CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED AND …centel.listedcompany.com/misc/financials/2010/note_q210... · 2010. 8. 16. · Central Plaza Hotel Public Company Limited and its

Central Plaza Hotel Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2010 (Unaudited)

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Note Contents 1 General information 2 Basis of preparation of the financial statements 3 Seasonal operations 4 Related party transactions and balances 5 Trade accounts receivable 6 Investments in subsidiaries 7 Investments in associates and jointly-controlled entities 8 Property, plant and equipment 9 Assets under financial lease agreement 10 Debentures 11 Provision for guarantee payment 12 Income tax expense 13 Segment information 14 Basic earnings (loss) per share 15 Dividends 16 Commitments with non-related parties 17 Political demonstration 18 Event after the reporting period 19 Thai Accounting Standards (TAS) and Thai Financial Reporting Standards (TFRS)

not yet adopted 20 Reclassification of accounts


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These notes form an integral part of the financial statements. The interim financial statements were authorised for issue by the audit committee on 2 August 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 30 June 2010 and 31 December 2009 were as follows:

Type of Country of business incorporation Ownership interest (%)

30 June 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 -

Centara Thai Hotel Management Co., Ltd. Not operate yet Thailand 100.0 - Investment in property fund Thai Pattana Fund 2 Property fund Thailand 23.83 23.83


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Type of Country of business incorporation Ownership interest (%)

30 June 31 December 2010 2009

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 C.S.C Worldwide Co., Ltd. (formerly: B - R (Thailand) Co., Ltd.)

Food and beverage

Thailand 100.0 100.0

Central Laundry Services Co., Ltd. Dormant Thailand 100.0 100.0 company Centara Egypt Co., Ltd. Not operate yet Egypt 100.0 - 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. On 26 May 2010, the FAP announced (Announcement No. 17/2010) the issuing a number of new and revised Thai Accounting Standards (TAS) and Thai Financial Reporting Standards (TFRS) (revised 2009). The Group has adopted the revised Framework (revised 2009) for the Preparation and Presentation of Financial Statements. The adoption of the revised Framework does not have any material impact on the consolidated or separate financial statements. New and revised TAS and TFRS which are not currently effective and have not been adopted in the preparation of these financial statements are disclosed in note 19. 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 and six-month periods ended 30 June 2010 are consistent with those applied in the financial statements for the year ended 31 December 2009.


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

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, 25.3% 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


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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 Other service expenses Market price Other expenses Contractually agreed prices Significant transactions for the three-month and six-month periods ended 30 June 2010 and 2009 with related parties were as follows:

Consolidated Separate financial statements financial statements Three-month period ended 30 June 2010 2009 2010 2009 (in thousand Baht) Subsidiaries Rental income - - 1,035 1,185 Interest income - - 36,138 38,977 Management fee income - - 18,839 30,642 Dividend income - - 125,824 56,324Interest expense - - 10,611 14,505 Other expenses - - 1,058 455 Rental expense - - 28,860 29,432 Jointly-controlled entities Management fee income 2,892 2,213 2,892 2,213 Interest income 613 613 613 613 Other income 718 543 - - Associates Dividend income 14,337 13,917 14,337 13,917 Interest income 5,602 1,218 - - Management fee income 4,649 - - - Rental expense 37,500 37,500 - - Other related parties Rental income 3,570 3,570 - - Area rental income - 11,767 - 11,767 Management fee income 1,898 1,732 1,898 1,732 Other income 5,940 5,414 - - Rental expense 26,238 25,457 19,733 19,195 Electricity expense 9,793 11,730 9,793 11,730 Management fee expense 6,303 6,723 927 1,122 Other service expenses 863 1,893 - -


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Consolidated Separate financial statements financial statements Six-month period ended 30 June 2010 2009 2010 2009 (in thousand Baht) Subsidiaries Rental income - - 2,070 2,370 Interest income - - 64,513 93,589 Management fee income - - 63,628 71,712 Dividend income - - 203,105 101,029 Interest expense - - 22,531 33,249 Other expenses - - 1,521 910 Rental expense - - 58,316 58,864 Jointly-controlled entities Management fee income 17,148 15,507 17,148 15,507 Interest income 1,220 1,220 1,220 1,220 Other income 1,305 1,130 - - Associates Dividend income 43,401 32,737 43,401 32,737 Interest income 10,968 2,354 - - Management fee income 11,470 - - - Rental expense 127,500 127,500 - - Loss on guarantee provision 11,980 - 6,010 - Other related parties Rental income 7,140 7,140 - - Area rental income - 11,767 - 11,767 Management fee income 4,050 1,732 4,050 1,732 Other income 11,374 11,270 - - Rental expense 52,385 51,770 39,319 39,237 Electricity expense 19,952 22,398 19,952 22,398 Management fee expense 17,888 18,069 2,112 2,548 Other service expenses 3,051 4,205 - -


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Balances as at 30 June 2010 and 31 December 2009 with related parties were as follows: Receivables from related parties Consolidated Separate financial statements financial statements 30

June 31

December 30

June 31

December 2010 2009 2010 2009 (in thousand Baht) Subsidiaries Central Samui Beach Resort Co., Ltd. - - 8,889 2,889Central Karon Village Co., Ltd. - - 7,401 1,686Central Krabi Bay Resort Co., Ltd. - - 5,565 8,180Central Hua Hin Beach Resort Co., Ltd.

-

-

1,155 1,730

Central World Hotel Co., Ltd. - - 23,070 46,349Central Samui Hotel Management Co., Ltd.

-

-

6,679 6,963

Centara International Management Co., Ltd.

-

-

5,949 3,415

Central Sukhontha Hotel Co., Ltd. - - 2,541 2,395Central Samui Village Co., Ltd. - - 1,463 1,686Central Mae Sot Hill Hotel Co., Ltd. - - 1,123 703Central Restaurants Group Co., Ltd. - - 1,866 1,019Others - - 1,320 980 - - 67,021 77,995Other related parties Karon Phuket Hotel Co., Ltd. 740 5,787 713 5,753Kata Phuket Hotel Co., Ltd. 2,831 4,535 1,435 3,361Regent Maldives Pvt. Ltd. 34,561 12,638 1,942 1,718Central Department Store Co., Ltd. 4,481 4,759 425 295Centara Hotels & Resorts Leasehold Property Fund 2,594 1,608 - - Others 3,295 6,085 2,544 5,450 48,502 35,412 7,059 16,577

Total 48,502 35,412 74,080 94,572


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Loans to related parties Consolidated Separate financial statements financial statements

Interest rate30

June 31

December 30

June 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 - - 217,200 217,200Central World Hotel Co., Ltd. 4.75 4.75 - - 382,500 382,500Centara International Management Co., Ltd. 4.75 4.75 - - 186,200 165,200Central Samui Hotel Management Co., Ltd. 4.75 - - - 25,000 - 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 10.0 167,495 167,495 - - Short-term loans to related parties

208,495 208,495 851,900 805,900

Long-term loans Subsidiaries Central Krabi Bay Resort Co., Ltd. 4.75 4.75 - - 402,300 419,800Central World Hotel Co., Ltd. 4.75 4.75 - - 1,862,500 821,500Triplenine Decor Co., Ltd. - - - - 81,176 81,176Centara International Management Co., Ltd. 4.75 4.75 - - 62,800 57,300 Associate Regent Maldives Pvt. Ltd. 10.0 10.0 56,528 58,136 - - Long-term loans to related parties

56,528 58,136 2,408,776 1,379,776


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Movements during the six-month periods ended 30 June 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 4,302,176Increase - - 1,376,500 384,000Decrease - - (301,500) (2,560,000)At 30 June - - 3,219,676 2,125,676 Jointly-controlled entity At 1 January 41,000 41,000 41,000 41,000At 30 June 41,000 41,000 41,000 41,000 Associate At 1 January 225,631 52,208 - - Unrealised loss on exchange (1,608) (1,374) - - At 30 June 224,023 50,834 - - Total loans to related parties At 1 January 266,631 93,208 2,185,676 4,343,176Increase - - 1,376,500 384,000Decrease - - (301,500) (2,560,500)Unrealised loss on exchange (1,608) (1,374) - -At 30 June 265,023 91,834 3,260,676 2,166,676


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Payables to related parties Consolidated Separate financial statements financial statements 30

June 31

December 30

June 31

December 2010 2009 2010 2009 (in thousand Baht) Subsidiaries Central Karon Village Co., Ltd. - - 13 29Central Krabi Bay Resort Co., Ltd. - - 26 24Central Hua Hin Beach Resort Co., Ltd.

-

-

216 255

Central World Hotel Co., Ltd. - - 2,854 5,899Central Samui Hotel Management Co., Ltd.

-

- -

- 33 45

Central Sukhontha Hotel Co., Ltd. - - 47 9Central Samui Village Co., Ltd. - - 16 - Central Mae Sot Hill Hotel Co., Ltd. - - 3 5Central Hotel Management Co., Ltd. - - 642 642Centara Thai Hotel Management Co., Ltd.

-

-

25,000 -

- - 28,850 6,908Other related parties Karon Phuket Hotel Co., Ltd. 599 168 24 77Kata Phuket Hotel Co., Ltd. 66 30 34 3Regent Maldives Pvt. Ltd. 461 1,895 - - AAPC (Thailand) Co., Ltd. 2,938 2,552 - - Others 1,508 1,359 - 100 5,572 6,004 58 180

Total 5,572 6,004 28,908 7,088

Short-term loans from Consolidated Separate related parties financial statements financial statements

Interest rate30

June 31

December 30

June 31

December 2010 2009 2010 2009 2010 2009 (% per annum) (in thousand Baht) Subsidiaries Central Samui Beach Resort Co., Ltd. 4.75 4.75 - - 204,500 617,500Central Karon Village Co., Ltd. 4.75 4.75 - - 29,000 19,500Central Hua Hin Beach Resort Co., Ltd. 3.00 3.00 - - 155,000 120,000Central Hotel Management Co., Ltd. 4.75 4.75 - - 350,500 330,500Central Restaurants Group Co., Ltd. 1.60 - - - 145,000 - Total - - 884,000 1,087,500


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Movements of short-term loans from related parties during the six-month periods ended 30 June 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 1,523,000Increase - - 414,000 284,000Decrease - - (617,500) (466,500)At 30 June - - 884,000 1,340,500 Provision for guarantee payment

Consolidated Separate financial statements financial statements

30

June31

December30

June 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 30 June 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 (14,014) 230,486 285,250 (16,845) 268,405 Total 326,000 (19,675) 306,325 366,750 (22,506) 344,244


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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 State Railway of Thailand (“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

30 June 31 December 2010 2009 (in thousand Baht)

Operating lease and service commitments Within one year 262,593 273,715 After one year but within five years 201,661 241,710 After five years 16,470 17,757 Total 480,724 533,182 As at 30 June 2010 and 31 December 2009, the Company has commitments under agreements with related parties as follows: - As at 30 June 2010, the Company was contingently liable as guarantor to local banks for

overdraft line, letter of credit line and other guarantees for certain subsidiaries totalling Baht 93 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 30 June

2010, the said loan had remaining balance of Baht 1,300 million. - As at 30 June 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 30 June 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).


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5 Trade accounts receivable Aging analyses for trade accounts receivable were as follows: Consolidated Separate financial statements financial statements 30

June31

December30

June 31

December 2010 2009 2010 2009 (in thousand Baht) Within credit terms 97,007 218,612 40,043 64,383Overdue:

Less than 3 months 48,179 79,616 16,722 14,3083-6 months 27,251 7,287 6,638 1,4376-12 months 7,818 3,243 1,033 423Over 12 months 2,260 5,911 625 1,155

182,515 314,669 65,061 81,706Less allowance for doubtful accounts (4,550) (4,711) (43) (433)Net 177,965 309,958 65,018 81,273 2010 2009 2010 2009 (in thousand Baht) Bad and doubtful debt expenses for the three-month period ended 30 June (354) (412) (389) - for the six-month period ended 30 June (161) (363) (389) 43 The normal credit term granted by the Group ranges from 15 to 30 days.


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6 Investments in subsidiaries

Separate financial statements 2010 2009 (in thousand Baht) Subsidiaries At 1 January 4,203,160 3,980,205 Subscription receivables 25,000 - Acquisitions 2,000 - Cash refund for unit holders in property fund (9,710) (9,710)At 30 June 4,220,450 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 for share capital 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 for share capital on 2 April 2010. On 27 May 2010, the Company invested in Centara Thai Hotel Management Co., Ltd. of 1,000,000 ordinary shares with a par value of Baht 100 per share (call-up of Baht 25 per share), totalling Baht 25 million. Total shares invested represent 100% ownership. The Company paid for share capital on 12 July 2010.

Central Plaza Hotel Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2010 (Unaudited) Investments in subsidiaries as at 30 June 2010 and 31 December 2009, and dividend income from those investments for the six-month periods ended 30 June 2010 and 2009 were as follows: Separate financial statements

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

six-month periods ended 30

June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

30 June 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 7,500 - Central Karon Village Co., Ltd. 100.0 100.0 150,000 150,000 189,000 189,000 - - 189,000 189,000 6,000 9,000 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 47,324 47,324 Central Hotel Management Co., Ltd. 100.0 100.0 1,000,000 1,000,000 999,999 999,999 (210,000) (210,000) 999,999 789,999 - - Central Restaurants Group Co., Ltd. 100.0 100.0 620,000 620,000 669,607 669,607 - - 669,607 669,607 95,000 - 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 - -

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Separate financial statements

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

six-month periods ended 30

June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

30 June 2009

(%) (in thousand Baht) Subsidiaries (continued) 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 - - - Centara Thai Hotel Management Co., Ltd. 100.0 - 25,000 - 25,000 - - - 25,000 - - - 4,105,875 4,078,875 4,352,770 4,325,770 (210,000) (210,000) 4,142,770 4,115,770 155,824 56,324 Property fund Thai Pattana Fund 2 23.83 23.83 815,000 815,000 77,680 87,390 - - 77,680 87,390 47,281 44,705 Total 4,920,875 4,893,875 4,430,450 4,413,160 (210,000) (210,000) 4,220,450 4,203,160 203,105 101,029


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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 (loss) of investments - equity method (19,802) 102,501 - - Acquisitions - 437 - 437 Cash refund for unit holders in property fund (4,898) - (4,898) - Dividend income (43,402) (32,737) - - At 30 June 1,103,411 1,157,859 1,045,205 1,049,446


Investments in associates and jointly-controlled entities as at 30 June 2010 and 31 December 2009, and dividend income from those investments for the six-month periods ended 30 June 2010 and 2009 were as follows:


Ownership

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

Dividend income for six-month periods ended

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

30 June 2009

(%) (in thousand Baht) Associates Centara Hotels & Resorts 25.3 25.3 3,200,000 3,200,000 805,205 810,103 898,573 932,268 - - 898,573 932,268 43,402 32,737 Leasehold Property Fund Regent Maldives Pvt. Ltd. 25.0 25.0 484,935 484,935 120,985 120,985 42,637 86,409 - - 42,637 86,409 - -

3,684,935 3,684,935 926,190 931,088 941,210 1,018,677 - - 941,210 1,018,677 43,402 32,737 Jointly - controlled entities Karon Phuket Hotel Co., Ltd. 50.0 50.0 520,000 520,000 260,000 260,000 97,075 89,536 - - 97,075 89,536 - - Kata Phuket Hotel Co., Ltd. 50.0 50.0 120,000 120,000 60,000 60,000 65,126 63,300 - - 65,126 63,300 - - 640,000 640,000 320,000 320,000 162,201 152,836 - - 162,201 152,836 - - Total 4,324,935 4,324,935 1,246,190 1,251,088 1,103,411 1,171,513 - - 1,103,411 1,171,513 43,402 32,737

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30


Ownership

interest Paid-up capital Cost method Impairment At cost - net Market price of listed securities

Dividend income for six-month periods ended

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

31 December

2009

30 June 2010

30 June 2009

(%) (in thousand Baht) Associates Centara Hotels & Resorts 25.3 25.3 3,200,000 3,200,000 805,205 810,103 - - 805,205 810,103 693,349 640,639 43,402 32,737 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 43,402 32,737

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 43,402 32,737


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8 Property, plant and equipment

Acquisitions, disposals and transfers of property, plant and equipment during the six-month periods ended 30 June 2010 and 2009 were as follows:

Consolidated financial statements 2010 2009

Acquisitionsand

transfers in - at cost

Disposal and

transfers out- net book

value

Acquisitions

and transfers in

- at cost

Disposal and


value (in thousand Baht) Land improvement 993 - 1,149 - Building and improvement 86,004 8,385 67,710 30,410 Machinery and equipment 37,156 1,793 66,623 8,649 Furniture, fixtures and office equipment 39,239 1,840 82,363 8,507 Hotel operating equipment 16,076 10,204 24,144 9,417 Leasehold improvements 1,871 - 1,953 - Vehicles 9,195 353 5,096 316 Assets under construction 611,712 30,397 1,068,401 28,503 Total 802,246 52,972 1,317,439 85,802

Separate financial statements 2010 2009

Acquisitionsand


Disposal and


value

Acquisitions

and transfers in

- at cost

Disposal and


value (in thousand Baht) Land improvement 477 - Building and improvement 4,137 - 1,576 - Machinery and equipment 5,285 4 9,930 192 Furniture, fixtures and office equipment 8,752 154

46,618

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Hotel operating equipment 6,444 3,776 18,889 1,699 Leasehold improvements 1,586 - 1,953 - Vehicles 3,209 - 2,938 55 Assets under construction 164,507 6,938 789,586 15,660 Total 194,397 10,872 871,490 17,638


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9 Assets under financial lease agreement

Acquisitions, disposals and transfers of assets under financial lease during the six-month periods ended 30 June 2010 and 2009 were as follows:

Consolidated financial statements 2010 2009

Acquisitionsand


Disposal and


value

Acquisitions

and transfers in

- at cost

Disposal and


value (in thousand Baht) Building and improvement 8,975 - 5,537 - Machinery and equipment 834 - - 11,251 Total 9,809 - 5,537 11,251

10 Debentures

Consolidated / Separated financial statements Interest rate Maturity date 30 June 31 December (%) 2010 2009 (in thousand Baht) No. 1/2009, set 1 4.00 29 July 2011 1,000,000 1,000,000No. 1/2009, set 2 4.55 29 July 2012 600,000 600,000No. 2/2009 4.45 24 July 2012 1,000,000 1,000,000No. 1/2010 3.50 30 September 2013 1,000,000 - No. 2/2010 3.85 23 June 2017 500,000 - 4,100,000 2,600,000Less deferred expense in issuing debentures (3,371) (4,184)Net 4,096,629 2,595,816Less debentures due within one year - - Debentures due after one year 4,096,629 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.


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Interest rate swap contracts As at 30 June 2010, the Company has various interest rate swap contracts which the details of the contracts are as follows: Conditions under previous contracts Principal Baht 3,100,000,000 Interest rate Quarterly, fixed interest rate of 3.50% - 4.55% p.a. Semi-annually, fixed interest rate of 4.45% p.a. Conditions under interest rate swaps contracts Principal Baht 3,100,000,000 Interest rate Monthly, floating interest rate of MLR-3%

Quarterly, floating interest rate of 6-months fixed deposit interest rate plus 2.815% Semi-annually, floating interest rate of 6-months fixed deposit interest rate plus 1.90% to 2.805%

The above contracts are mature during 29 July 2012 to 23 June 2017.

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 30 June 2010 and 31 December 2009 of provision for guarantee payment were as follows: Consolidated Separate financial statements financial statements 30

June 2010

31 December

2009

30 June 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 six-month periods ended 30 June 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 30 June 119,162 39,804 59,784 19,966


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12 Income tax expense

The current tax expense in the consolidated and separate statements of income is not equal to the amount determined by applying the Thai corporation tax rate to the accounting profit for the period principally because:

(a) unutilised tax losses brought forward from the previous year have been utilised during the year

to set-off against the current year's tax charge. (b) the different treatment for accounting and taxation purposes of certain items of income /

expenses.

13 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.

Central Plaza Hotel Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2010 (Unaudited) Revenue and results, based on business segments, in the consolidated financial statements for three-month periods ended 30 June 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 662 746 1,337 1,241 1,999 1,987 (18) (19) 1,981 1,968 Interest income 54 57 1 1 55 58 (49) (56) 6 2 Other income 128 104 8 7 136 111 (58) (64) 78 47 Total revenue 844 907 1,346 1,249 2,190 2,156 (125) (139) 2,065 2,017 Cost of sales 340 331 654 623 994 954 (18) (19) 976 935 Administrative expenses 179 170 418 445 597 615 (32) (37) 565 578 Other expenses 451 371 127 127 578 498 (26) (29) 552 469 Total expenses 970 872 1,199 1,195 2,169 2,067 (76) (85) 2,093 1,982 Share of profit (loss) from investments (43) 65 - - (43) 65 - - (43) 65 Profit (loss) before finance cost and income tax expense (169) 100 147 54 (22) 154 (49) (54) (71) 100 Finance cost (124) (90) - (2) (124) (92) 48 56 (76) (36) Income tax expense (8) (15) (46) (22) (54) (37) - - (54) (37) Profit (loss) for the period (301) (5) 101 30 (200) 25 (1) 2 (201) 27

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Revenue and results, based on business segments, in the consolidated financial statements for six-month periods ended 30 June 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 1,937 1,756 2,542 2,358 4,479 4,114 (34) (38) 4,445 4,076 Interest income 102 134 1 1 103 135 (91) (131) 12 4 Other income 291 243 15 14 306 257 (148) (138) 158 119 Total revenue 2,330 2,133 2,558 2,373 4,888 4,506 (273) (307) 4,615 4,199 Cost of sales 797 696 1,257 1,206 2,054 1,902 (34) (38) 2,020 1,864 Administrative expenses 390 342 806 839 1,196 1,181 (94) (82) 1,102 1,099 Other expenses 984 787 243 250 1,227 1,037 (53) (56) 1,174 981 Total expenses 2,171 1,825 2,306 2,295 4,477 4,120 (181) (176) 4,296 3,944 Share of profit (loss) from investments (20) 102 - - (20) 102 - - (20) 102 Profit before finance cost and income tax expense 139 410 252 78 391 488 (92) (131) 299 357 Finance cost (241) (210) (1) (4) (242) (214) 91 131 (151) (83) Income tax expense (45) (51) (76) (30) (121) (81) - - (121) (81) Profit (loss) for the period (147) 149 175 44 28 193 (1) - 27 193


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14 Basic earnings per share The calculations of basic earnings per share for the three-month and six-month periods ended 30 June 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:



Three-month period ended 30 June 2010 2009 2010 2009 (in million Baht / million shares) Profit (loss) attributable to equity holders of the Company (205) 21 26 36 Number of ordinary shares outstanding 1,350 1,350 1,350 1,350 Basic earnings (loss) per share (in Baht) (0.15) 0.02 0.02 0.03 Six-month period ended 30 June 2010 2009 2010 2009 (in million Baht / million shares) Profit attributable to equity holders

of the Company 1 166 156 111 Number of ordinary shares outstanding 1,350 1,350 1,350 1,350 Basic earnings per share (in Baht) 0.00 0.12 0.12 0.08

15 Dividends

At the annual general meeting of shareholders of the Company held on 26 April 2010, the shareholders approved the appropriation of dividend of Baht 0.05 per share, amounting to Baht 67.5 million. The dividend was paid to shareholders during 2010. At the annual general meeting of shareholders of the Company held on 23 April 2009, the shareholders approved the appropriation of dividend of Baht 0.10 per share, amounting to Baht 135 million. The dividend was paid to shareholders during 2009.

16 Commitments with non-related parties

Consolidated Separate financial statements financial statements 30 June 31 December 30 June 31 December 2010 2009 2010 2009 (in thousand Baht) Capital commitments Contracted but not provided

- Hotel construction 920,013 1,165,762 342,928 393,775 Operating lease and service commitments of Central Restaurants Group Co., Ltd. Within one year 76,011 81,709 - - After one year but within five years 54,241 58,204 - - After five years 3,564 4,037 - - Total 133,816 143,950 - -


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17 Political demonstration The political demonstration in Bangkok has impacted a subsidiary located in such area resulting revenues for the three months period ended 30 June 2010 for the subsidiary decreased by approximately Baht 158.5 million from the same period of prior year. Additionally, the political demonstration also impacted certain branches of another subsidiary located in the same area; consequently, revenues for the three months period ended 30 June 2010 for the subsidiary decreased by approximately Baht 29.4 million from the same period of prior year, whereby the mentioned revenues do not include revenue generated from new branches opennedg in 2010.

18 Events after the reporting period

Issue and offer of debenture On 5 July 2010, the Company issued the unsubordinated and unsecured debenture of Baht 500 million. Such debentures bear interest at fixed rate of 3.85 % p.a., payable on a quarterly basis. The debentures will be entirely matured on 29 July 2017. The Company has entered into interest rate swap contract for the debenture. The contract is effective on 5 July 2010 and will be matured on 29 June 2017 with the details as follow: Principal Baht 500,000,000 Interest rate Semi-annually, floating interest rate of 6-months fixed deposit interest rate plus

1.90 %

19 Thai Accounting Standards (TAS) and Thai Financial Reporting Standards (TFRS) not yet adopted The Group has not adopted the following new and revised TAS/TFRS that have been issued as of the reporting date but are not yet effective. The new and revised TAS/TFRS are anticipated to become effective for annual financial periods beginning on or after 1 January in the year indicated.

TAS/TFRS Topic Year

effective

TAS 1 (revised 2009) Presentation of Financial Statements 2011 TAS 2 (revised 2009) Inventories 2011 TAS 7 (revised 2009) Statement of Cash Flows 2011 TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates

and Errors 2011

TAS 10 (revised 2009) Events after the Reporting Period 2011 TAS 12 Income Taxes 2013 TAS 17 (revised 2009) Leases 2011 TAS 23 (revised 2009) Borrowing Costs 2011 TAS 24 (revised 2009) Related Party Disclosures 2011 TAS 27 (revised 2009) Consolidated and Separate Financial Statements 2011 TAS 28 (revised 2009) Investments in Associates 2011 TAS 31 (revised 2009) Interests in Joint Ventures 2011


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TAS/TFRS Topic Year

effective

TAS 33 (revised 2009) Earnings per Share 2011 TAS 34 (revised 2009) Interim Financial Reporting 2011 TAS 36 (revised 2009) Impairment of Assets 2011 TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets 2011 TAS 38 (revised 2009) Intangible Assets 2011 TAS 40 (revised 2009) Investment Property 2011 TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued

Operations 2011

Management is presently considering the potential impact of adopting and initial application of these new and revised TAS/TFRS on the consolidated and separate financial statements.

20 Reclassification of accounts Certain accounts in the statement of income for the three-month and six-month period ended 30 June 2009 have been reclassified to conform to the presentation in the 2010 interim financial statements as follows: Consolidated financial statements Before

reclass. Reclass. After

reclass. (in thousand Baht) Statement of income for three-month periods ended 30 June

Administrative and general expenses 560,472 18,027 578,499Land and building rental 89,832 (27,500) 62,332Management benefit expenses 2,126 9,473 11,599 -

for six-month periods ended 30 June Administrative and general expenses 1,062,901 36,342 1,099,243Land and building rental 233,287 (55,000) 178,287Management benefit expenses 2,587 18,658 21,245 -


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Separate financial statements Before

reclass. Reclass. After

reclass. (in thousand Baht) Statement of income for three-month periods ended 30 June

Administrative and general expenses 80,768 (9,153) 71,615Management benefit expenses 2,126 9,153 11,279 -

for six-month periods ended 30 June Administrative and general expenses 149,324 (18,308) 131,016Management benefit expenses 2,587 18,308 20,895 - The reclassifications have been made to comply with the classification set out in the Pronouncement of the Department of Business Development Re: Determination of items in the financial statements B.E. 2552 dated 30 January 2009.

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CENTRAL PLAZA HOTEL PUBLIC COMPANY LIMITED AND …centel.listedcompany.com/misc/financials/2010/note_q210... · 2010. 8. 16. · Central Plaza Hotel Public Company Limited and its