NOTE OF FINANCIAL STATEMENT FOR YEAR 1999

Vehicles 36,370,623 1,517,263 2,622,767 - - (29,267) 35,235,852 Chinaware, glassware, silverware and linen 69,348,220 7,913,491 10,527,137 - 4,674,052 - 71,408,626 Leasehold-net 170,700,495 - 780,736 15,666,208 - - 154,253,551 Total property, premises and equipment 4,680,996,475 120,472,067 36,462,697 40,578,302 34,025,288 (5,281,850) 4,753,170,981 .../12 - 12 - Consolidated Balance as at Additions Disposals Amortization Transfers Exchange Balance as at December 31, gain (loss) December 31, 1998 on translation 1999 Accumulated Depreciation - Land improvement 5,011,656 1,063,862 - - - - 6,075,518 - Buildings 287,796,564 39,994,939 2,048 - (804,882) - 326,984,573 - Buildings on lease land 520,652,360 64,662,937 - - (5,937,787) (3,692,662) 575,684,848 - Buildings-appraisal increase 55,770,983 2,413,045 - - - (323,904) 57,860,124 Sub-total 864,219,907 107,070,921 2,048 - (6,742,669) (4,016,566) 960,529,545 - Furniture and equipment 1,145,633,367 105,319,286 12,448,488 - (3,816,130) (732,715) 1,233,955,320 - Furniture and equipment-appraisal increase 4,764,359 - - - - (22,329) 4,742,030 Sub-total 1,150,397,726 105,319,286 12,448,488 - (3,816,130) (755,044) 1,238,697,350 - Interior and renovation 15,075,536 17,858,324 484,536 - 44,584,086 77,033,410 - Vehicles 25,471,543 4,197,634 3,233,177 - - (29,267) 26,406,733 Total accumulate depreciation 2,060,176,368 235,510,027 16,168,249 - 34,025,288 (4,800,877) 2,308,742,556 Property, premises and equipment-net Baht 2,620,820,107 115,037,960 20,294,448 40,578,302 - (480,973) 2,444,428,425 Depreciation and amortization Baht 306,654,734 276,088,329 .../13 - 13 - The Company only Balance as at Additions Disposals Amortized Transferred Balance as at December 31, December 31, 1998 1999 Land 29,761,040 - - - - 29,761,040 Land improvement 124,635 - - - - 124,635 Buildings 52,811,391 - - - - 52,811,391 Buildings on lease land 188,056,184 - - - - 188,056,184 Work in process 30,627,121 30,164,733 524,842 - (27,759,328) 32,507,684 Interior and renovation 18,282,994 36,387,043 361,458 24,912,094 12,639,125 42,035,610 Furniture and equipment 890,848,495 20,890,607 19,006,788 - 10,533,094 903,265,408 Vehicles 16,054,321 368,883 - - - 16,423,204 Chinaware, glassware, silverware and linen 35,800,643 5,274,552 8,733,770 - - 32,341,425 Leasehold-net 317,571,907 - - 23,666,208 - 293,905,699 Total property, premises and equipment 1,579,938,731 93,085,818 28,626,858 48,578,302 (4,587,109) 1,591,232,280 Accumulated Depreciation : Buildings 41,607,468 2,357,949 - - - 43,965,417 Buildings on lease land 158,072,197 6,890,529 - - - 164,962,726 Interior and renovation 9,771,902 4,764,120 - - - 14,536,022 Furniture and equipment 673,092,715 45,610,225 10,772,333 - (4,587,109) 703,343,518 Vehicles 10,037,699 2,622,450 84,070 - - 12,576,079 Total accumulated depreciation 892,581,981 62,245,273 10,856,383 - (4,587,109) 939,383,762 Property, premises and equipment net Baht 687,356,750 30,840,545 17,770,475 48,578,302 - 651,848,518 Depreciation and amortization Baht 126,580,258 110,823,575 As at December 31, 1999 and 1998, land and premises having a book value of Baht 840,361,288 and Baht 849,032,579, respectively, are mortgaged as security for loan from financial institutions and long-term loans of subsidiaries (see Notes 12 and 14). As at December 31, 1998, leasehold of the Company having a book value of Baht 158,000,000 and land and premises of subsidiaries having a book value of Baht 238,429,187 are mortgaged as security for the long-term loans of the Company (see Note 14). 11. OTHER ASSETS Other assets consist of the following: CONSOLIDATED THE COMPANY ONLY 1999 1998 1999 1998 Development expenses - 79,039,519 - - Goodwill on the acquisition of hotel business from subsidiary - - 358,750,000 399,750,000 Others 11,227,604 7,910,813 - - Baht 11,227,604 86,950,332 358,750,000 399,750,000 .../14 - 14 - 12. BANK OVERDRAFTS AND LOANS FROM FINANCIAL INSTITUTIONS Bank overdrafts and loans from financial institutions consist of the following: CONSOLIDATED THE COMPANY ONLY 1999 1998 1999 1998 Bank overdrafts 22,899,948 32,974,476 14,599,973 11,814,654 Loans from financial institutions 355,222,500 355,222,500 - - Baht 378,122,448 388,196,976 14,599,973 11,814,654 As at December 31, 1999 and 1998, the Company and subsidiaries have credit lines for bank overdrafts totalling Baht 114,000,000 and Baht 123,000,000, respectively, which are guaranteed by the chairperson and managing director of the Company totalling Baht 53,000,000 and are guaranteed by the Company totalling Baht 44,000,000 for 1999 and guaranteed by the chairperson and managing director of the Company totalling Baht 123,000,000 for 1998. As at December 31, 1999 and 1998, the Company has credit lines for bank overdrafts totalling Baht 60,000,000 and Baht 64,000,000, respectively, which are guaranteed by the chairperson and managing director of the Company Baht 43,000,000 for 1999 and Baht 64,000,000 for 1998. As at December 31, 1999 and 1998, loans from financial institutions are secured by the mortgage of land, premises and commercial building of two subsidiaries and also guaranteed by Royal Princess Public Company Limited (see Notes 8 and 10). 13. LONG-TERM LIABILITIES CONVERTED TO CURRENT LIABILITIES ACCORDING TO COVENANTS IN THE LOAN AGREEMENTS As at December 31, 1999 and 1998, one subsidiary, Korat Thani Corporation Limited, has not complied with the covenant in the loan agreement and in December 1999, the lender began legal proceeding against the company for repayment of debts. Accordingly, the loan in the amount of Baht 240,000,000 was presented as long-term liabilities converted to current liabilities according to covenants in the loan agreements. Such loan is collateralized by the mortgage of land and hotel building of the subsidiary and partly guaranteed by Royal Princess Public Company Limited (see Note 10). .../15 - 15 - 14. LONG-TERM LOANS Long-term loans consist of the following: CONSOLIDATED Interest rate Baht % p.a. 1999 Loans from financial institution Repayable in annual installments through 2001 by Korat Thani Corporation Limited MLR 240,000,000 Repayable in annual installments through 2000 by Royal Princess Public Co., Ltd. MLR 78,000,000 Long-term loans by Philippine Hoteliers, Inc. SIBOR+1.60 112,834,838 430,834,838 Less Current portion (78,000,000) Long-term liabilities converted to current liabilities according to covenants in the loan agreements (240,000,000) 112,834,838 In January and February 2000, the current portion of long-term debt has been prepaid in the amount of Baht 13,000,000. .../16 - 16 - CONSOLIDATED Interest rate US$ Exchange Baht % p.a. rate 1998 Loans from financial institution Repayable in Repayable in annual installments through 2001 by Korat Thani Corporation Limited MLR+0.75 240,000,000 Repayable in annual installments through 2002 by Dusit Thani Public Co., Ltd. MLR+0.75 252,000,000 Repayable in Semi-annual installments through 2002 by Dusit Thani Public Co., Ltd. LIBOR+2.50 1,750,000 36.89 64,557,500 Repayable in annual installments through 2000 of Royal Princess Public Co., Ltd. MLR+0.75 182,000,000 Long-term loans repayable by Philippine Hoteliers, Inc. SIBOR+1.60 339,202,515 1,077,760,015 Less Current portion (152,445,000) Long-term liabilities converted to current liabilities according to covenants in the loan agreements (240,000,000) 685,315,015 .../17 - 17 - In January and February 1999, the current portion of long-term debt has been prepaid in the amount of Baht 39,222,500 and also the long-term portion in the amount of Baht 127,000,000. THE COMPANY ONLY Interest rate US$ Exchange Baht % p.a. rate 1998 Loans from financial institution Repayable in semi-annual installments through 2002 LIBOR+2.50 1,750,000 36.89 64,557,500 Repayable in annual installments through 2002 MLR+0.75 252,000,000 316,557,500 Less Current portion (48,445,000) 268,112,500 As at December 31, 1999 and 1998, loan from financial institution of Korat Thani Corporation Limited repayable in annual installments through 2001 is guaranteed by the pledge of land and premises of Korat Thani Corporation Limited (see Note 10) and also guaranteed by Royal Princess Public Company Limited. Korat Thani Corporation Limited had not complied with a covenant in the loan agreement. Accordingly, the loan was presented as long-term liabilities converted to current liabilities according to covenants in the loan agreements. As at December 31, 1999 and 1998, loans from financial institution of Royal Princess Public Company Limited repayable in annual installments through 2000 are secured by the mortgage of land and premises of Royal Princess Public Company Limited (see Note 10). As at December 31, 1999 and 1998, long-term loans of Philippine Hoteliers, Inc. is repayable in 13 quarterly installments with two years grace period and is collaterized by a mortgage on the hotel building and its improvement and an assignment of the insurance contract on the said building and improvements. As at December 31, 1998, loans from financial institution of the Company repayable in annual installments through 2002 and semi-annual installments through 2002 are secured by the mortgage of land, premises and condominium units of subsidiaries, and leasehold of the Company (see Notes 8 and 10). The loan agreement with a financial institution carry certain restrictive covenants pertaining to the operations and financial position of the Company. Some loan agreements also carry restrictive covenants pertaining to the registered capital, the amount of tangible assets and dividend payment. .../18 - 18 - 15. LEGAL RESERVE Pursuant to the Public Companies Act B.E. 2535 (1992), the Company must allocate to a reserve fund not less than five percent of the annual net income, after deduction of the total accumulated loss brought forward (if any) until the reserve fund reaches an amount of not less than ten percent of the registered capital, unless the Company has a regulation or other law which prescribes for a higher amount of such reserve. 16. OTHER RESERVES 1999 1998 Reserve for business expansion 277,000,000 277,000,000 Reserve for dividend equalization 33,000,000 33,000,000 Baht 310,000,000 310,000,000 17. PRIOR YEARS ADJUSTMENTS Prior years adjustments consist of the following : 17.1 In the consolidated financial statements for the year ended December 31, 1999 and 1998, the recognition of share of subsidiaries losses in excess of investments and minority interest but not exceeding the amount of liabilities guaranteed by the other subsidiary retroactively, in the amount of Baht 32,702,131 and Baht 163,057,596, respectively (see Note 4.4). 17.2 In the Companys financial statements for the year ended December 31, 1998, the recognition of share of subsidiaries losses in excess of investments and minority interest but not exceeding the amount of liabilities guaranteed by the other subsidiary retroactively, in the amount of Baht 163,057,596 (see Note 4.4). 18. GAIN ON SALES OF INVESTMENTS For the year ended December 31, 1998, the subsidiary had a gain on the sale of investment in Melrose Texas Investment Partnership, L.P. in the amount of Baht 92,406,245. In addition, the Company had a gain in the amount of Baht 375,770,889 from the sale of investment in Dusit Sindhorn Company Limited to Siam Sindhorn Company Limited, which had a carrying value based on the equity method of Baht 734,229,111 and selling price of Baht 1,110,000,000. Dusit Sindhorn Company Limited is an associated company whose share capital was 49.99% owned by the Company. .../19 - 19 - 19. LONG-TERM LEASES Long-term leases consist of the following: Dusit Thani Public Company Limited Type of lease Period Rental payment per year Baht Land rental April 1, 1973-March 31, 2003 1st ten years 420,000 2nd ten years 780,000 3rd ten years 1,200,000 Land rental April 1, 1993-March 31, 2003 1,170,000 Land rental April 1, 1993-March 31, 2003 450,000 The Company also has a land lease agreement for the period from February 1, 1994, to September 30, 2017. The rental payments per year are as follows: Period Rental payment per year Baht February 1, 1994 - December 31, 2004 3,000,000 January 1, 2005 - December 31, 2010 3,600,000 January 1, 2011 - September 30, 2017 4,200,000 However, the rental payments may be changed according to the Swiss Franc exchange rate. On October 1, 1998, the Company entered into a land and hotel building lease agreement with one subsidiary, namely Dusit Hotels and Resorts Company Limited (formerly Dusit Resort Cha-am Company Limited), for a period of 3 years commencing on October 1, 1998, with the condition that the lease can be extended for another 6 periods, consisting of 5 periods of 3 years each and the last period of 2 years. The rental payment is Baht 900,000 per month. Royal Princess Public Company Limited Type of lease Remaining Period Rental Expenses for the Remaining Lease Period 1999 Building 2000-2000 901,353 Building 2001-2011 23,492,151 Baht 24,393,504 1998 Building 1999-2000 6,497,923 Building 2001-2011 23,492,151 Baht 29,990,074 .../20 - 20 - Philippine Hoteliers, Inc. The subsidiary company has a lease agreement for the land on which the hotel building is situated with a specified rental payable quarterly. The term of the lease is up to December 31, 2001 and is renewable for another period of 25 years at the option of the company. Upon termination of the lease, the company shall return and surrender to the lessor the leased property together with the building constructed thereon, and with all the permanent fixtures therein. 20. TRANSACTIONS BETWEEN RELATED COMPANIES Transactions between related companies are as follows: 20.1 Investment in subsidiary, associated, and related companies 1999 The Company Only Companys Type of Relationship Issued and % of Cost Equity Consolidated Dividend name Business paid-up shareholding Subsidiaries 1. Dusit Hotels and Resorts Co., Ltd. (formerly Dusit Resort Cha-am Hotel and Co,Ltd.) Condominium Subsidiary 225,000,000 97.32 403,890,820 0 0 2. Royal Princess Hotel and Public Co., Ltd. Management Subsidiary 600,000,000 79.65 780,046,661 327,683,860 0 3. Philippine Hoteliers, Inc. Hotel Subsidiary PESO409, 870,100 85.76 688,948,558 603,950,140 0 4. Dusit Thani Delaware, Inc. Holding Subsidiary US$ 850,000 100.00 0 0 0 5. Dusit Thani International Co., Ltd. Holding Subsidiary 4,000,000 99.99 3,999,720 3,127,480 0 6. Best Western Room (Thailand) Co., Ltd. reservation agent Subsidiary 25,000 99.30 24,825 25,787 25,787 7. Landmark Hotel Co., Ltd. Hotel Subsidiary 10,000,000 99.88 9,988,000 0 0 8. Dusit Thani College College Subsidiary - - - - 217,715,882 Associated companies 1. Worldclass Rent a Car Co., Ltd. Car rental Associated 100,000,000 20.00 20,000,000 0 0 2. Direct Commerce Technology Co., Ltd. E-Commerce Associated 10,000,000 49.00 1,224,990 1,224,990 1,224,990 Related companies 1. Acme Printing Co., Ltd. Printing house Director holds the shares 40,000,000 - - - - 2. Crown Property Bureau Land leasing Major shareholder - - - - - Baht 1,908,123,574 936,012,257 218,966,659 - .../21 - 21 - 1998 The Company Only Companys Type of Relationship Issued and % of Cost Equity Consolidated Dividend name business paid-up shareholding Subsidiaries 1. Dusit Hotels and Resorts Co,Ltd. Hotel and (formerly Dusit Resort Cha-am Co., Ltd.) condominium Subsidiary 225,000,000 93.56 391,191,880 0 0 2. Royal Princess Hotel and Public Co., Ltd. management Subsidiary 600,000,000 79.65 780,046,661 427,745,851 0 3. Philippine Hoteliers, Inc. Hotel Subsidiary PESO409,870,100 85.76 688,948,558 614,275,899 0 4. Dusit Thani Delaware, Inc. Holding Subsidiary US$ 850,000 100.00 21,726,000 113,968,118 0 5. Dusit Thani International Co., Ltd. Holding Subsidiary 4,000,000 99.99 3,999,720 4,802,335 0 6. Best Western (Thailand) Room Co., Ltd. reservation agent Subsidiary 25,000 99.30 24,825 25,787 25,787 7. Format Advertising Co., Ltd. Advertisement Subsidiary 500,000 59.70 298,500 1,106,178 1,106,178 8. Landmark Hotel Co., Ltd. Hotel Subsidiary 10,000,000 99.88 9,988,000 0 0 9. Dusit Thani College college Subsidiary - - - - 217,715,882 Associated companies 1. DPMN Industries Co., Ltd. Laundry Associated 60,000,000 25.00 15,000,000 0 0 2. Worldclass Rent a Car Co., Ltd. Car rental Associated 100,000,000 20.00 20,000,000 0 0 Related companies 1. Acme Printing Co., Ltd. Printing house Director holds the shares 40,000,000 - - - - 2. Crown Property Bureau Land leasing Major shareholder - - - - - Bah1,931,224,144 1,161,924,168 218,847,847 - On November 15, 1999, the Directors meeting of the Company passed a resolution to (more)