Explanation of the 20% change of Business Performance

LPN/IR3/50

22 February 2007

Subject: Explanation on the Change of More Than 20% of the Business Performance

To: Director and Manager The Stock Exchange of Thailand

Attachment : The Financial Statement for the year 2006

According to the Act of Legislation of The Stock Exchange of Thailand Section 56 on disclosing information that the Company had to submit its financial statement within 60 days after the last day of the end of the year 2006, we herewith submit to you 1 set of L.P.N Development Public CO., Ltd., its subsidiaries and joint companys' reviewed financial statement of 2006 L.P.N. Development Public Co., Ltd. carries on the business of real estate (residential condominiums) development with the largest proportion of the residential condominium unit registration in 2006 due to the differentiation strategy which added more facilities and services to meet all needs of the residents in Total Solution style. Moreover, the company placed an emphasis on creating vibrant and quality community under the concept of Corporate Environmental and Social Responsibility.

The company, its affiliates and joint companies had total revenues of Baht 5,020.49 Million, greater than those of Baht 3,582.63 Million in the same period of 2005, or 40.13 % more. This was the consequence of the unit ownership transfer and recognized revenues of 4 main projects, amounting 3,133 units, valuing Baht 4,635.55 Million, namely Lumpini Center Nawamin,Lumpini Place Pinklao, Lumpini Ville Sukhumvit 77 and Lumpini Ville Cultural Center. Another Baht 384.94 Million was from the unit ownership transfer of previous projects, rentals, service and management service fees and other revenues. However, the gross profit from the sales decreased from 35.46% in the previous year to 32.31% in this year. The main reason was that most recognized revenues in 2006 came from the unit ownership transfer of Lumpini Ville Cultural Center, which was the first project developed under the concept of Total Solution for residential condominium with the purpose of creating quality communities. Therefore, the company had spent more costs in adding facilities for the customers, encouraging their trust in the company and their recommendation to friends and relatives. Nevertheless, the company could maintain the rate of the gross profit no less than 30% as appointed. Consequently, the net profit in 2006 was 15.24% , decreasing from 16.42 % in 2005. By the way, when considering only the net income figure in 2006, there was 30.06 % increase from 2005 due to more revenue recognition. When considering the statement of cash flow on 31st December, 2006, the cash remained Baht 275.35 Million, decreasing from Baht 288.84 Million in the same period of the previous year or 4.67 % less. This was the result of the dividend paid for the turnover of 2005 and the first half of the year 2006, amounting Baht 442.82 Million, and the cost of an investment in a land to be developed in 2007. The debt to equity ratio on 31st December, 2005 and 2006 increased from 0.51:1 to 0.80:1 respectively. Moreover, interest bearing debt with interest also increased from 0.19:1 to 0.38:1. By the way, in 2007, the company is launching a new project named Lumpini Condo Town focusing on the target group with an income between 10,000-20,000 Baht/ month. For supporting the customers to have their own residence. The project would be managed in the small-size township style under the concept of Vibrant Community which meets all needs of city-life.

Summarized Table

	Consolidated Financial Statement			Company Only Financial Statement
Item	2006	2005	% Change	2006	2005	% Change
1. Total Revenues (Million Baht)	5,020.49	3,582.63	40.13%	4,924.43	3,526.87	39.63%
2. Gross Margin (G/P) from Sales (%)	32.31%	35.46%	(3.15%)	30.90%	33.79%	(2.89%)
3. G/P from Rent& Services (%)	25.99%	29.31%	(3.32%)	0.02%	20.72%	(20.70%)
4. G/P from Management Service Fee (%)	32.63%	41.81%	(9.18%)	-%	-%	-%
5. G/P from Line 2 4 (Million Baht)	1,588.01	1,249.20	27.12%	1,466.92	1,135.83	29.15%
6. G/P from Line 2 4 (%)	32.27%	35.66%	(3.39%)	30.69%	33.70%	(3.01%)
7. Selling and Administrative Expenses (Million Baht)	585.84	448.35	30.66%	523.29	445.45	17.48%
8. Selling and Administrative Expenses (%)	11.67%	12.51%	(0.84%)	10.63%	12.63%	(2.00%)
9. E.B.I.T. (Million Baht)	1,097.00	876.17	25.20%	1,077.94	842.60	27.93%
10. E.B.I.T. (%)	21.85%	24.46%	(2.61%)	21.89%	23.89%	(2.00%)
11. Net Profit (Million Baht)	765.23	588.38	30.06%	765.23	588.38	30.06%
12. Net Profit (%)	15.24%	16.42%	(1.18%)	15.54%	16.68%	(1.14%)
13. Earning per Share (Baht)	0.52	0.43	20.93%	0.52	0.43	20.93%
14. Book value per Share (Baht)	2.24	2.20	1.82%	2.25	2.20	2.27%

Yours Sincerely,

( Opas Sripayak )
Managing Director