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Message Messagefrom fromtheBoards BoardDirectors of Directors2 2 Company Information4 4 Company Information Financial Information6 6 Financial Information Nature of Business7 7 Nature of Business Shareholder Structure Management20 26 Shareholder Structure andand Management Board of Directors36 42 Board of Directors Organization Chart38 44 Organization Chart Project’s Information 46 Project Information 40 Map 52 Map 46 Marketing and Competition 53 Market and Competition Real Estate Business Outlook and Trend47 64 Real Estate Industry Outlook Trend 55 67 Othersand Information Others information Managements59 72 Management and Authorized Person Details of the company of Positions66 76 Details ofRemuneration Directors 70 77 Executives’ Executives’ Remuneration Corporate Governance71 79 Corporate Governance Reference73 87 ConnectedReference Transactions82 88 Factors83 94 Connected Transactions with RelatedRisk Persons Explanation and Analysis of Financial and Operating Results87 100 Risk Factors of Independent Auditor91 114 Explanation and AnalysisReport of Financial and Operating Statements of Financial Position104115 Results Notes to Consolidated Financial Statements Report of Independent Auditor 105125 The Board of Directors’ Responsibilities Balance Sheets 113171 Audit Financial Committee Report 2011 172 Note to Consolidated Statements 149 Auditor Fee Accuracy Sanctification Form 174 The Board of directors’ responsibilities 150 Audit committee report 152 Audit Fee Accuracy 156
002
Annual Report 2011
Message from the Board of Directors The ood disaster late 2011 caused massive damage to 17 provinces, affecting 1.9 million households. (Source: Department of Disaster Prevention and Mitigation). The agricultural and manufacturing sectors suffered dearly from the disaster, aside from huge loss of properties and the overall property development industry in the fourth quarter. In the Greater Bangkok, the ood affected a number of 1 million houses, including 549,888 units belonging to property development companies – 461,664 units being low-rise development and 88,224 units being high-rise development. (Source: Agency for Real Estate Affairs) Eighty per cent of the industry in this area was affected. Safe were the areas in the East of Bangkok like Ramkhamhaeng, Rama IX, Srinakarin, Suvarnabhumi, Bangna, Theparak and some areas in the West like Rama II and partial sections of Ratchaphruek. The ood hit 9 projects of the company, from 27 under development. Three of them were devastated. However, the company realized the importance of assistance to relieve
the troubles and help the projects’ residents. All projects were protected by ood barriers, and water pumps were installed and monitored around the clock. The company came up with the best efforts to ease troubles at affected projects, from the turning of condominium units in Metro Park Sathorn for shelters. Relief bags, food, drinking water, medicine, paper toilets, transport trucks and boats were prepared, aside from patrol boat services. High on the agenda was to pump water out of the sites. “Big bags” were placed to block the in ow, before the pumping started. This helped bring back the normal condition in a fast speed. After the water subsided, the company came up with assistance measures, like photos of all houses and electrical, water and sanitary system checks. The company also coordinated with government units for relief funds and worked with nancial institutions for relaxation in debt repayment conditions. Last, the company quickly rehabilitated the projects, to restore the normal condition. In the fourth quarter of the year, the company was ready to transfer units in Metro Sky Ratchada condominium project. Coupled with units from Metro Park Sathorn project, they increased the company’s condominium unit sale from Bt778 million in the same quarter in 2010 to Bt 1,074 million, or a 38% increase. Revenue from low-rise development projects was Bt6,926 million, close to 2010 level, thanks to the fact that newly-launched projects and those in city areas and in the West were unaffected. However, without proceeds from land plot sale like what happened in 2010, the net pro t was Bt488 million. The ood was past, but concerns linger on among ood victims, the general public and foreign investors. To restore the con dence, the government set up the Strategic Committee for Water Resources Management and proposed the water-management master plan to protect economic areas and key community areas in provinces with a total budget of Bt357,126 million. Short-term strategies will require a budget of Bt17,126 million while long-term projects
Property Perfect Public Company Limited
Dr.Tawatchai Nakhata Chairman
003
Chainid Ngow - Sirimanee Chief Executive Of cer
The company will launch 9 condominium projects, locating near electric train routes and community areas. The new S Class concept will be launched, together with a showroom on RatchaOn top of the government’s strategies, the company also comes up with dapisek Road which will distribute a long-term protection strategy to assure residents of existing projects and information of all projects. The company does not overlook buyers in general of safety. The strategy calls for three layers of protection. First, the development sites would be lifted above road height, particularly negative factors, which include the the entrance. Water pumping stations would be installed, while reservoirs will increase in minimum wage, construction be equipped with sluice gates. The fences around the projects would be materials and development cost due strengthened to prevent in ows of underground and above-ground water. to ood-prevention measures. This will Second, home fences would be installed with water-protection sheets. Third, raise the development cost and the the garage level would be lifted above road height to prevent houses from price of new houses should be adjusted ood and reduce losses. To be installed are valves to open and close the upward by 5-10%. drainage system, which would prevent water from the outside. Switches For the past year, the Board of would be higher above ground for safety. Directors would like to express gratitude for sustainable management of the Chao Phraya basin will require Bt300,000 million. The remaining Bt40,000 million is allocated for the remaining 17 basins. If all plans are implemented as planned, the water-management ef ciency is expected to increase and this should enhance home buyer con dence as they are looking for a house in Bangkok and peripheral areas.
The ood-protection measures are expected to increase con dence among home buyers. The company expects the property industry to show 10-15% in growth in 2012, thanks to the economic growth forecast of 5% compared to 1% in 2011. Meanwhile, the industry should witness higher sales due to delayed purchases in the fourth quarter. As an offensive strategy, the company sets to grow business from single houses and condominiums. This year, the company will launch 23 projects, consisting of those at new sites and expansion phases of existing projects, with combined value of about Bt26,000 million. Of total, 14 projects will be low-rise development, featuring new home designs to cover all target groups. In the second half of 2012, the company will launch more housing units with the price tag of Bt2.5-Bt3 million. Modi Villa, a new brand for single houses and duplex houses, will be launched.
to all supporters who are shareholders, investors, trade partners and nancial institutions for their supports. Thanks also go to all public and private organizations which joined forces in ghting last year’s oods, and all employees who showed their deep commitment. Aside from being a major force in further boosting the company’s growth, they have always helped the company overcome dif culties.
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Annual Report 2011
Company Information : Property Perfect Public Company Limited : 17th Flr. Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-247-3328 ent Type of Business : Real Estate Development, with focus on housing development for sale in Greater Bangkok under brands “Maneerin Lake & Park”, “Perfect Park”, “Perfect Place”, “Perfect Masterpiece”, “The Metro”, “The Villa”,” Modi Villa”, “Metro Park”, “Metro Sky”, “The Sky”. “ iCondo” and “Uniloft” No. of Paid-up Share : 4,726,456,320 Shares (31 December 2011) Par Value : Baht 1 Paid-up Capital : Baht 4,726,456,320
Name Head Of ce
Investment in Other Companies Name and Address
Registered Capital (MB)
Paid-up Capital (MB)
Estate Perfect Co., Ltd. 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02–246-0733
1,200
1,200
100%
Real Estate Development
Bright Development Bangkok Co., Ltd. 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02–246-0733
1,000
1,000
100%
Real Estate Development
Residence Number Nine Co., Ltd. 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02–246-0733
1,000
1,000
100%
We Retail Public Company Limited (Formerly Name: Daidomon Group Public Company Limited) 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02–246-0733
4,132
Percentage Type of of Business Investment
Real Estate Development 2,066
88.06%
Real Estate Development
Property Perfect Public Company Limited
005
Name and Address
Registered Capital (MB)
Paid-up Capital (MB)
U & I Construction Bangkok Co., Ltd. 27th Flr., Vongvanich B Bldg.,100/89 Rama IX Road, Huaykwang, Bangkok. Tel. 02–246-2095 Fax. 02–246-2020
100
50
100%
Real Estate Construction
Perfect Sport Club Co., Ltd. 19th Flr., Vongvanich B Bldg., 100/52 Rama IX Road, Huaykwang, Bangkok. Tel. 02-645-1406-8 Fax. 02-645-1409
5
5
100%
Manage Fitness and Clubhouse
Uniloft Service (Thailand) Co., Ltd. 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02–246-0733
0.1
0.1
100%
Service Apartment
Perfect Prefab Co., Ltd. 10th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02–246-0733
10
2.5
51%
Manufacturer and install prefab structures
2,230
1,780
20.22%
Real Estate Development
Real Service Co., Ltd. 100/9 Soi Ta-it, Rattanathibet Road, Nonthaburi Tel. 02-594-4001-5 Fax. 02-594-4021
40
22.5
19%
Home Service
Centrepoint Shopping Mall Co., Ltd. * (Subsidiary of We Retail Plc.) 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok Tel. 02-245-6640-7 Fax. 02-645-1976
500
400.2
88.06%
Real Estate Development
Krungthep Land Plc. 21st Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok Tel. 02-645-0960-3 Fax. 02-645-0380
* The subsidiary indirectly owned by the company.
Percentage Type of of Business Investment
006
Annual Report 2011
Financial Information
Consolidate The Company Only 2011 Financial Position (Unit : Million Baht) Total Assets Project Development Cost and Land for Development Total Liabilities Shareholders’ Equity Operation Results (Unit : Million Baht) Sales Total Revenue Gross Margin Net Income Financial Ratio Return on Total Revenue Return on Equity Return on Total Assets Current Ratio Quick Ratio Per Share Data (Unit : Baht) Net Income per share Dividend Book value
2011
2010
2009
21,379 18,602 17,318 13,099 18,021 11,711 11,027 9,866 13,989 11,767 10,551 6,674 7,390 6,834 6,767 6,425 8,081 5,618 7,462 4,846 8,221 5,812 7,586 4,977 2,932 2,113 2,434 1,498 488 331 538 386 5.94% 5.69% 7.09% 7.76% 6.70% 4.86% 8.15% 6.06% 2.37% 1.84% 3.54% 3.14% 1.82 1.36 2.21 2.45 0.15 0.12 0.41 0.21 0.10 0.04 1.56
0.07 0.04 1.45
Note : * The company change the par value from Bt6 to Bt1 on 6 May 2011
0.68 0.33 8.59
0.49 0.25 8.16
Property Perfect Public Company Limited
007
Nature of Business Background and Major Milestones Property Perfect Public Company Limited was established on 14 August 1985 by the group of Maneeya Estate’’s operators, with initial registered capital of Bt300,000. On 19 October 1993, the company was registered as a public company and on 1 June in the same year, it was listed on the Stock Exchange of Thailand in the Property Sector. Following the 1997 nancial crisis, the company like other local developers suffered dearly. On 19 February 2001, the company was ordered by the Central Bankruptcy Court to fall under business rehabilitation. The rehabilitation plan won the Court’s approval on 2 October 2001. The company was moved to the REHABCO Sector in 1997 and resumed share trading as a company under rehabilitation on 22 November 2001. Asian International Planners Company Limited is the planner. Following the success to meet the Stock Exchange of Thailand’s nancial criteria, the company returned to the Property Sector on 19 June 2002.In 31 December,2011, The company fully paid creditors as required by the rehabilitation plan. The company has extensively expanded the business and undergone capital increases and reduction. As of 31 December 2011, the company’s registered capital stood at Bt5,961.16million or 5,961.16 million shares at Bt1 par value while the paid-up capital totaled Bt4,726.46 million or 4,726.46 million shares at Bt1 par value. (The company registered a change in the par value from Bt6 a share to Bt1 on 6 May 2011).
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Annual Report 2011
Major events in the past 5 years 2007 : January 2007
2008
•
Subscribe to capital-increase shares of Krungthep Land Public Company Limited (Krungthep Land), to maintain its stake. The company was allocated 6,000,000 shares at Bt10 apiece or Bt60,000,000.
:
April 2007
•
Set up a new subsidiary, Bright Development Bangkok Company Limited, to develop Metro Sky Ratchada, with registered capital of Bt1 million, consisting of 10,000 shares (Par Bt100). The company owns 99.94%.
•
Issue 1-year secured debentures worth Bt462,150,000 of Bright Development Bangkok Compay Limited, to Lehman Brothers Pan Asian Investments. The proceeds are used to nance the purchase of a land plot on Ratchadapisek Road.
:
September 2007
•
Set up Centrepoint Shopping Mall Company Limited to develop shopping malls on land leased to the company and sub-leased to a foreign partner, which has been in the retail development business. The joint venture is registered with Bt1 million capital (10,000 shares at Bt100 par), owned 59.95% by the company and 40% by Timberline Investment Pte Ltd.
:
April 2008
•
Approve the issuance of all types of debentures (secured or unsecured) worth no more than Bt2,000 million. The 5-year debentures will be offered in a public offering and/or institutional investors, and/or a private placement. The proceeds will be used in expanding land bank, retiring high-cost debt, and boosting the working capital.
•
Establish Property Perfect Fund (the fund), with unit trusts worth Bt520 million. The proceeds were used to buy land and 64 units of 2-storey single houses. Five-year minimum revenue guarantee is offered to the fund. The company invested 5.73% in the fund and raised the stake to 6.46% as of 30 June 2010.
Resolutions of the 1/2008 extraordinary shareholder meeting on 20 June 2000 •
Cancel the issuance of remaining convertible debentures worth US$15 million, approved at the 1/2005 extraordinary shareholder meeting on 19 September 2005.
•
Cancel the issuance and allocation of 39,000,000 shares, reserved for the exercise of warrants issued to directors and/or employees under the ESOP scheme.
•
Reduce the registered capital from Bt6,213.56 million to Bt5,589.56 million, by the cancellation of 931.59 shares (Bt6 par value).
•
Approve the issuance of convertible debentures worth no more than US$30 million or no more than Bt1,000 million in baht equivalent, to be offered to foreign institutional investors or local institutional investors. The maturity must not exceed 5 years.
•
Increase the registered capital from Bt5,589.56 million to Bt6,552 million, by the issuance of 160.40 million shares (Bt6 par value) for the conversion of convertible debentures as approved at the shareholder meeting.
Property Perfect Public Company Limited
2009
2010
009
:
April 2009
•
Allocate partial earnings worth Bt40 million as legal reserves and approve the dividend of Bt0.36 per share or a total of Bt283,579,783.20, payable within 30 May 2009. Names of shareholders entitled to the payment were announced on 14 May 2009, accumulated accordingly to the Securities and Exchange Act’s Article 225. Closing date for the dividend payment was 15 May 2009.
•
Pay out bonus no more than Bt15 million to directors for the 2008 operating year. Chairman was tasked to allocate the amount.
•
Pay meeting allowance worth no more than Bt7.5 million to the board of directors for the 2009 operating year.
•
Appoint Mr.Narong Puntawong, CFA 3315, and/or Miss Thipawan Nananuwat, CFA 3459 and/or Miss Siraporn Ouaanunkun, CFA 3844, of Ernst & Young Thailand as the auditor in 2009, and set the auditing fee at no more than Bt1.65 million.
:
August 2009
•
Issue bill of exchange worth no more than Bt1,000 million.
:
November 2009
•
Invest Bt499 million for 4,999,000 capital-increase shares (Bt100 par value) of Bright Development Bangkok Company Limited, a subsidiary, to maintain the stake in the subsidiary.
•
Issue additional bill of exchange worth no more than Bt1,000 million.
:
January 2010
•
Invest Bt200 million for 20 million capital-increase shares (Bt10 par value) of Estate Perfect Company Limited (Estate) to maintain the stake.
•
Cancel the joint venture with Timberline Investment Pte. Ltd, which holds 40% in Centrepoint Shopping Mall Company Limited. The company bought 4,000 shares, at Bt100 apiece or a total of Bt400,000, which increased its stake in Centrepoint Shopping Mall Company Limited to 99.99%.
•
Increase Centrepoint Shopping Mall Company Limited’s registered capital from Bt1 million (10,000 shares at Bt100 par value) to Bt500 million. Only 30% of the registered capital is paid-up, or Bt150.7 million. This required the company’s investment of Bt149.7 million.
•
Acquire the 100% stake in Residence Number Nine Company Limited, for the ownership of Residence Number Nine Company Limited’s land.
:
April 2010
•
Appoint one extra independent director, to bring the total number to 5. This increased the number of directors to 12.
•
Cancel the unallocated debentures worth Bt80 million, approved by shareholders at the 2008 annual general meeting on 30 April 2008.
010
2011
Annual Report 2011
•
Approve the issuance of all types of debentures (secured and unsecured) worth no more than Bt4,000 million with maturity of no more than 5 years. The debentures are to be offered entirely or partially in a public offering, and/or sale to institutional investors and/or in a private placement, in the domestic market and/or overseas. The proceeds will be used to nance project development, expand land bank and increase the working capital.
:
May 2010
•
Set the outstanding value of bill of exchange at a point of time at no more than Bt2,000 million.
:
August 2010
•
Redeem secured debentures (series 1/2009) of Property Perfect Public Company Limited worth Bt520 million, ahead of the maturity in 2012.
:
November 2010
•
Approve the issuance of bill of exchange worth no more than Bt1,000 million and set the outstanding value of B/E at a point of time at no more than Bt3,000 million.
:
February 2011
• • •
Invest Bt500 million more in Bright Development Bangkok Co Ltd, a subsidiary. Establish U & I Construction Bangkok Company Limited to provide construction services, with registered capital of Bt100 million (Bt50 million paid-up). Appoint eight persons to the new executive committee, effective on 26 February 2011.
:
April 2011
• • • • •
Appoint an independent director to replace the one who tendered resignation. Cancel the issuance of convertible debentures worth no more than US$30 million, as approved by shareholders at the 1/2008 extraordinary meeting on 20 June 2008. Cancel the reserve of common shares and accordingly reduce the registered capital by Bt1,772.43 million. Split par from Bt6 to Bt1. Issue debentures worth no more than Bt4,000 million.
•
Increase capital by issuing new common shares.
:
May 2011
•
Establish a joint venture, namely Perfect Prefab Company Limited, with registered capital of Bt10 million (Bt2.5 million paid-up).
:
July 2011
•
Establish Uniloft Service (Thailand) Company Limited as a subsidiary, with registered capital of Bt100,000.
:
September 2011
•
Increase Perfect Sport Club Company Limited’s registered capital by Bt4 million to Bt5 million, to nance the investment in True Coffee shops inside the projects’ clubs.
Property Perfect Public Company Limited
•
•
:
011
Acquire capital-increase shares of We Retail Public Company Limited (formerly Daidomon Group Public Company Limited), offered through a private placement, and tender for the remaining shares through a mandatory tender offer. Dispose all shares held in Centrepoint Shopping Mall Company Limited to We Retail Public Company Limited at the price of Bt400.2 million. We Retail paid for the shares through its capital-increase shares.
November 2011 • • • •
•
Approve ood-management and ood-protection measures and budget for the company’s projects. Approve the guarantee to a nancial institution’s Bt444 million loan extended to Estate Perfect Company Limited for the development The Villa-Ladkrabang project. Endorse the sale of additional land, 21-0-77.3 rai, on Chaeng Wattana Road to the University of Thai Chamber of Commerce. Approve the sale of land for kindergarten construction in Perfect Place Ramkhamhaeng project; the 1,030.80 square wa land locating the project’s of ce; and the 1,121 square wa land near Perfect Place and Perfect Place Masterpiece Rattanathibet projects. Endorse the guarantee against a nancial institution’s Bt515.39 million loan extended to Bright Development Company Limited for the development of the iCondo Sukhumvit 103 residential condominium project.
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Annual Report 2011
Overall Business of the Group The company and subsidiaries operate in the property development business, with the focus in single houses and condominiums in the Greater Bangkok. Consolidated revenue from the sale of vertical and horizontal residential development projects as of 17 February are as follows; Investment Structure Property Perfect Plc.
Real Estate Development Units
Real Estate Units
Services-Oriented units
Construction Units
100.00% Bright Development Bangkok Co., Ltd.
100.00% Estate Perfect Co., Ltd.
100.00% U&I Construction Bangkok Co., Ltd.
100.00% Perfect Sport Club Co., Ltd. *****
100.00% Residence Number Nine Co., Ltd.
20.22% Krungtep Land Plc.***
51.00% Perfect Prefab Co., Ltd.
99.70% Uniloft Service (Thailand) Co., Ltd.
88.06% We Retail Plc. *
51.00% Riverside Homes Development Co., Ltd.****
19.00% Real Service Co., Ltd.. **
100.00% Centrepoint Shopping Mall Co., Ltd. *
Note :
* ** *** ****
Not operational yet Business operation discontinued Details in shareholder section Develop “The Pano” condominium. The remaining 49% stake is owned by a Singaporean group, represented by Fraser (Thailand) Pte Ltd. ***** Rename form Perfect Satellite Service Co., Ltd.
The company’s investment in subsidiaries and af liates can be put into 2 main categories as Real Estate Development & Construction and Services .
Property Development Units The company and subsidiaries are mainly involved with the property development for sale. The projects involve the development of single detached houses, townhouses, and condominiums. The company and subsidiaries normally put the construction of designed houses in the hands of contractors, but the construction process will be inspected by in-house engineers and architects at all stages. The company has ventured into construction business, through the establishment of a subsidiary which mainly serves the company and subsidiaries, to help reduce the construction cost. This is on top of the contracts with outside construction companies.
Property Perfect Public Company Limited
013
• Property Perfect Public Company Limited (“The Company”) Developing housing estates and condominiums. As of 31 December 2011, a total of 27 projects are under development with outstanding value of Bt20,366 million. The company also sits on 7 developed projects which are not yet put on sale: 2 single house projects, 1 townhouse project and 4 condominium projects. Total value of the projects is Bt8,665 million.
• Estate Perfect Co., Ltd. (Subsidiary) Estate Perfect Company Limited, (“Estate”) is located at 100/1 Varasombat Bldg., Floor 17th, 100/1 Rama IX Road, Huay Khwang, Bangkok. It was established in 1994, to develop single houses and townhouses. Its new projects will be of small scale, with focus on potential locations. Sale of Estate’s 4 projects is underway, and the remaining value of the unsold units is Bt2,856 million. They are Perfect Place Sukhumvit 77-Suvarnabhumi, Perfect Park Suvarnabhumi phases 1 and 2, The Villa RamkhamhaengSuvarnabhumi and The Villa Ramintra. It is also developing another project, which is not yet available for sale – The Villa Ladkrabang. The project value is Bt755 million. As of 31 December 2009, Estate was registered with Bt1,000 million of capital, all paid-up, consisting of 100 million shares at Bt10 par value. The company owns the entire 100% stake. Estate is now capitalized at Bt1,200 million, following the Board of Directors’ resolution in January 2010 to raise the capital from Bt1,000 million to Bt1,200 million. The company then issued 20,000,000 new shares at Bt10 par. The company now owns 100% of Estate. Estate’s 4 directors are:
Name 1. Mr.Chainid 2. Mr.Pramote 3. Mr.Pornswat 4. Mr.Nantachart
Ngow-Sirimanee Rermyindee Katechulasriroj Kliebphipat
Position Director Director Director Director
014
Annual Report 2011
• Bright Development Bangkok Co., Ltd. (Subsidiary) Bright Development Bangkok Co.,Ltd. (“Bright”) is Located at 100/1 Vorasombat Building (17th r), Rama IX Road, Huay Kwang, Bangkok, Bright Development was established on 2007 for condominium development. Bright Development is capitalized at Bt1 million . As of 31 December 2009, Bright’s registered capital increased by Bt499 million to Bt500 million from Bt1 million. In February 2011, Bright planned to raise the capital from Bt500 million to Bt1,000 million. The company now holds 100% in the company. Bright is now selling units in 5 projects, of which remaining value is Bt4,495 million – Metro Sky Ratchada Phase 1, iCondo Ngamwongwan, iCondo Sukhapiban 2, iCondo Sukhumvit 105, and iCondo Sukhumvit 103 of which sale started in the rst quarter of 2012. In 2011, Bright embarked on the project to develop premium dormitories, speci cally for students, under “Uniloft” brand. The project to create “extraordinary campus living” experience focuses on famous universities. At present, it is developing two Uniloft projects which are valued at Bt2,200 million – Uniloft near Chiangmai University in Chiang Mai and Uniloft near Mahidol University in Salaya, Nakhon Pathom. As both will gain from rental revenue, the company has a plan to sell the projects to a property fund, which should be established in 2012. Bright’s 4 directors are;
Name 1. Mr.Chainid 2. Mr.Pramote 3. Mr.Pornswat 4. Mr.Wicharn
Ngow-Sirimanee Rermyindee Katechulasriroj Siriwetwarawut
Position Director Director Director Director
Property Perfect Public Company Limited
015
• Krungthep Land Public Company Limited (Affiliate) Krungthep Land Public Company Limited (“Krungtep Land”), was established in 1984, located at 100/1 Vorasombat Building (21st r.), Rama IX Road, Huay Kwang, Bangkok. Krungthep Land is a property development company focusing on Bangkok and peripheral provinces. In 2004, the company raised the registered capital form Bt500 million to Bt1,000 million and changed the par value from Bt100 to Bt10, in preparation for business expansion. In July 2004, it forged equity participation with Fraser & Neave from Singapore, to develop The Pano - a condominium project by the Chao Phraya River. The condominium on Rama III Road is developed by Riverside Homes Development Company Limited, a joint venture of Krungthep Land and Fraser (Thailand) Pte Ltd. On 14 July 2005, Krungthep Land was transformed to a public company and in November 2005 it raised the capital from Bt1,000 million to Bt1,700 million. Fraser & Neave from Singapore, through Fraser (Thailand) Pte Ltd, then bought 50 million new shares or 33% of total. This reduced Property Perfect Public Company Limited’s stake to 20%. On 22 November 2006, there was a resolution to reduce Krungthep Land’s registered capital from Bt1,700 million to Bt1,500 million, and then to raise the capital from Bt1,500 million to Bt2,100 million. New shares were issued to existing shareholders at the price of Bt10 apiece. Krungthep Land’s shareholders at the 1/2007 extraordinary meeting approved the capital reduction from Bt2,100 million to Bt1,780 million. They also approved the Bt450 million capital increase, through the issuance of 45 million shares at Bt10 par to accommodate warrant exercise. This increased the registered capital to Bt2,230 million. Krungthep Land’s shareholders at the 1/2008 extraordinary meeting approved the issuance of US dollar-denominated convertible debentures at the value of Bt623.25 million, for sale to foreign investors. On 31 January 2008, the debentures were issued to Asia Investment International Limited, through the underwriting by Lombard Investment Inc. In 2010, the company issued name-bearing secured unsubordinated bonds worth Bt1,000 million, to institutional investors or high networth investors. The bond issue, with trustee, was rated “AA+(tha)” by Fitch Ratings (Thailand) Company Limited. In November 2011, Krungthep Land amended the issuance criteria to allow a call option. It redeemed all the bonds in December 2011.
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Annual Report 2011
As of 31 December, Krungthep Land is capitalized at Bt2,230 million (paid-up at Bt1,780 million or 178 million shares at Bt10 par value). The company owns 20.22% in the company. Shareholders of Krungthep Land are as follows:
Shareholders 1. 2. 3. 4. 5. 6. 7.
Fraser (Thailand) Pte. Ltd. Property Perfect Plc. Dr.Bichit Rattakul Mr.Wichai Thongtang Mrs.Nualla-or Khunphlin Mrs.Nada Nimkiatkhachorn Minor shareholders Total
No. of shares 72,000,000 35,999,964 25,000,000 15,000,000 15,000,000 14,500,000 500,036 178,000,000
% of total 40.45 20.22 14.04 8.43 8.43 8.15 0.28 100.00
Krungthep Land’s board of directors consists 12 members as follows:
Name 1. Dr.Bichit Rattakul 2. Mr.Thongchai Kunakornporamat 3. Mrs.Uraiwan Bhatarakarnt 4. Mr.Chan Kin Fai 5. Mr.Chainid Ngow-Sirimanee /1 6. Ms.Wilawan Leongnarktongdee 7. Mr.Seang Fuke Seng 8. Mr.Chia khong Shoong 9. Mr.Lim EE Seng 10. Mr.Prasong Vararattanakul 11. Mr.Keangkai Jiwanant 12. Mrs.Anchalee Chavanit
Position Chairman Director, Chief Executive Of cer Director, Executive director Director, Executive director Director Director Director Director Director Director, Independent director, Chairman of Audit Committee Director, Independent director, Member of Audit Committee Director, Independent director, Member of Audit Committee
Note : /1 Mr. Chainid Ngow-Sirimanee is a director of the company and he is a director of Krungthep Land as the company owns a 20.22% in the Krungthep Land. Mr. Chainid is a shareholder and a director of (1) Property Perfect Public Company Limited who holds 39,900,000 shares or 0.84% as of 9 December 2011 in the company and (2) a shareholder of Thai Property Public Company Limited (formerly Rattana Real Estate Public Company Limited), who owns 29,362,500 shares or 1.04% as of 9 December 2011 in Thai Property. His shareholding in Thai Property is a personal matter and has no connection with Property Perfect Public Company Limited
Property Perfect Public Company Limited
017
• We Retail Public Company Limited (Subsidiary) We Retail Public Company Limited (“We Retail”) is located at 100/1 Vorasombat Building Floor 17th, Rama IX Road, Huay Kwang, Bangkok. Formerly named Daidomon Group Public Company Limited, the company was renamed on 24 November 2011. Its business objective is to develop a shopping centre, of ce buildings and commercial rental projects. It is capitalized at Bt4,131,549,100 million, with Bt2,065,774,550 paid-up or 413,154,910 shares at Bt5 per value. The company bought We Retail’s 363,818,182 shares at Bt1.10 apiece or a total of Bt400.2 million, through a swap with shares of Centre point Shopping Mall Company Limited of which paid-up capital stood at Bt400.2 million. The share swap on 16 December 2011 allowed the company to hold 88.06% in We Retail, while the remaining 11.94% is held by existing shareholders. In effect, Centrepoint Shopping Mall turned to a subsidiary of We Retail. The high stake in We Retail forced the company to make a mandatory tender offer for the remaining shares of We Retail at Bt1.14 a share. The tender offer ran from 4 January 2012 to 7 February 2012. At the end, We Retail’s shareholders offered to sell 93,842 shares or 0.02%. This increased the company’s stake in We Retail to 88.08%, or 363,912,024 shares. The transaction was based on We Retail’s book value after the restructuring (We Retail’s book value plus book value of Center Point and We Retail after capital increase) plus a slight premium. The transaction should bene t the company in the following ways; 1) The company can operate the shopping mal, of ce building and commercial rental development business through a unit which is clearly separated from the company’s residential development business. 2) As We Retail is listed on the Stock Exchange of Thailand, it could mobilize funds to ef ciently nance the development projects. We Retail’s 6 directors are;
Name 1. Dr.Tawatchai 2. Mr.Kampol 3. Mr.Chainid 4. Mr.Pramote 5. Mr.Chaiyakorn 6. Mr.Chirddsak
Nakhata Tatiyawee Ngow-Sirimanee Rermyindee Boonlop Kukiattinun
Position Chaiman Director and Chief Executive Of ce Director Director Director, Independent Director, Member of Audit Committee Director, Independent Director, Member of Audit Committee
• Centrepoint Shopping Mall Co.,Ltd. (“Centrepoint”) (Affiliate of We Retail Plc.) Centrepoint Shopping Mall Co.,Ltd. (“Centrepoint”) is located at 100/1 Vorasombat Building 17th r, Rama IX Road, Huay Kwang, Bangkok. Established in December 2007. it was capitalized at Bt1,000,000, at Bt100 apiece, all paid-up. Centrepoint focuses on commercial development like shopping malls and rental of ce building. The company owns 59.99% in Centrepoint, and owning the other 40% is Timberline Investments Pte. Ltd. (Major-owned by Arangannal S/O Kathamuthu which has no connection with the company)
018
Annual Report 2011
The Board of Directors meeting on January 2010 approved the purchase of 4,000 shares or 40% of Centrepoint from Timberline Investments Pte. Ltd, which increased the company’s shares to 100%, to turn Centrepoint into a subsidiary. The Board also approved the capital increase in the subsidiary by Bt499 million from Bt1 million (10,000 shares at Bt100 par value). Centrepoint’s registered capital is now Bt500 million and the paid-up capital by Bt30 apiece or a total of Bt149.7 million was paid-up. This raised Centrepoint’s paid-up capital to Bt150.7 million. In September 2011, the company resolved to raise the paid-up capital by Bt30 apiece or a total of Bt149.7 million. In October 2011, the company resolved the raise the paid-up capital by Bt20 apiece or a total of Bt99.8 million. These boosted the subsidiary’s paid-up capital to Bt400.20 million. All the 5,000,000 shares in Centrepoint held by the company, or 100% of all issued shares, were swapped for 88.06% stake in Daidomon Group. This turned Centrepoint into a subsidiary of Daidomon Group, which was renamed to We Retail Public Company Limited on 24 November 2011. At present, Centrepoint owns the leasing rights on a property on Ratchadapisek Road. It has not yet commenced commercial operations. Centrepoint ’s 2 directors are: Name 1. Mr.Chainid Ngow-Sirimanee 2. Mr.Pramote Rermyindee
Position Director Director
• Residence Number Nine Company Limited (“Residence” ) (Subsidiary) Residence Number Nine Company Limited (“Residence”), is located at 100/1 Vorasombat Building (17th r), Rama IX Road, Huay Kwang, Bangkok, is capitalized at Bt1,000 million with 10 million shares at Bt100 par value. Owned 100% by the company, Residence focuses on low-rise residential development. Established in 2008 and In January 2010 , Residence becomes a subsidiary as the company. It is capitalized at Bt1,0000 million or 100% from old shareholders at Bt507 million. Residence’s original shareholders had no connection with the company or the transaction. Residence was taken over as the company planned to develop single houses and townhouses on a 170-rai plot in Bang Buathong, Nonthaburi, which is the only piece of asset of Residence. Residence’s 2 projects are now marketed–The Villa Bangbuathong (townhouse) and Perfect Park Bangbuathong (single house)–with combined remaining value of Bt1,618 million. It is developing one more project which is not yet put on the market–Modi Villa. This will comprise single houses, Duplex houses and townhouses. Residence’s 3 directors are: Name Position 1. Mr.Wicharn Siriwetwarawut Director 2. Mr.Sanpetch Sukkasem Director 3. Mr.Pornchai Ketlek Director
Property Perfect Public Company Limited
019
Construction business • U & I Construction Bangkok Company Limited U & I Construction Bangkok Company Limited (“U & I”), is located at 100/89 Vongvanich Building Floor 27, Rama IX Road, Huay Kwang, Bankgok. Established in April 2011, it has the registered capital of Bt100 million, of which Bt50 million is paid-up. It is 100% owned by the company. U & I’s main objective is to offer services to construct single houses, duplex houses, townhouses and condominiums for the company and subsidiaries. As it will be securing direct contracts from the group, this will promise construction exibility for the group and allow the company a better management on supply chain. This will help control the construction cost and construction period, as well as ensure effective control on the construction volume and quality. U & I is contracted to build iCondo Ngamwongwan, iCondo Sukhapiban 2, iCondo Sukhumvit 105, and Uniloft Salaya, as well as low-rise development projects like The Villa Ladkrabang and Modi Villa Ladkrabang. U & I’s 3 directors are; Name Position 1. Mr.Manit Yukkasemwong Director 2. Mr.Thamrong Plookchitsom Director 3. Mr.Sumeth Suwajanakorn Director
• Perfect Prefab Company Limited Perfect Prefab Company Limited (“Perfect Prefab”) is located at 100/1 Vorasombat Building Floor 10, Rama IX Road, Huay Kwang, Bangkok. Established in June 2011, it has Bt10 million in registered capital, with Bt2.5 million paid-up. The company owns 51% in Pefect Prefab, and the rest is held by Centre of Standard Precast Company Limited-which has experience in this business and has supplied prefab materials to the group for over 5 years owed the other 49%. The partner has no connection whatsoever with the company. The joint venture is established to manufacturer and install prefab structures, which are parts of single houses, townhouses and project fences, as well as condominiums. The automated production system is to ensure no effect from labor shortage. The company expects to bene t from the joint venture’s prefab technology. Perfect Prefab’s factory is under construction. It is expected to commence operations within the rst half of 2012. Perfect Prefab’s 5 directors are; Name Position 1. Mr.Wicharn Siriwetwarawut Director 2. Mr.Vorasak Chakrapiyanant Director 3. Mr.Vichaya Watananukit Director 4. Mr.Phuwit Phaengsuk Director 5. Mr.Kongsak Kaewsuriyathamrong Director
020
Annual Report 2011
Services-oriented units • Perfect Sport Club Company Limited Perfect Sport Club Company Limited (“Perfect sport club”) is located at 100/52 Vongvanij B Building (19 r.), Rama IX Road, Huay Kwang, Bangkok, was established in February 2003. it was capitalized at Bt1 million. The company resolved to raise the registered capital by Bt4,000,000 to Bt5,000,000, through the issuance of 40,000 new shares at Bt100 par value. The capital is fully paid-up. It is 100% owned by the company. th
Formerly called Perfect Satellite Services Company Limited, Perfect Sport Club operates tness clubs and sport clubs of the group. It aims to use the new capital to buy True Coffee franchise and open the coffee shop at the sport clubs, as part of its business plan. At present, 13 sport clubs exist. Perfect Sportclub‘s 5 Directors are ;
Name 1. Mr.Phairat Senachak 2. Ms.Rassamee Metavikul 3. Mr.Thongchai Piyasantiwong 4. 2,Lt. Pratomporn Nakata 5. Mr.Krittapas Pongpakawat
Position Director Director Director Director Director
Property Perfect Public Company Limited
021
• Uniloft Service (Thailand) Company Limited Uniloft Service (Thailand) Company Limited (“Uniloft Service”) is located at 100/1 Vorasombat Building Floor 17th , Rama IX Road, Huay Kwang, Bangkok. Established in July 2011, it has Bt100,000 in registered capital. It is 99.70% owned by the company. Uniloft Service operates a serviced apartment and management services for the group’s real estate projects. The company will start operations within early 2012 with the management Uniloft Chaingmai. Uniloft’s 3 Directors are:
Name 1. Mr.Saranyu Ngow-Sirimanee 2. Mr.Natthaphon Sueb-Am 3. Mr.Prathompob Intr-Bumrong
Position Director Director Director
022
Annual Report 2011
• Real Service Co.,Ltd. Real Service Co., Ltd. was established in 1995 to provide the construction and maintenance services for the company’s projects. After main contractors completed their jobs, it mainly gave nishing touches before the transfer of the completed units to clients. Real Service acted as the sub-contractor of the projects’ contractors, allowing the contractors to complete their obligations in a faster manner. This also allowed the company to realize revenue from the projects faster. The af liate’s registered capital was Bt40 million with 400,000 shares at Bt100 apiece. The company owned 19% in the af liate which has discontinued the operations. Real Service is now discontinued. Its shareholders were:
Shareholder 1. Property Perfect Plc. 2. Mr.Chainoi Bhongmakapat 3. Mr.Kit Bhongmakapat 4. Mr.Somkid Chidtrakul 5. Mr.Surasak Wacharaphongpricha 6. Mr.Pornswat Katechulasriroj 7. Mr.Tossaporn Jirakiatdeekul 8. Mr.Niwat Inklinpan Total
No. of shares 76,000 76,000 76,000 52,000 40,000 40,000 20,000 20,000 400,000
% of shares 19.00 19.00 19.00 13.00 10.00 10.00 5.00 5.00 100.00
Note : The person in No.5 as an executive of Property Perfect Public Company Limited . The person in No.6 as an executive of Property Perfect Public Company Limited Real Service’s 1 Director is:
Name 1. Mr.Chainarong Ngernsopha
Position Director
Property Perfect Public Company Limited
023
Total revenue structure from sales by product type The company’s main revenue derives from sales of land and houses, most of which are single-detached houses. The company’s revenue structure over the past three years were as follows:
Revenue from sales of land and houses Revenue from sales of condominium units Revenue from sales of land held for development Other revenues Receivable interest Revenue from deposits Reversal of allowance for loss on diminution in value of projects Others Total
Consolidated nancial statements 2011 2010 2009 Million Million Million Baht % Baht % Baht % 6,926 84.2% 7,003 80.5% 5,073 85.3% 1,074 13.1% 778 8.9% 778 13.1% 81 1.0% 836 9.6% 10 9
0.1% 0.1%
37 84 8,221
0.5% 1.0% 100.0%
7 4
0.1% -
76 0.9% 8,704 100.0%
1 9
0.1%
87 1.5% 5,948 100.0%
During 2009-2011, the company’s consolidated land and house sale revenue accounted for 85.3%, 80.5% and 84.2% of total revenue, respectively. And revenue from condominium sale accounted for 13.1%, 8.9% and 13.1% of total revenue, respectively and in 2010-2011, the company’s revenue from selling land accounted for 9.6%and 1.0% of total. Under the equity method, the company also reaped af liates’ contributions of Bt3million, Bt58 million and Bt25 million,In 2009-2011, respectively. House and condominium sale revenue from various projects are as follows;
Land and Houses Sales Revenue Structure by Product Type
Project Brand “Perfect Masterpiece” Maneeya Masterpiece Exclusive Zone Perfect Masterpiece Ekamai-RamIndra Perfect Masterpiece Rattanathibet Perfect Masterpiece Ramkhamhaeng Perfect Masterpiece Rama IX Perfect Masterpiece Rangsit Perfect Masterpiece Ratchapruek Perfect Masterpiece Sukhumvit 77 **
Product Type
2011 MB
SDH 43 SDH 99 SDH 177 SDH SDH 859 SDH SDH 107 SDH 27
2010 %
MB
%
1% 1% 3% 12% 2% -
284 320 84 928 12 66
4% 4% 1% 14% 1%
2009 MB % 12 169 202 52 455 160
3% 4% 1% 9% 3%
024
Annual Report 2011
Product Type
Project Brand “Perfect Place” Perfect Place Rattanathibet SDH/Land Perfect Place Rattanathibet Phase1 SDH Perfect Place Ramkhamhaeng-Suvarnabhumi SDH (The Private Zone) Perfect Place RamaV – Ratchapruek SDH Perfect Place Rattanathibet phase2 SDH Perfect Place Ratchapruek SDH Perfect Place Ramkhamhaeng-Suvarnabhumi SDH (The Lake Zone) Perfect Place Ramkhamhaeng-Suvarnabhumi SDH (The Lake Zone2) Perfect Place Ramkhamhaeng-Suvarnabhumi 2 SDH Perfect Place Rangsit SDH Perfect Place Sukhumvit 77-Suvarnabhumi ** SDH Brand “Maneerin” / Brand “Perfect Park” Maneerin Lake & Park Ratchapruek -Tiwanon SDH/Land Maneerin Exclusive Rangsit SDH Maneerin Park Rangsit SDH Maneerin Park Rattanathibet SDH Maneerin Park 2 Rangsit SDH Perfect Park Rangsit SDH Perfect Park Ramkhamhaeng-Suvarnabhumi SDH Perfect Park Rama V- Bangyai SDH Perfect Park Suvarnabhumi ** SDH Perfect Park Bhangbuatong*** SDH Brand “The Villa” / “The Metro” The Villa Rattanathibet The Metro RamaIX The Metro Sathorn The Villa Ramkhamhaeng** The Villa Ram-Indra** The Villa Ladkrabang** The Villa Bhangbuatong***
TH TH TH TH TH TH TH
2011 %
MB
%
2009 MB %
1% 1%
58 163 94
1% 2% 1%
423 301
8% 6%
434 579 133
6% 8% 2%
528 493 338
7% 7% 5%
57 17 279 166
1% 6% 3%
76
1%
-
-
-
-
268 46 415
4% 1% 6%
139 503
2% 7%
483
10%
128 2 113 5 601 323 273
2%
231 663 285 -
3% 10% 4%
212 11 8 599 363 -
4% 12% 7%
595 438 480 202 60 38
9% 6% 7% 3% 1%
477 512 110 -
10% 10% 3% -
MB 69 49
295 595 266 375 310 243
2010
2% 9% 5% 4%
4% 7% 4% 5% 5% 4%
1%
-
025
Property Perfect Public Company Limited
Project Other Maneeya 4 Nantana Garden Teparak Nantana Garden Rattathibet Changwattana Total Revenue from the Sale of land and houses Remark ** *** ****
2011
2010
2009 MB %
Product Type
MB
%
MB
%
SDH TH TH Land
12 3 1 -
-
1
-
5 -
-
7,003
100%
5,073
100%
6,926 100%
: SDH = Single Detached House, TH = Townhouse, Land = Land Developed by 100%-owned subsidiary Estate Perfect Co., Ltd . Developed by 100%-owned subsidies Residence Number Nine Co., Ltd. Developed by 100%-owned subsidies Bright Development Bangkok Co., Ltd.
As shown in the balance sheet, sales revenue of Property Perfect in 2009-2011 are Bt4,607million, Bt5,849million and Bt4,960million. In the same period, subsidiaries’ revenue is Bt1,006million , Bt1,154million and Bt 1,966million, respectively
Sales of Condominium Units Revenue Structure by Product type
Project Brand “Metro Park” Metro Park Sathorn Brand “Metro Sky” Metro Sky Ratchada**** Total Revenue from the Sale off Condominium Units
MB
%
2010 MB %
CONDO
579
54%
778
100%
779
100%
CONDO
495
46%
-
-
-
-
1,074
100%
778
100%
779
100%
Product Type
2011
2009 MB %
Revenue from sales of condominium units presented in the consolidated nancial statements came from total revenue from projects developed by Property Perfect Public Company Limited with the amount of Bt779million in 2009 ,Bt778 million in 2010 and Bt579 million in 2011.And the revenue from subsidiary with the amount of Bt495million in 2011.
026
Annual Report 2011
Shareholder Structure and Management 1. Shareholder Major shareholders A) The rst 10 largest shareholders as of 31 December 2011 are;
Rank
Name 1 Japan Asia Group Co., Ltd./1 2 Miss Sumonmas Lipisuntorn 3 Thailand NDVR Co., Ltd. 4 Natee International Law Of ce Co., Ltd./2 5 Andaman Long Beach Resort Co., Ltd./3 6 Miss Sumalee Ongjarit 7 Finansa Life Assurance Co., Ltd. 8 Mr.Mahintr Pratchayanant 9 Miss Sumalee Wangprakobsuk 10 Miss Sunee Sae-Ngao Data from Thailand Securities Depository Co.,Ltd.
No. of shares 583,465,008 339,414,534 324,854,656 222,113,568 220,744,200 157,041,874 104,070,000 93,740,600 87,003,530 82,591,962
% 12.34 7.18 6.87 4.70 4.67 3.32 2.20 1.98 1.84
1.75
Property Perfect Public Company Limited
027
Note /1 Japan Asia Group Company Limited emerges as a shareholder, as the creditor in the Rehabilitation Plan converted debts to equity in line with the Rehabilitation Plan. Japan Asia Group is registered in the British Virgin Islands, a sovereign territory of the United Kingdom, operating nancial services and investment. Under the British Virgin laws, the information of shareholders, registered capital and operating results of companies incorporated there is available only to authorized director, which in the case of Japan Asia Group is Star Mark Enterprises Limited. In quest for the information on its shareholders, the company learns that Japan Asia Group Company Limited’s ultimate shareholder is Mrs. Wai Ching Chung, a resident of Hong Kong, the People’s Republic of China. There is no connection between Japan Asia Group and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship. /2 Natee International Law Of ce Company Limited emerged as a shareholder, as a lawful representative of a creditor in the Rehabilitation Plan. Before the plan was terminated (the plan exit), the company was required to issue common shares to creditors entitled to debt to equity conversion as debt repayment. Then, Lowe’s Partner Investment Company Limited and Glorybye Associates Company Limited led petitions to the Central Bankruptcy Court, saying that they own debt claims of a creditor which was entitled for the issued shares and asking for the court’s judgment. The company thus assigned Natee International Law Of ce to represent the creditor. The law of ce was instructed to place the allocated shares at the Court. The shares would be given to the ultimate representative upon the Court’s decision on the case. Natee International Law Of ce provides legal and accounting services.
028
Annual Report 2011
On 25 October 2005, the Central Bankruptcy Court resolved that Glorybye Associates was the lawful representative and entitled to the shares. The case is under an appeal process and is not yet through. Glorybye Associates as such does not appear as a shareholder of the company as it has not yet received the shares from the Court. Glorybye Associates is registered in Samoa as an investment company, having United Continental Investors Limited as a director and executive. There is no connection between Glorybye Associates and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship. Until 31 December 2011, the shareholder remains on the list. /3 Andaman Long Beach Resort Company Limited (Andaman) is 100% owned by Resort Holding Company Limited. Resort Holding’s two major shareholders are Wahkit Finance Limited, 45%; registered overseas and an indirect major shareholder. Property Perfect Public Company Limited was informed by an executive of Andaman, based on information from its major shareholder, that Wahkit Finance has no connection with Japan Asia Group Compny Limited or MJL Intertrade Company Limited and/or Natee International Law Of ce Company Limited and Mr. Methee Tanmanatrakul, 45%; and Mr. Chaiwat Aswintrangkul 10%. Mr. Chaiwat Aswintrangkul or Mr. Methee Tanmanatrakul is authorized to sign obligations involving Andaman and Resort Holding. There is no connection between Andaman and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship. (Mrs. Vipa Tanmanatrakul owns 1,123,200 shares of Property Perfect Public Company Limited in her personal account, which is not included in Andaman’s shareholding.) B) Impact on shares or voting rights from NVDR As of 31 January 2011, Thai NVDR Company Limited holds 324,854,656 shares of the company, or 6.87% of paid-up common shares. As no voting right is given to Thai NVDR (except in the case of delisting from the Stock Exchange of Thailand), at the shareholder meeting, shareholders in general enjoy a 7.38% increase in voting rights. For the latest information on shares held by Thai NVDR, go to the exchange’s website at www.set.or.th.
Property Perfect Public Company Limited
029
2. Management Management structure The company’s management structure contains one board of directors and ve subcommittees. They are Audit Committee, Nominating Committee, Remuneration and Human Resources Committee, Risk Management Committee and Executive Board. Details are as follows: 1. The Board of Directors As of December 31, 2011, the board consists of 12 directors as follow::
No 1 2 3 4 5 6 7 8 9 10 11
Name Dr.Tawatchai Mr.Virayuk Mr.Chainid Mr.Phairat Mr.Vidhya Ms.Sirirat Mr.Ooi Boon Dr.Somsak Dr.Thamnoon Mrs.Nuanual Mr.Krish
12 Mr.Wanchai
Title Nakhata Chairman Puntupetch Deputy Chairman and Independent Director Ngow-Sirimanee Director and Chief Executive Of cer Senachack Director Nativivat Director Wongwattana Director Aun Director Toruksa Director / Independent Director and Audit Committee Ananthothai Director / Independent Director and Audit Committee Swasdikula-Na-AyudAyudhaya Director / Independent Director Follett Director / Independent Director and Chairman of Auditing Committee Thanittiraporn * Director / Independent Director
With Mr. Pramote Rermyindee as secretary of the board Note : * Mr.Wanchai Thanittiraporn appointed in accordance with a resolution of the company’s Board of Directors 1/2011 on 29 April 2011.
030
Annual Report 2011
Authorised directors Authorized signatory directors are 1) Dr.Tawatchai Nakhata and Mr.Chainid Ngow-Sirimanee are duly authorized to sign documents and af x the company’s seal. 2) Any one of the following directors - Dr.Tawatchai Nakhata or Mr.Chainid Ngow-Sirimanee - is authorized to co-sign documents with one the these directors - Mr.Phairat Senachack or Ms. Sirirat Wongwattana – and af x the company’s seal. 3) Dr.Tawatchai Nakhata or Mr.Chainid Ngow-Sirimanee or Mr.Phairat Senachack or Ms. Sirirat Wongwattana can sign and af x the company’s seal on the matters involving; (1) Commerce Ministry and related units (2) Revenue Department and related units (3) Lands Department and related units (4) Department of Public Works and Town & Country Planning and related units (5) Bangkok Metropolitan Administration, Pattaya City and related units (6) Municipality, provincial administrative organizations and tambon administration organizations (7) Government units, state enterprises and private organizations dealing with waterworks, electricity, telephone, postal and Internet services. The shareholders meeting or the Board can identify the directors with the authority to sign and af x the company’s seal.
Property Perfect Public Company Limited
031
Board of Directors’ authority and scope of responsibility The Board of Directors is authorized to make decisions and ensure that the company’s operations follow the objectives, regulations, shareholders’ resolutions and legal conditions. Its authority does not cover the decisions which must be approved by shareholders as prescribed by the Securities and Exchange Commission and the Stock Exchange of Thailand. Under the company’s regulations, the Board of Directors is authorized to appoint the executive board which will monitor the daily operations of the company under the guidelines and budget approved by the Board of Directors and handle other tasks bestowed by the Board of Directors. The executive board can approve the decisions within its power granted by the Board of Directors or have to propose the issues beyond its power for the Board of Directors’ consideration. The regulations also empower the Board of Directors to appoint other of cers or other working committees to assist the executive board. 2. Audit Committee As of 31 December 2011, the Audit Committee consists of 3 independent directors.
No. 1 2 3
Name Mr.Krish Dr.Somsak Dr.Thamnoon
Follett Toruksa Ananthothai*
Title Chairman of the Audit Committee Auditing Committee Auditing Committee
With Ms.Doungporn Rermyindee as the secretary Note: * Possessing expertise in accounting (See biography of directors, executives and authorized individuals)
032
Annual Report 2011
Audit Committee’s authority and scope of responsibility 1.
Supervise the company’s operations to ensure honesty, transparency, and responsibility to shareholders.
2. Ensure that the executive board and executives handle their responsibilities in an accurate, complete and standard manner. 3. Ensure the accuracy, suf ciency, and credibility of the nancial results, as well ensure the accurate and suf cient disclosure through coordination with external auditors and executives who take responsible for preparing quarterly and yearly nancial statements as requested by the company’s board of directors and/or the executive board. 4. Ensure appropriate and effective internal control, through the coordination with the internal auditors and auditors. 5. Appoint the auditor and set the auditor fee, which must be approved by the shareholders and based on reliability and adequacy of human resources, audit job volume made by the audit rm and experience of staffs who are in charge of the company’s accounting audit. 6. Make sure that the company follows the legal conditions set by the Securities and Exchange Commission, the Stock Exchange of Thailand and other related agencies. 7. Prevent con icts of interest through the inspection of the transactions of the company with connected parties and through coordination with the auditor as well as consider disclosing accurate and adequate information for connected transactions and any transactions that might cause con icts of interest. 8. Prepare the audit committee’s report and disclose the report in the annual report, which includes at least following issues. - Opinion related to prepare the company’s nancial reports and accurate and reliable information disclosure. - Opinion concerning to suf ciency of the company’s internal control system. - Reasons that the company’s auditor is appropriate for another term appointment. - Opinion to comply with the Securities and Exchange Act, the Stock Exchange of Thailand’s rules and laws relevant to the company’s business. - Other reports that should be acknowledged by shareholders and investors under scope of duty and responsibility assigned by the company’s directors. 9. Review the internal control’s reports. 10. Review the internal control’s ndings. If nding or suspecting of any misconduct, or the insuf ciency of the internal control, they must ask for the Board of Directors’ judgment. 11. Review the internal control’s inspection and the auditor’s recommendations, and follow through the improvements. 12. Authorize to examine, audit, call executive directors, executives, advisors, and accounting auditors to attend meeting to acknowledge information and seek independent opinions from other professional advisors if necessary to achieve in tasks under responsibility. 13. Perform other tasks assigned by the company’s board such as review of nancial and risk management policy, and business ethics conducted by executives.
Property Perfect Public Company Limited
033
The audit committee has a three-year term and it will be elected by the company’s board when their terms are ended by rotation. Independent Directors’ quali cations Independent directors must meet quali cations set by the Securities and Exchange Commission’s announcement at Kor Jor.28/2008 governing asking for permission and approving newly issued share offering, and audit committee quali cations required by the Stock Exchange of Thailand’s regulations. 3. The Nominating Committee The Nominating Committee consisted of 3 persons as of 31 December 2011.
No. 1 2 3
Name Dr.Somsak Mrs.Nuanual Mr.Vidhya
Title Toruksa Chairman of the Nominating committee Swasdikula-Na-Ayudhaya Nominating committee Nativivat Nominating committee
With Mr. Pramote Rermyindee as secretary Selection Committee’s scope of authority and responsibility 1. Review the individuals who are t to be the company’s directors and nominate the list to the board of directors and/or present the list to shareholders for of cial appointment. 2. In reviewing the individuals’ quali cations, the committee must consider their expertise, knowledge, ability and relevant experiences to ensure that the individuals’ quali cations would be useful for the company’s operations. Besides, the committee must consider that the nominations follow the legal framework particularly when it involves the nominations for independent directors and the audit committee members. 3. In selecting independent directors and the audit committee members, the committee must take into account; (A) The nominated individuals must hold no more than 5% of the paid-up capital of the company, af liates or subsidiaries. The percentage is inclusive of the shareholding of related individuals their spouses and underage children. (B) The nominated persons must not be related to the company’s executives or major shareholders. (C) The appointed persons must not have con icts of interest, directly or indirectly, in terms of nances or management of the company and af liates. They must not be the company’s major shareholders.
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Annual Report 2011
(D) The nominated persons must have no any relationship with the company and associates in ways of vested interest, or nancial or management bene t at present and over the past two years before appointed as independent directors. Such relations include - Being directors who take part in the company’s management, employees, staff members, advisers who receives a regular salary, or control authorities. - Being professional service providers such as auditors, legal Consultants, nancial advisors or price appraisers. - Having business relationship such as buy/sell goods, provide asset buy or sell service, give or receive nancial assistance etc. (E) In case that the nominated persons serve as independent directors of other companies in the group, they must disclose such information and remuneration received from those companies. (F) The nominated persons must not seat as any director in other listed companies in the group. 4. The appointed persons must be able to work and present their views with independence, free from the control from executives or major shareholders as well as their relatives. Director Selection Committee’s authority, duty and responsibility could not be transferred to others in a way that those who are authorized by the committee can approve transactions that might lead to con icts of interest (as de ned in the Securities and Exchange Commission’s announcement) with the company or subsidiaries, or he/she has vested interest with exception that those transactions are regarded as normal course of business with the clear scope. To present the selected persons to the board of directors, the Selection Committee must nominate only those who will ll the available director seats. Except when the committee members could not reach an agreement, they are allowed to present all the nominated names to the board for their consideration. 4. The Remuneration and Human Resources Committee The Remuneration and Human Resources Committee consisted of 3 persons as of 31 December 2011.
No. 1 2 3
Name Mr.Virayuk Mr.Krish Mr.Vidhya
Puntupetch Follett Nativivat
Title Chairman of the remuneration committee The remuneration committee The remuneration committee
With Mr. Pramote Rermyindee as secretary. The Remuneration and Human Resources Committee’s scope of authority and responsibility 1. Consider the company’s policies and criteria in paying the Chief Operation Of cer, directors, and the company’s advisors. 2. Consider the annual salary, annual pay increase, and the interim pay increase, as well as other bene ts to award all employees. 3. Consider the employment terms, regulations, and penal clauses which should be appropriate and fair. 4. The committee will report directly to the board of directors, to whom they will explain and answer all questions regarding the pays for employees at all levels.
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Remuneration and Human Resources Committee’s authority, duty and responsibility could not be transferred to others in a way that those who are authorized by the committee can approve transactions that might lead to con icts of interest (as de ned in the Securities and Exchange Commission’s announcement) with the company or subsidiaries, or he/she has vested interest with exception that those transactions are regarded as normal course of business with the clear scope. 5. Risk Management Committee Risk Management Committee consisted of 4 persons as of 31 December 2011.
No 1 2 3 4
Name Mrs.Nuanual Mr.Boonliam Dr.Thamnoon Mr.Chirdsak
Swasdikula-Na-Ayudhaya Luangnakthongdee Ananthothai Kukiattinun
Title Chairman of Risk Management committee Risk Management committee Risk Management committee Risk Management committee
With Dr.Theerathorn Tharachai as secretary Risk Management Committee’s scope of authority and responsibility 1. Review and present risk management policy and acceptable risk to the company’s board for approval. 2. Supervise development and practice throughout organization to comply with risk management framework. 3. Review risk management reports to monitor important risks and proceed to ensure that the organization has suf cient and appropriate risk management. 4. Present risk of the company in overall picture, and suf ciency of internal control system to manage risk in all important aspects to the company’s board. 5. Provide suggestion about risk management to the company and revise any information concerning risk management system development. 6. Authorizes to appoint the company’s risk evaluation and monitoring working group. 7. Perform other tasks about risk management assigned by the company’s board
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6. Executive Board Executive Committee’s authority and scope of responsibility as of 31 December 2011.
No 1 2 3 4 5 6 7 8
Name Title Dr.Tawatchai Nakhata Chief Executive Director (Authorized Signatory Directors) Mr.Chainid Ngow-Sirimanee Deputy Chief Executive Director (Authorized signatory Directors) Mr.Phairat Senachack Executive Director (Authorized signatory Directors) Ms.Supee Reodecha Executive Director Mr.Wicharn Siriwetwarawut Executive Director Mr.Pornswat Katechulasriroj Executive Director Mr.Wongsakorn Prasitvipat Executive Director Ms.Sirirat Wongwattana Executive Director and Secretary (Authorized Signatory Directors)
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Executive Committee’s authority and scope of responsibility * 1. Run the company’s daily operations under the guidelines set by the Board of Directors and within the scope of rules and regulations, as well as the company’s objectives and regulations. They are barred from transactions related to project opening and investment, not related to the company’s core business. 2. Appoint high-ranking executives to manage the company. 3. Set the annual budget for the Board of Directors’ approval. 4. Consider investment projects for the Board of Directors’ approval. 5. Review and approve land acquisition worth over Bt200 million but not more than Bt800 million. The amount must not exceed the sum approved by the Board. Any approved land purchase must be attached with the preliminary development plan and project feasibility, for the Board’s consideration. 6. Consider and approve borrowings and the nancing of normal transactions. - Project nancing – approved the project nancing worth not over Bt1,000 million per project, excluding infrastructure guarantee - Working capital – approved the borrowing of no more than Bt800 million for the working capital 7. Prepare, recommend and set business strategies for the Board of Directors. 8 Consider and approve the corporate marketing and public relations plans. 9. Evaluate the company’s performance in terms of asset management and nancial management to ensure ef ciency and effectiveness. 10. Conduct other tasks assigned by the Board of Directors. Notably, the executive board has no authority in handing its power to any member or others to approve a connected transaction (as prescribed by the Securities and Exchange Commission) or a transaction which could pose con icts of interest with the company or subsidiaries with exception of approval for normal course of business transactions as policy and criteria resolved by the board of directors under the Securities and Exchange Act, and the Stock Exchange of Thailand’s regulations, announcements and instructions or rules. Note: *Revised by Board’s resolutions at the 5/2009 meeting on 14 August 2009 7. Chief Executive Of cer * Chief Executive Of cer is the highest authority in the company’s management. perform duties and report operating performance to the Executive Committee, Board of Directors and shareholders as follows : 1. Set policies, direction, and strategies for the company’s business operation. 2. Set business planning, budget and authority of the company’s internal units which up to management department to seek the board’s approval. 3. Manage normal course of business activities under policies set by the company’s board, laws, conditions, regulations, memorandum of association, and the company’s rules. 4. Appointed Management Board, advisor and other directors to give advices concerning the company’s management. 5. Review and approve land acquisition worth no more than Bt500 million. The purchase must be noti ed to the Executive Committee, to proceed with the registration at the Lands Department. 6. Perform other tasks assigned by the company’s board.
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Chief Executive Of cer authority, duty and responsibility could not be transferred to others in a way that those who are authorized by Chief Executive Of cer can approve transactions that might lead to con icts of interest (as de ned in the Securities and Exchange Commission’s announcement) with the company or the subsidiaries and af liates, or he/she has vested interest with exception that those transactions are regarded as normal course of business as policies and principles set by the company’s board. . in compliance with laws governing securities and stock exchange, regulations, announcements, instructions or rules of the Stock Exchange of Thailand. Note: * Revised by Board’s resolutions at the 1/2010 meeting on 22 January 2010. 8. Executives The company’s executive team consisted of 8 members as of 31 December 2011.
1 2 3 4 5 6 7 8
Name Mr. Chainid Mr. Pramote Mr.Wicharn Mr.Pornswat Mr.Wongsakorn Miss Supee Miss Sirirat Mr.Surasak
Ngow-Sirimanee Rermyindee Siriwetwarawut Katechulasriroj Prasitvipat Reodecha Wongwatana Vacharapongpreecha
Position Chief Executive Of cer Company Secretary Deputy Chief Operating Of cer 1 Deputy Chief Operating Of cer 2 Deputy Chief Business Development Of cer Deputy Chief Financial Of cer Deputy Chief Support Of cer Assistant Chief Financial Of cer
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Meeting allowances of the company’s board and 4 units of subcommittees in 2010-2011 .
Name
Board Audit Remuneration Nominating Risk of Directors Committee Committee Committee Management Committee 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Dr.Tawatchai Nakhata 7 5 Mr.Virayuk Puntupetch *’*** 7 5 2 1 Mr.Chainid Ngow-Sirimanee 7 5 Dr.Somsak Toruksa* 6 5 8 7 1 Dr.Thamnoon Ananthothai * 6 5 8 7 8 8 Mr.Phairat Senachak 7 5 Mr.Vidhya Nativivat 7 5 1 1 Ms.Sirirat Wongwattana 7 5 Mr. David Bryce Van Oppen ***** 1 4 Mr.Ooi Boon Aun 7 5 Mrs.Nuanual Swasdikula-Na-Ayudhaya * 7 5 1 8 8 Mr.Krish Follett *’** 6 3 8 5 1 Mr.Wanchai Thanittiraporn * ’ **** 4 Mr.Pramote Rermyindee 7 5 1 1 Mr.Boonliam Luangnakthongdee 8 8 Mr.Chirdsak Kukiattinun 8 8 Total 7 5 8 7 1 1 8 8 Note: * Independent Directors ** Mr.Krish Follet appointed accordance of the board of company on 30 April 2010 and appointed to Chairman of Audit Committee on 1 May 2010. . *** Mr.Virayuk Puntupetch resigned from Chairman of Audit Committee with a resolution of the Company’s Board of Directors to appoint a new committee on 1 May 2010. **** Mr.Wanchai Thanittiraporn Appointed on 29 April 2011. ****** Mr.David Bryce Van Oppen Resigned as a director on 26 February 2011. Director and Executive Selection The selection committee exists to nominate individuals as the company’s directors. The Selection Committee will shortlist quali ed persons and submit the nominations to the Board of Directors or the shareholders meeting for the appointment. The Selection Committee places the knowledge, ability and experiences on top priority in completing the nomination, as the quali cations must support the company’s operations. (As speci ed by the scope of authority and responsibility of the Selection Committee, in nominating company directors).
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Components and appointment of directors The company’s Board of Directors contains at least 5 members and at least a half of the board members must reside in the Kingdom. In voting for directors at the shareholders meeting, one share is equivalent to one vote. Each shareholder is obliged to cast all votes for one or more persons, but they cannot ration votes for particular persons. Majority votes count in the voting. In case of equal votes, it is to be decided by chairman of the meeting. At annual shareholder meeting, one third of directors must end their term. If the number of directors cannot be divided into three portions, the number of resigned directors must be as close as the one-third ratio. Directors are barred from operating a similar business which competes against the company’s business, or being a partner of a partnership, a partner without limit in a limited partnership, or a director of any juristic body that operates in competition against the company, unless shareholders are noti ed of the fact before the appointment. Directors must immediately notify the company if taking any part in contracts with the company or when the holding of shares or debentures issued by the company or subsidiaries increases or decreases.
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3. Dividend policy of the company and subsidiaries Meeting of the company’s Board of Director No. 5/2007 resolved to amend the company’s dividend payout ratio from at 50% of net pro t after deducting corporate income tax and the dividend payment was subject to shareholders’ meeting to not less than 50%of net unconsolidated pro t after deducting legal reserve. Financial position, liquidity, business expansion and other factors related to the company’s management are also taken into dividend payment consideration. The amendment came after the company changed record method of investment in subsidiaries from cost to equity method. The company’s subsidiaries have dividend payout policy of at least 50% of unconsolidated net pro t after deducting legal reserve. Besides, nancial position, liquidity, business expansion and other factors related to the company’s management are also taken into dividend payment consideration.
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Board of Directors of the Company Dr.Tawatchai Nakhata
Mr.Virayuk Puntupetch
Chairman Chief Executive Director
Deputy Chairman Independent Director Chairman of the Remuneration Committee
Mr.Chainid Ngow-Sirimanee Chief Executive Officer Deputy Chief Executive Director Director
Dr.Somsak Toruksa
Dr.Thamnoon Ananthothai
Director Independent Director Audit Committee Chairman of Nominating Committee
Director Independent Director Audit Committee Risk Management Committee
Mr.Vidhya Nativivat Non Executive Director Nominating Committee Remuneration Committee
Property Perfect Public Company Limited
Mrs.Nuanual Swasdikula-Na-Ayudhaya
Mr.Krish Follett
Director Independent Director Chairman of Risk Management Committee Nominating Committee
Director Independent Director Chairman of Audit Committee Remuneration Committee
Mr.Phairat Senachack
Mr.Wanchai Thanittiraporn
Director Executive Director Consultant of Chief Executive Officer
Director Independent Director
Ms.Sirirat Wongwattana Mr.Ooi Bun Aun Non Executive Director
Director Executive Director Deputy Chief Support Officer
043
Mr.Pramote Rermyindee Company Secretary
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Organization Chart Property Perfect Public Company Limited Chief Advisor to the Board of Directors Board Of Directors Nominating Committee Executive Committee Risk management Committee
Chief Executive Officer(CEO)
Audit Committee
Advisors to the Chief Executive Officer
Internal Audit
Operating Group 1 (COO 1)
Operating Group 2 (COO 2)
Business Development Group (CBO)
Deputy Chief Operating Officer 1
Deputy Chief Operating Officer2
Deputy Chief Business Development Officer
Assistant Chief Operating Officer 1
Assistant Chief Operating Officer 2
Assistant Chief Business Development Officer
Project Management Division Zone I
Project Management Division - The Villa
Project Planning Division
Project Management Division Zone II
Project Management Division - iCondo
Design & Project Development Division
Project Management Division Zone III
Project Management Division - Uniloft
Advertising Division
Project Management Division Zone IV
Projects Planning and Development Division - iCondo Uniloft
Public Relations and Corporate Communication Division
Construction Management Division - The Villa
Sales Management Division
Project Management Division Zone V Construction Management Division Legal Procedure & Ownership Transfer Division
Construction Management Division - iCondo, Uniloft
Property Perfect Public Company Limited
Remuneration Committee
Company Secretary Office of the Chief Executive Officer Research & Business Development Division Product Development & Quality Control Division
Financial Group (CFO)
Support Group (CSO)
Deputy Chief Financial Officer
Deputy Chief Support Officer
Assistant Chief Financial Officer
Assistant Chief Support Officer
Finance & Treasury Division
Investor Relation & Information System Division
Accounting Division
Fund Management and Debenture Division
Budgeting Division
General Administration Division Human Resources Division
Legal
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Project’s Information Project of Property Perfect Plc. and Subsidiary’ on 31 December 2011. 1. Perfect Masterpiece Rattanatibet Phase 1-2 Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2007-2012 SDH 145 1,515 MB. 21 241 MB.
2. Perfect Masterpiece Rama IX Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2008-2014 SDH 284 3,570 MB. 121 1,219 MB.
3. Perfect Masterpiece Ratchapruek Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2011-2012 SDH 42 550 MB. 34 442 MB.
4. Perfect Masterpiece Rangsit Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2011-2012 SDH 33 639 MB. 32 626 MB.
5. Perfect Masterpiece Ramkhamheang Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2011-2012 SDH 37 800 MB. 32 573 MB.
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6. Perfect Place Rattanatibet Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2005-2012 SDH 742 3,321 MB. 144 592 MB.
7. Perfect Place Ratchapruek Phase1 Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2009-2012 SDH 391 2,016 MB. 112 564 MB.
8. Perfect Place Rangsit Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2011-2012 SDH 114 545 MB. 102 465 MB.
9. Perfect Place Ramkhamhaeng-Suvarnabhumi 2 Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2014 SDH 282 1,440 MB. 212 1,048 MB.
10. Perfect Place Ramkhamhaeng-Suvarnabhumi (Lake Zone) Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2011-2012 SDH 25 260 MB. 24 255 MB.
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11. Perfect Place Sukhumvit77-Suvarnabhumi* Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2004-2013 SDH 1,055 6,122 MB. 272 1,555 MB.
12. Maneerin Lake&Park Ratchapruek-Tiwanon Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2003-2012 SDH 702 3,100 MB. 71 330 MB.
13. Perfect Park RamaV-Bangyai Phase1-4 Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2007-2012 SDH,DH 1,198 3,924 MB. 260 884 MB.
14. Perfect Park Suvarnabhumi Phase1-2 * Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2007-2013 SDH 503 2,030 MB. 244 975 MB.
15. Perfect Park Rangsit Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 SDH 165 608 MB. 135 486 MB.
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16. Perfect Park Bangbuatong** Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 SDH 403 1,536 MB. 329 1,249 MB.
17. The Villa Rattanatibet. Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2006-2012 TH,DH 1,427 3,577 MB. 368 1,158 MB.
18. The Villa Ramkhamhaeng * Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 TH 284 655 MB. 12 29 MB.
19. The Villa Ram-Intra * Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 TH 295 685 MB. 127 297 MB.
20. The Villa Bangbuatong ** Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 TH 301 655 MB. 166 369 MB.
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21. The Metro Rama IX Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2008-2012 TH 554 2,280 MB. 71 290 MB.
22. The Metro Park Sathorn Phase 3 Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2009-2012 TH 2,155 3,806 MB. 1,352 2,433 MB.
23. Metro Sky Ratchada Phase 1*** Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 CD 441 1,097 MB. 144 341 MB.
24. Metro Sky Sukhumvit Phase1 Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 CD 588 1,623 MB. 364 991 MB.
25. icondo Ngamwongwan*** Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 CD 480 668 MB. 198 281 MB.
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26. icondo Sukapiban 2*** Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 CD 1,100 1,605 MB. 775 1,137 MB.
27. icondo Sukhumvit 105*** Time to Develop Product Total Units Total Project Value Remaining Units Remaining Project Value
2010-2012 CD 1,600 2,256 MB. 1,095 1,536 MB.
Note: * Subsidiary’s Project (Estate Perfect Co., Ltd.) ** SSubsidiary’s Project (Residence Number Nine Co., Ltd.) *** Subsidiary’s Project (Bright Development Bangkok Co., Ltd.) SDH DH TH CD
= = = =
Single Detached House Duplex House Town House Condominium
052 Map
Annual Report 2011
Property Perfect Public Company Limited
053
Marketing and Competition Marketing Marketing Strategy The company sets marketing strategies in line with competition, taking into consideration location, competition situation, target , SWOT analysis and external factor which effect to product development , the strategy as follow:
Product Strategies • Low Rise Residential Units Design The company applies data from the research and development department in designing to best respond to customer preferences. The company’s product design covers single houses, duplex house and townhouses – with focus on the look and usable space to t the new lifestyle as well as Thailand’s weather condition. The design team, with over 20 years of experience, also works with leading architecture rms in creating new innovative features – having the design, usable space and cost-ef ciency as the priorities. The company introduced V Series design, with space of large-sized houses extended horizontally and vertically for greater comfort. Usable space aside from extra-high windows to ensure all-day air ventilation and a door next to the beautiful garden. The modern design is overwhelmingly welcomed. In 2011, the C-series design was launched for Perfect Park and Perfect Place brands to improve the urban lifestyle features as follow:
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Cool lifestyle: Meeting the requirements of all lifestyles of new families, with more open space for all members’ activities. Click design: Outstanding new functions for maximum space utilization, hidden in modern interior and exterior designs. Convenience function: All corners are designed for different functions and more energy-saving. City location: Various accesses to the city area through expressways, Airport Rail Link, Purple Line electric train and Red Line electric train In 2012, the company plans to unveil the “New C-Series” design, for units priced between Bt3-Bt5 million. The design, cut out for the City Living lifestyle and City Link, will be available in projects near electric train routes and expressways, under Perfect Park and Perfect Place brands. “New C-Series” promises space as much as a big house. It also takes into account the environmental concerns, with energy-saving materials (Green Concept). It will also serve high-tech individuals (Technology for Life).
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Quality The company controls construction works quality, by having contractors complete the designed works with quality materials within the speci ed period. The construction pattern and methods are jointly formulated to meet the company’s standards. Since 2008, the company has applied new construction technology like the prefabrication, and rigid frame or skeleton system with the construction of single houses, duplex houses and townhouses of Perfect Place, Perfect Park ,The Villa and The Metro projects which have been warmly welcomed. In 2010, the company also developed the Site Management system, to put the comprehensive control on all construction steps to ensure complete products before delivery. In 2010, the company struck a partnership with Siam Cement Public Company Limited (SCG), whereby both jointly introduced a house completed by the innovative Modular system. As a choice to customers, the “SCG HEIM innovative House” is designed to enhance the quality of life through modern technology, high-quality materials and precise quality assessment. The innovative house rst prevailed as part of Perfect Masterpiece Rama IV project and has attracted warm welcome. In 2011, the new choice will be expanded to other projects of the company to meet the growing customer demand. In 2011, The company established Prefab Co., Ltd. to embraced the prefabricated technology to cope with business growth, as this technology reduces the construction period from 6-8 months to 4-5 months. Emphasis is maintained on the quality of construction materials, with the supply mainly from Siam Cement Public Company Limited (SCG), to assure customers of durability and beauty. The company and subsidiaries also control construction cost through bulk purchases and are prepared to introduce the supply chain management technique. In 2011, the company also established U & I Construction Bangkok Company Limited to provide the construction services of single houses, duplex houses, townhouses and condominiums to the group, for higher exibility in construction. It will directly take contracts from companies in the group. U & I will help the company take care of the supply chain and sub-contractor management, to ef ciently control construction cost and construction period, as well as the volume and quality of construction works. The company and subsidiaries have the policy to sell completely-built housing units, which match the need of customers who want to move in after purchases. They can view the complete units before making a decision. Within 1 month after purchases, the units can be transferred to customers who can immediately move in. The construction works of condominium units will however start after pre-sales.
• High Rise Residential Units The company has created the following condominium brands, according to target groups. Metro Park, near the city center and along the electric train route. The project’s price tag is between Bt1.2-Bt3 million per unit. Metro Sky, high-rise condominium, to lure home buyers looking for city units near the electric train routes. The units are priced between Bt2-Bt5 million per unit.
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The Sky, to be launched in 2012 to cash in on rising demand for condominiums and to expand the client base towards the premium segment. The high-rise condominium brand will target the new generation who seeks different products for their unique lifestyles. The condominiums will be completed with high-quality materials and offer a variety facilities. The units will be designed for maximum space utilization. The units will be priced in the range of Bt2.5-Bt8 million.
“iCondo”, by Bright Development Bangkok Company Limited (subsidiary). The low-rise condominium is designed to principally satisfy customers who seek accommodations in the city area or near the city area with convenient access to electric trains and expressways. The condominium is priced Bt1-Bt2 million. Uniloft, In 2010 a new premium dormitory project by Bright Development Bangkok Company Limited (Subsidiary). This would be rented to students under the “Extraordinary Campus Living” concept, with the aim to raise the dormitory standards for students who show greater demand for well-managed accommodations near universities. The company plans to sell the entire project to a property fund, expected to be established in 2012, targeting investors who seek constant and stable returns.
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The company and subsidiaries’ condominiums will draw customers mainly with the larger-than-required central area for the comfortable lifestyle. The condominiums will possess the single house project’s ambience, fully equipped with a swimming pool, a tness center and quality security system.
• Environment Impact Assessment Aside from the houses, the company also emphasises home design and the focus on the environmental management in the projects, security system, and after-sale services to ensure a perfect community for all clients to add value to residents in projects. With the focus, the company won EIA Monitoring Award from the Natural Resources and Environment Ministry for three consecutive years. The three projects received the awards, In 2005-2007,Perfect Place Rattanathibet, Perfect Place Ramkhamhaeng phase1. In 2006-2008, Perfect Place Ramkhamhaeng phase 2 and 3. In addition, the company provides public gardens, lakes, large and perfect club houses and shops in the club house areas to facilitate customers. The company has teamed up with business partners to open their shops in the club house areas such as Black Canyon, True Coffee, Clark Hatch Fitness Center, 7-Eleven, V Shop and 108- Shop Convenience stores. These facilities differentiate the company’s projects from others, creating the friendly ambience to residents who have warmly welcomed the concept.
Pricing The company has policy to set prices based on the economic condition, market demand and competition. These factors are jointly considered with costs, locations, project types and market conditions when compared with competitors. There are several guidelines for price setting such as setting higher price than rivals but better designs, and environmental and convenient facilities.The company has offered various project types and prices starting from aBt1.0 million to the luxurious projects with prices in a range of Bt7 million up to serve different demand as follows :
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The table described residence prices by brand
Type
1.0 – 2.0
Pricing (Unit : Million Baht) 2.0 – 3.0 3.0 – 4.0 4.0 – 5.0 5.0 – 6.0
6.0 up
7.0 MB up 3.5 - 7.0 MB
2.8 - 5.0 MB Single Detached House
1.6 - 3.0 MB
3.2 - 4.0 MB
1.7 - 3.0 MB Townhouse and Duplex House 2.5 - 8.0 MB 2.0 - 5.0 MB 1.2 - 3.0 MB
1.0 - 1.2 MB
Condominium
1.0 - 1.2 MB
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Place • Location The company’s projects are mostly located in high-potential locations, set along the electric train routes or new roads. Comparatively to competitors’ products, the projects are of higher potential and offer greater traveling convenience as. -
In the North and West of Bangkok, the projects are located near the Purple Line (Bang Sue-Bang Yai) and the Red Line (Bang Sue-Taling Chan). Others are on Ratchaphruek Road, with connections to Rama IV Bridge (Pak Kret) and Chaeng Wattana Road.
-
In the East, the projects are near the Airport Rail Link, Suvarnabhumi Airport, and the outer ring road (East) that links the North and South of Bangkok, as well as the Motorway that leads to Chon Buri and Pattaya.
-
City, projects are in business areas like the Ekamai-Ram Intra Road,Motor Way road, near Airport Rail Link, BTS on Ratchadapisek road, Sukhumvit 103 and 105 road and MRT subway as well as the routes which running and to be opened soon. They are mostly up-scale housing units(Perfect Masterpiece), 3-storey townhouses (The Metro) and condominium (Metro Park, Metro Sky, i-Condo).
In 2011, the company and subsidiaries launch 5 new projects with combined value of Bt3,039 million.
Promotion • Advertising & Place The company has applied the integrated communications as newspaper, TV Scoop, radio spot, Billboard, Direct mail etc, in selling the products. Mass media is exploited for the one-time advertisement to advertise a number of projects to target customers in lower advertising cost. Complimenting the strategy is the direct marketing, whereby a speci c media is chosen for a particular target group and a particular campaign. The company also resorts to new communications channels like the Internet, marketing events and customer relationship management (CRM) to take care of existing customers. The Perfect Friend Club is launched to thank existing customers who introduce the projects to their friends, as a means to effectively reach out to target customers at a low cost. The ratio of units sold under the scheme has been signi cantly rising, thanks to clients’ recommendations to their friends and relatives. The company has been offensive in terms of marketing activities. It is reaching out to customers through website, social media (Facebook and Twitter), and specialized activities for customers visiting the websites of the company and subsidiaries. Through the warmly-welcomed Perfect Card membership, it also builds a communication linkage with customers to promote the company’s products. The company was active in marketing activities and customer relationship management (CRM). Activities were hosted all year round, to ensure continued communications with project residents and target customers. The company has devised unique promotions for particular groups of target customers with realization of their different preferences, to speed up their buying decision process. The strategies take into account economic environment at a certain period. For example, for customers seeking a complete house, with
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help from leading nancial institutions, they are offered with low-interest loans, an extended borrowing period, and the step installment program. Through cooperation with leading furniture makers, the company offers customers a chance to buy a house with furniture at special prices, to help them save shopping time and reduce the need for an interior design. Special furniture prices also save their money, as loans for furniture purchase often carry higher interest rate than mortgage loans.
Brand Building Strategies The company’s brand has been differentiated from competitors’. The Brand DNA is created under the “Happy Living” concept, to underline the company’s focus in creating the new living standards for all residing in the Property Perfect projects. Happy Living contains 4 main happiness-supporting components as follows: -
House (Happy with Perfect Quality) Residing in high-quality houses, which are well-designed for maximized functions and pleasant look as well as for energy saving and environmental friendly purposes. The construction works are closely and thoroughly monitored and applied modern technology like the prefabrication which ensures short construction period but standard quarter. All the units are also subjected to the QC Pass system before delivery to customers.
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Security (Happy with Peace of Mind) Deriving from maximum security. Through cooperation with Thai Secom Pitakkij Co., Ltd. (SECOM), a leader security system provider in Japan, the trustworthy Home Security system is designed for all projects to cover from the entrance, guard booths and the overall projects’ space to customers’ home.
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Lifestyle (Happy with Healthy Lifestyle) Property Perfect is more than just a home. Here, activities are created to meet customers’ lifestyles. The projects are fully equipped with facilities like a giant club house, where tness, swimming pools, gyms, shops and other services. The central area is also open for relaxing and exercising purposes as well as family activities, something that they need not to nd outside the projects.
-
Green Environment (Happy with Friendly Environment) Near-nature environment is provided, with the larger central space which offers oral trees and large lakes for cool living amid fresh air.
The company believes that a successful brand is built upon customers’ good experiences, which will lead to the company’s sustainable image. The construction works, design and project planning are thus properly designed, along with emphasis on environment management, infrastructure and security inside the projects. Activities are also hosted for better relationships among residents, to create a warm community and happy environment to all residents. Favorable communities spark words of mouths among residents of the company ’s projects, which is a sustainable way to build brand.
• Target Group The company has speci ed products accordingly to their brands, taking into account the locations, and area’s growth potential, competition and development cost. The company has the policy to launch projects of different price tags in each area to cover different targets. The company’s projects are developed under the following 11 brands, to cover all market segments.
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Annual Report 2011
Condominiums 1. Metro Park, covers low-rise condominiums near mass transit routes, where 70% of central area, including the lake and the club house, is provided. 2. Metro Sky, focuses on high-rise downtown condominiums, which also boasts the green space, the Sky Lounge and other facilities. 3. The Sky, is a high-rise condominium project for new generation to whom quality must come rst. It will place emphasis on high-quality materials and a variety of facilities and promises maximum space utilization. Units under this brand will be priced at Bt2.5-Bt8 million. 4. iCondo, covers low-rise condominiums near mass transit routes, carried out by subsidiary Bright Development Bangkok Co, Ltd. with the price tag of Bt1-Bt2 million.. 5. Uniloft, a premium rental residential project, targets university students under the “Extraordinary Campus Living” concept. The project is set to uplift accommodation standards for students who demand closeness to universities. This brand belongs to Bright Development Bangkok Company Limited (Subsidiary). It will develop and then sell the projects to property funds. Townhouses 6. The Villa, a project near electric train routes and communities for new families. - Undertaken by the company are a 2-storey townhome project and a modern duplex house project, which comes with vast green area, a lake and a big clubhouse. Price tag is Bt1.7-Bt4 million per unit. - Launched by a subsidiary (Estate Perfect Company Limited) is “The Villa” 2-storey townhome project. Price tag is Bt2-Bt3 million per unit. 7. The Metro, covering 3-storey modern city townhouse, located along electric train routes and near facilities. Price tag is Bt3.2-Bt4 million per unit. Single Detached Houses 8. Modi Villa by Estate Perfect Company Limited and Residence Number Nine Company Limited (Subsidiaries) features two-storey townhomes and new-styled twin houses. Priced at Bt1.6-Bt3 million, the new brand will be unveiled in Ladkrabang and Pinklao areas. 9. Perfect Park, a multi-design single detached house and twinhouses that offers green space and Club House to start-up families. Price tag is Bt2.8-Bt5 million per unit. 10. Perfect Place, a single detached house on convenient locations, completed with lavish green space, lakes and Club House for medium-sized families. Price tag is Bt3.5-Bt7 million per unit. 11. Perfect Masterpiece, a spacious single detached house for larger families, standing amid huge green space and Club House. Price tag is Bt7million up per unit.
Competition The ood disaster late 2011 led to a contraction in overall supply and demand in the fourth quarter of the year and the rst quarter of 2012, as all awaited details of the government’s short-term and long-term oodmanagement measures as well as those of affected developers. Large-sized developers thus rushed to strengthen competitive advantages, by strengthening brand awareness and controlling cost and expenses which are rising in light of higher minimum policy and oil-pushed construction material prices. In 2012, they maintain focus on growth. The company targets sale revenue at Bt17,000 million, up 60% from the previous year. The amount is the highest record since the company’s establishment but it is in line with the company’s con dence in the strengths of the entire group. The company plans 23 new development
Property Perfect Public Company Limited
063
projects of which combined value is Bt26,000 million. Of total, 9 projects with Bt12,000 million in value will offer single houses; 5 worth Bt4,000 million to develop duplex houses and townhouses; and 9 worth Bt10,000 million to develop condominiums. The company also plans to develop shopping complexes on a 13-rai land plot on Ratchadapisek Road and a 25-rai land plot on Bangna-Trat Road, to secure higher revenue growth and stability in income generating. Price and product strategies will be the success key, aside from cooperation from partners to attract buyers and accelerate their decision making. In focus will be locations, which will determine the type of development, designs and prices. Locations are put in 4 categories as follows; Group 1: Excellent locations downtown (within 15km radius) The company introduces “Metro Sky” and “The Sky” condominium brands, offering units from Bt2 million to Bt8 million. This follows huge success of Metro Park Sathorn, a condominium located near the Light Green skytrain project. The company will proceed with the development concept which highlights traveling convenience promised by the sky train and the subway. The projects will also ensure pleasant living environment and despite full facilities, the prices would be lower than competitors’ in the same area. This has been the company’s strength. Projects under this concept will be introduced in other areas – chie y Ratchadapisek and Sukhumvit, to cope with higher demand. The company is convinced that the ood disaster and volatile oil price is boosting more demand for quality condominiums among rst-time buyers, while home owners would seek units for their second home, for the sake of traveling convenience and quality of life. This will ensure the persistently high demand for residential units located near mass-transit channels. Group 2: Good locations (within 15-20km radius from downtorwn) Most of the company’s projects are in this group, which shows erce competition due to relatively closeness to downtown and traveling convenience due to continued mass transit development. The prices of land along the mass transit routes are increasing, as they are the development areas for residential units priced from Bt3 million. The areas include Ratchaphruek Road, Rattanathibet Road, new Rama IX Road, the outer ringroad, OnNut Road and krungthep-Kreetha Road. These areas house the company’s projects under Perfect Masterpiece, Perfect Place, Perfect Park, The Metro and The Villa brands. Group 3: Suburban projects (20-30km radius) The projects have faced intensifying competition, due to relatively low land prices. The area can be developed into housing estates with price tag below Bt4 million. Most of the developers are concentrated in the area, as buyers in this income group are the biggest. However, concentration results in oversupplies. That led to a price war and pressures the selling price as well as margins. The company has plans to develop projects in this area to increase the market share and expand brand awareness of the Perfect Park, The Villa and Modi Villa brands. Group 4: Poor locations or out of town Some homebuyers are ready to buy houses far away from the city areas due to the cheap prices. All expect the housing value to rise in tandem with infrastructure and the upward trend in oil prices. Most of the buyers are people who have been residing in the areas for some time.
064
Annual Report 2011
Real Estate Business Outlook and Trend The Thai economy is expected to expand at an accelerated rate of 5% in 2012 (Source: Fiscal Policy Of ce, December 2011), on the back of demand from the public and private sectors. This is against the 1.1% growth rate in 2011 (Source: Fiscal Policy Of ce), due to the ood disaster which severely affected the manufacturing and agricultural sectors. The real estate industry in 2011 was directly affected by the last-quarter oods, which plunged both supply and supply. The industry in the rst three quarters was in positive condition, re ecting higher consumer con dence. Combined revenue of top 15 developers in the three quarters increased by 14% on year. Then, they were cautious of launching new projects, particularly condominiums, following massive launches late third quarter and in the fourth quarter of 2010. More single house projects were launched in 2010, thanks to positive economic outlook and clearer picture on the development of new mass transit routes which could save traveling time. The number of transferred units in the Greater Bangkok during January and November 2011 totaled 135,221 units, down 17% from the same period a year earlier. A sizeable number of transfers took place in the rst half of 2010 to bene t from stimulus measures. Thus condominium units which accounted for 40% of total showed a 17% decrease on year in terms of transfers from the same period a year ago; single houses down 15% and townhouses 14%. The number of registered residential units in the Greater Bangkok during January and November (See Figure 1) accounted for 72% of units completed in 2010, when a huge number of units were transferred ahead of the end of stimulus measures in the middle of the year and raised the number of registered units to the highest level since 1997. During January and November 2011, registered units totaled 77,351 units, down 20% from the same period in 2010. Condominium units accounting for 42% of all showed a 39% drop on year, while single houses accounting for 39% showed a 5% increase and townhouses and shophouses accounting for 17% also showed a 2% increase. (Source: Government Housing Bank’s Real Estate Information Center) The gures demonstrated adjustment accordingly to market condition. Notably, some of the transferred units were old stocks, showing a supply adjustment. Figure 1: Registered residential units in the Greater Bangkok in 1995-2010 and Jan-Nov 2011 (By type of development) Jan.1995
1996
1997
1998
1999 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Nov.11
Single houses 48,909 44,877 41,305 23,985 17,469 23,128 24,041 24,973 34,592 44,248 46,643 42,764 38,705 34,618 28,998 31,891 30,136 Duplex houses
1,089
791
1,009
196
178
539
227
Townhouses and shophouses 61,944 60,373 43,480 11,895 2,319 2,728 5,062
80
945
678
965
1,556
2,296
7,011 12,950 15,418 13,858 17,421 17,837 14,616
Condominiums 66,911 70,575 62,837 30,978 9,063 6,679 4,650 5,118 Total
1,144
7,399
1,138
1,431 1,377
11,116 14,663 13,187
8,439 10,534 18,607 17,432 34,049 53,725 59,919 32,651
178,853 176,616 148,631 67,054 29,029 33,074 33,980 37,182 56,085 69,050 71,713 79,757 75,530 85,579 94,977 107,904 77,351
Source: Real Estate Information Center, Government Housing Bank ‘
Property Perfect Public Company Limited
065
Picture 1: No. of registered residential units completed by developers in 1995-2010 and Jan-Nov 2011
‡
Available residential units in 2011 totaled 83,970 units, down 25.4% from 2010. (Source: Agency for Real Estate Affairs). Condominium units accounting for 49% of total showed a 31.9% drop from a year earlier. As developers adjusted strategies after the introduction of massive units in the previous year, the number of new units launched stayed in the decelerated pace all year round. The number of available townhouse units also dropped 30.3% but that of single houses increased sharply in the rst three quarters. Despite oods, the annualized available single house units thus dropped only 3% on year. Twin houses, accounting for only 4.5% of total, however showed a 29.3% increase, thanks to demand from buyers who could not afford single houses. Residential units sold in 2011 topped 81,816 units, down only 15% on year, which pushed the number of remaining units by only 3% from a year earlier. (Source: Agency for Real Estate Affairs). Most of the remaining units are condominiums, slated for completion in the next 1-2 years. Supply was evidently well absorbed, despite the last-quarter oods. The remaining supply covered units under construction and those whose construction works have not yet started. A sizeable portion of supply was out of the market thanks to stimulus measures, while construction works of most projects continued as planned. A sharp increase in supplies was witnessed only in some locations, p like along new mass transit routes or extension, on anticipation of a demand spike. New supplies in 2010-2011
Single Detached houses Duplex houses Towhouses Condominiums Total
2010 17,353 2,925 31,365 60,972 112,615
Source: Agency for Real Estate Affairs
2011 Change % 16,824 -3.0% 3,782 29.3% 21,872 -30.3% 41,492 -31.9% 83,970 -25.4%
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Annual Report 2011
Picture 2: New supplies (by category) in 2010-2011
‡
In 2012, oods will partially in uence home-buying decision. In the short term, demand for condominiums and low-rise units in high-ground areas should increase. Meanwhile, the government’s ood-management plan and developers’ measures to mitigate future disaster should sustain buyer con dence and demand for units in ooded-areas. In this circumstance, demand in the areas should return to normal soon, as lifestyles dictate the buying decision and as such relocating to a new place is not an easy thing. No matter what happens, low-rise housing units in suburban areas should remain the best answer to most consumers, aside from the issues of affordability and lifestyles. Developers themselves need adjustment, to focus more on products that suit affordability and fast-changing lifestyles. In this circumstance, large-sized developers are in the position to expand their market shares and maintain their competitive advantages. Notably, the industry outlook will chie y depend on the economic recovery and the pace of city expansion and transport infrastructure.
Property Perfect Public Company Limited
067
Other Information Financial structure The company’s securities 1. Common shares Accounting year Registered capital - Value (Bt) - No. of shares Registered capital - Value (Bt) - No. of shares - Par value (Bt./Shares)
31 Dec.2008
31 Dec.2009
31 Dec. 2010
31 Dec. 2011
6,552,000,000 1,092,000,000
6,552,000,000 1,092,000,000
6,552,000,000 1,092,000,000
5,961,161,256 5,961,161,256
4,726,329,720 787,721,620 6.00
4,726,329,720 787,721,620 6.00
4,726,344,720 787,724,120 6.00
4,726,456,320 4,726,456,320 1.00
As of 31 December 2008 and31 December 2009 , the company’s registered capital stood at Bt 6,552,000,000 (1,092,000,000 shares at Bt6 par value) and paid-up capital totaled Bt4,726,329,720 (787,721,620 shares at Bt6 par value). As of 31 December 2010, the company’s registered capital totaled Bt6,552,000,000 (1,092,000,000 shares at Bt6 par value) and paid-up capital totaled Bt4,726,344,720 (787,724,120 shares at Bt6 par value). The paid-up capital increased Bt15,000 following the exercise of warrants (for 2,500 shares at Bt6 apiece) in December. The new shares were registered with the Commerce Ministry on 11 January 2010. On 29 April 2011, the shareholder resolutions are as follows; 1. To cancel 160,405,804 common shares, Bt6 par value, totaling Bt962,434,824. 2. To cancel 135,000,000 common shares, Bt6 par value, totaling Bt810,000,000. 3. To reduce the registered capital from Bt6,552,000,000 (1,092,000,000 common shares, Bt6 par value), to Bt4,779,565,176 (796,594,196 common shares, Bt6 par value), by cancelling shares as in Resolutions No. 1 and 2. 4. To change the par value from Bt6 to Bt1. 5. To increase the registered capital from Bt4,779,565,176 (4,779,565,176 shares, Bt1 par value) to Bt5,961,161,256 (5,961,161,256 shares, Bt1 par value) through the issuance of 787,730,720 shares, at Bt1 par value to existing shareholders. A number of 393,865,360 new shares, at Bt1 par value, will also be reserved for warrant exercise. As of 31 December 2011, the company’s registered capital stood at Bt5,961,161,256 (5,961,161,256 shares with Bt1 par value) following the reduction of capital by Bt1,772,434,824 (295,405,804 shares with Bt6 par value) per Resolutions No. 1, 2 and 3. on 30 December 2010 to Bt4,779,565,176 (796,594,196 shares with Bt6 par) through the cancellation of unallocated common shares. The company also raised the registered capital per Resolutions No. 4 and 5, to Bt5,961,161,256 (5,961,161,256 shares at Bt1 par). Paid-up capital increased to Bt4,726,456,320 (4,726,456,320 shares at Bt1 par), resulting from the exercise of warrants worth Bt39,600 (39,600 shares at Bt1 par) in December 2010 and the exercise of warrants worth Bt72,000 in June 2011 (72,000 shares at Bt1 par). The company registered the capital increase with the Commerce Ministry following the warrant exercises on 13 January 2011 and 11 July 2011, respectively.
068
Annual Report 2011
2. Warrants (a) Warrants issued to uncollateralized creditors Under the Rehabilitation Plan, the company must issue free warrants to creditors with uncollateralized loans, at the ratio of 7 warrants per every Bt1,000 debt. Each warrant can be exercised for 1 share, at the price of Bt0.01. The company won the Securities and Exchange Commission to offer 53,000,000 warrants, with 10-year maturity, on 7 November 2002. The exercise date is xed for the last day of the second and fourth quarters of each year, starting from the fourth quarter in 2002. Receivership of cers later abolished some creditors’ claims. The company had issued only 50,930,000 warrants, and 2,070,000 were left unallocated. Shareholders at the 1/2005 meeting approved the cancellation of the remaining warrants. As of 31 December 2011, the number of remaining warrants which are not yet exercised stood at 8,851,476 units. (b) Free warrants issued to existing shareholders The company’s shareholders at the annual general meeting on 29 April 2011 approved the issuance of free warrants to existing shareholders, at the ratio of one warrant to one share held. Detail of the warrants are; No. of warrants 393,865,360 units Maturity 3 years from issue date Exercise date Last working day of each quarter Exercise price 1 baht Exercise ratio 1:1 To date, the company has not yet issued the warrants.
3. Debentures The Board of Directors at the 1/2011 meeting as of 25 February 2011 meeting and shareholders at the annual general meeting on 29 April 2011 approved the company’s plan to issue debentures worth upto Bt4,000 million. To date, the company is capable of issuing debentures worth upto Bt4,000 million. Meanwhile, details of outstanding debentures as of 31 December 2011 are as follows; (A) Secured debentures No.2/2009 # 2 Speci c name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date
: Secured debentures of Property Perfect Public Company Limited No.2/2009 # 2 maturing in 2012. : Holder-bearing, secured debentures with trustee : 800,000 units : 1,000 Baht : Bt 800million : Public offering to the general public and institutional investors : 14 August 2009 : 3 years from issue date : 14 August 2012
Property Perfect Public Company Limited
Interest rate Interest payment schedule Principal payment Early redemption Other signi cant condition Credit rating Trustee Registrar Secondary Market
069
: Fixed 6% per annum : 14 February, 14 May, 14 August, and 14 November of each year throughout the debentures’ life : Payment on maturity, 14 August 2012 : None : Debt to equity ratio must be maintained at no more than 1.75:1 : “BBB” by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited : Bank of Ayudhya Public Company Limited : Thai Bond Market Association
(B) Partially-collateralized debentures No.1/2010 Speci c name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Interest payment schedule Principal payment Early redemption Other signi cant condition Credit rating Trustee Registrar Secondary Market
: Partially-collateralized debentures of Property Perfect Public Company Limited No.1/2010, maturing in 2013 : Holder-bearing, partially-collateralized debentures, with trustee : 1,500,000 units : 1,000 Baht : Bt1,500 million : Public offering to the general public and institutional investors : 26 February 2010 : 3 years from issue date : 26 February 2013 : Fixed 5.9% per annum : 26 February, 26 May, 26 August and 26 November of every year throughout the debentures’ life. : Principal payment maturity date, 26 February 2013 : None : Debt to equity ratio must be maintained at no more than 1.75:1 : “BBB” by Tris Rating Co., Ltd. : TMB Bank Public Company Limited : TMB Bank Public Company Limited : Thai Bond Market Association
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Annual Report 2011
(C) Secured debentures No.2/2010 Speci c name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Interest payment schedule Principal payment Early redemption Other signi cant condition Credit rating Trustee Registrar Secondary Market
: Secured debentures of Property Perfect Public Company Limited No.2/2010, maturing in 2012 : Holder-bearing, secured debentures with trustee : 1,000,000 units : 1,000 Baht : Bt1,000million : Public offering to the general public and institutional investors : 9 September 2010 : 1 year and a half from issue date : 9 March 2012 : Fixed 5.5% per annum : 9 March, 9 June, 9 September and 9 December of every year throughout the debentures’ life. : Principal payment maturity date, 9 September 2012 : None : Debt to equity ratio must be maintained at no more than 1.75:1 : “BBB-” by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited : Bank of Ayudhya Public Company Limited : Thai Bond Market Association
(D) Secured debentures No.3/2010 Speci c name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Interest payment schedule Principal payment
: Secured debentures of Property Perfect Public Company Limited No.3/2010, maturing in 2013 : Holder-bearing, secured debentures with trustee : 1,000,000 units : 1,000 Baht : Bt1,000 million : Public offering to the general public and institutional investors : 18 November 2010 : 3 years from issue date : 18 November 2013 : Fixed 5.8% per annum : 18 November, 18 February, 18 May and 18 August of every year throughout the debentures’ life. : Principal payment maturity date, 18 November 2013
Property Perfect Public Company Limited
Early redemption Other signi cant condition Credit rating Trustee Registrar Secondary Market
: : : : : :
071
None Debt to equity ratio must be maintained at no more than 2:1 “BBB-” by Tris Rating Co., Ltd. Thanachart Bank Public Company Limited Thanachart Bank Public Company Limited Thai Bond Market Association
(E) Unsecured debentures No.4/2010 Speci c name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Interest payment schedule Principal payment Early redemption Other signi cant condition Credit rating Trustee Registrar Secondary Market
: Unsecured debentures of Property Perfect Public Company Limited N0.4/2010, maturing in 2012 : Unsecured holder-bearing debentures with trustee : 1,500,000 units : 1,000 Baht : Bt 1,500 million : Public offering to the general public and institutional investors : 18 November 2010 : 2 years from issue date : 18 November 2012 : Fixed 6.5 % per annum : 18 November, 18 February, 18 May and 18 August of every year throughout the debentures’ life. : Principal payment maturity date, 18 November 2012 : None : Debt to equity ratio must be maintained at no more than 2:1 : “BB+” by Tris Rating Co., Ltd. : Thanachart Bank Public Company Limited : Thanachart Bank Public Company Limited : Thai Bond Market Association
3 Mr.Virayuk Puntupetch Deputy Chairman / Independent Director / Chairman of The Remuneration Committee
2 Mr.Chainid Ngow-Sirimanee Chief Executive Of cer/ Deputy Chief Executive Director/ Authorized Signatory Directors
1 Dr.Tawatchai Nakhata Chairman / Chief Executive Director/ Authorized Signatory Directors
Name - Title
Academic Quali cations
• Bachelor of Laws 0.844% Chulalongkorn University • Thai Barrister-at-Law Thai Bar Association
65 • Master of Science 0.000% • Bachelor of Arts (Political Science), • Certi cate in Financial Policy Analysis Program International Monetary Fund, Washington DC, USA. • Certi cate in Stock Market Development Program Securities and Exchange Commission, Washington DC, USA • Certi cate in Executive Program, Harvard University, USA.
57
64 • Ph.D. University of Illinois 0.001 % • Audit Committee Program (ACP) 13/2006 ; Director Accreditation Program (DAP) 52/2006 ; Thai Institute of Directors; IOD
Age
Equity RelationHolding ship Chief Executive Director Chairman Chairman of Remuneration Committee Managing Director Fellow Member Consultant Engineer/ Managing Director Head of Construction Research Section
Designation
Director
2002 - Present
1979 - 1980
1986
1994-1998 1994 1989
1996-2000
2004 2000 - 2004 1998 - 2000
Property Perfect Public Company Limited
Bright Development Bangkok Co., Ltd./ Property Development Centrepoint Shopping Mall Co., Ltd./ Property Development Krungthep Land Public Company Limited/ Property Development Estate Perfect Company Limited/Property Development Thai Property Public Company Limited/Property Development (Formerly known as “Rattana Real Estate Public Company Limited”)
We Retail Public Company Limited Property Perfect Public Company Limited
Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited Ceda Co., Ltd./Structural engineering design service The Engineering Institute of Thailand Ceda Co., Ltd./Structural engineering design service Public Works Department, Ministry of the Interior
Company/Business Type
Property Perfect Public Company Limited The Secretariat of the Prime Minister Of ce Government Of cials in Charge of International Trade Affairs/The Of ce of Thai Trade Representative Senior Of cial Government Of cials of Prime Minister’s Of ce Inspectors-General/Director Ministry of Finance/Vayupak Fund Deputy Director/Director Fiscal Policy Of ce/Of ce of General Administration for 33rd Annual Meeting of the Board of Governors of Asian Development Bank Director Of ce of the Neighboring Countries Economic Development Cooperation Fund Specialist Expert for Debt Management Fiscal Policy Of ce Director Saving & Investment Policy Division, Fiscal Policy Of ce Director Capital Market Development Policy Division, Fiscal Policy Of ce Director Financial and Financial Institution Policy Division, Fiscal Policy Of ce Assistant to Country Executive Director of World Bank - Washington DC, USA. SEA Group
Deputy Chairman/Independent Director/ Chairman of The Remuneration Committee 2007 - April 2010 Chairman of Audit Committee 2006 Retired Government Of cer 2005 - 2006 Senior Of cial
2010 - Present
1999 - Present Director 1995 - Oct. 2010 Director
Director
2007 - Present
Nov.2011 - Present Director 1985 - Present Chief Executive Of cer/ Deputy Chief Executive Director 2007 - Present Director
2008 - Present 1992 - Present 2005 - 2009 1995 - Present 1995 - Present 1984 - 1995 1978 - 1984
Timing
Career experience within the past 5 years
Management and Authorized Person of the Company
072 Annual Report 2011
Academic Quali cations
57
54
62
6 Dr.Thamnoon Ananthothai Director/ Independent Director/ Audit Committee/Risk Management Committee
7 Mr.Phairat Senachack Director/ Executive Director/ Consultant of Chief Executive Of cer/ Authorized Signatory Directors
1.343%
0.000 %
• Mini MBA Thammasat University 0.000 % • Bachelor of Business Administration Assumption University • Director Certi cation Program(DCP)74/2006, • Director Accreditation Program (DAP) 30/2004; Thai Institute of Directors(IOD)
• Ph.D., International Management, 0.000% Walden University, Naples, Florida USA. • A.C.A. Certi cate, American Accreditation Council for Accountancy, USA. • M.B.A., Management, The University of Sarasota-Sarasota, Florida, USA. • B.A., Accountancy & Management, Eckerd College-St. Petersburg, USA. • Audit Committee Program(ACP) 10/2005, Director Accreditation Program (DAP) 48/2005, Director Certi cation Program (RCP) 14/2006, Understanding the Fundamental of Financial Statement (UFS) 7/2007; Thai Institute of Directors. (IOD)
• Master of Laws The George Washington University, USA • Bachelor of Laws, Thammasat University • Director Accreditation Program (DAP) 77/2005; Thai Institute of Directors (IOD)
60 • Ph.D., Laws, Ramkhamhaeng University • Master of Laws Ramkhamhaeng University • Audit Committee Program (ACP) 13/2006 ; Director Accreditation Program (DAP) 52/2006 ; Thai Institute of Directors(IOD)
Age
5 Mr.Vidhya Nativivat Non Executive Director/ Nominating Committee/ Remuneration Committee
4 Dr.Somsak Toruksa Director/ Independent Director/ Audit Committee/ Chairman of Nominating Committee
Name - Title
Equity RelationHolding ship Designation
Property Perfect Public Company Limited Property Perfect Public Company Limited
Bunchong and Vidhya Law Of ce Ltd./Law
Property Perfect Public Company Limited
Somsak Toruksa Law Of ce Co., Ltd./Law
Property Perfect Public Company Limited Property Perfect Public Company Limited
Company/Business Type
2011 - Present Director/Executive Director/ Consultant of Chief Executive Of cer 1996 - 2010 Director/Executive Director/ Deputy Chief Operating Of cer
Property Perfect Public Company Limited
Property Perfect Public Company Limited
Bangkok University/University Better World Green Public Company Limited IFS-Capital (Thailand) Public Company Limited Eastern Printing Public Company Limited Ua Withaya Public Company Limited Merchant Partners Securities Limited Clearing House of The Agricultural Futures Exchange of Thailand 2001 - Present Director of The Investment Management The National Social Security Fund. 1997 - Present Director of Economic Sector The Federation of Thai Industries. 2002 - 2003 Dean of College of Business Administration Dhurakij Pundit University/University 1998 - 2002 Managing Director/ President & CEO DBS Thai Danu Securities Limited/Securities
2010 - Present Risk Management Committee 2005 - Present Director/Independent Director/ Audit Committee 2008 - Present Director/Audit Committee 2007 - Present Vice Chairman/Chairman of Audit Committee 2007 - Present Director/Chairman of the Audit Committee 2006 - Present Director/Chairman of the Audit Committee 2005 - Present Director/Audit Committee 2004 - Present Executive Director 2001 - Present Executive Board Member/Sub-Committee
2004 - Present Non Executive Director/Nominating Committee/Remuneration Committee 1986 - Present Managing Director
2010 - Present Chairman of Nominating Committee 1998 - Present Director/Independent Director/ Audit Committee 1993 - Present Managing Director
Timing
Career experience within the past 5 years
Property Perfect Public Company Limited
073
53
62
63
63
9 Mrs.Nuanual Swasdikula-Na-Ayudhaya Director/ Independent Director/ Chairman of Risk Management Committee/Nominating Committee
10 Mr.Krish Follett Director/ Independent Director/ Chairman of Audit Committee/ Remuneration Committee
11 Mr.Wanchai Thanittiraporn Director/ Independent Director
Age
8 Mr.Ooi Bun Aun Non Executive Director
Name - Title 0.000 %
• Master of Economic Development National Institute of Development Adminstration (NIDA)
• MBA, Thammasat University • Bachelor of Economic, Thammast University • Advanced Management Program, Harvard Business School, Boston, USA.
0.000%
0.000%
• Bachelor of Laws , Thammasat University 0.000 % • Thai Barrister-at-Law Thai Bar Association
• B.A. Business Administration National University of Singapore.
Academic Quali cations
Equity RelationHolding ship
2011 - Present 1987 - 2009
1992 - 1995 1991 - 1992
1995 - 1996
1996 - 1998
2000 - 2002 1998 - 2000
2008 - 2009 2004 - 2008 2002 - 2004
2010 - Present
2010 - Present
1992 - 1994 1991 - 1992 1990 - 1991
1996 - 2008 1994 - 1996
Director /Independent Director Senior Executive Vice President
Director/ Independent Director/ Chairman of Audit Committee/ Remuneration Committee Director/ Independent Director/ Chairman of Audit Committee Assistant Governor, Operation Division Senior Director of Internal Audit Department Senior Director of Audit 1 Dept. for Finance Control 1 Division Director of Reorganization Department Director of Operation Division, Northeastern Region Of ce Assistant Director of Electronics Financial Transactions Center Assistant Director of Northern Region Of ce Establish Unit Director of Capital Market Audit Division Chief of Special Department in Financial Institution Supervision in Practice
Nominating Committee Director/Independent Director/ Chairman of Risk Management Committee Executive Vice President Senior Manager for Commercial Finance and Construction Finance Commercial Finance Manager Industrial and Commercial Finance Manager Business Development Manager
Executive Director Group Vice Chairman/President
2003 - 2004 1998 - 2003 2010 - Present 2009 - Present
Non Executive Director Financial & Management Consultancy Managing Director Honorary
Designation
2008 - Present 2007 - Present 2004 - 2006 1996 - 2006
Timing
Career experience within the past 5 years
Property Perfect Public Company Limited Krung Thai Bank Public Company Limited
Security and Exchange Commission Bank of Thailand
Bank of Thailand
Bank of Thailand
Bank of Thailand Bank of Thailand
Bank of Thailand Bank of Thailand Bank of Thailand
Amanah Leasing Public Company Limited
Property Perfect Public Company Limited
TMB Bank Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited
TMB Bank Public Company Limited TMB Bank Public Company Limited
Property Perfect Public Company Limited Property Perfect Public Company Limited
Property Perfect Public Company Limited East Asset Alliance Limited.(“EAAL”) Depfa Investment Bank Ltd, Hong Kong. Republic of Cyprus in Special Administrative Regions, Hong Kong, China. The Group Subsidiary of Standard Bank Asia Ltd. TCC. (Thai Beverage Group and Companies)
Company/Business Type
074 Annual Report 2011
51
45
51
15 Mr.Wicharn Siriwetwarawut Executive Director/ Deputy Chief Operating Of cer 1
16 Mr.Pornswat Katechulasriroj Executive Director/ Deputy Chief Operating Of cer 2
17 Mr.Wongsakorn Prasitvipat Executive Director/ Deputy Chief Business Development Of cer
• MBA. Chulalongkorn University • Bachelor of Architect Chulalongkorn University • Real Estate Course (RECU#10) Chulalongkorn University
• Bachelor of Engineer, King Mongkut’s Institute of Technology Ladkrabang
• MBA. Chulalongkorn University • Bachelor of Civil Engineer Chulalongkorn University
• MBA Roosevelt University, USA • Bachelor of Economic Thammasat University
48 • MBA Thammasat University • Bachelor of Accountancy Thammasat University • Certi ed Public Accountant
52
18 Mr.Surasak Vacharapongpreecha Asst. Chief Financial Of cer
• M.A. of Science- Finance, university of 0.000 % Houston-Clear lake, Texas, USA. • B.A. of Science, Economics & Business Administration-Finance, Kasetsart University
Academic Quali cations
0.126 %
0.110%
0.000 %
0.021%
0.000 %
58 • Bachelor of Laws Chulalongkorn University 1.445% • Thai Barrister-at-Law Thai Bar Association • Graduate Diploma in Business Law Thammasat University • Director Certi cation Program(DCP)69/2006 • Director Accreditation Program (DAP) 43/2005 Finance for Non-Finance Director; Thai Institute of Directors.(IOD)
50
Age
14 Ms.Supee Reodecha Executive Director/ Deputy Chief Financial Of cer
13 Mr.Pramote Rermyindee Company Secretary
12 Ms.Sirirat Wongwattana Director/ Executive Director/ Deputy Chief Support Of cer/ Authorized signatory directors
Name - Title
Equity RelationHolding ship Director/ Executive Director& Secretary of Executive/Deputy Chief Support Of cer Director/ Executive Director& Secretary of Executive/Assistant Chief Business Development Of cer Director of Investor Relation & Information System Division Head of Research Sub - Marketing Director Asst. Director of Provident Fund Dept.
Designation
2008 - Present 2005 - 2007 1993 - 2004
2008 - 2010 1993 - 2007
2011 - Present
2009 - 2010 2008 - 2009
2011 - Present
2003 - 2010 1995 - 2003
2011 - Present
2011 - Present 2008 - 2010 2002 - 2008
Property Perfect Public Company Limited
Research Dept./BFIT Securities Limited/ Securities BOA Asset Management company limited/Securities Bank of Asia Public Company Limited/ Securities
Property Perfect Public Company Limited
Property Perfect Public Company Limited
Property Perfect Public Company Limited
Company/Business Type
Asst. Chief Financial Of cer Property Perfect Public Company Limited Executive Director/Accounting Division Director Property Perfect Public Company Limited Executive Director/Accounting Division Property Perfect Public Company Limited Deputy Director
Executive Director/Deputy Chief Business Property Perfect Public Company Limited Development Of cer Asst. Chief Operating Of cer Property Perfect Public Company Limited Director of Design & Project Development Property Perfect Public Company Limited Division
Executive Director/Deputy Chief Operating Estate Perfect Co., Ltd. Of cer 2 Asst. Chief Business Development Of cer Estate Perfect Co., Ltd. Research and Business Development Director Property Perfect Public Company Limited
Executive Director/Deputy Chief Operating Property Perfect Public Company Limited Of cer 1 Asst. Chief Operating Of cer Property Perfect Public Company Limited Managing Director Baanpan Engineering & Holding Co., Ltd.
Executive Director/Deputy Chief Financial Of cer Property Perfect Public Company Limited Asst. Chief Financial Of cer Property Perfect Public Company Limited Executive Director/Finance Teasury Division Property Perfect Public Company Limited
1998 – Present Company Secretary
2000 - 2003 1999 - 2000 1998 - 1999
2003 - 2007
2008 - 2010
2011 - Present
Timing
Career experience within the past 5 years
Property Perfect Public Company Limited
075
076
Annual Report 2011
Details of Positions Details of directors, executive directors and directors of Property Perfect Plc., subsidiary company and af liates as of 31 December 2011. Company‘s name
Name
Associated Other Company Company
Company
Subsidiary Company
PF
ESTPF Bright Residence We Retail Centre U&I PFP PSC UST Point
1. Dr.Tawatchai Nakhata X, XXX 2. Mr.Virayuk Puntupetch *, XX 3. Mr.Chainid Ngow-Sirimanee /, //, /// / 4. Mr.Phairat Senachack /, //, /// 5. Dr.Somsak Toruksa *, / 6. Dr.Thamnoon Ananthothai *, / 7. Mr.Vidhya Nativivat / 8. Ms.Sirirat Wongwattana /, //, /// 9. Mr.Ooi Boon Aun / 10. Mrs.Nuanual Swasdikula-Na-Ayudhaya *, / 11. Mr.Krish Follett *, / 12. Mr.Wanchai Thanittriporn *, / 13. Mr.Pramote Rermyindee @ / 14. Ms.Supee Reodecha //, /// 15. Mr.Wicharn Siriwetwarawut //, /// 16. Mr.Pornswat Katechulasriroj //, /// / 17. Mr.Wongsakorn Prasitvipat //, /// 18. Mr.Surasak Vacharapongpreecha ///
KL
/ /
/
/
/ /
/
/
/ /
/
Note : 1. PF ESTPF Bright Residence We retail Centrepoint U&I PFP PSC UST KL REAL
= = = = = = = = = = = =
Property Perfect Public Company Limited Estate Perfect Company Limited Bright Development Bangkok Company Limited Residence Number Nine Co., Ltd. We Retail Public Company limited Centrepoint Shopping Mall Company Limited U&I Construction Bangkok Co., Ltd. Perfect Prefab Co., Ltd. Perfect Sport Club Co., Ltd. Uniloft Service (Thailand) Co., Ltd. Krungthep Land Public Company Limited Real Service Company Limited (REAL cease operations)
2. X XXX / ///
= = = =
Chairman Chief Executive Director Director Executive
XX * // @
/
= = = =
Deputy Chairman Independent Director Executive Director Company Secretary
/
REAL
Property Perfect Public Company Limited
077
Executives’ remuneration Financial benefits The company has in place a committee to consider remunerations. The committee is responsible for drafting the policy and criteria for the remuneration of chief executive of cer, directors, and the company’s advisors. It also takes charge in setting the annual pay increase and interim salary adjustment, as well as other bene ts to reward the contribution from executives and employees. Under its responsibility is also the regulations on employment, code of conduct and appropriate and fair punishment clauses. A) Director remuneration Meeting allowances and director fees paid out by the company in 2010and 2011 are as follows: (Unit: Million Baht)
Name Position Dr.Tawatchai Nakata Chairman/ Chief Executive Director Mr.Virayuk Puntupetch Deputy Chairman/ Chairman of Remuneration committee Mr.Chainid Ngow-Sirimanee Chief Executive Of cer and Deputy Chief Executive Director Dr.Somsak Toruksa Director/Audit Committee /Chairman of the nominating committee Dr.Thamnoon Ananthothai Director/Audit committee/ Risk Management committee Mr.Phairat Senachak Director/Executive Director Mr.Vidhya Nativivat Director/Nominating committee/ Remuneration committee Ms.Sirirat Wongwattana Director/Executive Director Mr.David Bryce Van Oppen Director Mr.Ooi Boon Aun Director Mrs.Nuanual SwasdikulaDirector/Nominating committee/ Na-Ayudhaya Chairman of Risk Management Committee Mr.Krish Follett* Director/Chairman of Audit committee/ Remuneration committee Mr.Wanchai Thanittiraporn ** Director Mr.Pramote Rermyindee Company Secretary Mr.Boonliam Luangnakthongdee Risk Management Committee Mr.Chirdsak Kukiattinun Risk Management Committee Miss.Somsri Kiattirarat Assistance company secretary Total
2011 2010 Meeting Meeting Allowance Pension Allowance Pension 0.700
-
0.500
1.500
0.530
-
0.420
0.800
0.350
-
0.250
0.800
0.590
-
0.460
0.800
0.780 0.350
-
0.700 0.250
0.800 0.800
0.410 0.350 0.050 0.350
-
0.250 0.250 0.200 0.250
0.800 0.800 0.800
0.780
-
0.650
0.800
0.730 0.200 0.240 0.240 6.650
-
0.400 0.240 0.240 5.060
0.480 0.500 0.500 10.180
078 Note :
Annual Report 2011
(Some directors, aside from meeting allowance, are receiving salaries as executives and members of the Executive Board) * Winning shareholders’ approval as director and independent director a the 1/2010 shareholder meeting on 30 April 2010. ** Winning shareholders’ approval as director and independent director at the 2/2022 shareholder meeting on 29 April 2011.
B.) The remunerations for the executives board members and executive directors in 2009-2011 Details are as follows:
Types of expenses Amount (person) Salary (Include Bonus) Others Total
2011** (Bt. million) 10 35.81 3.50 39.31
2010 (Bt. million) 13 64.27 4.55 68.82
2009 (Bt. million) 13 44.50 4.00 48.50
* Consisting of welfare, social security fund, and contribution to the provident fund paid by the company and employees at the rate of 3-10% of salary ** The remunerations for 11 executives in organization chart on 1 January 2011.
Other payments - None
Property Perfect Public Company Limited
079
Corporate governance The Board of Directors recognized the value of good corporate governance, in enhancing transparency, the company’s competitiveness, trust from shareholders, investors and other stakeholders, and the long-term business merits. Stakeholders and society’s bene ts were taken into account. The company has followed through the 5 sections of corporate governance practices as prescribed by the Stock Exchange of Thailand.
Section 1: Shareholders’ rights The Board of Directors emphasized shareholders’ rights and ensured equitable treatment to all, as prescribed in the company’s rules and regulations and relevant laws. Shareholders hold the rights to attend annual meetings, the rights to appoint their proxy to vote at the meetings, the rights to vote on the appointment or removal of individual directors, the rights to cast votes in signi cant matters, the rights to dividend, the rights to raise opinions and questions at the meetings, and the rights to suf cient and timely information. The Board sets the annual shareholder meeting (AGM) once a year, within 4 months after the end of each accounting year. If necessary, an extraordinary shareholder meeting will be called where shareholders can vote on issues which could affect their interests, or legal issues which need shareholders’ approval. In organizing the AGM, the Board puts forward the shareholders’ rights. Invitation containing agenda in details and the Board’s opinions was dispatched at least 15 days prior to the meeting date, with the proxy form, the list of independent directors and proxy advice. With timely information, shareholders can make decisions prior to the meeting date or could appoint independent directors as their proxy. The AGM was published in daily newspapers for at least 3 consecutive days and at least 3 days ahead of the meeting. The meeting details and agenda were also posted on the company’s website 30 days before the meeting, so that shareholders or investors can submit their questions in advance. During the meeting, the Board facilitates shareholders’ attendance and voting, and refrains from any actions which will limit their attendance. All shareholders are given full freedom to raise their questions and opinions.
Section 2: Equitable Treatment to Shareholders The company values equitable shareholder treatment. Shareholders’ rights are covered in the corporate governance policy and all are treated in a fair manner through these measures: •
The process to organize AGM is transparent and ef cient, in line with the company’s rules and regulations and relevant laws. Shareholders are given fair chance to raise opinions and questions, with suf cient time allocation.
•
Shareholders are asked to review and vote on directors on the individual basis, and to approve the directors’ remuneration, auditor’s appointment, auditor fee and other agenda as described in the meeting invitation.
•
Ballots are issued for all agenda.
•
Shareholders-cum-executives are barred from proposing extra agenda without notifying others in advance, so that all shareholders have suf cient time in reviewing details of each agenda.
•
Shareholders who cannot attend the meeting can appoint independent directors or other persons as their proxy, who will cast votes on behalf of them. The company’s proxy form is designed to allow shareholders to state their voting opinions.
080
Annual Report 2011
• The meeting is thoroughly recorded. The meeting minutes contain all signi cant information like the resolutions and votes, questions, explanations and opinions raised. •
Measures against insider trading among directors and executives are in place. All must report their shareholding, as well as the holdings of spouses and under-aged children. They must report on any change in the shareholdings, after acquisition, disposal or transfer, to the Securities and Exchange Commission under the Securities and Exchange Act BE2535’s Article 59, within 3 days after the acquisition, disposal or transfer.
•
In place are the measures and procedure in approving transactions with possible con ict of interest or connected transactions, with full compliance with the Stock Exchange of Thailand’s regulations on connected transactions, for the equitable bene ts of shareholders. Moreover, the Audit Committee also thoroughly screened connected transactions and transactions with possible con ict of interest, before submission to the Board, as required by the SET.
Section 3: Stakeholders’ rights The company realizes the signi cance of all stakeholders - shareholders, employees, customers, competitors, creditors (suppliers and contractors), relevant government agencies, society and environment. The policies are geared towards fairness to all groups of stakeholders Shareholders The company is concerned about transparency in important information disclosure to all shareholders accurately, completely and timely through channels including the SET’s electronic media, the company’s website, announcement in newspapers, press releases and written notices. Employees The company, through the Remuneration Committee, provides the appropriate pay structure for employees, as well as the systematic promotion process for fairness to all. A manual is issued to all employees, notifying them all of eligible welfares. The provident fund is in place for all employees. Customers The company has determined to not only quality construction but also code of conducts by taking care and responsible for customers, offering quality and standard services, and solving customer complaints or providing advices as the earliest. Competitors The company has adhered to good competition rules and avoided dishonest practices to destroy competitors. Creditors Product distributors - The company has a clear period for placing invoice and check payment after handing over/insp ecting works, informs contractors before they are hired and proceed payment to be in line with regulations strictly to ensure con dence of creditors.
Property Perfect Public Company Limited
081
Contractors - The company has a criteria for contractor selection to have ef cient contractors and offer them equal opportunity. The company has set fair price as the reference. Even though prices of some items are greater than agreed prices, the company can maintain the average price on par with the market price. Occasionally, the company has taken degree of dif culty of working condition into account for pricing and authorised each hiring sub-committee to consider the matter properly based on objectives and success in transparent procurement. To ensure contractors’ con dence and let them growth along with the company, the company has stated the clear construction progress and fair construction payment installment, inspection, and invoice placing in agreements with contractors for equal treatment, and set payment period in compliance with the company’s regulations. Society and environment In doing business, the company has placed great emphasis on society and environment, as it is a key factor in ensuring good quality of life for residents in the projects and surrounding communities. Activities for community, society and environment have been carried out continually. Community activities While the Greater Bangkok was faced with the ood disaster, the company took part in facilitating and lending help to residents in the projects. The Flood Flight Center was set up, to issue preparatory measures for all projects. Flood barriers were put up to block water, equipped with water pumps and 24-hour watch. For the ooded projects, full assistance was dispatched. Available units in Metro Park Sathorn were turned into shelters while residents were given necessity items, food, drinking water, medicine, paper toilets, boat and transport truck services to and from the sites. Patrol boats were dispatched to ensure safety, while work in pumping water out was in full speed to get the projects dry as soon as possible. Full on-line reports were available aside from the 24-hour Call Center. Communities near unaffected projects were assisted. The company helped pump water out of Ramkhamhaeng Soi 164 and Ramkhamhaeng Soi 174, where ood water caused traveling dif culty to residents. Life-support bags were also distributed to residents living near ood-affected projects. The company also introduced rehabilitation measures after the situation turned normal. The Welcome Home Center took charge in photographing all affected houses and in coordinating for the government’s ood-relief assistance. The center distributed the manual to residents, advising them on the checking of the electricity and water systems. All houses won 3-month waiver on central utility service fee. The center also coordinated with nancial institutions for the relaxation in mortgage payments and interest on mortgage and home- xing loans. It also contacted Siam Cement Group for the list of contractors and specially-priced construction materials for the residents. Activities for society and environment Property Perfect Public Company Limited has extended supports to social activities, to help the troubled and the underprivileged. In 2011, the company hosted an alm-taking ceremony for the second year, to mobilize funds for Phra Alongkot Dikkapanyo, the abbot of Wat Phra Bat Nam Phu in Lop Buri which takes care of many ill persons and orphans. This activity won supports from residents in the company’s projects as well as employees.
082
Annual Report 2011
The company also donated JPY2,037,300 to Thai students in Sendai, a city in Miyagi Prefecture in Japan, which was devastated by the Great Earthquake and Tsunami. This money, donated to the Thai students association in Japan, helped assure safe return of the students to Thailand.
Section 4: Information Disclosure and Transparency The Board puts emphasis on information disclosure and transparency, with suf cient information released to all stakeholders and measures to ensure the disclosure of accurate, complete and credible information in a timely manner for equal access. Key nancial information is suf ciently disclosed in the nancial statements, in line with the regulations. They are disclosed via the SET system and the company’s website. The nancial statements are reviewed/audited, with unconditional opinions from the auditor and the Board’s approval before the release to shareholders. The Board also expresses its responsibility for the nancial statements in the annual report. The company discloses signi cant nancial and non- nancial information through the SET system and the company’s website, for accurate, complete, equitable, fair, transparent and timely dissemination to the general public. The Investors Relations and Information Technology Unit is in charge of the dissemination and communicate with local and foreign shareholders, investors, stock analysts accurately, equitably and timely. Investors can contact the Investor Relations Unit for the company’s information at Tel: 0-2247-7500, Fax: 0-2247-7399, e-mail: santirak@pf.co.th, or www.pf.co.th/ir. The Board discloses its role and scope of responsibility as well as those of sub-committees, as well as the number of meetings each director attended under item “Management”. Remuneration of the directors and top executives are shown in item “Directors’ Remuneration”.
Property Perfect Public Company Limited
083
The company has pursued the Stock Exchange of Thailand’s rules and regulations governing connected transactions or acquisition and disposal of assets of listed companies, whichever is the case. Besides the company has set policies and guidelines to prohibit executives and related persons from using inside information for their own interests. The company has regarded an importance of ef cient internal control system for both executives and operational levels. Practices of operational staff and executives are determined and clearly written. The company has set up an internal audit of ce to exclusively take responsible for ef cient operational examination. The internal audit reports the result directly to the Audit Committee.
5. Board of Director’s Responsibility Board of directors’ structure The company requires independent directors account for at least one third of all directors, or at least 3. At present, the company’s board of directors consists of 12 experienced, knowledgeable and capable directors as follows: - Executive Director
4 persons
- Non-Executive Director
2 persons
- Independent Director
6 persons
The chairman does not serve as the CEO, to segregate their supervisory and executive roles. All directors possess full independence in giving opinions. Much emphasis is placed on the opinions of the independent directors. In any issue that draws any suggestions or disagreement from independent directors will be reviewed for transparency. The Board abides by the minimum requirements of the SEC and SET in formulating independent directors criteria. 1.
They must hold no more than 1% of all voting shares in the company, subsidiaries, af liates, or in the companies which are major shareholders or have controlling power over the company. The shareholding includes that of those related to the particular independent director.
2. They must not have been or are not involved in the management, or employees, wage earners, or advisors on the payroll, or controlling persons of the company, its subsidiaries, af liates, or equivalent companies, or juristic persons now and at least 2 years before their appointment as independent directors. Former civil servants for advisors of government agencies which are major shareholders or controlling persons are not included. 3. They are not related by blood or registration as parents, spouses, siblings, or children, spouses of any of the children to members of the management, major shareholders, those exercising control, or those about to be nominated as members of the management or controlling entities over the company or subsidiaries. 4. Have absolutely no vested interests in the company, its subsidiaries, af liates, or major shareholders or controlling entities of the company, which could obstruct their independent judgment. They are not either a signi cant shareholder or a controlling shareholder who has business relationship with the company, subsidiaries, af liates now and at least 2 years before their appointment.
084 5
Annual Report 2011
They do not serve as the auditor of the company, subsidiaries, af liates, the parent company, or controlling entities, or a signi cant shareholder (with over 10 per cent of voting shares including connected persons’) of the company, controlling entities, or a partner of the audit rm of which auditors perform their jobs on the company, subsidiaries, af liates, the parent companies or controlling entities at least 2 years before their appointment
6. They do not serve as a professional service provider, including legal or nancial services of which fees more than Baht2 million per year are levied on the company, subsidiaries, af liates, the parent company, or controlling entities, or a signi cant, controlling shareholder or a partner of the professional service provider at least 2 years before their appointment. 7. They are not appointed to represent the directors of the company, major shareholders, or shareholders who are related to major shareholders. 8. They do not operate a company with the similar nature to and signi cant competition with the company, subsidiaries or af liates, or hold a signi cant ownership in a partnership or act as a director with management power, employees, wage earners and advisor on payroll, or hold over 1% of voting shares of other companies which operate in the same industry or present signi cant competition against the company or subsidiaries. 9. Have no other characteristics that could bar the expression of their free views on the company’s operations. Sub-Committees The Board has appointed directors accordingly to their credentials to support the supervisory role and enhance supervisory ef ciency. Five sub-committees are established with clear role and scope of responsibility consists of Audit Committee, Executive Board, Nominating Committee for directors, Remuneration and Human Resources Committee and Risk Management Committee The ve sub-committees carry out their tasks in a transparent manner. Details of their names and scope of responsibility are included in item “Management Structure”. Responsibilities of the Board of Directors The Board consists of knowledgeable, capable, skilled and experienced persons who realize their roles and responsibilities, which resulted in ef cient operations. The Board takes part in formulating the vision, mission, strategies, goals, business plans and resource allocation, to ensure the management’s ef cient and effective implementation. The Board values good corporate governance, to enhance transparency and the company’s competitiveness. To instill trust among shareholders, investors and all stakeholders, there is the written corporate governance policy which is reviewed once a year to t the environment, business direction and international standards. The Code of Conduct is in place so that employees perform in accordance with the corporate governance policy. To prevent con icts of interest or connected transactions, the Board assigned sub-committees with clear segregation of roles. There are policies, code of practices and the procedure to approve transactions which might carry con ict of interest, as guidelines to executives, employees and relevant parties. Such cover the criteria in endorsing connected transactions, the use of inside information and information disclosure. The Board also demands the management to regularly assess business risks and formulate risk preventing and mitigation measures, and report them to the Board. These include the risks that may affect the company’s performance, as speci ed in item “Risk Factors”.
Property Perfect Public Company Limited
085
Board Meetings The Board holds quarterly meetings, aside from extra meetings as necessary, with clear and prepared agenda, to review the quarterly results as well as monitor progress. The chairman and CEO will jointly review the issues, before brining them up to the Board’s meetings. Each director is allowed to propose their own agenda. In each meeting, the chairman allocates suf cient and ample time for discussion. Meeting minutes are written and the minutes, approved by the Board, are stored for inspection by the Board and relevant parties. The minutes of the board of directors and sub-committees in 2009 are in “Management” Section. Board of Directors’ self assessment Executive directors conduct a quarterly evaluation to assess performance in part of their responsibility and the performance evaluation is presented to the company’s Board of Directors to compare with performance in the past. Remuneration The company has appointed the Remuneration and Human Resource Committee to consider remuneration principles and policies for Chief Executive Of cer, directors and advisors and determine bonus, salary adjustment annually and during the year, and other bene ts to staff in each level. Remuneration determination is based on experience, duty and scope of responsibility, and compare with other companies in the same industry (see details in heading remuneration of directors and management). Directors and Management improvement The company is concerned about the importance of Directors and Management improvement for management succession in the future. The company is aware of the importance of human resources in management level by organizing training “Real Estate Business Management”, contents of which include real estate knowledge, law, nance, accounting and good corporate governance to prepare the company’s high-level executives for being directors in the future. For the company’s directors, they participated in trainings held by Thai Institute of Directors and aimed to develop and support directors to take practices of good corporate governance in organization. Surveillance on use of inside information The company has policy to prohibit directors and management from directly and indirectly using inside information for their own bene ts. Directors, management and employees who learn about the company’s nancial information must not exploit the information one month before announcement of such information to the public. The company informs directors, management and staff mentioned above to avoid trading the company’s securities before the nancial statements are disclosed to the public. It also explains directors and management about duties in reporting their holding and change in holding in the company’s securities to the SEC as stipulated in article 59 and punishment in article 275 of the Securities and Exchange Act B.E 2535. The company has also stipulated discipline penalty for the company’s staff who breach the company’s rules and regulations or announcement as stated in rules and regulations governing staff’s operating practices.
086
Annual Report 2011
Human Resources Number of staffs and Employee Remuneration The company and subsidiaries’ No. of employees and remuneration, which consist of salary, bonus, welfare, overtime pay, allowances and provident fund contribution, are as follows: (The amount is excluding that of directors and executives)
Number of staffs Employee Remuneration
31 December 2011
31 December 2010
800 persons
669 persons
Bt398.06 million
Bt392.64 million
Human resource development policy The company places emphasis on human resource development. Through the HR development policy, the company demonstrates its dedication in enhancing employees’ value. Learning programs are created internally, to promote their knowledge and capability so that they can perform duty ef ciently and lead the company towards quality product development for society.
Property Perfect Public Company Limited
087
Reference Auditors
Miss Siriporn Aueanankul Ernst & Young Of ce Limited 33rdFloor, Lake Rajada Of ce Complex 193/136-137 New Rajadapisek Road, Bangkok 10110 Tel. 0-2264-0777, 0-2661-6190 Fax. 0-2264-0790, 0-2661-9192
Legal Advisor
Banchong and Vidhya Law Of ce 33/35, 33/39-40 Wallstreet Tower 9th Flr. Surawong Road, Kwaeng Suriyawongse ,Bangrak, Bangkok 10500 Tel. 0 2236-2334 Fax. 0 2236-3916
Share Registrar
Thailand Securities Depository Co., Ltd. 4th, 6th -7th Flr. ,The Stock Exchange of Thailand Bldg., 62 Ratchadaphisek Road, Klongtoey ,Bangkok 10110 Tel. 0-2359-1200 -1 Fax. 0-2359-1259
Property Valuation
Agency for real estate affairs Co., Ltd . 10 Nonsi Rd., Nonsi, Yannawa, Bangkok 10120 Tel.0-2295-3905 Fax. 0-2295-1154 Brooke Real Estate Limited Unit 2005-6, The Millennia Tower 20th Fl., 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel. 0-2652-6300 Fax.0-2652-639 Thai Property Appraisal Lynn Phillips Co., Ltd. 121/47-48 RS Tower Building, 11th Floor, Rachadaphisek Rd., Dindaeng, Bangkok 10320 Tel : 0-2641-2128-32 Fax : 0-2641-2134
A major shareholder of a subsidiary (Perfect Prefab Company Limited), holding a 49% stake
Relationship
Center of Standard Precast Limited. (Center Precast).
Related company
A major shareholder of a subsidiary (Perfect Prefab Company Limited), holding a 49% stake
Relationship
Detail
- Subsidiary (Estate Perfect Company Limited or Estate) hired Center Precast to produce and install prefab structure in its housing projects - Subsidiary (Resident Number Nine Company Limited) hired Center Precast to produce and install prefab structure in its housing projects
Transaction
Construction cost Advance payment to subcontractor Trade credit
Construction cost Advance payment to subcontractor Trade credit
Detail
The company hired Center Precast to Construction cost produce and install prefab structure for its Advance payment housing projects to subcontractor Trade credit
Transaction
1.2 Transactions between subsidiaries and related companies (with same shareholders)
Center of Standard Precast Limited. (Center Precast).
Related company
1. Related transactions 1.1. Transactions between the company and related companies (with same shareholders)
1.99
Value Audit Committee’s (Bt million) opinion 28.09 The transaction is a normal 0.12 course of business transaction whereby both companies 3.77 jointly set the price. 39.85 0.48
Value Audit Committee’s (Bt million) opinion 156.04 The transaction is a normal 17.52 course of business transaction whereby both companies 9.36 jointly set the price.
The Audit Committee of Property Perfect, consisting of Mr.Krish Follett as chairman, Dr.Somsak Toruksa and Dr.Thamnoon Ananthothai as members, had the following opinions on connected transactions in 2011:
Connected Transactions
088 Annual Report 2011
Shareholding (%) Estate Perfect 100% Company Limited (Estate)
Subsidiary
Loan guarantee
Amount
Value
Loan Interest received Interest receiveables
Connected transaction
- The company’s director Loan and executive(Mr. Chainid Ngow-Sirimanee) is a director of Estate - The company’s executive Land sale (Mr.Pramote Rermyindee) is a director of Estate.
Management
2. Connected transactions 2.1 Connected transactions with subsidiaries Detail
Audit Committee’s opinion
5%
2.27
1.49
Guarantee Amount (Bt million) Perfect Place Sukhumvit 77 800 Perfect Park Suvarnabhumi (2) 620 The Villa Lardkrabang 444 Total 1,864
Project
1,864 The company struck contracts to guarantee The company needs to provide nancial institutions’ loans to Estate, the loan guarantee due to its without any fee, for the development of: 100% shareholding in Estate.
Total
Perfect Place Rangsit
Ratanathibet
945.98 Estate is extended a loan carrying the The loan is the necessary nancial 32.47 interest rate at 0.25-0.65% above the assistance to nance Estate’s 45.49 company’s average nancing cost. project development and expansion plan. 2.27 The company sold land locating the Land sale is necessary, to allow company project’s roads to Estate, so joint ownership of the roads that the land is not registered as public between the company and property. Estate. This allows the company not to register the land as Project Ratio of Value Estate’s (Bt million) public property, which will bar ownership the company from selling the land to a third party. Perfect Place 19% 0.78
2011 (Bt million)
Property Perfect Public Company Limited
089
Bright Development Bangkok Company Limited (Bright)
Subsidiary
Share holding (%) 100
- The company’s director and executive (Mr. Chainid Ngow-Sirimanee) is a director of Bright. - The company’s executives (Mr.Pramote Rermyindee and Mr.Wicharn Siriwetwarawut ) are directors of Bright. - Estate’s director and executive (Mr.Pornswat Katechulasriroj) is a director of Bright.
Management
Loan Interest received Interest receivables
Loan Value guarantee
Advance Advance payment payment for land purchase
Loan
Connected transaction
Audit Committee’s opinion
The loan is the necessary nancial assistance to nance Estate’s project development and expansion plan. 1.50 The company made advance payment to The value of such transferred a broker for the partial land (48 square wa) payment is similar. accumulated for the development of Metro Sky Ratchada project. The company later established Bright to develop the project. The payment is thus booked as payment to Bright. 3,815 The company struck contracts to guarantee The company needs to nancial institutions’ loans to Bright provide the loan guarantee without any fee, for the development of: due to its 100% shareholding in Bright. Project Value (Bt million) Metro Sky Ratchada 870 iCondo Ngamwongwan 184 iCondo Sukhapiban 2 481 iCondo Sukhumvit 105 775 iCondo Sukhumvit 103 515 iCondo Salaya 1 210 Uniloft Salaya 1 370 Uniloft Salaya 2 211 Uniloft Chiangmai 199 Total 3,815
Detail
855.15 Bright is extended a loan carrying the 39.69 interest rate at 0.25-0.65% above the 28.80 company’s average nancing cost.
2011 (Bt million)
090 Annual Report 2011
100
Perfect Sport Club Company Limited (Perfect Sport Club)
Residence Number Nine Company Limited (Residence)
Share holding (%) 100
Subsidiary Connected transaction
- The company’s director and executive (Mr.Phairat Senachack) is a director of Perfect Sport Club - The company’s employees (Mr.Thongchai Piyasantiwong, Miss Rassamee Methavikul, and Mr.Kritpas Pongpakawat) are directors of Perfect Sport Club. Contract Operating expenses to operate Trade credit sport clubs
- The company’s Loan Amount executive (Mr.Wicharn guarantee Siriwetwarawut) is a director of Residence. - The company’s employees (Mr.Pornchai Ketlek and Mr.Sanphet Sukkasem) are directors of Residence.
Management
13.82 1.25
1,194
2011 (Bt million) he company struck contracts to guarantee nancial institutions’ loans to Residence without any fee, for the development of: Project Value (Bt million.) Perfect Park Bangbuathong 670 The Villa Bangbuathong 260 The Modi Villa Ladkrabang 264 Total 1,194 The company awarded Perfect Sport Club a contract to operate sport clubs inside its housing projects, at the monthly fee of Bt90,000-Bt138,000 per venue. Perfect Sport Club can charge accordingly to the actual cost for the provision of service of cers.
Detail
The transaction is a normal course of business transaction whereby both parties jointly set the price.
The company needs to provide the loan guarantee due to its 100% shareholding in Residence.
Audit Committee’s opinion
Property Perfect Public Company Limited
091
Share holding (%) 88.06 (indirectly owned by We Retail Public Company Limited )
- The company’s director and executive (Dr.Tawatchai Nakhata and Mr.Chainid Ngow-Sirimanee) are directors of We Retail. - The company’s executive (Mr.Pramote Rermyindee) is a director of We Retail. -
-
Loan to subsidiary Interest received Interest receivables
Connected transaction
- The company’s director and Loan executive (Mr.Chainid Ngow-Sirimanee) is a director of We Retail. - The company’s executive (Mr. Pramote Rermyindee) is a director of We Retail.
Management
-
-
1.92
-
2011 (Bt million)
None
Centrepoint is extended a loan carrying the interest rate at 0.25-0.65% above the company’s average nancing cost.
Detail
-
The loan is the necessary nancial assistance to nance Centrepoint’s project development and expansion plan.
Audit Committee’s opinion
Note: 1) The company formerly owned 100& in Centrepoint. We Retail became the major shareholder of Centrepoint, after the company paid for We Retail’s newly-issued shares with Centrepoint shares. 2) On 16 December 2011, the company bought 363,818,182 capital-increase shares (Bt5 par value) of We Retail, or 88.06% of paid-up capital, at Bt1.10 apiece. The company paid for the shares with 5,000,000 shares (Bt100 par value) of Centrepoint. This triggered a mandatory tender offer for the remaining shares of We Retail. The company ended up buying another 93,842 shares of We Retail. This increased the total holding in We Retail to 363,912,024 shares or 88.08%, as of 9 February 2012.
We Retail Public Company 88.06 Limited (We Retail) - formerly Daidomon Group Public Company Limited
Centrepoint Shopping Mall Company Limited (Centrepoint)
Subsidiary
092 Annual Report 2011
51
Perfect Prefab Company Limited (Perfect Prefab)
Krungthep Land Public Company Limited (Krungthep Land)
Subsidiary
Share holding (%) 20.22
Management
- The company’s director Land and executive purchase (Mr.Chainid Ngow-Sirimanee) is a director of Krungthep Land.
Management
Land cost
Connected transaction
- The company’s employees (Mr.Saranyu Ngow-Sirimanee and Mr.Nattaphon Sueb-am) are directors of Uniloft. - The company’s executive (Mr.Wicharn Siriwetwarawut) is a director of Perfect Prefab. - The company’s employee (Dr.Vorasak Chakrapiyanant) is a director of Perfect Prefab.
- Estate’s employee (Mr.Manit Yukkasemwong) is a director of U & I.
2.2 Connected transactions with affiliates
100
Uniloft Service (Thailand) Company Limited (Uniloft)
Share holding (%) U & I Construction Bangkok 100 Company Limited (U & I)
Subsidiary
122.32
2011 (Bt million)
-
-
-
-
-
-
Connected transaction
Detail
None
None
None
Detail
The company purchased the 7-3-35 rai land on Ramkhamhaeng Soi 164 from Krungthep Land for project development.
-
-
-
2011 (Bt million)
The transaction followed general practices and the price is not above the appraisal value by an SEC-certi ed appraisal company.
Audit Committee’s opinion
-
-
-
Audit Committee’s opinion
Property Perfect Public Company Limited
093
094
Annual Report 2011
Risk Factors Factors that could lead to risks to investors and the issuer are as follows:
1. Risk from access to funding and debt repayment ability Economic uncertainties, driven by the sub-prime crisis in the United States and public debt in the eurozone, have sent a widespread impact on the global economy. Financial institutions have been on alert in extending new loans, particularly to property developers. The ood disaster in October 2011 could also lead contracting demand, particularly in ooded areas. This could pose problems in access to funding and debt repayment ability. To achieve sale and revenue growth targets, the company has managed to obtain funds, mostly long term, to nance development projects. This includes term loans from nancial institutions and long-term debentures. At times, short-term loans including those raised through bill of exchange which bear low interest cost, are retired. As of 31 December 2011, the company’s consolidated liabilities totaled Bt13,989 million. This consisted of (1) bill of exchange, Bt2,003 million; (2) promissory notes, Bt800 million; (3) debentures which will mature within one year, Bt3,300 million; (4) long-term loans which must be repaid within 1 year, Bt637 million; (5) remaining debentures, Bt2,488 million; and (6) remaining long-term loans, Bt3,491 million. The company’s debt repayment is designed to suit incoming revenue and payments from the company’s clients. Long-term loans will be repaid to nancial institutions accordingly to the transfer period of each project. As of 31 December 2011, the outstanding value of under-development projects of the company and subsidiaries totaled Bt20,366 million. This should generate constant cash ow in the next few years. As of 31 December 2011, low-rise units in the transfer process were valued at Bt743 million while high-rise units at Bt2,975 million. Thanks to the company and subsidiaries’ clear target groups, potential locations of the projects, and marketing strategies that allows the setting of competitive pricing, the projects should not be adversely affected. The company and subsidiaries have struck agreements for term loan nancing. As of 31 December 2011, upto Bt6,894 million was available for future withdrawals. (These are the loans for 25 projects). This will reduce the funding risk. Meanwhile, on debt repayment ability, the consolidated debt to equity ratio as of 31 December 2011 was 1.89 times, while the net debt to equity ratio – calculated under the obligations to debenture holders on 31 December 2011 - was 1.74 times. The company holds it as the policy to maintain the debt to equity and funding structure in appropriate levels, aside from nurturing relationship with nancial institutions.
2. Risk from interest rate volatility As borrowing to nance project development and the operations is necessary, the interest rate has a direct impact on the company’s funding cost. The company is now subjected to the minimum loan rate (MLR) or lower. To mitigate the risk from interest rate volatility, the company resorts to the issuance of long-term debentures with xed rate, to re nance partial loans which are subjected to the oating rate and carry higher interest cost. Bill of exchange with low interest is also issued, to maintain the interest cost at the appropriate level. The interest volatility should slightly affect demand, as mortgage loans tend to carry a long maturity. Changes in the interest rates will thus slightly in uence the monthly installments. Moreover, most buyers have savings for downpayments. The company is also in the position to offer special interest rates, in cooperation with commercial banks. The vast range of product prices, set accordingly to real demand, should also reduce the impact from such volatility on buyers.
Property Perfect Public Company Limited
095
3. Risk from minimum return guarantee for property fund On 28 February 2008, the company sold assets – 64 units of complete 2-storey houses with land in Perfect Masterpiece Ekamai - Ramindra and Perfect Place Ramkhamhaeng - Suvarnabhumi – to Property Perfect Fund (Fund) for a total value of Bt510 million. Upon receiving the amount, the assets were transferred to the Fund without a repurchase condition, and they were written off from the company’s assets. The Fund’s unit trusts are valued at Bt520 million.
As of 31 December 2011, the company’s investment in the Fund is worth Bt34.03 million or 6.54% of outstanding unit trusts. (Government Savings Bank is the only unit holder with over 10% holding, 28.85% or Bt150 million. Other unit holders are individuals and juristic entities with holdings lower than 10%). The company extended the guarantee that the Fund’s minimum return (from rents and services before expenses) would be at least Bt55 million per annum for ve years, ending on 31 December 2012. The company had placed a guarantee endorsed by a nancial institution to the Fund. The company extended the guarantee that the Fund’s minimum return (from rents and services before expenses) would be at least Bt55 million per annum for ve years, The guaranteed amount in 2008 was lower than Bt55 million, as it was the rst year of the Fund. The guarantee was set accordingly to the period in the year). A risk persists from the guarantee in the event the Fund could not achieve the targeted revenue. The fund’s rents have shown improvement from end-2008. Then, only 21 from 64 houses for rents were taken up, or 32.81%. As of 31 December 2011, 40 were taken up, or 62.50% of 64 units. As of 31 December 2011, the company’s provision for minimum revenue guarantee stood at Bt10.91 million, considered enough for guarantee until 2012. In consultation with the fund manager, the company is resorting to new measures to reduce the risks on the guarantee, before the guarantee period will end on 31 December 2012. Such measures will need unit holders’ approval.
096
Annual Report 2011
4. Risk from guarantees to subsidiaries The company extended the guarantee against loans to three 100%-owned subsidiaries: (1) Estate Perfect Company Limited, (2) Bright Development Bangkok Company Limited, and (3) Residence Number Nine Company Limited. The total loan guarantee amounted to Bt6,872.4 million as of 31 December 2011. The company could incur risks from the loan guarantees if the subsidiaries cannot honor principal and interest repayments to their creditors in speci ed period. However, the subsidiaries need such loans and credit facilities to nance their property development projects, which are their major business. The company has closely monitored the subsidiaries’ business operations. As of 31 December 2011, the three subsidiaries are developing 10 projects with combined value of Bt17,319 million. The projects should generate suf cient pro ts and cash ow for the subsidiaries’ debt repayments. As such, the risk from the guarantee is at a low level.
5. Risk from demand for higher working capital to finance housing development To assure consumers of the product quality, the company maintains the policy, implemented in 2003, to sell completely-built units. This requires higher working capital to nance the construction works, before the company can realize sale revenue. This presents a risk on liquidity and a risk if the behavior of target consumers change while the construction works are underway. The company has imposed the systematic, transparent and thorough cash ow management policy, to reduce the risk on liquidity. Part of it is through pre-sale, to reduce risks which may occur if completed units cannot nd buyers. This convinces nancial institutions of the projects’ potential and with advance payments from clients, they approve the credit facilities. The demand for higher working capital to cope with business expansion has not derailed the company’s debt repayment ability, as the company repays the loans with sale proceeds from many projects which present different construction timeframes and selling periods. This allows the company to keep the cash ow manageable. The company also reduces liquidity risk by obtaining credit facilities from nancial institutions. As of 31 December 2011, the company and subsidiaries were able to withdraw Bt6,894 million under long-term nancing contracts. The company also puts into place the system to monitor sale and construction orders, to ensure the balance in the number of complete houses or inventories and marketing campaigns. The company has extensively surveyed consumer behavior, to correctly respond to demands of each target group. The construction is also planned in detail to reduce risks. The ratio of completed units, units under construction, and pre-ordered units is set at an appropriate level, taking into account the moving average sale and pre-ordered construction. The Load Bearing Wall technology also reduces the construction period and allows a more ef cient way to control quality as such prefab materials involve few workers. The technology reduces the construction period from 6-8 months to 4-5 months, allowing ef cient inventory management. At present, the company is capable of constructing 60 houses with the technique per month, and the capacity will rise to over 100 units a month after the formation of a joint venture namely Perfect Prefab Company Limited. The company’s factory, under construction, is located in Chaeng Wattana area and expected to commence operations in the rst half of 2012.
Property Perfect Public Company Limited
097
6. Risk from construction cost volatility Floods that hit the central region, including Bangkok and peripheral provinces, caused a shortage of construction materials and pushed up the prices. Several construction material makers operate in inundated industrial estates. The construction material price index in November 2011 showed a 7.3% increase from the same period a year earlier. The average increase during January-November 2011 was 6.3%. (Source : Bureau of Trade and Economic Indices, Commerce Ministry’s Of ce of Permanent Secretary) A number of construction workers also moved out from the Greater Bangkok, causing temporary labor shortage. The construction material prices are expected to return to normal late rst quarter of 2012, as several construction material makers have resumed normal operations. Meanwhile, the government’s Bt300 minimum wage policy could slightly affect the construction cost. However, as the prefab method covers 60-70% of construction works, this requires fewer workers than conventional construction method. As such, the policy’s impact would be limited. Moreover, the company has secured direct supplies of key construction materials like piles, strengthened concrete, water pumps, and door/window frames from major suppliers. This promises the availability of construction materials even in shortage periods. The construction cost is also kept at a level below the industry average.
7. Risk from shortage of quality contractors Risk from shortage of quality contractors could stem from a low number of contractors and the contractors’ inability to maintain quality, against the company’s emphasis on construction quality. The company now seeks services from over 100 contractors, small to large sizes. The company takes into account their quali cations and price quotations before awarding the contracts. The delivery period is clearly set, which helps limit the company’s troubles with contractors. Moreover, the company has constantly ensured that the volume of construction works to the contractors is in an appropriate level. The company also builds up a supply chain to ensure constant supplies of construction materials to the contractors, aside from training. The company also ranks contractors accordingly to their performance and considers adjustments of construction cost in line with
098
Annual Report 2011
market levels and construction material prices. The process is fair and accountable, to create cooperation between the company and contractors. The risk from contractor quality control thus barely emerges.
8. Risk from higher competition in the residential market The industry is facing ercer competition, re ecting through the increase of most developers’ sale and administrative cost. The competition tends to involve large-sized developers, which have continually witnessed bigger market shares. This partly results from their ability to cope with market volatility in the past few years, deriving from economic and political instability as well the oods in 2011. Large developers also demonstrate higher business potential and are capable of raising funds from various sources, thanks to greater con dence among investors and nancial institutions. Yet, higher competition is a risk and the company has realized this. The company is managing the risk by placing greater focus on research and development to enhance the competitiveness. The risk management strategy focuses on 3 main factors: (1) stock & inventory, which must be maintained at appropriate level to reduce risks from inventory and liquidity, (2) the variety of products which is being expanded by low-priced units (with unit price below Bt3 million) when the purchasing power is not yet normalized, and (3) diversi cation into rental property development to ensure revenue stsability, which include the development of dormitories, retail space and the setup of a property fund. The company also cooperates with nancial institutions to increase purchasing power and reduce installment burden.
9. Risk from flood disaster The ood disaster during October-November 2011 has sent a tremendous impact on the real estate industry, particularly industrial estates where export-oriented factories are located. This led to a sharp contraction in the economy in the last quarter. For the residential segment, much of the impacts were felt by low-rise projects in the West and North of Bangkok, both completed projects and those of which selling is underway. In completed projects, with the setup of juristic entities to oversee the estates, developers bear limited burden. However, residents in ooded projects may consider relocation and this may lead to a decline in house prices in the areas. In projects of which selling is under way, developers were responsible to take care of existing residents during and after the oods, while pushing for sale of remaining units. Large developers possess a competitive advantage over small developers, due to the greater nancial resources. It is very likely that high-income customers would consider relocation to unaffected areas, or they may wait until hearing the government’s and the projects’ ood-prevention plans before making the decision. But for the lower-income earners, it may prove dif cult for them to sell their houses, particularly low-rise ones, as they can afford only condominium units if moving into the inner areas. Three of the company’s projects were severely affected by the ood – Maneerin Lake and Park RatchaphruekTiwanont, Perfect Park Rangsit and Perfect Place Rangsit of which combined value was Bt4,253 million. The three projects have generated Bt2,972 million in sale revenue. Other six projects were brie y ooded and showed slight damage. Totally, 9 from 27 under-development projects were affected. The company shouldered a cost of about Bt80 million to assist the 9 projects; Bt40 million on ood prevention and the rest on rehabilitation of landscapes, infrastructure and xing of units available for sale. The three severely-hit projects are expected to resume selling in the second half of 2012, while sale of the 6 slightly-damaged projects – some of which transferred units in the fourth quarter of 2011 - should return to normal within the second quarter of 2012.
Property Perfect Public Company Limited
099
As the 9 projects are under-construction projects, the company comes up with the following measures: (1) during- ood help through temporary shelters at Metro Park Sathorn condominium, transport boat and truck service from project sites, and provision of relief bags (2) project rehabilitation through the pumping of water of the sites in cooperation with local administrative bodies, garbage clearing and landscape rehabilitation (3) after- ood assistance through check-ups of electrical and sanitary systems ahead of their return, distribution of home-returning manuals, coordination for help from the government and loan relaxation from nancial institutions and (4) prevention measures, to assure residents and customers of safety through new water-resisting fences, the water pumping system, and elevation of ground level for new projects. The future preventive measures should not largely push up the development cost. Some developers can also push the burden to customers. Yet, such measures as well as the government’s ood-management plan should restore consumer con dence.
Flood Protection System in Project Level
Land fill 30 cm.
Land fill 1.1 m. for entrance gate
Water level 1 m.
Vales to open and close the drainage system
The garage level lifted 1.1 m.
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Annual Report 2011
Explanation and Analysis of Financial and Operating Results Property Perfect Public Company Limited’s consolidated nancial and operating results for year 2009-2011 were as follows:
Subsidiary Establishment In 2007 Bright Development Bangkok Co.,Ltd. The company established Bright Development Bangkok Company Limited with a registered capital of Bt1 million, for the development of Metro Park Sky Ratchada. It raised the capital to Bt500 million in March 2010. In 2011, the registered capital was raised to Bt1,000 million, when Bright introduced iCondo condominium brand in 2011 as well as Uniloft dormitory brand in March 2011. The company now holds 100 % of the registered and paid-up capital. Centrepoint Shopping Mall Co.,Ltd. The company established a joint venture with Singapore’s Timberline Investments Pte. Ltd, a shopping complex developer. Centrepoint Shopping Mall Co.,Ltd was established with a registered capital of Bt1 million, held 59.99% of the registered and paid-up capital by the company, to handle commercial development like shopping malls and of ce buildings. On 22 January 2010, the Board approved the company’s purchase of all shares from Timberline Investments Pte. Ltd. (amounting to 400,000 shares at Bt100 par value). After the acquisition, the company owns99.99% in Centrepoint. The Board also approved the plan to raise Centrepoint’s registered capital from Bt1 million to Bt500 million. As 30% of capital is paid up, the paid-up capital is now Bt150.7 million.
In 2010 Residence Number Nine Co., Ltd. In March 2010, the company bought a 100% stake in Residence Number Nine Co., Ltd., which was capitalized at Bt1,000 million, from its shareholders at the cost of Bt507 million, to expand its residential development business. Estate Perfect Co., Ltd. In April 2010, Estate Perfect Co., Ltd., a wholly-owned subsidiary, raised the capital from Bt1,000 million to Bt1,200 million entirely shouldered by the company.
In 2011 U & I Construction Bangkok Company Limited In April, the company established U & I Construction Bangkok Company Limited with registered capital of Bt100 million, Bt50 million paid-up. The company holds 100% in U & I, which operates construction service business. Perfect Prefab Company Limited In June, the company established Perfect Prefab Company Limited with registered capital of Bt10 million, 25% paid-up. The company owns 51% in Perfect Prefab, which is a manufacturer and installer of prefab construction materials.
Property Perfect Public Company Limited
101
Uniloft Service (Thailand) Company Limited In July, Uniloft Service (Thailand) Company Limited was established with registered capital of Bt100,000, fully paid-up. The company owns 100% in Uniloft Service which operates in the apartment industry. Perfect Sport Club Company Limited In November, Perfect Sport Club Company Limited, 100% owned by the company, raised the capital from Bt1 million to Bt5 million. The company fully subscribed to new shares. We Retail Public Company Limited In December 2011, the company acquired We Retail Public Company Limited’s 363,818,182 newly-issued shares (par Bt5), at Bt1.10 apiece or a total of Bt400,200,000.20. This accounted for a 88.06% stake. Then, the company sold all 5,000,000 shares (paid-up for Bt400,200,000.20) in Centrepoint Shopping Mall Company Limited to We Retail Public Company Limited, at the paid-up value. We Retail Public Company Limited paid for the shares with its new shares, as said above. Then, in February 2012, the company bought another 93,842 shares in We Retail Public Company from other shareholders, boosting its stake from 88.06% to 88.08%.
Performance Overview The company showed an improvement from 2009, thanks to the new projects launched by the company and subsidiaries to meet consumer demand. In 2009, 4 new projects were unveiled - 3 covering single houses and 1 townhouse and the expansion phase of an existing condominium project. In 2010, the company and subsidiaries launched 11 new projects – 3 single house projects, 3 townhouse projects, and 5 condominium projects. In 2011, the company and subsidiaries launched 5 new projects – 5 single house projects. The outstanding projects under development are numbered 27 projects.
Consolidated Operating Results • Sales revenue The company realizes sales of land and house and condominium units as revenues in statements of income when ownership rights are transferred to buyers. In 2009, the consolidated revenue on land and house sales totaled Bt5,073.42 million, down Bt346.72 million from 2008. Attributing to the 2008 revenue was the sale of 64 houses worth Bt510 million to Property Perfect Fund. There was no such sale in 2009. And the value of sold condominium units in Metro Park Sathorn dropped to Bt778.47 million, against Bt1,330.99 million in 2008 as the company started to transfer the units in Phase II late 2007. Transfers continued throughout 2008 and only some units were left for transfers in 2009. Units in Phase III of the project are expected to be transferred and generate revenue late 2010. In 2010, the consolidated revenue from land and house sale totaled Bt7,002.70 million, up Bt1,929.28 million from 2009, thanks to higher sales and the higher number of projects that could generate revenue. Revenue from sale of Metro Park Sathorn project at Bt777.73 million dropped 0.74% from 2009. The company also earned Bt835.49 million from land sale, accounting for 9.69% of sale revenue. In 2011, the company registered the consolidated land and house sale revenue worth Bt6,925.68 million, down 77.02% from 2010. In the rst nine months, the consolidated sale revenue increased by Bt877 million from the same period a year earlier. The fourth-quarter gure dropped due to the ood disaster in the Central
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Annual Report 2011
region, including Bangkok, Nonthaburi and Pathum Thani which heavily plunged demand. In the quarter, the consolidated revenue was only Bt1,148.60 million, compared to Bt2,102.62 million in the same period a year earlier. In the quarter, the company reaped Bt1,074.15 million from condominium sale, up by Bt296.43 million from the same period a year ago, partially driven by revenue from Metro Sky Ratchada, a project by a subsidiary, which increased the number of revenue-generating projects from 1 to 2. Land sale revenue however dropped from Bt835.49 million to Bt81.42 million, or by Bt754.07 million from 2010 when it sold a land plot to a university worth Bt823.27 million. Sale revenue in 2011 thus totaled Bt8,081.25 million, down by Bt535.11 million or 6.21% from 2010. The consolidated sale revenue by project during 2009-2011 is available in the table showing revenue structure by product.
• Cost of sales and gross margin Calculation of costs of land and house sales and condominium units, which is the company’s and subsidiaries’ main cost, takes into account all project development costs that estimated to arise proportionately to land sold (and also actual costs) and the costs of sales are realized after the company books revenue from the sale of a particular unit. The above project development costs are presented at net cost from provision of losses from a write-down in project value. The cost covers the price of land, designs, infrastructure, construction and related interest. In 2009, the consolidated sale cost is as follows; -
Cost of land and house sales totaled Bt3,514.25 million, down Bt253.67 million or 6.73% from the previous year. The amount represented 69.27% of sale revenue, down from 69.52% in 2008.
-
Cost of condominium totaled Bt551.95 million, down Bt843.46 million or 60.44% from the previous year, or 60.44%. Sale cost accounted for 70.90% of sale revenue, which was above 66.15% in 2008.
The cost of house and land sale dropped due to lower sale revenue. Comparatively, the cost against sale revenue was not changed from the previous year. Meanwhile, the condominium sale cost raised, due to discounts on remaining units of Metro Park Sathorn Phase I and II. In 2010, the consolidated sale cost of the company and subsidiaries was as follows: -
The sale cost of land and house sale totaled Bt4,606.86 million, up Bt1,092.61 million or 31.09% from the previous year. The cost accounted for 65.79% of sale revenue, down from 69.27% in 2009.
-
The sale cost of condominium units totaled Bt496.70 million, down Bt55.24 million or 10.01% from the previous year. The sale cost accounted for 63.87 million of sale revenue, down from 70.90% in 2009.
-
The sale cost of land totaled Bt695. The sale cost of land totaled Bt 83.28% of sale revenue.
In 2011, the consolidated sale cost of the company and subsidiaries was as follows: -
Cost of land and house sales totaled Bt4,365.93 million, down Bt240.93 million or 5.23% from the previous year. The amount represented 63.04% of sale revenue, down from 65.79% in 2010.
Property Perfect Public Company Limited
103
-
Cost of condominium totaled Bt727.72 million, up Bt231.02million or 46.51% from the previous year. Sale cost accounted for 67.75% of sale revenue, which was above 63.87% in 2010.
-
The sale cost of land totaled Bt 55.27 The sale cost of land totaled Bt 67.88% of sale revenue.
Consolidated gross margin from land and houses sales In 2009, the consolidated gross pro t margin on land and house sale slightly rose to 30.73%, while the condominium gross pro t margin dropped to 29.10% due to discounts for Metro Park Sathorn Phase I and II projects. In 2010, the consolidated gross margin from land and house sale increased from 30.73% to 34.21%, due to higher sale prices as well as the realization of revenue from projects with higher gross margin. The gross margin of condominium units also increased to 36.13% while that of land was 16.27%. In 2011, the consolidated gross margin from land and house sale increased from 34.21% to 36.96%, due to higher sale prices as well as the realization of revenue from projects with higher gross margin. The gross margin of condominium units down from 36.15% to 32.25%. while that of land was 32.12%.
• Other revenue Most of other revenue came from utilities, Club House management fee, and con scated down payments. During 2009 and 201, other revenue on the consolidated basis totaled Bt95.93million, Bt87.98million and Bt139.52million, respectively. In 2011, the company reverted Bt37.037 million of debt to income, under the debt rehabilitation plan. (In 2009, asset disposal also raised Bt18.54 million in other revenue.)
• Selling and administrative expenses In 2009, sale and administrative cost on the consolidated basis totaled Bt1,034.58 million, down Bt209.52 million or 16.84% from 2008. Sale cost dropped Bt136.52 million, thanks to the Bt67 million decrease in the special business tax and transfer fee. The advertising, public relations and marketing cost also dropped Bt70 million. Meanwhile, administrative cost also declined Bt77.62 million, due to more ef cient expense control. In 2010, the consolidated sale and administrative cost as well as executives’ allowances totaled Bt1,756.14 million, up Bt721.56 million or 69.74% from 2009. Sale cost increased by Bt479.41 million as the special business tax and transfer fees went up by Bt233.56 million, as the tax reduction to 0.01% was raised back to the normal level of 3.3% on 28 March 2010. The advertising, public relations and marketing expenses rose by Bt233.40 million while the administrative cost increased by Bt223.40 million. As the company was prepared to launch new projects particularly in the second half of 2010, it shouldered higher employee and management expenses as well as higher executive pays by Bt18.75 million. In 2011, sale and administrative cost on the consolidated basis totaled Bt1,995.41 million, up Bt239.27 million or 13.62 % from 2010. Sale cost increase Bt169.24million, thanks to the Bt68.50 million increase in the special business tax and transfer fee. The advertising, public relations and marketing cost also increase Bt97.90 million. Meanwhile, administrative cost also increased by Bt70.02million, partly driven by ood-protection spending.
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• Other expenses The company in 2008 sold 64 units of land and houses with a combined value of Bt510 million to Property Perfect Fund. Under the agreement, the Company agrees to guarantee the minimum revenue of the fund (rental and service revenues before deducting expenses) at Bt55 million for a period of ve years, ending 31 December 2012. However, the amount of guaranteed revenue depends on the ratio of the value of the outstanding properties to the value of the properties in which the Fund initially invested, as determined by an appraisal company for the purpose of the initial investment. The company has estimated provision for loss from such guarantee at the present value of the cash ows which it expects to pay to the fund with a total of Bt73.8 million, and recorded it as a separate item under the heading of “loss arising from minimum revenue guarantee” in the income statements for the current period ended 31 December 2008. In 2009, the company booked Bt9.4 million losses from minimum return guarantee as expense, as the rental revenue under Property Perfect Fund was below expectation. In 2010, the company booked Bt35.60 million losses from the minimum return guarantee as expense, which was Bt26.18 million higher from 2009. In 2011, the company booked Bt33.59 million losses from the minimum return guarantee as expense, which was Bt2.01 million down from 2010.
• Financial expenses In 2009 to 2011 amounted to Bt286.59 million, Bt465.09 million and Bt417.22 million, respectively. It comprises interest expenses, expenses for provision for unconverted debentures according to maturity of the unsubordinated debentures, write-off premium on debentures and nancial charges. Interest expenses during 2009 to 2011 amounted to Bt178.96 million, Bt318.26 million and Bt393.48 million, respectively. Expenses for provision for unconverted debentures according to maturity of the unsubordinated debentures and write-off premium on debentures between 2009 and 2010 were Bt60.47 million and Bt67.60 million respectively. In 2011, there was no expense, as the unsubordinated convertible debentures were entirely redeemed in November 2010. Financial fees during 2009-2011 stood at Bt47.1 6million, Bt79.23 million and Bt23.74 million, respectively. The amount rose sharply in 2009 and 2010 due to the increase in issued debt instruments like debentures and bill of exchange. In 2010, it also shouldered a Bt26 million cost for the early redemption of some debentures.
• Net profit The consolidated net pro t during 2009-2011 were
(Unit : Million Baht) Net pro t (Unit : Million Baht) 2011
2011 488.00 2010
2010 550.44
2009 399.75 2009
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In 2009, the consolidated net pro t stood at Bt399.75 million, down Bt402.81 million or 50.19% from the previous year, due to lower sales of houses and condominium units as mentioned above. The gross pro t margin consequently dropped Bt582.62 million, while sale and administrative cost and other expenses dropped Bt273.90 million on year due to greater ef ciency in controlling expenses. The company also shouldered a Bt91.27 million increase in corporate tax. In 2010, the consolidated net pro t stood at Bt550.44 million, up Bt150.69 million or 37.69% from the previous year, due to the higher land and house sale as well as higher gross margin. Moreover, it earned Bt835 million from land sale. Still, sale and administrative cost as well as other expenses went up in line with business expansion. In 2011, the consolidated net pro t totaled Bt488.00 million, down by Bt62.44 million or 11.34% from the previous year. Despite lower sale revenue, the gross pro t margin pushed up the pro t margin. It is noted that sale and administrative expense increased in line with business expansion, as well as ood protection actions in the fourth quarter. Meanwhile, a cut in special business tax from 3.3% to 0.1% was terminated on 28 March 2010. This required the company to pay the special business tax at 3.3% in 2011.
Financial Status • Overall Picture of Financial Status Table presented consolidated nancial status
As of 31 December 2011 As of 31 December 2010 As of 31 December 2009
Assets 21,378.67 19,728.93 14,476.74
Liabilities 13,988.98 12,554.50 7,656.65
(Unit : Million Baht) Shareholders’ equity 7,389.69 7,174.43 6,820.09
• Assets The consolidated assets stood at Bt14,476.74 million, Bt19,728.93 million and Bt21,378.67 million during 2009 and 2011, respectively. In 2009-2011 assets increased Bt1,543.87 million ,Bt5,252.19 million and Bt1,649.74 million, respectively, as the company acquired additional land for the development of condominium, townhouse and rental dormitory. The assets as of 31 December 2011 was constituted mainly by project development cost, of which combined value was Bt12,968.7 million or 60.66% of total assets. That was followed by land bank worth Bt5,052.01or 23.63%. The others were cash and cash equivalents, Bt1,134.80%; advance payment for land purchase, Bt736.58 million; and investment in af liated companies, Bt546.71 million which accounted for 5.31%, 3.45% and 2.56%, of total assets respectively. The structure was in line with the nature of business of the company and subsidiaries.
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Project development costs
2011 Company – unconsolidated 8,403.30 64.80% Subsidiaries 4,565.43 35.20% Total * 12,968.73 100.00%
2010 6,749.27 66.67% 3,373.73 33.33% 10,123.00 100.00%
(Unit : Million Baht) 2009 7,151.91 82.12% 1,556.80 17.88% 8,708.71 100.00%
Note * Project development cost in consolidated nancial statements as of 31 December 2009 - 2011 -
The company’s unconsolidated development cost in 2009 slightly increased by Bt66.67 million. In 2010, it dropped by Bt402.64 million, as some was transferred to the sale cost while new projects were carried out by subsidiaries. In 2011, the cost increased by Bt1,654.03 million, in line with the number of projects under development. As of 31 December 2011, the development cost totaled Bt8,403.30 million, including Bt46.69 million provision against possible drop in project value. The provision was set accordingly to the accounting standards, when the book value was higher than the appraisal from independent appraisers.
-
Project development costs of the company’s subsidiaries were as follows: - Estate Perfect Co., Ltd. had 5 projects under development. The costs in 31 December 2011 were Bt1,383.06 million, Bt0.89 million were net allowance for loss on diminution in value of projects. - Bright Development Bangkok Co., Ltd. had 9 project under development. The costs in 2011 amounted to Bt2,180.03 million. - Residence Number Nine Co., Ltd. had 3 projects under development. The costs in 2011 amounted to Bt851.71 million. - Centrepoint Shopping Mall Co., Ltd. had project development costs of Bt150.63 million in 2011.
Net land bank
2011 Company – unconsolidated 3,307.18 65.46% Subsidiaries 1,744.83 34.54% Total * 5,052.01 100.00%
2010 4,277.59 77.87% 1,215.39 22.14% 5,492.98 100.00%
(Unit : Million Baht) 2009 2,713.86 74.89% 909.78 25.11% 3,623.64 100.00%
Note * Net land bank mentioned in nancial statements at 31 December 2009 - 2011. The company’s and subsidiaries’ net land held for development at the end of 2009-2011 had value of Bt3,623.64 million, Bt5,492.98 million and Bt5,052.01 million,, respectively. The costs incorporated land costs, land development costs, construction costs, capitalized interest, less transferred to costs of sales, land transferred to settle debts under rehabilitation plan and allowance for loss on depreciation of land held for development. development. In 2009-2011, the provision for possible depreciation of land bank stood at Bt104.00 million and Bt112 million at 31 December 2011. Since 2010 the company has accumulated on new land plot to serve both low-rise and hand-rise development.
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The company and subsidiaries will consider reverting land bank to book as project development cost only when the development starts - for example, when the land is being cleared or when development plan is plotted. Cash and Equivalents
(Unit : Million Baht) 2011 2010 2009 Company – unconsolidated 851.73 75.06% 1,585.30 78.56% 668.54 90.27% Subsidiaries 283.07 24.94% 432.55 21.44% 72.05 9.73% Total * 1,134.80 100.00% 2,017.85 100.00% 740.59 100.00% Note: * Cash and equivalents as appeared in consolidated nancial statements as of 31 December 2009-2011 Advance payment for land purchase
Company – unconsolidated Subsidiaries Total *
2011 439.90 59.72% 296.68 40.28% 736.58 100.00%
2010 348.55 62.84% 206.09 37.16% 554.64 100.00%
(Unit : Million Baht) 2009 79.02 61.36% 49.76 38.64% 128.78 100.00%
* Advance payment for Land purchase as appeared in concolidated nancial statements as of 31 December 2009-2011 Advance payment for land purchase is the deposit given to landlords or agents commissioned to accumulate land for the company. Once the land purchase was completed the deposit will be booked as the project development cost or in land bank category. Advance payment of the company and subsidiaries as of 31 December 2011 totaled Bt736.58million. -
Deposits to many landlords under land purchase contracts, signed jointly by landlords and agents, totaling Bt651.4 million: Bt354.7 million placed by the company and Bt269.7million by subsidiaries.
-
Deposits of Bt85.2 million to agents for the purchases of land which are under the signing process. The company is entirely obligated to the payment (including Bt49.1 million to be payable to employees who act as agents).
The combined value of signed land purchase contracts as of 1 December 2009-2011 totaled Bt452.4 million, Bt2,658.5 million, and Bt2,974.4 million, respectively. Investments in associates In 2005, Investments worth Bt300 million in Krungthep Land Public Company Limited represented a 20% stake in Krungthep Land Plc. (as of 31 December 2005, Krungthep Land’s paid-up capital was Bt1,500 million) and the Board of Directors’ meeting on 18 January 2007 approved the company to subscribe to Krungthep Land’s 6,000,000 capital increased shares at the par value of Bt10 each totaling Bt60 million to retain its shareholding ratio.
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On 16 November 2007, Krungthep Land’s 1/2007 extraordinary shareholders meeting resolved to decrease the registered capital from Bt2,100,000 million to Bt1,780,000,000 by canceling 32,000,000 unissued shares at the par value of Bt10 each for Bt320,000,000. The meeting also approved the recapitalization of Bt450,000,000 from Bt1,780,000 to Bt2,230,000,000 by issuing 45,000,000 capital increased shares at the par value of Bt10 each to reserve for exercise of convertible debentures . On 31 January 2008, Krungthep Land issued 188,806 units of 5-year, name-registered, unsecured convertible debentures with a face value of USD 100 or total value of USD 18,880,600, to an overseas company. In accordance with the conditions of the convertible debentures resolved by Krungthep Land’s Extraordinary General Meeting of shareholders No.1/2551 on 14 January 2008, Krungthep Land is to pay interest semi-annually at a rate of not exceeding 3% per annum or a dividend yield (whichever is higher) only in years in which Krungthep Land declares a dividend based on the conditions of the convertible debentures and mature on 31 January 2013. They are convertible upon the listing of Krungthep Land’s shares on the Stock Exchange of Thailand (SET) or the Market for Alternative Investment (MAI), or one year from the issue date (whichever is earlier), at a conversion price of Bt13.85 per a common share, on quarterly basis. In case that no interest is paid until the maturity date, Krungthep Land is to redeem the outstanding convertible debentures at a price equal to 1.311651 times in the baht equivalent of the face value. Such redemption is subject to change dependent upon the interest payment made during the life of the debentures. In November 2011, Krungthep Land amended the condition to allow early redemption of its convertible debentures, at the value equivalent to the baht-denominated value of the convertibles plus interest of 5.5% per annum, calculated from the issuance date to the redemption date. The interest is added into the principal every six months. In December 2011, Krungthep Land completed the early redemption. This allowed the company to book Bt7.5 million, under the equity method. This is shown under Item “Equity composure of unsubordinated convertibles”, in other components of shareholders’ equity. According to the consolidated nancial statements, the company recorded pro t sharing under the equity method and realized pro t of Bt3.00million in 2009, Bt57.89million in 2010 and Bt24.98million in 2011 as revenue in the income statements. Investments in associates under the equity method were Bt419.74million in 2009, Bt477.62million in 2010 and Bt495.13million in 2011. Other guarantee obligations The company guaranteed nancial institutions’ loans to subsidiaries worth totally Bt6,872.4 million: Bt1,864.0 million to Estate Perfect Company Limited; Bt3,814.9million to Bright Development Bangkok Company Limited; and Bt1,193.5 million to Residence Number Nine Company Limited. The company is not yet obligated to show responsibility for the guarantees as the subsidiaries are still honoring their debts.
• Asset quality Trade debtors and other debtors The company and subsidiaries have policy to realize revenue from sales of land and houses, land, and condominium units only when ownership rights are transferred to buyers. Thus, the company and subsidiaries record down payment and installments as liabilities in the item of deposits and clients’ advance payment. The overdue installments are booked in the item of trade debtors.
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Though the company focuses on selling pre-built houses, some clients prefer to buy houses under construction. The company then sold such houses to customers who are required to pay down payment in installments. The installments are included in trade debtors. Mostly, the debts in this item is cleared in less than a year. In 2011, consolidated trade debtors receivables totaled Bt32.70 million and consolidated allowance for doubtful debts for debtors who unpaid for over 12 months worth Bt9.59 million. Thus, net consolidated trade debtors totaled Bt23.11 million. The company believes that the allowances are suf cient for the current situation. Consolidated trade debtors can be broken down into 2 groups. Customers with overdue installments Customers with overdue installments are those who failed to pay installments for houses under construction. They had overdue installments of Bt14.65 million or 44.82% of total overdue loans. (or 63.43% of overdue installments from loan-loss provision) Customers with overdue transfer fee Customers with overdue transfer fee are those who did not pay all debts on the transaction date, accounting for 55.18% (or 36.57% of overdue fee from loan-loss provision) . However, the overdue loan worth Bt18.04 million representing 0.08% of total assets, an insigni cant ratio. The company also made allowance worth Bt9.59 million. In February, a Bt7.2 million payment was made. For clients who fail to pay the debts for 6 months or longer, the company has contacted them to pay their obligations and some cases have been brought to court. The company believes that the allowance for doubtful debts is suf cient under the present circumstances. Other debtors Other credits totaled Bt12.21 million, inclusive of Bt2.3 million interest receivables. Of total, outstanding Bt6.6 million belonged to We Retail Public Company Limited which sold its restaurant business to another company, and Bt2.5 million was the amount of credit before the business sale. The Bt2.3 million receivables are based on the interest from Bt450 million short-term bill of exchange issued by a bank. Debtors with overdue payment for land They consist of; A) university has not yet paid Bt15.5 million for a 385-rai land plot, cited in Note to Financial Statement No. 10. The company expects to get the repayment along with the payment for another 15-rai plot, which should be transferred within the rst quarter of 2011. Aside, the company placed a Bt100 million deposit to the university, as the guarantee for the construction of roads and infrastructure as speci ed in the land sale contract. B) Another party which has not yet paid Bt30.9 million for a piece of land, speci ed in Note to Financial Statement No. 10. On 1 February 2012, the party proposed a debt restructuring, whereby it will pay the entire principal and partial interest to the company within April 2012. The company has not set aside loan-loss provision against the loans in both accounts, as the management is convinced that full wouldwould be made. is convinced thatpayments full payments be made.
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• Liquidity Statements of cash ow between 2009 - 2011 were as follows :
Item Cash ow from operating activities Cash ow from investment activities Cash ow from nancing activities Net cash ow increase (decrease)
2011 (103.06) (2,142.21) 1,362.21 (883.05)
2010 414.10 (3,169.06) 4,032.23 1,277.27
(Unit: Million Baht) 2009 1,233.59 (1,660.86) 712.81 285.54
The operating cash ow on the consolidated basis stayed in the positive levels at Bt1,233.59 million, Bt414.10million during 2009 and 2010, respectively. This allowed net cash ow to stay in the positive level of Bt285.44million, Bt1,277. during the years. In 2011, the operating cash ow was minus Bt103.56 million, due to the development of several projects by the company and subsidiaries, including the development under iCondo brand and the Uniloft-branded dormitory. In the fourth quarter, unit transfers also contracted due to oods. Meanwhile, the cash ow from nancing activities also dropped from 2010. Net cash ow in 2011 thus declined by Bt883.05 million. Cash ow from investment activities has been in the negative area, totaling Bt1,660.86 million, Bt3,169.06 million and Bt2,142.21 million during 2009-2011, respectively . Due to the company’s land bank purchases to prepare for the company’s projects. Details as follow:. -
In 2009, consolidated payments and advance payment for more land plots totaled Bt1,599.15 million. Another Bt60 million was put as down payment for a company’s shares worth Bt507 million.
-
In 2010, investing activities concerned advance payment for land purchase and land purchases worth totally Bt2,697.91 million, cash payment of Bt352.18 million for common shares in a company priced at Bt507 million, deposits containing guarantee obligations worth Bt17.04 million, and leasehold rights worth Bt64.03 million.
-
In 2011, as part of investment activities, advance payments were made for new land plots totaling Bt2,077.66 million, aside from Bt16.49 million deposit which contains guarantee obligation, and Bt88.97 million payment for land, building and equipment.
On cash ow on nancing activities, during 2009-2011, in 2009 Bt1,329.40 million was raised through debentures and Bt1,272.10 million through bill of exchange and promissory notes. Net debt repayment totaled Bt1,605.16 million, aside from Bt283.54 million in dividend payment. In 2010, the debentures worth Bt4,768.38 million were issued, aside from Bt296.65 million long-term loan. In the year, a net increase in promissory note value reached Bt355.0 million. Convertible debentures worth Bt1,083.07 million were redeemed, while promissory notes worth Bt355 million were retired. The company also returned directors’ advance payments worth Bt80 million and paid out Bt196.90 million as dividend.
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In 2011, cash ow from nancing activities were boosted by a Bt1,694.13 million long-term loan, while the net increase in bill of exchange and promissory note topped Bt728 million. An amount of Bt800 million was spent to redeem debentures, while dividend payment in the year reached Bt259.92 million.
Dividend payment The company has paid dividends as follows: - For the 2009 performance, shareholders received Bt0.25 per share, totaling Bt196.90 million, as of 27 May 2010. - For the 2010 performance, shareholders received Bt0.33 per share, totaling Bt259.92 million, as of 27 May 2011.
Source of Funds • Liabilities As of 31 December 2011, consolidated liabilities reached Bt13,988.98 million (Bt11,767.35 million belonging to the company and Bt2,221.63 million to subsidiaries), up Bt1,434.48 million from 2010. Major changes are as follows; -
Net borrowing increased by Bt1,694.13 million, aside from the issuance of promissory notes worth Bt725.00 million and bill of exchange worth Bt6 milllion, deposits and advance payments from customers worth Bt97.25 million, reserves of Bt24.26 million for employee long-term bene ts, and Bt22.3 million unpaid tax.
-
Debentures worth Bt800 million were redeemed, while debt obligations to trade and other creditors declined Bt342.28 million.
The consolidated debt structure as of 31 December 2011 consisted of debentures, 41.37% of total; long-term loans, 29.51%; bill of exchange, 14.32%, and promissory notes, 5.72%. Details are as follows;
• Debentures As of 31 December 2011, outstanding secured debentures, of which principal is to be paid in full on maturity date, totaled Bt5,800.00 million (Bt5,787.912 million net, inclusive of advance insurance fee). All debentures were issued by the company to nance land purchase, increase working capital and repay loans. Details of the debentures are as follows; Secured/unsecured debentures issued by Property Perfect Public Company Limited
Secured debentures #2/2009 (2), Bt800 million, interest 6% per annum, payable every 3 months
Value (Million Baht) 800.000
Issue Date
Maturity Date
Condition
14 Aug 2009 14 Aug 2012 The ratio of collateral against outstanding debenture value must be maintained at 1.6:1 The ratio of total loans to shareholders’ equity must not exceed 1.75:1
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Partially collateralized debentures#1/2010, Bt1,500 million, interest 5.90% per annum, payable every 3 months Secured debentures#2/2010, Bt1,000 million, interest 5.50% per annum, payable every 3 months Secured debentures#3/2010, Bt1,000 million, interest 5.80% per annum, payable every 3 months Unsecured debentures#4/2010, Bt1,500 million, interest 6.50% per annum, payable every 3 months Total
Value Issue Date Maturity Condition (Million Date Baht) 1,478.912 26 Feb. 2010 26 Feb. 2013 The ratio of total loans to shareholders’ equity must not exceed 1.75:1
1,000.000 9 Sep. 2010 9 Mar. 2012 The ratio of collateral against outstanding debenture value must be maintained at 1:1 The ratio of total loans to shareholders’ equity must not exceed 1.75:1 1,000.000 18 Nov. 2010 18 Nov. 2013 The ratio of collateral against outstanding debenture value must be maintained at 1:1 The ratio of total loans to shareholders’ equity must not exceed 2:1 1,500.000 18 Nov. 2010 18 Nov. 2012 The ratio of total loans to shareholders’ equity must not exceed 2:1
5,787.912
Note: “Netliabilities” refers to liabilities in the balance sheets, inclusive of nancial obligations and other debts which may occur from loan guarantees, aval or other obligations to other individuals or juristic entities which do not appear in the balance sheets but in the Notes. Yet, the liabilities do not cover the obligations to nancial institutions’ papers, issued as guarantee for the development of property or infrastructure or other utilities involved. Net liabilities were less cash and equivalents as shown in the balance sheets, but included deposit accounts which are used as guarantees.
• Long-term loans As of 31 December 2011, outstanding long-term loans totaled Bt4,127.92 million: Bt2,399.90 million belonging to the company and Bt1,728.02 million to subsidiaries. The loans are used to nance property project development. Details are as follows;
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(Unit: Million Baht) 31 December 2011 31 December 2010 31 December 2009 Company Sub Total Company Sub Total Company Sub Total sidiaries sidiaries sidiaries 2,399.90 1,728.02 4,127.92 815.86 1,617.93 2,433.79 1,865.03 272.11 2,137.14
Long-term loans Minus – amount due within 1 year 223.14 413.98 637.12 - 148.68 45.54 194.22 Long-term loans (Net) 2,176.76 1,314.04 3,490.80 815.86 1,617.93 2,433.79 1,716.35 226.57 1942.92
In addition, the company guaranteed loans extended by nancial institutions to subsidiaries with a combined amount of Bt6,872.40 million.
• Bill of exchange As of 31 December 2011, outstanding totaled Bt2,003.00 million. All were issued by the company, carrying 4.55-4.95% per annum interest and coming due between January-June 2012.
• Promissory notes Outstanding value as of 31 December 2011 totaled Bt800 million. Maturing in February 2012, the promissory notes carry 7.50% in annual interest. The promissory notes are guaranteed by the mortgage of land and property in some projects. Shareholders’ equity The consolidated shareholders’ equity totaled Bt7,389.69 million as of 31 December 2011, an increase by Bt215.25 million from 2010. Much of the increase was attributed to the Bt488.0 million net pro t minus Bt259.9 million dividend for the 2010 operating year, paid in May 2011. The shareholder’s equity consisted of Bt4,726.46 million paid-up capital, the share loss of Bt20.68 million, the Bt7.29 million unrealized loss from share loss possibly deriving from a change in investment value, Bt223.10 million pro t provision, the Bt2,475.70 million unallocated net pro t, the Bt5.86 million premium from an investment in a subsidiary deriving from the purchase of shares above the subsidiary’s book value on the transaction date, a differential from share swaps with subsidiaries worth Bt46.09 million, and Bt44.36 million interests of parties without no controlling power. As of 31 December 2011, the outstanding number of warrants issued to creditors with uncollateralized loans stood at 8.85 million units. During the year, the par value was changed from Bt6 to Bt1. This increased the exercise ratio of the warrants to six shares at the price of Bt0.00167 per share. The warrants can be exercised on the last day of every second and fourth quarter during the 10 years from the fourth quarter of 2002. Debt to equity ratio The debt to equity ratio in 2008 was 1.12:1 increasing to 1.75:1 in 2010 and increasing to 1.89:1 in 2011, respectively. When debts rose on top of land purchases to accommodate future expansion.
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Report of Independent Auditor To the Shareholders of Property Perfect Public Company Limited I have audited the accompanying consolidated statements of nancial position of Property Perfect Public Company Limited and its subsidiaries as at 31 December 2011 and 2010, the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash ows for the years then ended, and have also audited the separate nancial statements of Property Perfect Public Company Limited for the same periods. These nancial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these nancial statements based on my audits. The nancial statements of a subsidiary, We Retail Public Company Limited, as at 31 December 2011 were audited by the other auditor, whose report has been furnished to me. My opinion on the consolidated nancial statements, insofar as it relates to the amounts included for this subsidiary, is based solely on the report of that auditor. The nancial statements re ect total assets and liabilities of that subsidiary as at 31 December 2011 of approximately Baht 50.4 million and Baht 53.2 million, respectively. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signi cant estimates made by management, as well as evaluating the overall nancial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, based on my audits and the report of the other auditor, the nancial statements referred to above present fairly, in all material respects, the nancial position of Property Perfect Public Company Limited and its subsidiaries and of Property Perfect Public Company Limited as at 31 December 2011 and 2010, and the results of their operations, and cash ows for the years then ended in accordance with generally accepted accounting principles. Without qualifying my opinion on the aforementioned nancial statements, I draw attention to Note 3 to the nancial statements. During the current year, the Company adopted a number of revised and new accounting standards as issued by the Federation of Accounting Professions, and applied them in the preparation and presentation of its nancial statements.
Siraporn Ouaanunkun Certi ed Public Accountant (Thailand) No.3844 Ernst & Young Of ce Limited Bangkok: 27 February 2012
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Statements of financial position Property Perfect Public Company Limited and its subsidiaries As at 31 December 2011 and 2010
Note
Consolidated nancial statements 2011 2010
(Unit: Baht) Separate nancial statements 2011 2010
Assets Current assets Cash and cash equivalents 8 1,134,799,368 2,017,853,585 851,725,365 1,585,301,183 Trade and other receivables 9 35,310,993 21,777,133 87,895,147 39,456,943 Account receivable - land 10 46,436,938 66,436,938 46,436,938 66,436,938 Project development costs 11 12,968,728,043 10,122,996,494 8,403,303,415 6,749,274,992 Retention per agreement 10 100,000,000 100,000,000 100,000,000 100,000,000 Advances to contractor-related party 18,117,218 17,518,704 Advances to contractors-unrelated parties 45,836,553 127,639,059 37,349,061 96,769,559 Other current assets 63,421,892 48,790,449 36,671,586 24,766,915 Total current assets 14,412,651,005 12,505,493,658 9,580,900,216 8,662,006,530 Non-current assets Restricted deposits 12 34,982,088 18,488,378 34,982,088 18,488,378 Loans to related companies 7 - 1,801,123,102 1,282,924,840 Investments in subsidiaries 13 - 2,702,032,399 1,897,157,356 Investment in associate 14 495,128,627 477,622,798 359,999,240 359,999,240 Other long-term investments 15 51,581,568 55,522,880 51,581,568 55,522,880 Land held for development 16 5,052,013,687 5,492,985,169 3,307,183,526 4,277,594,556 Advances for purchases of land 17 736,576,762 554,641,400 439,895,448 348,550,150 Property, plant and equipment 18 328,629,254 312,013,827 235,079,041 252,477,758 Leasehold rights 19 167,069,743 173,311,462 46,459,663 49,670,758 Other non-current assets 100,038,693 138,848,364 42,483,515 113,556,546 Total non-current assets 6,966,020,422 7,223,434,278 9,020,819,590 8,655,942,462 Total assets 21,378,671,427 19,728,927,936 18,601,719,806 17,317,948,992
The accompanying notes are an integral part of the nancial statements.
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Statements of financial position (continued) Property Perfect Public Company Limited and its subsidiaries As at 31 December 2011 and 2010
Note Liabilities and shareholders’ equity Current liabilities Trade and other payables Note payable Bills of exchange payable Current portion of debentures Current portion of long-term loans Deposits and cash received in advance Income tax payable Provisions Other current liabilities Total current liabilities Non-current liabilities Debentures, net of current portion Long-term loans, net of current portion Provision for long-term employee bene ts Other non-current liabilities Total non-current liabilities Total liabilities
20 21 22 23 25 9 27
23 25 26
Consolidated nancial statements 2011 2010
929,794,991 800,000,000 2,003,000,000 3,300,000,000 637,121,107 183,600,608 22,299,221 10,906,710 48,624,302 7,935,346,939
(Unit: Baht) Separate nancial statements 2011 2010
1,272,073,912 589,416,152 949,762,461 75,000,000 800,000,000 75,000,000 1,997,291,957 2,003,000,000 1,997,291,957 800,000,000 3,300,000,000 800,000,000 - 223,140,265 86,356,760 72,003,384 31,886,340 3,538,865 12,739,663 10,906,710 12,739,663 47,585,843 33,023,942 38,459,814 4,291,048,135 7,035,029,318 3,905,140,235
2,487,911,686 5,778,215,227 2,487,911,686 5,778,215,227 3,490,795,708 2,433,788,730 2,176,757,288 815,862,412 24,263,062 19,138,150 50,664,144 51,444,786 48,516,144 51,444,786 6,053,634,600 8,263,448,743 4,732,323,268 6,645,522,425 13,988,981,539 12,554,496,878 11,767,352,586 0,550,662,660
The accompanying notes are an integral part of the nancial statements.
Property Perfect Public Company Limited
117
Statements of financial position (continued) Property Perfect Public Company Limited and its subsidiaries As at 31 December 2011 and 2010
Note Shareholders’ equity Share capital 28 Registered 5,961,161,256 ordinary shares of Baht 1 each (2010: 1,092,000,000 ordinary shares of Baht 6 each) Issued and fully paid 4,726,456,320 ordinary shares of Baht 1 each (2010: 787,724,120 ordinary shares of Baht 6 each) Share discount 28 Share subscriptions received in advance 28 Retained earnings Appropriated - statutory reserve 30 Unappropriated Other components of shareholders’ equity Equity attributable to owners of the Company Non-controlling interests of the subsidiaries Total shareholders’ equity Total liabilities and shareholders’ equity
Consolidated nancial statements 2011 2010
(Unit: Baht) Separate nancial statements 2011 2010
5,961,161,256 6,552,000,000
5,961,161,256 6,552,000,000
4,726,456,320 (20,684,563) -
4,726,344,720 4,726,456,320 4,726,344,720 (20,573,149) (20,684,563) (20,573,149) 66 66
223,100,000 206,100,000 223,100,000 206,100,000 2,475,701,940 2,264,487,593 1,912,787,453 1,858,963,385 (59,240,133) (1,928,172) (7,291,990) (3,548,690) 7,345,333,564 7,174,431,058 6,834,367,220 6,767,286,332 44,356,324 7,389,689,888 7,174,431,058 6,834,367,220 6,767,286,332 21,378,671,427 19,728,927,936 18,601,719,806 17,317,948,992
The accompanying notes are an integral part of the nancial statements.
118
Annual Report 2011
Statements of comprehensive income Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010
Note Revenues Revenues from sales of land and houses Revenues from sales of residential condominium units Revenues from sales of land Other income Interest income Revenues from forfeiture of down payments Revenue from reversal of creditors per rehabilitation plan 20 Others Total revenues Expenses Cost of sales of land and houses Cost of sales of residential condominium units Cost of sale of land Selling expenses Administrative expenses Loss arising from minimum revenue guarantee 27 Total expenses Pro t before share of income from investment in associate, nance cost and corporate income tax Share of income from investment in associate 14 Pro t before nance cost and corporate income tax Finance cost Pro t before corporate income tax Corporate income tax Pro t for the year
Consolidated nancial statements 2011 2010
(Unit: Baht) Separate nancial statements 2011 2010
6,925,678,155
7,002,701,311 4,960,323,321
5,849,113,719
1,074,153,593 81,422,149
777,725,952 835,490,250
579,403,500 78,517,149
777,725,952 835,490,250
9,933,194
7,273,932
82,522,898
54,121,066
8,527,837
4,302,238
5,227,065
3,388,654
37,037,390 84,020,801 8,220,773,119
76,407,452 8,703,901,135
37,037,390 68,719,990 65,812,589 5,811,751,313 7,585,652,230
4,365,927,265
4,606,857,142
3,071,967,647 3,835,537,610
727,715,800 55,267,156 918,792,177 1,076,622,076
496,704,051 695,762,581 749,548,640 1,006,595,756
33,595,455 7,177,919,929
35,602,103 33,595,455 35,602,103 7,591,070,273 4,971,633,941 6,475,258,776
1,042,853,190
1,112,830,862
840,117,372
1,110,393,454
24,982,516
57,886,223
-
-
1,067,835,706 (417,217,839) 650,617,867 (162,618,562) 487,999,305
1,170,717,085 (465,089,702) 705,627,383 (155,190,445) 550,436,938
The accompanying notes are an integral part of the nancial statements.
381,774,982 51,379,305 617,807,522 815,109,030
496,704,051 695,762,581 598,083,442 813,568,989
840,117,372 1,110,393,454 (410,384,128) (459,875,182) 429,733,244 650,518,272 (98,994,170) (112,819,812) 330,739,074 537,698,460
Property Perfect Public Company Limited
119
Statements of comprehensive income (continued) Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010
Note
Consolidated nancial statements 2011 2010
(Unit: Baht) Separate nancial statements 2011 2010
Other comprehensive income: Gain (loss) on changes in value of available-for-sale investments Other comprehensive income for the year
(3,743,300) (3,743,300)
1,201,640 1,201,640
(3,743,300) (3,743,300)
1,201,640 1,201,640
Total comprehensive income for the year
484,256,005
551,638,578
326,995,774
538,900,100
488,129,353
550,436,938
330,739,074
537,698,460
(130,048) 487,999,305
550,436,938
484,386,053
551,638,578
326,995,774
538,900,100
(130,048) 484,256,005
551,638,578
0.1033
0.1165
0.0700
0.1138
0.1021
0.1152
0.0692
0.1125
Pro t (loss) attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries Total comprehensive income attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries
Earnings per share 32 Basic earnings per share Pro t attributable to equity holders of the Company Diluted earnings per share Pro t attributable to equity holders of the Company
The accompanying notes are an integral part of the nancial statements.
120
Annual Report 2011
Cash flow statements Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010
Cash ows from operating activities Pro t before tax Adjustments to reconcile pro t before tax to net cash provided by (paid from) operating activities: Share of income from investment in associate Depreciation and amortisation Amortisation of prepaid expenses Amortisation of premium on debentures Provision for unconverted debentures Amortisation of deferred debenture issuing costs Rental received in advance recognition Loss on impairment of investment (reversal) Reversal of creditors per rehabilitation plan Loss arising from minimum revenue guarantee Loss on impairment of assets Loss on sales of property, plant and equipment Dividend income Provision for long-term employee bene ts Interest income Interest expenses Pro t from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Trade and other receivables Account receivable - land Project development costs Retention per agreement Advances to contractors Other current assets Other non-current assets
Consolidated nancial statements
(Unit: Baht) Separate nancial statements
2011
2010
2011
2010
650,617,867
705,627,383
429,733,244
650,518,272
(24,982,516) (57,886,223) 64,677,464 62,856,916 49,994,713 43,260,169 27,142,681 24,017,785 10,441,583 57,158,531 9,696,460 15,910,665 9,696,460 (4,162,138) (4,628,646) (4,128,646) 198,012 (152,660) 198,012 (37,037,390) - (37,037,390) 33,595,455 35,602,103 33,595,455 9,099,739 49,437 173,531 38,272 (4,555,205) (4,620,726) (4,555,205) 24,263,062 19,138,150 (9,933,194) (7,273,932) (82,522,898) 393,475,697 318,258,592 386,694,786
51,520,358 22,909,173 10,441,583 57,158,531 15,910,665 (4,628,646) (152,660) 35,602,103 14,102,034 173,531 (4,620,726) (54,121,066) 314,015,152
1,139,163,180 1,167,709,537
824,862,738 1,108,828,304
(901,999) 8,322,794 - (35,478,938) (178,591,346) (254,600,402)
3,238,828 13,228,261 - (35,478,938) 409,034,729 739,614,035
- (100,000,000) - (100,000,000) 63,685,288 (41,408,494) 41,901,793 (10,538,994) (57,598,210) (32,379,333) (35,922,453) (8,130,147) (22,412,361) 5,499,004 (3,464,699) 9,158,044
The accompanying notes are an integral part of the nancial statements.
Property Perfect Public Company Limited
121
Cash flow statements (continued) Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010
Consolidated nancial statements 2011 2010 Increase (decrease) in operating liabilities Trade and other payables Deposits and cash received in advance Cash paid for minimum revenue guarantee Other current liabilities Other non-current liabilities Net cash from operating activities Cash paid for interest expenses Cash paid for corporate income tax Cash received for interest income Return of withholding tax Net cash from (used in) operating activities
(350,306,756) 97,243,848 (34,559,500) (2,709,976) 1,233,495 654,248,217 (688,772,981) (150,638,289) 7,215,381 74,891,519 (103,056,153)
(Unit: Baht) Separate nancial statements 2011 2010
353,459,653 (317,031,110) 80,265,570 (21,110,758) 40,117,044 (57,002,770) (36,602,344) (34,559,500) (36,602,344) 51,461,349 (5,435,753) 34,578,981 1,290,999 1,200,000 1,290,999 1,066,165,620 923,944,171 1,739,213,554 (343,856,183) (568,850,632) (289,422,389) (315,505,823) (95,455,305) (240,694,850) 7,294,972 5,940,946 7,064,210 74,537,729 414,098,586 340,116,909 1,216,160,525
Cash ows from investing activities Increase in restricted deposits (16,493,710) (17,039,498) (16,493,710) (17,039,498) Increase in loans to related companies - (995,573,930) (1,175,726,070) Cash received for interest income 2,280,589 20,850,283 Cash received for dividend income 4,555,205 4,620,726 4,555,205 4,620,726 Cash received from purchase of investment in subsidiary (Note 13) 36,825,599 Cash paid for purchase of investment in subsidiary - (352,181,539) (304,875,043) (522,100,000) Cash paid for purchase of non-controlling interests of the subsidiary (400,000) Increase in non-controlling interests of the subsidiary 1,225,007 Increase in other long-term investments (442,420) (442,420) Increase in land held for development (1,574,376,722) (2,188,409,941) (695,526,906) (1,621,913,546) Increase in advances for purchases of land (503,287,285) (509,497,698) (280,017,971) (339,411,448) Proceeds from sales of leasehold rights 65,000,000 Increase in leasehold rights (1,790,081) (64,033,319) Increase in property, plant and equipment (88,973,509) (41,987,869) (40,265,449) (22,109,303) Proceeds from sales of property, plant and equipment 106,907 316,287 106,907 316,287 Net cash used in investing activities (2,142,208,589) (3,169,055,271) (2,325,810,308) (3,607,954,989) The accompanying notes are an integral part of the nancial statements.
122
Annual Report 2011
Cash flow statements (continued) Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010 Consolidated nancial statements
(Unit: Baht) Separate nancial statements
2011
2011
2010
2010
Cash ows from nancing activities Increase (decrease) in note payable 725,000,000 (355,000,000) 725,000,000 Increase in bills of exchange payable 3,000,000 682,166,547 3,000,000 682,166,547 Decrease in advances from directors - (80,000,000) Increase (decrease) in long-term loans 1,694,128,085 296,649,823 1,584,035,141 (1,049,168,087) Increase (decrease) in debentures (800,000,000) 4,768,378,400 (800,000,000) 4,955,528,400 Decrease in unsubordinated convertible debentures - (1,083,068,000) - (1,083,068,000) Dividend paid (259,915,006) (196,900,033) (259,915,006) (196,900,033) Net cash from nancing activities 1,362,213,079 4,032,226,737 1,252,120,135 3,308,558,827 Net increase (decrease) in cash and cash equivalents (883,051,663) 1,277,270,052 (733,573,264) 916,764,363 Cash and cash equivalents at beginning of year 2,017,853,585 740,586,086 1,585,301,183 668,539,373 Cash and cash equivalents at end of year 1,134,801,922 2,017,856,138 851,727,919 1,585,303,736 Supplemental cash ow information Non-cash transactions Transfer advances for purchases of land to project development costs and land held for development 321,351,923 Transfer advances for purchases of land to loan to related company Transfer land held for development to project development costs 2,241,778,627 Transfer property, plant and equipment to project development costs 10,735,369 Settle increased share capital with loan to related company and interest receivable Issue promissory notes to purchase investment in a subsidiary Record deposit for purchase of shares as investment in a subsidiary -
83,632,050
188,834,673
63,882,050
-
-
6,000,000
563,268,037
1,811,924,360
132,986,844
2,408,994
10,735,369
2,408,994
-
500,000,000
699,000,000
75,000,000
-
75,000,000
60,000,000
-
60,000,000
The accompanying notes are an integral part of the nancial statements.
4,726,456,320 (20,684,563)
The accompanying notes are an integral part of the nancial statements.
Balance - as at 31 December 2011
Balance - as at 31 December 2010 4,726,344,720 (20,573,149) Additional ordinary shares as a result of warrant exercised 111,600 (111,414) Share subscriptions received in advance Increase in non-controlling interests of the subsidiary (Note 13) Decrease in Unsubordinated convertible debentures - equity component (Note 14) Dividend paid (Note 35) Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve -
Balance - as at 31 December 2009 4,726,329,720 (44,093,444) Additional ordinary shares as a result of warrant exercised 15,000 (14,975) Share subscriptions received in advance Additional purchase of investment in subsidiary Repayment for unsubordinated convertible debentures (Note 24) - 23,535,270 Dividend paid (Note 35) Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve Balance - as at 31 December 2010 4,726,344,720 (20,573,149) - (196,900,033) - 550,436,938
-
17,000,000
(17,000,000)
- 223,100,000 2,475,701,940
-
- (259,915,006) - 488,129,353
-
-
-
-
-
-
(186) 120
66 206,100,000 2,264,487,593
- 27,000,000 (27,000,000) 66 206,100,000 2,264,487,593
-
-
-
-
-
(25) 66
25 179,100,000 1,937,950,688
Share Issued and subscriptions fully paid received share capital Share discount in advance
Consolidated nancial statements
-
-
31,011,986
(7,291,990)
-
(3,743,300)
-
-
(3,548,690)
(3,548,690)
-
-
(7,476,716) -
-
-
7,476,716
7,476,716
- (23,535,270) 1,201,640 -
-
-
(4,750,330)
(5,856,198)
-
-
-
-
-
-
(5,856,198) (46,091,945)
-
-
(5,856,198)
66
26,261,656 6,825,548,645
-
(59,240,133) 7,345,333,564
-
(7,476,716) (7,476,716) - (259,915,006) (3,743,300) 484,386,053
(46,091,945)
120
(1,928,172) 7,174,431,058
(1,928,172) 7,174,431,058
- (23,535,270) - (196,900,033) 1,201,640 551,638,578
-
-
-
- (46,091,945) (46,091,945)
-
(5,856,198)
(5,856,198)
-
(5,856,198)
-
-
Total shareholders’ equity
(Unit: Baht)
(400,000)
66
(1,605,573)
120
44,356,324 7,389,689,888
-
(7,476,716) - (259,915,006) (130,048) 484,256,005
44,486,372
-
- 7,174,431,058
- 7,174,431,058
- (196,900,033) - 551,638,578
5,456,198
-
(5,456,198) 6,820,092,447
Equity attributable to the parent’s shareholders Other companents of equity Excess of investment Other in subsidiary arising as comprehensive a result of additional Retained earnings income purchase of investment Unsubordinated in the subsidiary at a Difference convertible price higher than the resulting from Total equity Equity attributable De cit on Total other net book value of share swap components of attributable to to non-controlling changes in value debenturesequity the subsidiary at the between the shareholders’ shareholders of interests of the Statutory of available-foracquisition date subsidiaries component subsidiaries reserve Unappropriated sale investments equity the Company
Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010
Statements of changes in shareholders’ equity
Property Perfect Public Company Limited
123
66
23,535,270 (20,573,149)
(20,573,149) (111,414) (20,684,563)
4,726,344,720
111,600 -
4,726,456,320
The accompanying notes are an integral part of the nancial statements.
Balance - as at 31 December 2011
-
-
(186) 120 -
66
-
(14,975) -
Balance - as at 31 December 2009 Additional ordinary shares as a result of warrant exercised 15,000 Share subscriptions received in advance Repayment for unsubordinated convertible debentures (Note 24) Dividend paid (Note 35) Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve Balance - as at 31 December 2010 4,726,344,720
Balance - as at 31 December 2010 Additional ordinary shares as a result of warrant exercised Share subscriptions received in advance Dividend paid (Note 35) Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve
(25) 66
Share discount (44,093,444)
Issued and fully paid share capital 4,726,329,720
Share subscriptions received in advance 25
Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010
-
(17,000,000)
223,100,000 1,912,787,453
17,000,000
- (259,915,006) - 330,739,074
206,100,000 1,858,963,385
27,000,000 (27,000,000) 206,100,000 1,858,963,385
- (196,900,033) - 537,698,460
-
(7,291,990)
-
(3,743,300)
(3,548,690)
(3,548,690)
1,201,640
-
-
-
-
-
-
(23,535,270) -
-
Other components of equity Other comprehensive income Retained earnings Unsubordinated De cit on changes in convertible value of available-fordebentures Statutory reserve Unappropriated sale investments equity component 179,100,000 1,545,164,958 (4,750,330) 23,535,270
Separate nancial statements
(7,291,990)
-
(3,743,300)
(3,548,690)
(3,548,690)
(23,535,270) 1,201,640
-
Total other components of shareholders’ equity 18,784,940
Statements of changes in shareholders’ equity (continued)
6,834,367,220
-
120 (259,915,006) 326,995,774
6,767,286,332
6,767,286,332
(196,900,033) 538,900,100
66
Total shareholders’ equity 6,425,286,199
(Unit: Baht)
124 Annual Report 2011
Property Perfect Public Company Limited
125
Notes to consolidated financial statements Property Perfect Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010 1. General information Property Perfect Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in the property development. The registered of ce of the Company is at 100/1 Vorasombat Building, 17th Floor, Rama 9 Road, Huaykwang, Bangkok.
2. Basis of preparation 2.1 The nancial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Noti cation of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The nancial statements in Thai language are the of cial statutory nancial statements of the Company. The nancial statements in English language have been translated from the Thai language nancial statements. The nancial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated nancial statements include the nancial statements of the Company (“the Company”) and the following subsidiary companies (“the subsidiaries”): Company’s name
Subsidiaries directly owned by the Company Estate Perfect Company Limited Perfect Sport Club Company Limited Bright Development Bangkok Company Limited Centrepoint Shopping Mall Company Limited Residence Number Nine Limited U&I Construction Bangkok Company Limited Perfect Prefab Company Limited Uniloft Service (Thailand) Company Limited We Retail Public Company Limited Subsidiary indirectly owned by the Company Centrepoint Shopping Mall Company Limited
Nature of business
Country of Percentage of incorporation shareholding 2011 2010 % %
Property development Clubhouse management Property development Property development Property development Construction service Producing and assembling prefabricated building system Apartment service Property development
Thailand Thailand Thailand Thailand Thailand Thailand Thailand
100.00 100.00 100.00 100.00 100.00 51.00
100.00 99.98 100.00 100.00 100.00 -
Thailand Thailand
100.00 88.06
-
Property development
Thailand
88.06
-
126
Annual Report 2011
b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The nancial statements of the subsidiaries are prepared using the same signi cant accounting policies as the Company. d) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated nancial statements. e) Non-controlling interests represent the portion of pro t or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated pro t or loss and within equity in the consolidated statement of nancial position. f) On 22 January 2010, a meeting of the Company’s Board of Directors passed a resolution to approve the purchase of the remaining shares of Centrepoint Shopping Mall Company Limited held by a company, for a total consideration of Baht 400,000 (4,000 ordinary shares with a value of Baht 100 each). This increased the Company’s shareholding in Centrepoint Shopping Mall Company Limited from 59.99% to 100.00% as a result. (The Company purchased the shares in April 2010). g) On 9 December 2009, a meeting of the Company’s Board of Directors passed a resolution to approve the acquisition of 10 million ordinary shares with a par value of Baht 100 each of Residence Number Nine Limited, for a price of Baht 507 million (100% of the paid up capital). On 2 March 2010, the Company received the transfer of ownership of these shares from the seller. Therefore, the Company included Residence Number Nine Limited’s nancial statements in its consolidated nancial statements as from 2 March 2010 onwards. h) On 25 February 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the establishment of U&I Construction Bangkok Company Limited, to engage in the provision of construction service. Such company has a registered share capital of Baht 100 million (1 million ordinary shares with a par value of Baht 100 each), 50% paid up and the Company held a 100% interest. This company was established on 5 April 2011. i) On 12 May 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the establishment of Perfect Prefab Company Limited to engage in producing and assembling prefabricated building system. Such company has a registered share capital of Baht 10 million (1 million ordinary shares with a par value of Baht 10 each), 25% paid up and the Company held a 51% interest. This company was established on 16 June 2011. j) On 26 July 2011, a meeting of the Company’s Board of Directors passed a resolution to ratify the establishment of Uniloft Service (Thailand) Company Limited to engage in apartment service. Such company has a registered share capital of Baht 100,000 (1,000 ordinary shares with a par value of Baht 100 each), 100% paid up and the Company held a 100% interest. This company was established on 21 July 2011. k) On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve subscription to no more than 363,818,182 newly issued ordinary shares of We Retail Public Company Limited (“We Retail”) (Formerly known as “Daidomon Group Public Company Limited”), equal to 88.06% of the total shares sold, at Baht 1.10 per share, and to approve the sale of all 5,000,000 ordinary shares in Centrepoint Shopping Mall Company Limited (“Centrepoint”) held by the Company, or 100% of the total shares of that company. The Company will receive payment for ordinary shares in We Retail through the transfer of the newly issued ordinary shares of We Retail.
Property Perfect Public Company Limited
127
On 16 December 2011, the Company completed the above transactions and as a result is the major shareholder of We Retail, with a controlling interest of 88.06%. Therefore, the Company included the nancial statements of We Retail Public Company Limited in its consolidated nancial statements as from 16 December 2011 onwards. The transaction is a reverse takeover. The Company treated the transaction as if, in order to maintain the shareholding structure of the combined entities at the same equity interest before the reverse acquisition, Centrepoint had to issue ordinary shares to exchange for ordinary shares of We Retail. The cost of the business combination is thus the fair value of Centrepoint’s number of equity interests, which was calculated by an independent nancial advisor using a discounted cash ow method. The remaining balance of approximately Baht 46.1 million represented the consideration exceeds the fair value of the identi able assets and liabilities of We Retail of approximately Baht 58.7 million, net of the non-controlling interest of Centrepoint of approximately Baht 12.6 million, presented as “Difference resulting from share swap between subsidiaries” in other components of shareholders’ equity. l) On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the sale of all 5,000,000 ordinary shares that the Company held in Centrepoint, or 100% of that company (Centrepoint had paid-up share capital amounting to Baht 400,200,000 including shares paid-up in October 2011) to We Retail. The Company will receive payment through the transfer of the newly issued ordinary shares of We Retail. As a result, the Company’s shareholding (indirectly held through We Retail) decreased to 88.06%. 2.3 The separate nancial statements, which present investments in subsidiaries and associate under the cost method, have been prepared solely for the bene t of the public.
3. Adoption of new accounting standards during the year During the current year, the Company adopted a number of revised and new accounting standards, issued by the Federation of Accounting Professions, as listed below. Accounting standards: TAS 1 (revised 2009) TAS 2 (revised 2009) TAS 7 (revised 2009) TAS 8 (revised 2009) TAS 10 (revised 2009) TAS 11 (revised 2009) TAS 16 (revised 2009) TAS 17 (revised 2009) TAS 18 (revised 2009) TAS 19 TAS 23 (revised 2009) TAS 24 (revised 2009) TAS 26 TAS 27 (revised 2009) TAS 28 (revised 2009)
Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Construction Contracts Property, Plant and Equipment Leases Revenue Employee Bene ts Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Bene t Plans Consolidated and Separate Financial Statements Investments in Associates
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Accounting standards: TAS 29 Financial Reporting in Hyperin ationary Economies TAS 31 (revised 2009) Interests in Joint Ventures TAS 33 (revised 2009) Earnings per Share TAS 34 (revised 2009) Interim Financial Reporting TAS 36 (revised 2009) Impairment of Assets TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets TAS 38 (revised 2009) Intangible Assets TAS 40 (revised 2009) Investment Property Financial reporting standards: TFRS 2 Share-Based Payment TFRS 3 (revised 2009) Business Combinations TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued Operations TFRS 6 Exploration for and Evaluation of Mineral Resources Financial Reporting Standard Interpretations : TFRIC 15 Agreements for the Construction of Real Estate Accounting Standard Interpretations: SIC 31 Revenue - Barter Transactions Involving Advertising Services These accounting standards do not have any signi cant impact on the nancial statements, except for the following accounting standards. TAS 19 Employee Bene ts This accounting standard requires employee bene ts to be recognised as expense in the period in which the service is performed by the employee. In particular, an entity has to evaluate and make a provision for post-employment bene ts using actuarial techniques. The Company and its subsidiaries previously accounted for such employee bene ts when they were incurred. The Company and its subsidiaries have changed this accounting policy in the current year and recognise the liability in the transition period as an expense on a straight-line basis over up to ve years from the date of adoption. The change of new accounting standard will have the effect of increasing provision for long-term employee bene ts account of the Company and its subsidiaries as at 31 December 2011 by Baht 24.3 million (Separate nancial statements: increasing by Baht 19.1 million) and increasing the employee expenses resulting in decreasing pro t of the Company and its subsidiaries for the year ended 31 December 2011 by Baht 24.3 million, or Baht 0.005 per share (Separate nancial statements: increasing employee expenses resulting in decreasing pro t by Baht 19.1 million, or Baht 0.004 per share). During the year 2011, the Company and its subsidiaries have calculated their long-term employee bene t liabilities as at 31 December 2010 to be Baht 73.5 million (Separate nancial statements: Baht 56.4 million) and this is recognised as an expense on a straight-line basis over up to ve years. As at 31 December 2011, the Company and its subsidiaries recognised Baht 14.7 million of such liabilities (Separate nancial statements: Baht 11.3 million) and Baht 58.8 million remains unrecognised (Separate nancial statements: Baht 45.1 million).
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4. New accounting standards issued during the years not yet effective The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for scal years beginning on or after 1 January 2013. Accounting standards: TAS 12 Income Taxes TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates Accounting Standard Interpretations: SIC 10 Government Assistance - No Speci c Relation to Operating Activities SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets SIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders The Company’s management believes that these accounting standards will not have any signi cant impact on the nancial statements for the year when they are initially applied, except for the following accounting standard. TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognise deferred tax assets and liabilities under the stipulated guidelines. At present, the management is evaluating the impact on the nancial statements in the year when this standard is adopted.
5. Significant accounting policies 5.1 Revenues recognition
Revenues from sales of land and houses/residential condominium units/land Revenues from sales of land and houses/residential condominium units/land are recognised as revenues when the ownership has been transferred to the buyer. Interest income Interest income is recognised on an accrual basis based on the effective interest rate. Dividends Dividends are recognised when the right to receive the dividends is established. 5.2 Cost of sales of land and houses/residential condominium units/land
In determining the cost of sales of land and houses/residential condominium units/land, the anticipated total development costs (after recognising the costs incurred to date) are attributed to units already sold on the basis of the salable area and then recognised as costs in pro t or loss.
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5.3 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions. 5.4 Trade accounts receivable
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging. 5.5 Project development costs
Project development costs are valued at the lower of cost and net realisable value. Project development costs consist of the costs of land, land development, construction, land lease and related interest. 5.6 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 5.7 Advances for purchases of land
Advances for purchases of land will be recognised as part of land costs when the title to the related land is transferred to the Company. 5.8 Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the estimated useful lives: Of ce buildings and clubhouses Furniture and equipment for of ces and clubhouses Motor vehicles Others
10 and 20 years 5 years 5 years 5 years
Depreciation is included in determining income. No depreciation has been provided on land and construction in progress. An item of property, plant and equipment is derecognised upon disposal or when no future economic bene ts are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in pro t or loss when the asset is derecognised.
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5.9 Leasehold rights and amortisation
Leasehold right is stated at cost less accumulated amortization and allowance for loss on impairment of assets (if any). Amortisation of leasehold right is calculated by reference to its cost on a straight-line basis over the leasehold period. Amortisation is included in determining income and is capitalised as part of project costs for leasehold rights of project under development. 5.10 Investments
a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in pro t or loss. b) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded as a separate item in shareholders’ equity, and will be recorded in pro t or loss when the securities are sold. c) Investments in non-marketable equity securities, which the Company classi ed as other investments, are stated at cost net of allowance for loss on impairment (if any). d) Investment in associate is accounted for in the consolidated nancial statements using the equity method. e) Investments in subsidiaries and associate are accounted for in the separate nancial statements using the cost method. The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of unit trusts is determined from their net asset value. The weighted average method is used for computation of the cost of investments. In the event the Company reclassi es investments from one type to another, such investments will be readjusted to their fair value as at the reclassi cation date. The difference between the carrying amount of the investments and the fair value on the date of reclassi cation are recorded in pro t or loss or recorded as surplus (de cit) from changes in the value of investments in shareholders’ equity, depending on the type of investment that is reclassi ed. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in pro t or loss. 5.11 Related party transactions
Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company. They also include associate and individuals which directly or indirectly own a voting interest in the Company that gives them signi cant in uence over the Company, key management personnel, directors and of cers with authority in the planning and direction of the Company’s operations.
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5.12 Unsubordinated convertible debentures
Unsubordinated convertible debentures are classi ed into liability and equity components and these are presented separately in the statement of nancial position. In separately presenting such components, the Company determines the liability component by discounting the stream of future payments of principal and interest at the prevailing market rate, while the carrying amount of the equity component is determined by deducting the liability component from the total face value of the unsubordinated convertible debentures and amortising the difference over the life of the debentures. 5.13 Impairment of assets
At the end of each reporting period, the Company performs impairment reviews in respect of the property, plant and equipment whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash ows are discounted to their present value using a pre-tax discount rate that re ects current market assessments of the time value of money and the risks speci c to the asset. In determining value in use, the estimated future cash ows are discounted to their present value using a pre-tax discount rate that re ects current market assessments of the time value of money and the risks speci c to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, re ects the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. An impairment loss is recognised in pro t or loss. In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in pro t or loss unless the asset is carried at a revalued amount, in which case the reversal, which exceeds the carrying amount that would have been determined, is treated as a revaluation increase. 5.14 Employee benefits
Short-term employee bene ts Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment bene ts De ned contribution plans The Company and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company. The fund’s assets are held in a separate trust fund and the Company’s contributions are recognised as expenses when incurred.
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De ned bene t plans The Company has obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company treats these severance payment obligations as a de ned bene t plan. The obligation under the de ned bene t plan is determined by a professionally quali ed independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment bene ts are recognised as income or expenses when the net cumulative unrecognised actuarial gains and losses at the end of the previous reporting period exceed 10% of the de ned bene t obligation at that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plan. For the rst-time adoption of TAS 19 Employee Bene ts, the Company elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy as an expense on a straight-line basis over up to ve years from the date of adoption. 5.15 Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, they are probable that out ow of resources embodying economic bene ts will be required to settle the obligation, and reliable estimate can be made of the amount of the obligation. 5.16 Income Tax
Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable pro ts determined in accordance with tax legislation.
6. Significant accounting judgments and estimates The preparation of nancial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Signi cant judgments and estimates are as follows: Leases In determining whether a lease is to be classi ed as an operating lease or nance lease, the management is required to use judgment regarding whether signi cant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging pro le of outstanding debts and the prevailing economic condition. Fair value of nancial instruments In determining the fair value of nancial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of nancial instruments.
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Impairment of equity investments The Company treats available-for-sale investments and other investments as impaired when there has been a signi cant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “signi cant” or “prolonged” requires judgement of the management. Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of the Company’s plant and equipment and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Project development costs estimation In ummarized revenue from real estate sales, the Company needs to estimate all project development costs, including land costs, land improvement costs, design costs, construction costs, and borrowing costs for construction. The management estimates these costs based on their business experience and revisit the estimation on a periodical basis or when the actual costs incurred signi cantly vary from the estimation. Post-employment bene ts under de ned bene t plans The obligation under the de ned bene t plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Provision for loss arising from minimum revenue guarantee In recording provision for loss arising from minimum revenue guarantees, the management estimates the cost of the expenses expected to be incurred as a result of providing minimum revenue guarantees based on the present value of the cash ows to be paid to the Fund, calculated on the basis of assumptions that are appropriate to the current operating results and circumstances of the Fund. The estimate is reviewed whenever circumstances changes. Litigations The Company and its subsidiary have contingent liabilities as a result of litigations. The Company’s and its subsidiary’s management has used judgement to assess the results of the litigations and believes that no loss will result. Therefore no contingent liabilities are recorded as at the end of reporting period.
7. Related party transactions During the years, the Company and its subsidiaries had signi cant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties.
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(Unit: Million Baht) Consolidated nancial statements 2011 2010 Transactions with subsidiaries (Eliminated from the consolidated nancial statements) Revenues from sales of land and house Revenue from sale of leasehold rights Interest income Purchase of land Clubhouse management expenses Transactions with associate Purchase of land Transactions with related company Cost of construction of houses
Separate nancial statements 2011 2010
Transfer Pricing policy
-
-
2 74 14
26 65 47 5 13
By agreement By agreement 5.19–5.82% per annum By agreement By agreement
122
-
122
-
By agreement
224
-
156
-
By agreement
As at 31 December 2011 and 2010, the balances of the accounts between the Company and those related companies are as follows: (Unit: Thousand Baht) Separate nancial statements 2011 2010
Consolidated nancial statements 2011 2010 Other receivables - related parties (Note 9) Advance - subsidiary Interest receivable - subsidiaries Total other receivables - related parties Advances to contractor - related party Related company (related by mutual shareholders) Total advances to contractor - related party
-
-
1,500 74,289 75,789
1,500 25,113 26,613
18,117 18,117
-
17,519 17,519
-
Trade and other payables - related parties (Note 20) Subsidiary Related companies (related by mutual shareholders) 15,122 Total and other payables - related parties 15,122
-
1,251 9,358 10,609
1,441 1,441
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Loans to related parties As at 31 December 2011 and 2010, the balance of loans between the Company and those related companies and the movement are as follows: (Unit: Thousand Baht) Separate nancial statements Balance as at Balance as at 31 December Increase Decrease 31 December Loans to related parties Related by 2010 during the year during the year 2011 Estate Perfect Co., Ltd. Subsidiary 460,977 485,000 945,977 Bright Development Bangkok Co., Ltd. Subsidiary 797,522 535,000 (477,376) 855,146 Centerpoint Shopping Mall Co., Ltd. Subsidiary 24,426 83,000 (107,426) Total 1,282,925 1,103,000 (584,802) 1,801,123 As discussed in Note 13 to the nancial statements, the Company paid up additional share capital of Bright Development Bangkok Company Limited amounting to Baht 500 million. The Company recorded the additional payments for share capital as a deduction against loans and interest receivable of the company, comprising loan amounting to Baht 477.4 million and interest receivable amounting to Baht 22.6 million Directors and management’s bene ts During the years ended 31 December 2011 and 2010, the Company and its subsidiaries had employee bene t expenses payable to their directors and management as below. (Unit: Million Baht) Consolidated nancial statements Separate nancial statements 2011 2010 2011 2010 Short-term employee bene ts 56.3 90.2 44.0 72.4 Post-employment bene ts 6.4 4.3 Total 62.7 90.2 48.3 72.4
Guarantee obligations with related parties The Company has outstanding guarantee obligations with its related parties, as described in Note 36.4 a) to the nancial statements.
8. Cash and cash equivalents
Cash Bank deposits Bill of exchange Total
Consolidated nancial 2011 2,556 682,243 450,000 1,134,799
statements 2010 2,114 2,015,740 2,017,854
(Unit: Thousand Baht) Separate nancial statements 2011 2010 1,613 1,530 400,112 1,583,771 450,000 851,725 1,585,301
As at 31 December 2011, bank deposits in saving accounts, xed deposits and bill of exchange carried interests between 0.25 and 3.00% per annum (2010: between 0.125 and 0.50% per annum).
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9. Trade and other receivables/Deposits and cash received in advance Trade receivable balances as at 31 December 2011 and 2010 are detailed below. Consolidated nancial statements 2011 2010 Total value of contracts signed 73,122,867 65,030,462 Percentage of total project sale value 64.99 60.05 Installments due 69,815,659 61,637,161 Less: Cash received (69,782,962) (61,605,091) Installments receivable 32,697 32,070 Less: Allowance for doubtful debts (9,593) (10,293) Installments receivable, net 23,104 21,777
(Unit: Thousand Baht) Separate nancial statements 2011 2010 63,681,714 58,030,636 72.48 68.84 62,178,912 56,520,552 (62,159,506) (56,497,415) 19,406 23,137 (9,593) (10,293) 9,813 12,844
Deposits and cash received in advance as at 31 December 2011 and 2010 are detailed below. (Unit: Thousand Baht) Consolidated nancial statements Separate nancial statements 2011 2010 2011 2010 Installments due 69,815,659 61,637,161 62,178,912 56,520,552 Less: Accumulated sale recognition (69,632,058) (61,550,804) (62,106,909) (56,488,666) Deposits and cash received in advance 183,601 86,357 72,003 31,886
As at 31 December 2011 and 2010, trade and other receivables were classi ed by aging as follows. Consolidated nancial statements 2011 2010 Trade receivables - Installments Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total trade receivables - Installments Trade receivables at transfer date Aged on the basis of due dates Not yet due Past due
8,141 2,583 3,031 900 14,655
4,895 2,283 3,117 2,673 12,968
(Unit: Thousand Baht) Separate nancial statements 2011 2010
675 126 107 456 1,364
1,711 631 793 900 4,035
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Consolidated nancial statements 2011 2010 Up to 3 months 979 959 3 - 6 months 820 6 - 12 months 470 7,000 Over 12 months 16,593 10,323 Total 18,042 19,102 Less: Allowance for doubtful debts (9,593) (10,293) Total trade receivables at transfer date, net 8,449 8,809 Total trade receivable, net 23,104 21,777 Other receivables Advance - related party Interest receivable - related party Interest receivable 2,293 Other receivables 9,914 Total other receivables 12,207 Trade and other receivables, net 35,311 21,777
(Unit: Thousand Baht) Separate nancial statements 2011 2010 979 959 820 470 7,000 16,593 10,323 18,042 19,102 (9,593) (10,293) 8,449 8,809 9,813 12,844 1,500 74,289 2,293 78,082 87,895
1,500 25,113 26,613 39,457
10. Account receivable - land Accounts receivable - land consists of the following: a)
An account receivable of Baht 15.5 million from the sale of approximately 385 rai of land to a university, as discussed in Note 11 to the nancial statements. The Company will receive payment together with payment for a remaining approximately 15 rai of land which the Company expects to be able to transfer ownership in the rst quarter in the year 2012. In addition, the Company deposited cash amounting Baht 100 million to that university as a guarantee of road and utility construction in accordance with details in the agreement.
b)
An account receivable from the sale of land of Baht 35.3 million, to be paid in installments, with the rst installment due on 30 April 2009 and full settlement due within December 2009. However, the debtor requested postponement of payment, such that it would be made in two installments, with the rst installment amounting to Baht 4.4 million (the Company received this on 6 November 2009) and the second installment, comprising the balance (Baht 30.9 million), to be paid within December 2009. On 11 February 2010, the debtor submitted a capital restructuring plan to the Company and requested further postponement of payment, to be within May 2010. On 30 July 2010, the debtor requested further postponement of payment to be made within September 2010 since it is restructuring its equity. On 3 November 2010, the debtor requested another postponement of payment, to be made within December 2010, since it is processing a loan agreement under a credit facility that has been granted by a bank.
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On 1 February 2012, the debtor put forward a debt settlement proposal, whereby it would agree to pay the full amount of principal and a portion of interest to the Company within April 2012. The Company has not provided allowance for doubtful debts for the balance since the Company’s management believes that it will receive full payment from this debtor.
11. Project development costs (Unit: Thousand Baht) Consolidated nancial statements Separate nancial statements 2011 2010 2011 2010 Land and construction developed Land and construction under development Total Less: Reduce cost to net realisable value Net
2,956,676 10,059,622 13,016,298 (47,570) 12,968,728
2,952,765 7,227,319 10,180,084 (57,088) 10,122,996
2,051,036 6,398,953 8,449,989 (46,686) 8,403,303
2,618,343 4,186,726 6,805,069 (55,794) 6,749,275
On 9 September 2009, the Company entered into an agreement to purchase and to sell land of 400 rai with a university at a price of Baht 900 million. Under the agreement, the Company must construct a road in accordance with details in the agreement, establish an education fund amounting to Baht 20 million for the university and comply with conditions stipulated in the agreement. In addition, the Company is to be liable for a ne if the Company defaults on the agreement. During the year 2010, the Company has transferred the ownership of approximately 371 rai of land to the university and recognised revenue amounting to Baht 835.5 million and cost of sales amounting to Baht 695.8 million. Subsequently, during the year ended 31 December 2011, the Company has additionally transferred the ownership of approximately 14 rai of land to the university and recognised revenue amounting to Baht 31.0 million and cost of sales amounting to Baht 25.8 million. Revenue and costs are recognised in proportion to the amount of land transferred, compared to all land per the agreement, based on the total sale price and total budget based on costs incurred to date, respectively (costs consist of land costs and utility costs per the agreement). The Company expects to transfer the ownership of the remaining 15 rai of land within the rst quarter in the year 2012. The Company’s and its subsidiaries’ project land and construction thereon with a net book value of Baht 9,685.2 million as at 31 December 2011 (2010: Baht 7,149.9 million), have been mortgaged with nancial institutions as collateral for credit facilities, guarantees and debentures. During the year ended 31 December 2011, the Company and its subsidiaries transferred land held for development to project development costs amounting to Baht 2,241.8 million (Separate nancial statements: Baht 1,811.9 million). During the year ended 31 December 2011, the Company and its subsidiaries included borrowing costs of Baht 312.2 million as cost of “Project development costs” (Separate nancial statements: Baht 197.7 million) (2010: Baht 135.1 million (Separate nancial statements: Baht 83.4 million)). Interest is charged at rate of 4.55% 7.63% per annum (2010: 5.75 - 7.25% per annum).
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12. Restricted deposits These represent xed deposits pledged with the banks to secure credit facilities.
13. Investments in subsidiaries Details of investments in subsidiaries as presented in separate nancial statements are as follows: (Unit: Thousand Baht) Company’s name
Paid-up capital 2011 2010
Estate Perfect Company Limited 1,200,000 Perfect Sport Club Company Limited 5,000 Bright Development Bangkok Company Limited 1,000,000 Centrepoint Shopping Mall Company Limited Residence Number Nine Limited 1,000,000 U&I Construction Bangkok Company Limited 50,000 Perfect Prefab Company Limited 2,500 Uniloft Service (Thailand) Company Limited 100 We Retail Public Company Limited 2,065,775 Total
1,200,000 1,000 500,000 150,700 1,000,000 -
Shareholding percentage 2011 2010 % % 100.00 100.00 100.00 99.98 100.00 100.00 100.00 100.00 100.00 100.00 51.00 100.00 88.06 -
Cost 2011
2010
738,459 5,000 999,999 507,000 50,000 1,275 100 400,200 2,702,033
738,459 999 499,999 150,700 507,000 1,897,157
Estate Perfect Company Limited On 22 January 2010, a meeting of the Company’s Board of Directors passed a resolution to approve an increase in the registered share capital of Estate Perfect Company Limited from Baht 1,000 million (100 million ordinary shares with a par value of Baht 10 each) to Baht 1,200 million (120 million ordinary shares with a par value of Baht 10 each). The Company held all shares. (The Company has paid up the additional share capital in March 2010). Perfect Sport Club Company Limited On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve an increase in the registered share capital of Perfect Sport Club Company Limited, from Baht 1 million (10,000 ordinary shares with a par value of Baht 100 each) to Baht 5 million (50,000 million ordinary shares with a par value of Baht 100 each) by offering the additional shares to the current shareholders in proportion to their existing holdings (The Company paid up the additional share capital in October 2011). Bright Development Bangkok Company Limited On 12 November 2009, a meeting of the Company’s Board of Directors passed a resolution to approve an increase in the registered share capital of Bright Development Bangkok Company Limited from Baht 1 million (10,000 ordinary shares with a par value of Baht 100 each) to Baht 500 million (5 million ordinary shares with a par value of Baht 100 each). The Company held all shares. (The Company paid up the additional share capital in March 2010).
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On 25 February 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the increase in the registered share capital of Bright Development Bangkok Company Limited from Baht 500 million (5 million ordinary shares with a par value of Baht 100 each) to Baht 1,000 million (10 million ordinary shares with a par value of Baht 100 each). The Company held all shares (The Company paid up the additional share capital in March 2011). Residence Number Nine Limited On 22 December 2009, the Company entered into the purchase and sale of share agreement with shareholders of Residence Number Nine Limited (“the seller”), in order to purchase all 6 million shares of Residence Number Nine Limited (“Residence”) for a total consideration of Baht 484 million. The Company paid a deposit of Baht 60 million. On 27 January 2010, the Company entered into a memorandum of amendment of the purchase and sale of share agreement with the seller. Residence is to increase its registered share capital from Baht 600 million (6 million ordinary shares with a par value of Baht 100 each) to Baht 1,000 million (10 million ordinary shares with a par value of Baht 100 each) by issuing new shares to the existing shareholders. The Company is to purchase all 10 million shares for a total consideration of Baht 507 million as detailed below. a) Cash of Baht 277 million, to be paid within the transfer date b) Promissory notes totaling Baht 170 million, with Baht 50 million to be paid within June 2010 and Baht 120 million to be paid within March 2011 (the Company made payment amounting to Baht 45 million during the year 2010 and Baht 75 million during the year 2011). c) Deposit of Baht 60 million On 2 March 2010, the Company is transferred ownership of these shares from the seller. Therefore, the Company included Residence’s nancial statements in its consolidated nancial statements as from 2 March 2010. Fair value of the identi able assets and liabilities as at the acquisition date of investment in subsidiary can be summarised below. (Unit: Thousand Baht) Cash and cash equivalents 19,818 Project development costs 315,594 Land held for development 164,395 Other current assets 7,200 Other current liabilities (7) Total net assets 507,000 Less: Issuing promissory notes for purchase of investment in subsidiary (paid in the year 2011) (75,000) Less: Deposit for purchase of shares (paid in the year 2009) (60,000) Cash payment for purchase of investment in subsidiary 372,000 Less: Cash and cash equivalents of subsidiary (19,818) Net cash payment for purchase of investment in subsidiary in the year 2010 352,182 U&I Construction Bangkok Company Limited On 25 February 2011, meetings of the Company’s Board of Directors passed a resolution to approve the establishment of a subsidiary, U&I Construction Bangkok Company Limited, to engage in the provision of construction service. Such company has a registered share capital of Baht 100 million (1 million ordinary shares with a par value of Baht 100 each), 50% paid up and the Company held a 100% interest. This company was established on 5 April 2011.
142
Annual Report 2011
Perfect Prefab Company Limited On 12 May 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the establishment of Perfect Prefab Company Limited to engage in producing and assembling prefabricated building system. Such company has a registered share capital of Baht 10 million (1 million ordinary shares with a par value of Baht 10 each), 25% paid up and the Company held a 51% interest. This company was established on 16 June 2011. Uniloft Service (Thailand) Company Limited On 26 July 2011, a meeting of the Company’s Board of Directors passed a resolution to ratify the establishment of Uniloft Service (Thailand) Company Limited to engage in apartment service. Such company has a registered share capital of Baht 100,000 (1,000 ordinary shares with a par value of Baht 100 each), 100% paid up and the Company held a 100% interest. This company was established on 21 July 2011. We Retail Public Company Limited (Formerly known as “Daidomon Group Public Company Limited”) On 29 September 2011, a meeting of the Company’s Board of Directors passed the following signi cant resolutions. a)
b)
Approved subscription to no more than 363,818,182 newly issued ordinary shares of We Retail Public Company Limited (“We Retail”), equal to 88.06% of the total shares sold, which are to be issued and offered to the Company on a private placement basis at Baht 1.10 per share. The meeting also approved the purchase of not more than 49,336,728 ordinary shares of We Retail from its existing shareholders through a mandatory tender offer. The mandatory tender offer will commence after increase in the paidup capital through the issue of new ordinary shares to be offered to the Company has been registered with the Ministry of Commerce.
Approved the sale of all 5,000,000 ordinary shares in Centrepoint Shopping Mall Company Limited (“Centrepoint”) held by the Company, or 100% of the total shares of that company (Centrepoint has the paid-up share capital amounting to Baht 400,200,000 including shares paid-up in October 2011) to We Retail. The Company will receive payment for ordinary shares in Centrepoint through the transfer of the newly issued ordinary shares of We Retail, under the transaction described in a) above. On 16 December 2011, the Company completed the above transactions and as a result is the major shareholder of We Retail, with a controlling interest of 88.06%. Therefore, the Company included the nancial statements of We Retail Public Company Limited in its consolidated nancial statements as from 16 December 2011 onwards. The transaction is a reverse takeover. The Company treated the transaction as if, in order to maintain the shareholding structure of the combined entities at the same equity interest before the reverse acquisition, Centrepoint had to issue ordinary shares to exchange for ordinary shares of We Retail. The cost of the business combination is thus the fair value of Centrepoint’s number of equity interests, which was calculated by an independent nancial advisor using a discounted cash ow method. The remaining balance of approximately Baht 46.1 million represented the consideration exceeds the fair value of the identi able assets and liabilities of We Retail of approximately Baht 58.7 million, net of the non-controlling interest of Centrepoint of approximately Baht 12.6 million, presented as “Difference resulting from share swap between subsidiaries” in other components of shareholders’ equity.
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Fair value of the identi able assets and liabilities as at the acquisition date of investment in subsidiary can be summarised below.
Cash and cash equivalents Trade and other receivables Other current assets Other non-current assets Trade and other payables Other current liabilities Other non-current liabilities Total net assets Less: Non-controlling interest of We Retail Total Non-controlling interest of Centrepoint Difference resulting from share swap between subsidiaries
(Unit: Thousand Baht) 36,826 9,914 743 2,901 (47,318) (3,749) (2,148) (2,831) (338) (2,493) (43,599) (46,092)
Subsequently, on 9 February 2012, the Company acquired 93,842 ordinary shares from outside shareholders, increasing its shareholders in that company from 88.06% to 88.08%. Centrepoint Shopping Mall Company Limited On 12 November 2009 and 22 January 2010, meetings of the Company’s Board of Directors passed the following signi cant resolutions: a)
Approved the purchase of the remaining shares of Centrepoint Shopping Mall Company Limited (“Centrepoint”) held by a company, for a total consideration of Baht 400,000 (4,000 ordinary shares with a value of Baht 100 each). This increased the Company’s shareholding in Centrepoint from 59.99% to 100.00% as a result. (The Company purchased the shares in April 2010). The excess of the acquisition price over the attributable net book value of this subsidiary at acquisition date, amounting to Baht 5.9 million, was therefore recorded in shareholders’ equity under the caption of “Excess of investment in subsidiary arising as a result of additional purchase of investment in the subsidiary at a price higher than the net book value of the subsidiary at the acquisition date”.
b)
Approved an increase in the registered share capital of Centrepoint, from Baht 1 million (10,000 ordinary shares with a par value of Baht 100 each) to Baht 500 million (5 million ordinary shares with a par value of Baht 100 each). The Company holds all shares and paid the called up portion (30%) of the additional share capital, amounting to Baht 149.7 million, in April 2010. Subsequently, the Company paid a further called up portion (30%) of the additional share capital, amounting to Baht 149.7 million, in September 2011 and an additional called up portion (20%) of the additional share capital, amounting to Baht 99.8 million, in October 2011.
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Annual Report 2011
On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the sale of all 5,000,000 ordinary shares that the Company held in Centrepoint, or 100% of that company (Centrepoint had paid-up share capital amounting to Baht 400,200,000 including shares paid-up in October 2011) to We Retail. The Company will receive payment through the transfer of the newly issued ordinary shares of We Retail. As a result, the Company’s shareholding (indirectly held through We Retail) decreased to 88.06%.
14. Investment in associate 14.1 Details of associate:
Company’s name
Krungthep Land Public Company Limited Total
Nature of business
(Unit: Thousand Baht) Consolidated nancial statements Share of income Country from investment of Shareholding Carrying amounts based in associate incorporation percentage on equity method during the year 2011 2010 2011 2010 2011 2010 % %
Property development
Thailand
20.22
20.22
495,129 495,129
477,623 477,623
24,983 24,983
57,886 57,886
(Unit: Thousand Baht) Separate nancial statements Nature of business
Company’s name
Krungthep Land Public Company Limited Total
Property development
Country of incorporation Shareholding percentage 2011 2010 % % Thailand
20.22
20.22
Cost 2011
2010
359,999 359,999
359,999 359,999
14.2 Summarised financial information of associate
Financial information of the associated company is summarised below:
Company’s name Krungthep Land Public Company Limited
Paid-up capital Total liabilities as at as at 31 December 31 December 2011 2010 2011 2010
Total assets as at 31 December 2011 2010
1,780
4,314
1,780
7,263 6,887
(Unit: Million Baht) Total revenues for the Pro t for the years ended years ended 31 December 31 December 2011 2010 2011 2010
4,030 2,335 4,040
129
504
Property Perfect Public Company Limited
145
In accordance with a resolution of the Extraordinary General Meeting of Shareholders No. 1/2008 held on 14 January 2008, on 31 January 2008, Krungthep Land Public Company Limited (“Krungthep Land”) issued and offered 188,806 units of 5-year, name-registered, unsecured convertible debentures with a face value of USD 100 or a total value of USD 18,880,600, to the overseas company. In accordance with the conditions of the convertible debentures, Krungthep Land is to pay interest semi-annually at a rate of not exceeding 3% per annum or a dividend yield (whichever is higher) only in years in which Krungthep Land declares a dividend based on the conditions of the convertible debentures and mature on 31 January 2013. They are convertible upon the listing of Krungthep Land’s shares on the Stock Exchange of Thailand or MAI, or one year from the issue date (whichever is earlier), at a conversion price of Baht 13.85 per ordinary share, on a quarterly basis. If no interest payment is made until the maturity date, Krungthep Land is to redeem the outstanding convertible debentures at a price equal to 1.311651 times the baht equivalent of the face value, with such redemption subject to change dependent upon the interest payment made during the life of the debentures. In November 2011, Krungthep Land amended the condition that Krungthep Land can redeem the convertible debentures before the maturity date. The early redemption value equals to the Baht equivalent of the face value and the interest of 5.5% per annum of the Baht equivalent of the face value calculated from the issuance date to redemption date. The interest is compounded every 6 months. Subsequently in December 2011, Krungthep Land redeemed all of convertible debentures before the maturity. The Company therefore recorded the reversal of equity of Krungthep Land amounting to approximately Baht 7.5 million which was presented under the heading of “Unsubordinated convertible debentures - equity component” in other components of equity.
15. Other long-term investments (Unit: Thousand Baht) Consolidated and separate nancial statements 2011 2010 Available-for-sale securities Investments in property funds Less: Allowance for change in value Trading securities Domestic marketable equity securities Less: Allowance for change in value Other investment Domestic non-marketable equity security Other long-term investments, net
54,055 (7,291) 46,764
54,057 (3,550) 50,507
1,800 (1,257) 543
1,800 (1,059) 741
4,275 4,275 51,582
4,275 4,275 55,523
146
Annual Report 2011
16. Land held for development The land held for development with a net book value of Baht 2,304.6 million as at 31 December 2011 (2010: Baht 3,901.5 million) has been mortgaged with the nancial institutions as collateral for credit facilities, guarantees and debentures. During the current year, the Company and its subsidiaries transferred land held for development to project development costs amounting to Baht 2,241.8 million (Separate nancial statements: Baht 1,811.9 million).
17. Advances for purchases of land
Balance as at 31 December 2010 Increase during the year Title of plots of land transferred during the year Transfer of advances for purchases of land to the subsidiary Balance as at 31 December 2011
Consolidated nancial statements 2011 2010 554,641 128,775 503,287 509,498 (321,351) (83,632) 736,577
554,641
(Unit: Thousand Baht) Separate nancial statements 2011 2010 348,550 79,021 280,180 339,411 (188,835) (63,882) 439,895
(6,000) 348,550
Approximately Baht 651.4 million (Separate nancial statements: Baht 354.7 million) of the above balance represented advances paid to landowners by the Company and its subsidiaries under agreements to purchase and to sell land already signed with the landowners by agents, the Company and its subsidiaries. The remaining advances, amounting to approximately Baht 85.2 million (Separate nancial statements: Baht 85.2 million), have been paid to agents in acquiring land (Baht 49.1 million paid to an agent who is employee of the Company) and agreements to purchase and to sell land are still in the process of being signed with the landowners. As at 31 December 2011, the Company and its subsidiaries were contracted to purchase and to sell land amounting to Baht 2,974.4 million (Separate nancial statements: Baht 1,304.2 million).
18. Property, plant and equipment (Unit: Thousand Baht)
Consolidated nancial statements Furniture and Of ce equipment for buildings and of ces and Land clubhouses clubhouses Cost 1 January 2010 60,607 Additions Transfer to project development costs Disposals (1,113) Transfer in (out) 31 December 2010 59,494
286,118 2,149 (4,771) 10,219 293,715
179,018 31,458 (4,862) 934 206,548
Motor Construction vehicles in progress 39,787 224 40,011
15,416 2,663 (2,409) (11,153) 4,517
Others
Total
40,648 5,494 (1,538) 44,604
621,594 41,988 (2,409) (12,284) 648,889
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147
(Unit: Thousand Baht)
Consolidated nancial statements Furniture and Of ce equipment for buildings and of ces and clubhouses clubhouses 76,816 (7,235) (17) (2,215) 687 286,463 281,836
Land Additions Transfer to project development costs Disposals Transfer in (out) 31 December 2011 59,494 Accumulated depreciation 1 January 2010 87,820 120,796 Depreciation for the year 30,092 24,432 Depreciation on disposals (1,740) (4,349) 31 December 2010 116,172 140,879 Depreciation for the year 29,479 26,212 Depreciation on disposals (2,032) 31 December 2011 145,651 165,059 Allowance for impairment 1 January 2010 1,112 3,032 Increase during the year 5,396 3,704 Decrease during the year (1,112) (3,032) 31 December 2010 5,396 3,704 31 December 2011 5,396 3,704 Net book value 31 December 2010 54,098 173,839 65,669 31 December 2011 54,098 137,108 116,777 Depreciation for the years as included in administrative expenses 2010 2011
Motor Construction vehicles in progress 10 8,216 (3,500) (687) 40,021 8,546
Others 3,932 48,536
Total 88,974 (10,735) (2,232) 724,896
32,524 2,182 34,706 1,565 36,271
-
34,616 2,939 (1,537) 36,018 4,168 40,186
275,756 59,645 (7,626) 327,775 61,424 (2,032) 387,167
-
-
-
4,144 9,100 (4,144) 9,100 9,100
5,305 3,750
4,517 8,546
8,586 8,350
312,014 328,629 59,645 61,424
(Unit: Thousand Baht)
Separate nancial statements Furniture and equipment Of ce for of ces buildings and and Land clubhouses clubhouses Cost 1 January 2010 60,607 Additions Transfer to project development costs -
243,766 -
153,873 19,035 -
Motor Construction vehicles in progress
Others
Total
33,454 214 -
32,394 535 -
538,255 22,109 (2,409)
14,161 2,325 (2,409)
148
Annual Report 2011
(Unit: Thousand Baht)
Separate nancial statements
Land Disposals (1,113) Transfer in (out) 31 December 2010 59,494 Additions Transfer to project development costs Disposals 31 December 2011 59,494 Accumulated depreciation 1 January 2010 Depreciation for the year Depreciation on disposals 31 December 2010 Depreciation for the year Depreciation on disposals 31 December 2011 -
Furniture and equipment Of ce for of ces buildings and and clubhouses clubhouses (4,771) (4,354) 10,218 172 249,213 168,726 31,991 (7,235) (1,964) 241,978 198,753 77,696 26,157 (1,740) 102,113 25,576 127,689
107,909 18,675 (3,864) 122,720 18,484 (1,819) 139,385
Allowance for impairment 1 January 2010 1,112 3,032 Increase during the year 5,396 3,704 Decrease during the year (1,112) (3,032) 31 December 2010 5,396 3,704 31 December 2011 5,396 3,704 Net book value 31 December 2010 54,098 143,396 46,006 31 December 2011 54,098 110,585 59,368 Depreciation for the years as included in administrative expenses 2010 2011
Motor Construction vehicles in progress (10,390) 33,668 3,687 8,216 (3,500) 33,668 8,403
Others (1,537) 31,392 58 31,450
Total (11,775) 546,180 40,265 (10,735) (1,964) 573,746
31,141 963 32,104 578 32,682
-
26,688 2,514 (1,537) 27,665 2,146 29,811
243,434 48,309 (7,141) 284,602 46,784 (1,819) 329,567
-
-
-
4,144 9,100 (4,144) 9,100 9,100
1,564 986
3,687 8,403
3,727 1,639
252,478 235,079 48,309 46,784
As at 31 December 2011, certain plant and equipment items had been fully depreciated but were still in use. The gross carrying amount (before deducting accumulated depreciation and allowance for impairment loss) of those assets amounted to approximately Baht 172.8 million (2010: Baht 145.5 million) (Separate nancial statements: Baht 152.2 million (2010: Baht 132.4 million)).
Property Perfect Public Company Limited
149
19. Leasehold rights Consolidated nancial statements Cost 1 January 2010 Additions 31 December 2010 Additions 31 December 2011 Accumulated amortisation 1 January 2010 Amortisation for the year 31 December 2010 Amortisation for the year 31 December 2011 Allowance for impairment 31 December 2010 31 December 2011 Net book value 31 December 2010 31 December 2011 Amortisation for the years 2010 (included in administrative expenses) 2011 (Baht 4.8 million included in project development costs, and the balance in administrative expenses)
(Unit: Thousand Baht) Separate nancial statements
346,767 64,033 410,800 1,790 412,590
92,000 92,000 92,000
39,118 8,527 47,645 8,031 55,676
39,118 3,211 42,329 3,211 45,540
189,844 189,844
-
173,311 167,070
49,671 46,460
8,527
3,211
8,031
3,211
The outstanding balance comprises leasehold rights to approximately 11 rai of land (Separate nancial statements: 4 rai), of which the Company subleased 4 rai for the remainder of the lease period. The sublessee made an advance payment and paid annual rental at rates stipulated in the contract. The Company recognises the advance lease payment over the period of the sublease contract. On 25 December 2007, the Company entered into an agreement to transfer leasehold rights to a subsidiary, with a contract value of Baht 200 million, of which Baht 80 million was paid on the contract date. The remaining balances are to be paid by the subsidiary on the date the transfer of leasehold rights is registered. On 27 June 2008, the Company entered into an amended agreement to transfer leasehold rights to the subsidiary, whereby it is to make the remaining payment to the Company on the date the transfer of leasehold rights is registered, and no later than 30 September 2009. On 26 June 2009, the agreement has been amended to extend the settlement date to be no later than 31 December 2009.
150
Annual Report 2011
On 22 January 2010, a meeting of the Company’s Board of Directors passed a resolution to cancel the above agreement, return Baht 80 million to a director of the subsidiary and approve the transfer of the leasehold rights to a subsidiary at a price of Baht 65 million. The Company transferred the leasehold rights to the subsidiary in April 2010. In addition, the term of the leasehold rights was extended to the year 2036, with an extension fee amounting to Baht 60 million and leasehold fees over the period amounting to Baht 249.6 million.
20. Trade and other payables
Trade account payable - related company Trade accounts payable - unrelated companies Account payable - Land Amounts due to related companies Creditors per rehabilitation plan Retention Accrued interest expenses Accrued expenses Total trade and other payables
Consolidated nancial statements 2011 2010 15,122 536,773 800,747 23,757 40,557 9,027 37,037 40,238 24,193 92,245 78,063 212,633 291,477 929,795 1,272,074
(Unit: Thousand Baht) Separate nancial statements 2011 2010 9,358 314,975 572,739 23,757 40,557 1,251 1,441 37,037 26,309 18,979 88,054 75,325 125,712 203,684 589,416 949,762
During the current year, the Company recorded the reversal of creditors per rehabilitation plan amounting to Baht 37.0 million since the opinion of the Company’s legal advisor was that these debts had expired. The Company presented this amount under the heading of “Revenue from reversal of creditors per rehabilitation plan” in the statement of comprehensive income. Baht 9.0 million (principal of Baht 6.8 million and accrued interest expenses of Baht 2.2 million of the balance of creditors per the rehabilitation plan belongs to We Retail Public Company Limited (“We Retail”), which is subject to interest at a rate of 7.50% per annum, is a liability that arose due to a re. We Retail will pay the creditors per the rehabilitation plan not more than Baht 5.0 million when the comptroller issues an order holding We Retail responsible for the re, and We Retail will claim this amount from its insurance company. The remaining amount of creditors per rehabilitation plan will be deemed forgiven on the date that the creditor is paid in full. We Retail has not yet received compensation from the insurance company since the comptroller is in the process of considering the case.
21. Note payable The promissory notes are subject to interest at a rate of 7.5% per annum and are to be repaid within February 2012. The promissory notes are secured by the mortgage of parts of the Company’s Project land and construction. The Company issued promissory notes totaling Baht 170 million in order to purchase investment in a subsidiary, as discussed in Note 13 to the nancial statements, with Baht 50 million to be paid within June 2010 (the Company made payment for this amount) and Baht 120 million to be paid within March 2011 (the Company made payment amounting to Baht 45 million during the year 2010 and Baht 75 million during the year 2011).
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22. Bills of exchange payable The meeting of the Company’s Board of Directors held on 12 November 2010 passed a resolution to stipulate that the revolving bills of exchange are to total not more than Baht 3,000 million at any time. The bills of exchange are subject to interest at a rate of 4.55 - 4.95% per annum and are to be repaid within January to June 2012.
23. Debentures
Secured debentures No. 2/2009#1 Secured debentures No. 2/2009#2 Secured debentures No. 1/2010 Unsecured debentures No. 1/2010 Secured debentures No. 2/2010 Secured debentures No. 3/2010 Unsecured debentures No. 4/2010 Total Less: Current portion Debentures-net of current portion
Consolidated nancial statements 2011 2010 300,000 800,000 800,000 1,487,912 1,478,215 500,000 1,000,000 1,000,000 1,000,000 1,000,000 1,500,000 1,500,000 5,787,912 6,578,215 (3,300,000) (800,000) 2,487,912 5,778,215
(Unit: Thousand Baht) Separate nancial statements 2011 2010 300,000 800,000 800,000 1,487,912 1,478,215 500,000 1,000,000 1,000,000 1,000,000 1,000,000 1,500,000 1,500,000 5,787,912 6,578,215 (3,300,000) (800,000) 2,487,912 5,778,215
Under the debenture agreement, there are normal covenants relating to various matters as required in the normal course of business. The Annual General Meeting of the Company’s shareholders held on 21 June 2006 and 30 April 2008 passed resolutions to approve the issue and offer of not more than Baht 3,200 million secured or unsecured debentures. The Company issued and offered the debentures under this solution as follows: - On 14 August 2009, the Company issued and offered 300,000 secured debentures No. 2/2009#1 with a par value of Baht 1,000 each, or a total value of Baht 300 million. The debentures mature on 14 February 2011, bear interest at a rate of 4.85% per annum and are secured by the mortgage of parts of the Company’s project land and construction. During the current year, the Company redeemed the debentures. - On 14 August 2009, the Company issued and offered 800,000 secured debentures No. 2/2009#2 with a par value of Baht 1,000 each, or a total value of Baht 800 million. The debentures mature on 14 August 2012, bear interest at a rate of 6% per annum and are secured by the mortgage of parts of the Company’s and subsidiary’s project land and construction. - On 26 February 2010, the Company and offered 1,500,000 secured debentures No. 1/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,500 million. The debentures mature on 26 February 2013, bear interest at a rate of 5.9% per annum and are secured by the letter of guarantee provided by a nancial institution of Baht 975 million. The Annual General Meeting of the Company’s shareholders held on 30 April 2010 passed the following resolutions:
152 a)
b)
Annual Report 2011
Approved the cancellation of the issue and offer of the remaining Baht 80 million debentures as previously approved by the 2008 Annual General Meeting of the Company’s shareholders held on 30 April 2008. Approve the issue and offer of not more than Baht 4,000 million secured or unsecured debentures and/ or the equivalent in another currency. During the year 2010, the Company issued and offer the debentures under the above resolution as follows: - On 26 August 2010, the Company issued and offered 500,000 unsecured debentures No. 1/2010 with a par value of Baht 1,000 each, or a total value of Baht 500 million. The debentures mature on 20 May 2011, bear interest at a rate of 4.65% per annum. During the current year, the Company redeemed the debentures. - On 9 September 2010, the Company issued and offered 1,000,000 secured debentures No. 2/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,000 million. The debentures mature on 9 March 2012, bear interest at a rate of 5.5% per annum and are secured by the mortgage of parts of the Company’s and subsidiary’s project land and construction. - On 18 November 2010, the Company issued and offered 1,000,000 secured debentures No. 3/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,000 million. The debentures mature on 18 November 2013, bear interest at a rate of 5.8% per annum and are secured by the mortgage of parts of the Company’s project land and construction. - On 18 November 2010, the Company issued and offered 1,500,000 unsecured debentures No. 4/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,500 million. The debentures mature on 18 November 2012, bear interest at a rate of 6.5% per annum. The Annual General Meeting of the Company’s shareholders held on 29 April 2011 passed a resolution to approve the issue and offer of not more than Baht 4,000 million secured or unsecured debentures and/or the equivalent in another currency, as detailed below. Term : Not over 5 years from the issue date Offering : To local investors by a way of public offering and/or private placement and/or to overseas investors and/or local institutional investors in one or several tranches Redemption : Debentureholders and the Company may or may not have early redemption rights, as stipulated in the prospectus for each tranche of debentures Interest rate : Depends on the state of the market when the debentures are issued and offered, or as stipulated in the prospectus for each tranche of debentures However, the Company’s Board of Directors or authorised persons have the authority to stipulate details regarding the debentures. The Company is currently applying to the regulator for authorisation to issue Baht 2,500 million of debentures.
24. Unsubordinated convertible debentures During the year 2010, the Company redeemed all of the unsubordinated convertible debentures and adjusted the unsubordinated convertible debentures - equity component account amounted to Baht 23,535,270, to share premium, which is recorded net of share discount in the shareholders’ equity in the statement of nancial position. The Annual General Meeting of the Company’s shareholders held on 29 April 2011 passed a resolution to approve the cancellation of the issue and offer of not more than USD 30 million of unsubordinated convertible debentures, or the equivalent of not more than Baht 1,000 million as previously approved by the Extraordinary General Meeting of the Company’s shareholders No.1/2008 held on 20 June 2008.
118.0
115.5
-
2) A facility of Baht 670.0 million
3) A facility of Baht 1,631.0 million
4) A facility of Baht 481.0 million
1) A facility of Baht 1,000.0 million
115.4 Interest at a rate tied to the minimum loan rate (MLR)
- Interest at a rate tied to the minimum loan rate (MLR)
252.4 Interest at a rate tied to the minimum loan rate (MLR)
Balance Interest rate 2011 2010 (Million Baht) 105.1 - Interest at a rate tied to the minimum loan rate (MLR) Repaying each time a condominium unit is redeemed from mortgage, at a rate of not less than 70% of the selling price , which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within June 2012. Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 60% of the selling price. which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within August 2012. Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 65% of the selling price. which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within September 2013 Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the bank. The Company made payments in full in 2011.
Repayment period
Long-term loans consist of loans granted by four nancial institutions under the following credit facilities.
The Company
25. Long-term loans
The guarantee of the mortgage of part of the Company’s project land and construction.
The mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
Security
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153
9) A facility of Baht 933.0 million
8) A facility of Baht 344.3 million
7) A facility of Baht 900.0 million
6) A facility of Baht 820.0 million
5) A facility of Baht 1,157.3 million
Balance Interest rate Repayment period 2011 2010 (Million Baht) 200.4 - Interest at a rate tied to Repaying each time a plot of land with house is the minimum loan rate redeemed from mortgage, at a rate of not less than (MLR) 65% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within June 2013. 187.9 278.1 Interest at a rate tied to Repaying each time a plot of land with house is the minimum loan rate redeemed from mortgage, at a rate of not less than (MLR) 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within December 2014. 210.2 170.0 Interest at a rate tied to Repaying each time a plot of land with house is the minimum loan rate redeemed from mortgage, at a rate of 70% of the (MLR) selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within October 2016. 83.1 - Interest at a rate tied to Repaying each time a plot of land with house is the minimum loan rate redeemed from mortgage, at a rate of not less than (MLR) 65% of the selling price. Any remaining balance is to be repaid within September 2013. 434.0 - Interest at a rate tied to Repaying each time a plot of land with house is the minimum loan rate redeemed from mortgage, at a rate of not less than (MLR) 65% of the selling price. Any remaining balance is to be repaid within October 2016. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
Security
154 Annual Report 2011
510.7
12) A facility of Baht 320.0 million
13) A facility of Baht 650.0 million
Total 2,399.9 Less: Current portion (223.1) Long-term loans - net of current portion 2,176.8
133.0
11) A facility of Baht 198.0 million
-
815.9 815.9
-
176.0
10) A facility of Baht 679.0 million
-
Balance 2011 2010 (Million Baht) 126.0 -
Repayment period
Interest at a rate tied to Repaying each time a condominium unit is redeemed the minimum loan rate from mortgage, at a rate of not less than 70% of the (MLR) selling price. Any remaining balance is to be repaid within May 2014. Interest at a rate tied to Repaying each time a condominium unit is redeemed the minimum loan rate from mortgage, at a rate of not less than 80% of the (MLR) selling price. Any remaining balance is to be repaid within June 2014. Interest at a rate tied to Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than the minimum loan rate 70% of the selling price, which is not to be less than (MLR) the amount informed to the bank. Any remaining balance is to be repaid within December 2014. Interest at a rate tied to Repaying each time a condominium unit is redeemed from mortgage, at a rate of not less than 70% of the the minimum loan rate selling price, which is not to be less than the amount (MLR) informed to the bank. Any remaining balance is to be repaid within October 2013
Interest rate
The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction.
Security
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293.3 Interest at a rate tied to the minimum loan rate (MLR)
62.8 Interest at a rate tied to the minimum loan rate (MLR)
- Interest at a rate tied to the minimum loan rate (MLR)
474.6 Interest at a rate tied to the minimum loan rate (MLR)
2) A facility of Baht 720.0 million 165.8
-
41.5
3) A facility of Baht 277.5 million
4) A facility of Baht 385.0 million
5) A facility of Baht 870.0 million 414.0
Balance Interest rate 2011 2010 (Million Baht) 1) A facility of Baht 560.0 million 91.3 237.8 Interest at a rate tied to the minimum loan rate (MLR)
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 75% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within April 2014. Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within September 2013. Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. The subsidiary made payments in full in 2011. Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within September 2016. Repaying each time a condominium unit is redeemed from mortgage, at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within June 2012.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
Security
Repayment period
Long-term loans consist of loans granted by four nancial institutions under the following credit facilities.
The subsidiaries
156 Annual Report 2011
- Interest at a rate tied to the minimum loan rate (MLR)
- Interest at a rate tied to the minimum loan rate (MLR) - Interest at a rate tied to the minimum loan rate (MLR) - Interest at a rate tied to the minimum loan rate (MLR)
9) A facility of Baht 515.4 million 89.8
10) A facility of Baht 198.6 million 157.1
12) A facility of Baht 370.3 million 57.4
51.4
150.0 Interest at a rate tied to the minimum loan rate (MLR)
8) A facility of Baht 775.1 million 178.3
11) A facility of Baht 211.3 million
82.2 Interest at a rate tied to the minimum loan rate (MLR)
7) A facility of Baht 480.6 million 82.2
Balance Interest rate 2011 2010 (Million Baht) 6) A facility of Baht 184.0 million 38.9 38.9 Interest at a rate tied to the minimum loan rate (MLR)
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
Repaying each time a condominium unit is redeemed from mortgage, at a rate of not less than 70% of the selling price , which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within June 2013. Repaying each time a condominium unit is redeemed from mortgage, at a rate of not less than 70% of the selling price , which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within February 2015. Repaying each time a condominium unit is redeemed from mortgage, at a rate of not less than 70% of the selling price , which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within July 2015. Repaying each time a condominium unit is redeemed from mortgage, at a rate of not less than 70% of the selling price , which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within October 2014. It is to be repaid monthly at Baht 2.3 million as from December 2012. Any remaining balance is to be repaid within December 2022 It is to be repaid monthly at Baht 2.5 million as from December 2012. Any remaining balance is to be repaid within December 2022 It is to be repaid monthly at Baht 4.5 million as from December 2012. Any remaining balance is to be repaid within December 2022
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction. The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction. The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
Security
Repayment period
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157
1,728.0 1,617.9 (414.0) -
1,314.0 1,617.9
Long-term loans - net of current portion
- Interest at a rate tied to the minimum loan rate (MLR)
16) A facility of Baht 228.5 million 28.0
Total Less: Current portion
220.0 Interest at a rate tied to the minimum loan rate (MLR)
15) A facility of Baht 632.1 million 242.1
Balance Interest rate 2011 2010 (Million Baht) 13) A facility of Baht 209.6 million 29.6 - Interest at a rate tied to the minimum loan rate (MLR) 14) A facility of Baht 260.0 million 60.6 58.3 Interest at a rate tied to the minimum loan rate (MLR) The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction. The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
It is to be repaid monthly at Baht 2.5 million as from December 2012. Any remaining balance is to be repaid within December 2022 Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within April 2013. Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within April 2014. Repaying each time a plot of land with house is redeemed from mortgage, at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within September 2015.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
Security
Repayment period
158 Annual Report 2011
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159
The outstanding long-term loans are as follows: Consolidated nancial statements Long-term loans Less: Current portion Long-term loans - net of current portion
2011 4,127,917 (637,121) 3,490,796
2010 2,433,789 2,433,789
(Unit: Thousand Baht) Separate nancial statements 2011 2,399,897 (223,140) 2,176,757
2010 815,862 815,862
The loan agreements contain normal covenants relating to various matters as required in the normal course of business. As at 31 December 2011, the long-term credit facilities of the Company and its subsidiary which have not been drawn down amounted to Baht 6,856.0 million.
26. Provision for long-term employee benefits Provision for long-term employee bene ts as at 31 December 2011, which is compensations on employees’ retirement, was as follows:
De ned bene t obligation at beginning of year Current service cost Interest cost De ned bene t obligation at end of year Unrecognised transitional provisions Provisions for long-term employee bene ts at end of year
Consolidated nancial statements 73,484 6,476 3,090 83,050 (58,787) 24,263
(Unit: Thousand Baht) Separate nancial statements 56,439 5,306 2,544 64,289 (45,151) 19,138
Long-term employee bene t expenses included in the pro t or loss for the year ended 31 December 2011 amounted to Baht 24.3 million (Separate nancial statements: Baht 19.1 million). Principal actuarial assumptions at the valuation date were as follows: Discount rate (% per annum) 4.8 Future salary increase rate (depending on age of employee)(% per annum) 5.0 - 7.0 Amounts of de ned bene t obligation for the current and previous three periods are as follows:
160
Year Year Year Year
Annual Report 2011
2011 2010 2009 2008
Consolidated nancial statements 83,050 73,484 59,703 48,995
(Unit: Thousand Baht) Separate nancial statements 64,289 56,439 49,092 40,286
27. Provisions Movements in provision account during the year ended 31 December 2011 are summarised below.
Balance as at 1 January 2011 Revise provision for loss arising from minimum revenue guarantee Adjust amounts to be paid Total Less: Paid for minimum revenue guarantee Balance as at 31 December 2011
(Unit: Thousand Baht) Consolidated and separate nancial statements 12,740 33,595 (868) 45,467 (34,560) 10,907
Minimum revenue guarantee for the Fund On 28 February 2008, the Company entered into an agreement to transfer the Company’s properties to Property Perfect Property Fund (“the Fund”), for a total consideration of Baht 510 million. Under the agreement, the Company agrees to guarantee minimum annual revenue for the Fund (rental and service revenues before deducting expenses) of Baht 55 million for a period of ve years, expiring on 31 December 2012. The guaranteed payment is due within 31 January and 31 July of each year in accordance with conditions as stipulated in the agreement. However, the amount of guaranteed revenue depends on the ratio of the value of the outstanding properties to the value of the properties in which the Fund initially invested, as determined by an appraisal company for the purpose of the initial investment. During the current year, the Company revised provision for loss from such guarantee by Baht 33.6 million (2010: Baht 35.6 million) and recorded it as a separate item under the heading of “Loss arising from minimum revenue guarantee” in the statement of comprehensive income.
28. Share capital/Share discount The Annual General Meeting of the Company’s shareholders held on 29 April 2011 passed the following signi cant resolutions: a) Approved the cancellation of Baht 962,434,824 ordinary shares (160,405,804 ordinary shares with a par value of Baht 6 each) as reserved for the conversion of the debentures to ordinary shares. b) Approved the cancellation of Baht 810,000,000 ordinary shares (135,000,000 ordinary shares with a par value of Baht 6 each) as reserved for the conversion of the debentures to ordinary shares, as previously approved by the Extraordinary General Meeting of the Company’s shareholders No.1/2005 held on 19 September 2005.
Property Perfect Public Company Limited
c)
d) e)
161
Approved the reduction of the registered share capital from Baht 6,552,000,000 (1,092,000,000 ordinary shares with a par value of Baht 6 each) to Baht 4,779,565,176 (796,594,196 ordinary shares with a par value of Baht 6 each) by canceling unissued shares of the Company as described in a) and b). Approved the change of the par value of the Company’s ordinary shares from Baht 6 to Baht 1 per share. Approved increase in the registered share capital from Baht 4,779,565,176 (4,779,565,176 ordinary shares with a par value of Baht 1 each) to Baht 5,961,161,256 (5,961,161,256 ordinary shares with a par value of Baht 1 each) by issuing 787,730,720 ordinary shares with a par value of Baht 1 each to offer to the Company’s existing shareholders and issuing 393,865,360 ordinary shares with a par value of Baht 1 each to be reserved for the exercise of the warrants as described in Note 29 to the nancial statements.
The Company registered the reduction of the registered share capital, change of the par value of the Company’s ordinary shares and increase in the registered share capital with the Ministry of Commerce on 4 May 2011, 6 May 2011 and 9 May 2011, As at 31 December 2011, the Company’s issued and paid up share capital has increased to Baht 4,726,456,320 (4,726,456,320 ordinary shares of Baht 1 each), with totaling Baht 39,600 (6,600 ordinary shares of Baht 6 each (for comparative purposes, this has been adjusted to 39,600 ordinary shares of Baht 1 each in accordance with the change in par value of the ordinary shares)) and Baht 72,000 (72,000 ordinary shares of Baht 1 each) being the result of the exercise of warrants in December 2010 and June 2011, respectively. The Company registered increase in its capital with the Ministry of Commerce on 13 January 2011 and 11 July 2011, respectively. The Company’s share discount is detailed below.
Balance as at 31 December 2010 Increase from conversion of warrants Balance as at 31 December 2011
(Unit: Thousand Baht) Consolidated and separate nancial statements (20,573) (112) (20,685)
29. Warrants Outstanding as at 31 December 2010 Exercised during the year Outstanding as at 31 December 2011
Units 8,863,476 (12,000) 8,851,476
Following the change in the par value of the Company’s ordinary shares, as discussed in Note 28 to the nancial statements, one warrant can be converted to six ordinary shares at an exercise price of Baht 0.00167 per share and have an exercise period of 10 years from the issue date, 7 November 2002, with stipulated exercise dates of the end of the second and the fourth quarter of each year. For comparative purposes, the change in the par value of the Company’s ordinary shares is adjusted as if the share spilt had occurred at the beginning of the earliest period reported.
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Annual Report 2011
In December 2010, the Company received advance subscription of Baht 0.00167 per share to 39,600 of the additional ordinary shares arising from the exercise of the warrants, a total of Baht 66. The Company registered the resulting increase of Baht 39,600 in its capital with the Ministry of Commerce on 13 January 2011. In June 2011, the Company received advance subscription of Baht 0.00167 per share to 72,000 of the additional ordinary shares arising from the exercise of the warrants, a total of Baht 120. The Company registered the resulting increase of Baht 72,000 in its capital with the Ministry of Commerce on 11 July 2011. In addition, the Annual General Meeting of the Company’s shareholders held on 29 April 2011 passed a resolution to approve the issue of the warrants to the Company’s existing shareholders in a ratio of 1 warrant for every 2 new ordinary shares to be offered to the Company’s existing shareholders as described in Note 28 e) to the nancial statements, without specifying the offer price. Details are as follows: No. of warrants granted (Units) Life of warrants Exercisable Exercise price per 1 ordinary share (Baht) Exercise ratio (warrant to ordinary share)
393,865,360 3 years from the issue date Last business day of each quarter from the issue date 1.00 1:1
Currently, the Company has not issued the warrants.
30. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5% of its net pro t after deducting accumulated de cit brought forward (if any), until the reserve reaches 10% of the registered capital. The statutory reserve is not available for dividend distribution.
31. Expenses by nature Signi cant expenses by nature are as follows:
Salaries, wages and other employee bene ts Depreciation and amortisation Rental expenses from operating lease agreements Speci c business tax and transfer fees Marketing expenses Project management expenses Loss arising from minimum revenue guarantee Real estate development during the year Changes in real estate projects Finance cost
Consolidated nancial statements 2011 2010 485,640 481,338 64,677 62,857 61,554 52,149 312,932 240,414 569,224 468,278 195,567 173,224 33,595 35,602 7,241,449 8,947,831 (2,404,760) (3,283,629) 729,439 600,211
(Unit: Thousand Baht) Separate nancial statements 2011 2010 365,667 392,203 49,995 51,520 39,796 35,646 215,633 204,713 369,682 359,045 151,711 143,976 33,595 35,602 3,991,022 6,110,746 (683,617) (1,161,094) 608,101 543,229
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32. Earnings per share Basic earnings per share is calculated by dividing pro t for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year, after adjusting the number of ordinary shares in issue during the year in proportion to the change in the number of shares as a result of the change in par value from Baht 6 each to Baht 1 each as discussed in Note 28 to the nancial statements. The number of ordinary shares is adjusted as if the share spilt had occurred at the beginning of the earliest period reported. Diluted earnings per share is calculated by dividing pro t for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued and adjusts the number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares in proportion to the change in the number of shares as a result of the change in par value from Baht 6 each to Baht 1 each as discussed in Note 28 to the nancial statements. The number of ordinary shares is adjusted as if the share spilt had occurred at the beginning of the earliest period reported. The following table sets forth the computation of basic and diluted earnings per share:
Consolidated nancial statements Weighted average number of Pro t for the year ordinary shares Earnings per share 2011 2010 2011 2010 2011 2010 Thousand Thousand Thousand Thousand Baht Baht shares shares Baht Baht Basic earnings per share Pro t attributable to equity holders of the Company Effect of dilutive potential ordinary shares Warrants 8,851,476 units (2010: 8,863,476 units) Diluted earnings per share Pro t of ordinary shareholders assuming the conversion of dilutive potential ordinary sharess
488,129
550,437
4,726,421
4,726,345
-
-
52,535
52,461
488,129
550,437
4,778,956
4,778,806
0.1033
0.1165
0.1021
0.1152
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Annual Report 2011
Separate nancial statements Weighted average number of ordinary shares Earnings per share Pro t for the year 2011 2010 2011 2010 2011 2010 Thousand Thousand Thousand Thousand Baht Baht shares shares Baht Baht Basic earnings per share Pro t attributable to equity holders of the Company Effect of dilutive potential ordinary shares Warrants 8,851,476 units (2010: 8,863,476 units) Diluted earnings per share Pro t of ordinary shareholders assuming the conversion of dilutive potential ordinary sharess
330,739
537,698
4,726,421
4,726,345
-
-
52,535
52,461
330,739
537,698
4,778,956
4,778,806
0.0700
0.1138
0.0692
0.1125
The par value of the Company’s ordinary shares has changed, as discussed in Note 28 to the nancial statements. Therefore, for comparative purposes, earnings per share of the prior year has been recalculated to re ect the impact of this change. In addition, the conversion to ordinary shares of the unsubordinated convertible debentures would increase earnings per share in the consolidated and separate nancial statements for the year ended 31 December 2010. Therefore the Company has not assumed conversion of unsubordinated convertible debentures in calculation of diluted earnings per share in the consolidated and separate nancial statements for the year ended 31 December 2010.
33. Financial information by segment The Company’s and its subsidiaries’ operations involve principally industry segments, property development and other related businesses (Revenues from other businesses are not material) and are carried on in the single geographic area of Thailand. As a result, all of the revenues, operating income and assets as re ected in these nancial statements pertain to the aforementioned single industry segment and geographic area.
34. Provident fund The Company, its subsidiaries and their employees have jointly established provident funds in accordance with the Provident Fund Act B.E. 2530. The Company, its subsidiaries and their employees contributed to the fund monthly at the rate of 3 - 10% of basic salary. The fund, which is managed by Kasikorn Asset Management will be paid to employees upon termination in accordance with the fund rules. During the current year, the Company and its subsidiaries contributed Baht 22.6 million (2010: Baht 17.7 million) (Separate nancial statements: Baht 18.2 million (2010: Baht 14.6 million)) to the fund.
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35. Dividends Final dividend for 2010 Final dividend for 2009
Approved by Total dividends Annual General Meeting of the shareholders on 29 April 2011 Baht 259.9 million Annual General Meeting of the shareholders on 30 April 2010
Baht 196.9 million
Dividend per share Baht 0.33 Baht 0.25
36. Commitments and contingent liabilities 36.1 Capital commitments
a) The Company and its subsidiaries had outstanding commitments of approximately Baht 1,418.7 million in respect of construction contracts of land and house projects and residential condominium units of which the Company and its subsidiaries had already entered into contracts with subcontractors. b) The Company and its subsidiaries had outstanding capital commitments of approximately Baht 2,323.0 million in respect of purchases of land. c) The subsidiary had outstanding capital commitments of approximately Baht 15.6 million in respect of land lease for real estate development. d) The subsidiary had outstanding commitments of approximately Baht 29.4 million in respect of a design contract for a shopping center and of ce project and consulting contract. 36.2 Operating lease commitments
The Company and its subsidiary have entered into several lease agreements in respect of the lease of land, vehicles, advertising board, of ce space and various services. The terms of the agreements are generally between 1 and 5 years. Operating lease agreements are non-cancellable. As at 31 December 2011, future minimum lease payments required under these non-cancellable operating lease contracts were as follows. Payable within: Less than 1 year 2 to 5 years
Million Baht 59.7 20.9
During the year ended 31 December 2011, the Company and its subsidiaries recognised rental expenses of Baht 258.1 million (Separate nancial statements: Baht 189.0 million). 36.3 Long-term service commitments
The Company has entered into clubhouse management agreements with its subsidiary. Under the conditions of these agreements, the Company is to pay monthly service fees as stipulated in the agreements. The fees for the year 2011 amounting to approximately Baht 13.8 million were recognised as expenses.
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Annual Report 2011
36.4 Guarantees
a) The Company has guaranteed bank credit facilities of its subsidiaries amounting to Baht 6,872.4 million. b) As at 31 December 2011, there were outstanding bank guarantees of approximately Baht 1,788.0 million issued by the banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of business. These included letters of guarantee amounting to Baht 813.0 million to guarantee the public utilities and Baht 975.0 million to guarantee the debentures. c) As at 31 December 2011, there was an outstanding letter of guarantee issued by a bank on behalf of the Company to guarantee minimum revenue of the Fund of Baht 55.0 million per year for a period of 5 years, ending on 31 December 2012.
37. Litigations Outstanding litigations as at 31 December 2011 are detailed below. a)
A subsidiary (Estate Perfect Company Limited) has been sued by a contractor for payment of outstanding construction fees amounting to approximately Baht 7.5 million. However, the subsidiary has countersued the contractor for Baht 8.4 million since the construction fees that the subsidiary paid were for more work than the contractor performed for the subsidiary. The court dismissed the lawsuit brought against the subsidiary but the plaintiff appealed this order. Currently, the lawsuit is being considered by the appeals court. However, the subsidiary believes that it will suffer no signi cant loss as a result of this litigation.
b)
A subsidiary (Estate Perfect Company Limited) has been sued by a customer seeking compensation of approximately Baht 7.7 million for infringement of the plaintiff’s rights. The court of rst instance dismissed the lawsuit brought against the subsidiary but the plaintiff appealed this order. Currently, the lawsuit is being considered by the appeals court. However, the subsidiary believes that it will suffer no signi cant loss as a result of this litigation. On 18 November 2010, the Central Bankruptcy Court ordered the termination of the rehabilitation plan of a subsidiary, We Retail Public Company Limited, since the subsidiary had completely complied with the rehabilitation plan. However, the subsidiary still has debts per rehabilitation plan amounting to Baht 9 million, which is a liability resulting from a re. The subsidiary will pay not more than Baht 5.0 million of this liability when the comptroller issues an order holding the subsidiary responsible for the re, and will claim this amount from its insurance company. Currently, the subsidiary has not received this amount from its insurance company since the comptroller is still considering the case.
c)
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38. Financial instruments 38.1 Financial risk management
The Company’s and its subsidiaries’ nancial instruments, as de ned under Thai Accounting Standard No.107 “Financial Instruments: Disclosure and Presentations”, principally consist of the following. Financial assets - Cash and cash equivalents - Trade accounts receivable - Account receivable - land - Retention per agreement - Advances to contractors - Restricted deposits - Loans to related companies - Other long-term investments - Advances for purchases of land
Financial liabilities - Trade accounts payable - Note payable - Bills of exchange payable - Creditors per rehabilitation plan - Amounts due to related companies - Deposits and cash received in advance - Debentures - Long-term loans - Deposits and cash received in advance for sublease agreement
The nancial risks associated with these nancial instruments and how they are managed is described below. Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, account receivable - land and loans. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material nancial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk involved the real estate business since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivable, account receivable - land and loans as stated in the statement of nancial position. Interest rate risk The Company and its subsidiaries are exposed to interest rate risk relating primarily to their cash at banks, loans, note payable, bills of exchange payable, creditors per rehabilitation plan, debentures and long-term loans. However, since most of the Company’s and its subsidiaries’ nancial assets and liabilities bear oating interest rates or xed interest rates which are close to the market rate, the interest rate risk is expected to be minimal. Signi cant nancial assets and liabilities as at 31 December 2011 classi ed by type of interest rates are summarised in the table below on the maturity date or, the repricing date if this occurs before the maturity date.
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Annual Report 2011
(Unit: Million Baht) Consolidated nancial statements
Financial assets Cash and cash equivalents Trade accounts receivable Account receivable-land Retention per agreement Advances to contractors Restricted deposits Other long-term investments Advances for purchases of land
Fixed interest rates Within 1-5 Over Floating 1 year years 5 years interest rate
Noninterest bearing
Total
Interest rate (% p.a.)
450.0 450.0
Financial liabilities Trade accounts payable Note payable 800.0 Bills of exchange payable 2,003.0 Creditors per rehabilitation plan 9.0 Accounts payable-land Deposit and cash received in advance Debentures 3,300.0 Long-term loans Deposits and cash received in advance for sublease agreement 6,112.0
-
-
682.2 35.0 717.2
2.6 23.1 46.4 100.0 63.9 51.6 736.6 1,024.2
1,134.8 23.1 46.4 100.0 63.9 35.0 51.6 736.6 2,191.4
0.25-3.00 0.25-0.75 -
-
-
-
551.9 23.8
551.9 800.0 2,003.0 9.0 23.8
7.50 4.55-4.95 7.50 -
2,487.9 -
-
4,127.9
183.6 -
183.6 5,787.9 4,127.9
4.65-6.50 MLR
2,487.9
-
4,127.9
48.5 48.5 807.8 13,535.6
-
Property Perfect Public Company Limited
169
(Unit: Million Baht)
Financial assets Cash and cash equivalents Trade accounts receivable Account receivable-land Retention per agreement Advances to contractors Restricted deposits Loans to related companies Other long-term investments dvances for purchases of land
Separate Fixed interest rates Within 1-5 Over 1 year years 5 years
nancial statements Floating interest rate
Noninterest bearing
Total
450.0 450.0
Financial liabilities Trade accounts payable Note payable 800.0 Bills of exchange payable 2,003.0 Accounts payable-Land Amounts due to related companies Deposits and cash received in advance Debentures 3,300.0 Long-term loans Deposits and cash received in advance for sublease agreement 6,103.0
Interest rate (% p.a.)
-
-
400.1 35.0 1,801.1 2,236.2
1.6 9.8 46.4 100.0 54.9 51.6 439.9 704.2
851.7 9.8 46.4 100.0 54.9 35.0 1,801.1 51.6 439.9 3,390.4
0.25-3.00 0.25-0.75 5.19-5.82 -
-
-
-
324.3 23.8 1.3
324.3 800.0 2,003.0 23.8 1.3
7.5 4.55-4.95 -
2,487.9 -
-
2,399.9
72.0 72.0 - 5,787.9 - 2,399.9
4.65-6.50 MLR
2,487.9
-
-
48.5 48.5 469.9 11,460.7
-
170
Annual Report 2011
38.2 Fair value of financial instruments
Since the majority of the Company’s and its subsidiaries’ nancial assets and liabilities are short-term or have interest rates close to the market rates, the fair values of these nancial assets and liabilities are not expected to differ materially from the amounts presented in the statement of nancial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the nancial instrument or by using and appropriate valuation technique, depending on the nature of the instrument.
39. Capital management The primary objective of the Company’s capital management is to ensure that it has appropriate capital structure in order to support its business and maximise shareholder value. As at 31 December 2011, the Group’s debt-to-equity ratio was 1.89:1 (2010: 1.75:1) and the Company’s was 1.72:1 (2010: 1.56:1).
40. Subsequent events On 27 February 2012, a meeting of the Company’s Board of Directors passed the following signi cant resolutions: a)
Approved proposing of the payment of a dividend of Baht 0.04 per share, totaling Baht 189.1 million (based on the number of ordinary shares in issue at present) in respect of the year 2011 income.
b)
Approved the issue and offer of secured debentures, in an amount not exceeding Baht 4,000 million, having maturity of not more than 5 years.
41. Reclassification To comply with the Noti cation of the Department of Business Development relating to the nancial statement presentation as described in Note 2 to the nancial statements, certain amounts in the nancial statements for the year ended 31 December 2010 have been reclassi ed to conform to the current year’s classi cation, without any effect to the previously reported pro t or shareholders’ equity.
42. Approval of financial statements These nancial statements were authorised for issue by the Company’s Board of Directors on 27 February 2012.
Property Perfect Public Company Limited
171
The Board of Directors’ responsibilities for financial reports Property Perfect Public Company Limited’s and subsidiaries’ nancial statements are prepared in compliance with accounting standard stipulated in the Accounting Professions Act B.E.2547, presented in accordance with the requirements in the Business Development Department’s announcement on 14 September 2001 regarding in the Accounting ACT.B.E.2543 , and adjusts accounting practices to be in line with the Federation of Accounting Professions Noti cation 9/2007, 38/2007 and 62/2007 concerning the accounting standard. The Board of Directors has appointed the Audit Committee comprising non-executive directors to take responsible for nancial reports to follow the account standard and related regulators, disclose adequate and on-time information, and have internal control system to supervise internal control activities and the Audit Committee’s Opinions in the Audit Committee’s reports shown in the annual report The Board of Directors takes responsible for Property Perfect’s and its subsidiaries’ nancial reports prepared to ensure that nancial position, revenue, expense and cash ow are presented accurately and reasonably. The Board of Directors prepares accurate and complete accounting records to maintain assets, and internal control system to prevent fraudulent irregularities activities. The Board of Directors has selected the appropriated and constantly practical accounting policy in preparing the nancial reports to re ect the company’s actual performance in compliance with the Generally Accepted Accounting principles and adequate information disclosure in notes to nancial statements. Auditor expresses opinions on Property Perfect’s and subsidiaries’ nancial statements in auditors’ report.
Dr.Tawatchai Nakhata Chairman
Chainid Ngow-sirimanee Chief Executive Of cer
172
Annual Report 2011
Audit Committee Report 2011 Dear valued shareholders Property Perfect Public Company Limited’s Audit Committee comprises three independent directors – having Mr.Krish Follett as Chairman, and Dr. Somsak Toruksa and Dr. Thamnoon Ananthothai as directors. Miss Duangporn Rermyindee, director of the internal audit of ce, was appointed the committee’s secretary. In 2011, the Audit Committee followed through the Audit Committee Charter, which was endorsed by the Board. It organized 9 meetings to review nancial information, connected transactions between the company and subsidiaries and the performance of the internal audit of ce. It had one meeting to discussions with the auditor for the exchange of views on the company’s internal control and accounting. The Audit Committee’s major activities can be summarized as below: 1. To review quarterly and yearly nancial statements, and yearly consolidated nancial statements for the year 2011 The Audit Committee reviewed the nancial statements, every time with the presence of executives for explanatory purposes. It also had a meeting with the auditor, for an updated opinion on the company’s internal control and accounting, to ensure that the nancial statements were prepared appropriately, and in compliance with the Generally Accepted Accounting Principles and other related regulations. The committee also has duty to assure accounting system’s accuracy and reliability and suf cient and on-time information disclosure in nancial statements to bene t investors and nancial statements users in making investment decision. All paper document involved in the reviews of nancial statements and the internal control was completely stored, for examination of all involved. 2. To review connected transactions Audit Committee reviewed connected transactions between the company and subsidiaries and associates to assure that the company operated in normal course of business and provided necessary nancial assistance to subsidiaries for project development and expansion as planned. 3. To review risk management Audit Committee made suggestions on the company’s risk management to ensure that the company ably puts risks at the acceptable level and achieve the business goals. The committee assigned the internal audit of ce to coordinate with the Risk Management Committee on risk assessment, to assimilate their data in internal audit planning. This is to ensure that the internal audit can support the company towards the prescribed goals, effectively and ef ciently. 4. To review good governance issues Audit Committee ensured that the company’s information disclosure is in line with the Securities and Exchange Act and other laws related to the company’s business operations, for the con dence among shareholders and investors. 5. To review evaluation of internal control system Audit Committee reviews in the way of COSO as to whether the company’s internal control system is appropriate, to achieves its objectives in using resources ef ciently and effectively, and has a preventive system to reduce mistakes, damages and deplete the company’s resources as well as whether the nancial statements is reliable. The committee also reviews the auditor’s comments on the internal control and reports the review to the Board of Directors.
Property Perfect Public Company Limited
173
6. To review internal audit Audit Committee approved the annual risk-based approach of the internal audit of ce; acknowledged the annual 2011internal audit assessment report; and ensured the ef cient and effective internal audit for acceptable risks and changing environment. Audit Committee ensured that the company improved its operations in line with suggestions on signi cant issues stated in the internal audit assessment report. Audit Committee also devised plans for the transformation from operational audit approach to risk-based audit approach, to come up with ef cient and effective advice for the management. It also evaluates the performance of the Internal Control Of ce director, to ensure his independence and compliance to the plan and professional requirements. 7. To review the company’s monitoring and operating performance evaluation system Audit Committee reviews the company’s performance to ensure that the company follows the targets and adjusts operation to be accordance with the changed situation. The committee supports the company to determine clearer performance evaluation and indicators and enhance the internal control become a part of normal practice of management .. 8. To conduct self-assessment Audit Committee carried out self-assessment in many aspects including the number of meetings, scope of power, internal control, nancial reporting, compliance to rules and regulations, coordination with the auditor, the supervision and improvement of internal control, in order to improve its operations and reporting to the Board. 9. To screen auditor Audit Committee selected the auditor upon on the auditor’s independence and de ned the appropriate fee. The decision was forwarded to the Board and later submitted to the shareholder meeting for approval. Ernst & Young Of ce Company Limited was appointed as the auditor for year 2011. 10. To advise and give recommendations to the executive committee Audit Committee examined and gave advice to the executive committee on nance, accounting and legal, to assure that the company achieves the designated business goals. It also advised the company to plot measures to cope with a reoccurring of a ood disaster. Audit Committee constantly reports resolutions of all meetings to the Board of Directors, independently practices assigned tasks on behalf of the Audit Committee with knowledge and competence, and gives suggestions straightly and appropriately for interests of the company, shareholders and other stakeholders.
(Mr. Krish Follett) Chairman of the Audit Committee 27 February 2012
174
Annual Report 2011
Auditor Fee Accuracy Sanctification Form The Fiscal year end on 31 December 2011 Item
Payer
Auditor
Fee
Audit Fee 1 Property Perfect Plc. 2 Estate Perfect Co., Ltd. 3 Perfect Sport Club Co., Ltd (Formerly: Perfect Satellite Services Co.,Ltd) 4 Bright Development Bangkok Co., Ltd. 5 Centrepoint Shopping Mall Co., Ltd. 6 Residence Number Nine Co., Ltd. 7 U & I Construction Bangkok Co., Ltd. 8 Perfecr Prefab Co., Ltd. 9 Uniloft Services (Thailand) Co., Ltd. Total fee
Miss. Siraporn Ouaanunkun Miss. Siraporn Ouaanunkun Miss. Siraporn Ouaanunkun
1,800,000 580,000 100,000
Miss. Miss. Miss. Miss. Miss. Miss.
320,000 100,000 200,000 230,000 80,000 50,000 3,460,000
Siraporn Siraporn Siraporn Siraporn Siraporn Siraporn
Ouaanunkun Ouaanunkun Ouaanunkun Ouaanunkun Ouaanunkun Ouaanunkun
The above information is / Accurate. I certify there is no other service I know of that the company and subsidiaries awarded to me, my auditing rm, and individuals or companies connected to me. Inaccurate. Note: ........................................................................................................................................................ ........................................................................................................................................................................ To improve the above information (if any), I af rm the accuracy of all information in this form that shows the audit fee and other service fee that the company and subsidiaries pay to me, my auditing rm, and individuals or companies connected to me
(Miss. Siraporn Ouaanunkun) Ernst & Young Co.,Ltd Auditor of Property Perfect Public Company Limited