Corporate Vision
Hemaraj is the “World Class Developer of Industrial Estates, Utilities, Power, and Property Customer Solutions”. - -
To Our Customers
• Providing total industrial estate solutions
allowing our customers to optimize their manufacturing, utility, and property resources. • Uncompromising in our international quality, industrial cluster, infrastructure development, and environmental commitment. • Aspiring for excellence from all of our employees in helping our customers to succeed, to grow, and to prosper.
To Society and Communities
• Contributing to economic growth through GDP multipliers,
employment, production, exports, skill development, education, and prosperity of communities.
For the Environment
• Being stewards of the environment and sustainable
communities with award winning environmental and Corporate Social Responsibility (CSR) recognition.
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To Employees
• Providing a nurturing workplace for professional development and well being.
Mission
To Develop World Class Industrial Estates, Utilities, Power and Property Customer Solutions.
Strategy
Hemaraj Land And Development Plc defines its business directions and strategies as: • Developing industrial estate, utility, power, and property solutions that have predictable growing revenue and superior profit opportunities in order to optimize shareholder value. • Leveraging complementary management expertise, customer relationship, infrastructure and environmental competence to expand opportunities in industrial estates, utilities, power, and property. • Utilizing sound company human and financial resources selectively for competing investment opportunities. • Contributing positively to neighbors, society and to our stakeholders with sustainable programs in education, community and the environment • Creating long-term shareholder value in a controlled way achieved through focused appreciate strategic, business, financial, environmental, community and governance disciplines.
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Financial Highlights Key Financial Figures Total Revenue Sales of land Sales of pre-fabricated factory Sales of condominium Sales of investment properties Services income Net Income Cash and cash equivalent Total Assets Total Debts/Loans Total Liabilities Total Shareholder’s Equity Earning Per Share (Baht) Par (Baht)
(Million Baht) 2011 2012 2013 2014 2015 4,150 1,784 180 463 - 1,722 597 3,718 20,010 8,462 10,881 9,129 0.06 0.40
6,399 3,972 37 220 - 2,170 2,371 1,694 26,357 10,741 15,277 11,080 0.24 0.40
8,770 5,771 68 352 - 2,579 5,086 4,780 33,600 13,899 18,716 14,884 0.45 0.40
6,333 3,446 39 195 - 2,653 3,265 2,087 33,902 15,531 18,605 15,297 0.31 0.40
7,471 4,622 23 34 2,792 3,336 2,936 32,491 14,907 18,197 14,295 0.34 0.40
Key Financial Ratios Current Ratio (Times) Net Debt to Equity (Times) Return on Assets Return on Equity Net Profit Margin Earnings per Share (Baht) Book Value per Share (Baht) No. of Shares Issued and Paid (Million Shares)
2011 2012 2013 2014 2015 4.95 0.78 3.1% 5.9% 13.8% 0.06 0.94 9,705
2.34 1.23 10.2% 23.7% 36.0% 0.24 1.14 9,705
3.51 0.94 17.0% 36.2% 37.6% 0.45 1.53 9,705
3.61 1.08 9.7% 19.9% 51.6% 0.31 1.58 9,705
4.01 1.07 10.0% 22.2% 44.6% 0.34 1.47 9,705
Total Revenue (Million Baht) 10,000
8,770
8,000 6,000 4,000 2,000 0
2,579
6,399 4,150
352 68
2,170 220 37
1,722 463 180 1,784
3,972
2011
2012
6,333 2,653 195 39
5,771
3,446
2013
Sales of land Sales of investment properties
2014
Sales of condominium Services income
7,471 2,792 34 23 4,622
2015
Sales of pre-fabricated factory
Total Net Income (Million Baht) 6,000
5,086 1,459
4,000
3,265
3,336
2,371 178
2,000
597 0 -2,000
3,950
3,268
3,698
2,193
840 -244
2011
-3
-323
2012
Normalized Net Income (NNI)
2013
-362
2014
F/X Unrealized Translation Gain and Loss
2015 HPF and reserve after rental reserve, income tax and minority interest
TOTAL ASSETS AND TOTAL LIABILITIES (Million Baht) 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
33,600
33,902
32,491
26,357 20,010 10,881
2011
18,716
15,277
2012
2013 Total Assets
18,605
2014
18,197
2015
Total Liabilities
NET DEBT TO EQUITY (Times) 1.50 1.25 1.00 0.75 0.50 0.25 0
1.23 0.78
2011
2012
0.94
1.08
1.07
2013
2014
2015
Hemaraj Land and Development Public Company
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Message from the Board of Directors
Dr. Somyos Anantaprayoon
Chairman of the Board of Directors 2 March 2016
Hemaraj Land And Development Public Company Limited announced its operating and financial results for the year 2015 as summarized below. For the year of 2015, Hemaraj Total Revenue was Baht 7,471.1 million compared with Baht 6,333.1 million for the same period of 2014, representing a 18% increase. Hemaraj reported Total Net Income of Baht 3,335.8 million, including of minority interest, an increase of 2% compared with the same period of the previous year. Earnings per-share was Baht 0.339 per share, representing an increase of 10%. For the year of 2015, Hemaraj recognized share of profit from power/ utility associates (excluding foreign exchange unrealized translation gain/loss) at Baht 1,594.2 million, or an increase of 1% from the same period of 2014. There was an unrealized foreign exchange translation loss from Power Investment (Gheco-One and GJP NLL) of Baht 362.5 million compared to an unrealized foreign
exchange translation loss of Baht 3 million in the same period of 2014. Therefore, Normalized Net Income (NNI) for year of 2015 was Baht 3,698.3 million, or a increase of 13%. At 31th December 2015, Hemaraj reported Total Assets of Baht 32,491 million, Total Liabilities of Baht 18,197 million and Total Shareholders’ Equity of Baht 14,295 million. The Net Debt to Equity ratio was 1.07 to 1 with Cash and cash equivalents of Baht 2,936 million.Industrial Estate land sales for 2015 were 1,043 rai (417 acres or 167 hectares), with 28 contracts, 22 new customers and 6 project expansions from existing customers. Sixty four percent of the contracts in 2015 were non automotive. Industrial Estate revenue was increased by 35%, as revenue is based on industrial land transfers. Rental Property revenue increased 4% from the same period of 2014 and revenue from industrial estate utilities (non power) also increased by 3% from the same period of 2014. The domestic OEM automotive sales were down 9% while automotive OEM production volume increased 2% and automotive exports increased 7% in 2015. Automotive export value increased 8% compared with the previous year auto value. Automotive in total was 15.13% of total Thailand exports. Industrial estate utilities increased to Baht 1,760.9 million, or an increase of 3%. Total Utilities which includes industrial estate utilities, dividend from power utilities associates, and other utilities and services fees increased to Baht 1,927.3 million, an increase of 4%. For 2015, Ready Built Factories were flat totaling 299,586 square meters under rental inclusive of the Hemaraj Property Fund. Hemaraj Logistics Parks for Rent
The combined leadership of WHA and Hemaraj will provide enhanced opportunities in providing complete industrial estate, utility, power, and logistics property solutions for our customers and in ensuring our joint success going forward. increased net 17,647 square meters or 21% from 2014 cumulative balance. In Power, Hemaraj received share of profit from power/utility associates (excluding foreign exchange unrealized translation gain/loss) at Baht 1,594.2 million, or a increase of 1% from the same period of 2014. Hemaraj also signed shareholder agreements with B.Grimm and Gulf Energy Development (GED) in 2015 to develop another seven 126 MW SPP power projects expecting COD starting from late 2016. The investment will increase Hemaraj’s equitable operating capacity from 318 MW to 538 MW by 2019. The combined leadership of WHA and Hemaraj will provide enhanced opportunities in providing complete industrial estate, utility, power, and logistics property solutions for our customers and in ensuring our joint success going forward. In summary, Hemaraj Land And Development Public Company Limited finished the year of 2015 with strong earnings amid Thailand’s and global economic concerns. Hemaraj received the ‘Very Good’ corporate governance recognition level in the Corporate Governance Report of Thai listed Companies in 2015 (CGR) from Thai Institute of Directors. Hemaraj received the “Excellent” and “Very Good” corporate governance recognition level for the last 7 years from 2009-2015. Hemaraj has broad strategic revenue in core business areas: - industrial estates, utilities, power, and property. Our 2015 operating and financial results, demonstrate the profitability from these recurring investments. Our strategy remains to provide superior long term returns to shareholders. As the second tender offer by WHA has been completed with 98.54% shareholding,
Mr. David R. Nardone
President & Chief Executive Officer 2 March 2016
we will be concentrating on the combined listed public company results going forward. On behalf of the Management and the Board of Directors of Hemaraj Land And Development Public Company Limited, we would like to express our appreciation to our stakeholders for entrusting us with this responsibility. Sincerely,
Hemaraj Land and Development Public Company
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Information of Board of Directors and Management
Dr. Somyos Anantaprayoon Age : 56 Years Chairman of the Board of Directors/Director 17 Mar 2015 Chairman of the Executive Committee 17 March 2015 Chairman of the Nomination & Remuneration Committee 18 March 2015 Chairman of the Risk Management Committee 18 March 2015
Education / IOD Trainning : Master of Business Administration for executives, Faculty of Commerce and Accountancy, Thammasat University Specialist doctor for Obstetrics and Gynecology, Rajavithi Hospital Doctor of Medicine, Mahidol University DAP in 2012, Thai Institute of Directors Association (IOD)
Subsidiary Companies Chairman & Director in 17 subsidiary companies Director in 6 subsidary of the holding company Associate Companies Director in 10 associates companies Director in 6 associates of the holding company
Present Positions :
Previous Positions :
Public Companies Chairman of the Board of Directors WHA Corporation PCL. (Holding Company) Chairman of the Executive Committee WHA Corporation PCL. (Holding Company)
The Honorary PH.D.Degree in Logistics and Supply Chain Management, Christian University of Thailand Master of Business Administration, Bangkok University Bachelor of Public Health, Mahidol University Present Positions :
Vice Chairman of the Board of Directors/Director 17 Mar 2015 Vice Chairman of the Executive Committee 17 March 2015 Member of Nomination & Remuneration Committee 18 March 2015 Member of Risk Management Committee 1 8 March 2015
Northeastern University, Boston, USA DCP 57/2005 , Thai Institute of Directors Association (IOD)
Present Positions :
Mr. David Richard Nardone Director 27 April 1994 Executive Director President and Chief Executive Officer 7 May 1998 Member of Risk Management Committee 28 February 2013
Associate Companies Director in 4 associate company Director in 4 associate of the holding companies Previous Positions :
Vice Chairman & Director in 15 subsidiary and associate companies Vice Chairman & Director in 20 holding company, subsidiary, and the company that related to the holding company
Public Companies Vice Chairman of the Board of Directors WHA Corporation PCL. (Holding Company) % Hemaraj Stock Held as of 31/12/2015 : Vice Chairman of the Executive Committee 0.00% WHA Corporation PCL. (Holding Company) Holding Company and Subsidiary Companies Chairman & Director in 14 subsidiary companies Director in 16 subsidary of the holding company Education / IOD Trainning : Master of Business Administration,
Age : 60 Years
% Hemaraj Stock Held as of 31/12/2015 :
0.00% Education / IOD Trainning :
Ms. Jareeporn Jarukornsakul Age : 49 Years
Chairman & Director in 22 holding company, subsidiary, and the company that related to the holding company Chairman & Director in 23 subsidiary and associates companies
Public Companies None Subsidiary Companies Director in 14 subsidiary companies of non-listed SET companies Associate Companies Chairman / Vice Chairman and Director in 9 associate companies Other companies None % Hemaraj Stock Held as of 31/12/2015 :
0.00%
Education / IOD Trainning :
Bachelor of Engineering in Sanitary in Engineering, Chulalongkorn University DAP 2/2003 and DCP 38/2003, Thai Institute of Directors Association (IOD), IOD Luncheon briefing 1/2013 : Thailand Economic Outlook 2013 Present Positions :
Mr. Vivat Jiratikarnsakul Age : 59 Years Director 27 April 1994 Executive Director 17 March 2015 Executive Vice President 17 March 2015 Chief Opration Officer 18 March 2015 Member of Risk Management Committee 18 Marach 2015
Public Companies None Subsidiary Companies Director in 12 subsidiary companies of non-listed SET companies Associate Companies Director in 2 associate companies Other Companies None % Hemaraj Stock Held as of 31/12/2015 :
0.04%
Education / IOD Trainning :
Mr. Krailuck Asawachatroj Age : 43 Years Director 29 April 2015 Executive Director 17 March 2015 Executive Vice President 17 March 2015 Chief Financial Officer 29 April 2015 Member of Nomination & Remuneration Committee 18 March 2015 Member of Risk Management Committee 18 March 2015
Executive Vice President / Chief Financial Officer Thoresen Thai Agencies PCL. Executive Vice President / Chief Financial Officer The Erawan Group PCL. Senior Vice President, Corporate Advisory The Siam Commercial Bank PCL.
Present Positions :
% Hemaraj Stock Held as of 31/12/2015 :
Education / IOD Trainning :
Subsidiary Companies Independent Director / Member of the Audit Committee Hemaraj Clean Water Co., Ltd. Other Companies Independent Director / Member of the Audit Committee / Monotechnology Co., Ltd. Director / Boon-Korn Co., Ltd. Director - Tax Accounting Federation of Accounting Professions, under The Royal Patronage of His Majesty the King Director - Tax Department Board of Trade of Thailand
Public Companies None Subsidiary Companies Director in 14 subsidiary companies Associate Companies Director in 4 associate companies
Master of Commerce and Accoutancy in Accounting, Chulalongkorn University ACP 2/2004, DAP 2/2003, DCP 38/2003, MFM 1/2009, MFR 5/2007, MIA 1/2007, MIR 2/2008, QFR 1/2006, RCC 7/2008, DCP Re 2/2009, Thai Institute of Directors Association (IOD), CPA Certificate, Thailand CIA Certificate, The Institute of Internal Auditors of USA CPIA, QIA Certificates, The Institute of Internal Auditors of Thailand Chartered Director Mrs. Punnee Worawuthichongsathit Age : 64 Years Independent Director 2 November 2000 Member of Audit Committee 3 November 2000
Previous Positions :
Master of Arts in Financial Engineering, New York University, USA Master of Business Administration in Finance, Claremont Graduate University, USA Bachelor of Engineering in Industrial Engineering, Thammasat University DCP 175/2014, Thai Institute of Directors Association (IOD)
Present Positions :
Public Companies Independent Director / Member of the Audit Committee The Brooker Group PCL. Independent Director / Member of the Audit Committee / Thai Wacoal Public Co., Ltd.
0.00%
Previous Positions :
Independent Director / Member of the Audit Committee GM Multimedia Public Co.,Ltd
% Hemaraj Stock Held as of 31/12/2015 :
0.00%
Hemaraj Land and Development Public Company
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Education / IOD Trainning :
Doctor of Philosophy, Khon Kaen University Master of Business Administration, Chulalongkorn University Bachelor of Business Administration, Chiang Mai University DCP 1/2003, DCP 55/2005, RCC 9/2009, Thai Institute of Directors Association (IOD), IOD Luncheon briefing 1/2013 : Thailand Economic Outlook 2013 Present Positions :
Mrs. Kritsana Sukboonyasatit Age : 45 Years
Subsidiary Companies None Other Companies Managing Director Business Excellence Consulting Co., Ltd. Vice Managing Director Carpet Maker Co., Ltd. Thailand Quality Award Assessor Thailand Quality Award % Hemaraj Stock Held as of 31/12/2015 :
0.00%
Public Companies Independent Director / Member of the Audit Committee WHA Corporation PCL.
Independent Director 18 March 2015 Member of Nomination & Remuneration Committee 18 March 2015
Education / IOD Trainning :
Master of Business Administration in Finance, Michigan State University, USA (Royal Thai Government Scholarship) ACP 13/2006, DCP 62/2005, MFM 1/2009, MFR 9/2009, MIA 5/2009, MIR 6/2009, RCP 17/2007, DCP Re 2/2009, Thai Institute of Directors Association (IOD) IOD Luncheon briefing 1/2013 : Thailand Economic Outlook 2013 Present Positions :
Mr. Somphong Wanapha
Age : 72 Years
Independent Director 29 April 2008 Chairman of the Corporate Governance Committee 27 February 2007
Mr. Jakrit Chaisanit Age : 43 Years Director 29 April 2015 Executive Director 17 March 2015 Member of Risk Management Committee 18 March 2015
Public Companies Chairman of the Audit committee Prasit Patana PCL. Chairman of the Audit committee Thaisecom Pitakkij Co., Ltd. Other Companies Chairman / Erawan Textile Co., Ltd.
Chairman of the Audit committee SECOM Co.,Ltd Previous Position :
Chairman of the Audit committee Government Savings Bank Chairman / Executive Board on M.B.A. Program, Thammasat University Chairman / Public Warehouse Organization, Ministry of Commerce Director / State Enterprise Performance agreement Evaluation Committee, Ministry of Finance Director / Sahapatana Interholding PCL. Secretary General Thailand Board of Investment % Hemaraj Stock Held as of 31/12/2015 :
0.00%
Education / IOD Trainning : Master of Engineering, University of Maryland Bachelor of Engineering, Chulalongkorn University DAP in 2012, Thai Institute of Directors Association (IOD)
Holding Company and Subsidiary Companies Director WHA Corporation (International) Co., Ltd. Other companies Managing Director / A&J Builder Co., Ltd.
Present Positions :
0.00%
Public Companies Chief Operation Officer WHA Corporation PCL. Subsidiary Companies Director / SME Factory Co., Ltd. Director / H-Construction Management and Engineering Co., Ltd
% Hemaraj Stock Held as of 31/12/2015 :
Education / IOD Trainning : Master of Law, Cornell University Bachelor of Law, Thammasat University DAP in 2012, Thai Institute of Directors Association (IOD)
Holding Company and Subsidiary Companies Director / WHA Corporation (International) Co., Ltd. Other companies Director / Nakit Property Co., Ltd.
Present Positions :
% Hemaraj Stock Held as of 31/12/2015:
Education / IOD Trainning :
Present Positions :
Public Companies Director / WHA Corporation PCL. Subsidiary Companies Director / SME Factory Co., Ltd. Director / Hemaraj Energy 2 Co., Ltd. Director / Hemaraj Energy 3 Co., Ltd.
0.00%
Mr. Narong Kritchanchai
Age : 40 Years
Director 29 April 2015 Executive Directo 17 March 2015 Member of Corporate Governance Committee 18 March 2015
Mr. Weidt Nuchjalearn Age : 63 Years
Master of Commerce and Accountancy, Thammasat University Bachelor of Science in Agricultural Economics, Kasetsart University DAP (Class SEC/2015), RCP (Class31), Thai Institute of Directors Association (IOD) Leadership Program (Class 18), Capital Market Academy (CMA) Top Executive Program in Commerce and Trade (Class 3/2010), Commerce Academy Financial Executive Development Program (FINEX) (Class 14/2) ,The Thai Institute of Banking and Finance Association
Public Companies Director / Dhipaya PLC Chairman / Krungthai-AXA-Insurance Life PLC Director / Srisawad Power PCL Subsidiary Companies Director / Hemaraj Clean Water Co., Ltd. Other Compaies Director / The ZooLogical Park Organization Director / Forest Industrial Organization Chairman of Audit Committee Thaifoods Co., Ltd. Chairman / KTB Leasing Co., Ltd. % Hemaraj Stock Held as of 31/12/2015 :
0.00%
Independent Director / Chairman of Audit Committee 20 January 2016
Education / IOD Trainning :
Master of Laws (LLM) Columbia University, New York, USA Barrister-at-Law, the Thai Bar Institute Bachelor of Laws (1st class Honour), Thammasat University Present Positions :
Mr. Ekajai Tivutanond Age : 64 Years Independent / Member of Audit Committee 14 August 2015
Public Companies None Subsidiary Companies Director / Hemaraj Clean Water Co., Ltd. Other Companies Director / Sathorn Assets Management Co., Ltd./ Non Performing Loans Management % Hemaraj Stock Held as of 31/12/2015 :
0.00%
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1. Mr. David Richard Nardone Age 60 Years
Education Master of Business Administration, Northeastern University, Boston, USA Position at Hemaraj Director / Executive Director / President / Chief Executive Officer Year Joined Hemaraj 1993 Hemaraj Stock Held as of 31/12/2015 0.00% 2. Mr. Vivat Jiratikarnsakul Age 59 Years Education Bachelor of Engineering in Sanitary in Engineering, Thammasat University Position at Hemaraj Director / Executive Director / Executive Vice President / Chief Operation Officer Year Joined Hemaraj 1993 Hemaraj Stock Held as of 31/12/2015 0.04% 3. Mr. Krailuck Asawachatroj Age 43 Years Education Master of Arts in Financial Engineering, New York University, USA and Master of Business Administration in Finance, Claremont Graduate University, USA Position at Hemaraj Director / Executive Director / Executive Vice President / Chief Financial Officer Year Joined Hemaraj 2015 Hemaraj Stock Held as of 31/12/2015 0.00% 4. Mr. Tanin Subboonrueng Age 52 Years Education Master of Business Administration, Assumption University Position at Hemaraj Vice President - Industrial Estate Operations Year Joined Hemaraj 1996 Hemaraj Stock Held as of 31/12/2015 0.00% 5. Mr. Preeprem Malasitt Age 63 Years Education Master of Business Administration, Northern Illinois University, USA Position at Hemaraj Director - IE Training Center and New Projects Year Joined Hemaraj 2007 Hemaraj Stock Held as of 31/12/2015 0.00% 6. Mr. Sirisak Kijraksa Age 55 Years Education Bachelor of Accounting, Bangkok University Position at Hemaraj Director - Accounting and Legal , Company Secretary Year Joined Hemaraj 1990 Hemaraj Stock Held as of 31/12/2015 0.00% 7. Ms. Rujira Panichagit Age 45 Years Education Master of Business Administration in Finance, Kasetsart University Position at Hemaraj Director - Special Project Year Joined Hemaraj 2015 Hemaraj Stock Held as of 31/12/2015 0.00% 8. Ms. Ladda Rojanavilaivudh Age 49 Years Education Master of Business Administration, Bangkok University and Master pf Arts in Japanese Literature, Nara University, Japan Position at Hemaraj Director - Industrial Estate Customer Development Year Joined Hemaraj 2001 Hemaraj Stock Held as of 31/12/2015 0.00% 9. Ms. Anchalee Parsertchand Age 46 Years Education Master of Business Administration, Assumption University and Master of Arts in Japanese, Keio University, Japan Position at Hemaraj Director - Industrial Factories and Logistics Parks Customer Development Year Joined Hemaraj 2001 Hemaraj Stock Held as of 31/12/2015 0.00%
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10. Ms. Somjai Wachiraha Age 55 Years Education Bachelor of Business Administration in General Affairs, Ramkhamhaeng University Position at Hemaraj Director - Finance Year Joined Hemaraj 1990 Hemaraj Stock Held as of 31/12/2015 0.00% 11. Ms. Siyaphas Chantachairoj Age 46 Years Education Master of Arts in Business & Managerial Economics, Chulalongkorn University Position at Hemaraj Director - Corporate Marketing & Property Customer Development Year Joined Hemaraj 1993 Hemaraj Stock Held as of 31/12/2015 0.00% 12. Mr. Apichat Trongsukson Age 50 Years Education Master of Business Administration, Nida University and Master of Science in Computer, Mahidol University Position at Hemaraj Assistant Director - Information System & Services Year Joined Hemaraj 1994 Hemaraj Stock Held as of 31/12/2015 0.00% 13. Mr. Paopitaya Smutrakalin Age 44 Years Education Master of Science in Finance, Drexel University, Philadelphia, USA Position at Hemaraj Director - Corporate Planning & Investor Relations Year Joined Hemaraj 1996 Hemaraj Stock Held as of 31/12/2015 0.00% 14. Mr. Suwat Thitathanakit Age 45 Years Education Master of Engineering, Kasetsat University Position at Hemaraj Director - Industrial Estate Development Year Joined Hemaraj 2003 Hemaraj Stock Held as of 31/12/2015 0.00% 15. Mr. Bordin Harnvanich Age 44 Years Education Master of Business Administration, Chulalongkorn University Position at Hemaraj Director - Industrial Factories and Logistics Parks Development Year Joined Hemaraj 2003 Hemaraj Stock Held as of 31/12/2015 0.00% 16. Mr. Rakphol Kangnoy Age 40 Years Education Bachelor of Science in Environmental Engineering, Burapha University Position at Hemaraj Director - Industrial Estate Operations Year Joined Hemaraj 2008 Hemaraj Stock Held as of 31/12/2015 0.00% 17. Mr. Dumrongchai Rojanajirakul Age 45 Years Education Master of Business Administration, National Institute of Development Administration Position at Hemaraj Director - Procurement Year Joined Hemaraj 2008 Hemaraj Stock Held as of 31/12/2015 0.00% 18. Mr. Niphone Harnpatanapanich Age 58 Years Education MBA, Chulalongkorn University Position at Hemaraj Director - Property Project Planning Year Joined Hemaraj 2003 Hemaraj Stock Held as of 31/12/2015 0.00%
The Company’s Business Profile
Hemaraj Land And Development Public Company Limited (“Hemaraj”), established on 15 August 1988, is Thailand’s leading developer of Industrial Estates, Utilities, Power, and Property Customer Solutions. The combined leadership of WHA and Hemaraj will provide enhanced opportunities in providing complete industrial estate, utility, power, and logistics property solutions for our customers Hemaraj has developed and managed 8 industrial estates and industrial land. Automotive Cluster in the Eastern Seaboard and Hemaraj Eastern Seaboard is the most significant automotive cluster in Thailand where Ford, Mazda, General Motors, Suzuki, Auto Alliance (a joint venture between Ford and Mazda), SAIC/CP-MG and over 233 automotive manufacturers from all over the world have selected Hemaraj’s Industrial Estates as their strategic locations for their investment in Thailand. Situated at the prime locations to the National Petrochemical Complex, Map Ta Phut Deep Sea Port in Rayong and Laem Chabang Deep Sea Port in Chonburi, Hemaraj’s Industrial Estates have become clusters for Petrochemical and other Industrial as well for over 25 years. Hemaraj is Thailand’s largest private provider of raw water, industrial water and waste water to industrial estate users, including the other services such as pipe rack rental
service to industrial estate users. Industrial customers mainly are petrochemical, steel, automotive and power. In power business, the company has invested in various types of projects including Independent Power Producer Project (IPP) and Small Power Producer Project (SPP) with strategic partnership with reputable international operators such as Glow Energy Plc., Gulf JP NLL Co.Ltd, Gulf Energy Development Co.,Ltd, and B.Grimm Power Co.,Ltd.etc. The combined leadership of WHA and Hemaraj has strengthen its rental properties business both of ready-built factories for rent and logistics parks for rent which represent a total area of over 850,000 square meters. Hemaraj also provided other services such as logistics system and supply chain management in all 8 industrial estates and industrial land. In addition, Hemaraj also focused on environmental management and corporate social responsibilities by setting up policies and plans to ensure high standard of environmental management, including setting up policies of corporate social responsibilities. The achievement can be seen from the setting up of E:mc^2 (Environmental Monitoring and Control Awards) and from ISO 14001;2004, ISO 9001:2008 and EIA Monitoring Hemaraj Land and Development Public Company
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Awards that Hemaraj received. In 2010, Hemaraj was chosen as the model for Eco Industrial Estate from IEAT. Hemaraj is aware of the importance of good corporate governance, thus, has adopted the Good Corporate Governance as practical guidelines and tries to continuously improve those perfect practices as reflected by achieving the 5 logos “Excellent” and 4 logos “Very Good” corporate governance recognition rating from Thai Institute of Directors (IOD) the last 7 years consecutively from 2009 to 2015.
Industrial Estates Hemaraj has developed and managed 6 Industrial Estates, 2 Industrial Lands with a combined land area of 45,198 rai (7,232 hectares). Hemaraj has 668 distinct customers from 1,003 contracts including 233 automotive Location
customers with 352 automotive contracts with the total investment estimate more than US$ 26 billion and over 120,000 employees. 1. Hemaraj Eastern Industrial Estate (Hemaraj EIE) 2. Eastern Seaboard Industrial Estate (ESIE) 3. Hemaraj Eastern Seaboard Industrial Estate (Hemaraj-ESIE) 4. Hemaraj Chonburi Industrial Estate (Hemaraj CIE) 5. Hemaraj Chonburi Industrial Estate 2 (Hemaraj CIE 2) 6. Hemaraj Eastern Seaboard Industrial Estate 2 (Hemaraj-ESIE 2) 7. Hemaraj Rayong Industrial Land (Hemaraj RIL) 8. Hemaraj Saraburi Industrial Land (Hemaraj SIL)
Total Area (Rai)
HEIE Map Ta Phut District, Rayong 3,733 ESIE Pluak Daeng District, Rayong 9,726 H-ESIE Pluak Daeng District, Rayong 8,112 HCIE Sriracha District, Chonburi 3,909 HCIE 2 Sriracha District, Chonburi 632 H-ESIE 2 Sriracha District, Chonburi 3,654 HRIL Ban Khai District, Rayong 3,438 HSIL Nong Khae District, Saraburi 3,619
Utilities Hemaraj is the largest private provider of raw water and industrial water to industrial users with the current capacity of 281,000 cubic meters per day and 150,000 cubic meters per day for waste water treatment. Hemaraj provides dependable utility solutions to industrial customers and manages the industrial estate property and private utilities to allow customers to optimize their efforts in manufacturing. In addition, all Hemaraj’s industrial estates are ISO 14001;2004, ISO9001:2008 certified and Hemaraj-CIE, ESIE has received EIA Monitoring Awards in 2011 while Hemaraj-SIL has received
Key Estate Specialization Chemical, Petrochemical, Steel, Cogeneration Power Auto Manufacturing, Auto Parts Auto Manufacturing, Auto Parts Electronics, Steel, Power Auto Manufacturing, Auto Parts Auto Manufacturing, Auto Parts Light Chemical, Consumer, Building Material Building Material, Electronics, Cogeneration Power
CSR-DIW since 2009 to 2014 and Hemaraj-RIL has received CSR-DIW in 2010, 2011, 2013, and 2014
beyond Hemaraj’s industrial estates and leverage technical resources. • Eastern Pipeline Services Company Limited: a 100% subsidiary company to provide piping distribution for Chemical, Steam and Industrial Gas for heavy industrial users with a total investment of Baht 334 million. • H-Construction Management and Engineering Company Limited: a 100% subsidiary company to provide design, construction supervision, project and construction management services.
Water : • Hemaraj Water Company Limited : a 100% indirect subsidiary company to develop and manage water resources and to provide treated water to industrial factories. • Hemaraj Clean Water Company Limited : a 100% subsidiary company to produce and distribute the industrial water to supply the industrial factories in the Industrial Estates.
Power :
Other Utilities and Services : Utilities and Industrial Services assist the customers in benefiting from the shared resources and utility expertise of Hemaraj and its global partners. These capabilities extend
Hemaraj invested in five operating power plants, representing a total production of 1,652 MW. In addition, the company continued to expand power business and signed shareholder agreements to develop another 7 SPP power projects in 2015, representing a total production of 882 MW and expected COD starting from 2016 onwards. • Hemaraj holds 35% equity in Gheco-One, a joint venture between Hemaraj and Glow group, operating a 660 MW Independent Power Producer (IPP) coal power plant in Maptaphut Industrial Estate. • Hemaraj holds 5% equity in Glow IPP, a joint venture between Hemaraj and Glow group , operating a 713 MW Independent Power Producer (IPP) gas power plant in Hemaraj Chonburi Industrial Estate. • Hemaraj holds 12.75% indirectly in Hydro Power Plant Project, a joint venture between Hemaraj and Glow Hemaraj Land and Development Public Company
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group, operating a 152 MW Independent Power Producer (IPP) hydro power plant in Laos People’s Democratic Republic. • Hemaraj Energy Company Limited (Hemaraj Energy), a subsidiary of Hemaraj Land And Development Public Company Limited, holds 25.01% in Gulf JP NLL Company Limited (GNLL), operating a 126 MW SPP gas power plant in Hemaraj Rayong Industrial Land • Hemaraj Energy Company Limited (“Hemaraj Energy), a subsidiary of Hemaraj Land And Development Public Company Limited, holds 25.01% in Gulf Solar Company Limited (“Gulf Solar”) with Gulf Energy Development Company Limited, operating a 598.25 Kilowat for 6 solar rooftop projects in the company’s industrial estate • Hemaraj Energy company Limited (“Hemaraj Energy”), a subsidiary company of Hemaraj, holds 25.01% in Bowin Clean Energy Company Limited (“Bowin”) with B.Grimm Power Company Limited, operating a 132 MW SPP cogeneration gas power plant in Hemaraj Chonburi Industrial Estate. • Hemaraj Energy company Limited (“Hemaraj Energy”), a subsidiary company of Hemaraj, holds 25.01% in the 6 Small Power Plant (SPP) Projects with Gulf MP Compnay Limited, operating an average 126 MW cogeneration gas power plant in the company’s industrial estates as GVTP, GTS1, GTS2, GTS3, GTS4 and GNLL2
Property
Ready Built Factories for Rent : Hemaraj designs and develops turnkey RBF factories, with clear span layout, no column in the middle, and expandable options sizing from 450 square meters to 10,000 square meters for rent located in both General Industrial Zone and Duty Free Zone in multiple industrial estates/zones of Hemaraj. Ready Built Factories provides customers flexibility on investment and financing as well as a growth path to larger buildings or developed land as their business expands. Hemaraj also manages the utility and fit-out requirements to fit customers’ needs. Hemaraj has built 345 units with over 692,878 square meters to date in its multiple industrial estate locations.
Logistcis Park for Rent : Hemaraj Logistics Park is comprising high quality logistics distribution warehouse buildings. With the growing demand for logistic services and storage which has become more specific and sophisticated, Hemaraj sees a great potential in the development of logistics parks to serve all
aspects of customers’ requirements. Located in strategically location, Hemaraj Logistics Park develops the top quality international standard ready-built logistics warehouses with various sizes from 1,500 to 12,000 square meters. Now are available in 4 selected locations with over 180,000 square meters being developed. Besides, the customers will experience Hemaraj’s world class utilities, facilities, and afterrent services. Selective Property : • On 29 April 2015, the company has disposed of certain assets of the company that have not been used in its core business (the “Non-Core Assets”) . The Non-Core Assets included 1) UM Tower having a net leasable area of approximately 29,000 square meters and land adjacent having area of 2.8 rai. 2) the 3-storey commercial buildings having a total usable area of approximately 1,100 square meters and 3) vacant land on Koh Lan Island Chonburi province having a total area of approximately 253 rai.
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Business Structure
Hemaraj Land and Development PCL. Utilities
Industrial Estates Water 60%
Subsidiaries
Eastern Seaboard Industrial Estate (Rayong)
99.99%
Hemaraj Eastern Seaboard Industrial Estate
99.99%
Eastern Industrial Estate
99.99%
Hemaraj Saraburi Industrial Land 99.99%
Hemaraj Rayong Industrial Land 29.99% 70%
99.99%
Associates
Rayong 2012 Hemaraj Eastern Seaboard Industrial Estate 4
Others
99.99%
H-Construction Management and Engineering
Hemaraj Clean Water 25% 99.99%
Hemaraj Water
Eastern Pipeline Service
99.99%
74.99%
Property
Power 99.99%
SME Factory
International 99.99%
Hemaraj Energy 3 The Park Residence
99.99%
Hemaraj Energy 2
99.99%
Eastern Seaboard Property and Marina Services
Hemaraj Energy
Glow Hemaraj Wind
Hemaraj REIT Management
51%
Gulf JP NLL
25.01%
Bowin Clean Energy
25.01%
Gulf TS1
25.01%
Gulf TS2
25.01%
Gulf TS3
25.01%
Gulf TS4
25.01%
Gulf VTP
25.01%
Gulf Solar
25.01%
35%
GHECO - One
51%
Houay Ho Thai
Hemaraj Industrial Property and Leasehold Fund
99.99%
99.99%
H-International (BVI) Hemaraj International Hemaraj International (SG)
100%
100%
100%
99.99%
23.12%
25%
Houay Ho Power (Lao P.D.R)
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Major/Significant Events in 2015
Hemaraj appointed Asia Plus to underwrite baht bonds
Generating Authority of Thailand (EGAT) and other customers in the industrial estates.
On 10 February 2015, Hemaraj has issued 10-year Bonds (Baht 1,500 million) at 5.0% interest rate and 7-year Bonds (Baht 1,000 million) at 4.7% interest rate with Asia Plus as the underwriter of Hemaraj debentures worth a total of Baht 2,500 million.
Hemarj joint investment in the small power plant projecst with Gulf Group
Hemaraj set up new subsidiary company On 27 February 2015, Hemaraj has set up H-International (SG) Pte. Ltd.a new subsidiary company in Singapore in order to support the possibility of the business opportunity for AEC.
Hemaraj joint investment in the small power plant project of Bowin Clean Energy Company Limited On 27 February 2015, Hemaraj Energy company Limited (“Hemaraj Energy”), a subsidiary company of Hemaraj, holds 25.01% in Small Power Plant (SPP) Project of Bowin Clean Energy Company Limited (“Bowin”) with B.Grimm Power Company Limited. The business operation of Bowin is cogeneration the power plant of an approximate 132 megawatt for supplying the power to the Electricity
On 24 March 2015, Hemaraj Energy company Limited (“Hemaraj Energy”), a subsidiary company of Hemaraj, holds 25.01% with entering into Shareholders Agreement and Share Sale and Purchase Agreement in the 6 Small Power Plant (SPP) Projects in the Company’s industrial estates as GVTP, GTS1, GTS2, GTS3, GTS4 and GNLL2.
Hemaraj set up new subsidiary company On 31 March 2015, Hemaraj has set up Hemaraj REIT Management Company Limited a new subsidiary company in order to operate the business of trust management.
Hemaraj changed in the shareholding structure On 20 April 2015, WHA Venture Holding Company Limited, a fully owned subsidiary of WHA Corporation Public Company Limited completed their voluntary tender offer for 92.88% of the total shares of Hemaraj Land and Development Public Company Limited.
Hemaraj disposed of non-core assets On 29 April 2015, Hemaraj has disposed of certain assets of the company that have not been used in its core business (the “Non-Core Assets”) . The Non-Core Assets included 1) UM Tower having a net leasable area of approximately 29,000 square meters and land adjacent having area of 2.8 rai. 2) the 3-storey commercial buildings having a total usable area of approximately 1,100 square meters and 3) vacant land on Koh Lan Island Chonburi province having a total area of approximately 253 rai.
Hemaraj considered the delisting of the Company from the Stock Exchange of Thailand On 28 July 2015, Hemaraj considered the delisting of the company from the Stock Exchange of Thailand, after having received the tender offer for the entire securities of the Company from WHA which currently holds 92.88% of the company shares and proposed to the Shareholders’ Meeting to consider such matters. The Extraordinary General Meeting of Hemaraj Shareholders to consider whether to approve this or not will be held on 30 September 2015.
Hemaraj set up new subsidiary company On 7 September 2015, Hemaraj has set up Hemaraj Energy 2 Company Limited a new subsidiary company in order to operate the business of holding company
Hemaraj set up new subsidiary company On 22 September 2015, Hemaraj has set up Hemaraj Energy 3 Company Limited a new subsidiary company in order to operate the business of holding company
TRIS Rating Downgraded Company Rating to “BBB+” and Revised Outlook to “Stable” On 18 September 2015, TRIS Rating lowered the company and debenture ratings of Hemaraj Land and Development PLC (HEMRAJ) to “BBB+” from “A”. The ratings
of HEMRAJ are revised down to reflect the creditworthiness of a group of WHA Corporation PLC (WHA), which held 92.88% interest in HEMRAJ as of 22 July 2015. HEMRAJ’s credit profile remains strong, however, according to TRIS Rating‘s Group Rating Methodology published in July 2015, HEMRAJ’s credit rating is capped by the credit profile of WHA Group.
Hemaraj approved the delisting of the Company’s securities from the Stock Exchange of Thailand On 30 September 2015, the Extraordinary General Meeting of Shareholders No.1/2015 of the company was approved the delisting of the Company’s securities from the Stock Exchange of Thailand and the Executive Committee of the Company or its delegated persons to be authorized to consider and determine the details and/or conditions with regard to the delisting of the Company’s shares from SET and execute any relevant documents and agreements to undertake any act that is necessary and appropriate was approved. The votes of approval was not less than three-forth of the total issued share of the company and there was no votes of disapproval more than 10 percent of the total issued share of the Company.
Hemaraj received “Very Good” from Thai Institute of Directors and “Excellent” from Thai Investors Association Hemaraj receives the ‘Very Good’ corporate governance recognition level in the Corporate Governance Report of Thai listed Companies in 2015 (CGR) from Thai Institute of Directors. Hemaraj achieves the ‘Excellent’ recognition level in Assessment Program of Listed Companies by Thai Investors Association from AGM 2015.Hemaraj received the “Excellent” and “Very Good” corporate governance recognition level for the last 7 years from 20092015.
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Major Customer Development in 2015 Hemaraj Seals Major Land Deal with SAIC Motor-CP For MG Production Plant at Hemaraj ESIE 2 SAIC Motor-CP Co., Ltd., manufacturer of MG Cars in Thailand, has signed a land purchase agreement with Hemaraj Land And Development Plc. for a plot of land at Hemaraj Eastern Seaboard Industrial Estate 2. Once completed, the Chonburi plant will have a maximum production capacity of 200,000 units per annum, both for the domestic and the export markets, thus becoming the company’s production hub in Southeast Asia. This deal, covering 437.5 rai, also marks Hemaraj’s largest land sale for 2015
AW Thailand Co., Ltd. Acquires 133 Rai at Hemaraj ESIE 2 for New Manufacturing Facility AW (Thailand) Co., Ltd., a wholly-owned subsidiary of AISIN AW CO., LTD, world leader in automatic transmissions and car navigation systems, has purchased 133 rai of land at Hemaraj Eastern Seaboard Industrial Estate 2. With a capital of 4.65 Billion Baht and a production capacity of 120,000 units per year, the new manufacturing facility to be built on the site will start operating in July 2017. AW’s new subsidiary in Thailand will respond to the expanding demand of automatic transmission customers within ASEAN.
Ardex Inks Hemaraj SIL Land Purchase Deal Ardex, a leading manufacturer and supplier of special materials for the building trade, has just concluded a land purchase deal for a site at Hemaraj Saraburi Industrial Land (Hemraj SIL). With a registered capital of 100 Million Baht, Ardex (Thailand) Co., Ltd has initiated its plans to build a factory in Thailand to meet the increasing demand for its market-shaping innovations in the construction sector.
BorgWarner (Thailand) Purchases Land in ESIE BorgWarner (Thailand) Ltd., a business of BorgWarner Inc., a global leader in powertrain systems and solutions, recently finalized its purchase agreement with Hemaraj Land And Development Plc for a 22 rai plot at the Eastern Seaboard Industrial Estate (ESIE). A new high-tech facility will be built on the site to meet automakers’ increasing demand for more fuel-efficient engine technology.
Freyabadi (Thailand) Signs Leasing Deal for Factory at ESIE Freyabadi (Thailand) Co., Ltd., one of the largest chocolate producers in the world, recently signed a contract with Hemaraj Land And Development Plc. for the lease of a Ready Built Factory at the Eastern Seaboard Industrial Estate (Rayong). The new plant will help the company expand its production capacity to serve the increasing demand of its customers in the region’s food and beverage industry.
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MSSL WH System (Thailand) Finalizes Factory Leasing Deal in Hemaraj’s Industrial Estate MSSL WH System (Thailand) Co., Ltd., a subsidiary of the Samvardhana Motherson Group, acclaimed manufacturer of automotive components, has signed a lease for a ready-built factory at Hemaraj Eastern Seaboard Industrial Estate. The 5,640 square meter plant will enable the company to deliver a comprehensive range of high-quality products to its customers in the automotive sector within the region.
ZF Lemforder (Thailand) Finalizes Factory Extension in Hemaraj’s Industrial Estate German leading technology company ZF Lemforder (Thailand) Co., Ltd., recently signed a contract for the Buildto-Order expansion of its manufacturing plant in the Eastern Seaboard Industrial Estate (Rayong), developed by Hemaraj Land And Development Plc. ZF Lemforder (Thailand) entrusts Hemaraj to operate the factory design and expansion, adding another 4,446 sq. m. to the company’s facility, from the previous 6,912 sq. m.-factory. The new Build-to-Order extension will help boost its production capacity and accommodate increased orders from major automakers across the region. Tada Plastic Seals Ready-Built Factory Contract in Hemaraj’s Industrial Estate Tada (Thailand) Co., Ltd., a subsidiary of Japanbased Tada Plastics Mold Ltd., has signed a lease contract for a ready-built factory at the Eastern Seaboard Industrial Estate (Rayong) developed by Hemaraj Land And Development Plc. The 1,262 square meter plant will enable the company to design and produce automotive and electronic parts for domestic consumption and the regional market.
Bianchi Coating (Thailand) Leases Factory at ESIE Bianchi Coating (Thailand) Co., Ltd., a leading company offering painting and coating solutions for the automotive industry, recently signed a lease contract for a ready-built factory at the Eastern Seaboard Industrial Estate (Rayong), developed by Hemaraj Land And Development Plc. The new plant will use the latest technology to accelerate the company’s production and service capacity and satisfy the growing demands of its customers. Hi-Tech Precision Mold Closes RBF Lease Deal at ESIE Hi-Tech Precision Mold Co., Ltd., an industry expert in motor core die, fin die and other precision spare parts, recently finalized the lease contract for a ready-built factory in Eastern Seaboard Industrial Estate (Rayong), developed by Hemaraj Land And Development Plc. The new plant, with cutting-edge technology and state-of-the art production capacity, affirms the company’s commitment to delivering products with the highest quality and reliability standards. KIYA Corporation (Thailand) Closes Land Deal at Hemaraj CIE 2 KIYA Corporation (Thailand) Co., Ltd., a Japan-based manufacturer of automotive components, recently signed a purchasing contract to secure a plot of land in Hemaraj Chonburi Industrial Estate 2 (Hemaraj CIE 2), developed by Hemaraj Land And Development Plc. The land will serves as the new company’s factory to enhance its production capacity and quality to response the rising demands of its clients in various industrial sectors.
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Danieli Automation Finalizes Factory Lease at Hemaraj’s Industrial Estate Danieli Automation, a leading provider of electrical engineering and equipment, as well as knowhow in process control and turnkey electrical systems for metals industry, recently signed a lease contract for a Ready Built Factory (RBF) at the Eastern Seaboard Industrial Estate (Rayong), developed by Hemaraj Land And Development Plc. Once completed, the 3,008 square meters facility will enable the company to better support the needs of its clients in the region, while leveraging on the 40-year experience and technological capabilities of its headquarters in Buttrio, Italy. Alpha Auto Finalizes RBF Lease Deal at Eastern Seaboard Industrial Estate Alpha Auto Co., Ltd., a subsidiary of the ACCU Service Group, recently signed a lease contract with Hemaraj Land And Development Plc. for a ready-built factory (RBF) at the Eastern Seaboard Industrial Estate (Rayong). Covering a total area of 528 square meters, the new facility will enable Alpha Auto to provide integrated warehouse and logistic services to their customers in the automotive sector. Hainbuch (Thailand) Seals Ready-Built Factory Deal With Hemaraj Hainbuch (Thailand) Co., Ltd., a subsidiary of Germany-based HAINBUCH GmbH Spannende Technik, provider of advanced work holding technology solutions, has finalized the lease contract for an additional Ready-Build Factory adjacent to the existing building to increase their production area. The facility will enable the company to offer the most cost-efficient solutions and products to its expanding customer base in Thailand and the rest of the region.
Chassis Systems Siam Leases Hemaraj CIE Factory Chassis Systems Siam Ltd., a subsidiary of Brakes India Private Limited, leading manufacturer of automotive and non-automotive braking solutions systems and ferrous castings in India, recently signed a lease contract for a 900-square meter ready-built factory located at Hemaraj Chonburi Industrial Estate. This strategic move will help the company provide global quality braking solutions to its growing customer base in the region. Crown Equipment (Thailand) Seals RBF Lease Deal at Hemaraj’s Industrial Estate Crown Equipment (Thailand) Co., Ltd, a subsidiary of Ohio-based Crown Equipment Corporation, One of the world’s leading Material Handling Equipment Manufacturer’s, recently signed a lease agreement with Hemaraj Land and Development Plc. for a ready-built factory (RBF) at the Eastern Seaboard Industrial Estate (Rayong). The new facility will enable Crown Equipment (Thailand) to provide faster and improved delivery of goods and services in the Rayong area. Natural Stream Industrial (Thailand) Leases Factory at Hemaraj CIE Natural Stream Industrial (Thailand) Co., Ltd., natural vegetation mat producer and distributor, recently signed a lease contract for a Ready-Built Factory at Hemaraj Chonburi Industrial Estate (Hemaraj CIE). The company aims to address problems related to soil erosion along shorelines and riverbanks through stabilization techniques that are safe, sustainable and environment-friendly.
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2015 Excellence Recognition to Communities Education Hemaraj Art Camp Enhances Creativity of Thai Youth Hemaraj Land And Development Plc. recently organized an Art Camp for primary students from 14 schools in the provinces of Rayong and Chonburi, to develop their interest in the arts and to encourage self-expression. Throughout the workshop, the children were taught basic art principles and were encouraged to use their creativity and imagination while drawing inspiration from their culture and history. The Art Camp provided a platform for artistic expression and skills development for underprivileged children. Hemaraj Organizes Art Camp for Teachers in Eastern Seaboard Hemaraj Land And Development Plc. recently held an art camp for teachers from 16 schools located around Hemaraj’s industrial estates in Rayong and Chonburi provinces. During this workshop, 37 teachers attended art appreciation classes and learned techniques that they can apply to their classes. The aim of this workshop was to train teachers to foster children’s creativity and self-expression through art.
Hemaraj’s “Art Camp at Hometown” Enhances Children’s Imagination and Creativity in Eastern Seaboard Appreciating art as an integral part of children’s education, Hemaraj Land And Development Plc has collaborated with Inspiresight for the third consecutive year to hold the “Art Camp at Hometown” project. The program is a 3-day session for local junior to high school students in the Eastern Seaboard area. The objective is to teach children about art outside their classrooms and encourage them to make creative artworks. This year, 38 young students from 9 schools located around Hemaraj’s industrial estates participated in the program. Focusing on honing art and knowledge skills of young children from neighboring communities, as well as guiding them to embrace love and pride for their hometown, this year’s program took place at Wat Khao Bot and Hemaraj Eastern Seaboard Industrial Estate’s water pumping station in Rayong province. Local students attending the program had a fabulous time learning art techniques and creativity from Mr. Sawan Tangtrongsittikul, Director of Inspiresight. Ms Siyaphas Chantachairoj, Director of Corporate Marketing and Peoperty Customer Development, Hemaraj Land And Development Plc, also showed her support as the president of this year’s program.
Hemaraj Organizes Art Competition Under the Project of Art Camp at Hometown For Students in Eastern Seaboard Hemaraj Land And Development Plc., recently launched a fun and rewarding art contest under the project of Art Camp at Hometown among local students in schools around the Eastern Seaboard. Held twice a year, the friendly competition aims to develop the students’ artistic skills and unleash their creativity. A total of 40 students from 20 schools in Rayong and Chonburi provinces joined this year’s contest.
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Hemaraj and AMCHAM Sponsor English Camp Hemaraj Land And Development Plc., in cooperation with AMCHAM Thailand Charitable Foundation, recently held a 4-day English Camp for English teachers from 15 schools in Rayong and Chonburi provinces. The workshop focused on developing teachers’ communication skills through innovative methods, in order to improve the language proficiency of young school children in local communities.
Hemaraj 2015 Annual Contribution to 64 Schools in Eastern Seaboard Area Ms. Siyaphas Chantachairoj (7th left, front row), Director - Corporate Marketing & Property Customer Development, Hemaraj Land And Development Plc., together with a group of Hemaraj’s staff, customers, partners and associates of Hemaraj industrial estates, delivered school kits and sports equipment for over 17,200 students in 64 schools in Rayong and Chonburi provinces. The Annual School Contribution Program is part of Hemaraj’s social outreach activities to support neighboring communities. The operator’s Hemaraj Saraburi Scholarship Program “But Pan Pan’s” Annual 2558. The Community Relations Committee of Hemaraj Saraburi Industrial Land (Hemaraj SIL) partnered with customers for this year’s scholarship project. A total of 87 students from 16 schools in the area received their scholarship certificates from Mr. Narongsak Chatchaval, Site Superintendent of Hemaraj SIL, including executives of manufacturing and Community Relations Committee.
Hemaraj Investor Club Charity Golf Proceeds Go to Sugar Mill School Hemaraj Land And Development Plc. handed over a generous cheque to the Sugar Mill School in Rayong Province for the renovation of its canteen. The funds were collected during the Hemaraj Investor Club Charity Golf event held in November 2014, with Hemaraj matching each Baht raised in order to help the neighboring community.
Hemaraj Welcomes Vocati onal Education Commission to Hemaraj’s Industrial Estates The Vocational Education Commission (VEC), under the Ministry of Education, visited the Eastern Seaboard Industrial Estate (Rayong) and Hemaraj Eastern Seaboard Industrial Estate upon to observe the Dual Vocational Training (DVT) Program. The DVT program has a good cooperation from American Axle & Manufacturing (Thailand) Co., Ltd., Inergy Automotive Systems (Thailand) Ltd., and Bangkok Eastern Coil Center Co., Ltd. Hemaraj’s customers receive the technician students from Ban Khai Technical College. Under this program, deserving students are given on-the-job training opportunities to prepare them for professional life and to answer the growing demand for skilled labor from the private sector. Qualified students from Bankhai Technical College receive full tuition scholarships plus allowances during their 11-month training period..
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Community Hemaraj Brings Mobile Medical Unit to Affected Communities Following LLIT Warehouse Fire To complement the response of provincial authorities, following the fire that broke out at the nearby LLIT (Thailand) warehouse, Hemaraj Land And Development Plc. deployed a mobile medical unit to Khao Kansong municipal district and Chompol Chaopraya municipal district. The medical team provided residents with health check-ups and answered their questions regarding exposure to pollution. No cases of respiratory complications were reported, as examinations only showed symptoms of common ailments.
Hemaraj Provides Flu Shots for 400 Chonburi Residents Hemaraj Land And Development Plc., recently sent a mobile medical unit to provide free flu shots to over 400 residents of Chonburi’s Khaokansong district. Ms. Siyaphas Chantachairoj (2nd right) Director - Corporate Marketing & Property Customer Development, and Mr. Sunya Baopoonthong (far right), Corporate Affairs Manager, presided over this community health project, which is part of Hemaraj’s Corporate Social Responsibility (CSR) annual activities.
Hemaraj Provides Free Medical Set for Tasith Community Members Hemaraj Land And Development Plc., recently provided medicines for 300 community residents of Tasith sub-district in Rayong province. This activity is one of Hemaraj’s Corporate Social Responsibility (CSR) initiatives to take care of the health of the people living in nearby communities.
Hemaraj Provides Free Health Check-Ups for Residents in Rayong’s Chompholchaopraya Hemaraj Land And Development Plc. recently sent a mobile medical unit to provide free health check-ups to over 110 residents of Rayong’s Chompholchaopraya Sub-district Municipality. Ms. Siyaphas Chantachairoj, Director - Corporate Marketing & Property Customer Development, presided over this community health project to promote and improve the wellness of residents in communities around Hemaraj Industrial Estates, as part of Hemaraj’s Corporate Social Responsibility (CSR) annual activities.
28th Blood Donation at Hemaraj EIE The Eastern Safety and Environmental Club (ESEC) of Hemaraj Eastern Industrial Estate (Hemaraj EIE), together with the Rayong Provincial Red Cross Chapter, recently organized its 28th blood donation activity at the Hemaraj EIE compound. A total of 72,800 cc. of blood was collected from 165 donors, including Hemaraj employees, customers and residents of the neighboring community. The donated blood was promptly delivered to the Thai Red Cross Society, Rayong, to help people in need.
Hemaraj Holds 29th Blood Donation Campaign The Eastern Safety And Environmental Club (ESEC) of Hemaraj Eastern Industrial Estate (Map Ta Phut), together with the Rayong Provincial Red Cross Chapter, recently launched its 29th blood donation activity at the Hemaraj EIE office. The blood donation, from a total of 146 voluntary donors, including industrial estate employees, customers and residents of nearby communities, was delivered to Thai Red Cross Society to help hospitals and needy patients in Rayong.
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Hemaraj EIE Safety and Environmental Club Launches CSR Activities for Rayong Communities The Eastern Safety and Environmental Club (ESEC) of Hemaraj Eastern Industrial Estate (Map Ta Phut), manufacturers from different Hemaraj industrial estates and Hemaraj employees recently conducted CSR activities for local communities in Rayong. The team painted fences at Wat Maab Chalood School and repaired roads around Baan Nong Fab School, using funds, amounting to 480,000 Baht, raised during the annual ESEC golf charity event. Hemaraj : Caring for Its Communities Leaders, representatives and villagers from 15 communities around the Rayong, Map Tha Phut and Chonburi industrial estates were invited for informal talks. Hemaraj representatives explained to around 150 people from the communities of Aor Bor Tor PluakDaeng, Tasith, Nhongrai, Bowin, Map Chalood and Nong Fab what the company does in terms of land development and industrial estate management. They also explained how Hemaraj’s strict factory supervision ensures that all manufacturing activities are done in compliance with the rules and regulations set by the Industrial Estate Authority of Thailand. This reassured community members that their industrial neighbours would not do anything to jeopardise their safety and health. Hemaraj Renews Chonburi FC Sponsorship Hemaraj Land And Development Plc recently renewed its sponsorship of Chonburi FC for the 8th consecutive year, to promote sports among the youth and show its full support for the local community. Khun Preeprem Malasit Hemaraj’s Director - IE Training Center & New Projects, made the announcement at the Bang Sai Chonburi Stadium in the presence of Chonburi FC club officials, team players, and local media
Hemaraj EIE and Local Communities Carry on Bamboo Sticky Rice Ceremony at Luang Tia Shrine The Safety And Environmental Club (ESEC) of Hemaraj Eastern Industrial Estate (Map Ta Phut), in cooperation with residents of the Maab Chalood and Maab Chalood - Chak Klang communities, assembled at the Luang Tia Shrine to carry on the traditional Bamboo Sticky Rice Ceremony. Hemaraj executives, industrial estate manufacturers and employees also joined the occasion to make this local specialty that is typical of Rayong and the Eastern region. The activity underlines Hemaraj’s steadfast support for residents of neighboring communities. Hemaraj Donates to Nepal Earthquake Relief On behalf of Hemaraj Land And Development Plc., Mr. Rakphol Kangnoy, Director - Industrial Estate Operations, presents a donation of 100,000 Baht to Mr. Somsak Suwansudcharid , Governor of Rayong Province, for the victims of the devastating earthquake that hit Nepal last April 25, 2015.
Hemaraj Responds to Nepalese Earthquake Victims Hemaraj Land And Development Plc. presents a donation of 100,000 Baht for the victims of the earthquake in Nepal that caused thousands of casualties and left multitudes more injured or missing. Mr. Narongsak Chatchaval, Senior Site Superintendent of Hemaraj Saraburi Industrial Land handed over the funds to Saraburi Governor Wichien Putthiwinyu.
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Environmental Care Hemaraj Receives Eco Champion Award Eastern Seaboard Industrial Estate (Rayong) developed by Hemaraj Land And Development Plc. recently received the Eco Champion Award from the Industrial Estate Authority of Thailand (IEAT) to promote Hemaraj’s industrial estates as an “Eco Industrial Town”. This award was given to industrial estates that have shown their outstanding commitment to sustain the environment and to support local communities in their vicinity. Hemaraj SIL Receives Eco Industrial Town Award Hemaraj Saraburi Industrial Land (Hemaraj SIL) developed by Hemaraj Land And Development Plc., recently received the Eco Industrial Town 2015 Award from the Ministry of Industry’s Department of Industrial Works. This distinction was given in recognition of the industrial estate’s efforts to protect the environment and to enhance the eco networks within the vicinity. Hemaraj Joins 2015 ECO for Life project Hemaraj Land And Development Plc. joined team with Maxis International (Thailand) Co., Ltd., and Baan Khao Klong Song community to participate in the 2015 ECO for Life project held by Industrial Estate Authority of Thailand (IEAT). During the project, Hemaraj and the community have jointly created furniture and home appliances from low-quality tyres in order to reduce waste disposal and help local communities around the Eastern Seaboard Industrial Estate (Rayong) benefit from the recycled resources
Training In 2014, the company arranged internal training programs by selecting the programs that appropriate for each department. The programs include emergency and insurgency response program, fire fighting drills, services training, marketing and sales techniques, technical skills such as computer and English etc., work ethics, accounting practices
and new accounting standards, energy saving and several environmental programs. For external training, the programs mainly aim for supporting duties as well as developing experiences and skills to its employees. In 2014, the company provided the trainings both internally and externally for its employee totaling 8,273 hours, average 24.77 hours/person.
Chemical spill prevention training Hemaraj arranged training program about chemical spill prevention training to related officers on March 27, 2015 at Eastern Seaboard Industrial Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate, Hemaraj Chonburi Industrial Estate
Traffic accident prevention training Hemaraj arranged training program about traffic accident prevention training to related officers on May 28, 2015 at Eastern Seaboard Industrial Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate, Hemaraj Chonburi Industrial Estate
First Aid Training Hemaraj arranged training program about fire fighting drill training to related officers on July 28, 2015 at Hemaraj Saraburi Industrial Estate
Energy Conservation Awareness Hemaraj arranged training program about energy conservation awareness to related officers on August 27, 2015 at Eastern Seaboard Industrial Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate, Hemaraj Chonburi Industrial Estate
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Basic Fire Fighting Training Hemaraj arranged training program about basic fire fighting training to related officers on September 2, 2015 at Eastern Seaboard Industrial Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate, Hemaraj Chonburi Industrial Estate
Safeguarding the Environment From the start, Hemaraj has continuously focused on integrating environmental management together with the development of the industrial estates by applying the standard system of environmental management, or ISO 14001, in all organizational management aspects. The company has set up an environment management policy, implement and continuously improve it. By living up to its commitment to Corporate Social Responsibility (CSR), Hemaraj shows its dedication to society, concern for neighboring communities, and respect for the environment. Through development of its industrial estates, Hemaraj has studied, designed and developed the utility system with high engineering standard such as the industrial water production and distribution system, which is a power saving and environmental friendly system. For wastewater treatment system, Hemaraj has adopted HM King Bhumibol’s wetland project involving biological wastewater treatment at the Hemaraj Eastern Seaboard Industrial Estate and the Eastern Seaboard Industrial Estate (Rayong). Environment-friendly and nature-based, this system uses treated wastewater efficiently and helps reduce energy consumption better comparing with other systems. Hemaraj is confident that the treated wastewater from the constructed wetland project leaves no environmental impact on nearby public water resources. Moreover, this
treated water can be used as second grade water for gardening in the green areas and for dust control within development areas. Furthermore, Hemaraj has established the Environmental Monitoring & Control Center or Air Quality Monitoring Station (AQMS) and waste water automatic testing tool or COD online offering a real-time processing of environmental reports to the environment’s quality control center (E:mc^2) at the Eastern Seaboard Industrial Estate (Rayong). The company can easily monitor the quality of air and waste water through Hemaraj’ website. In 2014, Hemaraj has actively participated in two initiatives organized by the Industrial Estate Authority of Thailand (IEAT), namely the Eco Industrial Town - Eco Champion level and Eco for Life projects. With all environment management activities mentioned above, many of Hemaraj’s industrial estates have continuously been winning the EIA Monitoring Awards, with the latest recognition received in 2014. This distinction is given to manufacturers that strictly implement the environmental measures as required by the EIA report and with outstanding environmental management. Hemaraj will continue to focus on sustainable development together with social responsibility and environmental management.
Economic & Competitive Condition The 2015 Thai economy grew only by 2.8% compared to 0.8% in 2014 due to First, higher than anticipated growth in public investment and private consumption partly offset weaker exports and private investment. Second, additional government stimulus measures provided some support to the economy for 2015 due to stronger private sector confidence. Third, tourism, following the bombing incident in Bangkok, is likely to recover at a faster pace.
In 2015, the Private Consumption Index increased by 2.1%. Manufacturing Production Index increased by 0.9% and the capacity utilization rate flat at 64.7%. For the year 2015, the Private Investment Index decreased by 2.0%. Export volumes for Thailand were US$ 212.1 billion, or a 5.6% decrease, and Imports decreased by 8.5% to US$ 177.5 billion. Current account ended the year with a surplus of US$ 34.84 billion, or 8.9% of GDP
GDP % 7.0
6.5
6.0 5.0 4.0 2.9
3.0
2.8
2.0 1.0 0.0
0.8 0.1
2011
2012
2013
2014
2015
2013
2014
2015
Source : Bank of Thailand, February 2016
Capacity Utilization % % 120 100 80 60 40 20 0
2011 Petrochemical
2012
Automotive
Total
Source : The Office of Industrial Economics, January 2016 Hemaraj Land and Development Public Company
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Land sales of Thailand’s industrial property market sector increased 35% from 1,576 rai in 2014 to 2,121 * rai in
2015. In 2015, Hemaraj sold 1,043 rai of industrial land, or equivalent to 49% of total market share. *
Thailand Industrial Property Market & Hemaraj’s Market Share RAI 12,000 10,000 8,000 6,000 4,000 2,000
60%
10,872 46%
2,317
49%
50%
42%
40%
5,757 29%
30%
4,746
21%
1,670
20%
2,200 4,087
8,555
2011
2012
1,576 2,546
665 911
1,043 1,083
2013
2014
2015
0 Competitors
2,121
Hemaraj
10% 0
Hemaraj’s Market Share
Note * CB Richard Ellis 2015, Excludes Rojana sales data
There were a total projects submitted of 1,038 projects in 2015 with amount Baht 218.12 billion, representing an decreased of 68% and 89% respectively from 2014. Investments were highest in the service and public utilities industry followed by the agricultural and agricultural products
industry, the electronic and electrical appliances Industry, the metal products, machinery and transport equipment industry, the chemical, plastics and paper industry, the light industry, and mineral, ceramics and basic metals industry.
BOI Application Submitted Billion Baht 2,500 1,957 1,500
1,156
1,001
626 500 0
218
2011
2012
Source : Board of Investment, January 2016
2013
2014
2015
Value of new projects approved by The Board of Investment (BOI) in 2015 increased significantly to Baht 809.38 billion compared with Baht 724.74 billion in 2014, or a 12%
increased. The number of projects approved was 2,327 projects, increased by 40% from 2014.
BOI Application Approved Billion Baht 12,000 984
10,000
1,027
8,000 6,000
725
809
448
4,000 2,000 0
2011
2012
2013
2014
2015
Source : Board of Investment, January 2016
Thailand still remains a regional production hub in the ASEAN automotive industry, particularly for one-ton pickups and small passenger cars. In 2015, the vehicle production was 1,911,751 vehicles (#12 Global) . Domestic vehicle sales and vehicle exports in 2015 were 698,168 vehicles and 1,204,895 vehicles respectively. In 2015, automotive export was 15.05% of total export value.
1 Rai = 1,600 Square Meters or 0.4 Acres Source : Bank of Thailand, December 2014 and Automotive Intelligent Unit
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Risk Factors & Others External Risks The company faces investment and management risks associated with Thai government, Bank of Thailand, and government agency policies as well as others such as town planning, environmental law, investment promotion act and economic environment in neighboring and other countries. In addition, Foreign Direct Investment, inflation, oil price, interest rates, land cost, construction cost, the 300 Baht minimum wage, and shortages of skilled labor are factors that could affect the company business. In the end of 2014, the government had announced the change of BOI privileges to be in line with of the national social and economic development plan, the country’s development plan of agricultural sector, industrial sector and service sector which already become effective since 2015. However, the company is aware of the risks and effects of this change. To reduce impacts of the risk, the company had already applied the BOI privilege at the end of 2014 for the existing and future industrial estates to ensure that there are available lands with BOI privilege to supply the expansion of industrial sector. Moreover, the company is well aware of the risks and effects associating with such factors and uses its best endeavor to apply the systematic monitoring and analytical measurement to prevent and to minimize such risks at the acceptable level when comparing to the expected investment return. The Board of Directors and Management have also implemented the business strategy with appropriate adjustments based on the situation as witnessed from broadened operating revenue and improved profit margins. Increases in revenue from industrial estates utilities and rental, which are recurring and predictable, have balanced our revenue structure. Our multiple-locations industrial estates with a high percentage of repeat customers and the niche selective property projects have also reduced our risk profile. However, as industrial development is in place, the broad revenue cushions this impact, and strong balance sheet minimizes disruptions.
Financial Risks The operating performance, financial status, economic environment in Thailand and other countries, access
to financial and capital market, foreign exchange and interest rates are risk factors to the company’s financial management. The operating performance, financial status, economic environment in Thailand and other countries, access to financial and capital markets, foreign exchange and interest rates are risk factors to the company’s financial management. Since the financial crisis in 1998, the company has consistently improved its financial position by having an appropriate and sufficient source of funds with a reasonable cost of capital and appropriate financial structure to support the company’s competitiveness. As of end of 2015, the Company’s net debt to equity ratio was 1.28 to 1 times with cash balance of Baht 2,937 million. The company has a strong balance sheet and a lower debt level, moderate level of cash on hands, no foreign currency debts and broader lending sources. These will provide the company more flexibility to grow the business expansion, yet to minimize the financial risks.
Risk from Political Instability and Thai Government Instability The political instability within the country has been occurring from time to time for the last decade. During the year 2014, the government has declared the martial law applied for the whole country. This incident may adversely impact negatively on Thailand’s image, the interest and confidence of customers, investors or tourists. In addition, the business might be affected from a change of Government or relevant working group that often cause intermittent and uncertain of the policy especially the policy regarding to investment promotion, industrial estates development and fundamental utility and foundation that is essential for developing countries. However, from the past events, political instability was affecting the economy only in a short period. After political issues have been resolved, the consumption, the spending, the business and foreign investments will come back as normal. The company is aware of this risk and continues to monitor and analyze the impact of this ongoing political unrest. In the short term, the company has seen some direct impact to our industrial customers’ operation. The foreign investment has slowed down. The company has already adjusted the work
plan including the operation, the investment and the financing to properly accommodate this uncertainty.
Risk from investing in Independent Power Producer (IPP) The company has invested in Independent Power Producer (IPP) project in Gheco-One Company limited with Glow Energy. This is in line with our strategy to broaden our revenue by selectively pursuing superior profit opportunities from complementary businesses to increase the predictability and sustainability of the longer-term revenue stream. Risk from investment, risk from changes of rules, regulations, government policy, delay of construction, financing risk, risk from environmental impact, risk from raw material sourcing, risk from operations regularly and continuously, risk from sole customer, foreign exchange risk, and interest rate risk are risks involved the project and the material change in such factors could materially affect the project’s performance as well as the company’s. The company is aware of the risk from such factors by having a feasibility study as well as the sensitivity analysis to cover all areas and to consider together with the attractiveness of the project, including the return which is recurring and predictable throughout the project life after the commercial operation regularly. This project was developed and managed by Glow Energy (GDF Suez), Thailand’s leading private power producer. In addition, Gheco-One signed the foreign exchange rate swap, interest swap, coal cost forward contract, and various contracts on matching currency of lending with costs and revenue streams and interest rate swaps in order to minimize those risks. Gheco-One has commercially operated since 19 August 2012.
Risk from Accidents, Fires and Chemical Spills Hemaraj regards risks posed by accidents - such as fires, chemical spills, and traffic incidents - as a high-priority matter in its industrial estates and industrial lands. In compliance with the National Fire Protection Agency’s (NFPA)
standards, Hemaraj has installed fire extinguishing systems to cover all areas in its projects. Moreover, the company has employed emergency response teams that are stationed 24/7 and equipped with fire engines and other necessary equipment to tackle any unexpected event with minimal delay. Hemaraj has also prepared effective emergency response plans for various situations in each industrial estate, providing training programs for businesses and government agencies to help minimize the impact of accidents.
Risks of Industrial Land Sales Business Risk from Automotive and Petrochemical Customers The company has 294 customers from automotive (233) and petrochemical (61) sectors out of 668 customers, or 44% of total customers. The company will be affected from the slowdown of investment from these sectors both revenue from land sales and other related revenue. The company is aware of such factors and its effect. Our marketing plan is to expand our customer base in different sectors such as electronic, energy, steel, construction materials, logistics, food, etc. so that the company will not entirely depend on one or two sectors. The company now has 8 industrial estates under development which targeting various sectors. The company also tracks and analyzes the customer mix and demographic on a regular basis and adjusts our strategy accordingly. In 2015, Industrial Estate Land Sales were 1,044 rai of which 616 rai or 59% were from nonautomotive/petrochemical sectors. Risks from Flooding Flooding incidents in many areas around the country, especially during the rainy season of 2011, have inflicted damages on many business sectors as well as the confidence of investors seeking to engage in new ventures or expansions of existing operations. These investors have become more selective in choosing a development site in order to minimize flood-related risks. In selecting new sites, Hemaraj considered various factors - including infrastructure readiness, land size, as well as flooding risks. Currently, Hemaraj operates a total of 8 industrial estates and industrial lands, all situated in the Hemaraj Land and Development Public Company
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Eastern Region of the country. These industrial estates and industrial lands are located high above sea level and close to public water sources, both of which serve as deterrents against the threat of flooding and help carry rainwater discharged from retention ponds. Hemaraj Saraburi Industrial Land is the only industrial land located in the central river basin, an area facing flooding risks from heavy rainfall and uncontrollable natural water flow from the North. In recognition of this risk, Hemaraj assigned specialists to study the area’s geological characteristics to develop a model based on historical rainfall data. The resulting model has been used to evaluate the effectiveness of existing flood prevention systems. Moreover, Hemaraj improved its earth dykes to prevent flooding, while drainage systems in bottleneck areas were improved and expanded. Hemaraj also improved pumping systems in retention ponds to drain excess water from the industrial land. All equipment and machinery are regularly inspected and maintained to ensure high efficiency at all times. Due to constant changes within and without the industrial estates, Hemaraj carries out thorough monitoring and assessment of these areas both before and after the rainy season to ensure the optimal effectiveness of all systems. In addition, Hemaraj developed measures to cope with unforeseen consequences of rain storms, and an on-site emergency response team is available 24 hours a day. Risks from Drought Hemaraj Industrial Estates and Industrial Lands, located in Eastern part of Thailand or Eastern Seaboard, are situated close to large holding ponds - namely Dok Kray, Nong Pla Lai, and Klong Yai holding ponds. These three detention basins have a maximum capacity of up to 275 million cubic meters. However, in order to maintain a adequate water supply to support future demand, East Water Public Company Limited has already set up water plumbing systems to draw water from Prasae Reservoir to Klong Yai and Nong Pla Lai holding ponds. This system will help stabilize and sustain the water supply in Eastern Thailand to cope with various. In 2015, there was the risk of draught in several areas including Saraburi province which our industrial land located. To overcome the risk, government and the company remains hard at work to further address the water situation,
and the company is confident that both completed and ongoing projects will help ensure an adequate water supply to cope with increasing demand and potential draughts in the year to come.
Risks of Rental Property Business Risks from Short Term Contract of Ready Built Factory and Warehouse Currently, our standard ready built factory and warehouse contract periods are 3 years which after the contracts expires, tenants will have the option to renew. This risk will be occurred if tenants decide not to renew the contracts. However, the company found that if the tenants already start their operation and there is no significant adverse effect from external factors (political issue, economic crisis, etc), they would decide to renew the contract with our agreed escalation. From our past records, more than 80% of expiring contracts, tenants decided to renew. Due to the prime and strategic location, nearby Laem Chabang deep sea port and the center of several industry hubs with the international standard of ready built factory and warehouse, the company is confident that tenants would renew the contract. On the other hand, in the case that the factory or warehouse becomes vacant, the company will be able to find new tenant in a short period of time due to our own strength in professional property management as well as the abovementioned factors. Risks from Sectoral Concentration The company is aware of the risk from the concentration of the tenants in a particular location which may cause from industries or nationalities of the tenants. If the investment from specific industry or from specific country significantly decreases, it would affect the company’s income. However, the company has well diversified customer base which does not rely only on automotive sector but we do have tenants from electronic, packaging, food, consumer product and other sectors. In addition, the company also has tenants from several countries such as Japan, China and European country which all above mentions will reduce the risk of sectoral concentration.
Stock Information and Shareholding Register Shares
Shareholding
The company’s register capital was 6,000,000,000 Baht and paid-up capital Baht 3,882,074,476.40 Baht, divided into common stock 9,705,186,191 shares at par value 0.40 per share
Major shareholders of Hemaraj Land and Development as of 29 February 2015
No. Major Shareholders No. of Shares 1 WHA Venture Holding Co., Ltd. 2 Mr.Sawasdi Horrungruang Total
9,563,839,406 64,803,500 9,628,642,906
% of Total Issued Share 98.544 0.668 99.212
Other insurance securities During the years 2010 - 2015, the company has issued unsubordinated and unsecured of Baht 17,000 million at Baht 1,000 per share with duration 3-10 years and pay interest every three months. In 2015, 1 bond, namely HEMRAJ155A, became due and fully repaid and issued 2
unsecured Baht bonds, namely HEMRAJ252A of Baht 1,500 million and namely HEMRAJ222A of Baht 1,000 million. As at December 31, 2015, the outstanding amounts of the bonds were Baht 13,938 million.
Hemaraj Land and Development Public Company
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Unsubordinated and Unsecured debentures Debentures Amount (MB) HEMRAJ155A* 1,500 HEMRAJ177A 2,300 HEMRAJ190A 638 HEMRAJ160A 1,500 HEMRAJ217A 2,000 HEMRAJ231A 2,500 HEMRAJ244A 2,500 HEMRAJ252A** 1,500 HEMRAJ222A** 1,000
Interest rate per annum Year/ Maturity Date Year 1-3 4.90% 5 Year, Maturity Date 2015 Year 4 5.80% Year 5 6.50% Year 1 - 3 4.90% 7 Year, Maturity Date 2017 Year 4 - 6 6.00% Year 7 6.50% Year 1 - 3 4.90% 9 Year, Maturity Date 2019 Year 4 - 6 6.00% Year 7 6.50% Year 8 - 9 6.75% Year 1 - 3 5.15% 5 Year, Maturity Date 2016 Year 4 5.50% Year 5 5.60% 5.65% 9 Year, Maturity Date 2021 5.50% 10 Year, Maturity Date 2023 5.75% 10 Year, Maturity Date 2024 5.00% 10 Year, Maturity Date 2025 4.70% 7 Year , Maturity Date 2022
Note : * HEMRAJ155A maturity date on 25 May 2015 ** HEMRAJ252A and HEMRAJ222A issued on 20 February 2015
Dividend Policy The Company shall pay dividend at the rate of not less than 50% of net profit of the Company’s separated financial statement after all deductions as required by law or by the company, subject to Hemaraj and its affiliate’s cash
flow, liquidity, contract’s obligations and commitments and future investment plans, including justifications and other future consideration as deem appropriate.
Hemaraj Land and Development Public Company
227
Industrial Estate Operations
Industrial Factories and Logistics Parks Customer Development
Industrial Customer Development
Industrial Estate Development
Corporate Marketing / Property Customer Development
Advisors
Risk Management Committee
Property Project Planning
Procurement
Chief Operating Officer
President & CEO
Executive Committee
Board of Directore
Shareholders
Industrial Factories and Logistics Parks Development
Industrial Estate Development
Development
Technical Estate Operations
Corporate Governance Committee
Nominating Committee
Management Structure as of 31 December 2015
Business Development
Information System & Services
Corporate Planning & Investor Relations
Accounting
Internal Audit
Audit Committee
HR & Benefits
Finance
Chief Financial Officer
Legal
Special Projects
Management Structure
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Board of Directors As of December 31, 2015, Board of Directors consists of 12 members as follows: 1. Dr. Somyos Anantaprayoon (1) Chairman of the Board of Directors / Director Chairman of the Executive Committee / Chairman of Nomination and Remuneration Committee / Chairman of Risk Management Committee 2. Miss Jareeporn Jarukornsakul (1) Vice Chairman of the Board of Directors / Vice Chairman of the Executive Committee / Nomination and Remuneration Committee Member / Risk Management Committee Member 3. Mr. David Richard Nardone Director/ President / Chief Executive Officer / Executive Director/ Risk Management Committee Member 4. Mr. Vivat Jiratikarnsakul Director/ Vice Executive President / Chief Operation Officer / Executive / Director / Risk Management Committee Member 5. Mr. Krailuck Asawachatroj (3) Director/ Vice Executive President / Chief Financial Officer/ Executive Director/ Nomination and Remuneration Committee Member / Risk Management Committee Member 6. Mr. Somphong Wanapha Independent Director/ Chairman of Corporate Governance Committee 7. Mrs. Punnee Worawuthichongsathit Independent Director/ Audit Committee Member 8. Mrs. Kritsana Sukboonyasatit (2) Independent Director / Nomination and Remuneration Committee Member 9. Mr. Jakrit Chaisanit (3) Director / Executive Director/ Risk Management Committee Member 10. Mr. Narong Kritchanchai (3) Director/ Executive Director / Corporate Governance Committee Member 11. Mr. Ekajai Tivutanond (4) Independent Director / Audit Committee Member
12. Mr. Weidt Nuchjalearn (5) Independent Director / Chairman of Audit Committee Note (1) Dr. Somyos Anantaprayoon and Miss Jareeporn Jarukornsakul has been appointed as director on 17 March 2015 (2) Mrs. Kritsana Sukboonyasatit has been appointed as director on 18 March 2015 (3) Mr. Krailuck Asawachatroj, Mr. Narong Kritchanchai, and Mr. Jakrit Chaisanit has been appointed as director on 29 April 2015 (4) Mr. Ekajai Tivutanond has been appointed as director on 14 August 2015 (5) Mr. Weidt Nuchjalearn has been appointed as director on 20 January 2016 The Company’s Board of Directors consists of 5 Independent Directors who have qualifications according to such prescribed in regulation of SET and SEC as follows: (1) holding shares not exceeding 0.50 percent of the total number of voting rights of the company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, including the shares held by related persons of the independent director. (2) neither being nor having been an executive director, employee, staff, or advisor who receives salary, or a controlling person of the company, its parent company, subsidiary, affiliate, same-level subsidiary or juristic person who may have conflicts of interest unless the foregoing status has ended not less than two years prior to the date of application filing with the Office. (3) not being a person related by blood or registration under laws, such as father, mother, spouse, sibling, and child, including spouse of the children, executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling persons of the company or its subsidiary. (4) not having a business relationship with the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest, in the manner which may interfere with his independent judgement, and neither being nor having been a major shareholder, nonindependent director or executive of any person having business relationship with the company, its parent company,
subsidiary, affiliate or juristic person who may have conflicts of interest unless the foregoing relationship has ended not less than two years prior to the date of application filing with the Office. The term “business relationship” includes any normal business transaction, rental or lease of immovable property, transaction relating to assets or services or grant or receipt of financial assistance through receiving or extending loans, guarantee, providing assets as collateral, including any other similar actions, which result in the applicant or his counterparty being subject to indebtedness payable to the other party in the amount of three percent or more of the net tangible assets of the applicant or twenty million Baht or more, whichever is lower. The amount of such indebtedness shall be calculated according to the calculation method for value of connected transactions under the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Act of Listed Companies Concerning the Connected Transactions mutatis mutandis. The combination of such indebtedness shall include indebtedness taking place during the course of one year prior to the date on which the business relationship with the person commences. (5) neither being nor having been an auditor of the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest, and not being a major shareholder, non-independent director, executive or partner of an audit firm which employs auditors of the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest unless the foregoing relationship has ended not less than two years from the date of application filing with the Office. (6) neither being nor having been any professional advisor including legal advisor or financial advisor who receives an annual service fee exceeding two million Baht from the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest, and neither being nor having been a major shareholder, non-independent director, executive or partner of the professional advisor unless the foregoing relationship has ended not less than two years from the date of application filing with the Office. (7) not being a director who has been appointed as a representative of the company’s director, major shareholder
or shareholders who are related to the company’s major shareholder. (8) not having any characteristics which make him incapable of expressing independent opinions with regard to the company’s business affairs. Basic Scope of Board of Directors’ Responsibility The Board of Directors’ prime responsibility is to formulate corporate visions, overall policies and major strategies with ability, integrity and care, so as to achieve continuous and long lasting benefits to the company and Shareholders. This responsibility includes effective control and supervision of the Management to assure that Board instructions are put into practice with efficiency and in line with relevant rules of law and supervising authorities’ regulations, with the Company’s own requirements, as well as with good corporate governance principles. In discharging its responsibility, the Board may appoint or assign one or more specific directors or any other persons to act on its behalf, and can revoke such appointments or assignments, as it considers necessary or appropriate. Term of the Board of Directors In every Annual Ordinary Meetings, 1/3 of the board of directors shall be resigned. In case it is undividable, the resigned director must be as close to 1/3 and such resigned director may be re-elected to assume the same position. Executive Committee As of December 31, 2015, Executive Committee consists of 7 members as follows: 1. Dr. Somyos Anantaprayoon Chairman of the Executive Committee 2. Miss Jareeporn Jarukornsakul Vice Chairman of the Executive Committee 3. Mr. David Richard Nardone Executive Committee Member 4. Mr. Vivat Jiratikarnsakul Executive Committee Member 5. Mr. Krailuck Asawachatroj Executive Committee Member 6. Mr. Jakrit Chaisanit Executive Committee Member 7. Mr. Narong Kritchanchai Executive Committee Member Hemaraj Land and Development Public Company
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The Executive Committee has been assigned by the Board of Directors to help formulate the Company’s operation policy and strategies, to supervise and to ensure that such approved policy and strategies are followed through with responsibilities, integrity and care, and in line with relevant rules of law, the Company’s rules, as well as the Board of Directors and Shareholders’ approval. Scope of the Executive Committee’s Authority and Responsibility 1. To screen and review business plans, investment plans, together with the relevant budgets, as prepared by the Management, prior to submitting the said data to the Board of Directors for consideration and approval. 2. To monitor, supervise and control the Company’s work progress, in order to ensure that the Company’s operations are in line with what the authorizing or assigning Board would expect. 3. To consider granting permission to commence important activities, as well as to authorize payments in excess of Management authority, in accordance with the Company’s authorization rules and the approved budgets. 4. To set the Company’s organization chart, authority of the Management, the remuneration policy and salary structure of the Company. 5. To assign one or more specific persons to act on behalf of the Executive Committee, or to revoke such assignments as the Executive Committee may consider appropriate. 6. To perform any other tasks, as assigned by the Board of Directors. The above-stated scope of authority would not apply where a vested interest or a conflict of interest concerning a related-party transaction under SEC regulations is at issue. In such a case, the Executive Committee would need to refer the matter to the Board of Director or to a Shareholders’s Meeting, as the case may be, for consideration and approval, unless appropriate pre-set permission is already in evidence. Audit Committee As of December 31,2015, Audit Committee consists of 3 members as follows:
1. Mr. Weidt Nuchjalearn Chairman of Audit Committee who has knowledge and experiences to audit Company’s financial statements 2. Mrs. Punnee Audit Committee Member Worawuthichongsathit who has knowledge, and experiences to audit Company’s financial statements 3. Mr. Ekajai Tivutanond Audit Committee Member who has knowledge, and experiences to audit Company’s financial statements The Audit Committee Charter endows the Audit Committee with the following duties and responsibilities to the Company’s Board of Directors: 1. To review that the Company’s financial reports are correct and sufficient. 2. To review that the Company has appropriate and efficient internal control and internal audit system to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge of an internal audit. 3. To review that the Company complies with laws relating to securities and securities markets, as well as with SET’s rules and regulations and any other laws relating to the Company’s business. 4. To consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year. 5. To review the Connected Transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Exchange’s regulations, and are reasonable and for the highest benefit of the Company. 6. To prepare, and to disclose in the Company’s annual report, an audit committee’s report which must be signed by the audit committee’s chairman and consist of at least the following information. An opinion on the accuracy, completeness and creditability of the Company’s financial report An opinion on the adequacy of the Company’s internal control system
An opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to the Company’s business An opinion on the suitability of an auditor An opinion on the transactions that may lead to conflicts of interests The number of the audit committee meeting, and the attendance of such meeting by each committee member An opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter Other transactions which, according to the audit committee’s opinion, should be know to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors 7. To report the Audit Committee’s performance to the Company’s Board of Directors at least on a quarterly basis. 8. To perform any other work that the Audit Committee agrees to, as may be assigned by the Company’s Board of Directors. The Audit Committee has 3 years period and may be re-elected to assume the same position. The audit committee/ independent director shall be appointed by the board of directors and shareholders. The audit committee/independent director shall assume their positions for 3 years and at least one member shall have financial and accounting knowledge and be able to review the accuracy and completeness of the financial statements of the company. Corporate Governance Committee As of December 31, 2015, the Corporate Governance Committee consists of 3 members as follows: 1. Mr. Somphong Wanapha Chairman of Corporate Governance Committee 2. Mr. Krailuck Asawachatroj Corporate Governance Committee Member 3. Mr. Narong Kritchanchai Corporate Governance Committee Member
The Corporate Governance Committee shall consider and propose practical guidelines and advices of Good Corporate Governance according to the SET and SEC’s regulations including other institutions. The Company has set the Corporate Governance Policies including business ethics according to the advices from the Corporate Governance Committee who has considered, edited and proposed to the Board of Directors. The company’s Corporate Governance Policy and Business Ethics has been approved by The Board of Directors and become effective already. The Corporate Governance Committee has 3 years period and may be re-elected to assume the same position. Nomination and Remuneration Committee As of December 31, 2015, the Nomination and Remuneration Committee consists of 3 members as follows: 1. Dr. Somyos Anantaprayoon Chairman of Nomination and Remuneration Committee 2. Miss Jareeporn Jarukornsakul Nomination and Remuneration Committee Member 3. Mrs. Kritsana Sukboonyasatit Nomination and Remuneration Committee Member The Nomination and Remuneration Committee handles preliminary selections, as well as to compile relevant data, of suitable candidates for Board’s formal consideration. A short list of suitable Director candidates, together with relevant background information, would be submitted in advance by current directors and/or shareholders for formal consideration in the Board meeting. Such a meeting would first concentrate on the Company’s specific requirements, before proceeding to discuss each candidate in depth on issues of reputation, experience, reliability, known ability and vision, as well as other relevant aspects. Those chosen by the Board would have their names proposed to the forthcoming Shareholders’ Meeting for consideration and approval. The Nomination and Remuneration Committee shall determine the compensation of the Board of Directors and Directors in Sub-Committees for the Board of Directors and the Annual General Meeting of Shareholder’s consideration and approval. Such compensation proposal would be based on the general market trend, information obtained from the Stock Exchange of Thailand, individual responsibility levels and work results, as well as on the Company’s actual Hemaraj Land and Development Public Company
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performance and prevailing financial strength. The Nomination and Remuneration Committee has 3 years period and may be re-elected to assume the same position. Risk Management Committee As of December 31, 2015, the Risk Management Committee consists of 6 members as follows 1. Dr. Somyos Anantaprayoon Chairman of Risk Management Committee 2. Miss Jareeporn Risk Management Jarukornsakul Committee Member 3. Mr. David Richard Nardone Risk Management Committee Member 4. Mr. Vivat Jiratikarnsakul Risk Management Committee Member 5. Mr. Krailuck Asawachatroj Risk Management Committee Member 6. Mr. Jakrit Chaisanit Risk Management Committee Member Responsibilities of risk management committee : 1. Determine risk management policies 2. Determine risk management strategies in order to maintain acceptable risk level under appropriate cost which yields acceptable return 3. Reports the results of the risk assessment to the committee 4. To make the decisions and recommend to the problem related to risk management 5. Act accordingly to the work assigned by the committee After 3 years the risk committee is able to remain at the same position Company Management The Company Management consists of 1. Mr. David Richard Nardone President 2. Mr. Vivat Jiratikarnsakul Vice Executive President 3. Mr. Krailuck Asawachatroj Vice Executive President 4. Mr. Tanin Subboonrueng Vice President - Industrial Estate Operations 5. Mr. Sirisak Kijraksa Director - Accounting and Legal 6. Ms. Somjai Wachiraha Director - Finance 7. Mr. Niphone Director - Property Project Harnpatnapanich Planning
8. Ms. Rujira Panichagit Director - Special Project 9. Mr. Paopitaya Smutrakalin* Director - Corporate Planning and Investor Relations 10. Mr. Suwat Thitathanakit Director - Industrial Estate Development 11. Mr. Bordin Harnvanich Director - Industrial Factories and Logistics Parks Development 12. Mr. Rakphol Kangnoy Director - Industrial Estate Operations 13. Ms. Siyaphas Chantachairoj Director - Corporate Marketing & Property Customer Development 14. Ms. Ladda Rojanavilaivudh Director - Industrial Estate Customer Development 15. Ms. Anchalee Parsertchand Director - Industrial Factories and Logistics Parks Development Customer Development 16. Mr. Preeprem Malasitt Director - IE Training Center and New Projects 17. Mr. Apichat Trongsukson Assistant Director - Information System & Services 18. Mr. Dumrongchai Assistant Director - Rojanajirakul Procurement Note * Mr. Paopitaya Smutrakalin has resign from Hemaraj Land And Development Public Company Limited on 1 October 2015 The President & Chief Executive Officer has the responsibility in assigning each management member with appropriate duties and authority in order to enable the Company to implement its policy and strategies, together with its business plans, in an efficiently effective manner and in accordance with the targets and budgets as determined or approved by the Board and/or the Executive Committee.
Company Secretary The Company has appointed Mr. Sirisak Kijraksa as of company secretary since February 29, 2008. The qualification of company secretary appear in section of good corporate governance P.243.
Remuneration for Directors and Management In 2015, the total remuneration for the 21 Directors, as approved by the Shareholders, was Baht 22,881,150 (Baht
25,795,000 in 2014), being consisted of Meeting Fees and quarterly remuneration as per following details:
Total Remuneration as of 31 December 2015 (Previous Board of Director) Directors’ Remuneration (Baht) Name Position Meeting Compen- Bonus Total Fees sations 1. Mr. Chavalit Sethameteekul 2. Mr. Sawasdi Horrungruang 3. Mr. Thongchai Srisomburananonta 4. Mr.Thavorn Anankusri 5. Mr. Sudhipan Charumani 6. Mr. David Richard Nardone 7. Mr. Peter John Edmondson 8. Mrs. Punnee Worawuthichongsathit 9. Mr. Vivat Jiratikarnsakul 10. Ms. Pattama Horrungruang 11. Mr. Somphong Wanapha 12. Mr. Vikit Horrungruang
Chairman of Board of 185,000.00 315,277.78 - 500,277.78 Directors / Director Director/ Executive Committee 105,000.00 416,666.66 - 521,666.66 Director / Chairman of Executive 105,000.00 385,416.66 - 490,416.66 Committee / Nomination and Remuneration Committee Director/ Executive Committee 105,000.00 364,583.33 - 469,583.33 Independent Director / 205,000.00 211,111.11 - 416,111.11 Chairman of Audit Committee / Chairman of Nomination and Remuneration Committee Director/ Executive Committee 105,000.00 364,583.33 - 469,583.33 Independent Director/ Audit 150,000.00 208,333.33 - 358,333.33 Committee Member Independent Director / Audit 170,000.00 208,333.33 - 378,333.33 Committee Member / Corporate Governance Committee Member / Nomination and Remuneration Committee Member Director / Executive Committee 105,000.00 208,333.33 - 313,333.33 Director / Executive Committee 125,000.00 364,583.33 - 489,583.33 and / Corporate Governance Committee Member Director/ Chairman of 135,000.00 208,333.33 - 343,333.33 Corporate Governance Committee Director 105,000.00 208,333.33 - 313,333.33 1,600,000.00 3,463,888.85 - 5,063,888.85 Total Hemaraj Land and Development Public Company
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Total Remuneration as of 31 December 2015 (New Board of Director) Directors’ Remuneration (Baht) Name Position Meeting Compen- Bonus Total Fees sations 1. Dr. Somyos Anantaprayoon Chairman of the Board of 640,000.00 1,979,166.67 - 2,619,166.67 Directors / Chairman of the Executive Committee / Chairman of Nomination and Remuneration / Chairman of Risk Management Committee 2. Miss Jareeporn Jarukornsakul Vice Chairman of the Board of 445,000.00 1,464,583.34 - 1,909,583.34 Directors / Vice Chairman of the Executive Committee / Nomination and Remuneration Committee Member / Risk Management Committee Member 3. Mr. David Richard Nardone Director / President / Chief 350,000.00 1,385,417.67 - 1,735,417.67 Executive Officer / Executive Committee / Risk Management Committee Member 4. Mr. Vivat Jiratikarnsakul Director / Executive Vice 385,000.00 1,385,417.67 - 1,770,417.67 President / Chief Operation Officer / Executive Committee / Risk Management Committee Member 5. Mr. Krailuck Asawachatroj Director / Executive Vice 265,000.00 1,266,826.02 - 1,531,826.02 President / Chief Financial Officer / Executive Committee / Corporate Governance Committee Member / Risk Management Committee Member 6. Mr. Somphong Wanapha Independent Director / Chairman 415,000.00 791,666.67 - 1,206,666.67 of Governance Corporate Committee 7. Mrs. Punnee Independent Director / Audit 545,000.00 791,666.67 - 1,336,666.67 Worawuthichongsathit Committee Member 8. Mrs. Kritsana Sukboonyasatit Independent Director/ 340,000.00 788,888.89 - 1,128,888.89 Nomination and Remuneration Committee Member 9. Mr. Phorntep Rattanataipop (1) Independent Director / 185,000.00 225,702.08 - 410,702.08 Audit Committee Member
Directors’ Remuneration (Baht) Name Position Meeting Compen- Bonus Total Fees sations 10. Dr.Schitt Laowattana (2) 11. Mr. Jakrit Chaisanit 12. Narong Kritchanchai 13. Mr. Ekajai Tivutanond
Independent Director / Chairman 275,000.00 463,837.79 - 738,837.79 of Audit Committee Director / Executive Director / 175,000.00 1,266,826.92 - 1,441,826.92 Risk Management Committee Member Director / Executive Director / Corporate Governance Committee Member 195,000.00 1,266,826.92 - 1,461,826.92 Director / Audit Committee Member 145,000.00 380,434.78 - 525,434.78 Total 4,360,000.00 13,457,262.09 - 17,817,262.09
No remuneration or other privilege revenue to directors Note : (1) Mrs has resign from Independent Director and Audit Committee Member on 8 June 201 (2) Mrs has resign from Independent Director and Chairman of Audit Committee Member on 15 October 2015 1. In 2015, the total remuneration for the Company’s Executives and Management in the forms of salaries, bonuses, and provident fund for 27 persons in 2015 was 219,170,308 Baht
Personnel Total number of employees and its subsidiaries which includes full time employees, directors, and advisers is 332 employees. Total remuneration of executives and employees of the company and subsidiaries for the year 2015 which included salaries, bonuses, provident fund and the other benefits, the total amount was 370,647,820 Baht. The company believes that the success of organization can be achieved through the quality, competency, and the commitment of the employees of all level. The company realized that employees are the company’s valuable resource by providing them with fair and appropriate compensation. Creating a good and safe working environment and also disclosing the policy and welfare that they are entitle. In the employee handbook which covers on regulations, group health insurance, provident fund, etc. The company also focusing on continued developing knowledge and skills of
employees by providing necessary training both internal and external the company. The company has an annual budget for human resources development program for its employee in developing skill which is essential to their works including IT, management, and others. Such program also covers the quality assurance and environmental management in compliance with the standard of environment management system (ISO 14001) and the quality management system (ISO 9001).
Internal Control and Risk Management The company emphasizes on the important of internal control and risk management by focusing on arranging sufficient and appropriate system for the business. Since 2000, the Board of Directors has hired an independent auditing office to serve as internal auditor. Under the coordination with Company Secretary, internal audit is obligated to report quarterly to the Audit Committee and the Management which follows the annual audit plan agreed by the Audit Committee Hemaraj Land and Development Public Company
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and the Management. The report is aim at the assessment of efficiency, effectiveness and also the adequacy of internal control and risk management for an individual task as well as overall business operations. The report also includes the assessment of employees’ attention to internal control, corporate governance principles, operational monitoring, asset protection and fraud prevention. The company has implemented risk management by established risk management policy. The risk management policy involves the considerate operational strategy which consider each risk factor. The company also try to minimize those risk factors to be at an acceptable level compared to the required return. The company will follow the risk management policy under the supervision of the risk management committee by reporting to them on a regular basis. The Board of Directors acknowledged and approved the report of the Audit Committee in the 5 assessment areas: internal control, risk management, operational monitoring, information and communication, and tracking system of the company and its subsidiary that the efficiency, effectiveness and adequacy of the internal control were at the same level as they were in the previous year and without any significant flaw and also in line with the external auditor’s report. The summary of the report was presented in 2015 Annual Report to both the Board of Directors and shareholders. All notes and recommendations from the said report conducted by both internal and external auditor are taken into account for continuing improvement in such areas. The Board of Directors also has a role in assessing the adequacy of internal control according to an annual assessment form that the company prepared in accordance with the guidelines of the Stock Exchange of Thailand. The key objective is to allow the Board of Directors to recognize and monitor closely pleasant and unpleasant works for the maximum benefit of the company in every aspect. The company operates under a system of good governance with the assistance of sub-committee, for example, the Audit Committee, the Board of Directors, the Governance Committee and etc., in order to present ideas to the Board of Directors. The system also includes business consultants legal advisor, internal auditors and certified public consultant.
According to the Audit Committee Meeting, C.S.E Company Limited was selected to be company’s internal auditor effective in 2015. C.S.E Company Limited assigned Mrs. Wimollak Phanrattanapong, the Director, to be the main responsible person acting as company’s internal auditor. The Audit Committee has considered the qualification of C.S.E Company Limited and Mrs. Wimollak Phanrattanapong and agreed that they are appropriate and adequate to perform the duties since they are independent and have experiences in auditing in various businesses for over 20 years. Moreover, they involved in training courses related to auditing with Federation of Accounting Professions and other organizations. The consideration and approval, appointment, transfer and dismissal of the head of internal auditor of the company must be approved by the Audit Committee. The qualification of the head of internal auditor is presented in the appendix. Internal Auditor - External Entity Company : C.E.S. Company Limited Name Address : 92/18 Floor 9 Sathornthani 2 North Sathorn Road Silom Bangrak Bangkok 10500 Telephone : 02 - 2668423 Fax : 02 - 2367877 Head of : Mrs. Wimollak Phanrattanapong Internal CPA : 4102 Auditor Training : Federation of Accounting Course in Professions Training course and 2014 consultancy 8
Good Corporate Governance Good Corporate Governance Policy The Company subject to the awareness on the importance of good corporate governance, have thus adopted Good Corporate Governance of the Stock Exchange of Thailand (SET) as practical guidelines and tried to continuously improve those perfect practices to achieve good standards, efficiency and transparency in our business operation and enhance confidence to all shareholders, investors and other related parties based on important contents as follows: 1. Rights of the Shareholders The company has well realized to safeguard rights and benefits of the shareholders by effectively operating our business to build permanent growth and provide suitable remuneration to the shareholders including to encourage the shareholders to exercise their rights in the Shareholders’ Meeting and shall not infringe nor prejudice the shareholders’ rights whatsoever. All shareholders shall be invited to join in Annual Ordinary Meeting or Extraordinary Meeting (if any) as the company shall serve invitation letter and related agendas for consideration prior to all Meetings. The shareholders, as the investors are entitled to vote according to the number of shares holding and each of them shall exercise all votes to conclude the resolution and maintain their benefits and comment toward important decisions, such as, profit allocation and dividend payment, appointment of auditor, prescription of compensation and election the Board of Directors, amendment of Articles of Association and increasing of capital, etc. All shareholders are entitled to receive correct, open, sufficient and update information. The shareholder can appoint any person as its proxy to join in the meeting as deemed appropriate or may appoint Chairman of Audit Committee who is an independent director according to the instruction of the Securities and Exchange Commission (SEC). In such meeting, the company shall provide the shareholders an equal opportunity to inquire company-related business as deemed reasonable. It is the duties and responsibilities of Board of Directors and related senior Managements to join in each
Shareholders’ Meeting to jointly clarify related details of the agendas and answer all inquiries of the shareholders. In case of it is necessary and unable to join in the meeting, notice must be given to the Chairman of the Board or Office of the Secretary of the company in advance. 2. Equitable treatment of shareholders The company have emphasized and overseen to maintain equitable treatment of shareholders. 2.1 To ensure a clear and transparent process while enabling the Company to tangibly observe corporate governance, allowing minor shareholders to propose in advance the agenda items for the AGM and nominate directors, criteria were established for proposals made by minor shareholders to identify items that are truly beneficial to the Company and choose qualified individuals as directors who efficiently perform their roles for the best interest of the Company and stakeholders and also through the Company’s web site. 2.2 All shareholders shall be invited to join in all Ordinary or Extraordinary Meetings. The company shall serve the shareholders invitation letter and related agendas for consideration in advance especially before the Ordinary Shareholders’ Meeting which shall be held once a year within April. The company shall not add any important agenda without advance notice to the shareholders to enable the shareholders to study supporting information before making any decision. 2.3 Any shareholder unable to personally join in the meeting, the company shall deliver Power of Attorney according to the form prescribed by Ministry of Commerce to such shareholder along with invitation letter to enable such shareholder to assign its proxy to join in the meeting on its behalf. In this regard, the company shall propose name and information of at least one independent director of the company as additional option of the shareholder. 2.4 The shareholder is entitled to vote according to the number of share holding and each of them must exercise all votes to conclude resolution and maintain benefit of the investor for transparency and traceability. For voting in Hemaraj Land and Development Public Company
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important agenda, the company shall give voting cards equal to the number of agendas to the shareholders upon registration. After the question is satisfactorily answered, the shareholder shall vote on the card of such agenda, the cards shall be gathered and counted by the independent person for transparency. 2.5 The company has correctly, adequately and clearly recorded Minutes of Meeting for material content and after submitting to SET and SEC sent to the shareholder after 14 days of the Meeting and further publicized such minutes on company’s website. 2.6 The company has prescribed written guidelines to maintain and safeguard internal information related to the good corporate governance for fairness to the shareholders and to prevent the directors, employees and related persons, such as, spouse, under legal age child and nominee from using internal information which is an important content on changing of share price and still undisclosed to the public to sell and purchase share. In this regard, pursuant to the Securities and Exchange Act, B.E. 2535, the directors and Managements must report the possession of company’s securities upon first admission and further report all securities transaction to SEC within 3 working days and the company shall compile such report as agendas to regularly inform the Board of Directors’ Meeting. 3. Roles of the Stakeholders The company have realized to the rights of all groups of stakeholders, i.e. from shareholder, employee, customer, debtor, supplier and competitor, environment and society and government agencies to receive appropriate care of rights and free from any infringement according to related laws or agreements by prescribing rules on treatment of stakeholders in each group as follows: Shareholders Disclosure of important information both related to financial and non-financial to the shareholder correctly, adequately, equally and in time via several channels, such as, company’s website, newspaper advertising or written letter, etc.
Employees The company value every of its employees with its consideration that they are worthy resource without discrimination, from their knowledge, capacity, the employees’ qualification and the suitable achievement according to the performance evaluation, the company’s performance and survey of salary level in the market of both same business and other business, providing a good safety working environment, provide them to know policy and their entitled welfare by producing employee manual to prescribe working rules and regulations, group health insurance manual, group life insurance, life provident fund, etc. Moreover, it also emphasizes on development of knowledge, ability and skill of employee by providing of annual budget for them to attend training and seminars in order to enhance their efficiency and develop their skill, expertise and ability to perform their duties effectively. Customers Concern on the customer’s satisfaction and strictly comply with contract or agreed conditions and attentively solve all problems claimed or suggested by the customers. The Company will explore the customer satisfaction with the products and services of the company at least one year, then the result is used to rectify the defects. Creditor, Supplier and Competitor Treat creditors with fairness and not violate the rights of creditors by strictly complying with the terms of contracts and financial obligations regarding repayment, assets safeguarding, and other conditions including the misuse of loan as agreed with the creditors, the use of dishonest procedure and the concealing of facts that will cause damages to the creditors. Comply with good competition rules, such as, comply with terms and conditions of the contract, do not take any trading advantage nor exploit benefit by giving false or untrue information nor use dishonest method to destroy the competitor. In addition, the company has the rule and
regulation for the supplier and/or contractor selection, provided that the assessment for supplier and/or contractor selection is separated according to the activity or work responsibility in a format as specified by the company. In other words, the score is separated into 3 groups as follows; Group A shall be registered as the addition for the procurement; Group B shall be considered in the next time by the additional assessment; and Group C shall not be considered for the procurement for 3 years. Nevertheless, such regulation shall be revised once a year. The company gives priority to good quality local contractors/supplier. From the 2015 contractor/supplier evaluation result, 111 contractors received A rating (scored 80 points or more), 10 contractors received B rating (scored 61-79 points) and no contractor received C rating (below 60 points). From dealer/supplier 161 suppliers received A rating, 7 suppliers received B rating (scored 61-79 points) and no supplier received C rating (below 60 points). Environment and Society The company has environmental policy to develop industrial estate which is the company’s major business simultaneously with environmental conservation according to the environmental management standard ISO 14001. In social respect, the company has policy to promote participation with other social organizations, communities and neighboring establishments in education, safety, fire prevention and others, such as, to establish scholarship project to the community schools, company visitation program and establishment of security center and fire prevention for group of companies. Government agencies Comply with related laws, rules, regulations and official stipulations including also good cooperation with government agencies. The company cooperates and supports the measure of government and private in relation to the anticorruption and unreasonable expense. The company emphasized to strictly comply with environmental laws and standards by prescribing all managements and employees to strictly observe and perform their duties according to the rules, regulations, laws, policies,
requirements and standards related to the quality, safety, occupational health and environment. In addition, the company also publicized to build knowledge and understanding on procedures and precautions for correct practice, free from danger to the health, property and environment. Moreover, the company also developed, reviewed and corrected thereof, strongly and continuously shared the responsibility to the safety, occupational health and environment of the society by arranging both internal and external training schemes that consist of legal knowledge, environmental operation management including cultivating sense of duty on environmental conservation every year for all employees of the Company, using natural resources for optimal benefit i.e. re-using copy paper, turning off air-conditioner during the lunchtime and watering the plants with treated water at the industrial estates, with awareness to the environmental importance and safety of related stakeholders including to promote social activities to conserve environment and sustainably develop living quality. Accident statistics or Absenteeism rate or Morbidity rate of the operation The company does not have statistic for accident statistics or absenteeism rate or morbidity rate of the operation in 2015 The company has a policy of non-infringement any intellectual property or copyright, including investigating of the third party’s information for avoiding the intellectual property infringement of other person such as non-exploiting business plan of other person and employees are responsible for maintaining the company’s confidential trade information. The usage of internet is permitted for work related purpose only. Employees will not disclose/publish any information that will risk the company’s reputations. All company’s computer programs contain valid license. In 2015, the company did not violate any intellectual property. The company shall strictly comply with the rules of human rights, treat to labors fairness, learns and understands the principle of human right, provided that such principle of human right shall be applied as the part of business operation. In addition, the company opposes the activity which may violate the principle of international human right, not hire the Hemaraj Land and Development Public Company
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child or illegal labors. In addition, the Company also has the guideline to promote to employee to respect for the human rights and dignity of the individual human. 1. The company agrees to equally accept stakeholders’ complaints on inappropriate behavior or behaviors that conflict to the law, company’s ethic and corruption committed by the committee, executive and employees. The company will handle all complaints with equality, transparency and fairness under an appropriate period of time. All information obtained will be confidential in order to prevent and conflicts to the informant. The person in charge of handling all complaints must gather facts, processing, filtering and report to the committee. The followings are where stakeholder can send their complaints to the Company Secretary’s office . 1.1 Telephone number 02-719-9555 1.2 Facsimile number 02-719-95646-47 1.3 E-mail : secretarycompany@hemaraj. com 2. Direct E-mail the Chairman of the Audit Committee E-mail : auditcommittee@hemaraj.com The company concerns of informant’s security. The company will not reveal name, last name, address, photo or any information which can identify the informant. The person who suffers from the wrong-doing will receive a proper action as fair and appropriate. 4. Disclosure of Information and Transparency The company has disclosed financial information and other information related to business and operating result in correct, sufficient, regular, update and credible manner via the Stock Exchange in the Annual Information Form (Form 56-1) and Annual Report (56-2) and on www.hemaraj.com and invest@hemaraj.com both in update Thai and English version to enable the investor to clearly know and/or study about the company. In addition, the senior management also held seminar between senior management and investment facilitator, analyst and economic reporter both domestic and abroad regularly and invite all interesting parties from several important sectors to visit industrial estate of the company.
In addition, the company also established “Investor Facilitation” unit to directly publicize information beneficial to the investors, shareholders, related parties, general publish, financial institute and securities analysts, provided that the company shall provide the information of company which is beneficial to the investors and join the Opportunity day as organized by the Stock Exchange of Thailand. Important information of the company is consisted of financial and non-financial information, particularly, the financial statements of the company has been reviewed/audited from the auditor that it is correct in according to the general certified accounting principles and duly approved from the Audit Committee/Board of Directors before disclosing to the shareholders. The Board of Directors has disclosed their responsibilities toward such financial report in the annual report. For the disclosure of non-financial information, the company has disclosed interrelated items, discussion of management and risk management including good corporate governance report in annual report and Form 56-1 and company’s website. The company has disclosed details of roles and responsibilities of Board of Director, sub-committee, frequency of the Meeting and frequency of participation of each director, comment of the Board on business operation and also disclosed compensation payment policy for directors and senior managements in the annual disclosure form (form 56-1) and annual report of the company. 5. Responsibilities of the Board of Directors 5.1 Structure of the Board of Directors The Board of Directors can be grouped according to the characteristic as follows: Directors who are management groups. Directors who are not management. Directors who are independent. At least 1/3, but not less than 3 members, of the Board of Directors must be independent directors. In
2015, the company has 12 directors, consisted of the directors who are not management 5 persons of which 5 persons are independent directors. Chairman of the Board of Director is not a independent director because the company believes that Chairman of the Board of Director shall be involved and have expertise in the business. The Board has set the qualification of board members to be diversified and also consider from the skills that needed in the board as well as their expertise and gender. In 2015, there was two female independent members. The Board of Directors shall assume their positions for 3 years whereby 1/3 directors shall be resigned in every Annual Ordinary Meetings. In case it is undividable, the resigned director must be as close to 1/3 and such resigned director may be re-electing to assume the same position. The Company has prescribed qualification of independent director who have well knowledge in Finance, Economic, Accounting, public administration and other field of businesses suitable as standard factors to safeguard benefit of the shareholders and others. Additionally, to have qualification according to such prescribed in regulation of SET and SEC as follows: 1. holding share not exceeding 0.5% of paid up capital of the company, subsidiaries, associates or related companies or juristic persons with potential conflict of interest including also share held by related persons. 2. uninvolved in management, not being an employee, staff, consultant earning permanent salary in the company or the company’s management, its subsidiaries, associates, related companies or other persons with potential conflict of interest except in the case that such interests finished at least 2 years prior to the appointment date. 3. Shall have no blood relationship or relationship through legal registration in the forms of parents, spouse, siblings and children, or children’s spouses with executive directors, management, controllers, or major shareholders of the company or its subsidiaries of executive directors, management, controllers, or the persons who are nominated for an executive position or executives of the company or its subsidiaries.
4. Not holding business relationship with the company, principal company, subsidiary companies, affiliated companies, major shareowner, or person holding controlling power of the company, which may hinder the exertion of his/her independent discretion, and not being or having ever been a shareowner, with significant implication, or person holding controlling power of the person holding business relationship with the company, principal company, subsidiary companies, affiliated companies, major shareowner, or person holding controlling power of the company, unless having vacated from said tenure for not less than two years before appointment as an independent director. Business relationship as in first paragraph shall include the normal course of trading transaction for business undertaking, lease or grant of lease of immovable asset, transactions relating to asset or service, or grant or receipt of financial assistance through acceptance or grant of loans, guaranty, grant of asset as guaranty for loans, including other similar behavior, thus making the person applying for permission or a contract party liable to payment of debt to another party, from 3 percent of net tangible assets of the person applying for permission, or from Baht 20 million or over, whichever is lower. The calculation of debt burdens as referred to above shall comply with the valuation of connected transaction in compliance with the notification of the Capital Market Supervisory Board on the criteria of the connected transaction, with the respective differences having been considered (mutatis mutandis). However the consideration of the said debt burdens shall include the debt burden incurred within one year before having business relationship with the same person. 5. Shall not be or used to be auditors of the company, its subsidiaries, joint venture companies, the major shareholders or the company’s executives. The Independent Directors shall not be major shareholders, executives or business partners of juristic person under the management of the auditor of the company, its subsidiaries, joint venture companies, major shareholders or the company’s executives except when such activities finished at least 2 years prior to the appointment date.
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6. Shall not work or used to work in a profession that included law and financial consultant services and asset appraising, which receives service fees of over 2 million baht per year from the company, its subsidiaries and joint venture companies or major shareholders or the company’s executives. In the case that the profession is registered as a person juristic, this rule covers the case of being the major shareholder, executives, or business partner of that professional service, except such services ended at least 2 years prior to the appointment date. 7. Not being the director who is appointed to safeguard benefit of the company director, major shareholder or shareholder who is related to the major shareholder of the company. 8. Able to perform his duties and express comment independently. The Company have policy to allow the director to assume as director in the listed companies not exceed 5 (five) companies. And in case of being the director in the same business, the information about position of each director must be disclosed to the shareholders. The Company does not allow Chief Executive Officer or senior management to assume the same position in other companies at too high degree until resulting inefficient performance. In case of being the chief executive officer or senior management in other companies in the same business, information about position of each director must be disclosed to the shareholders. The Company has clearly separated Chairman of the Board, the Chief Executive Officer and their duties. The role of Chair of the Board of Director as follows; 1. Act as the leader of the committee with responsible to monitor and administrate the duty of the executive committee and other committees to achieve objectives as planned. 2. Chair the shareholders meeting. 3. Make the final decision at the Board of Directors meeting when the vote casting result is equal.
5.2 Roles and Responsibilities of the Board of Directors The roles and responsibilities of the Board of Directors are as prescribed by the relevant laws, rules and regulations while the roles and responsibilities of the committees are also clearly defined. This allows the Board and the committees to review and provide appropriate advice within the scope of its roles and responsibilities. The roles and responsibilities of the Company’s Board of Directors are as follows: The Company’s directors must be knowledgeable, capable and experienced. They must also have an interest in the business of the company in which they are directors, as well as having honesty and integrity in conducting such businesses. The Directors must perform their duties with honesty and care according to the relevant laws, The SET’s and SEC’s roles and regulation as well as with good corporate governance principles. They must also protect the rights of the Company, in addition to being accountable to the Company’s shareholders. The Board of Directors’ prime responsibility is to formulate corporate vision, overall policies and major strategies with ability, integrity and care, so as to achieve continuous and long lasting benefits for the Shareholders. This responsibility includes effective control and supervision of the Management to assure that Board instructions are put into practice with efficiency and in line with relevant rules of law and supervising authorities’ regulations, with the Company’s own requirements, as well as with good corporate governance principles. In discharging its responsibility, the Board may appoint or assign one or more specific directors or any other persons to act on its behalf, and can revoke such appointments or assignments, as it considers necessary or appropriate. The Company will revise the company’s vision and mission at least every 1 years. The Board of Directors must manage to have effective internal control system and internal audit system.
5.3 Sub-committee The Board of Directors can set committees to assist in the study and screening of some specific tasks on behalf of the board. The qualifications and scope of work of each sub-committee will be defined. The company has therefore appointed sub-committees. The Executive Committee, presently consisted of 6 directors, has been assigned by the Board of Directors to help formulate the Company’s operation policy and strategies, and to supervise and ensure that such approved policy and strategies are followed through by the Management with efficiency and safety, so that the Company successfully attains its desired goals. Audit Committee, consisted of 3 Independent Directors. All Audit Committees must have the good knowledge, understanding and working experience in accounting, legal and finance and have responsibilities to report to the Board of Directors and follow Securities and Exchange Commission (SEC) and Stock Exchange of Thailand (SET)’s rules. The Audit Committee is a committee of the board of directors responsible for oversight regulatory compliance, financial reporting and accounting and monitor the effective of internal control process, internal audit and the internal risk management. The Audit Committee o give an opinion in appointing, transferring and dismissing of the Head of internal audit and related parties which involved in internal audit and also to appoint and terminate external auditors. The audit committee duties and independent reviews with internal audit which the company has engaged external reporting directly to the audit committee, as well as consulting with legal experts and accountants regularly. The audit committee will have a meeting with the auditor without management attending at least one time a year for the opinion from auditor. The Nomination and Remuneration Committee, having duties and responsibilities as follows: To assist in identifying qualified individuals to be nominated as a Director and Chief Executive Officer based on appropriate criterion for approval by the Company’s Board of Directors and/or the General Meeting of Shareholders, as the case may be. To study, evaluate and propose the
remuneration of Board of Director including the SubCommittee and to propose to be approved by the Annual General Shareholder meeting. The Corporate Governance Committee, consisted of 3 directors, to consider and propose practical guidelines and advices of good corporate governance according to the SET to Board of Directors. The Risk Management Committee, consisted of 6 directors, to review the company’s risk management and provide advices and/or recommendations in relating to the company’s risk management to the Executive Committee, provided that the Risk Management Committee is authorized to investigate any documents and call any relevant person in order to obtained the information. The committee is also responsible for assessment and evaluation process of the corruption as a precaution to maintain the risk at an acceptable level. In addition, there will be a thorough crosscheck i.e. any donations made must be for a project that has objectives to bring a betterment of the society and also other action as assigned by the Executive Committee for the process of the corruption to effective. The Risk Management Committee will review and improve about corruption regularly and report to the Board according. The company secretary, the company has appointed 1 qualified person as the company secretary, provided that the company secretary is the person who has knowledge and understanding of business, including the secretarial work as well as related laws and regulation. In addition, the company secretary shall also develop his knowledge and update news and information in order to always develop his performance. The company secretary shall perform his function according to law and company’s rule and regulation with his responsibility, carefulness, honesty and diligence subject to the company’s corporate governance. The company secretary shall not do any act which may affect the company’s reputation and image or have a conflict of interest with the company and keep the company’s confidential information. Moreover, the company secretary has a pleasant personality and ability to cooperate with other internal department, including other entity.
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The company secretary has duties and responsibilities as specified and announced by the Securities and Exchange Commission, the Stock Exchange of Thailand. In addition, the company secretary support the Board of Directors in relating to the rule and regulation in order that the Board of Director is able to perform his duties efficiently and to meet the target which results in the maximum benefit for the company. The company secretary has a duty to provide the advice relating to law, rule and regulation of the Securities and Exchange Commission, the Stock Exchange of Thailand, including other law that the company should know, cooperate to comply with the Board of Director’s resolution and also assist in Board of Director’s activities. 5.4 Corporate Governance Policy, The Board of Directors have launched the Good Corporate Governance Policy, complied with and regularly reviewed such policy once a year. 5.5 Code of Business Conduct, The Company has established Code of Business Conduct as manual for Board of Directors, executive officer and employee to understand and comply with such code thoroughly. The company has been monitored this compliance regularly. 5.6 Conflict of Interest, The Company’s Board of Directors and Management have been acknowledged and realized the importance of legal and ethical conflict of interest and related transactions guidelines. The company has disclosed, in accordance with the regulations of Stock Exchange of Thailand, such information, detail and reason/ necessity, if any in the company’s Annual Report and the 56-1 Form. The Company further uses the Audit Committee, internal auditors, external auditors, and external lawyers to review compliance. In the addition, a director, and executives or a related person may have any transactions with the company or the subsidiaries, in case of any normal business or supporting normal business transaction in the future, the Board of Directors approved in principle, that the management could approve those above transactions, which must be a transaction with the same commercial terms as those an ordinary person would agree with any unrelated counterparty
under the similar circumstances, on the basis of commercial negotiation and without any dependent interest resulted from the status of the director, executive or related person by the Securities and Exchange Act (No.4) B.E. 2551. The company had established rules that a director and an executive shall file the company a report on his interest or a related person’s interest. Within 30 days for the first report and submit next report within 15 days from the change date. Company’s secretary shall be responsible for keeping reports on interest filed by directors and executives and presenting copies of such reports to Chairman of the Board and Chairperson of the Audit Committee. The information will be used to monitor and manage the conflict of interest. 5.7 Internal controlling system and internal audit, The Audit Committee is aware of the inportance of internal control system, the Company establishes the Company’s internal control system to be applied adequately and appropriately for operations in order to protect any potential damanges to the Company. The audit committee is responsible to review that the Company has appropriate and efficient internal control and internal audit systems. Through its basic quarterly discussions with the outsourced professional internal Auditor, the experienced External Auditor, and appropriate Management representatives, the Audit Committee, whose members are also well acquainted with accounting and financial issues, is confident that the Company, together with its subsidiaries, are equipped with a dependable system of internal control, of which the outsourced internal audit function constitutes an important integral part. Such satisfactory findings have been reported for Board acknowledgement subsequent to each quarterly meeting of the Audit Committee. 5.8 Risk Management, The committee strongly emphasized on risk management. In 2013, the committee set up the risk management committee and to meet the criteria of the Stock Exchange of Thailand for Corporate Governance. The risk management policy involves the considerate operation strategy by considering each factor. The company also try to minimize those risk factors to be at
the acceptable level compare the required return. The director of risk management policies specific to the operation of the risk management committee. The results were reported to the Board on a regular basis. 5.9 Usage of internal information, The company has measures to respond SET’s policy to prevent unauthorized use of internal material information of the company by its personnel (or related party) or leakage to specific individual or group of the outsiders before generally publicized by the company. In this regard, the Company has announced to all personnel especially at Management level about ethics, reputation and image of the company including rules and methods of SET and SEC regarding such matter and duties to disclose and report about share holding or changing thereof. 5.10 The Board of Directors’ Meeting The Board shall prescribe meeting date in advance which shall be held at least 7 times a year (provided that in year of 2015, the Board of Director’s meeting is held 14 times) including the meeting for considering the company’s balance sheet which is held 4 times a year, to certify quarterly financial statement of the company. In this regard, the Audit Committee shall review correctness and completeness of information disclosed in financial statements and further report to the Board of Directors on quarterly basis. In addition to those above mentioned meetings, the company also holds the meeting to consider about business operation as deemed necessary including in urgent matter if necessary. The Management shall prepare performance report to the Board on monthly basis to enable the Board to continuously and timely supervise and control performance of Management.
In each meeting, the Chairman of the Board and Chief Executive Officer shall jointly consider several matters to be included in the agendas. For other matters, each director can propose the matter as he deemed important and necessary to the meeting. The company shall serve invitation letter, agendas and supporting details to the Board for consideration in advance not less than 5 days prior the meeting except it is an urgent meeting . The Chairman of Board of Directors shall allocate times for the Management to propose its concerned matter and the directors shall sufficiently, carefully and thoroughly debate all problems and allow the Board to carefully discreet all issues included in the meeting including the corporate governance. The Board shall invite senior executives to join in the meeting to provide information, details and additional information related to those problems to enable the meeting to know all information and make acquaintance to senior executives for use in supporting the management succession plan. The company allows non-management independent directors to hold the meeting to jointly discuss all possible issues without participation of the management. In Board of Meeting, should have directors attend at least 80% and each director must attend at least 75% of all Board Meetings held in a year. The Board decision will be made when the minimum quorum is at least 2/3 of all directors. For 2015, there was one internal meeting among non-executive directors in December.
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During the period from January to December 2015, the Company held 14 Board of Directors’ meetings which most Board of Directors attended the Meetings except on urgent business or on the oversea business trips. Nomination Corporate Risk Shareholder Board of Audit and Name of Director Governance Management Directors Committee Remuneration Meeting Committee Committee Committee
Dr. Somyos Anantaprayoon (1) 11/11 - 3/3 - 1/1 1/1 (1) Miss Jareeporn Jarukornsakul 11/11 - 3/3 - 1/1 1/1 Mr. David Richard Nardone 13/14 - - - 1/1 1/1 Mr. Vivat Jiratikarnsakul 14/14 - - - 1/1 1/1 (3) Mr. Krailuck Asawachatroj 7/7 - - 1/1 1/1 1/1 Mr. Somphong Wanapha 14/14 - - 2/2 - 1/1 Mrs. Punnee Worawuthichongsathit 13/14 6/6 - 1/1 - 1/1 Mr. Ekajai Tivutanond (5) - - - - - Mr. Weidt Nuchjalearn (4) 3/3 1/1 - - - Mrs. Kritsana Sukboonyasatit (2) 7/8 4/4 3/3 - - 1/1 Mr. Jakrit Chaisanit (3) 5/7 - - - 1/1 (3) Mr. Narong Kritchanchai 5/7 - - 1/1 1/1 Note (1) Dr. Somyos Anantaprayoon and Miss Jareeporn Jarukornsakul has been appointed as director on 17 March 2015 (2) Mrs. Kritsana Sukboonyasatit has been appointed as director on 18 March 2015 (3) Mr. Krailuck Asawachatroj, Mr. Narong Kritchanchai, and Mr. Jakrit Chaisanit has been appointed as director on 29 April 2015 (4) Mr. Ekajai Tivutanond has been appointed as director on 14 August 2015 (5) Mr. Weidt Nuchjalearn has been appointed as director on 20 January 2016
Self-assessment of Board of Directors, Managing Director and Chief Executive Officer The Board of Directors shall regularly conduct selfassessment according to the form of the company to jointly consider their performances and problems to find out appropriate improvement. Compensation of the Board of Directors and Management
Remuneration of The Board of Directors including subcommittee have been evaluated and considered by the Nomination and Remuneration Committee to propose to be considered by the Board of Director and then proposed for an approval in the Annual General Shareholder’s meeting. Such compensation proposals are based on market trend including data from SET, individual responsibility level and Board performance, as well as the company’s actual performance and prevailing financial strength. For the top
executive level and CEO, compensation are determined by the Executive Committee, taking into account such factors as the basic in house rates, the prevailing employment environments, work performance or contribution to the company, the degree of dedication shown and the company’s own specific needs. These consideration factors are deemed to provide a suitable package for the recruitment and retention of quality personnel for the company’s benefits. Directors and Managements Development The Board of Directors has policy to promote training and education to the directors, audit committee, management, secretary and employee of the company about corporate governance, business ethics and compliance with quality management system standard ISO 9001:2008 to continuously improve their performances. The company shall, especially, promote the directors and secretary to attend several training courses of Institute of Directors. The company will provide director manual that included all important information about nature and business operation of the company for new director to study and as guidelines for proper implementation. The Board of Directors promotes the Company to plan for Development Plan of executives and assigning the Managing Director to report interim performance to the Board of Directors. In preparation of the person to work in the case of the Managing Director / the Chief Executive Officer is unable to work or retirement in order to reduce the risk or effect caused by the discontinued management. Therefore, the company has established the succession plan including providing the training and development of the knowledge and ability to the Executive Director for gaining the understanding, experiences and the readiness of the work management. The person who has the suitable qualification may be elected to assume this position.
Handling of the Company’s Internal Information The company has established a policy in response of the Stock Exchange’s policy that aims to protect the Company’s internal confidential information being used or exploited by employees (or relevant individuals) or related to the outside prior to the official announcement to the public. The company has announced ethics, reputation of the organization as well as regulations of the Stock Exchange of Thailand and Securities and Exchange Commission (SEC) to employees especially the management and also the responsibility in revealing and reporting the possession of company’s shares. The Company has defined the practice of trading securities by using inside information below. “Prohibits directors, executives, as well as spouses and minor children of such persons trading in securities of the company within the two weeks before the disclosure of quarterly financial statements of the company and within 24 hours after the disclosure of financial statements to the Stock Exchange of Thailand.”
The Practicing of Good Corporate Governance The company shall abide with Good Corporate Governance so that quality of management is effective, transparent and accessible. The Good CG will enhance confidence and trust from shareholders, investors, stakeholders, and related parties. The Good CG is a tool to increase value and enhance stable growth to the company in term of financial result, investment return and competitiveness. The Board of Directors shall ensure that the company abide with good corporate governance and comply with regulations of Stock exchange of Thailand and the Security and Exchange Commission.
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Corporate Social Responsibilities : CSR
Overview of CSR policies Hemaraj Land And Development Plc and its subsidiaries have defined sustainable Corporate Social Responsibility (CSR) policies - both CSR in process and CSR after process - through various communication channels: annual report, code of conduct, website, brochures, newsletters, etc. This ensures that all stakeholders are informed about the company’s CSR policies, mission and strategies. Hemaraj integrates CSR into every aspect of its business. It has always been the company’s core policy since it was established in 1988, especially in the development of its industrial estates and utilities. For instance, the implementation of programs such as Public Participation 1 (PP1) and Public Participation 2 (PP2) has enabled the company to communicate with surrounding communities. It helped the company identify needs of the communities and define the most effective outreach programs for the past 27 years..
At least once a year, Hemaraj examines feedback and comments from all stakeholders, including communities and related government agencies. The company has set a procedure in place and has installed various channels to enable all residents and stakeholders to file their complaints. The company also focuses on CSR activities throughout the development of its industrial estates and during its business operations. By applying ISO 14001:2004, ISO 9001:2008 systems and the CSR DIW under the supervision of the Department of Industrial Works, Hemaraj has been able to provide sustainable and environment-friendly services to their shareholders. Aside from CSR in process activities, Hemaraj also aims for sustainable growth by getting involved with communities to protect the environment, promote education and provide community care.
Hemaraj Land and Development Plc and its subsidiaries’ Corporate Social Responsibilities (CSR) Hemaraj is committed to emphasize the importance of ethical business practices and environment protection under its “Committed to Thailand’s Sustainable Growth’’ policy, for the benefit of all stakeholders, including shareholders, employees, customers, creditors, suppliers and competitors, environment and society as well as government agencies. Vision Hemaraj is the “World Class Developer of Industrial Estates, Utilities, Power, and Property Customer Solutions”. To Our Customers Providing total industrial estate solutions allowing our customers to optimize their manufacturing, utility, and property resources. Uncompromising in our international quality, industrial cluster, infrastructure development, and environmental commitment. Aspiring for excellence from all of our employees in helping our customers to succeed, to grow, and to prosper. To Society and Communities Contributing to economic growth through GDP multipliers, employment, production, exports, skill development, education, and prosperity of communities. For the Environment Being stewards of the environment and sustainable communities with award winning environmental and Corporate Social Responsibility (CSR) recognition. To Employees Providing a nurturing workplace for professional development and well being. Mission To Develop World Class Industrial Estates, Utilities, Power and Property Customer Solutions.
Strategy Hemaraj Land And Development Plc defines its business directions and strategies as: Developing industrial estate, utility, power, and property solutions that have predictable growing revenue and superior profit opportunities in order to optimize shareholder value. Leveraging complementary management expertise, customer relationship, infrastructure and environmental competence to expand opportunities in industrial estates, utilities, power, and property. Utilizing sound company human and financial resources selectively for competing investment opportunities. Contributing positively to neighbors, society and to our stakeholders with sustainable programs in education, community and the environment Creating long-term shareholder value in a controlled way achieved through focused appreciate strategic, business, financial, environmental, community and governance disciplines
Implementation and reporting (1) Report parameter Hemaraj is committed to publishing reports on its CSR activities for internal and external stakeholders: Shareholders Employees Customers Creditors Suppliers and competitors Environment and society Government agencies As an industrial estate developer, Hemaraj is required to issue regular reports according to the Environmental Impact Assessment (EIA) rules and submit these reports every 6 months to the Office of Natural Resources and Environmental Policy Planning, Ministry of Natural Resources and Environment.
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(2) Execution For planning and implementing business strategies, code of conduct has been made available to the Board of Directors, management and staff to foster a better understanding of ethical practices.
Risk Assessment A special risk management committee, reporting directly to the Board of Directors, provides constant risk factor assessment and analysis of potential effects. Moreover, Hemaraj has initiated a risk assessment program for business operations within its industrial estates. Hemaraj continuously studies and assesses company products and services that could have a potential impact on customers and consumers. For example, Hemaraj continues to improve the rainwater drainage system at Hemaraj Saraburi Industrial Land (Hemaraj SIL). For this purpose, a consulting engineering company has been hired to analyze leaks, identify hazards and develop a plan to improve the rainwater drainage system and the flood protection system. After adopting the measures suggested, Hemaraj set up a team to ensure constant follow-up, examination and maintenance of the systems, and to record data that could help reduce risks of flooding and other disasters at the industrial land.
Regulation Emplacement Hemaraj sees the importance of corporate operation that complies with the international standards, thus the company establishes the operating regulations, controlling and verification schemes and environmental care processes for its stakeholders to abide by. To illustrate, the Environmental Monitoring & Control Center (ESIE): E:mc^2 has been established at the Eastern Seaboard Industrial Estate (Rayong) with a Baht 5-million investment. A cooperation between Hemaraj and IEAT, the E:mc^2 serves as the country’s first environmental real time monitoring unit at private sector’s industrial estate. Hemaraj has adopted long-term environmental measures for its industrial estates, in accordance with the EIA, to ensure minimum environmental impact. Even before the industrial estates were developed, Hemaraj developed policies based on EIA studies, analyses and assessments to
prevent long-term effects on the environment. These policies were intended to give the company an overhead view of possible situations and enable it to forecast potential impact. All systems and regulations to prevent, reduce and follow-up the quality of the environment have been approved by stakeholder groups and Office of Natural Resources & Environmental Policy and Planning. All types of activities are monitored by environment quality tests. Hemaraj received the ISO14001 for environmental management systems which provides a systematic process to analyze and address environmental issues. Hemaraj can set the proper goals and procedures, followed by examination and assessment. The results are used to improve Hemaraj’s environmental management. Hemaraj abides by EIA guidelines, ensuring that all projects and factories comply with the environmental regulations for wastewater management, air emission regulations and industrial waste management solutions. In case of an incident that could affect the environment, Hemaraj has emergency measures in place, as well as trained staff to handle the situation, ensuring full recovery as soon as possible.
Employee Communications In order to establish a lasting relationship with its employees, Hemaraj provides a good and safe working environment, fair remuneration packages and good benefits. Innovative initiatives are encouraged, such as the Constructed Wetlands, - Following HM King Bhumibol’s footsteps in treating waste water biologically, which enables employees to acquire knowledge about surrounding communities. Innovation and technology play a big part in Hemaraj’s desire to use alternative renewable energy in the future, in particular, through solar energy. Hemaraj, in cooperation with Gulf Energy Development, has been investing in Solar PV Rooftops to continuously promote energy conservation and a greener environment for the community. Solar PV Rooftops were recently installed in ready built factories and warehouses at Hemaraj Chonburi Industrial Estate and Hemaraj Eastern Seaboard Industrial Estate. In 2015, Hemaraj joined the ECO for Life project under the theme “From Waste to Social Benefit”. The Hemaraj environmental team, in collaboration with the IEAT and
neighboring communities, initiated this project to recycle waste products from Hemaraj’s estates, thereby benefitting the neighboring communities. Based on the Zero Waste from Water Treatment Process, waste sludge is sent to a waste processor certified by the Department of Industrial Works. However, this procedure requires substantial costs for transport and disposal of the residue, in addition to the risks of foul odours and contamination. Therefore, Hemaraj initiated its own study on waste containing residues that can be converted to fertilizers for agriculture. Experiments using these fertilizers are currently being made with plants that are native to Rayong such as rubber, cassava and winter melon. Studies showed that plants that were grown with this fertilizer became more productive than those that were not. Tests also concluded that the chemical and physical properties of these waste products were beneficial for plants, enabling farmers to cut costs and increase their income. Hemaraj also encourages its employees to take part in community projects by participating in CSR activities. For example, annual school contribution around the company’s industrial estates cover 64 schools and 17,200 students; water supply projects are initiated in various communities during water-shortage periods, or giving support to communities if they are in need, as well as regular forestation projects in neighboring communities. In addition, Hemaraj stands against all forms of corruption and intellectual property infringements, as stipulated in the employee and the code of conduct.
Monitoring Hemaraj promotes corporate transparency in every aspects of company operation, including all the CSR activities. Among the notable CSR activities include “Adopt a School”, a collaboration between Hemaraj and The American Chamber of Commerce in Thailand (AMCHAM), initiated in 2005. The “Teacher Fellowship Program” has been one of the project created to support the shortage of teachers in Rayong and Chonburi area. Moreover, the initiative project of “Teacher English Camp 2015” is to improve English language skill to those 40 school teachers. Both projects have been closely investigated by Hemaraj’s executives and board members of The American Chamber of Commerce in Thailand. Every
process, since the budget proposal, the operation, to the end of the project, showcased the transparency of the company without any fraud.
Business Execution and possible effects on CSR As of 2015, Hemaraj and its subsidiaries have not been involved in any business activities affecting CSR principles. However, the company has defined measures to deal with environmental complaints, as follows: In case of compliant request, the company will assemble related information and conduct a primary investigation Once the investigation is completed, if: 2.1 the case is groundless, a detailed explanation will be provided through appropriate communication channels 2.2 the case is accurate and factual, but 2.2.1 not related to the company, the complainant will be notified and a further investigation into the real cause will be launched 2.2.2 related to the company, a meeting of the stakeholders shall be called in order to determine the causes and effects, and look for preventive measures and solutions. Results will be communicated to the complainant through appropriate communication channels.
Preventing Corruption (1) Hemaraj, according to its Board of Directors business policies, is not involved in any form of corruption, as stated in the code of conduct available to the committee, management and employees (2) Hemaraj has joined Thailand’s Private Sector Collective Action Coalition Against Corruption, demonstrating its solid commitment to fight corrupt practices. In conclusion, in 2015, Hemaraj Land And Development Plc. has run its operations responsibly, in a corruption-free environment, ensuring respect for human rights, fair labor practices and responsibility for all consumers, in accordance with the Global Reporting Initiative (see details on page 208).
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Management Discussion and Analysis Results of operation for year 2015
Overall Performance For Year Increase/(Decrease) (Unit: Million Baht) 2015 2014 Amount % Revenues
Sales of Real Estate Rental, Services and Utilities Income Total Revenues
4,679 3,680 999 27.1 2,792 2,653 139 5.2 7,471 6,333 1,138 18.0
Cost of Sales and Services
Cost of Sales of Real Estate Cost of Rental, Services and Utilities Income Total Cost of Sales and Services Gross Profit Other Income SG&A Provision for Loss Arising from Guarantee of Minimum Rental Income Finance Costs Share of Profit from Investments in Associates Profit before Income Tax Expenses Income Tax Expense Normalized Net Profit Unrealized Gain/Loss from FX Translation Net Profit Non-controlling Interests Net Profit Attributable to Equity Holders of the Parent
(2,775) (1,774) 1,001 56.4 (1,252) (1,397) (145) (10.4) (4,027) (3,171) 856 27.0 3,444 3,162 283 8.9 432 245 187 76.2 (913) (915) (2) (0.2) (15) (28) (13) (45.1) (761) 1,667 3,855 (157) 3,698 (362) 3,336 47 3,289
(752) 1,653 3,366 (98) 3,268 (3) 3,265 262 3,003
9 14 490 59 431 (359) 71 (215) 286
1.2 0.9 14.6 60.3 13.2 11,978.1 2.2 (82.1) 9.5
Hemaraj finished the year of 2015 with strong earnings amidst slowdown Thai economy. In particular, Hemaraj reported total revenues of Baht 7,471 million and net profit of Baht 3,336 million. Normalized net profit increased by 13.2% YoY to stand at Baht 3,698 million, while net profit increased by 2.2% YoY to record at Baht 3,336 million due to Baht 362 million unrealized foreign exchange loss which was non-cash accounting expenses. Total operating revenue in 2015 grew by 18.0% YoY from Baht 6,333 million to stand at Baht 7,471 million mostly because of 27.1% growth in sales of real estate as a result of big-lot land sales. In additions, our service income also rose by 5.2% to Baht 2,792 million. Our gross profit rose from Baht 3,162 million in 2014 to Baht 3,444 million in 2015. Gross profit margin remains high in all business units. Gross margin for industrial estates was 40.4%; whereas normalized gross margin for utilities and industrial properties were 36.0% and 79.3%, respectively. Share of gain from investment in associates before unrealized FX gain/loss increased to Baht 1,667 million in 2015 from Baht 1,653 million in 2014. However, due to unrealized foreign exchange loss from power investment of Baht 362 million arising from Thai baht depreciation, the net share of gain from investment in associates in 2015 was Baht 1,305 million. The unrealized FX loss is accounting expense with no effect on cash.
Hemaraj, therefore, had normalized net income of Baht 3,698 million in 2015, equivalent to 49.5% normalized net margin. Whereas, net profit attributable to equity holders (after non-controlling interests) for 2015 performance was Baht 3,289 million, compared to Baht 3,003 million in 2014. Performance by Business Hemaraj has four core businesses, namely, 1) Industrial Estate, 2) Utilities, 3) Power and 4) Industrial Properties, and, as a result, has diversified sources of income of which significant portion is on recurring basis. Industrial Estate land sales, Utilities services income and Industrial Properties rental income are recognized as parts of total revenues, however, power business is recognized as dividend income from power associates and share of gain from investments in power associates. For 2015, Hemaraj recorded total revenues of Baht 7,471 million of which 62.6% was sales of real estate and 37.4% was rental, services and utilities income. While, in 2014, the proportion between sales of real estate and service income is 58.1% and 41.9%, respectively. The total operating revenue was before share of gain from investment in associates from our power investment which is profit recognition. Hemaraj’s operating performance in 3Q15 improved in four core businesses as seeing from the revenue structure table below showing positive sales or income growth in every core business units.
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Revenues Structure
Increase/Decrease 2015 2014 (Unit : Million Baht) Amount % Amount % Amount % Sales of Real Estate Sales of Land Sales of Condominium and Ready-built Factory Sales of Investment Properties Rental, Services and Utilities Income Utilities Industrial Properties Others Total Revenues
4,679 4,622 23 34 2,791 1,934 800 58
62.6 61.9 0.31 0.45 37.4 25.9 10.7 0.8
3,680 3,446 234 - 2,653 1,782 728 143
58.1 54.4 3.7 - 41.9 28.1 11.5 2.3
999 1,176 (211) 34 138 151 72 (85)
27.1 34.1 (90.1) N.A. 5.2 8.5 9.8 (59.3)
7,471
100.0
6,333
100.0
1,137
18.0
Industrial Estate For 2015, we recorded revenue from land sale of Baht 4,679 million. The revenue, which was recognized based on land transfer, increased from Baht 3,680 million in previous year mainly from an increase in total number of land transfer in 2015 from a number of big-lot land sales. Our 2015 gross margin remained high at 40.4%, dropped from our record high of 52.2% in 2014. Hemaraj recorded land sales in 2015 of 1,043 rai, representing a total of 22 new customers and 28 new contracts which included 6 project expansions from existing customers. Utilities Our services income from utilities in 2015 increased by 8.5% YoY to record at Baht 1,934 million due mainly from a combination of increased service income from industrial estate utilities and enhanced capacity fees and charges. Raw water demand reduced by 12.6% YoY as a result of Glow IPP plant shut down as well as petrochemical customers’ switching from our raw water to our potable and clarified water.
Demand in potable and clarified water rose by 2.9% YoY owing to an increase in demand of clarified water from petrochemical plant and plant reoperation of one big customer. Service income from wastewater improved due to higher volume and price. Normalized gross profit margin of utilities business in 2015 increased to 36.0% from 34.3% in 2014. Power Hemaraj recognized the performance of our Power Business in 2 items, 1) dividend income and 2) share of profit from investments in associates. In 2015, no dividend income from an investment in Glow IPP was recognized since they planned to have major maintenance in 2016. Hemaraj recognizes all of our other investments in Power Business via share of profit from investments in associates, which is profit recognition net of all the relevant cost and expenses. Share of profit from investment in power associates was Baht 1,594 million, Baht 16 million increased from 2014 number.
However, in 2015, Hemaraj also recorded Baht 362 million of unrealized loss from foreign exchange translation arising from Thai baht depreciation. Unrealized loss from foreign exchange is accounting expense with no effect on cash. As a result, a total share of profit from investments in power associates recognized by Hemaraj for 2015 was Baht 1,232 million. Hemaraj continued to expand our power business. In 2015, we signed shareholder agreements with B.Grimm and Gulf Energy Development in 2015 to develop another 7 power projects of 126 MW SPP expecting COD starting from 2017 onwards. This investment will increase Hemaraj’s equity operating capacity from 318 MW to 538 MW by 2019. Industrial Properties Total rental revenue from industrial properties, including ready-built factories, ready-built warehouses and pipe-rack rental, was Baht 800 million, representing 9.8% increase compared to 2014 as a result of increased total rented area, particularly in ready-built warehouses segment and higher average lease rate per sqm of ready-built factories. As of the end of 2015, total rented area of ready-built factories and warehouses under Hemaraj was 293,690 sqm, 19,003 sqm increased from 274,687 sqm as of the end of 2014. In 2015, we also stop recording depreciation on some of the industrial properties we plan to inject into Hemaraj Real Estate Investment Trust (“HREIT”) as per the accounting standard practice. Excluding the depreciation effect, normalized gross margin of our industrial properties stood at 79.3%, better than 74.1% in 2014.
Hemaraj had no policy to sell ready-built factories and warehouses to industrial customers; thereby, no sale of ready-built factories and warehouses in 2015. Pipe rack’s occupied area increased from 1.44 million inch meter at the end of previous year to 1.64 million inch meter at the end of 2015. Also, pipe rack rental rate per sqm increased by 5% YoY from rate adjustment. Other Businesses Hemaraj has divested UM Tower which was the non-core assets since mid of 2Q15, rental revenues from commercial office properties in 2015 therefore was Baht 30 million, compared to Baht 96 million in 2014. In additions, rental income from other commercial properties such as ESIE Plaza I, II etc. generated Baht 18 million in 2015, slightly increased from Baht 17 million in 2014. Furthermore, in 2015, there was Baht 23 mm sales of condominium from the last unit of the Park Chidlom Condominium sold in 3Q15. A total of 218 units of the Park Chidlom Condominium were successfully sold out. Profitability 2015 gross profit was recorded at Baht 3,444 million, an increase of Baht 283 million from 2014. Our gross profit margin in 2015 remained strong at 46.1%, though slightly decreased from 49.9% in 2014. Hemaraj reported 2015 net profit of Baht 3,336 million, representing Baht 71 million increase. We accordingly were able to maintain our high level of net profit margin in 2015 at 44.6%.
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Financial position Million Baht 40 ,000 35,000 30,000
32,491
33,902
25,000 20,000
18,197 18,605 14,295 15,297
15,000 10,000 5,000 0
Total Assets
Total Liabilities
31-Dec-15
The consolidated balance sheet as of 31 December 2015 is summarized as follows. Assets Total assets as of 31 December 2015 were Baht 32,491 million, decreased by Baht 1,411 million from Baht 33,902 million at year-end 2014. Total current assets as of 31 December 2015 were Baht 19,836 million compared to Baht 17,307 million at the end of 2014. This included cash and cash equivalent of Baht 1,476 million, short-term investment of Baht 1,461 million, trade and other receivables of Baht 225 million and cost of real estate developments of Baht 12,982 million. Non-current assets were Baht 12,655 million as of 31 December 2015. This included net investment property of Baht 2,468 million, net property, plant, and equipment of Baht 1,986 million, and long-term investment in associates of Baht 7,895 million which mainly includes 35% shareholdings in 660 MW coal-fired power plant GHECO-One which is the joint investments with Glow Energy Plc. and 23% shareholdings in Hemaraj Property Fund (“HPF”).
Shareholders’ Equity 21-Dec-14
Liabilities As of 31 December 2015, total liabilities were Baht 18,197 million. Major items comprised of long-term debentures of Baht 13,899 million, trade and other payables of Baht 2,191 million and long-term borrowings from financial institutions of Baht 1,008 million. Total liabilities decreased Baht 409 million or by 2.2% from Baht 18,605 million at year-end 2014 partly due to a significant drop in long-term borrowings from financial institutions despite an increase in long-term debentures. Shareholders’ Equity As of 31 December 2015, total shareholders’ equity was Baht 14,295 million, decreased Baht 1,002 million from Baht 15,297 million at the end of 2014. The change was from a significant drop in retained earnings resulting from dividend payment of Baht 4,295 million in 2015. Accordingly, debt to equity ratio was 1.27 times at the end of 2015, increased from 1.22 times at the end of previous year. While, interest bearing debt to equity ratio increased from 1.02 times at 2014 year-end to 1.05 times at the end of 2015.
Cash flow and source of fund analysis Cash Flows Analysis (Unit : Million Baht) 2015 2014 Net Cash Provided by (Used in) Operating Activities Net Cash Provided by (Used in) Investing Activities Net Cash Provided by (Used in) Financing Activities Difference from Foreign Exchange Translation Increase (decrease) in Cash and Cash Equivalents, Net Cash and Cash Equivalent, Beginning of the Period Cash and Cash Equivalent, Ending of the Period As of 31 December 2015, cash and cash equivalent were Baht 1,476 million, excluding short-term investment amounted Baht 1,461 million which has comparable liquidity to cash. Therefore, Hemaraj’s total cash and cash equivalent including short-term investment was Baht 2,936 million, increased Baht 849 million from year-end 2014. During 2015, Hemaraj generated Baht 2,481 million from Operating Activities and Baht 1,834 million from Investing Activities, while used Baht 4,926 million in Financing Activities. Use of fund Hemaraj continues to strategically invest in our Industrial Estate, Utilities, Power and Industrial Properties businesses aiming to expand our capabilities to serve our
2,481 1,834 (4,926) (1) (612) 2,087 1,476
(2,037) 565 (1,222) 0 (2,693) 4,780 2,087
customers with quality integrated service solution and provide attractive returns on investment to our shareholders. Source of Fund Hemaraj manages our capital structure and source of fund carefully considering potential risks and returns. Currently, our main sources of fund are from cash flow from operation and debt financing via corporate bonds. In 2015, Hemaraj issued unsecured Baht bonds of Baht 2,500 million with 7-year and 10- year tenors, and repaid long-term borrowings from financial institutions and matured bonds totaling Baht 2,858 million. Our net interest-bearing debt to equity stood healthily at 0.84 times at the end of 2015.
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Key Financial Ratios
2015 2014
Return on Assets Return on Equity Gross Profit Margin Net Profit Margin Debt to Equity (times) Interest-bearing Debt to Equity (times) Net Interest-bearing Debt to Equity (times) Earnings per Share(1) (Baht) Book Value per Share (Baht) No. of Shares Issued and Paid (million shares)
10.0% 22.2% 46.1% 44.6% 1.27 1.05 0.84 0.34 1.47 9,705
9.7% 19.9% 49.9% 51.6% 1.22 1.02 0.88 0.31 1.58 9,705
Remark : (1) Earnings per share is calculated by dividing the net profit attributable to ordinary shareholders of the company by the weighted average number of ordinary shares issued and paid-up during the year
SIGNIFICANT EVENTS On 16 February 2016, WHA Venture Holding Co., Ltd., a fully owned subsidiary of WHA Corporation PCL, completed their tender offer for 98.54% of the total
shares of Hemaraj. The SET recently approved to delist Hemaraj shares with last trading date on 1 March 2016.
Report on Responsibilities of the Board of Directors Towards the Financial Report of the year 2015 The Board of Directors of Hemaraj Land and Development Public Company Limited realizes its role and responsibility as the Directors of a listed company in supervising the Company to have the Financial Reports of year 2015 to present sufficient in materiality, relevant and transparent financial and accounting information. Appropriate accounting policies have been put in place and adhered to on a consistent basis according to the generally accepted accounting principle while due consideration has been placed on the process of preparing the Company’s and the Consolidated fiscal year 2015 financial statements including other information that have been included in the annual report of this year. The Audit Committee, who is appointed by the Company’s Board of Directors, comprising of independent directors fully qualified in accordance with the requirement of the Stock Exchange of Thailand have reviewed and ensure accuracy and sufficiency of the financial report including accurate and complete disclosure of connected transactions or transactions with possible conflict of interests, sufficient and effective internal control and internal audit system, risk management and appropriate corporate governance and to be compliance with the requirement of the Stock Exchange of Thailand and relevant rules and regulations. The Company’s Board of Directors has the opinion that the financial statements and financial reports for the year 2015 of the Company and the Subsidiaries, which have been reviewed by the Audit Committee in conjunction with the management, and audited by the Company’s auditors, reflect accurate financial position, operational results and cash flow status in accordance with consistent appropriate accounting policies generally accepted accounting standards and according to relevant rules and regulations.
(Dr. Somyos Anantaprayoon) Chairman of the Board of Directors 2 March 2016
(Mr.David Richard Nardone) President & CEO 2 March 2016
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Audit Committee Report for 2015 The Audit Committee of Hemaraj Land And Development Public Company Limited has the following independent non-executive directors as its members: 1) Mr. Weidt Nuchjalearn The Chairman of Audit Committee 2) Mr. Ekajai Tivutanonda The Member of Audit Committee 3) Mrs. Punnee Worawuthichongsathit The Member of Audit Committee The Audit Committee members are qualified in accordance with the rules and regulations for Audit Committees, as issued by the Securities and Exchange Commission and the Stock Exchange of Thailand. The Audit Committee has fulfilled its responsibilities according to the scope and duties assigned by the Board of Directors in compliance with its Charter and official regulations. Six formal Audit Committee meetings were held in respect of its 2015 financial year duties. By invitation, such meetings were also attended by the internal and external auditors, as well as by members of the company management, inclusive of the Chief Financial Officer, with occasional participations by the Chief Executive Officer and the Company’s external legal council upon requests. Moreover, the Audit Committee also arranged time to meet with the internal and external auditors without executives of the Company being present. Such meetings were officially arranged quarterly, with informal consultations added as deemed necessary. The activities of the Audit Committee covered the following areas: 1) Review of the interim and annual financial statements of 2015 to verify that the statements were accurate and complete, and that relevant supporting financial information was disclosed. The review was conducted with inputs from the management and the external auditors. The Audit Committee and external auditors agreed that the financial statements were correct and had been prepared in accordance with financial reporting standards. It should be hereby mentioned that as a Thai listed public company, the Company had diligently applied itself to the Federation of Accounting Professionals of Thailand’s revised sets of accounting standards, which had been introduced in conjunction with international practice. 2) Review of the internal and risk management control system in order to verify that the system was appropriate and effective in meeting its objectives. The review which was conducted with inputs from the internal auditors, coupled with discussions with the external auditors, did not reveal any significant weaknesses or deficiencies, either at company or subsidiary level. The Audit Committee and both the internal and external auditors are of the view that the prevailing internal control and risk management system meets the requirements of the SET and SEC, and is adequate to safeguard assets and provide sufficient disclosure of information. 3) Review of the internal audit function to ensure its effectiveness and independence. The internal audit function is conducted by a reputable and independent outsourced audit firm. Work is performed in accordance with a program jointly studied and approved on a continuing basis by the Audit Committee, together with the Management. The internal auditors report their findings to both the Audit Committee and the Management on a quarterly basis, with open access to the Audit Committee at all times. The Audit Committee believes that the internal audit functions of the Company and subsidiaries are appropriate, effective and independent. 4) Review of compliance with the Securities and Exchange Acts, other relevant laws and SEC-SET regulations, as well as the Company’s own rules and obligations to external parties. This review, which was performed by the Audit Committee members, with contracted assistance from the internal auditors, did not find any significant instances of non-compliance. 5) Review of, and giving opinion on, connected transactions and transactions potentially giving rise to conflicts of interest, together with the aspect of information disclosure on such transactions in compliance with the regulations of the SET and SEC. The Audit Committee and both the internal and external auditors were of the opinion that such transactions had fully
and appropriately been disclosed in the financial statements and notes thereto, and were reasonable, of a normal business nature, as well as being beneficial to the Company. 6) Considering the appointment of external auditors and their remuneration for the year 2016, and recommending such to the Board of Directors for submission to the Shareholders’ Annual General Meeting. Having considered past performance, independence and remuneration issues, the Audit Committee was satisfied with audit personnel of the present external audit firm, PricewaterhouseCoopers ABAS Ltd., on all counts. The Audit Committee thus recommended Mr. Chanchai Chaiprasit (Certified Public Accountant registration number 3760), or Mrs. Unakorn Phruithithada (Certified Public Accountant registration number 3257), Mr. Boonlert Kamolchanokkul (Certified Public Accountant registration number 5339) or Mrs. Anuthai Poomsurakul (Certified Public Accountant registration number 3873) of Price Waterhouse Coopers ABAS LTD., be appointed the Company’s external auditor for the financial year ending 31st December 2016 at a remuneration of Bath 2,150,000 (Two million one hundred fifty thousand baht only). This represented a Baht 450,000 (Four hundred fifty hundred baht only) increment from the 2015 level due largely to increased work volume. The Audit Committee also agreed to recommend the appointment of Mr. Chanchai Chaiprasit (Certified Public Accountant registration number 3760, or Mrs. Unakorn Phruithithada (Certified Public Accountant registration number 3257), or Mr. Boonlert Kamolchanokkul (Certified Public Accountant registration number 5339) or Mrs. Anuthai Poomsurakul (Certified Public Accountant registration number 3873) each from PricewaterhouseCoopers ABAS Ltd., to serve as the external auditor of the Company’s subsidiaries for the 2016 financial year at a remuneration of Baht 7,650,000 (Seven million six hundred fifty thousand baht only). This denoted a Baht 2,570,000 (Two million five hundred seventy thousand baht only) increase from the 2015 level, induced by expansion in working volume and in the number of subsidiaries companies. Additionally, the Audit Committee recommended an fee of “BOI certifying budget” from Baht 455,000 (Four hundred fifty five thousand baht only) for 2016. The present and proposed external auditors have no family, financial interest, employment, investment or business relationship with the Company or any of its subsidiaries, other than in the normal course of audit business. In summary, the Audit Committee, in the course of discharging its Chartered responsibilities as assigned by the Board of Directors, found that the Company had presented its financial and operational information in a true and fair manner, had appropriate and effective internal controls and audit and risk management, had complied with laws, regulations and obligations, and had disclosed connected transactions correctly. Nevertheless, the Company has strictly give precedence to and comply with the corporate governance practice which the Company received “Very Good” level (4 logos) as assessment of corporate governance recognition in 2015 by the Thai Institute of Directors Association (Thai IOD) and maintaining a quality for arrangement of Annual General Meeting of Shareholder of year 2015 by receiving total score of 100 points from the assessment of Thai IOD as well as the assessment with the previous year.
(Weidt nuchjalearn) The Chairman of Audit Committee 17 March 2016 Hemaraj Land and Development Public Company
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Auditor’s Report To The Shareholders of Hemaraj Land and Development Public Company Limited I have audited the accompanying consolidated and company financial statements of Hemaraj Land and Development Public Company Limited and its subsidiaries and of Hemaraj Land and Development Public Company Limited, which comprise the consolidated and company statements of financial position as at 31 December 2015, and the related consolidated and company statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other notes.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position of Hemaraj Land and Development Public Company Limited and its subsidiaries and of Hemaraj Land and Development Public Company Limited as at 31 December 2015, and its consolidated and company results of operations and its cash flows for the year then ended in accordance with Thai Financial Reporting Standards.
PricewaterhouseCoopers ABAS Ltd. Bangkok 24 February 2016
Anothai Leekitwattana Certified Public Accountant (Thailand) No. 3442
Statements of Financial Position Hemaraj Land and Development Public Company Limited and its subsidiaries As at 31 December 2015 Consolidated
Company
Restated 31 December 31 December 2015 2014
Assets Current assets Cash and cash equivalents Short-term investment Trade and other receivables, net Short-term loans to related parties Cost of real estate developments, net Other current assets Assets held for sale Total current assets Non-current assets Investments in available-for-sale Investments in associates Investments in subsidiaries Other long-term investments, net Investment property, net Property, plant and equipment, net Deferred tax assets Deferred income from operation lease agreement Other non-current assets Total non-current assets Total assets
Restated
1 January 2014
31 December 31 December 2015 2014
1 January 2014
Notes
Baht
Baht
Baht
Baht
Baht
Baht
8 9 10 39 11 12 13
1,475,613,992 1,460,829,078 225,117,417 1,432,900,000 12,982,025,794 131,275,146 2,128,543,262 19,836,304,689
2,087,414,640 184,114,078 1,432,900,000 13,485,345,013 117,124,818 17,306,898,549
4,780,438,967 298,240,369 1,432,900,000 11,437,035,642 98,248,731 18,046,863,709
996,449,205 1,460,829,078 175,799,269 7,788,300,000 4,046,332,796 66,521,721 161,494,509 14,695,726,578
1,613,378,196 911,602,177 6,970,300,000 4,473,553,672 49,478,678 14,018,312,723
1,028,712,647 1,488,909,289 5,538,899,962 3,800,104,086 44,572,628 11,901,198,612
14 14 15 16 17 32 18
495,980 571,295 584,791 495,980 571,295 584,791 7,894,511,389 7,425,486,405 6,883,959,070 5,422,459,244 5,422,459,244 5,422,459,244 - 9,828,861,581 7,059,284,449 5,579,784,554 144,283,003 144,298,003 144,283,003 142,500,003 142,500,003 142,500,003 2,467,691,585 6,974,322,371 6,741,040,523 23,032,446 76,115,763 34,939,064 1,986,392,080 1,891,713,625 1,614,164,087 56,784,466 104,858,084 112,896,752 48,416,502 41,829,959 39,442,367 29,573,188 18,202,637 16,133,217 10,245,215 102,846,771 117,163,615 130,062,526 100,722,342 115,864,796 129,400,743 12,654,882,525 16,595,385,273 15,553,536,367 15,604,429,250 12,939,856,271 11,438,698,368 32,491,187,214 33,902,283,822 33,600,400,076 30,300,155,828 26,958,168,994 23,339,896,980
The accompanying notes on pages 13 to 96 form part of the financial statements
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Statements of Financial Position (Cont’d) Hemaraj Land and Development Public Company Limited and its subsidiaries As at 31 December 2015 Consolidated
Company
Restated 31 December 31 December 2015 2014 Notes
Liabilities and shareholders’ equity Current liabilities Short-term borrowings from financial institution Trade and other payables Short-term borrowings from related parties Short-term borrowings from others Current portion of long-term borrowings from financial institutions Current portion of long-term debenture Current portion of provision for liabilities arising from guarantee of rental income Accrued income tax Other current liabilities Liabilities related directly to assets held for sale Total current liabilities Non-current liabilities Long-term borrowings from related party Long-term borrowings from financial institutions Long-term debentures, net Deferred tax liabilities Employee benefit obligations Provision for liabilities arising from guarantee rental income Unearned income from rental and leasehold right Other non-current liabilities Total non-current liabilities Total liabilities
20 19 39
20 21 24,39
22 13
Baht
Baht
-
1 January 2014 Baht
Baht
Baht
1 January 2014 Baht
300,000,000
400,000,000
2,190,682,203 1,932,071,411 3,220,208,205 5,225,448,910 - 489,908,990
437,686,325 -
346,467,988 -
262,500,000 384,755,822
317,289,625
394,368,715 1,492,928,518 1,492,577,651 98,165,208 15,403,147 15,403,147
394,368,715 10,422,360
262,500,000 551,505,822
1,492,928,518 1,492,577,651 107,422,348 107,422,348 55,019,036 111,999,129 144,773,684
26,820,837 115,488,297 -
609,679,390
31 December 31 December 2015 2014
-
40,000,000 809,218,920
300,000,000
Restated
499,789,625
221,310,659 125,415,164 -
729,218,920
40,196,958 3,324,840
45,450,021 -
53,822,938 -
4,952,043,838 4,788,386,366 5,168,936,966 7,996,430,283 2,938,372,966 1,522,371,626 39 20 21 32 23 24,39 25
- 1,091,906,620 1,026,176,694 1,035,901,814 198,775,000 1,514,025,000 1,980,950,000 120,900,000 1,356,150,000 1,740,950,000 12,405,883,551 11,410,047,068 10,414,340,584 12,405,883,551 11,410,047,068 10,414,340,584 113,885,978 137,713,013 123,268,597 75,354,651 83,673,372 70,702,637 31,223,089 38,263,691 31,393,681 - 107,422,348 196,330,416 15,403,147 20,844,720 157,880,953
164,596,796
171,234,561
40,975,792
43,459,792
45,943,792
292,721,318 399,545,327 590,532,682 92,908,479 53,352,288 51,811,568 13,244,501,451 13,817,022,924 13,547,359,477 13,783,797,531 13,942,852,680 13,341,186,159 18,196,545,289 18,605,409,290 18,716,296,443 21,780,227,814 16,881,225,646 14,863,557,785
The accompanying notes on pages 13 to 96 form part of the financial statements
Statements of Financial Position (Cont’d) Hemaraj Land and Development Public Company Limited and its subsidiaries As at 31 December 2015 Consolidated
Company
Restated 31 December 31 December 2015 2014 Notes
Liabilities and shareholders’ equity (Cont’d) Shareholders’ equity Share capital Authorised share capital Ordinary shares, 15,000,000,000 shares of par Baht 0.40 each Issued and paid-up share capital Ordinary shares 9,705,186,191 shares of par Baht 0.40 each Share premium account ordinary shares Retained earnings Appropriated - legal reserve Unappropriated Other components of equity Equity attributable to owners of the parent Non-controlling interests Total shareholders’ equity Total liabilities and shareholders’ equity
Baht
Baht
Restated
1 January 2014 Baht
31 December 31 December 2015 2014 Baht
Baht
1 January 2014 Baht
6,000,000,000 6,000,000,000 6,000,000,000 6,000,000,000 6,000,000,000 6,000,000,000
26 26 27 28
3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476 438,704,620 438,704,620 438,704,620 438,704,620 438,704,620 438,704,620 600,000,000 9,073,902,779 (29,895,986) 13,964,785,889 329,856,036 14,294,641,925 32,491,187,214
600,000,000 10,084,369,142 (31,268,625) 14,973,879,613 322,994,919 15,296,874,532 33,902,283,822
600,000,000 8,864,635,692 (31,304,091) 13,754,110,697 1,129,992,936 14,884,103,633 33,600,400,076
600,000,000 3,598,303,964 844,954 8,519,928,014 8,519,928,014 30,300,155,828
600,000,000 5,155,922,309 241,943 10,076,943,348 10,076,943,348 26,958,168,994
600,000,000 3,555,307,354 252,745 8,476,339,195 8,476,339,195 23,339,896,980
The accompanying notes on pages 13 to 96 form part of the financial statements
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Statements of Comprehensive Income Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the year ended 31 December 2015 Consolidated Notes
Revenues Sales of real estate Rental, services and utilities income Total revenues Cost of sales and services Cost of sales of real estate Cost of rental, services and utilities Total cost of sales and services Gross profit Other income Profit from sale of investments in subsidiaries Interest income Management income and commission fee Dividend income Gain on sale of building Others Selling expenses Administrative expenses Provision for loss arising from guarantee of minimum rental income Other expenses Loss from sales of investments in subsidiaries Loss on exchange rate Finance costs Share of gain from investments in associates Profit before income tax expenses Income tax expenses Profit for the year
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
40 40
4,679,213,788 3,680,162,516 2,845,991,575 2,791,915,405 2,652,934,495 137,367,420 7,471,129,193 6,333,097,011 2,983,358,995
527,051,786 147,065,255 674,117,041
30
2,774,547,351 1,252,087,164 4,026,634,515 3,444,494,678
297,246,119 101,587,798 398,833,917 275,283,124
7
98,054,654
39
39
29 14 31
140,081,032 13,327,446 4,803,536 45,569,362 130,615,182 (279,856,057) (633,245,183)
1,773,810,183 1,694,990,158 1,397,319,492 90,676,379 3,171,129,675 1,785,666,537 3,161,967,336 1,197,692,458 -
-
132,326,803 492,772,764 419,974,363 8,008,280 176,076,524 247,826,411 65,439,602 2,267,259,534 3,544,856,165 1,982,602 32,636,410 177,569 37,634,862 9,709,537 4,920,396 (268,009,920) (159,222,984) (64,170,316) (647,239,128) (300,564,026) (310,469,134)
(15,238,889)
(27,771,420)
(760,643,314) 1,305,072,583 3,493,035,030 (157,241,466) 3,335,793,564
(65) (751,701,488) 1,650,405,202 3,363,042,666 (98,108,269) 3,264,934,397
The accompanying notes on pages 13 to 96 form part of the financial statements
-
(730,837)
(14,942,362)
(153,478,511) (65,836,433) (3,337,719) (766,057,063) (751,463,837) 2,730,257,373 3,348,654,660 11,521,303 1,431,193 2,741,778,676 3,350,085,853
Statements of Comprehensive Income Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the year then ended 31 December 2015 Consolidated Notes
Other comprehensive income (expense) Items that will not be reclassified subsequently to profitor loss Actuarial loss on defined employee benefit plans Actuarial loss on defined employee benefit plans associates Total items that will not be reclassified subsequently to profit or loss Items that will be reclassified subsequently to profit or loss Translation of financial statements differenes Gain on remeasuring available-for-sale investments Total items that will be reclassified subsequently to profit or loss Other comprehensive (expense) income for the periods - net of tax Total comprehensive income for the periods Profit attributable to Equity holders of the parent Non-controlling interests Total income for the periods Total comprehensive income attributable to Equity holders of the parent Non-controlling interests Total comprehensive income for the periods Earnings per share Basic earnings per share
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
-
(2,464,540) (304,500)
-
(2,542,107) -
-
(2,769,040)
-
(2,542,107)
769,628 603,011
46,268 (10,802)
603,011
(10,802)
1,372,639
35,466
603,011
(10,802)
1,372,639
(2,733,574)
603,011
(2,552,909)
3,337,166,203 3,262,200,823 2,742,381,687 3,347,532,944 33
3,288,930,658 3,003,191,697 2,741,778,676 3,350,085,853 46,862,906 261,742,700 3,335,793,564 3,264,934,397 2,741,778,676 3,350,085,853 3,290,303,297 3,000,118,739 2,742,381,687 3,347,532,944 46,862,906 262,082,084 3,337,166,203 3,262,200,823 2,742,381,687 3,347,532,944
33
0.34
0.31
0.28
0.35
The accompanying notes on pages 13 to 96 form part of the financial statements
Hemaraj Land and Development Public Company
267
34
4
34
4
438,704,620 438,704,620 438,704,620 438,704,620 438,704,620 438,704,620
3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476
Baht
3,882,074,476 -
Baht
The accompanying notes on pages 13 to 96 form part of the financial statements
Beginning balance as at 1 January 2015 Cumulative effect of the change in accounting policy Beginning balance as at 1 January 2015 Dividend from subsidiaries paid to non-controlling interests Total comprehensive income for the year Appropriated - legal reserve Dividend paid Decrease in non-controlling interests during the year Ending balance as at 31 December 2015 Beginning balance as at 1 January 2014 Cumulative effect of the change in accounting policy Beginning balance as at 1 January 2014 Dividend from subsidiaries paid to non-controlling interests Total comprehensive income (expense) for the year Appropriated - legal reserve Dividend paid Share of other comprehensive expense of associates Actuarial loss on defined employee benefit plans Increase in non-controlling interests during the year Adjust in non-controlling interests Ending balance as at 31 December 2014
Notes
Issued and paid-up share capital
Premium on paid-up capital ordinary shares, net
Consolidated
9,805,231,652 279,137,490
Baht
Unappropriated
9,073,902,779 8,628,123,754 236,511,938 8,864,635,692 -
(2,803,924) (33,421,031) 600,000,000 10,084,369,142
-
- 3,003,191,697 - (1,746,928,792) (304,500)
600,000,000 600,000,000 600,000,000 -
- 3,288,930,658 - (4,299,397,021) -
600,000,000 10,084,369,142 -
600,000,000 -
Baht
Appropriated legal reserve
Retained earnings
(31,510,569)
-
46,268 -
(30,740,941) (31,556,837) (31,556,837) -
769,628 -
(31,510,569) -
(31,510,569) -
Baht
Exchange differences on translating financial statements
241,944
-
(10,802) -
844,955 252,746 252,746 -
603,011 -
241,944 -
241,944 -
Baht
Fair value change in availablefor-sale Investments Baht
Total Equity Attributable to owners of the parent
(2,803,924) (33,421,031) (31,268,625) 14,973,879,613
-
35,466 3,003,227,163 - (1,746,928,792) (304,500)
(29,895,986) 13,964,785,889 (31,304,091) 13,517,598,759 236,511,938 (31,304,091) 13,754,110,697 -
1,372,639 3,290,303,297 - (4,299,397,021) -
(31,268,625) 14,973,879,613 -
(31,268,625) 14,694,742,123 279,137,490
Baht
Total Other components of equity
Other components of equity
Total Equity Attributable to Owners of the Parent
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the year then ended 31 December 2015
Statements of Changes in Shareholders’ Equity
Baht
Total shareholders’ equity
(2,803,924) (262,499,895) 33,421,031 322,994,919 15,296,874,532
(262,499,895)
262,082,084 3,265,309,247 - (1,746,928,792) (304,500)
329,856,036 14,294,641,925 1,139,279,634 14,656,878,393 (9,286,698) 227,225,240 1,129,992,936 14,884,103,633 (840,001,237) (840,001,237)
46,862,906 3,337,166,203 - (4,299,397,021) (1,182) (1,182)
322,994,919 15,296,874,532 (40,000,607) (40,000,607)
334,457,683 15,029,199,806 (11,462,764) 267,674,726
Baht
Noncontrolling interests
268 Annual Report 2015
Hemaraj Land and Development Public Company
269
The accompanying notes on pages 13 to 96 form part of the financial statements
Beginning balance as at 1 January 2015 Cumulative effect of the change in accounting policy Beginning balance as at 1 January 2015 Dividend paid Total comprehensive income for the year Ending balance as at 31 December 2015 Beginning balance as at 1 January 2014 Cumulative effect of the change in accounting policy Beginning balance as at 1 January 2014 Dividend paid Total comprehensive income (expenses) for the year Transferred to retained earnings Ending balance as at 31 December 2014
Notes
34
4
34
4
3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476 3,882,074,476
Baht
Issued and paid-up share capital
438,704,620 438,704,620 438,704,620 438,704,620 438,704,620 438,704,620
Baht
Premium on paid-up capital ordinary shares, net
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the year then ended 31 December 2015
600,000,000 600,000,000 600,000,000 600,000,000 600,000,000 600,000,000
Baht
Appropriated legal reserve
5,167,181,921 (11,259,612) 5,155,922,309 (4,299,397,021) 2,741,778,676 3,598,303,964 3,565,623,794 (10,316,439) 3,555,307,355 (1,746,928,792) 3,350,085,853 (2,542,107) 5,155,922,309
Baht
Unappropriated
Retained earnings
Company
241,943 241,943 603,011 844,954 252,745 252,745 (10,802) 241,943
Baht
Fair value change in available-forsale Investments
241,943 241,943 603,011 844,954 252,745 252,745 (10,802) 241,943
Baht
Total Other components of equity
Other components of equity
Statements of Changes in Shareholders’ Equity (Cont’d)
10,088,202,960 (11,259,612) 10,076,943,348 (4,299,397,021) 2,742,381,687 8,519,928,014 8,486,655,635 (10,316,439) 8,476,339,196 (1,746,928,792) 3,350,075,051 (2,542,107) 10,076,943,348
Baht
Total Shareholders’ Equity
270
Annual Report 2015
Statements of Cash Flows Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the year ended 31 December 2015 Consolidated Notes
Cash flows from operating activities Profit before income tax expenses Adjustments for: Gain from sales of temporary investments Doubtful debt expenses (reverse) Share of profit from investments in associates Loss (gain) on exchange rate (Gain) Loss on sales of investment in subsidiaries Gain from sales of other long-term investments Gain from sales of investment property Deferred income from operating lease agreements Gain from sales of building and equipment Depreciation and amortization Amortisation of leasehold right Amortisation of issuing debenture expenses Employee benefit obligations Provision for loss arising from guarantee of minimum rental income Provision for maintenance Deferred leasehold right income - related parties Unearned income from rent and leasehold right Dividend income Finance costs Changes in operating assets and liabilities Trade and other receivables Cost of real estate developments Other current assets Other non - current assets Trade and other payables Other current liabilities Other non - current liabilities Cash provided by (used in) operating activities Cash paid for finance costs Cash paid for corporate income tax Net cash provided by (used in) operating activities
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
3,493,035,030 3,363,042,666 2,730,257,373 3,348,654,660 10 14 14
21 24
(9,371,802) 2,016,107 9,943,221 (1,305,072,583) (1,650,405,202) (88,502,772) -
(9,371,802) (1,623,917) 65,836,433 162,850,313
(46,467) 3,316,941 -
(180,000) (26,736,896) (17,782,600)
-
(26,736,896) -
-
(45,232,486) 270,699,111 9,834,824 7,422,350 (7,822,000) 15,238,888
(1,982,602) 334,407,895 8,707,269 6,477,221 9,890,060 27,771,420
(32,636,410) 20,087,781 9,834,824 7,422,350 (7,040,602) 730,837
(926,535) 21,021,352 7,576,235 6,477,221 3,692,376 14,942,362
19,330,127 76,341,886 4,423,653 4,707,658 (6,715,843) (5,584,371) (2,484,000) (2,484,000) (1,053,394) (4,803,536) (65,439,602) (2,267,259,534) (3,544,856,165) 760,643,314 751,701,488 766,057,063 751,463,837 3,065,999,233 2,863,317,955 1,420,347,966 613,539,475 (56,146,622) 132,007,959 (8,107,086) 7,816,288 268,855,665 (22,613,414) 59,094,370 3,446,906,393 (814,920,548) (151,966,875) 2,480,018,970
101,941,819 97,527,139 249,078,826 (2,329,915,898) 357,993,849 (665,705,907) 4,268,339 (736,944) 6,160,437 5,699,630 8,661,900 6,422,581 (1,320,008,958) 382,529,430 110,385,196 (46,723,360) (9,676,716) (13,080,577) (190,941,087) 42,881,030 1,540,721 (911,861,560) 2,299,527,154 308,340,752 (784,160,251) (818,529,146) (772,485,808) (340,465,940) (16,306,100) (11,066,487) (2,036,487,751) 1,464,691,908 (475,211,543)
The accompanying notes on pages 13 to 96 form part of the financial statements
Statements of Cash Flows (Cont’d) Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the year ended 31 December 2015 Consolidated
Cash flows from investing activities Cash paid for purchase of temporary investments Cash received from sale of temporary investments Cash received from sale of investments in subsidiaries, net Proceeds from sale of other long - term investments Payments for short - term loans to related parties Cash received from short-term loans to related parties Cash paid for acquisition of investments in associates Cash paid for acquisition of investments in subsidiaries Dividend received from associates Dividend received from subsidiaries Dividend received from others Proceeds from sales of investment properties Purchases of investment properties Purchases of assets for rent Proceeds from sales of building and equipment Purchases of building and equipment Cash paid for rental income guarantee Net cash provided by (used in) investing activities Cash flows from financing activities Repayment of short-term from financial institution Proceeds from issuing debentures Cash paid for expired debentures Cash paid for issuing debentures Repayment of short-term from related parties Proceeds from short-term borrowings from related parties Repayment of advance payment from related parties Repayment of long-term borrowings from related parties Repayment of short-term borrowings from others Cash paid for long - term borrowings The minority shareholders increased Dividend paid to shareholders Cash paid for non-controlling interests
Company
2015
2014
2015
2014
Notes
Baht
Baht
Baht
Baht
9
(4,460,000,000) 3,009,371,802 2,818,619,734
14
14 14 14
24 20 21 21 21
- (4,460,000,000) - 3,009,371,802 - 2,391,149,649
-
195,000 - (2,828,600,000) (2,003,400,000) - 2,010,600,000 571,999,963 (325,534,528) (3,659,469) - (843,555,224) (1,216,999,895) 1,161,582,127 1,111,067,613 1,132,506,502 1,111,067,613 - 1,774,649,150 2,702,023,665 4,803,536 65,439,602 3,568 60,039,638 33,500,000 33,500,000 (33,021,660) (54,703,153) (695,000) (1,168,441) - (17,788,798) 124,013,178 1,982,617 98,373,832 926,542 (376,454,957) (429,529,743) (37,791,403) (8,494,243) (122,661,236) (107,422,348) (16,133,984) (15,403,147) 1,834,412,996 565,386,321 2,263,378,892 1,200,591,695 (300,000,000) 2,500,000,000 (1,500,000,000) (11,235,000) -
(309,679,390) 2,500,000,000 (400,000,000) (12,561,800)
(300,000,000) 2,500,000,000 (1,500,000,000) (11,235,000) -
(100,000,000) 2,500,000,000 (400,000,000) (12,561,800) (53,239,362)
-
-
489,908,990 (75,321,787)
-
-
-
(106,508)
(13,107,960)
(222,500,000) - (262,500,000) 20 (1,057,536,902) (415,208,803) (890,786,902) (317,333,803) 105 (4,294,958,584) (1,744,471,771) (4,294,958,584) (1,744,471,678) (1,182) Hemaraj Land and Development Public Company
271
272
Annual Report 2015
Statements of Cash Flows (Cont’d) Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the year ended 31 December 2015 Consolidated Notes
Dividend paid from a subsidiary to non-controlling interests Net cash (used in) provided by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents end of year Non-cash transaction: Transfer cost of real estate development to investment property Transfer investment property to assets classified as held for sales Cost of real estate development - Trade accounts payable Share held for transfer to settle for the investment in subsidiary The acquisition of non-controlling interest by issuing promissory notes. Investment in subsidiaries increased Short-term borrowings from others increased
2015
2014
2015
2014
Baht
Baht
Baht
Baht
(40,000,946)
8
Company
(4,926,232,614) (611,800,648) 2,087,414,640 1,475,613,992
(840,001,238)
-
-
(1,221,922,897) (4,344,999,791) (140,714,603) (2,693,024,327) (616,928,991) 584,665,549 4,780,438,967 1,613,378,196 1,028,712,647 2,087,414,640 996,449,205 1,613,378,196
419,687,036
341,732,652
115,845,922
43,011,757
2,121,005,878
(341,732,652)
161,494,509
(43,011,757)
1,662,292,472 1,308,064,652
535,448,951
79,092,514
- 4,480,021,840
-
-
The accompanying notes on pages 13 to 96 form part of the financial statements
(262,499,895) 262,499,895
-
(262,499,895) 262,499,895
NOTES TO FINANCIAL STATEMENTS 1. General information Hemaraj Land and Development Public Company Limited (“the Company”) has been incorporated under the Civil and Commercial Code of Thailand on 15 August 1988 and has been subsequently listed on the Stock Exchange of Thailand and transformed to a Public Company Limited according to the Public Company law on 10 July 1992 and 12 July 1993, respectively. The address of the Company’s registered office is as follows: 18th floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang subdistrict, Suanluang district, Bangkok, Thailand 10250. The principal business operations of the Company are summarised as follows: 1. Industrial estate development projects located in the Eastern Seaboard of Thailand. The projects are operating under the joint operation agreements with the Industrial Estate Authority of Thailand (“IEAT”) Company Name Hemaraj Land and Development Plc.
Site Location
Hemaraj Chonburi I and II
Sriracha district, Chonburi province
Hemaraj Eastern Seaboard II
Banbueng district, Chonburi province
Eastern Industrial Estate Co., Ltd.
Hemaraj Eastern (Map Ta Phut) Muang district, Rayong province
Eastern Seaboard Industrial Estate (Rayong) Co., Ltd.
Eastern Seaboard (Rayong)
Pluak Daeng district, Rayong province
Hemaraj Eastern Seaboard Industrial Estate Co., Ltd.
Hemaraj Eastern Seaboard
Pluak Daeng district, Rayong province
Hemaraj Eastern Seaboard III
Nong Yai district, Chonburi province
Hemaraj Eastern Seaboard IV
Pluak Daeng district, Rayong province
Hemaraj Eastern Seaboard Industrial Estate 4 Co., Ltd.
Industrial Estate
2. Industrial zone development projects. Company Name
Industrial Zone
Site Location
Hemaraj Saraburi Industrial Land Company Limited
Hemaraj Saraburi
Nongkae district, Saraburi province
Hemaraj Rayong Industrial Land Company Limited
Hemaraj Rayong
Ban kai district, Rayong province
3. A condominium for sales being developed by the Company in the project name of The Park Chidlom, located in Chidlom Road, Bangkok. 4. Service business related to the mentioned industrial estates and industrial zone consisting of service providing for public utilities and facilities, office building for sale and lease, prefabricated factory for sale and lease, land rental, commercial plaza rental, pipe rack rental in Industrial Estates, building contractor and others. For reporting purposes, the Company and its subsidiaries are referred to as “the Group”, in which WHA Corporation Public Company Limited is an ultimate parent company of the Group.
Hemaraj Land and Development Public Company
273
274
Annual Report 2015
The Company received a letter from WHA Venture Holding Co. Ltd. (the “Offeror”), a major shareholder of the Company, requesting to propose to shareholders for delisting the Company’s securities from the Stock Exchange of Thailand (“SET”). An Extraordinary shareholders meeting no 1/2015 was held on 30 September 2015. At the meeting, the shareholders resolved to approve the withdrawal of the Company’s securities from the Stock Exchange of Thailand. Subsequently, on 23 February 2016, the Company received an approval for delisting the Company’s securities from the Stock Exchange of Thailand which will be effective from 2 March 2016. This consolidated and company financial statements was authorised by the Board of Directors on 24 February 2016.
2. Accounting policies
The principal accounting policies applied in the preparation of these consolidated and company financial statements are set out below:
2.1 Basis for preparation
The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Financial Reporting Standards issued under the Accounting Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act. The consolidated and company financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The preparation of financial statements in conformity with Thai generally accepted accounting principles requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5. Comparative figures have been adjusted to conform with changes in presentation in the current year as described in Note 4. An English version of the consolidated and company financial statements has been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail.
2.2 New financial reporting standards and revised financial reporting standards and interpretations
2.2.1 New financial reporting standards and revised accounting standards, revised financial reporting standards are effective on 1 January 2015. a) Financial reporting standards with significant changes are as follows: TAS 1 (revised 2014) TAS 12 (revised 2014) TAS 16 (revised 2014) TAS 19 (revised 2014) TAS 27 (revised 2014) TAS 28 (revised 2014)
Presentation of financial statements Income Taxes Property, plant and equipment Employee benefits Separate financial statements Investments in associates and joint ventures
TAS 34 (revised 2014) TFRS 3 (revised 2014) TFRS 10 TFRS 11 TFRS 12 TFRS 13 TFRIC 14 (revised 2014)
Interim financial reporting Business Combinations Consolidated financial statements Joint arrangements Disclosure of interests in other entities Fair value measurement TAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction
Commencing 1 January 2015, the Group has applied the aforementioned accounting standards. The application of those accounting standards does not have significant impact to the financial statements being presented except the adoption of TAS 1 (revised 2014) ‘Presentation of financial statements’, TAS 12 (revised 2014) ‘Income Taxes’, TAS 28 (revised 2014) ‘Investments in associates and joint ventures’ and TFRS 3 (revised 2014) ‘Business Combinations’ which the impact to the financial statements is presented in Note 4. Financial reporting standards with minor changes There are 41 financial reporting standards with minor changes which the Group assesses that do not have impact to the Group. 2.2.2 New financial reporting standards, revised accounting standards and revised financial reporting standards are effective on 1 January 2016. a) Financial reporting standards with significant changes are as follows: TAS 16 (revised 2015) TAS 19 (revised 2015) TAS 24 (revised 2015) TAS 27 (revised 2015) TAS 36 (revised 2015) TAS 38 (revised 2015) TAS 40 (revised 2015) TFRS 3 (revised 2015) TFRS 8 (revised 2015) TFRS 10 (revised 2015) TFRS 12 (revised 2015) TFRS 13 (revised 2015)
Property, plant and equipment Employee benefits Related party disclosures Separate financial statements Impairment of assets Intangible assets Investment property Business combinations Operating segments Consolidated financial statements Disclosure of interests in other entities Fair value measurement
The management has assessed and considered that the above revised standards will not have a material impact on the Group. Significant changes in those new and revised accounting standards are summarised as below. TAS 16 (revised 2015), ‘Property, plant and equipment’ clarifies how the gross carrying amount and the accumulated depreciation are treated where an entity uses the revaluation model. TAS 19 (revised 2015), ‘Employee benefits’ is amended to apply to contributions from employees or third parties to defined benefit plans and to clarify the accounting treatment of such contributions. The amendment distinguishes between contributions that are linked to service only in the period in which they arise and those linked to service in more than one period. Hemaraj Land and Development Public Company
275
276
Annual Report 2015
TAS 24 (revised 2015), ‘Related party disclosures’ includes as a related party an entity that provides key management personnel services to the reporting entity or to the parent of the reporting entity (the ‘management entity’). Disclosure of the amounts charged to the reporting entity is required. TAS 27 (revised 2015), “separate financial statements’ allows an investment entity that is exempted from consolidating its subsidiaries presenting separate financial statements as its only financial statements. It requires the investment entity to measure its investment in subsidiaries at fair value through profit or loss. TAS 36 (revised 2015), ‘Impairment of assets’ is amended to provide additional disclosure requirement when the recoverable amount of the assets is measured at fair value less costs of disposal. The disclosures include 1) the level of fair value hierarchy, 2) when fair value measurement categorised within level 2 and level 3, disclosures is required for valuation technique and key assumption. TAS 38 (revised 2015), ‘Intangible assets’ is amended to clarify how the gross carrying amount and the accumulated amortisation are treated where an entity uses the revaluation model. TAS 40 (revised 2015), ‘Investment property’ clarifies that TFRS 3 should be applied when determining whether an acquisition of an investment property is a business combination. TFRS 3 (revised 2015), ‘Business combinations’ clarifies i) an obligation to pay contingent consideration which meets the definition of a financial instrument as a financial liability or equity, on the basis of the definitions in TAS 32, ‘Financial instruments: Presentation’ (when announced) or other applicable standards. It also clarifies that all non-equity contingent consideration is measured at fair value at each reporting date, with changes in value recognised in profit and loss, and ii) TFRS 3 does not apply to the accounting for the formation of any joint venture under TFRS 11. TFRS 8 (revised 2015), ‘Operating segments’ requires disclosure of the judgements made by management in aggregating operating segments. It is also amended to require a reconciliation of segment assets to the entity’s assets when segment assets are reported to chief operating decision maker. TFRS10 (revised 2015) ‘Consolidated financial statements’ is amended to define an investment entity and introduce an exception from consolidation. These amendments mean that many funds and similar entities will be exempt from consolidating most of their subsidiaries. Instead, they will measure them at fair value through profit or loss. TFRS 12 (revised 2015) introduces disclosures that an investment entity needs to disclose. TFRS 13 (revised 2015), ’Fair value measurement’ is amended to clarify that the portfolio exception in TFRS 13 applies to all contracts (including non-financial contracts) within the scope of TAS 39 (when announced) or IFRS 9 (when announced). b) Financial reporting standards with minor changes There are 40 financial reporting standards with minor changes which the Group assesses that do not have impact to the Group.
2.3 Group Accounting - Investments in subsidiaries and associates
(1) Subsidiaries Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns though its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. If the business combination is achieves in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measured are recognised in profit or loss. Any contingent consideration to be transferred by the group is regcognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognise and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss. Intercompany transactions, balances and unrealised gains or loss on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. In the company’s separated financial statements, investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment.
Hemaraj Land and Development Public Company
277
278
Annual Report 2015
A test for impairment for investments in subsidiaries is carried out when there is a factor indicating that investments might be impaired. If the carrying value of the investments is higher than its recoverable amount, impairment loss is charged to the profit or loss. (2) Transactions and non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. (3) Disposal of subsidiaries When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. (4) Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. The group’s investment in associates includes goodwill identifies on acquisition. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate. The Group’s share of its associates’ post-acquisition profits or losses is recognised in the profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. The group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to share of profit/(loss) of associates in the income statement. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in associates are recognised in the profit or loss.
In the company’s separated financial statements, investments in associates are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment.
2.4 Foreign currency translation
(a) Functional and presentation currency Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Baht, which is the company’s functional and the group’s presentation currency. (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss. When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that gain or loss is recognised in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognised in profit and loss, any exchange component of that gain or loss is recognised in profit and loss.
2.5 Cash and cash equivalents
In the consolidated and Company statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated and Company statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
2.6 Trade accounts receivable
Trade accounts receivable are carried at the original invoice amount and subsequently measured at the remaining amount less any allowance for doubtful receivables based on a review of all outstanding amounts at the year-end. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written-off during the year in which they are identified and recognised in profit or loss within selling and marketing costs.
2.7 Cost of real estate developments
Cost of real estate developments consists of land costs, development costs, pre-fabricated factory costs, condominium construction costs, and finance costs on borrowings for projects development, pre-fabricated factory, condominium construction, land deposits and advances for construction costs. These costs are transferred to cost of sales when revenue from sales is recognized. For pre-fabricated factory costs and its related development for a portion which have solid policy for lease will be transferred to property investment when completed. Cost of real estate developments is stated at the lower of cost or net realisable value. Loss on projects revaluation is included in the statements of income. Hemaraj Land and Development Public Company
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280
2.8 Investments
Annual Report 2015
The Group classified investments other than investments in subsidiaries and associates and interests in joint ventures into available-for-sale investments and other investments. The classification is dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. 1) Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in interest rates, are classified as available-for-sale; and are included in non-current assets unless management has expressed the intention of holding the investment for less than 12 months from the statement of financial position date or unless they will need to be sold to raise operating capital, in which case they are included in current assets. 2) Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to-maturity and are included in non-current assets, except for maturities within 12 months from the statement of financial position date which are classified as current assets. 3) Investments in non-marketable equity securities are classified as other long term investments. All categories of investment are initially recognised at cost, which is equal to the fair value of consideration paid plus transaction cost. Available for sale investments are subsequently measured at fair value. The fair value of investments is based on quoted bid price at the close of business on the statement of financial position date by reference to the Stock Exchange of Thailand. The fair value of investments in debt securities is based on Net Asset Value (NAV) at the close of business on the statement of financial position date by reference to the Asset Management Company. The unrealised gains and losses of available for sale investments are recognised in other comprehensive income. Held-to-maturity investments are carried at amortised cost using the effective yield method less impairment loss. Other long term investments are carried at cost less impairment loss. A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the profit or loss. When disposing of part of the Company’s holding of a particular investment in debt or equity securities, the carrying amount of the disposed part is determined by the weighted average carrying amount of the total holding of the investment.
2.9 Non-current assets held for sale
Non-current assets are classified as non-current assets held for sales and presented as current assets if their carrying amount will be recovered principally through a sale transaction and a sale is considered highly probable. A non-current asset held for sales is not depreciated while it is classified as held for sale. They are stated at the lower of the carrying amount and fair value less cost to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use.
The Group will classify investment properties and related leasehold rights as non-current assets held for sale once the criteria above are met. In addition, the Group will also classify other assets related to non-current asset held for sales which will be disposed when non-current assets held for sales are sold. Other assets which relate to non-current assets held for sale comprise deferred income from operating lease agreements and other non-current assets.
2.10 Investment Property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as investment property. Land held under operating leases is classified and accounted for by the Group as investment property when the rest of the definition of investment property is met. Investment property is measured initially at its cost, including related transaction costs and borrowing costs. Borrowing costs are incurred for the purpose of acquiring, constructing or producing a qualifying investment property are capitalised as part of its cost. Borrowing costs are capitalised while acquisition or construction is actively underway and cease once the asset is substantially complete, or suspended if the development of the asset is suspended. After initial recognition, investment property is carried at cost less any accumulated depreciation and any accumulated impairment losses (if any). Land is not depreciated. Depreciation on other investment properties is calculated using the straight line method to allocate their cost to their residual values over their estimated useful lives, as follows: Buildings and construction 20, 30 Years Pipe racks 15 Years Electricity systems 10 Years Building improvements 5 Years Equipment and structure 5 Years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.
2.11 Capitalisation of borrowing costs
Borrowing costs to finance the construction of property and equipment are capitalised during the period of time that is required to complete and prepare the property for its intended use as part of cost of the asset. The borrowing costs include interest on short-term and long-term borrowings. The capitalisation rate used to determine the amount of borrowing costs to be capitalised is a weighted average interest rate applicable to the Group’s outstanding borrowings during the year. Where funds are borrowed specifically for the acquisition, construction or production of property and equipment, the amount of borrowing costs eligible for capitalisation on that asset is determined at the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investments of those borrowings. Hemaraj Land and Development Public Company
281
282
Annual Report 2015
2.12 Leasehold rights
2.13 Property, plant and equipment
Expenditure on acquired leasehold right is capitalised and amortised using the straight line method over the lease period, generally over 20 to 30 years. Property, plant and equipment are stated at cost less any accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost to their residual values over their estimated useful lives, as follows: Land improvement 10 Years Office building 50 Years Building, building improvement and utilities systems 10 - 20 Years Tools and office equipment 5 Years Vehicles 5 Years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The asset’s carrying amount is written-down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.16). Gains or losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other net gains or losses’ in profit or loss.
2.14 Goodwill
Goodwill represents the excess of the consideration transferred over the fair value of the Group’s share of the net identifiable assets, liabilities and contingent liability of the acquired subsidiary and the fair value of the non-controlling interest in the acquired subsidiary undertaking at the date of acquisition. Goodwill on acquisitions of subsidiaries is separately reported in the consolidated statement of financial position. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment.
2.15 Intangible assets
Computer software
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: • it is technically feasible to complete the software product so that it will be available for use; or for sale • management intends to complete the software product and use or sell it; • there is an ability to use or sell the software product; • it can be demonstrated how the software product will generate probable future economic benefits; • adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and • the expenditure attributable to the software product during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Computer software development costs recognised as assets are amortised over their estimated useful lives, which does not exceed 10 years.
2.16 Impairment of assets
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
2.17 Leases Where a Group company is the lessee
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. Hemaraj Land and Development Public Company
283
284
Annual Report 2015
Leases of property, plant or equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to profit or loss over the lease period so as to achieve a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant or equipment acquired under finance leases is depreciated over the shorter period of the useful life of the asset and the lease term.
Where a Group company is the lessor
When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method, which reflects a constant periodic rate of return. Initial direct costs are included in initial measurement of the finance lease receivable and reduce the amount of income recognised over the lease term. Assets leased out under operating leases are included in property, plant and equipment in the statement of financial position. They are depreciated over their expected useful lives on a basis consistent with other similar property, plant and equipment owned by the Group. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.
2.18 Borrowings
Borrowings are recognised initially at the fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between proceeds (net of transaction costs) and the redemption value is recognised in statement of comprehensive income over the period of the borrowings using the effective yield method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of reporting date. Borrowings Costs General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessary take a substantial period of time to get ready for their intended use of sale, are added to the cost of those assets. Until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
2.19 Current and deferred income taxes
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of reporting period in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised, using the liability method, on temporary differences arising from differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
2.20 Employee Benefits
Group companies operate various retirement benefits schemes. The Group has both defined benefit and defined contribution plans. The Group recognises a liability and an expense for bonuses and expected benefit. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation. A defined contribution plan is a retirement plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The Group pays contributions to a separate fund which is managed by an external fund manager in accordance with the provident fund Act. B.E. 1987. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. Hemaraj Land and Development Public Company
285
286
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
2.22 Share Capital
The Group’s employee benefits comprise of typically post-employment benefits. An amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognised in the statement of financial position in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period and adjusted with unrecognised past-service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yield of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Past-service costs are recognised immediately in profit or loss.
2.21 Provisions
Annual Report 2015
Ordinary shares with discretionary dividends are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.23 Financial assets and financial liabilities
Financial assets carried on the statement of financial position include cash and cash equivalents, shortterm investment, trade and other accounts receivable, short-term loan to related parties and investment in available-for-sale. Financial liabilities carried on the statement of financial position include bank overdrafts and short-term borrowing from a financial institution, trade and other accounts payable, short-term borrowing from related parties, long-term borrowing from financial institutions, liabilities under finance lease agreements, certain parts of current liabilities, and debenture. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.
2.24 Revenue recognition
2.25 Finance costs
Finance costs comprise interest expense from bank loans, debentures, related parties, liabilities under finance lease contracts, and amortisation of bonds.
2.26 Dividend distribution
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and service in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts, and after eliminating sales within the Group. Revenue from sales of land, pre-fabricated factory and buildings are recognised in full amount when the risk and reward is transferred; the ownership has been transferred to buyers and all payments have been received from the buyers. Cost of sales is calculated from the estimated cost per rai of each project. Income and cost of services are recognised on the accrual basis. Service income represents income received from providing of public utilities, potable water, raw water and reused water, waste water treatment processing, additional work in building construction and rental services in respect of land, commercial building, warehouse, factory, resident and pipe rack to the Industrial Estate, training center and business center. Cost of services represents cost incurred from providing of such services. The recognition of income from public utilities service is ceased when the customers cease their business operations and have payment difficulties. Interest income is recognised using the effective interest method. Revenue arising from right rental is recognised on an accrual basis in accordance with the substance of the relevant agreements. Dividend income is recognised when the right to receive payment is established.
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.
2.27 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as Board of Directors that makes strategic decisions. The Group’s principle business operations are real estate business, power business, others and holding company in overseas. Since major business operations occur in Thailand, there has been presented segment information by business only.
3 Financial risk management
3.1 Financial risk factors
3.1.1 Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying business, the Group treasury aims at maintaining flexibility in funding by keeping committed credit lines available. Hemaraj Land and Development Public Company
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Annual Report 2015
3.1.2
Credit risk
3.1.3
Interest rate risk
The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that rental and services are provided to customers with an appropriate credit history. Deposits are limited to high credit quality financial institutions. Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Group’s income and operating cash flows are substantially independent of changes in market interest rates. All interest rate derivative transactions are subject to approval by the Finance Director before execution. The Group has no significant interest-bearing assets. However, the Group has entered into long-term borrowing agreements with financial institutions bearing floating interest rates. The Group has not entered into interest rate swap contract covering the interest rate risk for such borrowings. The Group also issued debentures with fixed interest rates. For those debentures, the Group has entered into an interest rate swap contract to swap fixed interest rates for floating interest rates for some debenture balances (Note 21) in order to reduce finance costs. The management believe that effect of interest rate fluctuation on long-term borrowing agreements with financial institutions and interest rate swap contract will not materially affect the Group.
Hemaraj Land and Development Public Company
289
Financial assets Cash and cash equivalents Short-term investment Trade and other accounts receivable Investment in available-for-sale Total financial assets Financial liabilities Current portion of long-term borrowings from financial institutions 809,218,920 Current portion of debentures (net) Trade and other payables Long-term borrowings from financial institutions (net) 198,775,000 Debentures (net) Total financial liabilities 1,007,993,920
Mark to market
- 198,775,000 - 12,405,883,551 - 12,405,883,551 1,492,928,518 12,405,883,551 2,190,682,203 17,097,488,192
- 809,218,920 - 1,492,928,518 - 2,190,682,203 2,190,682,203
Total
1,492,928,518 -
Without interest
8,173,741 1,475,613,992 - 1,460,829,078 1,460,829,078 - 225,117,417 225,117,417 495,980 495,980 - 1,694,616,216 3,162,056,467
1-10 years
1,467,440,251 1,467,440,251
less than 1 year
Fixed interest rate remaining period before maturity date or repricing rate
2015 (Baht)
Consolidated
MLR minus contract rate MLR minus contract rate -
-
Float rate
4.70 - 6.00
5.50 - 5.60 -
-
0.05-2.08 -
Fixed rate
Interest rate (%)
Outstanding balance of significant financial assets and financial liabilities and their interest rates as at 31 December 2015 and 2014 are summarised as follows:
less than 1 year 1-10 years
Without interest
MLR minus contract rate MLR minus contract rate -
300,000,000
1,514,025,000 11,410,047,068 17,200,226,952
551,505,822 1,492,577,651 1,932,071,411
-
Float rate
2,087,414,640 184,114,078 571,295 2,272,100,013
Total
5.15 - 6.00
5.80 - 6.50 -
-
0.10 - 1.95 -
Fixed rate
Interest rate (%)
3.2 Accounting for derivative financial instruments and hedging activities The Group is party to derivative financial instrument, which comprises interest rate swap agreements. Such instrument is not recognised in the financial statements on inception Interest rate swap contracts protect the Group from movements in interest rates. Any differential to be paid or received on an interest rate swap contract is recognised as a component of interest revenue or expense over the period of the agreement. Gains and losses on early termination of interest rate swaps or on repayment of the borrowing are taken to profit or loss. Disclosures about derivative financial instruments to which the Group is a party are provided in Note 35.
Financial assets Cash and cash equivalents - 2,086,219,238 1,195,402 Trade and other accounts receivable - 184,114,078 Investment in available-for-sale 571,295 Total financial assets - 2,086,219,238 - 185,880,775 Financial liabilities Short-term loan from financial institutions - 300,000,000 Current portion of long-term borrowings from financial institutions 551,505,822 Current portion of debentures (net) - 1,492,577,651 Trade and other payables - 1,932,071,411 Long-term borrowings from financial institutions (net) 1,514,025,000 Debentures (net) - 11,410,047,068 Total financial liabilities 2,065,530,822 1,792,577,651 11,410,047,068 1,932,071,411
Mark to market
Fixed interest rate remaining period before maturity date or repricing rate
2014 (Baht)
Consolidated
290 Annual Report 2015
3.3 Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: • Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). • Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2). • Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). The following table presents the Group’s financial assets that are measured at fair value at 31 December 2015.
Assets
Short-term investments Available-for-sale investments Total assets
Level 1
Level 2
Level 3
Total
Baht
Baht
Baht
Baht
1,460,829,078 495,980 1,461,325,058
-
- 1,460,829,078 495,980 - 1,461,325,058
The following table presents the Group’s financial assets that are measured at fair value at 31 December 2014
Assets Short-term investments Available-for-sale investments Total assets
Level 1
Level 2
Level 3
Total
Baht
Baht
Baht
Baht
571,295 571,295
-
-
571,295 571,295
There were no transfers between Level 1 and 2 during the year. The fair values less any estimated credit adjustments for financial assets and liabilities with a maturity of less than one year are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate available to the Group/Company for similar financial instruments. Information on the fair values of borrowings is disclosed in Note 20.
Hemaraj Land and Development Public Company
291
292
Annual Report 2015
4. Reclassifications and correction errors
4.1 Reclassifications
During the year 2015, the Group had reclassified some transactions of prior year to conform with 2015 presentation.
4.2 Correction of errors
During the year 2015, the Group has corrected some errors of prior year as follows: 1) Investments in associates On 30 January 2013, a subsidiary invested in Gulf JP Company Limited. (“GNLL”), a small power plant (“SPP”), in order to supply a 126 MW power electricity to the Electricity Generating Authority of Thailand (“EGAT”) and industrial customers by acquiring 34.61 million ordinary shares amounting to Baht 193.58 million which represented 25.01% of registered share capital in Gulf JP Company Limited. The associate has entered into an agreement for the electricity to the Electricity Generating Authority of Thailand (“EGAT”) for a period of 25 years from the date of purchase of electricity in commercial projects. This project has commercially operated on 1 May 2013. A subsidiary has recorded the acquisition of shares as stated above as “right from investment in associate” which is amortised over a period of 25 years. In accordance with TFRS 3 (revised 2014), the identifiable assets and liabilities must be recognised and measured at fair value at the acquisition date by an acquirer and the difference between the consideration and fair value of asset and net carrying amount of the identifiable assets and liabilities at the acquisition date should be recognised as goodwill or negative goodwill which will be presented net from the investment in associates in the consolidated financial statement. 2) The adjustment of the elimination of related parties transactions on the consolidated financial statements The Group did not properly eliminate profit from related parties transaction in relation to cost of real estate development. In addition, the group did not realised such profit in the financial statement when sold to the end customers. 3) Sinking fund The Group amortised certain sinking fund paid to the Industrial Estate Authority of Thailand for maintenance and replacement according to the opened operating areas on the straight line method over period of 20 years and recorded as cost of service and utilities. However the sinking fund is not under control of the Group and is not generated future economic benefit to the Group, therefore it is not fall into the criterial of asset. The fund is directly related to sales of land for the industrial estate development project, as such, it should be recorded as cost of real estate development. 4) Deferred tax The Group has adjusted deferred income tax arising from the above impact. In addition the group has make a correction of errors in relation to the offsetting of deferred income tax of the same tax entity in the statements of financial position in accordance with Thai accounting standards no. 12 (Revised 2015) “Income tax”.
Hemaraj Land and Development Public Company
293
236,511,938 (9,286,698)
294,495,624 761,767,242 889,198,025 8,628,123,754 1,139,279,634
298,240,369 1,432,900,000 11,437,035,642 1,614,164,087 130,062,526 39,442,367 3,220,208,205 125,415,164 394,368,715 98,165,208
Baht
Restated
162,674,222 16,768,209 1,437,571,647 13,140,529,907 1,768,847,532 46,813,503 217,299,191 73,075,746 1,899,922,221 128,232,093 1,500,000,000 -
Baht
Originally stated
(98,165,208) 196,330,416 214,844,696 171,234,561 171,234,561 (171,234,560) 590,532,682 564,142,122 (289,198,025) 600,000,000 908,672,126 - 8,864,635,692 9,805,231,650 - 1,129,992,936 334,457,683
(23,659,416) 10,414,340,584 11,438,000,000 - 123,268,597 168,958,800
298,240,369 (152,102,985) (17,300,237) (126,595,896) 120,571,366 80,953,154 (69,692,655) 9,779,127 (9,779,127) (5,631,285) 98,165,208
Baht
Reclassification
279,137,489 (11,462,764)
(31,245,787)
344,815,106 (124,037,257) (31,245,787) 19,405,394 -
Baht
Adjustments
184,114,078 1,432,900,000 13,485,345,013 1,891,713,625 117,163,615 41,829,959 1,932,071,411 115,488,297 1,492,577,651 107,422,348
Baht
Restated
(107,422,348) 107,422,348 164,596,796 164,596,796 (164,596,795) 399,545,327 (308,672,126) 600,000,000 - 10,084,369,139 - 322,994,919
(27,952,932) 11,410,047,068 - 137,713,013
184,114,078 (162,674,222) (16,768,209) (4,671,647) 122,866,093 70,350,112 (93,261,934) 12,743,796 (12,743,796) (7,422,349) 107,422,348
Baht
Reclassification
31 December 2014
The presentation of the statement of financial position as at 1 January 2014 has been presented in accordance with TAS 1, Presentation of Financial Statements paragraph 40A.
(52,953,753)
10,438,000,000 176,222,350
298,847,923 (122,921,940) (52,953,752) 21,007,086 -
Baht
Baht
152,102,985 17,300,237 1,559,495,896 11,138,187,719 1,493,592,721 49,109,372 221,905,295 92,396,119 3,189,421,992 135,194,291 400,000,000 -
Adjustments
Originally stated
1 January 2014
Consolidated
The effects of correction of errors and reclassification to the financial statement as at 1 January 2014 and 31 December 2014 were as follows.
Trade and other receivables, net Trade receivable, net Other receivables Short-term loan to related parties Cost of real estate development, net Property, plant and equipment, net Other non-current assets Intangible assets Deferred tax assets Trade and other payables Other current liabilities Current portion of debentures Current portion of provision for liabilities arising from guarantee rental income Long-term debentures, net Deferred tax liabilities Provision for liabilities arising from guarantee rental income Benefit income from rental and leasehold right Other non-current liabilities Legal reserve Retained earnings Non-controlling interests
4,995,801 (15,096,290) (1,828,914) 215,951 (1,828,914) (10,316,440)
382,794,776 4,804,837 6,640,209,639 3,795,108,284 124,249,758 48,355,082 114,079,645 17,962,131 203,840,140 132,652,178 61,032,758 400,000,000 1,035,967,713 10,438,000,000 1,828,914 31,267,080 100,239,360 3,565,623,794
Baht
Baht
Baht
Restated Baht
Originally stated
20,844,720
30,806,294
45,943,792 45,943,792 (48,427,792) 51,811,568 99,296,082 - 3,555,307,354 5,167,181,921
(10,422,360)
10,422,360 10,422,360 (65,899) 1,035,901,814 1,026,176,694 (23,659,416) 10,414,340,584 11,438,000,000 2,801,118
1,488,909,289 1,488,909,289 (382,794,776) - 130,189,878 (4,804,837) 4,544,079 (1,101,309,677) 5,538,899,962 7,747,168,220 - 3,800,104,085 4,468,890,261 (11,353,006) 112,896,752 117,321,541 81,045,661 129,400,743 45,514,687 (98,983,355) - 108,783,214 16,133,217 21,003,755 142,411,897 346,467,988 345,672,601 (132,652,178) 79,412,817 (7,209,820) 53,822,938 55,165,184 (5,631,285) 394,368,715 1,500,000,000
Baht
Reclassi fication Baht
Reclassi fication Baht
Restated
(11,259,612)
-
(2,801,118)
15,403,147 43,459,792 43,459,792 (45,943,794) 53,352,288 - 5,155,922,309
(15,403,147)
15,403,147 15,403,147 - 1,026,176,694 (27,952,932) 11,410,047,068 -
- 911,602,177 911,602,177 - (130,189,878) (4,544,079) - (776,868,220) 6,970,300,000 4,663,411 - 4,473,553,672 - (12,463,457) 104,858,084 70,350,109 115,864,796 (15,521,280) (93,261,934) (2,801,118) 18,202,637 401,744 91,611,980 437,686,325 - (79,412,817) (9,715,163) 45,450,021 (7,422,349) 1,492,577,651
Baht
Adjustments
31 December 2014
The presentation of the statement of financial position as at 1 January 2014 has been presented in accordance with TAS 1, Presentation of Financial Statements paragraph 40A.
Trade and other receivables, net Trade receivables, net Other receivables Short-term loan to related parties Cost of real estate development, net Property, plant and equipment, net Other non-current assets Intangible assets Deferred tax assets Trade and other payables Short-term loan from related parties Other current liabilities Current portion of debentures Current portion of provision for liabilities arising from guarantee rental income Long-term loan from related parities Long-term debenture, net Deferred tax liabilities Provision for liabilities arising from guarantee rental income Unearned income from rental and leasehold right Other non-current liabilities Retained earnings
Adjustments
Originally stated
1 January 2014
Company
294 Annual Report 2015
The effects to the comprehensive statement of income for the year ended 31 December 2014 are as follows: Consolidated
Cost of sale Financial costs Cost of services Profit sharing from investment in associates
Originally stated
Adjustments
Restated
Baht
Baht
Baht
1,761,937,017 761,796,531 1,444,420,140 1,655,278,240
11,873,166 (10,095,042) (47,100,648) (4,873,038)
1,773,810,183 751,701,488 1,397,319,492 1,650,405,202
The effects of the above on earnings (loss) per share for the year ended 31 December 2014 are as follows: Basic earnings (loss) per share Baht
Before restatement The effects from change in accounting policy and correction of errors After restatement
The effects of the above to the statement of income for the year ended 31 December 2014 are as follows: Company
Cost of sales Cost of services
0.31 0.03 0.34
Originally stated
Adjustments
Restated
Baht
Baht
Baht
294,761,067 103,129,678
2,485,052 (1,541,880)
297,246,119 101,587,798
The effects of the above on earnings (loss) per share for the year ended 31 December 2014 are as follows: Basic earnings (loss) per share Baht
Before restatement The effects from the adjustments After restatement
0.35 (0.07) 0.28
5 Critical accounting estimates, assumptions and judgements
Estimates assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Hemaraj Land and Development Public Company
295
296
Annual Report 2015
Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below. (a) Employee benefit obligations The present value of the employee benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for employee benefit include the discount rate. Any changes in these assumptions will have an impact on the carrying amount of employee benefit obligations. The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the employee benefit obligations. In determining the appropriate discount rate, the Group considers the market yield of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related employee benefit obligations. Other key assumptions for employee benefit obligations are based in part on current market conditions. Additional information is disclosed in Note 23. (b) Property, plant and equipment, investment properties and depreciation In determining depreciation of plant and equipment, and investment properties, the management is required to make estimates of the useful lives and residual values of plant and equipment, and investment properties and to review estimate useful lives and residual values when there are any changes. During the year ended 31 December 2015, the Group considered the useful lives of factory and warehouses (investment properties) by annual basis with engineers of the Group. The Group considered to changes the useful lives of buildings and warehouses from 20 years to 30 years. This change was considered as change in estimation, the Group applied the changes in estimates prospectively. The effect of the changes to the statement of financial position as at 31 December 2015 and the income statement for the year ended 31 December 2015 are summarised below. As at 31 December 2015 Consolidated financial statements
Statements of financial position Increase in investment properties Income statements Decrease in depreciation Profit attributable to: Increase in equity holders of the Company Increase in non-controlling interests of the subsidiaries Basic earnings per share Increase in equity holders of the Company (Baht per share)
Company financial statements
35,110,588
508,506
35,110,588
508,506
32,237,151 2,873,437
508,506 -
0.003
0.000
(c) Impairment of investments The Group will recognise an impairment loss when there is a factor indicating that an impairment might be impaired. The Group will use future cash flow that expect to return from investment and discounted with the rate which is reflected with related risk. (d) Deferred income taxes assets The Group will recognise deferred income tax assets only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
6. Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Hemaraj Land and Development Public Company
297
Baht
Baht
(28,879) -
45,569,362 (760,614,435) 73,367,367 1,231,705,216
(115,522,032) - (41,719,434) 1,076,596,832 1,231,216,840 780,309,514
820,789,969 1,087,858 180,000
- 1,030,931,256 - 1,030,931,256
Baht
Other
(499,083) 10,707 -
1,698,103,161 287,727,745 (152,034,336)
4,679,213,788 1,760,984,149 6,440,197,937
Power
Real Estate
Domestic
2015
Baht
- 4,679,213,788 3,680,162,516 - 2,791,915,405 1,699,322,181 - 7,471,129,193 5,379,484,697
Baht
(1,399,041) 3,079 -
Baht
(42,070) -
690,961,271 2,238,685 -
953,612,314 953,612,314
Baht
Other
3,288,930,658
- (157,241,466) (67,228,065) - (30,880,204) 247,670,378 3,335,793,564 1,035,769,857 1,574,086,287 662,277,682 (46,862,906)
- 45,569,362 1,982,602 - (760,643,314) (751,659,418) - 1,305,072,583 74,922,953 1,575,482,249
(2,239,498) 2,516,154,549 1,536,584,121 886 288,827,196 241,167,664 249,908,990 98,054,654 -
Baht
Power
Real Estate
Holding Company Total
Domestic
Overseas
2014
- 3,680,162,516 - 2,652,934,495 - 6,333,097,011
Baht
Total
3,003,191,697
- (98,108,269) (7,199,429) 3,264,934,397 (261,742,700)
1,982,602 - (751,701,488) - 1,650,405,202
(7,199,483) 2,218,946,868 56 243,409,482 -
Baht
Holding Company
Overseas
7.1 The information of revenue and profit from domestic and oversea business for the years ended 31 December 2015 and 2014 were as follows:
Sales of real estate Service income Total sales and services income Gain (loss) from operations Other income (Loss) gain on sale of investment Gain on sale of assets Finance costs Share of profit from investments in associates Income tax expenses Profit (loss) for the year Net profit attributable to non-controlling interests Net profit attributable to equity-holders of the parent
7. Segment information
298 Annual Report 2015
Hemaraj Land and Development Public Company
299
Real Estate
Baht
Baht
-
3,249,690,269 147,175,362 159,345,339 23,658,958,803 7,388,063,584 1,433,151,189
-
-
-
987,852,790
111,868,586 -
Baht
Other
2014
198,142 3,556,409,112 1,767,357,370 142,500,445 128,111,034 11,013,638 32,491,187,214 25,751,944,711 6,909,920,281 1,227,832,410
-
- 2,128,543,262
762,866 -
Baht
2,128,543,262
10,815,496 1,475,613,992 1,962,229,687 - 12,982,025,794 13,485,345,013
Baht
Power
Total
Holding Company
- 7,894,511,389 658,829,435 6,766,656,970 - 2,467,691,585 6,974,322,371 - 1,986,392,080 903,860,835 -
151,320,425 -
Baht
Other
Domestic
Overseas
659,324,190 7,235,187,199 2,467,691,585 863,906,655 - 1,122,485,425
5,701,023 -
Baht
Baht
1,307,777,048 12,982,025,794
Power
Real Estate
Domestic
2015
Baht
Total
32,919 2,038,001,768 12,586,420 33,902,283,822
-
- 7,425,486,405 - 6,974,322,371 - 1,891,713,625
12,553,501 2,087,414,640 - 13,485,345,013
Baht
Holding Company
Overseas
7.2 Business segment information in the consolidated financial statements as of 31 December 2015 and 2014 was as follows:
Cash and cash equivalents Cost of real estate developments, net Investment in associates Investment property, net Property, plant and equipment, net Assets of group assets classified as held for sales Other assets Total assets
300
Annual Report 2015
8. Cash and cash equivalents
As at 31 December, cash and cash equivalents comprise the following: Consolidated
Cash Deposits at financial institutions Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
8,173,741 1,195,402 1,467,440,251 2,086,219,238 1,475,613,992 2,087,414,640
595,454 562,989 995,853,751 1,612,815,207 996,449,205 1,613,378,196
9. Short-term investments
As at 31 December, short-term investments comprise the following: Consolidated
Unit trusts - available for sale open-end mutual fund on debt securities Add Unrealised gain on fair value of available-for-sale investment Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
1,460,000,000
- 1,460,000,000
-
829,078 1,460,829,078
829,078 - 1,460,829,078
-
Short-term investment for the year ended 31 December have the following movement: Consolidated
Beginning balance Purchase unit trust-saving during the year Sale of unit trust-saving during the year Unrealised gain on fair value of available-for-sale investment Ending balance
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
4,460,000,000
- 4,460,000,000
-
(3,000,000,000)
- (3,000,000,000)
-
-
829,078
-
- 1,460,829,078
-
829,078 1,460,829,078
As at 31 December 2015, the Company has short-term investment amounting to Baht 1,460,829,078 represents local mutual fund units at banks which was held on a short-term basis.
The fair value of short-term investment are based on the closing price as the end of year. The fair values are within level 1 of the fair value hierarchy.
10. Trade and other receivables, net
As at 31 December, trade and other receivables, net comprise the following: Consolidated
Trade accounts receivable - other companies Trade accounts receivable - related parties (Note 39.2) Less Allowance for doubtful account Trade accounts receivable, net Accrued income Prepaid expenses Dividend receivables Other receivables Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
165,049,232
182,183,187
6,942,817
11,312,973
4,232,805 (23,001,904) 146,280,133 39,789,919 23,930,261 15,117,104 225,117,417
1,476,832 (20,985,797) 162,674,222 13,589,499 7,850,357 184,114,078
155,531,418 (3,216,215) 159,258,020 1,838,988 7,000,688 7,701,573 175,799,269
123,717,037 (4,840,132) 130,189,878 3,819,149 639,899,686 137,693,464 911,602,177
As at 31 December, trade accounts receivable were classified by aging as follows: Consolidated
Trade account receivables Within due Less than 3 months Over 3 months to 6 months Over 6 months to 12 months Over 12 months Total Less Allowance for doubtful accounts Trade account receivables, net
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
124,747,822 21,532,312 963,313 3,660,455 18,378,135 169,282,037 (23,001,904) 146,280,133
136,049,647 28,024,167 2,600,746 4,408,437 12,577,022 183,660,019 (20,985,797) 162,674,222
59,675,945 99,582,074 493,677 404,932 2,317,607 162,474,235 (3,216,215) 159,258,020
121,880,202 8,309,676 216,648 433,295 4,190,189 135,030,010 (4,840,132) 130,189,878
As at 31 December 2015, the Group had trade accounts receivable of Baht 44,534,215 (31 December 2014: Baht 47,610,372) that were overdue for payment. The management has reviewed the aforementioned receivable’s ability to meet its obligation and considered to set an allowance for doubtful accounts of Baht 23,001,904 (31 December 2014: Baht 20,985,797). Hemaraj Land and Development Public Company
301
302
Annual Report 2015
11. Cost of real estate developments, net
Cost of real estate developments, net for the year ended 31 December 2015 has the following movement: Consolidated
Company
Baht
Baht
Beginning balance Additions during the year Capitalised finance cost during the years Transferred to investment properties (Note 16) Transferred to cost of sale Ending balance
13,485,345,013 2,634,168,246 50,323,598 (420,026,817) (2,767,784,246) 12,982,025,794
4,473,553,672 1,328,255,383 48,566,717 (115,815,922) (1,688,227,054) 4,046,332,796
As at 31 December 2015, the partial of land in the projects of the Group has been mortgaged as collateral for borrowings from local financial institutions and other companies.
12. Other current assets
As at 31 December, other current assets comprise the following: Consolidated
Account receivable - Revenue department Prepaid corporate income tax VAT refundable Suspense VAT Others Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
45,177,085 20,680,798 34,888,926 4,875,445 25,652,892 131,275,146
56,394,998 35,706,852 15,989,093 9,033,875 117,124,818
40,490,326 15,822,836 410,354 47,274 9,750,931 66,521,721
16,383,223 24,081,467 9,013,988 49,478,678
13. Non-current assets held for sale
The movement of assets classified as held for sales and direct liabilities relate directly to assets held for sale for the year ended 31 December 2015 are as follows:
Non-current assets held for sales Beginning balance Additions during the year Disposals during the year Ending balance
Consolidated
Company
Baht
Baht
4,988,953,075 (2,860,409,813) 2,128,543,262
2,462,530,982 (2,301,036,473) 161,494,509
Direct liabilities relate to non-current assets held for sales Beginning balance Additions during the year Disposals during the year Ending balance
Baht
Baht
191,069,174 (46,295,490) 144,773,684
3,324,840 3,324,840
Consolidated
Company
Baht
Baht
2,121,005,878 7,537,384 2,128,543,262
161,494,509 161,494,509
144,773,684 144,773,684
3,324,840 3,324,840
Details of income generated from the non-current assets held for sale which are presented in comprehensive income statement are as follows:
For the year ended 31 December 2015
Company
Non-current assets held for sale disposed during the year amounting to Baht 2,860.41 million comprised property, plant and equipment, investment property and the investment in subsidiaries, which are the owner of the certain assets that have not been used in Group’s core business, respectively, which the Company’s Board of Directors has approved the disposal of certain assets as mentioned above on 19 March 2015. Subsequently, the Company and its subsidiaries completed the disposal of such property, plant and equipment, investment property and the investment in subsidiaries during the year ended 31 December 2015 included the settlement of its consideration are as follows: Group of non-current assets held for sale and liabilities related directly to non-current assets held for sale as at 31 December 2015 are as follows:
Non-current assets held for sales Buildings, factories and warehouses Investment properties (Note 16) Deferred income from operating lease agreement Total Direct liabilities relate to non-current assets held for sales Deposit from long-term lease agreement Total
Consolidated
Consolidated
Company
Baht
Baht
304,804,103
8,548,994
On 18 May 2015, the Group approved to sell their investment properties to Hemaraj Real Estate Investment Trust (in process of establishment). This plan is estimated to complete within one year. Therefore, the Group reclassified only parts of buildings, factories and warehouses which met financial lease condition to assets classified as held for sales, including reclassified relevant liabilities to direct liabilities relate to assets classified as held for sales and the relevant land as operating lease. Hemaraj Land and Development Public Company
303
304
Annual Report 2015
14. Investments in subsidiaries and associates (a) Investment in associates The change in book value of investment in associates for the year ended 31 December 2015 can be analysed as follows: Consolidated
Company
Baht
Baht
Book value at the beginning of the year - restate Additions Share of profit after tax Dividend income Book value at the end of the year
7,425,486,405 325,534,528 1,305,072,583 (1,161,582,127) 7,894,511,389
5,422,459,244 5,422,459,244
The amounts recognised in the statement of financial position as at 31 December are as follows: Consolidated (Equity method)
Associates
Company (Cost method)
2015
2014
2015
2014
Baht
Baht
Baht
Baht
7,894,511,389 7,425,486,405 5,422,459,244 5,422,459,244 7,894,511,389 7,425,486,405 5,422,459,244 5,422,459,244
The amounts recognised in the income statement for the year ended 31 December are as follows: Consolidated
Associates
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
1,305,072,583 1,650,405,202 1,305,072,583 1,650,405,202
-
-
Set out below are the associates of the group as at 31 December 2015, which, in the opinion of the directors, are material to the group. The associates as listed below have share capital consisting solely of ordinary shares, which are held directly by the group; the country of incorporation or registration is also their principal place of business. Nature of investment in associates for the year 2015 and 2014.
Paid-up share capital
Name of entity
Directed associates Gheco-One Company Limited
31 December 2015 Baht
31 December 2014 Baht
Percentage of shares hold by the company
Registered in
11,624,000,000 11,624,000,000
Thailand
Nature of the relationship
35
Measurement
Note 1 Equity method
Gheco-One Company Limited is power plant operation and sale of electricity. The financial statements of the significant associates under equity method are shown as follow: Summarised statement of financial position Gheco-One Company Limited As at 31 December
Current assets Cash and cash equivalents Other-current assets (excluding cash) Total current assets Current liabilities Financial liabilities (excluding trade payables) Other current liabilities (including trade payables) Total current liabilities Non-current liabilities Assets Financial liabilities Other non-current liabilities Total non-current liabilities Net assets
2015
2014
Baht
Baht
2,239,254,652 5,087,875,437 7,327,130,089
1,557,185,764 6,596,288,649 8,153,474,413
6,113,047,142 1,187,260,127 7,300,307,269
6,194,123,231 2,775,040,242 8,969,163,473
34,468,281,121 16,407,655,998 297,702,865 16,705,358,863 17,789,745,078
35,810,719,759 17,408,274,396 301,540,596 17,709,814,992 17,285,215,707
Summarised statement of comprehensive income Gheco-One Company Limited For the year ended 31 December
Revenue Depreciation and amortisation Interest income Interest expense Profit or loss from continuing operations Income tax expense
2015
2014
Baht
Baht
13,422,529,690 1,071,275,236 8,384,381 (1,318,182,266) 3,566,430,475 (151,251,504)
15,035,057,820 1,079,616,474 10,968,967 (1,435,239,012) 4,229,793,972 (20,408,656)
Hemaraj Land and Development Public Company
305
306
Annual Report 2015
Gheco-One Company Limited For the year ended 31 December
Post-tax profit from continuing operations Other comprehensive income Total comprehensive income Dividend received from associated
2015
2014
Baht
Baht
3,415,178,971 3,415,178,971 1,018,727,352
4,209,385,316 4,209,385,316 1,037,441,992
Above information is included in the financial statements of the associates (This isn’t share of the group in such associated companies). Reconciliation of summarised financial information Reconciliation of the summarised financial information presented to the carrying amount of its interest in associates Gheco-One Company Limited
Net assets as at 31 December Profit during the year Dividends Net assets at end of year Interest in associates (%) Carrying value
2015
2014
Baht
Baht
17,285,215,707 3,415,178,971 (2,910,649,600) 17,789,745,078 35 6,226,105,801
16,039,950,391 4,209,385,316 (2,964,120,000) 17,285,215,707 35 6,049,520,523
Insignificant associates In addition to interests in associates as mentioned above. The Group also has interests in associated companies, where the individual is not important. Which save investments using the equity method, including: Paid-up Capital
Company name
Houay Ho Thai Company Limited (1) Hemaraj Industrial Property and Leasehold Fund Indirect associates Houay Ho Thai Company Limited (1)
31 December 2015 Baht
31 December 2014 Baht
527,690,000,000 527,690,000,000
Registered in
Percentage of shares held by the Company
Thailand
51
4,700,000,000
4,700,000,000
Thailand
23
40,000,000*
50,000,000*
Laos People’s Democratic Republic
13
Nature of relationship
Measurement
Shareholder Equity method Shareholder Equity method Shareholder Equity method
Paid-up Capital
Company name
31 December 2015 Baht
31 December 2014 Baht
Registered in
Percentage of shares held by the Company
Nature of relationship
Glow Hemaraj Wind Company Limited (2) Gulf JP NLL Company Limited
2,500,000
2,500,000
Thailand
51
Shareholder
1,384,000,000
1,384,000,000
Thailand
25
Shareholder
Gulf Solar Company Limited (3)
14,632,000
14,632,000
Thailand
25
Shareholder
Bowin Clean Energy Limited (4)
186,741,520
-
Thailand
25
Shareholder
Gulf VTP Company Limited (5)
169,999,999
-
Thailand
25
Shareholder
Gulf TS1 Company Limited (6)
171,498,828
-
Thailand
25
Shareholder
Gulf TS2 Company Limited (7)
177,000,000
-
Thailand
25
Shareholder
Gulf TS3 Company Limited (8)
166,974,937
-
Thailand
25
Shareholder
Gulf TS4 Company Limited (9)
165,000,000
-
Thailand
25
Shareholder
Measurement
Equity method Equity method Equity method Equity method Equity method Equity method Equity method Equity method Equity method
*USD (1) The Company directly held 51% in Houay Ho Thai Company Limited and Houay Ho Thai held 25% in Houay Ho Power Company Limited which registered in Lao People’s Democratic Republic (US. currency is used for business operation). The Company did not include the financial information of Houay Ho Thai Company Limited in the consolidated financial information since the Company is the strategic partner. In addition, the other investors are proficient in the operation of all power plants. (2) The Company indirectly held 51% by Hemaraj Energy Company Limited in Glow Hemaraj Wind Company Limited, which had the initial capital share in the amount of Baht 10 million and Hemaraj Energy Company Limited paid the share capital of Baht 2.5 per share in the total amount of Baht 1.28 million. (3) On 21 October 2014, the Company invested in 25.01% of total paid-up shares of Gulf Solar Company Limited with amount of investment Baht 3.66 million. (4) The Company indirectly held 25% by Hemaraj Energy Company Limited in Bowin Clean Energy Company Limited, which had the initial capital share in the amount of Baht 447 million and Hemaraj Energy Company Limited paid the share capital of Baht 40 per share in the total amount of Baht 105.04 million (5) The Company indirectly held 25% by Hemaraj Energy Company Limited in Gulf VTP Company Limited, which had the initial capital share in the amount of Baht 665 million and Hemaraj Energy Company Limited paid the share capital in the total amount of Baht 46.67 million. Hemaraj Land and Development Public Company
307
308
Annual Report 2015
(6) The Company indirectly held 25% by Hemaraj Energy Company Limited in Gulf TS1 Company Limited, which had the initial capital share in the amount of Baht 694 million and Hemaraj Energy Company Limited paid the share capital in the total amount of Baht 43.52 million. (7) The Company indirectly held 25% by Hemaraj Energy Company Limited in Gulf TS2 Company Limited, which had the initial capital share in the amount of Baht 704 million and Hemaraj Energy Company Limited paid the share capital in the total amount of Baht 44.27 million. (8) The Company indirectly held 25% by Hemaraj Energy Company Limited in Gulf TS3 Company Limited, which had the initial capital share in the amount of Baht 664 million and Hemaraj Energy Company Limited paid the share capital in the total amount of Baht 41.77 million. (9) The Company indirectly held 25% by Hemaraj Energy Company Limited in Gulf TS4 Company Limited, which had the initial capital share in the amount of Baht 655 million and Hemaraj Energy Company Limited paid the share capital in the total amount of Baht 41.27 million.
Total book value of the equity in associates are recorded by equity method per each non-significant Total share from investment in associates profit from continued operations Total comprehensive income
2015
2014
Baht
Baht
1,668,405,588
1,371,092,844
115,764,024 115,764,024
177,120,352 177,120,352
(b) Investment in subsidiaries The movements in net book value of investments in subsidiaries as at 31 December: Company
Opening book value Increase during the year - Paid in cash - Paid by transfer of investment in associates and other companies Sold during the year Ending book value
31 December 2015
31 December 2014
Baht
Baht
7,059,284,449
5,579,784,554
845,457,847
1,479,499,895
4,478,119,247 (2,553,999,962) 9,828,861,581
7,059,284,449
During the year 2015, the company registered a new subsidiary called Hemaraj Energe 2 Company Limited which had the initial paid-up capital share in amount of Baht 4,481 Million. The share paid by cash in amount of Baht 2.88 million and by transferring partial investment in associates and other companies for remaining amount of Baht 4,478.12 million which was in progress as at 31 December (Note 39). The transfer was carried out in 15 February 2016.
Deconsolidation The Group sold Million Island Pattaya Company Limited and H-Phoenix Property Company Limited which were subsidiaries and are the owner of the certain assets which are not in the Group’s core business, to the winning bidders. The Company opened the bidding auction publicly during 20 March 2015 to 20 April 2015. On 21 April 2015, the meeting of the Executive Committee No. 15/2015 approved the winner bidder and entered into a sale and purchase agreement with the winner on 29 April 2015. The disposal of this investment effects the loss in power of control of Million Island Pattaya Company Limited and H-Phoenix Property Company Limited and recorded net gain from sales with cost of sales amounted to Baht 88.5 million in statements of comprehensive income. Net book value of assets of subsidiaries as at the date of disposal are as follows:
Cash and cash equivalents Trade and other receivables Investments in subsidiaries Investment property, net Property, plant and equipment, net Current assets and other assets Trade and other payables Deferred tax liabilities Employee benefit obligations Current and non-current liabilities Total net assets of disposed subsidiaries Add Non-controlling interests Less Cash received from sale of investments in subsidiaries (Gain) loss from sale of investments Cash received from sale of investments in subsidiaries Less Cash and cash equivalents of subsidiaries Net cash received from sale of investments
Consolidated
Company
Baht
Baht
62,438,905 13,127,176 2,762,414,827 45,931 3,032,171 (10,729,335) (15,362,804) (496,721) (21,914,323) 2,792,555,827 40 (2,881,058,639) (88,502,772) 2,881,058,639 (62,438,905) 2,818,619,734
2,553,999,962 2,553,999,962 (2,391,149,649) 162,850,313 2,391,149,649 2,391,149,649
Hemaraj Land and Development Public Company
309
100,000,000 100,000,000 1,165,000,000 1,165,000,000
Eastern Pipeline Services Company Limited Rayong 2012 Company Limited
400,000,000 1,000,000 -
400,000,000 1,000,000 10,000,000 240,000,000 4,481,000,000
Hemaraj Eastern Seaboard Industrial Estate 4 Company Limited Eastern Seaboard Property and Marina Services Company Limited Hemaraj Reit Management Company Limited H - International (SG) Pte. Ltd. Hemaraj Energy 3Company Limited
645,000,000
645,000,000
Hemaraj Clean Water Company Limited
194,000,000
1,000,000
4,600,000 294,000,000
67,600 25,290 17,150,000
67,600 25,290 17,150,000
SME factory Company limited
H-International(BVI) Company limited Hemaraj International Limited H-Construction Management and Engineering Company Limited The Park Residence Company Limited
Thailand
500,000,000
Thailand Singapore Thailand
Thailand
Thailand
Thailand
Thailand
Thailand
Thailand Thailand Thailand
Thailand Thailand
Thailand
1,000,000,000 1,000,000,000 500,000,000
Thailand
Thailand
358,000,000
358,000,000
400,000,000
Eastern Seaboard Industrial Estate (Rayong) Company Limited Hemaraj Eastern Seaboard Industrial Estate Company Limited Hemaraj Saraburi Industrial Land Company Limited
400,000,000
Eastern Industrial Estate Company Limited
Company name
31 December 31 December 2015 2014 Baht Baht Registered in
Paid-up capital
Industrial estate development Industrial estate development Industrial estate development Industrial estate development Pipe Rack Rental Industrial estate development Holding Company Holding Company Design and construction supervision service Industrial estate development Sell and Lease of Factory Produce and distribute the industrial water Industrial estate development Industrial estate development Fund Management Holding Company Holding Company
Nature of relationship
The Company has investments in subsidiaries as at 31 December 2015 and 31 December 2014 as follows:
99.99 99.99 99.99
99.99
99.99
99.99
99.99
99.99
100.00 100.00 99.99
99.99 99.99
99.99
99.99
60.00
99.99
Percentage of shares held by the Company
0.01 0.01 0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01 0.01
0.01
0.01
40.00
0.01
Percentage of shares held by the noncontrolling interests
310 Annual Report 2015
Hemaraj Land and Development Public Company
311
100,000,000 200,000,000 4,481,000,000
Hemaraj Water Company Limited
Hemaraj Energy Company Limited Hemaraj Energy2 Company Limited
Thailand Thailand
Thailand
Thailand
Industrial estate development Water resources development and management Holding Company Holding Company
Nature of relationship
0.01 0.01
0.01
99.99 99.99 99.99
0.01
99.99
Percentage of shares held by the Company
Percentage of shares held by the noncontrolling interests
The financial information of the subsidiaries above was included in the Group’s consolidated financial statements. The portion of the parent company’s voting rights does not differ from the portion of common share held by the parent company. The total balance of non-controlling interests during the year is Baht 46.86 million, which is from Eastern Seaboard Industrial Estate (Rayong) Company Limited.
100,000,000 -
100,000,000
1,000,000,000 1,000,000,000
Indirect subsidiaries Hemaraj Rayong Industrial Land Company Limited
Company name
31 December 31 December 2015 2014 Baht Baht Registered in
Paid-up capital
312
Annual Report 2015
Summarised financial statements of subsidiary with significant non-controlling interests The summarised financial statements of subsidiary with significant non-controlling interests are shown as follow: Summarised statement of financial position as at 31 December Eastern Seaboard Industrial Estate (Rayong) Company Limited
Current Assets Liabilities Total current net assets Non-current Assets Liabilities Total non-current net assets Net assets
2015
2014
Baht
Baht
1,569,755,055 (765,988,178) 803,766,877
1,466,604,504 (622,810,996) 843,793,508
400,754,019 (415,135,866) (14,381,847) 789,385,030
485,719,738 (557,283,929) (71,564,191) 772,229,317
Summarised statement of comprehensive income as at 31 December Eastern Seaboard Industrial Estate (Rayong) Company Limited
Revenue Profit before income tax Income tax expense Post-tax profit from continuing operations Other comprehensive income Total comprehensive income Total comprehensive income allocated to non-controlling interests Dividend paid for non-controlling interests
2015
2014
Baht
Baht
441,276,259 122,678,365 (5,522,651) 117,155,714 117,155,714 46,862,286 40,000,000
1,877,669,491 671,222,412 (16,868,343) 654,354,069 848,438 655,202,507 262,081,003 840,000,000
Summarised statement of cash flows as at 31 December Eastern Seaboard Industrial Estate (Rayong) Company Limited
Cash flow from operating activities Cash generated from operations Interest paid Income tax paid Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Net (decrease) increase in cash and cash equivalents Cash, cash equivalents and bank overdrafts at beginning of year Cash and cash equivalents at end of year
2015
2014
Baht
Baht
24,619,049 (11,207,051) (161,174,855) (147,762,857) (79,943,080) (2,247,554,390) (2,475,260,327)
4,200,760 (11,207,051) (6,730,952) (13,737,243) (96,629,380) (46,750,000) (157,116,623)
2,669,894,987 194,634,660
194,634,658 37,518,035
The information above is the amount before inter-company eliminations.
15. Other long-term investments, net
As at 31 December, other long-term investments, net comprise of: Consolidated
Related parties Sriracha Harbor Public Company Limited Eastern Fluid Transport Company Limited Total Other parties Glow IPP Company Limited Other companies Total Less Allowance for impairment Total Other long-term investments, net
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
1,500,000 1,500,000
15,000 1,500,000 1,515,000
-
-
142,500,003 1,000,000 143,500,003 (717,000) 142,783,003 144,283,003
142,500,003 1,000,000 143,500,003 (717,000) 142,783,003 144,298,003
142,500,003 142,500,003 142,500,003 142,500,003
142,500,003 142,500,003 142,500,003 142,500,003
Hemaraj Land and Development Public Company
313
314
Annual Report 2015
The movement of other long-term investments for the year ended 31 December are as follows: Consolidated
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
Opening net book amount 144,298,003 144,283,003 142,500,003 142,500,003 Additions 15,000 Disposals (15,000) Ending net book amount 144,283,003 144,298,003 142,500,003 142,500,003 Other long-term investments are the investment in the limited company, which the holding parentage in such investments is insignificant cause to the Company has no influence control. Therefore, it is quite limit to obtain enough financial data for measurement of their fair value. In addition, the Company has no plan to dispose these investments, therefore, the appraisal report for investment value is not prepared. As a result, the fair value of other long-term investments is not available for disclosure. Other long-term investments are stated at cost less impairment, if any.
16. Investment properties, net
Investment properties for the year ended 31 December 2015 have the following movements: Consolidated
Land Baht
As at 1 January 2015 Cost Less Accumulated depreciation Net book amount For the year ended 31 December 2015 Opening net book amount Additions Transfer in (out) Transferred in from cost of real estate Developments (Note 11) Disposals Deconsolidation Transferred out to non-current assets held-for-sales (Note 13) Depreciation
Building, Building improvements and Utility Construction system in progress Baht
Baht
Total Baht
2,814,381,816 3,633,079,707 1,213,968,072 7,661,429,595 - (687,107,224) - (687,107,224) 2,814,381,816 2,945,972,483 1,213,968,072 6,974,322,371 2,814,381,816 2,945,972,483 1,213,968,072 6,974,322,371 5,856,681 26,825,199 32,681,880 33,502,718 274,817,489 (308,320,207) 93,816,802 326,210,015 - (9,289,935) (2,215,170,467) (539,542,251) (2,121,005,878) - (69,155,674)
- 420,026,817 - (9,289,935) (7,702,109) (2,762,414,827) - (2,121,005,878) - (69,155,674)
Consolidated
Land
Accumulated depreciation for disposals Closing net book amount As at 31 December 2015 Cost Less Accumulated depreciation Net book amount
Baht
726,530,869
Building, Building improvements and Utility Construction system in progress Baht
Baht
Total Baht
2,526,831 816,389,761
2,526,831 924,770,955 2,467,691,585
726,530,869 1,122,019,836 - (305,630,075) 726,530,869 816,389,761
924,770,955 2,773,321,660 - (305,630,075) 924,770,955 2,467,691,585
Investment properties for the year ended 31 December 2014 have the following movements: Consolidated
Land Baht
As at 1 January 2014 Cost Less Accumulated depreciation Net book amount For the year ended 31 December 2014 Opening net book amount Additions Transfer in (out) Transferred from cost of real estate developments Disposals Depreciation Accumulated depreciation for disposals Closing net book amount As at 31 December 2014 Cost Less Accumulated depreciation Net book amount
Building, Building improvements and Utility Construction system in progress Baht
Baht
Total Baht
2,690,551,305 3,307,244,044 1,270,505,634 7,268,300,983 - (527,260,460) - (527,260,460) 2,690,551,305 2,779,983,584 1,270,505,634 6,741,040,523 2,690,551,305 130,989,170 (7,158,659) 2,814,381,816
2,779,983,584 1,270,505,634 6,741,040,523 132,053,542 - 132,053,542 10,080,288 (56,537,562) (46,457,274) 210,743,482 - 341,732,652 (27,041,649) - (34,200,308) (163,153,957) - (163,153,957) 3,307,193 3,307,193 2,945,972,483 1,213,968,072 6,974,322,371
2,814,381,816 3,633,079,707 1,213,968,072 7,661,429,595 - (687,107,224) - (687,107,224) 2,814,381,816 2,945,972,483 1,213,968,072 6,974,322,371
Hemaraj Land and Development Public Company
315
316
Annual Report 2015
Investment properties for the year ended 31 December 2015 have the following movements: Company
Land Baht
As at 1 January 2015 Cost Less Accumulated depreciation Net book amount For the year ended 31 December 2015 Opening net book amount Additions Transferred in from cost of real estate Developments (Note 11) Disposals Transferred to non-current assets held-for-sales (Note 13) Depreciation Accumulated depreciation for disposals Closing net book amount As at 31 December 2015 Cost Less Accumulated depreciation Net book amount
Building, Building improvements and Utility Construction system in progress Baht
Baht
Total Baht
8,581,027 8,581,027
74,339,596 (6,804,860) 67,534,736
-
82,920,623 (6,804,860) 76,115,763
8,581,027 -
67,534,736 725,000
-
76,115,763 725,000
12,915,770 102,900,152 - (9,289,935) (161,494,509) - (1,366,626) 2,526,831 21,496,797 1,535,649
-
(1,366,626) 2,526,831 23,032,446
21,496,797 21,496,797
-
23,360,237 (327,791) 23,032,446
1,863,440 (327,791) 1,535,649
- 115,815,922 - (9,289,935) - (161,494,509)
Investment properties for the year ended 31 December 2014 have the following movements: Company
Land Baht
As at 1 January 2014 Cost Less Accumulated depreciation Net book amount For the year ended 31 December 2014 Opening net book amount Additions Transferred in from cost of real estate developments Depreciation Closing net book amount As at 31 December 2014 Cost Less Accumulated depreciation Net book amount
Building, Building improvements and Utility Construction system in progress Baht
Total
Baht
Baht
5,730,616 5,730,616
33,009,810 (3,801,362) 29,208,448
-
38,740,426 (3,801,362) 34,939,064
5,730,616 2,850,411 8,581,027
29,208,448 1,168,441 40,161,345 (3,003,498) 67,534,736
-
34,939,064 1,168,441 43,011,756 (3,003,498) 76,115,763
8,581,027 8,581,027
74,339,596 (6,804,860) 67,534,736
-
82,920,623 (6,804,860) 76,115,763
Fair values were assessed by professional independent valuers, who qualified as expert and has extensive experiences in location and types of investment property, are reference from Cost method and Income method. The fair values are classified in level 3 of the fair value hierarchy. Amounts recognised in profit and loss that are related to investment properties are as follows: Consolidated
Rental income and service income Direct operating expense arise from investment property that generated rental income for the period Direct operating expense arise from investment property that did not generated rental income for the period
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
665,471,958 614,188,958
12,456,382
10,120,701
86,016,985 187,871,416
2,023,901
6,056,952
-
-
5,531,795
4,837,996
Hemaraj Land and Development Public Company
317
318
Annual Report 2015
As at 31 December 2015, The Group has assessed the fair values of investment properties in an amount of Baht 4,907 million (The Company : Baht 73.73 million). The investment properties, which were transferred to assets classified as held for sale of Baht 2,121 million and Baht 161 million for consolidated financial statement and company financial statement respectively, are related to the factory buildings and warehouses (Note 13 for details of non-current assets held for sale).
17. Property, plant and equipment, net Consolidated
As at 1 January 2015 Cost Less Accumulated depreciation Less Provision for impairment Net book amount For 31 December 2015 Opening net book amount Additions Transfer in (out) Disposals Depreciation Accumulated depreciation for disposals Closing net book amount As at 31 December 2015 Cost Less Accumulated depreciation Less Provision for impairment Net book amount
Land
Land improvements, Building and Utility system
Furniture, fixture and equipment, Tools and Vehicles
Construction in progress
Total
Baht
Baht
Baht
Baht
Baht
2,198,288 2,495,893,716 804,233,516 - (1,023,145,098) (617,715,879) 2,198,288 1,472,748,618 186,517,637
-
240,415,075 3,542,740,595 - (1,640,860,977) (10,165,993) (10,165,993) 230,249,082 1,891,713,625
2,198,288 1,472,748,618 186,517,637 230,249,082 1,891,713,625 17,531,626 110,168,291 245,195,110 372,895,027 - 344,898,707 10,524,418 (355,423,125) - (133,329,636) (34,193,225) - (167,522,861) (137,506,421) (61,890,237) (199,396,658) 56,643,488 32,059,459 88,702,947 2,198,288 1,620,986,382
243,186,343
120,021,067 1,986,392,080
2,198,288 2,724,994,413 890,732,999 - (1,104,008,031) (647,546,656) 2,198,288 1,620,986,382 243,186,343
130,187,060 3,748,112,760 - (1,751,554,687) (10,165,993) (10,165,993) 120,021,067 1,986,392,080
Consolidated
As at 1 January 2014 Cost Less Accumulated depreciation Less Provision for impairment Net book amount For 31 December 2014 Opening net book amount Additions Transfer in (out) Disposals Depreciation Accumulated depreciation for disposals Closing net book amount As at 31 December 2014 Cost Less Accumulated depreciation Less Provision for impairment
Net book amount
Land
Land improvements, Building and Utility system
Furniture, fixture and equipment, Tools and Vehicles
Construction in progress
Total
Baht
Baht
Baht
Baht
Baht
2,198,288 2,274,973,657 731,127,291 - (904,207,172) (575,235,850) 2,198,288 1,370,766,485 155,891,441
95,473,866 3,103,773,102 - (1,479,443,022) (10,165,993) (10,165,993) 85,307,873 1,614,164,087
2,198,288 1,370,766,485 22,116,952 - 198,803,105 - (118,937,924) -
155,891,441 85,307,873 1,614,164,087 47,606,033 377,614,455 447,337,440 33,851,241 (232,673,246) (18,900) (8,351,048) (8,351,048) (50,831,063) - (169,768,987) 8,351,033 8,351,033
2,198,288 1,472,748,618
186,517,637
230,249,082 1,891,713,625
2,198,288 2,495,893,716 804,233,516 - (1,023,145,098) (617,715,879) -
240,415,075 3,542,740,595 - (1,640,860,977) (10,165,993) (10,165,993)
2,198,288
1,472,748,618 186,517,637
230,249,082
1,891,713,625
Company
As at 1 January 2015 Cost Less Accumulated depreciation Less Provision for impairment Net book amount For 31 December 2015 Opening net book amount Additions Transfer in (out)
Land
Land improvements, Building and Utility system
Furniture, fixture and equipment, Tools and Vehicles
Construction in progress
Total
Baht
Baht
Baht
Baht
Baht
-
120,042,919 165,569,895 (48,810,685) (131,989,945) 71,232,234 33,579,950 71,232,234 4,363,758 -
33,579,950 29,867,714 45,900
769,564 286,382,378 - (180,800,630) (723,664) (723,664) 45,900 104,858,084 45,900 (45,900)
104,858,084 34,231,472 -
Hemaraj Land and Development Public Company
319
320
Annual Report 2015
Company
Land
Land improvements, Building and Utility system
Furniture, fixture and equipment, Tools and Vehicles
Construction in progress
Total
Baht
Baht
Baht
Baht
Baht
Disposals Depreciation Accumulated depreciation for disposals Closing net book amount As at 31 December 2015 Cost Less Accumulated depreciation Less Provision for impairment Net book amount
- (105,441,193) (1,461,367) 41,184,205 9,877,637 -
(21,371,839) (15,113,010) 19,898,114
- (126,813,032) - (16,574,377) 61,082,319
46,906,829
18,965,484 174,111,670 (9,087,847) (127,204,841) 9,877,637 46,906,829
-
56,784,466
723,664 193,800,818 - (136,292,688) (723,664) (723,664) 56,784,466
Company
As at 1 January 2014 Cost Less Accumulated depreciation Less Provision for impairment Net book amount For 31 December 2014 Opening net book amount Additions Transfer in (out) Disposals Depreciation Accumulated depreciation for disposals Closing net book amount As at 31 December 2014 Cost Less Accumulated depreciation Less Provision for impairment Net book amount
Land
Land improvements, Building and Utility system
Furniture, fixture and equipment, Tools and Vehicles
Construction in progress
Total
Baht
Baht
Baht
Baht
Baht
- 119,729,835 161,032,127 - (46,091,461) (123,831,359) - 73,638,374 37,200,768 -
73,638,374 37,200,768 313,084 7,988,629 2,204,239 - (5,655,100) (2,719,224) (13,813,679)
-
71,232,234
5,655,093 33,579,950
- 120,042,919 165,569,895 - (48,810,685) (131,989,945) - 71,232,234 33,579,950
2,781,274 283,543,236 - (169,922,820) (723,664) (723,664) 2,057,610 112,896,752 2,057,610 112,896,752 211,429 8,513,142 (2,223,139) (18,900) - (5,655,100) - (16,532,903) 45,900
5,655,093 104,858,084
769,564 286,382,378 - (180,800,630) (723,664) (723,664) 45,900 104,858,084
Plant and equipment that were sold during the period included some spaces of UM Tower used in operations, of which the book value were Baht 68 million and Baht 64 million for consolidated financial information and company financial information respectively. These spaces were sold along with other non-core assets of the Group. Depreciation expense of million Baht 201.55 (2014: million Baht 171.25) has been charged in “cost of goods sold” million Baht 169.94 (2014: million Baht 141.62) in and million Baht 31.61 (2014: million Baht 29.63) in “administrative expense”. Leased assets included above, where the Group and the Company is a lessee under a finance lease, comprise vehicle: Consolidated
Cost - Capitalised finance leases Less Accumulated depreciation Net book amount
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
9,169,000 (4,956,306) 4,212,694
10,668,000 (3,911,843) 6,756,157
6,149,000 (4,039,550) 2,109,450
7,648,000 (3,599,087) 4,048,913
18. Other non-current assets
As at 31 December, other non-current assets are as follows: Consolidated
Prepaid right Leasehold right and land, net Program computer, net Others Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
42,767,383 38,482,117 13,869,900 7,727,371 102,846,771
57,886,654 42,192,837 12,463,456 4,620,668 117,163,615
42,767,383 38,482,117 13,869,900 5,602,942 100,722,342
57,886,654 42,192,837 12,463,456 3,321,849 115,864,796
Hemaraj Land and Development Public Company
321
322
Annual Report 2015
19. Trade and other payables
As at 31 December 2015 and 2014, trade and other payables consisted of: Consolidated
Trade payables from other parties Trade payables from related parties (Note 39.2) Accrued cost of real estate development Cash received and income received in advance Advance payment from related parties (Note 39.4) Interest payables Accrued expenses Dividend payables Share held for transfer to settle for the investment in subsidiary (Note 39) Others Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
408,625,035 11,713,302
316,029,734 11,344,306
202,262,211 18,295,922
71,363,929 6,052,240
1,253,667,437 247,130,600 -
992,034,918 418,743,458 -
333,186,740 5,436,802 4,091,029
7,728,585 98,062,922 79,412,817
131,622,350
135,575,987
131,592,205
135,497,570
67,795,826 16,552,540
45,599,211 12,114,441
33,798,789 16,552,540
27,369,100 12,114,102
- 4,480,021,870
-
53,575,113 629,356 210,802 2,190,682,203 1,932,071,411 5,225,448,910
85,060 437,686,325
-
20. Borrowings
Borrowings as at 31 December are as follows: Consolidated
Current Short-term borrowing from a financial institution Current portion of long-term borrowings from financial institutions Total current borrowings Non-current Long-term borrowings from financial institutions Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
-
300,000,000
-
300,000,000
809,218,920 809,218,920
551,505,822 851,505,822
729,218,920 729,218,920
384,755,822 684,755,822
198,775,000 1,514,025,000
120,900,000 1,356,150,000
1,007,993,920 2,365,530,822
850,118,920 2,040,905,822
As at 31 December 2014, the Group has short-term borrowing from a financial institution amounting to Baht 300 million. This short-term borrowing is at call and bears interest rate at 3.10% per annum. The borrowing was fully paid during the year ended 31 December 2015. The movements of long-term borrowings as at 31 December are as follows:
For the period ended 31 December 2015 Opening net book value of the year Additions during the year Repayment during the year Closing net book value of the year Current portion of long-term borrowings Long-term borrowings from financial institutions
Consolidated
Company
Baht
Baht
2,065,530,822 1,740,905,822 (1,057,536,902) (890,786,902) 1,007,993,920 850,118,920 (809,218,920) (729,218,920) 198,775,000 120,900,000
As at 31 December 2015, the Group has long-term borrowings in Baht currency from local financial institutions, the outstanding amounting to Baht 1,008 million (2014: Baht 2,366 million). The long-term borrowings will be matured within 3 to 8 years after the agreement commencement date, with the interest rate at MLR-2% to MLR -1.75% per annum as stated in each contract. As at 31 December 2015, the Group has secured long-term borrowings in Baht currency amounting to Baht 850 million from local financial institutions (2014: Baht 1,741 million). The borrowings will be matured with 3 to 8 years after the agreement commencement date, with the interest rate at MLR-2% per annum as stated in each contract. The interest rate risks on the borrowings of the Group and the Company is as follows: Consolidated
Borrowings - at fixed rates - at floating rates Total borrowings
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
50,000,000 50,000,000 957,993,920 2,015,530,822 1,007,993,920 2,065,530,822
850,118,920 1,740,905,822 850,118,920 1,740,905,822
Hemaraj Land and Development Public Company
323
324
Annual Report 2015
The exposure of the Group and The Company’s borrowings to interest rate changes and the contractual repricing dates at the statement of financial position dates are as follows: Consolidated
Total borrowing as at 31 December 2015 Total borrowing as at 31 December 2014
6 months or less
6-12 months
1-5 years
Over 5 years
Total
Baht
Baht
Baht
Baht
Baht
- 650,266,520 107,875,000 199,852,400 957,993,920 281,250,000
90,000,000 1,374,625,000 269,655,822 2,015,530,822 Company
Total borrowing as at 31 December 2015 Total borrowing as at 31 December 2014
6 months or less
6-12 months
1-5 years
Over 5 years
Total
Baht
Baht
Baht
Baht
Baht
- 650,266,520 281,250,000
- 199,852,400 850,118,920
90,000,000 1,100,000,000 269,655,822 1,740,905,822
The effective interest rates at the statement of financial position date were as follows: Consolidated and Company 2015 %
Borrowings from financial institutions
2014 %
4.52 - 5.10
4.76 - 5.34
The carrying amounts and fair values of certain long-term borrowings are as follows: Consolidate Carrying amount
Long-term borrowings from financial institutions and another person
Fair Values
2015
2014
2015
2014
Baht
Baht
Baht
Baht
1,007,993,920 2,065,530,822 1,008,146,447 2,064,938,174 1,007,993,920 2,065,530,822 1,008,146,447 2,064,938,174
Company Carrying amount
Long-term borrowings from financial institutions and another person
Fair Values
2015
2014
2015
2014
Baht
Baht
Baht
Baht
850,118,920 1,740,905,822
849,287,249 1,739,216,775
850,118,920 1,740,905,822
849,287,249 1,739,216,775
The fair values of borrowings are based on future discounted cash flows using a discount rate based upon the borrowing rate at 4.52% - 5.10% (2014: 4.76% - 5.34%) fair value. which the management expects the Group to pay at the statement of financial position date. The of short-term borrowings and liabilities from long-term lease agreement and convertible bonds approximate their book value and are classified in level 3 of fair value hierarchy. Fair value of current portion of borrowings are approximated to their book value resulting from the insignificant impact of the discount rate. Maturity of borrowings from financial institutions (exclude liabilities from long-term lease agreement) are as follows: Consolidate
Within 1 year up to 2 years Between 2 years and 5 years Over 5 years
2015
2014
2015
2014
Baht
Baht
Baht
Baht
700,266,520 1,658,000,000 107,875,000 137,875,000 199,852,400 269,655,822 1,007,993,920 2,065,530,822
650,266,520 1,471,250,000 199,852,400 269,655,822 850,118,920 1,740,905,822
Borrowing facilities The Group and the Company have the following undrawn committed borrowing facilities: Consolidated
Floating rate - Expiring within 1 year - Expiring over 1 year
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
300,000,000 300,000,000
250,000,000 300,000,000 550,000,000
300,000,000 300,000,00
250,000,000 300,000,000 550,000,000
Hemaraj Land and Development Public Company
325
326
Annual Report 2015
The facilities expiring within one year are annual facilities subject to review during years. The other loan facility has been used to expand the operations of the Group and the Company.
21. Long-term debentures, net
Long-term debentures as at 31 December consisted of: Consolidated and Company
Face value of debentures Less Deferred direct expenses in issuing debentures Net book value Current portion of debentures, net Long-term debentures, net
2015
2014
Baht
Baht
13,938,000,000 (39,187,931) 13,898,812,069 (1,492,928,518) 12,405,883,551
12,938,000,000 (35,375,281) 12,902,624,719 (1,492,577,651) 11,410,047,068
The movements of long-term debentures, net for years ended 31 December are as follows: Consolidated and Company
Opening net book value of the year Additions during the year - Debentures - Deferred direct expenses in issuing debentures Repayment during the year Amortisation of direct expenses in issuing debentures Closing net book value of the year
2015
2014
Baht
Baht
12,902,624,719 10,808,709,298 2,500,000,000 2,500,000,000 (11,235,000) (12,561,800) (1,500,000,000) (400,000,000) 7,422,350 6,477,221 13,898,812,069 12,902,624,719
The effective interest rate as at 31 December are as follows: Consolidated and Company
Debentures
2015
2014
Baht
Baht
4.70 - 5.96
5.32 - 5.96
During the year ended 31 December 2015, the Group issued unsubordinated and unsecured Baht 2.5 million units at Baht 1,000 per unit totalling Baht 2,500 million (2014 : the Group issued unsubordinated and unsecured 2.5 million units at Baht 1,000 per unit totalling Baht 2,500 million). Long-term debentures, net as at 31 December consisted of:
No.
Date
Maturity date
3/2553
25 May 2010
25 May 2015
4/2557
21 July 2010
21 July 2017
5/2553
5 October 2010
5 October 2019
1/2554
4 October 2011
4 October 2016
Interest rate (p.a.)
Year 1-3 : 4.90%, Year 4 : 5.80% and Year 5 : 6.50% Year 1-3 : 4.90%, Year 4-6 : 6.00% and Year 7 : 6.50% Year 1-3 : 4.90%, Year 4-6 : 6.00%, Year 7 : 6.50% and Year 8-9 : 6.75% Year 1-3 : 5.15%, Year 4 : 5.50% and Year 5 : 5.60% 5.65% 5.50% 5.75% 4.70% 5.00%
1/2555 12 July 2012 12 July 2021 1/2556 25 January 2013 25 January 2023 1/2557 30 April 2014 30 April 2024 1/2558 20 February 2015 20 February 2022 1/2558 20 February 2015 20 February 2025 Total Less Current portion of debentures, net Deferred direct expenses in issuing long-term debentures, non-current portion Long-term debentures, net
2015
2014
Baht
Baht
- 1,500,000,000 2,300,000,000 2,300,000,000 638,000,000
638,000,000
1,500,000,000 1,500,000,000 2,000,000,000 2,500,000,000 2,500,000,000 1,000,000,000 1,500,000,000 13,938,000,000 (1,492,928,518)
2,000,000,000 2,500,000,000 2,500,000,000 12,938,000,000 (1,492,577,651)
(39,187,931) (35,375,281) 12,405,883,551 11,410,047,068
Hemaraj Land and Development Public Company
327
328
Annual Report 2015
The Company entered into interest-swap agreements with one commercial bank residing in Thailand. The purpose is to swap the interest rate of the debentures issued. The details are as following:
No.
1/2556
1/2557
1/2558
Amount (Million Baht)
Term of debenture
Effective date of debenture (Issue date)
2,500 Swap fixed-rate interest at 5.50% 25 January 2013 per annum through the debenture life to Floating rate 3m THBFIX on 15 October 2015 + 4.77% in the first year, 5.50% in the second to fourth year, and 3m THBFIX (In Arrears) + 2.90% in the fifth to eighth year 2,500 Swap fixed-rate interest at 5.70% 30 April 2014 per annum through the debenture life to Floating rate 3m THBFIX on 15 October 2015 + 4.77% in the first year, 5.70% in the second to fourth year, and 3m THBFIX (In Arrears) + 2.90% in the fifth to ninth year 1,500 Swap fixed-rate interest at 5.00% 20 February 2015 per annum through the debenture life to Floating rate 3m THBFIX on 15 October 2015 + 4.77% in the first year, 5.00% in the second to fourth year, and 3m THBFIX (In Arrears) + 2.90% in the fifth to tenth year
Total effects from the interest-swap agreements
Receivable (payable) from interest-swap agreements Consolidated and Company 2015
2014
Baht
Baht
(4,247,846)
-
(3,081,527)
-
(2,402,122)
-
(9,731,495)
-
The carrying amount and fair value of debentures are as follows: Consolidated and Company Carrying amount
Debentures
Fair value
2015
2014
2015
2014
Baht
Baht
Baht
Baht
13,898,812,069 12,902,624,719 14,755,897,115 13,654,750,175 13,898,812,069 12,902,624,719 14,755,897,115 13,654,750,175
The fair values are based on discounted cash flows at discount rate of 5.87% (2014: 5.54%) which is determined by Thai Bond Market Association as at reporting date of the Group. This fair value measurement method complied with Level 2 input of fair value hierarchy.
22. Other current liabilities
As at 31 December, other current liabilities consisted of: Consolidated
Account payable - Revenue Department Current portion of unearned income from rental and leasehold right Undue output vat Others Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
46,088,667 13,782,052
41,909,219 5,584,370
19,471,606 2,484,000
25,268,206 2,484,000
26,890,009 25,238,401 111,999,129
23,636,255 44,358,453 115,488,297
11,218,700 7,022,652 40,196,958
8,820,128 8,877,687 45,450,021
23. Employee benefit obligations
The movement of employee benefit obligation for the year is as follows: Consolidated
As at 1 January Current service cost Interest cost Actuarial losses on defined employee benefit plans Less Benefits paid during the year As at 31 December
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
83,673,372 8,034,118 2,795,996
70,702,637 7,248,314 2,641,746
38,263,691 2,742,832 1,253,508
31,393,681 2,559,824 1,132,552
(19,148,835) 75,354,651
3,080,675 83,673,372
(11,036,942) 31,223,089
3,177,634 38,263,691
Hemaraj Land and Development Public Company
329
330
Annual Report 2015
Post-employment benefit expenses which are recognised as income or expense in operating profit in the statement of comprehensive income are as follows: Consolidated
Company
Restated
Current service costs Interest costs Total employee benefits expenses
Restated
2015
2014
2015
2014
Baht
Baht
Baht
Baht
7,248,314 2,641,746 9,890,060
2,742,832 1,253,508 3,996,340
2,559,824 1,132,552 3,692,376
8,034,118 2,795,996 10,830,114
Actuarial gains for the year 2015 and 2014 were included in other comprehensive income in statement of comprehensive income. The principal actuarial assumptions used were as follows: Consolidated 2015
Discount rate Salary increase rate Retirement age Staff turnover rate
2014
Company 2015
2014
2.76% - 4.34% 3.22 - 4.34% 3.28% 3.28% 5.42% - 6.55% 5.42 - 6.55% 5.42% 5.42% 55 years old 55 years old 55 years old 55 years old 3.00 - 19.00% 3.00 - 19.00% 3.00 - 16.00% 3.00 - 16.00%
Sensitivity analysis for each significant assumptions as at 31 December 2015 are as follow; Consolidated Change in assumption
Discount rate Salary growth rate Staff turnover rate
1% 1% 1%
Increase in assumption
Decrease in assumption
Decrease by 5.20% - 11.43% Increase by 5.84 - 13.10% Increase by 7.61% - 14.27% Decrease by 6.89 - 12.54% Decrease by 5.53% - 12.17% Increase by 0.69 - 9.30% Company
Discount rate Salary growth rate Staff turnover rate
Change in assumption
Increase in assumption
Decrease in assumption
1% 1% 1%
Decrease by 5.20% Increase by 7.61% Decrease by 5.53%
Increase by 5.84% Decrease by 6.89% Increase by 3.12%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumption the same method (present value of the defined benefit obligation calculated with the projected unit credit method) at the end of the reporting period of calculating the retirement benefit obligation recognised within the statement of financial position. The weighted average durations of the retirement benefit obligation as at 31 December 2015 and 2014 are 8.50 and 9.50 years, respectively. Expected maturity analysis of undiscounted retirement benefits:
Benefits expected to be paid less than a year Benefits expected to be paid between 1 - 2 years Benefits expected to be paid between 2 - 5 years Benefits expected to be paid between over 5 years Total benefits expected to be paid
2015
2014
Baht
Baht
10,251,974 17,323,250 25,553,493 270,581,647 323,710,364
5,873,238 9,761,550 8,140,011 69,699,229 93,474,028
24. Provision for liabilities arising from guarantee rental income
The Group has estimated provision for liabilities arising from guarantee rental income at the present value of the cash flows which the Group expects to pay to Hemaraj Industrial Property and Leasehold Fund as follows:
As at 1 January 2014 Increase during the year Decrease from actual paid As at 1 January 2015 Increase during the year Decrease from actual paid As at 31 December 2015 Current portion of provision for liabilities arising from guarantee rental income Long-term portion of provision for liabilities arising from guarantee rental income
Consolidated
Company
Baht
Baht
294,495,624 9,257,140 (88,908,068) 214,844,696 15,238,888 (122,661,236) 107,422,348
31,267,080 4,980,787 (5,441,573) 30,806,294 730,837 (16,133,984) 15,403,147
(107,422,348)
(15,403,147)
-
-
The Group entered into agreements to guarantee the minimum rental income that Hemaraj Industrial Property and Leasehold Fund will receive from the Group over the period of 3 years from the register transferring ownership date of Hemaraj Industrial Property and Leasehold Fund. Hemaraj Land and Development Public Company
331
332
Annual Report 2015
25. Unearned income from rental and leasehold right
Unearned income from rental and leasehold right as at 31 December consisted of: Consolidated
Unearned income from rental (Note 39.2) Less Accumulated income recognition Unearned income from rental, net Less Current portion Non-current portion Deferred leasehold right income, net - Related parties (Note 39.2) - Other parties Less Accumulated income recognition Leasehold right income, net Less Current portion Non-current portion Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
167,531,127 (11,275,839) 156,255,288 (5,584,371) 150,670,917
167,531,127 (5,691,468) 161,839,659 (5,584,371) 156,255,288
-
-
18,946,668 18,946,668 (3,538,951) 15,407,717 (8,197,681) 7,210,036 157,880,953
11,314,723 11,314,723 (2,973,215) 8,341,508 8,341,508 164,596,796
62,100,000 62,100,000 (18,640,208) 43,459,792 (2,484,000) 40,975,792 40,975,792
62,100,000 62,100,000 (16,156,208) 45,943,792 (2,484,000) 43,459,792 43,459,792
Number of shares
Ordinary Shares
Share Premium
Total
Shares
Baht
Baht
Baht
26. Share capital and premium on share capital
At 1 January 2014 Issue of shares At 31 December 2014 Issue of shares At 31 December 2015
9,705,186,191 3,882,074,476 9,705,186,191 3,882,074,476 9,705,186,191 3,882,074,476
438,704,620 4,320,779,096 438,704,620 4,320,779,096 438,704,620 4,320,779,096
27. Legal reserve Consolidated and Company
At 1 January Appropriation during the year At 31 December
2015
2014
Baht
Baht
600,000,000 600,000,000
600,000,000 600,000,000
28. Other component of equity
At 31 December 2013 Revaluation of investment in available-for-sale Difference from currency translation At 31 December 2014 Revaluation of investment in available-for-sale Difference from currency translation At 31 December 2015
Consolidated
Company
Baht
Baht
(31,304,091) (10,802) 46,268 (31,268,625) 603,011 769,628 (29,895,986)
252,745 (10,802) 241,943 603,011 844,954
29. Finance costs Consolidated
Bank borrowings Debentures Amortisation of bonds issue fee Other Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
19,923,263 729,451,146 7,422,349 3,846,556 760,643,314
49,536,978 690,607,428 7,550,221 4,006,861 751,701,488
14,079,089 743,784,458 7,422,349 771,167 766,057,063
42,239,653 700,702,471 7,550,221 971,492 751,463,837
30. Expenses by nature Consolidated
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
Cost of sales of real estate 2,774,547,351 1,773,810,183 1,694,990,158 Employee benefits expenses 238,297,116 215,843,401 57,610,727 Depreciation and amortisation 276,177,958 362,426,439 25,753,033 Transfer fee of land and specific business tax 183,791,380 159,420,310 105,348,904 Consulting fees 43,628,949 32,293,272 34,959,518 Remuneration of directors and 250,926,457 243,362,529 125,625,184 Management (Note 39.6)
297,246,119 68,821,710 26,679,896 21,520,942 19,487,456 148,757,637
Hemaraj Land and Development Public Company
333
334
Annual Report 2015
31. Income tax expenses
Income tax expenses for the years ended 31 December summarises below; Reconciliation of income tax expenses and the results of accounting profit using the basic tax rate of the year presents as follow; Consolidated 2015
2014
2015
2014
Baht
Baht
Baht
Baht
Profit before income tax expense 3,493,035,030 (Profit) loss from promoted activities which (659,087,533) exempt from payment of corporate income tax (100%) Share of net (profit) loss from investments (1,305,072,583) - equity method 1,528,874,914 Tax calculated at a tax rate of 20% 305,774,983 Impact: Income not subject to tax (226,982,010) Prior year tax losses which recognised deferred (17,353,905) income tax in current year Under record of prior year income tax 13,141,543 Expenses not deductible for tax purpose 82,660,855 Income tax expense 157,241,466
Company
3,363,042,666 2,730,257,373 3,348,654,660 (962,892,681) (401,762,520) (131,450,557) (1,650,405,202)
-
-
749,744,783 2,328,493,853 3,217,204,103 149,948,957 465,698,771 643,440,821 (228,762,197) (453,451,907) (702,971,983) - (17,353,905) 176,921,509 98,108,269
(6,414,262) (11,521,303)
58,099,969 (1,431,193)
Reconciliation of income tax expenses and the results of accounting profit using the basic tax rate of the year presents as follow; Consolidated
Current income tax on taxable profit for the year Deferred tax (Note 32) Total current income tax
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
172,442,993 (15,201,527) 157,241,466
85,432,611 12,675,658 98,108,269
(11,521,303) (11,521,303)
(1,431,193) (1,431,193)
32. Deferred tax assets and deferred tax liabilities
Deferred income tax assets and deferred tax liabilities comprise the following: Unit: Baht Consolidated 2015
Deferred tax assets: Deferred tax asset to be recovered within 12 months Deferred tax asset to be recovered after more than 12 months Deferred tax liabilities: Deferred tax liabilities to be settled within 12 months Deferred tax liability to be settled after more than 12 months
2014
Company 2015
2014
16,210,621
24,592,695
3,733,308
11,355,017
64,366,286
48,389,098
26,041,396
9,648,738
80,576,907
72,981,793
29,774,704
21,003,755
(1,370,266)
(3,519,138)
(201,516)
(2,801,118)
(144,676,117) (165,345,709)
-
-
(146,046,383) (168,864,847)
(201,516)
(2,801,118)
The movement of deferred income taxes comprise the following: Unit: Baht Consolidated 2015
Deferred tax assets: At 1 January Credited (Debited) to profit or loss Tax charged directly to equity At 31 December Deferred tax liabilities: At 1 January Credited (Debited) to profit or loss Deconsolidation of subsidiary At 31 December
41,829,959 6,737,296 (150,753) 48,416,502
2014
Company 2015
2014
39,442,367 1,768,758 618,834 41,829,959
18,202,637 11,521,303 (150,752) 29,573,188
16,133,217 1,431,193 638,227 18,202,637
(137,713,013) (123,268,597) 8,464,231 (14,444,416) 15,362,804 (113,885,978) (137,713,013)
-
-
The Group are certain that the deferred tax assets are utilizable.
Hemaraj Land and Development Public Company
335
336
Annual Report 2015
The movement in deferred tax assets and liabilities comprise the following: Unit: Baht Consolidated At 1 January
Charged (credited)
Charged directly
2015
to profit or loss
to equity
Deferred tax assets Allowance for doubtful debts 1,171,297 Impairment of assets 144,733 Impairment of investment 143,400 Timing differences of accounting 16,078,587 and taxable income recognition Provision for maintenance 1,374,726 Employee benefits obligations 14,050,908 Provision for guarantee minimum 6,161,259 rental income Timing differences of depreciation (3,190,621) of buildings Unrealised gains on investments (50,764) in available-for-sale securities Tax loss carried forward not over 5,946,434 than 5 years Total 41,829,959 Deferred tax liabilities Timing differences of accounting (146,129,939) and taxable income recognition of leases Allowance for doubtful debts 308,854 Impairment of assets 1,888,466 Provision for maintenance 2,257,190 Employee benefit obligations 2,307,695 Provision for guarantee minimum 16,220,195 rental income Timing differences of depreciation (14,565,474) of buildings Interest payment Total (137,713,013)
Deconsolidation At 31 December of subsidiary
2015
(158,550) (4,150,637)
-
-
1,012,746 144,733 143,400 11,927,950
(1,374,726) (761,448) (3,080,629)
-
-
13,289,461 3,080,631
3,190,621
-
-
-
-
(150,753)
-
(201,517)
13,072,665
-
-
19,019,099
6,737,296
(150,753)
-
48,416,502
3,863,583
-
1,659,266 (1,956,269) (426,881) (3,742,882)
-
(99,345) -
1,968,120 1,888,466 300,921 1,781,469 12,477,313
(896,675)
-
15,462,149
-
9,964,089 8,464,231
-
9,964,089 15,362,804 (113,885,978)
- (142,266,355)
Unit: Baht Consolidated At 1 January
Charged (credited)
Charged directly
2014
to profit or loss
to equity
Deferred tax assets Allowance for doubtful debts 983,607 187,690 Impairment of assets 144,733 Impairment of investment 143,400 Timing differences of accounting 21,584,626 (6,122,174) and taxable income recognition Provision for maintenance 879,040 495,686 Employee benefits obligations 11,151,742 2,899,166 Provision for guarantee minimum 6,253,416 (92,157) rental income Timing differences of depreciation (2,105,897) (1,084,724) of buildings Unrealised gains on investments (53,463) in available-for-sale securities Tax loss carried forward not over 461,163 5,485,271 than 5 years Total 39,442,367 1,768,758 Deferred tax liabilities Timing differences of accounting (149,333,771) 3,203,833 and taxable income recognition of leases Allowance for doubtful debts 1,848,315 (1,539,461) Impairment of assets 1,888,466 Provision for maintenance 4,105,561 (1,848,371) Employee benefit obligations 2,313,664 (5,970) Provision for guarantee minimum 26,836,075 (10,615,880) rental income Timing differences of depreciation (10,926,907) (3,638,567) of buildings Total
(123,268,597)
(14,444,416)
Deconsolidation At 31 December of subsidiary
2014
616,135
-
1,171,297 144,733 143,400 16,078,587
-
-
1,374,726 14,050,908 6,161,259
-
-
(3,190,621)
2,699
-
(50,764)
-
-
5,946,434
618,834
-
41,829,959
-
- (146,129,938)
-
-
-
- (14,565,474)
-
-
308,854 1,888,466 2,257,190 2,307,694 16,220,195
(137,713,013)
Hemaraj Land and Development Public Company
337
338
Annual Report 2015
Unit: Baht Company
Deferred tax assets Allowance for doubtful debts Impairment of assets Impairment of investment Timing differences of accounting and taxable income recognition Provision for maintenance Employee benefits obligations Provision for guarantee minimum rental income Timing differences of depreciation of buildings Unrealised gains on investments in availablefor-sale securities Tax loss carried forward not over than 5 years Total Deferred tax assets Allowance for doubtful debts Impairment of assets Impairment of investment Timing differences of accounting and taxable income recognition Provision for maintenance Employee benefits obligations Provision for guarantee minimum rental income Timing differences of depreciation of buildings Unrealised gains on investments in availablefor-sale securities Tax loss carried forward not over than 5 years Total
At 1 January
Charged (credited)
Charged directly
At 31 December
2015
to profit or loss
to equity
2015
968,026 144,733 851,379
(324,783) 803,519
-
643,243 144,733 1,654,898
10,000 7,652,738 6,161,260 (2,750,354) (50,765)
(10,000) (1,408,121) (3,080,630) 2,750,354 -
(150,752)
6,244,617 3,080,630 (201,516)
5,215,620 18,202,637
12,790,963 11,521,303
(150,752)
18,006,583 29,573,188
977,320 144,733 -
(9,293) -
-
968,026 144,733 -
4,020,720 287,206 6,278,736 6,253,416 (1,775,451)
(3,169,342) (277,206) 738,475 (92,157) (974,903)
635,527 -
851,378 10,000 7,652,738 6,161,259 (2,750,354)
(53,465) 16,133,217
5,215,619 1,431,193
2,700 638,227
(50,763) 5,215,619 18,202,637
Statement of financial position has outstanding balance of deferred tax assets and deferred tax liabilities as follows: Unit: Baht Consolidated 2015
Deferred tax assets Deferred tax liabilities
2014
48,416,502 41,829,959 (113,885,978) (137,713,013)
Company 2015
2014
29,573,188 -
18,202,637 -
33. Earnings per share
Basic earnings per share is calculated by dividing the net profit attributable to shareholders of the company by the weighted average number of ordinary shares in issue during the year (Note 26). Consolidated 2015
2014
Company 2015
2014
Earnings (Baht) Net profit attributable to ordinary shareholders 3,288,930,658 3,003,191,697 2,741,778,676 3,350,085,853 of the company Weighted average number of 9,705,186,191 9,705,186,191 9,705,186,191 9,705,186,191 ordinary shares outstanding (Shares) Basic earnings per share (Baht per share) 0.34 0.31 0.28 0.35
34. Dividends per share
Dividend
Approved by
Year 2015 Interim dividend for year 2015 The Board of Directors’ Meeting held on 7 July 2015 Total dividend paid during year 2015 Year 2014 Interim dividend for year 2014 The Board of Directors’ Meeting held on 3 October 2014 Dividend from the profit of year The Board of Directors’ Meeting 2013 held on 28 February 2014 and the 2014 Annual General Meeting of Shareholders on 29 April 2014 Total dividend paid during year 2014
Dividend paid (Baht)
Dividend paid per share (Baht)
4,299,397,021
0.44
4,299,397,021
0.44
679,360,252
Payment date
31 July 2015
0.07 31 October 2014
1,067,568,540
0.11
1,746,928,792
0.18
16 May 2014
Hemaraj Land and Development Public Company
339
340
Annual Report 2015
35. Financial instruments
A financial instrument is any contract that gave rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. The Group has no policy to speculate or trade in off-balance sheet derivative financial instruments. Outstanding balance as at 31 December of financial instruments that recorded in the statements of financial position is as follows: Consolidated
Company
2015 Derivative financial instruments
Interest rate swaps
-
2014
2015
2014
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Baht
Baht
Baht
Baht
Baht
Baht
Baht
Baht
9,731,495 -
-
-
9,731,495 -
The Group entered into the interest rate swap contract in order to use it as a risk management instrument to manage on the fluctuation of future interest rate of debenture (Note 21) by changing from fixed interest rate to floating interest rate under the interest rate swap contract. Under the interest rate swap contracts, the Group agreed to exchange the difference between fixed rate and floating rate which are calculated by reference to the agreed notional principal amounts. Net fair values of derivative financial instruments The net fair values of derivative financial instruments at 31 December and designated for cash flow hedges were as follow: Consolidated
Contracts with positive/(negative) fair values: Interest rate swaps
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
(150,258,565)
- (150,258,565)
-
Fair value of the interest rate swap contracts which is not in the liquidity market calculated by observable market data, and fall with Level 2 of the fair value hierarchy.
36. Assets pledged as collaterals
Hemaraj Land and Development Public Company Limited
1) Investment in ordinary shares of GHECO - One Company Limited amounted to 406.84 million shares have been pledged with the lender secured for borrowings obtained by that company. 2) Investment in ordinary shares of Glow IPP Company Limited amounted to 14.25 million shares have been pledged with the lender secured for borrowings obtained by that company. 3) Investment in rrdinary shares of Huay Ho Thai Company Limited amounted to 26.91 million shares have been pledged with the lender secured for borrowings obtained by that company.
4) The partial land and attachments have been mortgaged as collateral for borrowings from local commercial banks and financial institutions.
Eastern Industrial Estate Company Limited
Eastern Seaboard Industrial Estate (Rayong) Company Limited
Hemaraj Eastern Seaboard Industrial Estate Company Limited
Hemaraj Rayong Industrial Land Company Limited
Hemaraj Energy Company Limited
The Company’s partial land as a part of cost of real estate development, has been mortgaged as collateral for borrowings from a commercial bank. The Company’s partial land and pre-fabricated factories have been mortgaged as collateral for overdrafts and borrowings from commercial bank. The Company’s partial land and pre-fabricated factories have been mortgaged as collateral for the Company and Parent Company’s borrowings from local commercial bank. The Company’s partial land has been mortgaged as collateral for the Parent company’s borrowings from a local commercial bank. (1) Investment in ordinary shares of Gulf JP NLL Company Limited amounted to 34.61 million shares have been pledged with the lender secured for borrowings obtained by that company. (2) Investment in ordinary shares of Gulf Solar Company Limited amounted to 0.37 million shares have been pledged with the lender secured for borrowings obtained by that company. (3) Investment in ordinary shares of Bowin Clean Energy Company Limited amounted to 1.17 million shares have been pledged with the lender secured for borrowings obtained by that company. (4) Investment in ordinary shares of Gulf VTP Company Limited amounted to 16.63 million shares have been pledged with the lender secured for borrowings obtained by that company. (5) Investment in ordinary shares of Gulf TS1 Company Limited amounted to 17.36 million shares have been pledged with the lender secured for borrowings obtained by that company. (6) Investment in ordinary shares of Gulf TS2 Company Limited amounted to 17.61 million shares have been pledged with the lender secured for borrowings obtained by that company. (7) Investment in ordinary shares of Gulf TS3 Company Limited amounted to 16.61 million shares have been pledged with the lender secured for borrowings obtained by that company. (8) Investment in ordinary shares of Gulf TS4 Company Limited amounted to 16.38 million shares have been pledged with the lender secured for borrowings obtained by that company.
37. Significant commitments
As of 31 December 2015, commitments are as follows: The Group have participated in the industrial estate establishment with the Industrial Estate Authority of Thailand (IEAT) as the joint operation agreements as follows: 1) Hemaraj Chonburi Industrial Estate in Phase 1 and Phase 2 according to the joint operation agreements dated 5 July and 29 December 1989, respectively. On 31 October 2001, the Company entered into the amendment to such joint operation agreements with IEAT. On 29 March 2005, the Company combined such agreement into one joint operation agreement. Hemaraj Land and Development Public Company
341
342
Annual Report 2015
2) Hemaraj Eastern Industrial Estate (Map Ta Phut) according to the joint operation agreement dated 27 December 1989. On 31 October 2001, the Company entered into the amendment to such joint operation agreements with IEAT. On 29 March 2005, the Company combined such agreement into one joint operation agreement. 3) Eastern Seaboard Industrial Estate (Rayong) according to the joint operation agreement No. 1/2539 and 1/2540 4) Hemaraj Eastern Seaboard Industrial Estate according to the joint operation agreement No. 1/2542 (TS 21) 5)) Hemaraj Chonburi Industrial Estate II according to the joint operation agreement No. 1/2556 6) Hemaraj Eastern Seaboard Industrial Estate II according to the joint operation agreement No. 4/2557 7) Hemaraj Eastern Seaboard Industrial Estate III according to the joint operation agreement No. 5/2557 8) Hemaraj Rayong 36 Industrial Estate according to the joint operation agreement No. 3/2557 The major conditions are summarised as follows: 1) The Company shall provide utilities systems and facilities to the entrepreneurs in the industrial estate with payment of expenses on its participation in the procedures to the IEAT. 2) The Company shall not transfer assets, component part and equipment as well as utilities systems and facilities to the IEAT. 3) The Company shall provide a fund for the maintenance and construction of utilities systems and facilities in the industrial estate (Sinking Fund).
Hemaraj Land and Development Public Company Limited
The Company acquired 5% investment in the amount of Baht 142.50 million in Glow IPP Company Limited in order to maintain holding ratio to comply with the conditions with Electricity Generating Authority of Thailand. The Company has commitment under construction contrction contracts in utilities system, with the remaining commitment balance amount to Baht 783.08 million. The Company has commitment to grant loan to that company in proportion of the shareholders’ participation. GHECO-One Company Limited entered into a power sale and purchase agreement (PPA) with EGAT on 10 September 2008 where GHECO-One shall supply all its electricity production to EGAT for 25 years from the Commercial Operation Date (COD) under the IPP Program. In addition, GHECO-One Company Limited had pledged the bid bond of USD 10 million to guarantee the bidding with Electricity Generating Authority of Thailand and guarantee by the Company in the portion of investment. GHECO-One has started commercial operation on 26 July 2012. The total project cost of GHECOOne Company Limited is estimated at USD 1,170 million or Baht 38,991 million which require investment from shareholders in the amount of approximately Baht 13,500 million. The Company has commitment to invest in proportion to the shareholders’ participation 35% being Baht 4,750 million. GHECO-One Company Limited is funded by local and international financial institutions of approximately of USD 460 million and Baht 9,960 million with the condition that the Company shall provide deposit or bank letter of credit to guarantee the joint venture agreement of the Company for the unpaid capital and the Company shall pledge the ordinary shares of GHECO-One Company Limited with the lender secured for this project borrowings. The Company has commitment under construction contracts to construct ready-built factories and public utilities, with the remaining commitment balance amounting to Baht 359.12 million
Hemaraj Clean Water Company Limited
The Company has commitment under construction contracts in utilities system, with the remaining commitment balance amounting to Baht 57.08 million.
Eastern Seaboard Industrial Estate (Rayong) Company Limited
The Company has commitment under construction contracts in utilities system, with the remaining commitment balance amounting to Baht 22.09 million.
Hemaraj Eastern Seaboard Industrial Estate Company Limited
The Company has commitment under construction contracts to construct ready-built factories and public utilities, with the remaining commitment balance amounting to Baht 21.06 million.
SME Factory Company Limited
The Company has commitment under construction contracts to construct ready-built factories and public utilities, with the remaining commitment balance amounting to Baht 1.67 million.
Hemaraj Rayong Industrial Land Company Limited
The Company has commitment under construction contracts in utilities system, with the remaining commitment balance amounting to Baht 3.04 million.
Capital commitment
Capital commitment at the statement of financial position date but not recognised in the financial statements is as follows: Consolidated
Property, plant and Equipments and Investment property Intangible assets Total capital commitment
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
464,072,217 464,072,217
334,378,666 10,556,000 344,934,666
359,123,933 359,123,933
194,999,769 10,556,000 205,555,769
Operating lease commitments
The Company has the obligations under long-term lease agreements for office buildings and vehicles, the term of contracts are 3 years and 5 years, respectively. The obligations for rental payments are as follow: Consolidated
Not later than 1 year Later than 1 year but not later than 5 years Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
6,604,633 16,833,229 23,437,862
-
3,110,076 6,033,544 9,143,620
-
Hemaraj Land and Development Public Company
343
344
Annual Report 2015
38. Contingent liabilities
As at 31 December 2015, contingent liabilities consisted of: 1) The Group have entered into land sale and purchase contracts, which the contract term requires the Group to contingently liable to repay deposits and installments in the event that buyers are unable to obtain satisfactory approvals from the Board of Investment and/or the IEAT to set up their operations. 2) The Group have obligation regarding guarantee of the borrowings agreement of the Group in the total credit line of Baht 3,488 million. (The Company: Baht 440 million) 3) The Group have obligations regarding guarantee of the hire purchase agreements of its related companies in the total credit line of Baht 56.28 million. (The Company: Baht 11.40 million). 4) The Group have obligations regarding guarantee and under condition of the letters of guarantee issued by the banks for their performance under the joint operation agreements with the Industrial Estate Authority of Thailand, their compliance with the agreement made with the Customs House in the free tax area, the construction of utilities under land sale contract, the construction of utility and power substation, and their performance under the raw water purchase agreement and others in the total amount of Baht 715.50 million. (The Company: Baht 311.31 million). 5) The Group has obligations regarding guarantee under condition of the letters of guarantee issued by the Group according to the joint operation agreement with power group in the total amount of Baht 2,341.49 million. 6) The Group have contingent liabilities from entering into agreements to appoint properties managements with the Fund, whereby it agreed to repay the excess operating expenses over 4 percent of annual total operating revenue of the Fund for the period of 3 years from the register date of the Fund. 7) The Company has obligations regarding under condition of the letter of guarantee issues by the Company for the payment of the minimum income from annual minimum operating revenues of the subsidiaries to Hemaraj Industrial Property and Leasehold Fund. 8) The Company has obligations regarding guarantee under condition of the letters of guarantee issued by the Company for a related company in the total amount not exceeding of Baht 13.47 million.
39. Related-party transactions
Individuals and enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related-party relationship, attention is directed to the substance of the relationship, and not merely the legal form.
39.1 Revenue and expenses
For the years ended 31 December, the Group had significant transactions with related parties as follows: Consolidated
Services income Parent company Associates Subsidiaries Total Interest income Associates Subsidiaries Total Commission and Management income Associates Subsidiaries Total Deferred leasehold right income Subsidiaries Total Provision for liabilities arising from guarantee of rental income Associates Total Dividend income Associates Subsidiaries Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
569,227 33,956,208 34,525,435
277,297 16,628,763 16,906,060
232,753 17,698,539 17,931,292
100,303,000 363,359,082 463,662,082
100,303,000 299,506,084 399,809,084
13,327,446 162,749,078 176,076,524
8,008,280 239,818,131 247,826,411
-
2,484,000 2,484,000
2,484,000 2,484,000
27,771,420 27,771,420
730,837 730,837
14,942,362 14,942,362
1,132,201 1,132,201
100,303,000 100,303,000
100,303,000
13,327,446 13,327,446
8,008,280 8,008,280 -
15,238,889 15,238,889 -
100,303,000
- 1,132,506,501 1,111,067,613 - 1,134,749,465 2,373,748,913 - 2,267,255,966 3,484,816,526
Hemaraj Land and Development Public Company
345
346
Annual Report 2015
39.2 Balance with related parties Consolidated
Trade receivables - related parties Parent company Associates Subsidiaries Total Trade receivables - related parties Not due Less than 3 months Total Less Allowance for doubtful accounts Total Advance payment from related parties Subsidiaries Total Short-term loans to related parties Associates Subsidiaries Total Trade payables - related parties Associates Subsidiaries Total Other payables Subsidiaries Short-term borrowings from related parties Subsidiaries Total Provision for liabilities arising from guarantee of rental income Associates - Current portion - Non-current portion Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
4,708 4,228,097 4,232,805
1,476,832 1,476,832
1,646,142 153,885,276 155,531,418
1,319,508 122,397,529 123,717,037
4,232,805 4,232,805 4,232,805
1,476,832 1,476,832 1,476,832
57,309,726 98,221,692 155,531,418 155,531,418
116,218,220 7,498,817 123,717,037 123,717,037
-
-
1,448,489 1,448,489
-
1,432,900,000 1,432,900,000 1,432,900,000 1,432,900,000 6,355,400,000 5,537,400,000 1,432,900,000 1,432,900,000 7,788,300,000 6,970,300,000 11,713,302 11,713,302
11,344,306 11,344,306
1,411,321 16,884,601 18,295,922
1,876,350 4,175,890 6,052,240
-
- 4,480,021,870 - 4,480,021,870
-
-
-
489,908,990 489,908,990
-
107,422,348 107,422,348
107,422,348 107,422,348 214,844,696
15,403,147 15,403,147
15,403,147 15,403,147 30,806,294
Consolidated
Unearned income from rental - related parties Associates - Current portion - Non-current portion Total Deferred leasehold right income Subsidiaries Deferred leasehold right income Less Accumulated amortisation Deferred leasehold right income, net
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
5,584,371 150,670,917 156,255,288
5,584,371 156,255,288 161,839,659
-
-
-
-
62,100,000
62,100,000
-
-
(18,640,208) 43,459,792
(16,156,208) 45,943,792
39.3 Short-term loans to related parties
The movements of short-term loans to related parties for the years ended 31 December are as follows: Consolidated
Beginning balance Addition during the year Repayment during the year Ending balance
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
1,432,900,000 1,432,900,000 6,970,300,000 5,538,900,000 - 2,828,600,000 2,003,400,000 - (2,010,600,000) (572,000,000) 1,432,900,000 1,432,900,000 7,788,300,000 6,970,300,000
39.4 Advance payment from related parties
The movements of advance payment from related parties for the years ended 31 December are as follows: Consolidated
Beginning balance Increase during the year Paid during the year Ending balance
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
-
-
79,412,817 132,652,179 7,353,597 91,702,359 (82,675,385) (144,941,721) 4,091,029 79,412,817
Hemaraj Land and Development Public Company
347
348
Annual Report 2015
39.5 Long-term loans from related parties
The movements of long-term loans from related parties for the years ended 31 December are as follows: Consolidated 2015
2014
2015
2014
Baht
Baht
Baht
Baht
Beginning balance Repayment during the year Unrealised gain on exchange rate Ending balance
Company
-
- 1,026,176,694 1,035,901,814 (34,000) (13,042,061) 65,763,926 3,316,941 - 1,091,906,620 1,026,176,694
39.6 Remuneration of directors and management
For the years ended 31 December 2015 and 2014, the Group had remuneration of directors and management as follows: Consolidated
Remuneration of directors and management Total
Company
2015
2014
2015
2014
Baht
Baht
Baht
Baht
250,926,457 250,926,457
243,362,529 243,362,529
125,625,184 125,625,184
148,757,637 148,757,637
39.7 On 24 December 2013, the Group entered into an agreement relating to the lease of land and building in Hemaraj Chonburi Industrial Estate, Eastern Seaboard Industrial Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate, Hemaraj Saraburi Industrial Zone, and Hemaraj Industrial Property and Leasehold Fund, whereby the Group agreed to lease land, building and other related equipment to the Fund and in return received 30 years’ rental for the land totaling Baht 167.53 million. The Group recorded this rental fees as “Rental income received in advance” in the statements of financial position, and it will be recognised as rental income by straight-line method over the period of the lease agreement.
40. Benefits from the Board of Investment of Thailand (BOI)
As at 31 December 2015, the Group has received the benefits from the Board of Investment of Thailand (BOI) for activities as follows: • Parent company has received the benefits from the Board of Investment of Thailand (BOI) totally 5 certificates for activities as follows; Building factories and warehouses activities, 2 certificates. Real estate development for industrial, 3 certificates
• Subsidiaries have received the benefits from the Board of Investment of Thailand (BOI) totally 69 certificates for activities as follows; Building factories and warehouses activities, 51 certificates. Real estate development for industrial, 15 certificates. Logistics parks, 1 certificate. Public utilities and basis services production of tab water or water supply for industry, 2 certificates. Significant privileges consist of: 1) Tax exemption on the profit that the Company gains for 8 years since the first date of revenue generated. If the Company has loss from the operation, BOI allows the Company to deduct the loss from the profit that might occur in another 5 years after BOI expiry date. In addition, the Company can also choose to deduct the loss in one year or multiple years combine. 2) Tax exemption on the profit that the Company gains (no more than 100% of the finance cost that is not included in land cost and working capital that have 7 years of useful life). If the Company has loss from the operation, BOI allows the Company to deduct the loss from the profit that might occur in another 5 years after BOI expiry date. In addition, the Company can also choose to deduct the loss in one year or multiple years combine. 3) Tax exemption on the profit that the Company gains (no more than 100% of the finance cost that is not included in land cost and working capital that have 8 years of useful life). If the Company has loss from the operation, BOI allows the Company to deduct the loss from the profit that might occur in another 5 years after BOI expiry date. In addition, the Company can also choose to deduct the loss in one year or multiple years combine. 4) The Group does not need to include dividend received from a BOI-promoted entity to calculate the income tax expenses during the exemption period. 5) Tax deduction (50% of normal rate) on net profit within 5 years after the end of the right period as mentioned in 1 above. 6) Two times deduction on travel, electricity, and water supply cost within 10 years starting from the date that the Group receives its first profit from the operation. 7) Deduction on investment cost (25% of investment cost that is not included in the normal depreciation rate). As a promoted company, the Company must comply with certain conditions and restrictions provided for in the promotional certificates. Rental income and services income for promoted and non-promoted activities for the years ended 31 December 2015 and 2014 can be classified as follows:
Hemaraj Land and Development Public Company
349
350
Annual Report 2015
Consolidated 2015 (Baht)
Income from sales of investment properties Rental income Services income
Promoted
Nonpromoted
activity
activity
3,953,526,702
2014 (Baht)
Total
Promoted
Nonpromoted
activity
activity
692,187,086 4,645,713,788 2,938,749,230
Total
702,106,386 3,640,856,066
- 33,500,000 33,500,000 39,306,450 - 39,306,450 1,014,509,103 1,777,406,302 2,791,915,405 1,203,239,056 1,449,695,439 2,652,934,495 4,968,035,805 2,503,093,388 7,471,129,193 4,181,294,736 2,151,802,275 6,333,097,011 Company 2015 (Baht)
Income from sales of investment properties Rental income Services income
Promoted
Nonpromoted
activity
activity
2014 (Baht)
Total
Promoted
Nonpromoted
activity
activity
Total
2,567,852,700
244,638,875 2,812,491,575
175,286,275
351,765,511
527,051,786
12,132,476 2,579,985,176
33,500,000 33,500,000 125,234,944 137,367,420 403,373,819 2,983,358,995
8,531,636 183,817,911
138,535,619 490,299,130
147,065,255 674,117,041
41. Subsequent events
On 9 February 2016, WHA Venture Holding Company Limited acquired additional shares of Hemaraj Land and Development Public Company Limited for 549,684,996 shares at a proportion of 5.66%, totalling Baht 2,418,613,982. At the end of the tender offer period, the Group holds the subsidiary’s shares at a proportion of 98.54%. On 16 February 2016, the Company received result of tendor offer for the Company’s securities from WHA Venture Holding Company Limited amounting to 549,684,996 shares at a proportion of 5.66%, totalling Baht 2,418,613,982. At the end of the tender offer period, the Group holds the subsidiary’s shares at a proportion of 98.54%. On 23 February 2016, Hemaraj Land and Development Public Company Limited received an approval for delisting the Company’s securities from the Stock Exchange of Thailand effective from 2 March 2016.
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Related Transactions in the Year 2015 between the Company, Subsidiaries and Associated Companies, Related Companies, are as follows :
1. Associated Companies: 100,303 - - - The Company has provided a Loan from the Company 1.1 Gheco-One Company The Company holds a stake - Limited of 35.00% in Gheco-One Subordinated Loan of Baht 1,433 million is proportionate to the Two of the executive with an interest rate of MLR% since percentage of its Electricity and Power Generation directors serve on the 2012 proportionate to the percentage ownership and necessity Board of Directors and the of its ownership in accordance with of the project - The Loan Executive Committee of the the terms and conditions of the was proposed and associated company as shareholder’s agreement. approved by the Board stated in the Company’s of Directors joint venture investment policy
Income Expenses (Unit : Thousands) (Unit : Thousands) Com- Name of Company Nature of mission Minimum Necessity / Opinion Description with Related Relationship of Audit Committee Transactions Service Interest and Compen- Advisory Income Income Mana- sation Fee gement Guarantee Income
The related transactions among the company and its subsidiaries, affiliated companies, related companies and/or the third party generally are from normal course of businesses which the price of the transaction will be considered based on the reasonable and fair market prevailing rate and the company’s rules and regulations. The transactions will be considered and approved by the Board of Directors, Executive Committee or senior management as the case may be, including to be reviewed by the Audit Committee in compliance with the rules stated by the Stock Exchange of Thailand (SET), Securities and Exchange Commission (SEC), as well as Thai Accounting Standards in relation to information disclosure and practices of listed companies in connected transactions, announced by the Federation of Accounting Profession.
The Necessity and Reasonableness of Related Transactions during the year
Transactions with Related Parties
1.2 Hemaraj Industrial The Company holds a 1,034 - 13,327 15,239 - The company receives compensation Remuneration is based Property and 23.12% stake in the fund as the property fund manager as on the market rate and Leasehold Fund follows: guaranteed minimum 1. Management fee at the rate of compensation is based on 2-5 percent of operating revenue the sales contract terms 2. Tenant solicitation fee at the rate of 0.5-1 percent per month per rent 3. The group of companies has guaranteed a minimum compensation to the property fund for a period of 3 years 1.3 Gulf JP NLL The Company holds a stake 32,859 - - - - The Company provides utility and Pricing policy is based Company Limited of 25.01% in Gulf JP NLL wastewater treatment services to its on the market rate associates 1.4 Gulf Solar BV The Company holds a 17 - - - - The Company provides rooftop area to Pricing policy is based Company Limited 25.01% stake through Gulf host solar cell panels to its associates on the market rate Solar Company Limited 1.5 Gulf Solar TS1 The Company holds a 46 - - - - The Company provides rooftop area to Pricing policy is based Company Limited 25.01% stake through Gulf host solar cell panels to its associates on the market rate Solar Company Limited 1.6 WHA Corporation Holds majority of the 569 - - - - The Company provides utility and Pricing policy is based Public Company Company’s shares through wastewater treatment services to its on the market rate Limited WHA Venture Holdings associates Company Limited and shares the same Board of Directors
Income Expenses (Unit : Thousands) (Unit : Thousands) Com- Name of Company Nature of mission Minimum Necessity / Opinion Description with Related Relationship of Audit Committee Transactions Service Interest and Compen- Advisory Income Income Mana- sation Fee gement Guarantee Income
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The Company and its subsidiary has Pricing policy is based hired an external legal counsel to on the market rate provide legal advices and guidance while working alongside the internal legal team to review any legal documents and contracts
Future related transactions will be conducted as part of normal course of businesses of which the price will be considered based on the reasonable and fair market prevailing rate and the company’s rules and regulations. The transactions will be considered and approved by the Management in each level, Executive Committee, Board of Director, or Shareholder’s Meeting, whichever the case maybe according to the Company’s rules and regulations. Directors or staff with an interest in such transaction shall not be allowed to participate in the approval process. In addition, the transaction will be reviewed by certified external auditor, 3rd party internal auditor, and the Audit Committee of the company. The company shall disclose the transaction details in compliance with related law and the regulation of the Stock Exchange of Thailand (SET), Securities and Exchange Commission (SEC), and Thai Accounting Standards in relation to information disclosure and practices of listed companies in connected transactions, announced by the Federation of Accounting Profession.
Policy and Approval Procedures of Related Transactions in the future
1.7 RL Counsel One member of the - - - - 321 Company Limited Executive Committee serves as an executive director at RL Counsel
Income Expenses (Unit : Thousands) (Unit : Thousands) Com- Name of Company Nature of mission Minimum Necessity / Opinion Description with Related Relationship of Audit Committee Transactions Service Interest and Compen- Advisory Income Income Mana- sation Fee gement Guarantee Income
Hemaraj International Limited H-International (BVI) Company Limited Eastern Industrial Estate Company Limited Eastern Pipeline Services Company Limited (2)
Scotia Centre, 4th Floor Holding 0.03 100 - - - - - P.O.Box 2804, George Town, Company Grand Cayman, Cayman Islands Romasco Place, Wickhams Cay 1, Holding 0.07 100 - - - - - P.O. Box 3140, Road Town, Tortola Company British Virgin Islands. 18th Floor, UM Tower, Industrial 400 99.99 1,397.08 15% 457.42 5% 445.32 3% 9 Ramkhamhaeng Road, Suanluang, Estate Bangkok 10250, Thailand Developer th 18 Floor, UM Tower, Pipe Rack 100 99.99 154.81 2% 133.81 2% 127.28 1% 9 Ramkhamhaeng Road, Suanluang, Rental Bangkok 10250, Thailand
Subsidiary Companies
Hemaraj Land and 18th Floor, UM Tower, Industrial 3,882 3,144.36 34% 844.23 10% 1,222.08 10% Development 9 Ramkhamhaeng Rd., Suanluang, Estate Public Company Limited Bangkok 10250, Thailand Developer Registration No. Bormorjor Tel.(662) 719-9555 0107536000676 Fax (662) 719-9546-7 Share Capital www.hemaraj.com 15,000,000,000 shares E-mail : invest@hemaraj.com Issued 9,705,186,191 shares
Paid % of Revenue (Mil. Baht) Nature of Capital Invest- Name Address Business (Mil.Baht) ment 2015 % 2014 % 2013 %
Holding Structure & Revenue of the Company Subsidiaries and Associated Companies
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Eastern Seaboard Industrial 18th Floor, UM Tower, Industrial 358 60 314.59 3% 1,756.76 21% 3,209.13 27% Estate (Rayong) 9 Ramkhamhaeng Road, Suanluang, Estate Company Limited Bangkok 10250, Thailand Developer th H-Construction Management 18 Floor, UM Tower, Design and 17.15 99.99 2.16 0% 12.59 1% 15.23 1% and Engineering Company 9 Ramkhamhaeng Road, Suanluang, Construction Limited and Supervision Service Bangkok 10250, Thailand The Park Residence 18th Floor, UM Tower, Real Estate 4.60 99.99 - - - - - Company Limited 9 Ramkhamhaeng Road, Suanluang, Development and Service Management Bangkok 10250, Thailand Hemaraj Eastern 18th Floor, UM Tower, Industrial 1,000 99.99 694.86 7% 1,354.57 16% 4,444.68 36% Seaboard Industrial 9 Ramkhamhaeng Road, Suanluang, Estate Bangkok 10250, Thailand Developer th Hemaraj Water Company 18 Floor, UM Tower, Water 100 99.99 379.59 4% 470.63 6% 412.47 3% (3) Limited 9 Ramkhamhaeng Road, Suanluang, Resource Bangkok 10250, Thailand Development and Management th SME Factory Company 18 Floor, UM Tower, Factory for 294 99.99 114.92 1% 114.02 1% 250.11 2% Limited 9 Ramkhamhaeng Road, Suanluang, Sale and Bangkok 10250, Thailand Rental H-Phoenix Property 18th Floor, UM Tower, Office for - - - - 96.28 1% 77.24 1% (8) Company Limited 9 Ramkhamhaeng Road, Sale and Suanluang, Bangkok 10250, Rental Thailand
Paid % of Revenue (Mil. Baht) Nature of Capital Invest- Name Address Business (Mil.Baht) ment 2015 % 2014 % 2013 %
Hemaraj Clean Water 18th Floor, UM Tower, Produce and 645 99.99 495.64 5% 338.82 4% 327.48 3% Company Limited 9 Ramkhamhaeng Road, distribute the Suanluang, Bangkok 10250, industrial Thailand water Hemaraj Saraburi Industrial 111 Moo 7, Nong Pla Mao Industrial 500 99.99 289.76 3% 453.15 5% 432.36 3% Land Company Limited Sub-District Nong Khae District, Estate Saraburi 18140, Thailand Developer th Hemaraj Rayong Industrial 18 Floor, UM Tower, Industrial 1,000 99.99 786.90 8% 546.14 7% 580.05 5% (1) Land Company Limited 9 Ramkhamhaeng Road, Suanluang, Estate Bangkok 10250, Thailand Hemaraj Energy Company 18th Floor, UM Tower, Holding 200 99.99 0.01 0% - 0% 0.04 0% Limited 9 Ramkhamhaeng Road, Suanluang, Company Bangkok 10250, Thailand Million Island Pattaya 18th Floor, UM Tower, Industrial - - - - 0.03 - 0.32 (8) Company Limited 9 Ramkhamhaeng Road, Suanluang, Estate Bangkok 10250, Thailand Developer th Rayong 2012 18 Floor, UM Tower, Industrial 1,165 99.99 - - 0.01 0% 0.05 0% (4) Company Limited 9 Ramkhamhaeng Road, Suanluang, Estate Bangkok 10250, Thailand Developer th Eastern Seaboard Property 18 Floor, UM Tower, Industrial 1.00 99.99 - - - - - and Marina Services 9 Ramkhamhaeng Road, Suanluang, Estate Company Limited Bangkok 10250, Thailand Development for investment and marina services
Paid % of Revenue (Mil. Baht) Nature of Capital Invest- Name Address Business (Mil.Baht) ment 2015 % 2014 % 2013 %
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Cofely (Thailand) Company Limited (6) GHECO-One Company Limited Houay Ho Thai Company Limited
107/1 Moo 4, Eastern Seaboard Industrial Estate (Rayong), Pluakdeang, Rayong, Thailand 195 Empire Tower, 38th Floor, Park Wing, South Sathorn Road, Bangkok 10120, Thailand 10 / 190-193 , Trendy Tower, 26th Floor, Soi Sukhumvit 13, Sukhumvit Road, Kwaeng Klongtoeynua, Khet Wattana, Bangkok
Facilities - - - - - - 1.20 - Management Services Electricity 11,624 35 1,195.31 13% 1,473.28 18% 568.10 5% and Power Generation Holding 527.69 51 9.14 0% 60.83 1% 4.85 1% Company
Associated Companies
Hemaraj Eastern Seaboard 18th Floor, UM Tower, Industrial 565 99.99 0.01 0% 0.03 0% - Industrial 9 Ramkhamhaeng Road, Suanluang, Estate Estate Company Limited 4 Bangkok 10250, Thailand Developer Hemaraj REIT Management 27th Floor, UM Tower, Industrial 10 99.99 0.02 0% - - - Company Limited 9 Ramkhamhaeng Road, Suanluang, Estate Bangkok 10250, Thailand Developer H-International (SG) Private Holding 240 99.99 249.91 3% - - - Company Limited Company th Hemaraj Energy 2 18 Floor, UM Tower, Holding 4,481 99.99 - - - - - (5) Company Limited 9 Ramkhamhaeng Road, Suanluang, Company Bangkok 10250, Thailand Hemaraj Energy 3 18th Floor, UM Tower, Holding 4,481 99.99 - - - - - Company Limited 9 Ramkhamhaeng Road, Suanluang, Company Bangkok 10250, Thailand
Paid % of Revenue (Mil. Baht) Nature of Capital Invest- Name Address Business (Mil.Baht) ment 2015 % 2014 % 2013 %
Glow Hemaraj Wind 195 Empire Tower, 38th Floor, Electricity 2.50 51 -0.09 0% -0.12 0% -0.11 0% Company Limited Park Wing, South Sathorn Road, and Power Bangkok 10120, Thailand Generation Gulf JP NLL 87 M Thai Tower, 11st Floor, Electricity 1,384 25.01 35.45 1% 46.37 1% -15.07 -1% (7) Company Limited All Seasons Place, Wireless Road, and Power Phatumwan, Bangkok 10330, Generation Thailand Hemaraj Industrial Property 199 Column Tower, 21st-23rd Floor, Property 4,700 23.12 73.37 1% 74.92 1% - and Leashold Fund Ratchadapisek Road, Klongtoey, Fund Bangkok 10110, Thailand (7) Gulf Solar Company Limited 87 M Thai Tower, 11st Floor, Solar 14.63 25.01 -0.01 0% -0.01 - - All Seasons Place, Wireless Road, Rooftop Phatumwan, Bangkok 10330, Thailand Bowin Clean Energy Electricity 420 25.01 -1.23 0% - - - Limited (7) and Power Generation Gulf VTP Company Limited (7) 87 M Thai Tower, 11st Floor, Solar 170 25.01 -0.24 0% - - - All Seasons Place, Wireless Road, Rooftop Phatumwan, Bangkok 10330, Thailand Gulf TS1 Company Limited (7) 87 M Thai Tower, 11st Floor, Solar Rooftop 174 25.01 -0.21 0% - - - All Seasons Place, Wireless Road, Phatumwan, Bangkok 10330, Thailand
Paid % of Revenue (Mil. Baht) Nature of Capital Invest- Name Address Business (Mil.Baht) ment 2015 % 2014 % 2013 %
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Management 10 and Maintenance of Pipe Rack Electricity 50 and Power (Million Generation USD)
Related Companies
12.75
15
-
-
-
-
-
-
-
-
-
-
-
-
87 M Thai Tower, 11st Floor, Solar Rooftop 177 25.01 -0.16 0% - - - All Seasons Place, Wireless Road, Phatumwan, Bangkok 10330, Thailand 87 M Thai Tower, 11st Floor, Solar Rooftop 167 25.01 -0.15 0% - - - All Seasons Place, Wireless Road, Phatumwan, Bangkok 10330, Thailand 87 M Thai Tower, 11st Floor, Solar Rooftop 165 25.01 -0.10 0% - - - All Seasons Place, Wireless Road, Phatumwan, Bangkok 10330, Thailand
Eastern Fluid Transport 618 Nimom Makkasan Road, Company Limited Makkasan, Ratchthewi, Bangkok 10400, Thailand Houay Ho Power P.O.Box 5464, Nong Bone Road, (9) Company Limited Bane Fai, Xaysetta District, Vientiane Lao People’s Democratic Republic
Gulf TS2 Company Limited (7) Gulf TS3 Company Limited (7) Gulf TS4 Company Limited (7)
Paid % of Revenue (Mil. Baht) Nature of Capital Invest- Name Address Business (Mil.Baht) ment 2015 % 2014 % 2013 %
(1)
(2)
Held 99.99% indirectly held by Hemaraj Saraburi Industrial Land Company Limited. Held 74.99 % directly and 25% indirectly through Eastern Industrial Estate Company Limited (3) Held 99.99% indirectly held by Hemaraj Clean Water Company Limited. (4) Held 70 % directly and 35% indirectly through Hemaraj Rayong Industrial Land Company Limited (5) Held 99.99% indirectly held by Hemaraj Energy 3 Company Limited. (6) In 2013, the Company has sold investment in Cofely (Thailand) 39.99% to Cofely South East Asia PTE Limited (7) Held 25.01% indirectly held by Hemaraj Energy Company Limited. (8) On 29 April, 2015, the Company disposal of certain assets of the Company that have not been used in its core business (9) 51% directly held by the Company in Houay Ho Thai Company Limited that has held 25% in Houay Ho Power Company Limited, a company registered in Lao People’s Democratic Republic (US. currency is used for business operation).
Remark
Glow IPP Company Limited 195 Empire Tower, 38th Floor, Electricity 2,850 5 - - - - - Park Wing, South Sathorn Road, and Power Bangkok 10120, Thailand Generation Total Revenue : Hemaraj Land And Development PLC. and Subsidiaries 9,335.70 100% 8,233.76 100% 12,102.81 100%
Paid % of Revenue (Mil. Baht) Nature of Capital Invest- Name Address Business (Mil.Baht) ment 2015 % 2014 % 2013 %
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Associated Companies
Subsidiary of Associated Companies
Notes : 1) / = Director 2) X = Chairman 3) // = Executive Director
1. Dr. Somyos Anantaprayoon /, X X /, // X X X X X X X X X X X X X / / / / / / / / / / 2. Miss Jareeporn Jarukornsakul /, // / /, // / / / / / / / / / / / / / / / / / 3. Mr. David Richard Nardone /, // / /, // / / / / / / / / / / / / / X X / / / / / / / / 4. Mr. Vivat Jiratikarnsakul /, // / / / / / / / / / / / / / / 5. Mr. Somphong Wanapha / 6. Mrs. Punnee Worawuthichongsathit / / 7. Mrs. Kritsana Sukboonyasatit / 8. Mr. Krailuck Asawachatroj /, // / /,// / / / / / / / / / / / / / / / / 9. Mr. Jakrit Chaisanit /, // / X 10. Mr. Narong Kritchanchai /, // / X X / 11. Mr. Ekajai Tivutanond / / 12. Mr. Weidt Nuchjalearn / / 13. Mr. Tanin Subboonrueng / / 14. Mr. Sirisak Kijraksa / / / / / 15. Mr. Sunthorn Kongsunthornkitkul / / 16. Mr. Paopitaya Smutrakalin / / 17. Mr. Phorntep Rattanataipop / 18. Mr. Teerasak Suwanyos /
Name
Subsidiary Companies
Information of Directors and Management in Company, Subsidiaries and Associated Companies
Hemaraj Land and Development Plc. Eastern Industrial Estate Co., Ltd. Eastern Seaboard Industrial Estate (Rayong) Co., Ltd. Hemaraj Eastern Seaboard Industrial Estate Co., Ltd. Eastern Pipeline Services Co., Ltd. The Park Residence Co., Ltd. H-Construction Management and Engineering Co., Ltd. Hemaraj Water Co., Ltd. SME Factory Co., Ltd. Hemaraj Clean Water Co., Ltd. Hemaraj Saraburi Industrial Land (Saraburi) Co., Ltd. Hemaraj Rayong Industrial Land Co., Ltd. Rayong 2012 Co., Ltd. H-International (BVI) Co., Ltd. Hemaraj International Co., Ltd. Hemaraj Energy Co., Ltd. Eastern Seaboard Property and Marina Services Co., Ltd. Hemaraj Eastern Seaboard Industrial Estate 4 Co., Ltd. Hemaraj REIT Management Co., Ltd. Hemaraj Energy 2 Co., Ltd. Hemaraj Energy 3 Co., Ltd. GHECO-One Co., Ltd. Glow Hemaraj Wind Co., Ltd. Houay Ho Thai Co., Ltd. Houay Ho Power Co., Ltd. Gulf JP NLL Co., Ltd. Gulf VTP Co., Ltd. Gulf TS1 Co., Ltd. Gulf TS2 Co., Ltd. Gulf TS3 Co., Ltd. Gulf TS4 Co., Ltd. Bown Clean Energy Co., Ltd. Gulf Solar Co., Ltd. Gulf Solar BV Co., Ltd. Gulf Solar KKS Co., Ltd. Gulf Solar TS 1 Co., Ltd. Gulf Solar TS 2 Co., Ltd.
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The remuneration of the Auditor of company Audit Fee In 2015, the company and its subsidiary(ies) paid the auditors and the audit firm, PricewaterhouseCoopers ABAS Ltd, amounted to 9,8000,000 Baht.
Non-Audit Fee The company and its subsidiary(ies) has made a payment for Non-Audit Fee of other services such as service fee of the provision of BOI’s report to Auditors which it is the regular office of the auditor(s) in the latest accounting year 2015 in the total amount money of 455,000 Baht.
Profile and contacts Name
: Hemaraj Land And Development Public Company Limited
Business Activity
: 1. Industrial Estate Development and Management
2. Industrial Estate Utilities 2.1 Utilities and Industrial Services including raw water supply, potable & clarified water and waste water management, etc.. 2.2 A center of services and other utilities , industrial services, such as utilities maintenance, preventive maintenance, renting a pipe rack. and design and construction consultant etc.. 3. Power Investment with our strategic partners 3.1 Independent Power Producer Project (IPP) 3.2 Small Power Producer Project (SPP) 3.3 Alternative Energy and Solar Rooftop on Ready Built Factories for rent 4. Property 4.1 Ready Built Factories for rent 4.2 Niche selective property project - The Park Chidlom 4.3 Logistics Park for rent - Hemaraj Logistics Park Head Office : 9 UM Tower, 18th Floor, 9 Ramkhamhaeng Road, Suangluang, Bangkok 10250, Thailand Company Registration No. : 0107536000676 Phones : 02-719-9555 Fax : 02-719-9547 Website : http://www.hemaraj.com Register shares : Authorized capital Baht 6,000,000,000 and paid-up capital Baht 3,882,074,476.40, divided into common stock 9,705,186,191 shares at par value Baht 0.40 per share. Juristic persons : Details in section 20 Holding structure & revenue of the company, subsidiaries and associated companies
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364 Other references
รายงานประจําปี 2558
: Share registrar
Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Bldg., 93 Ratchadaphisek Road, Dindaeng, Dindaeng, Bangkok 10400 Tel. 02-009-9999 Fax 02-009-9991 Internal Audit CAS Co.,Ltd 92/18 Sathorn Thanee Bldg, 9th Floor, Zone B North Sathorn Road, Silom, Bangrak, Bangkok 10500, Thailand Tel. 0-2229-2800 Fax 0-2359-1259 Auditor Mr. Anothai Leekitwattana CPA No. 3442 PricewaterhouseCoopers ABAS Ltd. 15th Floor, Bangkok City Tower 179/74-80 South Sathorn Road, Sathorn, Bangkok, 10120, Thailand Tel. 02-344-1000 Fax 02-286-4440 Attorney RL Counsel Company Limited 62/15 Thaniya Road, Suriyawongse Bangrak, Bangkok 10500 Thailand Tel. 02-235-3339 Fax 02-235-3076 Financial Advisor Per Project
วิสัยทัศน์
บริษัท เหมราชพัฒนาที่ดิน จำ�กัด (มหาชน) ในฐานะผู้นำ�ด้านการ พัฒนานิคมอุตสาหกรรม ระบบสาธารณูปโภค พลังงาน และ อสังหาริมทรัพย์ระดับโลก ได้กำ�หนดพันธกิจสำ�คัญในด้านต่างๆ ดังนี้
ลูกค้า
• ให้บริการด้านนิคมอุตสาหกรรมแบบครบวงจร เพื่อให้ลูกค้าสามารถดำ�เนินการผลิต ใช้สาธารณูปโภค และอาคารพื้นที่โดยได้รับประโยชน์สูงสุด • ดำ�เนินธุรกิจด้วยมาตรฐานสากล ทั้งในการพัฒนาคลัสเตอร์ อุตสาหกรรม การพัฒนาสาธารณูปโภคพื้นฐาน และการดูแลรักษาสิ่งแวดล้อม • สร้างแรงบันดาลใจให้พนักงานมุ่งสู่ความเป็นเลิศ เพื่อช่วยให้ลูกค้าประสบความสำ�เร็จ และเติบโตอย่างต่อเนื่อง
สังคมและชุมชนท้องถิ่น
• ช่วยส่งเสริมการเติบโตด้านเศรษฐกิจของประเทศ ด้วยการเพิ่ม มูลค่าผลิตภัณฑ์มวลรวมภายในประเทศ ก่อให้เกิดการจ้างงาน การผลิตและการส่งออกสินค้า มีส่วนผลักดันการพัฒนาทักษะ ฝีมือแรงงาน สนับสนุนด้านการศึกษา และสร้างความเจริญก้าวหน้าให้กับชุมชนท้องถิ่น
สิ่งแวดล้อม
• มุ่งมั่นบริหารจัดการด้านสิ่งแวดล้อมเพื่อการอยู่ร่วมกันกับชุมชนท้องถิ่น อย่างยั่งยืนซึ่งเหมราชฯ ได้รับรางวัลรับรองคุณภาพด้านการรักษาสิ่งแวดล้อม และความรับผิดชอบต่อสังคมมาอย่างต่อเนื่อง
พนักงานองค์กร
• ส่งเสริมสภาพแวดล้อมการทำ�งานที่ดี เพื่อความก้าวหน้าในอาชีพ และสุขภาวะของพนักงาน
พันธกิจ
ยึดมั่นอุดมการณ์ คุณธรรม และความเป็นธรรมในการดำ�เนินธุรกิจในฐานะผู้นำ�ในการ พัฒนานิคมอุตสาหกรรมระดับโลก ควบคู่ไปกับการดูแล และรับผิดชอบต่อชุมชน สังคม และสิ่งแวดล้อมอย่างยั่งยืน
กลยุทธ์
บริษัท เหมราชพัฒนาที่ดิน จำ�กัด (มหาชน) ได้กำ�หนดทิศทาง และกลยุทธ์ในการดำ�เนินธุรกิจประกอบด้วย • การพัฒนานิคมอุตสาหกรรม สาธารณูปโภค ไฟฟ้า และอสังหาริมทรัพย์ เพื่อก่อให้เกิดรายได้ที่คาดการณ์ ได้ เกิดผลกำ�ไรสูงสุด ช่วยเพิ่มคุณค่าให้แก่ผู้ถือหุ้น • การใช้ความเชี่ยวชาญในการบริหารงาน ทั้งด้านโครงสร้างพื้นฐาน และสิ่งแวดล้อม กอปรกับความสัมพันธ์ที่ดีกับลูกค้า เพื่อก่อให้เกิดการขยายโอกาสทางธุรกิจ ทั้งในด้านนิคมอุตสาหกรรม สาธารณูปโภค ไฟฟ้า และอสังหาริมทรัพย์ • ใช้ทรัพยากรบุคคล และสินทรัพย์ทางการเงินของบริษัท เพื่อสร้างโอกาส ในการลงทุนทางธุรกิจ • ดำ�เนินกิจกรรมโครงการต่างๆ ด้านการศึกษา พัฒนาชุมชน และสิ่งแวดล้อม อย่างยั่งยืน ให้แก่ชุมชน สังคม และผู้มีส่วนได้ส่วนเสีย อย่างดี • การเพิ่มคุณค่าให้กับผู้ถือหุ้นในระยะยาว ด้วยแนวทางกลยุทธ์ การดำ�เนินธุรกิจ การบริหารการเงิน การดูแลสิ่งแวดล้อมและสังคม ภายใต้กรอบจริยธรรมที่ดี
ผู้ลงทุนสามารถศึกษาข้อมูลของบริษัทที่ออกหลักทรัพย์เพิ่มเติมได้จากแบบแสดงรายการข้อมูลประจำ�ปี (แบบ 56-1) ของบริษัท ที่แสดงไว้ใน www.set.or.th หรือ บนเว็บไซต์ของบริษัท เหมราชพัฒนาที่ดิน จำ�กัด (มหาชน) www.hemaraj.com Investor may additionally obtain the information of the issuing company from its annual filing (Form 56-1) showing in www.set.or.th or in the website of Hemaraj Land and Development Public Company Limited www.hemaraj.com