Annual Report 2019 Building For The Future 2019 Annual Report 1 Annual Report 2019 Chairman’s Message 4 Contents Group CEO’s Message 6 Key Milestones 8 Our Strategy In Focus 10 Our Business At a Glance 12 Hotels & Resorts 14 Hospitality Education 16 Property Development 18 Dusit Foods 20 Hospitality-Related Services 21 Board of Directors 22 Awards 2019 24 Significant Financial Information 26 The Results Of Operations And Profit 27 Appropriation For 2019 Shareholding Structure 28 Revenue Structure 29 Nature Of Business 32 Risk Factors 56 Shareholders 59 Dividend Policy 61 Management Structure 62 Corporate Governance Report 74 Dusit Thani And Sustainability Development 99 Internal Controls And Risk Management 115 Auditor’s Fee 116 Related Party Transactions 117 Management Discussion And Analysis 2019 121 The Audit Committee Report For 2019 129 The Nomination Remuneration And Corporate 131 Governance Committee Report For 2019 The Investment Committee Report For 2019 132 The Board Of Directors’ Responsibility 133 For Financial Reports Independent Auditor’s Report 134 And Financial Statements Board Of Directors, Executives, Authorized Persons 245 And Company Secretary Subsidiary And Associated Companies 270 General Information And 276 Other Significant Information 3 Dusit Thani Public Company Limited Annual Report 2019 Chairman’s Message “Throughout the year, the Board and I were delighted to sign off on several initiatives that will help to mitigate risk and safeguard stakeholders while furthering Dusit’s strategic journey towards balance, expansion, and diversification.” Dear shareholders and stakeholders, 2019 was a challenging year for the tourism and hospitality Normally a significant source of revenue for our company, the industry as our business was conducted against a backdrop of hotel officially closed its doors after almost 50 years of illustrious various disruptive forces. The US-China trade tensions, regional service on 5 January 2020. The closure marked the end of an tensions in the Middle East, the surging Thai baht, and cooling era, the beginning of a new strategic chapter, and the challenge tourist arrivals in Thailand were just some of the external to establish new sources of revenue to compensate for the threats our company and others faced throughout the year. shortfall until the new Dusit Thani Bangkok opens in 2023. This challenge and shortfall, of course, had been anticipated As a company, we also suffered one of the darkest days in our and planned for, and all our investments in new lines of history when terrorists stormed the compound that houses business and new properties in Bangkok were strategically dusitD2 Nairobi hotel in Kenya, claiming the lives of 21 innocent made to compensate for the loss of short-term revenue while people, including six of our beloved colleagues. keeping our talented Dusit Thani Bangkok team intact. Though we succeeded in creating new business units and opening new The resilient response of the hotel team to this senseless tragedy, properties for these employees to run, the external challenges and their determination to quickly get the hotel back up and mentioned above slowed our progress towards obtaining running, is truly an inspiration to us all. The outpouring of realisable revenue from these investments. We have recalibrated support from the global network of Dusit properties was also as a result, and have strong foundations to build on in 2020 heartening to see, demonstrating the core value of care that and beyond. runs deep throughout our company and our people. Our strong corporate governance and commitment to creating Unpredictable and shocking events like this, alongside other sustainable value for all our stakeholders was officially disruptive external forces in 2019, highlighted the importance recognised by the Thai Institute of Directors Association (IOD) of having the right mix of smart investment, talented and at the Board of the Year Awards 2018, held in 2019, where we skilled employees, capacity for innovation and diversification, received the silver award in the category for leading companies and forward-thinking mentality needed to overcome any with a market capitalisation of under 30 billion baht. For us, ongoing challenges and obstacles while continuing to lay the business is a marathon, not a sprint, and we will take every foundations for long-term value creation. step necessary to ensure we can always go the distance. Throughout the year, the Board and I were delighted to sign off On behalf of the Board of Directors, I would like to thank all our on several initiatives that will help to mitigate risk and safe- guests, customers, business partners and all other stakeholders guard stakeholders while furthering Dusit’s strategic journey for your continued and much-appreciated support for our towards balance, expansion, and diversification. company and your trust in our unique brand of Thai-inspired, gracious hospitality. We look forward to creating long-term “We look forward to creating long-term These initiatives, which included, amongst others, the formation value for you while building a future we can all be proud of. of new hospitality-related services in Bangkok, also directly value for you while building a future addressed the internal challenges our company faced in 2019. Graciously yours, Chief among these challenges was the closure of our renowned we can all be proud of.” flagship hotel, Dusit Thani Bangkok, for redevelopment as part of our landmark mixed-use development, Dusit Central Park. Arsa Sarasin Arsa Sarasi Chairman / Independent Director 4 5 Annual Report 2019 “Throughout the year, the Board and I were delighted to sign off on several initiatives that will help to mitigate risk and safeguard stakeholders while furthering Dusit’s strategic journey towards balance, expansion, and diversification.” Dear shareholders and stakeholders, 2019 was a challenging year for the tourism and hospitality Normally a significant source of revenue for our company, the industry as our business was conducted against a backdrop of hotel officially closed its doors after almost 50 years of illustrious various disruptive forces. The US-China trade tensions, regional service on 5 January 2020. The closure marked the end of an tensions in the Middle East, the surging Thai baht, and cooling era, the beginning of a new strategic chapter, and the challenge tourist arrivals in Thailand were just some of the external to establish new sources of revenue to compensate for the threats our company and others faced throughout the year. shortfall until the new Dusit Thani Bangkok opens in 2023. This challenge and shortfall, of course, had been anticipated As a company, we also suffered one of the darkest days in our and planned for, and all our investments in new lines of history when terrorists stormed the compound that houses business and new properties in Bangkok were strategically dusitD2 Nairobi hotel in Kenya, claiming the lives of 21 innocent made to compensate for the loss of short-term revenue while people, including six of our beloved colleagues. keeping our talented Dusit Thani Bangkok team intact. Though we succeeded in creating new business units and opening new The resilient response of the hotel team to this senseless tragedy, properties for these employees to run, the external challenges and their determination to quickly get the hotel back up and mentioned above slowed our progress towards obtaining running, is truly an inspiration to us all. The outpouring of realisable revenue from these investments. We have recalibrated support from the global network of Dusit properties was also as a result, and have strong foundations to build on in 2020 heartening to see, demonstrating the core value of care that and beyond. runs deep throughout our company and our people. Our strong corporate governance and commitment to creating Unpredictable and shocking events like this, alongside other sustainable value for all our stakeholders was officially disruptive external forces in 2019, highlighted the importance recognised by the Thai Institute of Directors Association (IOD) of having the right mix of smart investment, talented and at the Board of the Year Awards 2018, held in 2019, where we skilled employees, capacity for innovation and diversification, received the silver award in the category for leading companies and forward-thinking mentality needed to overcome any with a market capitalisation of under 30 billion baht. For us, ongoing challenges and obstacles while continuing to lay the business is a marathon, not a sprint, and we will take every foundations for long-term value creation. step necessary to ensure we can always go the distance. Throughout the year, the Board and I were delighted to sign off On behalf of the Board of Directors, I would like to thank all our on several initiatives that will help to mitigate risk and safe- guests, customers, business partners and all other stakeholders guard stakeholders while furthering Dusit’s strategic journey for your continued and much-appreciated support for our towards balance, expansion, and diversification. company and your trust in our unique brand of Thai-inspired, gracious hospitality. We look forward to creating long-term These initiatives, which included, amongst others, the formation value for you while building a future we can all be proud of. of new hospitality-related services in Bangkok, also directly addressed the internal challenges our company faced in 2019. Graciously yours, Chief among these