over At call 12 months 12 months Total Interest rate Financial assets/liabilities Cash and cash equivalents % per annum Pledged fixed deposits at financial institution % per annum Bank overdrafts and short-term loans from financial institutions % per annum Long-term loans , , % per annum Unsecured debentures % per annum

27 (Unit: Million Baht) THE COMPANY ONLY 30 September 2005 Floating rate Fixed rate Non-interest Total Financial assets/liabilities Cash and cash equivalents Short-term loans from financial institutions Unsecured debentures The fixed interest rates on financial instruments held as of 30 September 2005 and the period of time from the balance sheet date to their maturity dates are as follows: - (Unit: Million Baht) THE COMPANY ONLY 30 September 2005 Within Over At call 12 months 12 months Total Interest rate Financial liabilities Short-term loans from financial institutions % per annum Unsecured debentures % per annum 22. FINANCIAL INFORMATION BY SEGMENT The Company s segmented financial information, divided between the real estate business and hotel business, as presented in the consolidated financial statements as of 30 September 2005 and 31 December 2004, and for the three-month and nine-month periods ended 30 September 2005 and 2004 is as follows:

28 (Unit: Million Baht) For the three-month period ended 30 September 2005 Real Estate Hotel Business Business Others Eliminate Total Revenues - Third parties Related parties (23) 10 Total (23) 733 Operating profit (17) 394 Selling and administrative expenses (170) Depreciation and amortisation (93) Directors remuneration (1) Interest expenses (44) Income tax (27) Earnings of minority interest (13) Net earnings for the period 46 (Unit: Million Baht) For the three-month period ended 30 September 2004 Real Estate Hotel Business Business Others Eliminate Total Revenues - Third parties Related parties (36) 13 Total (36) 614 Operating profit (25) 368 Selling and administrative expenses (151) Depreciation and amortisation (69) Other expenses (5) Directors remuneration (1) Interest expenses (28) Income tax (18) Earnings of minority interest (11) Net earnings for the period

29 (Unit: Million Baht) For the nine-month period ended 30 September 2005 Real Estate Hotel Business Business Others Eliminate Total Revenues - Third parties 331 1, ,038 - Related parties (86) 27 Total 378 1, (86) 2,065 Operating profit (69) 1,146 Selling and administrative expenses (483) Depreciation and amortisation (250) Directors remuneration (5) Interest expenses (108) Income tax (86) Earnings of minority interest (38) Net earnings for the period 176 (Unit: Million Baht) For the nine-month period ended 30 September 2004 Real Estate Hotel Business Business Others Eliminate Total Revenues - Third parties 326 1, ,813 - Related parties (133) 38 Total 408 1, (133) 1,851 Operating profit (90) 1,122 Selling and administrative expenses (441) Depreciation and amortisation (202) Other expenses (5) Directors remuneration (3) Interest expenses (84) Income tax (57) Earnings of minority interest (36) Net earnings for the period

30 The Company and its subsidiaries have applied the pricing policies described in Note 4 to set the transfer price. (Unit: Million Baht) 30 September 2005 Real Estate Hotel Business Business Others Eliminate Total Inventories - net Property, plant and equipment - net 2,350 5, ,389 Land awaiting development Other assets 837 Total assets 9,522 (Unit: Million Baht) 31 December 2004 Real Estate Hotel Business Business Others Eliminate Total Inventories - net Property, plant and equipment - net 2,251 5,282 - (32) 7,501 Land awaiting development Other assets 711 Total assets 8, RECLASSIFICATION Certain amounts in the financial statements, as presented herein for comparative purpose, have been reclassified to conform to the current period s classification, with no effect on previously reported net earnings or shareholders equity. 24. APPROVAL OF INTERIM FINANCIAL STATEMENTS These interim financial statements have been approved by the directors of the Company

31 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS "AMARIN PLAZA PUBLIC COMPANY LIMITED") BALANCE SHEETS CONSOLIDATED THE COMPANY ONLY Note 30 September December September December 2004 (Unaudited (Audited) (Unaudited (Audited) but reviewed) but reviewed) ASSETS CURRENT ASSETS Cash and cash equivalents 156, ,459 1,559 10,127 Current investment 2 42, Trade accounts receivable - net 3 113,758 90, ,546 Trade accounts receivable - related parties 4 18,438 8, Inventories - net 5 40,947 32, Short-term loans to a subsidiary company ,082 34,695 Other current assets Prepaid expenses 34,003 12,824 1, Prepaid expenses - related parties 4 8,168 5,415 1, Withholding tax deducted at source - refundable within one year - 6, Advances 3,242 1,040-1,040 Others 17.8, ,207 20,913 1,121 1,232 TOTAL CURRENT ASSETS 546, ,294 89,981 53,275 NON-CURRENT ASSETS Investments accounted for under equity method Investments in subsidiary companies ,240,683 4,112,293 Investments in associated companies Other long-term investments Pledged fixed deposits at financial institution Investments in related company 4,527 4,100 2,515 2,315 Investments in other company Long-term loans to and interest receivable from subsidiary companies ,215, ,302 Property, plant and equipment - net 8 8,389,595 7,501,046 56,719 51,835 Land awaiting development 8 254, , Intangible assets - net 51,926 49,050 6,686 7,258 Other non-current assets Deposits for lease of land, building and equipment 209, ,415 40,268 43,336 Withholding tax deducted at source - net of refundable within one year 45,853 41,039 10,332 12,941 Others 19,809 22, TOTAL NON-CURRENT ASSETS 8,976,039 8,082,474 4,572,428 5,203,331 TOTAL ASSETS 9,522,077 8,499,768 4,662,409 5,256,606 The accompanying notes are an integral part of the financial statements.

32 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS "AMARIN PLAZA PUBLIC COMPANY LIMITED") BALANCE SHEETS (Continued) CONSOLIDATED THE COMPANY ONLY Note 30 September December September December 2004 (Unaudited (Audited) (Unaudited (Audited) but reviewed) but reviewed) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Bank overdrafts and short-term loans from financial institutions 9 785, , , ,448 Accounts payable - trade and construction 139, ,218 1,152 10,799 Trade accounts payable - subsidiary companies ,295 Current portion of liabilities under finance lease agreements 25,038 8, Current portion of hire purchase payable 1,786 1,511 1,786 1,511 Current portion of long-term loans , , Short-term loans from related party 4 80,374-80,374 - Other payable - related parties 4 32,677 29,302 1, Other current liabilities Retention 12,426 22, Advances from customers 17,192 20, Value added tax payable 5,503 9, Accrued expenses 91,395 52,819 3,589 2,644 Income tax payable 36,942 36, Others 66,076 42, ,272 TOTAL CURRENT LIABILITIES 1,622,089 1,413, , ,217 NON-CURRENT LIABILITIES Liabilities under finance lease agreements - net of current portion 38,737 13, Hire purchase payable - net of current portion 2,931 3,515 2,931 3,515 Long-term loans from a subsidiary company ,391 Long-term loans - net of current portion 10 2,986,030 2,413, Unsecured debentures , ,000 - Accounts payable for leasehold rights 360, , Deposits from lessees 190, ,016 22,705 25,154 Deferred income - net , , Provision for loss on investments in subsidiary companies ,447 TOTAL NON-CURRENT LIABILITIES 3,982,866 3,087, , ,507 TOTAL LIABILITIES 5,604,955 4,501,207 1,106,438 1,726,724 The accompanying notes are an integral part of the financial statements.

33 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS "AMARIN PLAZA PUBLIC COMPANY LIMITED") BALANCE SHEETS (Continued) CONSOLIDATED THE COMPANY ONLY 30 September December September December 2004 (Unaudited (Audited) (Unaudited (Audited) but reviewed) but reviewed) SHAREHOLDERS' EQUITY Share capital Authorised share capital 1,519,700,408 ordinary shares of Baht 1 each 1,519,700 1,519,700 1,519,700 1,519,700 Issued and paid-up share capital 1,453,048,008 ordinary shares of Baht 1 each 1,453,048 1,453,048 1,453,048 1,453,048 Additional paid-in capital Premium on ordinary shares 4,000 4,000 4,000 4,000 Surplus from revaluation of land, buildings and leasehold rights of subsidiaries - net 1,450,721 1,513,961 1,450,721 1,513,961 Change in percentage of holding in subsidiaries 119, , , ,325 Unrealised gain on changes in the value of investments Retained earnings Appropriated - statutory reserve 49,763 58,426 33,490 33,490 Unappropriated 478, , , ,528 EQUITY ATTRIBUTABLE TO COMPANY'S SHAREHOLDER 3,555,971 3,529,882 3,555,971 3,529,882 MINORITY INTEREST - EQUITY ATTRIBUTABLE TO MINORITY SHAREHOLDERS OF SUBSIDIARIES 361, , TOTAL SHAREHOLDERS' EQUITY 3,917,122 3,998,561 3,555,971 3,529,882 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 9,522,077 8,499,768 4,662,409 5,256, The accompanying notes are an integral part of the financial statements. DIRECTORS

34 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS "AMARIN PLAZA PUBLIC COMPANY LIMITED") STATEMENTS OF EARNINGS FOR THE THREE-MONTH PERIODS ENDED 30 SEPTEMBER 2005 AND 2004 CONSOLIDATED THE COMPANY ONLY Note REVENUES Revenues from hotel operations 602, , Rental of units in buildings and related service income 119, ,283 9,676 34,404 Other income Interest income ,238 9,918 Others 10,499 13,011-2,361 Share of profits from investments accounted for under equity method ,079 85,682 TOTAL REVENUES 733, ,592 83, ,365 EXPENSES Cost of sales and direct costs of rental and services 339, ,222 4,419 16,043 Selling and administrative expenses 170, ,638 17,246 13,746 Depreciation and amortisation 91,951 68,431 2,821 1,697 Other expenses - 4, Directors' remuneration 1,640 1,419 1, TOTAL EXPENSES 603, ,683 25,601 31,786 EARNINGS BEFORE INTEREST EXPENSES AND INCOME TAX 129, ,909 58, ,579 INTEREST EXPENSES (43,391) (28,078) (12,314) (15,946) INCOME TAX 13 (27,062) (18,285) - - EARNINGS AFTER INCOME TAX 59,508 96,546 46,078 84,633 EARNINGS OF MINORITY INTEREST (13,430) (11,913) - - NET EARNINGS FOR THE PERIOD 46,078 84,633 46,078 84,633 (Unit: Baht) BASIC EARNINGS PER SHARE Net earnings Weighted average number of shares 1, , , ,453.0 million shares million shares million shares million shares The accompanying notes are an integral part of the financial statements.

35 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS "AMARIN PLAZA PUBLIC COMPANY LIMITED") STATEMENTS OF EARNINGS FOR THE NINE-MONTH PERIODS ENDED 30 SEPTEMBER 2005 AND 2004 CONSOLIDATED THE COMPANY ONLY Note REVENUES Revenues from hotel operations 1,683,696 1,441, Rental of units in buildings and related service income 358, ,994 37, ,335 Other income Interest income 1, ,335 29,571 Others 21,649 45, ,242 Share of profits from investments accounted for under equity method , ,165 TOTAL REVENUES 2,064,818 1,851, , ,313 EXPENSES Cost of sales and direct costs of rental and services 919, ,942 15,654 48,193 Selling and administrative expenses 483, ,752 47,105 42,231 Depreciation and amortisation 249, ,927 8,231 4,360 Other expenses - 4, Directors' remuneration 4,945 2,997 3, TOTAL EXPENSES 1,656,738 1,379,591 74,415 95,414 EARNINGS BEFORE INTEREST EXPENSES AND INCOME TAX 408, , , ,899 INTEREST EXPENSES (107,769) (83,940) (38,197) (47,802) INCOME TAX 13 (85,813) (57,269) - - EARNINGS AFTER INCOME TAX 214, , , ,097 EARNINGS OF MINORITY INTEREST (38,325) (36,569) - - NET EARNINGS FOR THE PERIOD 176, , , ,097 (Unit: Baht) BASIC EARNINGS PER SHARE Net earnings Weighted average number of shares 1, , , ,453.0 million shares million shares million shares million shares The accompanying notes are an integral part of the financial statements.

36 THE ERAWAN GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES (FORMERLY KNOWN AS "AMARIN PLAZA PUBLIC COMPANY LIMITED") STATEMENTS OF CASH FLOWS FOR THE NINE-MONTH PERIODS ENDED 30 SEPTEMBER 2005 AND 2004 CONSOLIDATED THE COMPANY ONLY Cash flows from operating activities Net earnings for the period 176, , , ,097 Adjustments to reconcile net earnings to net cash provided by (paid for) operating activities: - Minority interest in net earnings of subsidiaries 38,325 36, Share of profits from investments accounted for under equity method - - (207,327) (297,165) Loss on changes in value of investments 10,502 9, Loss (gain) on sale of fixed assets 54 4,973 (13) (468) Allowance for doubtful accounts (reversal) (1,998) 2, Reversal of provision for obsolete inventories (678) Depreciation and amortisation 249, ,927 8,231 4,360 Amortisation of prepaid interest expenses 12,782-12,782 - Rental deposits and leasehold rights received from lessees applied as rental charge (8,822) (10,459) (15) (2,026) Deferred income and advance received from customers applied as income (17,173) (14,103) (99) (4) Earnings (loss) from operating activities before changes in operating assets and liabilities 458, ,811 (10,227) (1,206) Decrease (increase) in operating assets Trade accounts receivable (13,580) (14,496) 3,955 (4,082) Trade accounts receivable - related parties (10,402) (301) Inventories 2,142 12, Advances (2,202) 15, Land leasehold right and construction in progress - (13) - - Other receivable - subsidiary company - - (694) (5,222) Other current assets (124,020) 10, ,381 Other non-current assets 4,529 17,211 5,728 1,213 The accompanying notes are an integral part of the financial statements.