รายงานประจำปี 2553 บริ ษ ั ท เหมราชพั ฒ นาที ่ ด ิ น จำกั ด (มหาชน)
ชั้น 18 อาคารยูเอ็มทาวเวอร์ เลขที่ 9 ถนนรามคำแหง สวนหลวง กรุงเทพมหานคร 10250 ประเทศไทย โทรศัพท์ : 66-2719-9555 โทรสาร : 66-2719-9546-7 ทะเบียนเลขที่ : บมจ.0107536000676
Hemaraj Land And Development Public Company Limited th
18 FL., UM Tower, 9 Ramkhamhaeng Rd., Suangluang, Bangkok 10250 THAILAND Tel : 66-2719-9555 Fax : 66-2719-9546-7 Registration No. : BORMORJOR.0107536000676 e-mail : marketing@hemaraj.com, invest@hemaraj.com www.hemaraj.com, www.theparkresidence.co.th
Annual Report 2010 Hemaraj Land And Development Public Company Limited
บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน)
รายงานประจำปี 2553
Annual Report 2010
P roperty I
ndustrial estates
U tilities บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน)
Hemaraj Land And Development Public Company Limited
สารบัญ
Contents 02 จุดเด่นทางการเงิน 03 สาส์นจากคณะกรรมการบริษัทฯ 04 ข้อมูลของคณะกรรมการและคณะผู้บริหาร 09 ลักษณะการดำเนินธุรกิจและโครงสร้างธุรกิจ 13 เหตุการณ์ที่สำคัญในปี 2553 23 ภาวะเศรษฐกิจและการแข่งขัน 24 บทรายงานและการวิเคราะห์ของฝ่ายบริหาร 27 โครงสร้างการจัดการ 32 การปฏิบัติตามหลักการกำกับดูแลกิจการที่ดี 39
105 Financial Highlights 106 Message from the Board of Directors 107 Information of Board of Directors and Management 112 The Company’s Business Profile
40 รายงานของคณะกรรมการตรวจสอบประจำปี 2553 42 รายงานของผู้สอบบัญชีรับอนุญาต 43 งบการเงิน 53 หมายเหตุประกอบงบการเงิน 96 โครงสร้างผู้ถือหุ้นและโครงสร้างองค์กร 97 รายการระหว่างกัน 100
143 Audit Committee Report for 2010 145 Independent Certified Public Accountants’ Report 146 Financial Statements 156 Notes to Financial Statements 199 Shareholding & Organization Structure 200 Transactions with Related Parties 204 Holding Structure and Revenue of the Company,
and Business Structure Major/Significant Events in 2010 Economic & Competitive Condition
116 126 127 Management Analysis 130 Management Structure 135 Good Corporate Governance 142 Report on Responsibilities of the Board of Directors
รายงานความรับผิดชอบของคณะกรรมการ ในการจัดทำรายงานทางการเงินประจำปี 2553 Towards the Financial Report of the Year 2010
โครงสร้างการลงทุนและรายได้ของบริษัท บริษัทย่อย และบริษัทร่วม ข้อมูลการดำรงตำแหน่งของกรรมการและผู้บริหาร ในบริษัท บริษัทย่อยและบริษัทร่วม ค่าตอบแทนของผู้สอบบัญชี บุคคลอ้างอิงอื่นๆ
96
103 104
Subsidiaries and Associated Companies
206 Information of Directors and Management in Company, Subsidiaries and Associated Companies
207 The Remuneration of the Auditor of Company 208 Other References
Corporate Vision, Mission & Strategy Strategy Corporate Vision
To create long-term shareholder value in a controlled way achieved through focused appropriate strategic, business, financial and governance disciplines. This long-term value can be realized by demonstrating and communicating respect for our customers, employees, and stakeholders while behaving in a manner that is communally, ethically, and environmentally responsible.
Mission
“To Develop World Class Industrial Estates Utilities and Property Customer Solutions�
Hemaraj Strategy
1. Developing industrial estate, utility, and property solutions that have predictable growing revenue and superior profit opportunities in order to optimize shareholder value. 2. Leveraging complementary management expertise in property, utilities infrastructure and environmental competence. 3. Utilizing company financial resources selectively for competing investment opportunities.
Financial Highlights KEY FINANCIAL RATIOS
KEY FINANCIAL FIGURES (Million Baht)
2008
2009
Operating Revenue* 4,714 Total Industrial Estate Revenue* 2,854 Total Utilities Revenue* 922 Total Rental Property and Services* 480 Total Sale of Property* 459 Total Revenue 4,983 Net Income 1,342 Cash 932 Total Assets 13,712 Total Debts/Loans 3,454 Total Liabilities 5,574 Total Shareholder’s Equity 8,138 Earning Per Share (Baht) 0.14 Par (Baht) 0.40
2010
2,229 704 1,026
4,220 1,501 1,472
515 (15) 2,223 575 910 13,680 4,023 5,222 8,458 0.06 0.40
480 766 4,020 1,216 3,517 18,715 8,011 9,577 9,138 0.13 0.40
Current Ratio (Times) Net Debt to Equity (Times) Return on Assets Return on Equity Net Profit Margin Earnings per Share (Baht) Earnings per Share (Baht) fully diluted Book Value per Share (Baht) No. of Shares Issued and Paid (Million Shares) No. of Warrants Outstanding (Million Shares)
2008 2.35 0.57 8% 13% 27% 0.14
2009
2010
0.14 0.87
0.06 0.87
0.13 0.94
2.42 0.51 4% 6% 26% 0.06
105
5.27 0.66 5% 11% 30% 0.13
9,381.84 9,705.19 9,705.19 327.55
-
-
Note : *Internal Reclassification
OPERATING REVENUE
NET INCOME
6,000
1,400
5,000
1,200
4,000 3,000
4,714 459 480
4,220
922
480 2,229 515
2,854
1,000
800
400 200
1,501
704 (-15)
0 Million Baht
-1000 Million Baht
2008
2009
2010
Total Sale of Property Total Rental Property and Services
2008
2009
2010
Year
Year
Total Utilities Revenue Total Industrail Estate Revenue
TOTAL ASSETS AND TOTAL LIABILITIES
NET DEBT TO EQUITY
20,000
1.00
18,715 15,000
0.75
13,712
13,680
10,000
0.50
9,577 5,574
5,000
0 Million Baht
575
600
1,472
1,026
0
1,216
1,000
766
2,000
1,342
5,222
0.57
0.66 0.51
0.25
0.00
2008 Total Assets
2009
2010
Year
Time
2008
2009
2010
Year
Total Liabilities
รายงานประจํ า ปี 2553
• Annual Report 2010
Message From The Board Of Directors
106 We are pleased to report that Hemaraj Land And Development Public Company Limited finished 2010 with Total Net income of Baht 1,215.9 million, an increase of 111% from the same period of 2009. This also reflected unrealized currency gains of Baht 394 million. Total Revenue was Baht 4,020.2 million compared with Baht 2,223 million for the same period of 2009, representing an 81% increase. The Year 2010 reflected the overall return of industrial investment to markets with stronger competitive conditions and significantly to Thailand. This was due to access to growing markets, the need for cost and currency competitiveness, as well as for consolidation opportunities. Industrial estates sales, with weakness in the chemical sector and continued strong demand in the automotive sector reflected 930 rai (372 acres) sold or rented in 2010. This includes the new Ford Motor Company regional manufacturing plant of 468 rai (187 acres) at Hemaraj Eastern Seaboard Industrial Estate “Detroit of the East” automotive cluster earlier in 2010. We believe the industrial opportunities partially reflect the 65 % automotive production growth, to a record 1,645,000 vehicles for 2010 (#13 global for 2010), from depressed levels in 2009. There are new automotive plants under construction and new product initiatives underway among the various automotive original equipment manufacturers and automotive suppliers. Thailand has provided an improving investment climate and predictable rules of law enforcement mitigating lingering political risk factors. However, the government has been less deliberate in the protection of investor fairness particularly in regard to the new Environmental Health Impact Assessment requirements where EHIA approvals are still in process. The opportunity is for Thailand to benefit from the investment growth and consolidation of production to strategic locations. Industrial cluster opportunities will continue for automotive, petrochemical, and other industrial sectors long term, particularly at Hemaraj’s “Detroit of the East” automotive cluster in the Eastern Seaboard. Therefore, we feel that the positioning in our industrial business model will remain attractive. Our strategic business plan entails significant capital commitments and opportunities while broadening our strong liquid financial position. This includes the investment in our 35% shareholding in the Gheco-One IPP independent power project under construction as well as recurring power, factory, and other utility investments. In 2010, we completed the share acquisition of the remaining 75% shares in SIL Industrial Land and Rayong Industrial Land from a subsidiary of the Siam Cement Group. Financially, Hemaraj has maintained a strong balance sheet and cash flexibility to fund these plans. Hemaraj reported 2010 Year-end Total Assets of Baht 18,715 million including Baht 4,283 million in cash and cash deposits. Total Liabilities were Baht 9,577 million with Total Shareholder Equity of Baht 9,138 million. The Net Debt to Equity ratio remains below our target of 1 to 1 times being at 0.66 to 1 times. On financial sources, in 2010 we raised Baht 6 billion in corporate unsecured fixed interest rate bonds (some with stepped interest rates) with tenors of from 3 to 9 years. This enhances the sources breadth and predictability of funding for our business at a time when interest rates are at historical low rates. Hemaraj has strived to continuously improve our comprehensive good corporate governance principles by welcoming the significant commitments obligations and responsibilities that companies have toward all stakeholders. We are proud that our commitment, dedication and action have been recognized with the ‘Excellent’ 5 logo corporate governance rating by the Thai Institute of Directors again in 2010 while acknowledging that we still have more to accomplish. The Hemaraj strategic, business, financial, and governance plans that we outline reflect improving market and investment opportunities. We continue to develop industrial estate utility and property solutions that have predictable growing revenue and superior profit opportunities in order to optimize long-term shareholder value. The Management and the Board of Directors of Hemaraj Land And Development Public Company Limited are grateful to our stakeholders for entrusting us with this responsibility.
Mr. David R. Nardone
President & Chief Executive Officer 10 March 2011 รายงานประจํ า ปี 2553
• Annual Report 2010
Mr. Chavalit Sethameteekul Chairman of the Board of Directors 10 March 2011
Information of Board of Directors and Management
107
Board Of Directors Age : IOD Trainning :
64 Years Education / M.B.S. (Political Science), Thammasart University, Bangkok Certificate class 40, National Defence College of Thailand Barrister at Law, Institute of Legal Education of Thai BAR LL.B..(Hons), Thammasart University, Bangkok DAP 6/2003 and DCP 74/2006, Thai Institute of Directors Association (IOD) Kellog School of Management, “Strategic Thinking and Executive Action” (Kellogg School of Management, Evanston, Illinois, Campus of Northwestern University, USA) Present Positions : • Chief Executive Officer Sriracha Harbour PCL. Previous Positions : • Director General The Customs Department, Ministry of Finance • Deputy Permanent Secretary Ministry of Finance • Inspectors General Ministry of Finance • Deputy Director General The Excise Department, Ministry of Finance • Chairman The Board of Small Business Credit Guarantee Corporation • Vice Chairmen The Board of Metropolitan Electricity Authority • Vice President The Board of Airports of Thailand Public Compay Limited • Vice President The Board of TOT Public Company Limited • Director Office of The Council of State • Director The Thai BAR
% Hemaraj Stock Held as of 31/12/2010 :
Mr. Chavalit Sethameteekul
Chairman of the Board of Director, Member of Nomination and Remuneration Committee
0.00%
Age : 67 Years Education / IOD Trainning : Institute of Chartered Accountants in England and Wales
ACP 6/2005, DAP 2/2003, DCP 57/2005, MIA 3/2008, MIR 4/2008, QFR 3/2006, RCC 8/2009, DCP Re 2/2009, Thai Institute of Directors Association (IOD) Present Positions : • Director Vasupak Associates Co., Ltd. Previous Positions : • Director Union Textile Industries Co.,Ltd . • Director Union Thread Industries Co.,Ltd
% Hemaraj Stock Held as of 31/12/2010 :
0.00%
Mr. Sudhipan Charumani Independent Director Chairman of the Audit Committee Chairman of the Nomination and Remuneration Committee
รายงานประจํ า ปี 2553
• Annual Report 2010
Age : 58 Years Education / IOD Trainning : Junior High School, Rojseri-Anusorn School
108
DAP 77/2009, Thai Institute of Directors Association (IOD) • Subsidiary Companies Chairman and Director in 12 Subsidiary Companies of Non-Listed SET Companies • Other Companies • Director Live Smart Co., Ltd. • Director Ruamruedee Capital Co.,Ltd Previous Positions : • Director Pan Sanitary Co.,Ltd. • Director Private Business
Present Positions :
Mr. Thongchai Srisomburananont
% Hemaraj Stock Held as of 31/12/2010 :
0.02%
Director Chairman of the Executive Committee Member of Nomination and Remuneration Committee
Age : 55 Years Education / IOD Trainning : MBA, Northeastern University, Boston, USA
Present Positions :
DCP 57/2005, Thai Institute of Directors Association (IOD)
• Subsidiary Companies Chairman and Director in 14 Subsidiary Companies of Non-Listed SET Companies • Associated Companies • Vice Chairman GHECO-One Co., Ltd. • Chairman Cofely (Thailand) Co.,Ltd. • Director Houay Ho Thai Co., Ltd. • Director Houay Ho Power Co., Ltd.
Mr. David Richard Nardone
% Hemaraj Stock Held as of 31/12/2010 :
0.43%
Director and Executive Director President
Mr. Vivat Jiratikarnsakul
Director and Executive Director Executive Vice President
รายงานประจํ า ปี 2553
Age : 55 Years Education / IOD Trainning : Bachelor of Sanitary, Faculty of Engineering, Chulalongkorn University DAP 2/2003 and DCP 38/2003, Thai Institute of Directors Association (IOD) Present Positions : • Subsidiary Companies Director in 14 Subsidiary Companies of Non-Listed SET Companies • Associated Companies • Director GHECO-One Co., Ltd. • Director Cofely (Thailand) Co.,Ltd. • Director Houay Ho Thai Co., Ltd. • Director Houay Ho Power Co., Ltd.
% Hemaraj Stock Held as of 31/12/2010 :
• Annual Report 2010
0.09%
Age: Education :
61 Years Bachelor of Science in Chemistry (Honor), University of Sheffield, England Present Positions : • Investor Consultant Private Sector Previous Positions : • Manager West Merchant Bank Singapore • Director Standard Charter Merchant Bank Singapore • Senior Manager The Arab Investment Company, Riyadh and Bahrain • Manager Williams & Glyn’s Bank
% Hemaraj Stock Held as of 31/12/2010 :
0.05%
109 Mr. Peter John Edmondson
Independent Director Member of the Audit Committee
Age : 59 Years Education / IOD Trainning : Master 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 Present Positions: • Independent Director/ • Member of the Audit Committee The Brooker Group PCL. • Independent Director/ • Member of the Audit Committee Thai Wacoal Public Co.,Ltd • 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 Previous Positions : • Independent Director/ • Member of the Audit Committee GM Multimedia Public Co.,Ltd
% Hemaraj Stock Held as of 31/12/2010 :
Mrs. Punnee Worawuthichongsathit Independent Director Member of the Audit Committee Member of the Corporate Governance Committee
0.00%
รายงานประจํ า ปี 2553
• Annual Report 2010
Age : 49 Years Education / IOD Trainning : MBA, Thammasat University
110
Ms. Pattama Horrungruang
Director and Executive Director Senior Vice President Member of the Corporate Governance Committee
DAP 1/2003, DCP 55/2005, RCC 9/2009, Thai Institute of Directors Association (IOD) Present Positions : • Subsidiary Companies Director in 11 Subsidiary Companies of Non-Listed SET Companies • Associated Companies • Director Cofely (Thailand) Co.,Ltd. • Director GHECO-One Co., Ltd. • Director Houay Ho Thai Co., Ltd. • Other Companies • Director CA-Post (Thailand) Co.,Ltd
% Hemaraj Stock Held
as of 31/12/2010 :
Mr. Somphong Wanapha Independent Director Chairman of the Corporate Governance Committee
0.00% Age : 67 Years Education / IOD Trainning : MBA, 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) Present Positions : • Chairman of the Audit committee Prasit Patana PCL. • 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 31/12/2010 :
0.00%
40 Years Age : Education / IOD Trainning : MBA, Finance, Northeastern University, USA
Mr. Vikit Horrungruang Director Member of the Audit Committee
DCP 64/2005, DCP Re 2/2009, Thai Institute of Directors Association (IOD) Present Positions : • Managing Director Sriracha Harbour PCL. • Deputy Managing Director T.C.Exhibition Co.,Ltd. • Director Suntec Metal Co.,Ltd. • Director Flaming Property Co.,Ltd. • Director Eastern Enterprise Co.,Ltd. • Director CA-Post (Thailand) Co.,Ltd Previous Position : • Director Phromnares Co.,Ltd. • Executive Vice President Neo Step Co.,Ltd.
% Hemaraj Stock Held as of 31/12/2010 : รายงานประจํ า ปี 2553
• Annual Report 2010
1.12%
111 17
10
8
5
14
Management
1. Mr. David Richard Nardone
16
4
2
Age 55
Education MBA, Northeastern University, Boston, USA Position at Hemaraj Director / Executive Director / President / Chief Executive Officer Year Joined Hemaraj 1993 Hemaraj Stock Held as of 31/12/2010: 0.43%
2. Mr. Vivat Jiratikarnsakul
6
13
9. Ms. Anchalee Parsertchand
Age 41
10. Ms. Somjai Wachiraha
Age 50
11. Ms. Jinnapat Tongviseskul
Age 41
12. Ms. Chantana Hinkaew
Age 41
13. Mr. Apichat Trongsukson
Age 46
14. Mr. Tanin Subboonrueng
Age 47
15. Mr. Paopitaya Smutrakalin
Age 40
16. Mr. Niphone Harnpatanapanich
Age 54
17. Ms. Prattana Kijjanon
Age 46
Education MBA, Assumption University and MA, Japanese, Keio University, Tokyo, Japan Position at Hemaraj Director - Industrial Customer Development Year Joined Hemaraj 2001 Hemaraj Stock Held as of 31/12/2010: 0.00%
Age 60
Age 58
Education MBA, Nida University and MS (Computer), Mahidol University Position at Hemaraj Assistant Director - Information System & Services Year Joined Hemaraj 1994 Hemaraj Stock Held as of 31/12/2010: 0.00%
Age 50
Education MBA, Business Administration, Assumption University Position at Hemaraj Director - Industrial Estate Development Year Joined Hemaraj 1996 Hemaraj Stock Held as of 31/12/2010: 0.00%
Age 44
Education MS, Finance, Drexel University, Philadelphia, USA Position at Hemaraj Director - Corporate Planning & Investor Relations Year Joined Hemaraj 1996 Hemaraj Stock Held as of 31/12/2010: 0.00%
Age 43
Education MBA, Chulalongkorn University Position at Hemaraj Director - Residential Project Planning Year Joined Hemaraj 2003 Hemaraj Stock Held as of 31/12/2010: 0.00%
Education MBA, Bangkok University Position at Hemaraj Director - Small Power Year Joined Hemaraj 1995 Hemaraj Stock Held as of 31/12/2010: 0.00%
8. Ms. Ladda Rojanavilaivudh
15
Education MBA, University of Nottingham, UK and MA, Thammasat University Position at Hemaraj Director - Corporate Marketing Year Joined Hemaraj 2004 Hemaraj Stock Held as of 31/12/2010: 0.00%
Education Bachelor of Accounting, Bangkok University Position at Hemaraj Director - Accounting and Legal Year Joined Hemaraj 1990 Hemaraj Stock Held as of 31/12/2010: 0.00%
7. Mr. Khamhoung Ratsamany
12
Age 49
Education MBA, Northern Illinois University, USA Position at Hemaraj Director - IE Training Center and New Projects Year Joined Hemaraj 2007 Hemaraj Stock Held as of 31/12/2010: 0.00%
6. Mr. Sirisak Kijraksa
11
Education MBA, Economic & Administration, Chulalongkorn University Position at Hemaraj Director - Residential Customer Development Year Joined Hemaraj 1993 Hemaraj Stock Held as of 31/12/2010: 0.00%
Education Bachelor of Mechanical Engineering, Chulalongkorn University Position at Hemaraj Vice President - Industrial Estate Operations Year Joined Hemaraj 2007 Hemaraj Stock Held as of 31/12/2010: 0.00%
5. Mr. Preeprem Malasitt
9
Age 55
Education MBA, Thammasat University Position at Hemaraj Director / Executive Director / Senior Vice President / Chief Financial Officer Year Joined Hemaraj 2003 Hemaraj Stock Held as of 31/12/2010: 0.00%
4. Mr. Sunthorn Kongsunthornkitkul
3
Education Bachelor of Business Administration, General Affairs, Ramkhamhaeng University Position at Hemaraj Director - Finance Year Joined Hemaraj 1990 Hemaraj Stock Held as of 31/12/2010: 0.00%
Education Bachelor of Sanitary, Faculty of Engineering, Chulalongkorn University Position at Hemaraj Director / Executive Director/ Executive Vice President Year Joined Hemaraj 1989 Hemaraj Stock Held as of 31/12/2010: 0.09%
3. Ms. Pattama Horrungruang
1
Education MBA, Bangkok University and MA, Nara Women University, Nara, Japan Position at Hemaraj Director - Industrial Customer Development Year Joined Hemaraj 2001 Hemaraj Stock Held as of 31/12/2010: 0.00%
Education MBA, Thammasat University Position at Hemaraj Director - Procurement Year Joined Hemaraj 2008 Hemaraj Stock Held as of 31/12/2010: 0.00%
รายงานประจํ า ปี 2553
• Annual Report 2010
112
The Company’s Business Profile and Business Structure
Hemaraj has continued to be Thailand’s leading developer of Industrial Estates, Utilities, and Property Customer Solutions since 1988. The “Detroit of the East” Automotive Cluster in the Eastern Seaboard is the most significant automotive cluster in Thailand where Ford, Mazda, General Motors, Auto Alliance (a joint venture between Ford and Mazda), Suzuki and over 140 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 location 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 20 years. By offering the developed industrial land, utilities, ready built factories for rent and sale, quality industrial services, and an integrated logistics and supply chain in 6 industrial estates and industrial lands, mostly located in Eastern Seaboard of Thailand, Hemaraj’s Industrial Estates have also focused on the environmental management through policies and plans. With the success of E=MC2 (Environmental Monitoring and Control Center) and achievements in ISO 14001, ISO 9001:2000, the Best Environmental Management EIA awards, and 5 or “Excellent” corporate governance recognition rating of Thai Listed Companies 2010, Hemaraj has been chosen as the industrial estate model for practicing ECO industrial town from IEAT in 2010.
Industrial Estates
Hemaraj has developed and managed 4 Industrial Estates and 2 Industrial Lands with a combined land area of 31,350 rai (13,000 acres), 426 distinct customers, 148 automotive customers from 223 contracts, 643 land or factory contracts with the total investment more than US$ 20 billion and over 80,000 employees. 1. Hemaraj Eastern Seaboard Industrial Estate (H-ESIE) 2. Eastern Seaboard Industrial Estate (ESIE) 3. Hemaraj Eastern Industrial Estate (HEIE) 4. Hemaraj Chonburi Industrial Estate (HCIE) 5. Rayong Industrial Land (RIL) 6. SIL Industrial Land (SIL)
Location
BOI Zones Total Area (Rai)
H-ESIE Pluak Daeng, Rayong II, III, Free Zone 8,126 ESIE Pluak Daeng, Rayong II, III, Free Zone 8,628 HEIE Map Ta Phut, Rayong III 3,546 HCIE Bowin, Chonburi II, Free Zone 3,993 RIL Ban Khai, Rayong III 3,438 SIL Nong Khae, Saraburi II 3,619 Total 31,350 รายงานประจํ า ปี 2553
• Annual Report 2010
Key Estate Specialization Auto Manufacturing, Auto Parts Auto Manufacturing, Auto Parts Chemical, Petrochemical, Steel, Cogeneration Power Electronics, Steel, Power Light Chemical, Consumer Building Material, Electronics
Utilities
Industrial Estate: the largest private supplier of clarified and treated potable water to industrial users with the capacity of 165,000 cubic meters per day and 96,000 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. All Hemaraj’s industrial estates have received the Best Environmental Management EIA awards from the Ministry of Sciences, Technology and Environment and are ISO 14001, ISO 9001:2000 certified.
113
Power:
- GHECO-One Company Limited, a 35/65 Joint Venture in a 660 MW IPP with Thailand’s largest private power provider, Glow Energy, GDF Suez Energy Group, formally named Tractebel, Belgium to supply power to Electricity Generating Authority of Thailand (EGAT). The Gheco-One Project has obtained EIA approval on 15 May 2008 and is under construction with a schedule to have its commercial operation in early 2012. - Hemaraj holds 5% equity in Glow IPP, the 713 MW IPP Power Project locating in Hemaraj Chonburi Industrial Estate in operation since 2001. - Hemaraj holds 12.75% in Hydro Power Plant Project, Houay Ho Power in Laos People’s Democratic Republic by holding shares in Houay Ho Thai Company Limited, whose shareholders are Hemaraj and Glow group. Houay Ho Power is a company operating a 152 megawatt Hydro Power Plant business in Laos People’s Democratic Republic under a 30 years concession from the Laos Government.
Water:
- Hemaraj Water Company Limited: a 100% 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. 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 beyond Hemaraj’s industrial estates and leverage technical resources. - Cofely (Thailand) Limited (Previousely Elyo-H Facilities Management): a 40/60 Joint Venture with GDF Suez Energy and Teo Hong Silom to provide utility and facility management services to industrial customers. Major customers are ESSO, Glow, Lite On, Saint-Gobain Sekurit, Thai German Ceramic, Siam Ceramic Group Industry. - 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 200 million. รายงานประจํ า ปี 2553
• Annual Report 2010
114
- H-Construction Management and Engineering Company Limited: a 100% subsidiary company to provide design, construction supervision, project and construction management services.
Property
Ready Built Factories for Rent and Sales:
Hemaraj designs and develops turnkey RBF factories, with clear span layout, no column in the middle, and expandable options sizing from 500 square meters to 8,000 square meters for rent and sales 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. H-Construction Management and Engineering, Hemaraj’s subsidiary company, also manages the utility and fit-out requirements to fit customers needs. Hemaraj has built 125 units with over 276,000 square meters to date in its multiple industrial estate locations. Selective Property: - H-Phoenix Property Company Limited: a 100% subsidiary company for commercial property lease or sale and management with a registered capital and paid-up of Baht 480 million. H-Phoenix has acquired the majority ownership of office units in UM Tower and additional adjacent freehold land area of 2 rai 3 ngan 55.2 square wah (1,155.2 square wah or 4,620.8 square meters). UM Tower is a 31-storey juristic office building, set on two rai of land with a total net lettable or salable area of 35,500 square meters. The building is located at 9 Ramkhamhaeng Road, which is close to the expressway, airport, linking the Eastern Seaboard, and downtown as well as next to the Airport Express Station which started operating in 2010. The current occupancy rate is approximately 75%. The adjacent land will provide Hemaraj with future property development opportunities. - The Park Chidlom, an exclusive Bangkok luxury high-rise condominium residence under the lifestyle concept of “a symphony in living’ with the highest international standards in the most convenient Bangkok city location. The Park Chidlom, set on five and one half rai, has two residential towers: the 35-storey Somkid Tower and the 28-storey Chidlom Tower, with a total of 218 units comprising 87,000 gross square meters and 53,299 net square meters. In 2008, The Park Chidlom won the Best High Rise Development Thailand - Five Star Award of the prestigious CNBC Asia Pacific Property Awards 2008 held in Singapore.
รายงานประจํ า ปี 2553
• Annual Report 2010
รายงานประจํ า ปี 2553
Associates
Subsidiaries
Hemaraj Rayong Industrial Land
99.99%
Hemaraj Saraburi Industrial Land 99.99%
Eastern Industrial Estate 99.99%
Hemaraj Eastern Seaboard 99.99%
Eastern Seaboard Industrial Estate (Rayong) 60%
Industrial Estates
Business Structure
Hemaraj Water
99.99%
Hemaraj Clean Water 99.99%
Water
Houay Ho Power (Lao P.D.R)
GHECO - One 35%
Power
Utilities
25%
25%
Cofely (Thailand) 39.99%
Eastern Pipeline Services 74.99%
H-Construction Management and Engineering 99.99%
Others
Hemaraj Land and Development PCL.
The Park Residence 99.99%
H-Phoenix Property 99.99%
SME Factory 99.99%
Property
Houay Ho Thai 51%
Hemaraj International 100%
H-International (BVI) 100%
Others
115
• Annual Report 2010
Major/Significant Events in 2010
116
Industrial Estate Land Sales
After the economic slowdown in 2009, Hemaraj sees the ongoing recovery of economic activities in major manufacturing sectors and the global economic revival return in 2010, particularly in Automotive and Industrial Investment in emerging market and significantly Thailand. Supporting by the market growth, competitiveness, and consolidation opportunities, industrial estates sales (or rentals) reflected 930 rai (372 acres) sold in 2010 with a continued strong demand in the automotive sector. Reinforced the success of Hemaraj’s automotive cluster “Detroit of the East” and extended the 16-year relationship, Ford Motor Company chose Hemaraj Eastern Seaboard Industrial Estate for their new plant expansion in Thailand of 468 rai (187 acres) in earlier 2010. From 41 contracts, 19 new customers and 22 project expansions from existing customers, total industrial customers are now 426 distinct new customers with 643 contracts including 148 automotive customers with 223 automotive contracts.
Hemaraj Acquires Remaining 75% of SIL Industrial Land Shares from Siam Cement Hemaraj has completed the acquisition of the remaining 75% shares in SIL Industrial Land Co., Ltd. from Cementhai Holding Co., Ltd., a subsidiary of The Siam Cement Public Company Limited. The value of the share acquisition is approximately Baht 763.7 million in addition to the assumption by Hemaraj of the shareholder loan to SIL of Baht 380 million. Hemaraj used its own internal cash sources in the acquisition. SIL Industrial Land Co., Ltd. (SIL) is an industrial park development with its SIL location in Saraburi, Thailand and its wholly owned subsidiary Rayong Industrial Land Co., Ltd. (RIL) location being in Rayong, Thailand. SIL has a gross land area of 3,619 rai with an estimated remaining sellable area of 1,064 rai as of June 30, 2010. RIL has a gross land area of 3,438 rai with an estimated remaining sellable area of 1,711 rai as of June 30, 2010. Hemaraj Joins Hand with CAT to Provide Ultra High Speed
Telecom to Its Customers
On January 22, 2010, Hemaraj has signed an MOU with CAT Telecom Public Company Limited to kick off its Bt600-million “Ultra High Speed Telecommunications Network” project.
รายงานประจํ า ปี 2553
• Annual Report 2010
Managed and implemented by CAT, the project is destined to upgrade telecommunications infrastructure across Hemaraj’s industrial estates and at its UM Tower to ensure higher efficiency, reliability and availability to the needs of existing and prospective entrepreneurs and investors. Under the MOU, CAT will provide the industrial estates and the headquarters building with an access to ultra high speed communications network, using the country’s first FTTF (Fiber-to-the-Factory) platform. This is Thailand’s fist FTTF (Fiber To The Factory) architecture to industrial estates
117
TRIS Rating Affirms Company Rating at “A-” and Revised Outlook to “Stable”
On August 6, 2010, TRIS Rating Co., Ltd has affirmed the company rating of Hemaraj at “A-” and has revised the rating outlook to “stable” from “negative”. The rating continues to reflect the company’s proven record in industrial estate development, growing base of recurring income from utilities services and its healthy balance sheet. The “stable” outlook reflects the ongoing recovery of economic activities in major manufacturing sectors and the expected global economic review which will subsequently lead to growing demand for industrial property. However, the political uncertainty and the Map Ta Phut problem remain rating concerns. The increasing contribution from the utilities services and rental businesses are expected to provide more reliable cash flow streams for Hemaraj to counterbalance the fluctuations in industrial land sales. In addition, TRIS Rating expects the company to continue its conservative business policy and be able to maintain the debt to capitalization ratio below its stated policy of 50%.
Hemaraj received “Excellent” Corporate Governance
Hemaraj receives the ‘Excellent’ corporate governance recognition level in the Corporate Governance Report of Thai listed Companies in 2010 (CGR). Hemaraj achieves the ‘Excellent’ recognition level in the Rights of Shareholders, Role of Stakeholders, and Disclosure and Transparency categories. The company earns the ‘Very Good’ and ‘Good’ levels of recognition in the Equitable Treatment of Shareholders and Board Responsibilities categories, respectively.
Major Customer Development
•
Hemaraj Congratulates Ford Motor on New Plant’s Stone Laying
Hemaraj congratulated Ford Motor Company Thailand at the Foundation Stone Laying ceremony for Ford’s new manufacturing plant located on 468 rai (187 acres) in Hemaraj Eastern Seaboard Industrial Estate. The occasion also marked the 15-year automotive relationship developing the “Detroit of the East” between Ford and Hemaraj. Ford announced a US$450 million or 15 billion baht investment to construct the new state-of-the-art passenger car facility, which will start operation in 2012 with an initial production capacity of 150,000 units per year.
Itakura Jitsugyo Purchases SME Factory at Hemaraj Eastern Seaboard Industrial Estate
•
Itakura Jitsugyo Company Limited signed an agreement to purchase SME Factory for its plant at Hemaraj Eastern Seaboard Industrial Estate. The plant will assemble automotive glass for Suzuki Automobile Manufacturing (Thailand) Co., Ltd.
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• Annual Report 2010
118
• Chalybs Cylinders Purchases 70 Rai at Hemaraj’s Eastern Seaboard Industrial Estate (Rayong)
Chalybs Cylinders Limited, a leading high-pressure gas cylinder from Italy recently signed an agreement with Hemaraj to purchase land of 70 rai at Eastern Seaboard Industrial Estate (Rayong) for its first plant in Thailand. The factory will manufacture CNG Cylinders for Natural Gas Vehicles with a capacity of 200,000 cylinders per year, scheduled to commence operation in 2011. The total value of investment is 2 Billion Baht.
• M&T Purchases Land for Expansion at Eastern Seaboard Industrial Estate (Rayong)
M&T Allied Technologies Co., Ltd., a key supplier of auto parts for Japanese car brands, signed a contract with Hemaraj to purchase additional land of 5 rais for its factory expansion in Eastern Seaboard Industrial Estate (Rayong). M&T is a manufacturer of Shift Lever and Spare Tire Carrier. T he land purchase is in line with the company’s plan to increase its production to serve the world’s top leading vehicle brands such as Toyota, Isuzu, Honda, Ford, Mazda and Suzuki.
• KC Altech Purchases Hemaraj SME Factory at Eastern Seaboard Industrial Estate (Rayong)
KC Altech (Thailand) Co., Ltd. signed an agreement with Hemaraj to purchase SME Factory for its plant at Eastern Seaboard Industrial Estate (Rayong). With a registered capital of Baht 37 million, the plant will produce Aluminum Tube mainly for supply to LG Electronics (Thailand) Co., Ltd. and Halla Climate Control Thailand Co., Ltd.
DaikyoNishikawa (Thailand) Purchases 14 Rai in Hemaraj ESIE for Plant Expansion
•
DaikyoNishikawa (Thailand) Co., Ltd., one of the largest plastics manufacturers in Japan purchased additional land of 14 rai in Hemaraj Eastern Seaboard Industrial Estate for its plant expansion. The company last year opened a factory on a 25 rai piece of land in the industrial estate to produce automotive plastic parts for supply to Auto Alliance (Thailand) Co., Ltd.
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• Annual Report 2010
• Bolwell Holdings (Thailand) Purchases Ready-Built Factory at Hemaraj ESIE
Bolwell Holdings (Thailand) Co., Ltd., a leading composite mouldings manufacturer from Australia signed an agreement to buy a ready-built factory at Hemaraj Eastern Seaboard Industrial Estate. The company will produce composite mouldings at a maximum capacity of 75,000 pieces per year for 100% export.
119
• Narumi (Thailand) Purchases Ready- Built Factory in Eastern Seaboard Industrial Estate (Rayong)
Narumi (Thailand) Co., Ltd., a leading manufacturer of automotive door handle from Japan, signed a contract to purchase a ready-built factory in Eastern Seaboard Industrial Estate (Rayong). With a registered capital of 100 million baht, the company will produce automotive door handle for supply to Mitsubishi Laem Chabang with a capacity of 2 million pieces per year. • Eurokera (Thailand) Leases Ready-Built Factory in Hemaraj Eastern Seaboard Industrial Estate
Eurokera (Thailand) Co., Ltd – a leading manufacturer of heat-resistant ceramic glass from Francesigned a contract to lease a ready-built factory in Hemaraj Eastern Seaboard Industrial Estate (Hemaraj ESIE). The new plant will produce ceramic glass for kitchen appliances. The factory will be operational in 2011.
• Katoen Natie (Thailand) to Expand Factory at Hemaraj Eastern Seaboard Industrial Estate
Katoen Natie (Thailand) Co., Ltd. - a leader in value-added logistics services provider from Belgium signed a contract to buy 65-rai land at Hemaraj Eastern Seaboard Industrial Estate. The purchased land is for the expansion of its factory which will provide various logistics services including warehousing, inventory management through Professional Warehouse Management System, packaging and labeling, pre and sub-assembly, Supply in Line Sequence (SILS) logistics, Supply Chain Management, and On-site logistics.
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• Annual Report 2010
• Sang Chareon Eastern Galvanize Purchases 21 Rai at Hemaraj Chonburi Industrial Estate
120
Sang Chareon Eastern Galvanize Co., Ltd - a Thai galvanizing service provider - signed a contract to buy land at Hemaraj Chonburi Industrial Estate. The purchased 21 rai of land is for a new factory which will provide services of galvanizing cast on steel finishing under the registered capital of 25 million Baht.
• Minoru (Thailand) Purchases Ready- Built Factory in Eastern Seaboard Industrial Estate (Rayong)
Minoru (Thailand) Co., Ltd.-a Japanese manufacturer of Auto Parts - signed a contract to purchase land and ready-built factory in Eastern Seaboard Industrial Estate (Rayong). The new plant will produce A/C Ducts, Spoilers, HVAC Cases at a capacity of 350,000 pieces/month for supply to automotive manufacturers and primary parts suppliers.
Tanaka Ai Industries (Thailand) Expands Factory in Hemaraj’s Eastern Seaboard Industrial Estate (Rayong)
•
Tanaka Ai Industries (Thailand) Co., Ltd, a Japanbased company specialized in slitting and rewinding of nonwoven fabrics, signed a contract to purchase additional 12 rai (4.8 acres) of land for its second plant in Eastern Seaboard Industrial Estate (Rayong). With the new expansion Tanaka Ai (Thailand)’s manufacturing facilities will now cover a total area of 92 rai (36.8 acres) in Hemaraj’s ESIE.
Hemaraj to Communities
• Hemaraj, VEC and OBEC to Proceed with “Industrial Skill Training” for Secondary School Students in Rayong and Chonburi
Ms. Narisara Chavaltanpipat, Deputy Minister of Education presided over the MOU signing ceremony between Hemaraj Land And Development Public Company Limited, Office of the Vocational Education Commission (VEC) and Office of The Basic Education Commission (OBEC) to organize “Industrial Skill Training Project” for students from extended schools under the Chonburi Educational Service Office Area 3 and Rayong Educational Service Office Area 1. The objective of the project is to equip the students with industrial skills essential for their future employment including elementary electricity class for Mathayom 2 students and industrial hygiene and safety class for Mathayom 3. It also helps broaden students’ perspectives on vocational education that gives them a promising career alternative, particularly in response to the requirements of the industrial sector. Seven schools in areas around Hemaraj’s industrial estates in Rayong and Chonburi provinces have been selected to participate in the first phase of the project.
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• Annual Report 2010
Hemaraj Donates Baht 6.6 Million for Haiti Earthquake Relief
•
121
H.E. Suthep Thaugsuban, Deputy Prime Minister and Mr. Virachai Virameteekul, Minister Attached to the Prime Minister’s Office received cash donation of over 6.6 million baht from Hemaraj Land And Development Plc. at the Government House to support the government’s Haitian Earthquake Relief Efforts.
• Hemaraj Awarded AMCHAM’s CSR 2010 Excellence Recognition
Hemaraj was awarded The American Chamber of Commerce (AMCHAM) Corporate Social Responsibility 2010 Excellence Recognition. The award intends to raise CSR awareness and share best practices among AMCHAM’s member companies. For more than 20 years, Hemaraj has committed to be a good corporate citizen by practicing good governance and implementing various sustainable social projects. • Hemaraj’s Tree Planting at Eastern Seaboard Industrial Estate (Rayong)
Hemaraj organized Tree Planting activity to expand green areas in the Eastern Seaboard Industrial Estate together with corporate members in the industrial estate and community leaders planted 1,000 trees during the event.
•
Hemaraj Organizes “Art Camp”
Heamraj organized “Art Camp” - a continuous art workshop program for students. Since the first workshop in 2009, Hemaraj has invited art experts from Inspire Sight Art & Culture Center to give basic principles and knowledge about arts through fun hands-on activities. During the workshop, art is also related to environment and local culture to help enhance students’ skill in arts and instill a feeling of pride and gratitude towards their hometown.
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•
Safety Club of Hemaraj EIE Organized Social Responsibility Activity
The Eastern Safety and Environmental Club (ESEC) of Hemaraj Eastern Industrial Estate (Map Ta Phut) in cooperation with The Industrial Estate Authority of Thailand (IEAT), launched “ESEC Day in School” campaign at Wat Mapchalood School, Rayong. The campaign is aimed at raising awareness of safety in schools. At the event, representatives of factories in the estate maintained trench and drainage covers as well as pathway marks for more safety.
• Hemaraj Supports Chonburi Football Club at Thailand Premier League 2010
Hemaraj, a major sponsor of Chonburi Football Club, participated in a Press Conference announcing Thailand Premier League 2010 which will be held from 13th March to - 30th October 2010. Under a three-year sponsorship agreement worth a total of Baht 18 Million, Hemaraj has been providing cash support of 6 million baht per year to Chonburi Football Club since 2008.
•
S I L Industrial Land Awarded “CSR-DIW”
Mr. Vitoon Simachokedee, Permanent Secretary, Ministry of Industry presented CSR-DIW (Corporate Social Responsibility, Department of Industrial Work) certifying plague to Mr. Sunthorn Kongsunthornkitkul, Vice President of S I L Industrial Land Co., Ltd. after passing the coaching and verifying seminar by Management System Certification Institute (Thailand) (MASCI). Managed by Hemaraj Land And Development Plc. S I L is one of the two companies in Saraburi receiving the CSR-DIW.
• Hemaraj and Schools in Rayong and Chonburi Take Big Step Forward for Holistic Learning Approach
Hemaraj, in collaboration with AMCHAM Thailand Charitable Foundation (ATCF), held a seminar and exhibition on “Holistic Learning Approach” at ESIE Plaza 1, Eastern Seaboard Industrial Estate, Rayong The event was organized to complement the “Train the Trainers” primary teachers training program. Exhibits and presentations at the seminar and exhibition include project details, administration strategies, and useful experiences from the six pilot schools in the program. Students’ work under the project were also on display. The event ends with the recruitment of more schools into 2010 training scheme which will be continuously supported by Hemaraj and ATCF.
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• Annual Report 2010
• Hemaraj Supported Water Relief in Pluakdaeng, Rayong
123
Hemaraj in cooperation with the Disaster Prevention and Relief Office, Pluakdaeng Subdistrict Administrative Organisation (Aor Bor Tor Pluakdaeng), Rayong distributed water to communities in Pluakdang area affected by draught situation. The quantity of water released from March to May totals 1,400 cubic meters
• Hemaraj 2010 Annual Contribution to 51 Schools in Rayong and Chonburi
Hemaraj, in cooperation with customers and alliances of its industrial estates, distributed school kits and sport equipment to over 13,700 students in 51 schools in Rayong and Chonburi provinces under its Annual School Contribution Program. The project is part of Hemaraj’s social contribution activities, which have been continuously implemented for over 12 years. • IEAT and Plants in Map Ta Phut Signed Agreement to Promote Local Income Generation in Rayong
The Industrial Estate Authority of Thailand (IEAT) in cooperation with The Federation of Thai Industries (FTI) and Map Ta Phut Plant Manager Club (PMC) signed a collaborative agreement in an attempt to promote income generation in Rayong. Under this effort, all participating businesses and manufacturers including their non-resident staff in Map Ta Phut are encouraged to transfer their vehicle and house registrations to Rayong in order that the province collects more business, motor vehicle and individual income taxes. So far business operators have agreed to transfer registration of more than 1,500 cars to Rayong as part of their social responsibility.
Hemaraj Provides Free Optical Check-up for Community
•
Mobile Medical Unit from Hemaraj joined Health Fair 2010 organized by Tasith Subdistrict Administration, Rayong Province. During the fair, Hemaraj provided free optical check-up and eyeglasses to villagers.
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• Annual Report 2010
124
•
Hemaraj Helps Maab Chalude Community
Fire Fighting Team of Hemaraj in cooperation with Sriracha Green Point Co., Ltd. recently helped Maab Chalude Community and Huey Pong Housing Estate nearby Hemaraj Eastern Industrial Estate (Map Ta Phut) clean venue for Mother’s Day Fair 2010. Hemaraj supplied 5,000 liters of water for the cleaning.
•
Hemaraj Joins Eco-Industrial Estate Development Initiative
Hemaraj was chosen as one of the pioneers to implement eco-industrial estate development initiative . An MOU signing was held between the Industrial Estate Authority of Thailand (IEAT), Department of Industrial Works, Ministry of Industry and selective industrial estate developers to declare their commitment for sustainable eco-industrial estate development in Thailand at an event entitled “Next Step of EcoIndustrial Estate Development in Thailand” recently organized by the Ministry of Industry at BITEC.
• Hemaraj Donates One Million Baht for Flood Relief
Hemaraj’s SIL Industrial Land (Saraburi) donated 1,000,000 Baht to Mr. Thavorn Prommechai, Saraburi Provincial Governor for flood relief in Saraburi Province.
Environmental Care
Hemaraj Land And Development Plc. maintains the environmental policy in developing the industrial estates by emphasizing on land development as well as increasing the infrastructure service capacities& performance. Besides focusing on environmental management, Hemaraj also encourages companies in the estates to become aware of the significance of environmental care and community relations. Aim to the best result for all stakeholders, the Safety &Environment Clubs are where members from companies in the estates join to share the same objective in caring for the environment. All through the year, the clubs conducted several activities including Environment, Health and Safety activities for members and communities. Internal and external Emergency Drills were conducted frequently as well among the estates and the communities nearby as one of the major activity. Besides, Hemaraj has been practicing and managing environmental related projects and has received the Environmental Management System Certification: ISO 14001, and EIA awards
รายงานประจํ า ปี 2553
• Annual Report 2010
Year 2010 is the years that Hemaraj integrate a lot of program on environmental and social activities from existing projects and also establishing a lot of new program during the year for better quality of environment, health and safety of people around the estates. After we have success the E=MC2, Environmental Monitoring and Control Center, in 2009 together with a lot of friendly environmental & social programs, Hemaraj again been chosen as the model for practicing ECO industrial town from IEAT in 2010 which is the main policy of IEAT to target all estate become sustainable developing estate within year 2014. CSR (Corporate Social Responsibility) is another significant tool that Hemaraj use to integrate the efficiency of managing environmental and social part. A lot of CSR programs have been conducted thought the year. In 2010, we have started seeking collaboration for the co-CSR program with our strategic partners tangibly through their professional, experience and authority to help integrating better environmental and social solution for all stakeholders. Hemaraj also commit for the transparent environmental monitoring and participating from communities nearby, we have conducted the public hearing from communities and concerned parties as part of the mitigation plan set up during the starting of the new developed area. Hemaraj foresees the significance in maintaining the environment care projects. From day one, Hemaraj believes in the principle of sustainable co-existing of environment and community and this is our promise to the public.
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125
• Annual Report 2010
Economic & Competitive Condition
126
The 2010 Thai economy is forecasted to grow by 7.8% compared to -2.3% in 2009. The factors attributed to the growth are from the export volume of goods and services, following the steady economic recovery of major trading partners in Asia and new market economies in particular even though there were the strong Baht and flood problems in the latter half of 2010. In 2010, the Private Consumption Index increased by 5.9% from the better employment situation, higher farm price, and rising consumer confidence following the resolution of the political turmoil. Manufacturing Production Index increased by 3.9% and the capacity utilization rate increased to 63.4%. For the year 2010, the Private Investment Index increased by 17.6%. Export volumes for Thailand were increased to US$ 195.3 billion, a 28% increase, while Imports increased by 37% to US$ 179.6 billion, especially Raw Materials & Intermediate Goods and Capital Goods increased by 42% and 27%, respectively. Current account ended the year with a surplus of US$ 14.8 billion. The balance of payments was US$ 31.3 billion. The industrial property market sector increased 294% from 901 rai in 2009 to 3,622 rai in 2010. In 2010, Hemaraj sold 930 rai of industrial land, or equivalent to 26% of total market share. The Board of Investment (BOI) project approval significantly increased to Baht 491 billion compared with Baht 281 billion in 2009, or 75% increase. The number of projects approved was 1,566 projects, a 56% increase from 2009. Thailand still remained a regional production hub in the ASEAN automotive industry, particularly for one-ton pickups and small passenger cars. In 2010, the vehicle production reduced to 1.645 million vehicles from 999,378 vehicles in 2009, a 65% increase. Domestic vehicle sale in 2010 was 800,357 vehicles and 896,065 vehicles for export. In 2010, automotive export was 10% of total export value.
GPD
% Capacity Utilization %
%
110
10.0
100
8.0
7.8
6.0 4.0
4.5
5.1
90 80
4.9
70
3.0
60
2.0
50
0.0
40
-2.3
-2.0
30 20
-4.0
10
2005
2006
2007
2008
2009
2010
2000
Total
BOI Application Approvals 800 700 600 500 400 300 200 100 0
2004
2006
Petrochemical
2008
2010
Automotive
Thailand Industrial Property Market 5,000
744
4,617 4,170
4,000
571
Baht : Billion 2005
2002
500
491
373
3,000
3,546
3,236 2,865
2,000
281
1,000
900
0
2006
2007
2008
2009
2010
Rai
2005
2006
2007
2008
2009
2010
1 Rai = 1,600 Square Meters or 0.4 Acres Source: Bank of Thailand, March 2012, Board of Investment, January 2010 รายงานประจํ า ปี 2553
• Annual Report 2010
Management Analysis
127
Operating Performance
For the Year 2010, Hemaraj reported Total Net Income of Baht 1,215.9 million, or an increase of 111% compared with the same period of 2009. The increase of Net Income for the Year 2010 was due to increases in industrial land sales, industrial estate utilities, the rental and sale of ready built factories and residential condominiums as well as profits from associates (significantly unrealized currency translation gain of Baht 394 million related to power) in comparison to the same period of the prior year. Earnings pershare was 0.125 Baht per share, representing an increase of 105% from the same period of 2009. For the Year 2010, Hemaraj’s Total Revenue was Baht 4,020.2 million compared with Baht 2,222.7 million for the same period of 2009, representing an 81% increase. Total Operating Revenue from core businesses was Baht 4,219.7 million, an 89% increase from the same period of 2009. Industrial Estate Land Sales for Year 2010 including Profit from Associates. Industrial Estate Land Sales were Baht 1,501.0 million, or a 113% increase. There is an additional Baht 788 million in deferred revenue from Industrial Estate Land Sales not recognized to date, based on the percent completion method from 3 industrial estate new phase developments though the Thailand accounting method is changing for revenue recognition in 2011. Total Utilities Revenue including industrial estate utilities, dividend from power/utilities associates, and other utilities & services fees increased to Baht 1,472.4 million in total, an increase of 43%. The industrial estate utilities have increased 26% to Baht 967.7 million, from stronger water demand and the consolidation of Hemaraj Saraburi Industrial Land and Hemaraj Rayong Industrial Land in Quarter 4, 2010. Lower capacity payments from chemical business reflected a decrease in Other Utilities and Service Fees by 79%. Total Rental Revenue including ready built factory rental, pipe-rack rental, commercial office rental and others decreased to Baht 480.4 million in total, a decrease of 7% which reflected by lower construction management fees by 64%. However, the rental revenue from ready built factory, piperack, commercial office and other rental property increased 13% from stronger rental demand. Sale of Property including ready built factory sales and residential sales increased from no residential sales in 2009 to Baht 766 million, a 5312% increase.
Financial Status
The consolidated Balance Sheet in 2010 is summarized as follows. Total Assets in 2010 were Baht 18,715 million, a 37% increase from Baht 13,681 million in 2009. Total Current Assets in 2010 were Baht 11,202 million compared to Baht 7,684 million in 2009, or a increase of 46%. This includes Cash on Hand of Baht 3,517 million, Account Receivable of Baht 561 million and Land held for Real Estate development of Baht 7,046 million. Other Assets were Baht 7,513 million in 2010. This includes Land held for commercial purposes not under development of Baht 315 million, assets for rent of Baht 2,021 million, and long-term investment in other companies of Baht 3,479 million. Long term investment includes, 5% direct holding in a 713 MW gasfired power plant Glow IPP Co., Ltd., 51% holding in Houay Ho Thai Co., Ltd. which holds 25% in 152 MW Hydro Power Project in People Democratic Republic of Laos, and 35% holding in 660 MW coal-fire power plant Gheco-One of which Baht 766 million deposited for future equity commitment. All power projects are the joint investments with Glow Energy Plc. (GDF Suez). Total Liabilities in 2010 were Baht 9,577 million an 82% increase from Baht 5,222 million in 2009. The increase was mainly from the issuance of unsecured Baht Bonds of Baht 6,000 million in 2010 to retire short term commercial papers and to fund the future project development i.e. power and properties projects.
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Total Shareholders Equity in 2010 was Baht 9,138 million versus Baht 8,459 million in 2008, or an 8% increase due to the Net Operating Profit of 2010, the dividend payment, and growing operating revenue from a broader revenue mix. As of December 31, 2009, there were 9,705.19 million common shares outstanding. The 2010 Net Debt to Equity ratio was at 0.66 to 1.
Risk Factors & Others External Risks
The company faces investment and management risks associated with Thai government and Bank of Thailand policies as well as external political and economic environment in neighboring and other countries. In addition Foreign Direct Investment, inflation, oil price, interest rates, land cost, construction cost, and shortages of skilled labor are factors that could affect the company businesses. The company is aware of the risks and effects associating with such factors and tries to have a systematic monitoring and analytical measurement to prevent and to minimize such risks at the acceptable level when comparing to the expected 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, industrial development is in place, broad revenue cushions this impact, and strong balance sheet minimizes disruption. 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. An appropriate and sufficient source of funds with a reasonable cost of capital and appropriate financial structure will support the company’s competitiveness. Since the economic crisis, the company’s financial structure has been continuously strengthening resulting in improving in net debt to equity ratio. In 2010 the net debt to equity ratio was 0.66 to 1 times with cash balance of Baht 3,517 million. With a strong balance sheet and a lower debt level, high 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 Automotive and Petrochemical Customers The company has 197 customers from automotive (148) and petrochemical (49) sectors out of 426 customers, or 46% 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 has benefited from these clusters, but it is also expanding our customer base in different sectors such as electronic, energy, steel, construction materials, etc. so that the company will not entirely depend on one or two sectors. In Quarter 4, 2010, the company acquired 75% of shares in Saraburi Industrial Land and Rayong Industrial Land from Siam Cement Group which have total area of more than 7,000 rai and expanded our customer base into various sectors. The company also tracks and analyzes the customer mix and demographic on a regular basis and adjusts our strategy accordingly.
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 changes of rules, regulations, and government policy, delay of construction, financing risk, risk from environmental impact, risk from raw material sourcing, 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. รายงานประจํ า ปี 2553
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The company is aware of the risk from such factors by having a feasibility study as well as the sensitivity analysis cover all areas and considering together with the attractiveness of the project, including the return which is recurring and predictable throughout the project life after the commercial operation. This project will be developed and managed by Glow Energy (GDF Suez), Thailand’s leading private power producer. As of December 2010, Gheco-One has obtained Environmental Impact Assessment (EIA) approval from Office of National Environmental Policy (ONEP) and under the process for applying the Environmental and Health Impact Assessment (EHIA), signed Power Purchase Agreement (PPA) with Electricity Generating Authority of Thailand (EGAT), signed Coal Supply Agreements (CSA) with suppliers, secured Project Financing from lenders, and signed the Engineering Procurement Contract (EPC) with contractor. The project is under construction and planned for the commercial operation date (COD) by Quarter 1, 2012 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. The construction of GHECO-One as of December 31, 2010 was88% complete. Risk from the Map Ta Phut Effect In September 2009, the Central Administrative Court issued an injunction to 8 government agencies to suspend the 76 projects in Map Ta Phut temporarily until actions made in compliance with the Constitution of The Kingdom of Thailand 2550 Article 67 (2). In December 2009, the Supreme Administrative Court revised the injunction and suspended the projects which are under the 11 categories of projects or activities that may have severe impacts on the community with respect to the Notice of the Ministry of Natural Resources and Environment dated August 31, 2010 and their licenses were issued after the Constitution B.E. 2550 until appropriate actions are made in compliance with the Constitution of The Kingdom of Thailand 2550 Article 67 (2). The related government agencies, private sector, and the community have been participating to issue the framework, guidelines, as well as the rules and regulations in compliance with Article 67 (2) of the Constitution to be appropriate and fair to all parties for those projects that may have severe impacts on the community and subject to the EHIA. Although, none of Hemaraj’s industrial estate project is subject to the EHIA, the company also set up a special team to work closely with related government agencies and community to provide necessary information and fully cooperates with them in order to resolve this conflict. In longer term, the company’s strategy is to broaden the revenue base into businesses, which have growing, and predictable revenue stream such as utilities business. In 2010, the company had operating revenue from non-industrial land sales as much as 63% of Total Operating Revenue.
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Management Structure Board of Directors
As of December 31, 2010, Board of Directors consists of 10 members as follows: 1. Mr. Chavalit Sethameteekul Chairman of the Board of Directors/ Nomination and Remuneration Committee 2. Mr. Thongchai Srisomburananonta Director/ Chairman of the Executive Committee/ Nomination and Remuneration Committee 3. Mr. David Richard Nardone Managing Director/ Executive Director 4. Mr. Sudhipan Charumani Independent Director/ Chairman of the Audit Committee/ Chairman of the Nomination and Remuneration Committee 5. Mr. Peter John Edmondson Independent Director/ Audit Committee 6. Mrs. Punnee Worawuthichongsathit Independent Director/ Audit Committee/ Corporate Governance Committee 7. Mr. Vivat Jiratikarnsakul Director/ Executive Director 8. Ms. Pattama Horrungruang Director/ Executive Director/Corporate Governance Committee 9. Mr. Somphong Wanapha Independent Director/ Chairman of the Corporate Governance Committee 10. Mr. Vikit Horrungruang Director With Mr. Sirisak Kijraksa as Company Secretary The Company’s Board of Directors consists of 4 Independent Directors who have qualifications according to such prescribed in regulation of SET and SEC as follows: (1) holding shares not exceeding 0.5 per cent 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, non-independent 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
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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, nonindependent 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, 2010, Executive Committee consists of 4 members as follows: 1. Mr. Thongchai Srisomburananonta Chairman of the Executive Committee 2. Mr. David Richard Nardone Executive Committee Member 3. Mr. Vivat Jiratikarnsakul Executive Committee Member 4. Ms. Pattama Horrungruang Executive Committee Member 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.
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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 for Board consideration. 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, 2010, Audit Committee consists of 3 members as follows: 1. Mr. Sudhipan Charumani Audit Committee Chairman who has knowledge and experiences to audit Company’s financial statements 2. Mr. Peter John Edmondson Audit Committee Member 3. Mrs. Punnee Worawuthichongsathit 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, and - 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; and
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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. Corporate Governance Committee As of December 31, 2010, the Corporate Governance Committee consists of 3 members as follows: 1. Mr. Somphong Wanapha Corporate Governance Chairman 2. Mrs. Punnee Worawuthichongsathit Corporate Governance Member 3. Ms. Pattama Horrungruang Corporate Governance 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, 2010, the Nomination and Remuneration Committee consists of 3 members as follows: 1. Mr. Sudhipan Charumani Nomination and Remuneration Committee Chairman 2. Mr. Chavalit Sethameteekul Nomination and Remuneration Committee Member 3. Mr. Thongchai Anankusri 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 performance and prevailing financial strength. The Nomination and Remuneration Committee has 3 years period and may be re-elected to assume the same position. Company Management The Company Management consists of The President & CEO 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. รายงานประจํ า ปี 2553
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Remuneration for Directors and Management 1. Total remuneration for the 10 Directors in 2010 was Baht XX,XXX,XXX (Baht 15,795,000 in 2009), being Board and Committee Meeting Fees and being Compensations, as per following individual details: กรรมการ ตำแหน่ง
1. นายชวลิต เศรษฐเมธีกุล
ค่าตอบแทน (บาท) เบี้ยประชุม ค่าตอบแทน กรรมการ
ประธานกรรมการ/กรรมการสรรหาและ พิจารณาผลตอบแทน 2. นายธงชัย ศรีสมบูรณานนท์ กรรมการ/ประธานกรรมการบริหาร/ กรรมการสรรหาและพิจารณาผลตอบแทน 3. นายสุทธิพันธุ์ จารุมณี กรรมการอิสระ/ประธานกรรมการตรวจสอบ/ ประธานกรรมการสรรหาและพิจารณา ผลตอบแทน 4. นายเดวิด ริชาร์ด นาร์โดน กรรมการ/กรรมการบริหาร 5. นายปีเตอร์ จอห์น เอ็ดมันสัน กรรมการอิสระ/กรรมการตรวจสอบ 6. นางพรรณี วรวุฒิจงสถิต กรรมการอิสระ/กรรมการตรวจสอบ/ กรรมการบรรษัทภิบาล 7. นายวิวัฒน์ จิรัฐติกาลสกุล กรรมการ/กรรมการบริหาร 8. นางสาวปัทมา หอรุ่งเรือง กรรมการ/กรรมการบริหาร/ กรรมการบรรษัทภิบาล 9. นายสมพงษ์ วนาภา กรรมการ/ประธานกรรมการบรรษัทภิบาล 10. นายวิกิจ หอรุ่งเรือง กรรมการ รวม
รวม
2. Total remuneration for the Company’s Executives and Management by way of salaries, bonuses, and provident fund contributions for 19 persons in 2010 was Baht XXX.XX million.
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Good Corporate Governance
135 Hemaraj Land and Development Plc., 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:-
Rights of the Shareholders
The company have 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.
Equitable treatment of shareholders
The company have emphasized and overseen to maintain equitable treatment of shareholders. 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. 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. 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. 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 important agenda, the company shall give voting cards equal to the number of รายงานประจํ า ปี 2553
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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. The company have 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. The company have 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.
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, 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 a budget for them to attend annually training 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. Creditor, Supplier and Competitor 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. Environment and Society The company have 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 have 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 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
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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, using natural resources for optimal benefit with awareness to the important of environment and safety of related stakeholders including to promote social activities to conserve environment and develop living quality permanently. Moreover, the Company provides channel to report any misconduct directly to the board of directors through the Company’s website or any issue can be sent directly as follows: 1. Direct submission 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
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Disclosure of Information and Transparency
The company have 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 Relation” unit to directly publicize information beneficial to the investors, shareholders, related parties, general publics, financial institute and securities analysts. 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 have disclosed their responsibilities toward such financial report in the annual report. For the disclosure of non-financial information, the company have 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 have 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.
Responsibilities of the Board of Directors
Structure of the Board of Directors
The Board of Directors can be divided into groups characterized by qualification prescribe in regulation of SET and SEC as follows: - Directors who are Management groups - Directors who are not Managment - Directors who are independent. At least 1/3, but not less than 3 members, of the Board of Directors must be independent directors. Presently, the Company has 10 directors, consisted of the directors who are not Management 6 persons of which 4 persons are independent directors. 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-elect to assume the same position.
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The Company have 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. The Company have policy to allow the director to assume as director in other companies as deemed appropriate. In case of being the director in the same business, information about position of each director must be disclosed to the shareholders. 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 do 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 have clearly separated Chairman of the Board, the Chief Executive Officer and their duties. The Company has appointed a Company Secretary to provide advices on legal aspect, rules and regulations of SEC, SET and other laws which should be known and coordinate to comply with resolution of the Board and oversee activities of the Board. 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. The Board of Directors may appoint or designate any committees or others to perform their roles on behalf of the Board of Directors as well as cancel or change or overrule the roles under their consideration. - The Board of Directors must manage to have effective internal control system and internal audit system. 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 have therefore appointed sub-committees as follows: - - The Executive Committee, presently consisted of 4 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, having duties and responsibilities to the Board of Directors, as follows:- 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 systems;
รายงานประจํ า ปี 2553
• Annual Report 2010
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 propose the appointment of the Company’s statutory auditor and to propose his professional fees; 5. To consider whether the Company discloses correct and adequate information with regards to third party transactions or any transactions with a conflict-of-interest tendency; 6. To include in the Company’s annual report the Audit Committee’s own review result, expressing opinion on the Company’s internal control system, as well as on the preparatory procedure and data disclosure of the financial statements. This review report shall be signed by the audit committee chairman; 7. To report the Audit Committee’s performance to the Company’s Board of Directors at least on a quarterly basis; 8. To participate in the appointment, removal, work assessment and remuneration granting of the internal auditor; and 9. To perform any other work that the Audit Committee agrees to, as may be assigned by the Company’s Board of Directors. - The Nomination and Remuneration Committee, consisted of 3 directors, having duties and responsibilities as follows: - As Nomination role, 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. As Remuneration role, to study, evaluate and propose the remuneration of Board of Directors and to propose to be approved by the Annual General Shareholders 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 and SEC’s regulations to Board of Directors. Corporate Governance Policy: The Board of Directors have launched the Good Corporate Governance Policy, complied with and regularly reviewed such policy once a year. 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. 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. Additionally, in case of any normal businesses or supporting normal business transactions in the future, therefore, the Board of Directors have approved in principle that the management could approve those above transactions, which must be a transaction with the same commercial terms as those an the company 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 according to the Securities and Exchange Act (No.4) B.E. 2551. Internal controlling system and internal audit: The Company is aware of the inportance of internal control system and establishes the Company’s internal control system to be applied adequately and appropriately for operations in order to protect any potential damages 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 review has been reported for Board acknowledgement subsequent to each quarterly meeting of the Audit Committee.
รายงานประจํ า ปี 2553
139
• Annual Report 2010
140
Risk Management The Board of directors gives high priority to the risk management by assign
the Company to consistently evaluate company risk factors and analyze the impacts on those risks and implement the measures to counter those risks and regularly report to the Board of directors. Usage of internal information: The company have 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. The Board of Directors’ Meeting The Board shall prescribe Meeting date in advance which shall be held at least 4 times a year to certify quarterly financial statement of the company. In this regard, the Audit Committee shall review the accuracy 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 meetings to consider business operations as deemed necessary including in urgent matters if necessary. 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 before each meeting. For matter of nondisclosure agendas shall be discussed in the 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. 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 adequate information. The company allows non-management independent directors to hold the meeting to jointly discuss all possible issues without participation of the Management. During the period from January to December 2010, the Company held 5 Board of Directors’ Meetings of both regular and emergency natures which most Board of Directors attended the Meetings except on urgent business or on the oversea business trips. Name of Director Board of Audit Nomination and Good Corporate Directors Committee Remuneration Governance Committee Committee
Mr. Chavalit Sethameteekul Mr. Thongchai Srisomburananonta Mr. David Richard Nardone Mr. Sudhipan Charumani Mr. Peter John Edmondson Mrs. Punnee Worawuthichongsathit Mr. Vivat Jiratikarnsakul Ms. Pattama Horrungruang Mr. Somphong Wanapha Mr. Vikit Horrungruang
5/5 - 5/5 - 5/5 - 5/5 4/4 5/5 4/4 5/5 4/4 5/5 - 5/5 - 5/5 - 5/5 -
1/1 - 1/1 - - - 1/1 - - - - 2/2 - - - 2/2 - 2/2 - -
Self-assessment of Board of Directors The Board of Directors shall regularly conduct self-assessment according to the form of the company to jointly consider their performances and problems to find out appropriate improvement.
รายงานประจํ า ปี 2553
• Annual Report 2010
In order to prepare the personnel who can take action on behalf of the manager director/president of operating staff who are unable to perform the duty or seek out of its terms including minimize the risk or impact of the discontinuance to the company’s management performance, the Company has prepare the plan to inherit the position including with the setting up the training, and knowledge and capacity development for the director to have understanding, experiences and readiness to execute the work by the person who has appropriate qualification as appointed to be selected in such position. Remuneration of Directors and Management Remuneration of the Board of Directors including subcommittees have been evaluated and considered by the Nomination and Remuneration Committee to propose to be considered by the Board of Directors 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, compensations 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.
141
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 9001:2000 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.
รายงานประจํ า ปี 2553
• Annual Report 2010
Report on Responsibilities of the Board of Directors Towards the Financial Report 142 of the year 2010 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 2010 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 2010 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. Also, to have 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 is of the opinion that the financial statements and financial reports for the year 2010 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 as appropriate in material aspect in accordance with consistent appropriate accounting policies and with generally accepted accounting standards, according to relevant rules and regulations.
รายงานประจํ า ปี 2553
(Mr.David Richard Nardone) President & CEO
• Annual Report 2010
(Mr.Chavalit Sethameteekul)
Chairman of the Board of Directors
Audit Committee Report for 2010 The Audit Committee of Hemaraj Land And Development Public Company Limited has the following independent non-executive directors as its members: 1) Mr. Sudhipan Charumani Audit Committee Chairman 2) Mr. Peter J. Edmondson Audit Committee Member 3) Mrs. Punnee Worawuthichongsathit Audit Committee Member 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. Four formal Audit Committee meetings were held in respect of its 2010 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. Two such meetings were officially arranged at mid-year and at year-end respectively, with informal consultations additionally held as deemed necessary. The activities of the Audit Committee covered the following areas: 1. Review of the interim and annual financial statements of 2010 to verify that the statements were accurate and complete, and that relevant supporting financial information was disclosed. The review was conducted with input 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 generally accepted accounting principles. It should be hereby mentioned that as a Thai listed public company, the Company at 2010 year-end was in the process of assessing the impact on itself from the Federation of Accounting Professionals of Thailand’s new sets of accounting standards, which would be applied from the 2011 financial year onwards, in conjunction with international practice. 2. Review of the internal control system in order to verify that the system was appropriate and effective in meeting its objectives. The review was conducted with input from the internal auditors, coupled with discussions with the external auditors, which did not reveal any significant weaknesses or deficiencies. The Audit Committee and both the internal and external auditors are of the view that the prevailing internal control system meets the requirements of the SET and SEC, and are 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 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, and the Audit Committee believes that the internal audit function of the Company is appropriate, effective and independent. 4. Review of compliance with the Securities and Exchange Acts, other relevant laws and SECSET 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. รายงานประจํ า ปี 2553
143
• Annual Report 2010
144
6 Considering the appointment of external auditors and their remuneration for the year 2011, 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, A.M.T. & Associates, on all counts. The Audit Committee thus recommended that the 2010-external-auditor Mrs. Natsarak Sarochanunjeen (Certified Public Accountant registration number 4563), or Professor Kesree Narongdej (Certified Public Accountant registration number 76) or Mr.Sumit Khuapiboon (Certified Public Accountant registration number 4885), all of A.M.T. & Associates, be appointed the Company’s external auditor for the financial year ending 31st December 2011 at a remuneration of Bath 1,240,000. This represented a Baht 110,000 increment from the 2009-2010 levels, due largely to increased consolidation work volume resulting from the acquisition of 3 new subsidiary companies. The Audit Committee also agreed to recommend the appointment of Mrs. Natsarak Sarochanunjeen or Professor Kesree Narongdej or Mr.Sumit Khuapiboon or Mr.Chaiyuth Angsuwithaya (Certified Public Accountant registration number 3885) or Mr. Somchai Kanjanawongpaisarn (Certified Public Accountant registration number 3428), each of A.M.T. & Associates, to serve as the external auditor of the Company’s subsidiaries for the 2011 financial year at a remuneration of Baht 3,400,000. This denoted a Baht 700,000 increase from the 2009-2010 levels, due mostly to the addition of the 3 newly acquired subsidiaries. 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. Moreover, the Company continued to emphasize good corporate governance principles, and received a top-classification score in the National CG Committee’s 2010-reports in respect of its AGM conducting, as well as and its comparative CG standing, amongst Thai listed companies. Sudhipan Charumani
Chairman ofth the Audit Committee 12 March 2011
รายงานประจํ า ปี 2553
• Annual Report 2010
Independent Certified Public Accountants’ Report To the Shareholders of Hemaraj Land and Development Public Company Limited
145
I have audited the consolidated balance sheets of Hemaraj Land and Development Public Company Limited and its subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of changes in shareholders’ equity, income and cash flows for the years then ended. I have also audited the financial statements for the same periods of Hemaraj Land and Development Public Company Limited. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. As described in note 10 to the financial statements, I have not audited the financial statements of two subsidiaries (on October 1, 2010, the Company acquired additional investment from 25% to 100%) which were included in the consolidated financial statements for the year ended December 31, 2010. The financial statements for those two subsidiaries reflect total assets as of December 31, 2010 of Baht 1,499.92 million, and total revenues from October 1, 2010 to December 31, 2010 of Baht 29.42 million. The financial statements of those subsidiaries have been audited by other auditor whose reports have been furnished to me, and my report, insofar as it relates to the amounts for those subsidiaries included in the consolidated financial statements for the year ended December 31, 2010, are based solely on the reports of the said auditor. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion. Based on my audits and other auditor’s report as mentioned in the first paragraph, in my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hemaraj Land and Development Public Company Limited and its subsidiaries and of Hemaraj Land and Development Public Company Limited as of December 31, 2010 and 2009, the results of their operations, and cash flows for the years then ended in conformity with generally accepted accounting principles. Without qualifying opinion to the above financial statements, I draw attention on the matter as discussed in note10.2 to financial statements that on October 1, 2010, the Company acquired additional investment in two associates from 25% to 100% resulting in changing those two associates to subsidiaries. As a result, the Company’s consolidated financial statements have already included those two subsidiaries’ balance sheets as of December 31, 2010 and statements of income from October 1, 2010 to December 31, 2010. On October 1, 2010, the Company’s payment of Baht 763.69 million for the additional investment acquisition of those two subsidiaries resulted in a gain from a bargain purchase presenting a profit of Baht 145.41 million in the consolidated statements of income for the year ended December 31, 2010.
A.M.T. & ASSOCIATES Bangkok, Thailand February 28, 2011
(Natsarak Sarochanunjeen) C.P.A (THAILAND) Registration No. 4563
รายงานประจํ า ปี 2553
• Annual Report 2010
Balance Sheets
146
Hemaraj Land and Development Public Company Limited and Its Subsidiaries As at December 31, 2010 and 2009
BAHT
ASSETS
NOTE
CURRENT ASSETS Cash and cash equivalents 6 Temporary investments marketable securities, net Trade account receivables Related parties, net 7 Other parties, net 7 Unbilled completed work 7 Short - term loans and advance to related parties 5 Inventory Cost of real estate developments, net 9, 28 and 29 Other current assets Revenue department receivable Interest receivables Others Total Current Assets NON - CURRENT ASSETS Deposit at financial institution with commitment 6 and 28 Investments in subsidiaries 5, 10 and 28 Investments in associates 2.2, 5, 10, 28 and 29 Other long - term investments Related parties, net 11 Other parties, net 11, 28 and 29 Assets for rent, net 12 and 28 Property, plant and equipment, net 13 and 28 Other non - current assets Leasehold land and land held for commercial purposes, net 14 and 28 Sinking fund, net 15 and 29 Advance payment for right Others, net Total Non - Current Assets TOTAL ASSETS
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009 3,516,614,394.23
909,430,084.97
3,001,237,078.14
525,127,783.23
755,798.96
600,342.36
755,798.96
600,342.36
70,620.40 195,246,817.85 365,485,061.27
2,286,088.44 132,980,476.01 215,482,928.21
34,258,661.43 17,634,387.72 78,960,609.00
29,175,393.14 9,268,004.19 63,380,832.09
5,629,016.44 11,040,000.00 7,046,528,352.61
5,627,942.47 11,520,000.00 6,371,980,818.17
1,033,768,366.76 11,040,000.00 1,486,393,762.01
724,452,492.75 11,520,000.00 1,884,398,188.52
41,282,628.25 456,968.67 18,754,961.58 11,201,864,620.26
2,171,777.95 4,340,592.42 28,019,473.20 7,684,440,524.20
31,045,720.45 456,968.67 6,192,868.10 5,701,744,221.24
4,340,592.42 8,067,948.54 3,260,331,577.24
766,176,577.64 - 3,479,385,280.15
2,059,901,000.00 - 763,408,020.52
766,176,577.64 3,935,034,591.50 2,988,869,244.04
2,059,901,000.00 2,931,595,206.50 640,369,244.04
1,500,000.00 142,783,002.50 2,021,019,844.15 574,087,219.51
1,500,000.00 142,783,002.50 2,077,394,869.55 440,117,205.76
- 142,500,002.50 85,720,072.77 91,494,979.75
142,500,002.50 91,324,397.16 94,123,951.27
314,936,500.00 314,936,500.00 314,936,500.00 80,309,310.50 82,359,744.69 19,683,721.98 109,890,841.22 106,937,302.50 109,890,841.22 23,436,191.39 6,891,466.15 20,277,429.05 7,513,524,767.06 5,996,229,111.67 8,474,583,960.45 18,715,389,387.32 13,680,669,635.87 14,176,328,181.69
314,936,500.00 21,214,259.95 106,937,302.50 2,935,055.66 6,405,836,919.58 9,666,168,496.82
The accompanying notes to financial statements are an integral part of these statements.
รายงานประจํ า ปี 2553
• Annual Report 2010
SEPARATE FINANCIAL STATEMENTS 2010 2009
Balance Sheets (Continued) Hemaraj Land and Development Public Company Limited and Its Subsidiaries As at December 31, 2010 and 2009
BAHT
LIABILITIES AND SHAREHOLDERS’ EQUITY
NOTE
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009
CURRENT LIABILITIES Short-term loans from financial institutions 16 - 450,000,000.00 Trade account payables Related parties 4,073,977.41 2,921,314.93 Other parties 209,246,369.23 216,492,490.17 Current portion of long - term loans 20 and 28 656,428,432.70 719,483,965.00 Current portion of long term loans by scheduled transfer 20 and 28 93,505,125.00 311,641,440.00 Short - term loans and advance from related parties 5 - 267,394,103.76 Short - term loans from other parties and other persons 17 and 28 30,000,000.00 450,000,000.00 Other current liabilities Unearned income and income received in advance 8 861,882,623.30 599,683,192.77 Accrued interest expenses 65,027,324.08 5,204,181.87 Accrued expenses 49,174,322.08 29,329,504.66 Other account payables 5,276,024.15 6,815,234.01 Accrued income tax 26 48,511,027.84 62,921,742.41 Revenue department payable 19,955,087.37 12,562,607.03 Accrued specific business tax and transfer fee 18,864,315.28 - Dividend payable 22 8,143,925.76 6,425,129.06 Others 57,270,784.05 24,164,497.25 Total Current Liabilities 2,127,359,338.25 3,165,039,402.92 NON - CURRENT LIABILITIES Debentures 18 6,000,000,000.00 - Other long - term loans, net 20 and 28 1,230,982,991.68 1,859,139,214.38 Long - term loans and advance from related party 5 and 19 - - Other non - current liabilities Retention payables 71,274,799.45 78,731,424.74 Guarantee received 120,712,702.01 96,831,540.63 Deferred leasehold right income Related party, net 5 - - Other parties, net 15,049,613.35 16,987,857.64 Others 11,379,029.85 5,353,007.81 Total Non - Current Liabilities 7,449,399,136.34 2,057,043,045.20 TOTAL LIABILITIES 9,576,758,474.59 5,222,082,448.12 The accompanying notes to financial statements are an integral part of these statements.
147
SEPARATE FINANCIAL STATEMENTS 2010 2009
-
450,000,000.00
893,241.35 11,478,466.91 353,750,750.00
6,991,431.36 9,479,728.02 389,805,500.00
17,343,625.00
244,885,250.00
-
237,394,103.76
-
420,000,000.00
11,704,688.88 64,841,907.67 28,697,289.89 1,178,616.39 - 10,920,832.41
20,178,712.02 4,895,318.17 18,032,693.99 1,155,885.37 44,636,676.76 6,872,793.47
4,602,959.37 8,143,684.77 9,103,066.41 522,659,129.05
6,424,825.22 10,814,358.09 1,871,567,276.23
6,000,000,000.00 975,000,000.00
1,135,114,750.00
988,693,397.33
1,058,559,125.42
20,352,439.61 3,529,000.00
27,869,881.94 5,169,050.00
55,879,791.88 - 9,766,447.31 8,053,221,076.13 8,575,880,205.18
58,363,791.84 2,705,526.11 2,287,782,125.31 4,159,349,401.54
รายงานประจํ า ปี 2553
• Annual Report 2010
Balance Sheets (Continued)
148
Hemaraj Land and Development Public Company Limited and Its Subsidiaries As at December 31, 2010 and 2009
BAHT
LIABILITIES AND SHAREHOLDERS’ EQUITY
NOTE
SHAREHOLDERS’ EQUITY Share capital - Baht 0.40 par value Authorized share capital Common stocks 15,000,000,000 shares Issued and paid-up share capital Common stocks 9,705,186,191 shares Premium (discount) on common stocks, net Unrealized gain (loss) from changes in carrying amount of available-for-sale securities Translation of financial statements differences Retained earnings Appropriated - legal reserve 22 Unappropriated Total Equity of Parent Company’s Shareholders Minority interest Total Shareholders’ Equity TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009
6,000,000,000.00
6,000,000,000.00
6,000,000,000.00
6,000,000,000.00
3,882,074,476.40
3,882,074,476.40
3,882,074,476.40
3,882,074,476.40
438,704,620.10
438,704,620.10
438,704,620.10
438,704,620.10
477,211.62
321,755.02
477,211.62
321,755.02
(32,062,345.83)
(30,268,955.06)
588,247,395.00 3,894,949,609.59
535,664,645.14 3,265,337,687.05
409,930,799.66 869,260,868.73
378,570,532.18 807,147,711.58
8,772,390,966.88 366,239,945.85 9,138,630,912.73
8,091,834,228.65 366,752,959.10 8,458,587,187.75
5,600,447,976.51 - 5,600,447,976.51
5,506,819,095.28 5,506,819,095.28
18,715,389,387.32 13,680,669,635.87 14,176,328,181.69
9,666,168,496.82
The accompanying notes to financial statements are an integral part of these statements.
รายงานประจํ า ปี 2553
• Annual Report 2010
SEPARATE FINANCIAL STATEMENTS 2010 2009
-
-
Statements of Income
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the years ended December 31, 2010 and 2009
BAHT
NOTE
REVENUES Sales of land Sales of pre-fabricated factory Sales of condominium Services income 5 Other income Gain from bargain purchase 10.2 Interest income 5 Management income and commission fee 5 Dividend income 10 Gain on exchange rate Others Total Revenues EXPENSES Cost of land sales Cost of pre-fabricated factory sales Cost of condominium sales Cost of services 5 Selling expenses General and administrative expenses Director remuneration 23 Total Expenses
PROFIT BEFORE SHARE OF PROFITS FROM INVESTMENTS IN ASSOCIATES SHARE OF PROFITS FROM INVESTMENTS IN ASSOCIATES 2.2 and 10 PROFIT BEFORE FINANCE COSTS AND INCOME TAX EXPENSES FINANCE COSTS 5 PROFIT BEFORE INCOME TAX EXPENSES INCOME TAX EXPENSES 26
NET PROFIT Profit attributable to: Equity holders of the parent Minority interests
BASIC EARNINGS PER SHARE
Net profit attributable to equity holders of the parent Weighted average number of ordinary shares (shares)
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009
149
SEPARATE FINANCIAL STATEMENTS 2010 2009
1,486,183,484.53 272,175,113.80 493,722,496.82 1,433,175,676.88
688,618,386.66 42,776,200.00 (57,472,769.71) 1,375,831,672.83
183,832,522.11 - 493,722,496.82 156,492,200.34
1,199,909.36 (57,472,769.71) 156,260,762.96
145,408,440.80 77,485,444.44 23,963,966.83 64,616,271.82 - 23,488,593.78 4,020,219,489.70
- 73,798,505.45 33,184,365.20 35,966,583.35 30,122.33 29,968,823.69 2,222,701,889.80
- 91,418,172.49 77,376,177.91 611,335,485.52 69,584,941.05 14,408,142.11 1,698,170,138.35
83,133,604.49 67,000,593.60 695,536,334.94 33,984,147.92 13,134,084.21 992,776,667.77
964,293,216.18 178,643,192.87 270,623,225.07 841,585,894.74 122,262,065.63 421,696,408.84 24,690,000.00 2,823,794,003.33
385,271,928.68 35,654,970.94 (20,538,302.18) 789,102,263.82 59,537,781.15 334,114,552.48 24,335,000.00 1,607,478,194.89
134,577,533.91 - 270,623,225.07 111,243,024.42 55,816,021.13 258,139,889.74 16,150,000.00 846,549,694.27
335,239.42 (14,418,302.18) 125,621,493.82 32,975,439.02 193,565,634.31 15,795,000.00 353,874,504.39
1,196,425,486.37
615,223,694.91
851,620,444.08
638,902,163.38
421,954,962.86
80,619,045.21
1,618,380,449.23 (284,069,552.72) 1,334,310,896.51 (46,896,960.95) 1,287,413,935.56
695,842,740.12 (143,753,206.61) 552,089,533.51 46,793,493.91 598,883,027.42
851,620,444.08 (268,467,016.80) 583,153,427.28 44,051,922.26 627,205,349.54
638,902,163.38 (144,660,125.59) 494,242,037.79 102,295,701.62 596,537,739.41
1,215,926,597.31 71,487,338.25 1,287,413,935.56
575,238,626.43 23,644,400.99 598,883,027.42
627,205,349.54 - 627,205,349.54
596,537,739.41 596,537,739.41
0.13
0.06
0.06
0.06
9,705,186,191
9,482,856,164
9,705,186,191
9,482,856,164
-
-
The accompanying notes to financial statements are an integral part of these statements.
รายงานประจํ า ปี 2553
• Annual Report 2010
รายงานประจํ า ปี 2553
Separate Financial Statements
• Annual Report 2010 927,637.64 - - - - (927,637.64) -
- - - - 129,338,064.80 3,882,074,476.40
- - - - -
- - - - 3,882,074,476.40 3,752,736,411.60
-
3,882,074,476.40
The accompanying notes to financial statements are an integral part of these statements.
Beginning balance as of January 1, 2009 Unrealized gain from changes in carrying amount of available-for-sale securities Net profit Appropriated - legal reserve 22 Dividend paid 22 Exercise of warrant 21 Ending balance as of December 31, 2009
Beginning balance as of January 1, 2010 Unrealized gain from changes in carrying amount of available-for-sale securities Net profit Appropriated - legal reserve 22 Dividend paid 22 Ending balance as of December 31, 2010
- - - - (36,903,746.26) 438,704,620.10
475,608,366.36
- - - - 438,704,620.10
438,704,620.10
Premium Issued and (discount) paid-up on common NOTE share capital Warrants stocks, net
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For The Years Ended December 31, 2010 And 2009
227,196.66 - - - - 321,755.02
94,558.36
155,456.60 - - - 477,211.62
321,755.02
- - 29,826,886.97 - - 378,570,532.18
348,743,645.21
- - 31,360,267.48 - 409,930,799.66
378,570,532.18
5,506,819,095.28
Total
5,146,906,661.11 - 227,196.66 596,537,739.41 596,537,739.41 (29,826,886.97) (328,359,182.80) (328,359,182.80) - 91,506,680.90 807,147,711.58 5,506,819,095.28
568,796,041.94
- 155,456.60 627,205,349.54 627,205,349.54 (31,360,267.48) (533,731,924.91) (533,731,924.91) 869,260,868.73 5,600,447,976.51
807,147,711.58
Unrealized gain (loss) from changes Retained earnings in carrying Unappropriated amount of Retained available-for-sale Appropriated earnings securities legal reserve Unappropriated
BAHT
Statements of Changes in Shareholders’ Equity
150
รายงานประจํ า ปี 2553
- - - - - - - - (36,903,746.26) 438,704,620.10
- - - - - - - - (927,637.64) -
- - - - - - - - 438,704,620.10
- - - - - - - - - 475,608,366.36
438,704,620.10
-
927,637.64
The accompanying notes to financial statements are an integral part of these statements.
Beginning balance as of January 1, 2009 3,752,736,411.60 Unrealized gain from changes in carrying amount of available-for-sale securities - Currency translation differences - Transaction not recognized in the statements of income - Net profit - Appropriated - legal reserve 22 - Dividend paid 22 - Decrease in minority - Dividend from subsidiaries paid to minority - Exercise of warrants 21 129,338,064.80 Ending balance as of December 31, 2009 3,882,074,476.40
Beginning balance as of January 1, 2010 3,882,074,476.40 Unrealized gain from changes in carrying amount of available-for-sale securities - Translation of financial statements differences - Transaction not recognized in the statements of income - Net profit - Appropriated - legal reserve 22 - Dividend paid 22 - Increase in minority - Dividend from subsidiaries paid to minority - Ending balance as of December 31, 2010 3,882,074,476.40
BAHT
227,196.66 - 227,196.66 - - - - - - 321,755.02
94,558.36
155,456.60 - 155,456.60 - - - - - 477,211.62
321,755.02
535,664,645.14 3,265,337,687.05 8,091,834,228.65
467,851,405.48 3,086,271,483.08 7,754,498,083.21 - - - 227,196.66 (1,277,175.75) - - (1,277,175.75) (1,277,175.75) - (1,049,979.09) - - 575,238,626.43 575,238,626.43 - 67,813,239.66 (67,813,239.66) - - - (328,359,182.80) (328,359,182.80) - - - - - - - - - - - 91,506,680.90 (30,268,955.06) 535,664,645.14 3,265,337,687.05 8,091,834,228.65
(28,991,779.31)
- - - 155,456.60 (1,793,390.77) - - (1,793,390.77) (1,793,390.77) - (1,637,934.17) - - 1,215,926,597.31 1,215,926,597.31 - 52,582,749.86 (52,582,749.86) - - - (533,731,924.91) (533,731,924.91) - - - - - - - - (32,062,345.83) 588,247,395.00 3,894,949,609.59 8,772,390,966.88
(30,268,955.06)
Translation of Total financial Retained earnings Equity of Parent statements Appropriated Company’s differences legal reserve Unappropriated Shareholders
Equity of Parent Company’s Shareholders
Unrealized gain Premium (loss) from changes in Issued and (discount) carrying amount of paid-up on common available-for-sale NOTE share capital Warrants stocks, net securities
CONSOLIDATED FINANCIAL STATEMENTS
Total
- 227,196.66 - (1,277,175.75) - (1,049,979.09) 23,644,400.99 598,883,027.42 - - (328,359,182.80) (21.00) (21.00) (40,000,868.71) (40,000,868.71) - 91,506,680.90 366,752,959.10 8,458,587,187.75
383,109,447.82 8,137,607,531.03
- 155,456.60 - (1,793,390.77) - (1,637,934.17) 71,487,338.25 1,287,413,935.56 - - (533,731,924.91) 190.00 190.00 (72,000,541.50) (72,000,541.50) 366,239,945.85 9,138,630,912.73
366,752,959.10 8,458,587,187.75
Minority interest
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the years Ended December 31, 2010 and 2009
Statements of Changes in Shareholders’ Equity
151
• Annual Report 2010
Statements of Cash Flows
152
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the years ended December 31, 2010 and 2009
BAHT
NOTE
CASH FLOWS FROM OPERATING ACTIVITIES Net profit Adjustments to reconcile net profit to net cash provided by (used in) Allowance for doubtful accounts Share of profits from investments in associates 2.2 and 10 Gain on exchange rate Gain from sales of equipment Donation of equipment Depreciation of assets 12 and 13 Amortization of sinking fund 15 Provision for maintenance Provision for withholding tax deduct at source Adjustment of retention payable Gain from bargain purchase 10.2 Dividend income 10 Realization of deferred leasehold right income - related party 5 Realization of deferred leasehold right income - others Finance costs 5 Income tax expenses 26 Decrease (increase) in operating assets : Account receivables related parties Account receivables other parties Unbilled completed work Inventory Cost of real estate developments Other current assets Other non - current assets
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009 1,287,413,935.56
598,883,027.42
627,205,349.54
596,537,739.41
(711,471.08)
1,356,103.56
(2,321,838.54)
1,558,600.82
(421,954,962.86) - (155,622.85) - 181,033,182.68 5,405,121.69 5,139,627.04
(80,619,045.21) - (1,862,605.82) 2,957,619.47 169,960,500.15 5,077,961.10 4,639,857.92
- (69,765,728.09) (62,165.91) - 20,567,024.34 1,530,537.97 (4,117,754.34)
(33,915,610.59) (775,697.93) 2,957,619.47 22,015,880.53 1,530,537.87 74,522.47
- - (145,408,440.80) (64,616,271.82)
1,942,929.98 (1,002,190.75) - (35,966,583.35)
- - - (611,335,485.52)
(1,002,190.75) (695,536,334.94)
(2,483,999.96)
(2,483,999.96)
-
-
(1,938,244.29) 284,069,552.72 46,896,960.95 1,175,173,366.94
(1,372,508.09) 143,753,206.61 (46,793,493.91) 760,954,779.08
- 268,467,016.80 (44,051,922.26) 183,631,034.03
144,660,125.59 (102,295,701.62) (66,674,509.63)
2,215,468.04
1,153,141.23
(5,083,268.29)
75,184,227.10
(61,554,870.76) (150,002,133.06) 480,000.00 (577,393,989.22) 8,609,102.85 (17,375,492.51)
(1,062,711.61) 880,644,988.01 240,000.00 (459,654,295.91) 31,511,183.52 (24,571,627.54)
(6,044,544.99) (15,579,776.91) 480,000.00 398,004,426.51 5,758,704.19 (20,295,912.11)
(5,437,499.11) 815,389,978.94 240,000.00 (159,799,082.31) 3,620,580.57 (28,370,895.92)
The accompanying notes to financial statements are an integral part of these statements.
รายงานประจํ า ปี 2553
• Annual Report 2010
SEPARATE FINANCIAL STATEMENTS 2010 2009
Statements of Cash Flows (Continued) Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the years ended December 31, 2010 And 2009
BAHT
NOTE
Increase (decrease) in operating liabilities : Trade account payables - related parties Trade account payables - other parties Unearned income and income received in advance Accrued expenses Other account payables Accrued specific business tax and transfer fee Other current liabilities Retention payables Guarantee payable 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 CASH FLOWS FROM INVESTING ACTIVITIES Increase in short - term loans and advance to related parties Decrease (increase) in investments in subsidiaries 10.2 Cash received from subsidiaries acquisition 10.2 Increase in investments in associate Dividend received from subsidiaries Dividend received from associates Dividend received from other companies Decrease in deposit at financial institution with commitment Cash received from sales of building and equipment Increase in building and equipment Increase in assets for rent Increase in sinking fund Net Cash Provided by (Used in) Investing Activities
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009
SEPARATE FINANCIAL STATEMENTS 2010 2009
1,152,662.48 (7,246,120.94)
(292,883.09) (107,602,244.51)
(6,098,190.01) 1,998,738.89
5,390,095.04 (29,156,716.13)
262,199,430.53 19,844,817.42 (1,539,209.86)
(426,750,273.25) (41,148,750.28) (1,205,075.50)
(8,474,023.14) 10,664,595.90 22,731.02
(21,161,630.64) (35,461,013.43) 1,020,330.42
18,864,315.28 35,359,140.10 (7,456,625.29) 23,881,161.38 6,026,022.04
(344,768.73) (55,196,533.84) (42,224,238.50) (3,070,768.91) (3,293,265.97)
4,602,959.37 6,454,501.60 (7,517,442.33) (1,640,050.00) 7,060,921.20
(1,326,513.32) (46,213,436.35) (41,144,448.75) (524,687.90) (2,134,878.10)
731,237,045.42 (262,120,974.13) (98,124,729.95)
508,086,654.20 (216,739,384.17) (176,395,007.35)
547,945,404.93 (213,856,490.67) (31,630,474.95)
463,439,900.48 (168,649,632.28) (101,240,311.54)
370,991,341.34
114,952,262.68
302,458,439.31
193,549,956.66
(1,073.97)
(5,627,942.47)
(170,901,112.95)
(580,658,648.28)
(763,689,385.00)
240,499,979.00
- - (267,219,274.04) (2,588,250,000.00) - 395,889,729.30 9,274,986.00 13,914,713.34 35,966,583.35 63,116,281.82
(267,219,274.04) 737,774,717.85 9,274,986.00 34,916,590.35
- 34,730,597.00 (2,307,937,010.11) - 13,914,713.34 64,616,271.82
-
1,293,724,422.36 2,189,085.94 (181,197,186.79) (33,279,183.30) (3,354,687.50) (1,116,594,051.21)
- 1,862,616.82 (113,031,157.23) (70,326,192.15) (6,780,133.46)
153
1,293,724,422.36
-
2,095,628.00 (14,367,190.52) - -
775,700.93 (4,170,972.61) -
(415,880,513.18) (1,768,466,913.65)
171,193,079.20
The accompanying notes to financial statements are an integral part of these statements.
รายงานประจํ า ปี 2553
• Annual Report 2010
Statements of Cash Flows (Continued)
154
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the years ended December 31, 2010 And 2009
BAHT
NOTE
CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term loans from financial institutions Increase in debentures 18 Decrease in short - term loans from other parties and other persons 17 Increase (decrease) in short - term loans and advance from related parties Decrease in long - term loans from related party Increase (decrease) in other long term loans Proceeds from exercise of warrants Cash paid for dividend 22 Dividend paid to minority interest Cash received (paid) from minority interest Net Cash Provided by (Used in) Financing Activities Translation of financial statements differences Increase (decrease) in cash and cash equivalents, net Cash and cash equivalents, beginning of years Cash and cash equivalents, end of years 6
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009
(450,000,000.00) 6,000,000,000.00
(685,000,000.00) (450,000,000.00) - 6,000,000,000.00
(685,000,000.00) -
(420,000,000.00)
420,000,000.00
(420,000,000.00)
420,000,000.00
(232,058,040.39)
222,058,040.39
(232,058,040.39)
(550,557,892.42)
(100,000.00)
(20,624,720.00)
(423,711,125.00) - (532,013,065.36) -
819,805,500.00 91,506,680.90 (329,853,076.37) -
-
-
(909,348,070.00) - (532,013,065.36) (102,000,604.35)
601,237,322.40 91,506,680.90 (329,852,792.82) (40,000,868.71)
190.00
(21.00)
3,354,580,409.90
279,948,361.16
(1,793,390.77)
(1,277,175.75)
• Annual Report 2010
- 3,942,117,769.25 -
(254,723,507.89) -
2,607,184,309.26
(22,257,065.09) 2,476,109,294.91
110,019,527.97
909,430,084.97 3,516,614,394.23
931,687,150.06 909,430,084.97
415,108,255.26 525,127,783.23
The accompanying notes to financial statements are an integral part of these statements.
รายงานประจํ า ปี 2553
SEPARATE FINANCIAL STATEMENTS 2010 2009
525,127,783.23 3,001,237,078.14
Statements of Cash Flows (Continued) Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the years ended December 31, 2010 and 2009
BAHT
NOTE
CONSOLIDATED FINANCIAL STATEMENTS 2010 2009
155
SEPARATE FINANCIAL STATEMENTS 2010 2009
SUPPLEMENTAL CASH FLOWS INFORMATION: OPERATING ACTIVITIES, INVESTING ACTIVITIES AND FINANCING ACTIVITIES NOT AFFECTING CASH The increase in proportion of investment in subsidiaries Increase in investments in subsidiaries Decrease in investments in associates
(280,312,989.89) 280,312,989.89
- -
Increase in cash and cash equivalents, end of period from the increase in proportion of investment in subsidiaries on acquisition date Increase in cash and cash equivalents, end of period (30,710,983.77) - Increase in account receivables related parties (3,460.79) - Increase in account receivables other parties (20,447,958.91) - Increase in cost of real estate developments (1,410,856,508.61) - Increase in other current assets (2,308,721.53) - Increase in building and equipment (35,394,695.05) - Increase in other non - current assets (197,792.30) - Increase in trade account payables related parties 2,483,782.80 - Increase in trade account payables other parties 7,823,643.95 - Increase in accrued expenses 5,369,662.81 - Increase in other account payables 724,800.43 - Increase in accrued specific business tax and transfer fee 345,637.30 - Increase in accrued income tax 9,311,645.70 - Increase in other current liabilities 16,846,075.27 - Increase in retention payables 107,305.00 - Increase in guarantee payable 166,650.00 - Increase in short - term loans from related party 380,000,000.00 - Increase in retained earnings 576,740,917.70 - The accompanying notes to financial statements are an integral part of these statements.
- -
-
-
-
-
-
- - - - -
-
-
-
- - -
-
- - - - -
-
- -
-
รายงานประจํ า ปี 2553
• Annual Report 2010
Notes to Financial Statements
156
Hemaraj Land and Development Public Company Limited and Its Subsidiaries For the years ended December 31, 2010 and 2009
1. GENERAL INFORMATION
1.1 General matter
On August 15, 1988, Hemaraj Land and Development Public Company Limited (“the Company”) was incorporated under the Civil and Commercial Code of Thailand and was subsequently listed on the Stock Exchange of Thailand and transformed as a Public Company Limited on July 10, 1992 and July 12, 1993, respectively. The Company, which is the parent company of Hemaraj Group, operates its business as a real estate developer 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”), in the names of the Company and its 3 subsidiaries as follows:
Company Name
Industrial Estate
Hemaraj Land and Development Plc. Hemaraj Chonburi Eastern Industrial Estate Co., Ltd. Hemaraj Eastern (Map Ta Phut) Eastern Seaboard Industrial Estate Eastern Seaboard (Rayong) Co., Ltd. (Rayong) Hemaraj Eastern Seaboard Industrial Hemaraj Eastern Estate Co.,Ltd. Seaboard
2.
รายงานประจํ า ปี 2553
Sriracha district, Chonburi province Muang district, Rayong province Pluak Daeng district, Rayong province Pluak Daeng district, Rayong province
Industrial zone development projects The projects are operating under the names of 2 subsidiaries as follows: Company Name
Industrial Zone
Hemaraj Saraburi Industrial Land Hemaraj Saraburi Company Limited (Formerly known as “SIL Industrial Land Company Limited”) Hemaraj Rayong Industrial Land Hemaraj Rayong Company Limited (Formerly known as “RIL Industrial Land Company Limited”)
Site Location
3.
Site Location
Nongkae district, Saraburi province Ban kai district, Rayong province
A condominium for sales being developed by the Company in the project name of The Park Chidlom, located at Chidlom Road, Bangkok. 4. Service business related to the mentioned industrial estates consisting of service providing for public utilities, office building and prefabricated factory for sale and lease, land rental, commercial plaza rental, pipe rack rental in Industrial Estates, building contractor and others. Hemaraj Group’s head office is located at 18th floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang subdistrict, Suanluang district, Bangkok, Thailand 10250.
• Annual Report 2010
1.2 The Central Administrative Court ordered to suspend the construction of 76 projects in Rayong Province
Reference is made to the injunction of the Central Administrative Court, ordering 8 government authorities to order the temporary suspension of the projects or activities altogether 76 projects in Rayong Province until the Court renders a judgment or an order otherwise except the projects or activities which had received the permits before the effectiveness of the Constitution of Thailand B.E.2550 and the projects or activities which are not required the Environmental Impact Assessment (EIA) according to the Declaration of the Ministry of Natural Resources and Environment dated June 16, 2009. On December 2, 2009, the Supreme Administrative Court has an order amending the injunction order of the Central Administrative Court’s the temporary suspension of the 76 projects to release 11 projects from such suspension and remain other 65 projects suspended in which if the suspending 65 projects have an operation under Constitutional Law of Thailand B.E. 2550 section 67 paragraph 2, the effected projects could submit a motion to release from such temporary suspension. In January 2010, one of the subsidiary’s project which is effected from the court order, had requested the Industrial Estate Authority of Thailand (IEAT) to consider whether the obtaining of Industrial Estate permission for these expansion land from IEAT since September 2006 are considered to be such permission by the government allowing according to the specific law, which means that such project has obtained the permission before the Constitution Announcement (B.E. 2550) as the Central Administrative Court’s order in December 2009, and it was informed by IEAT that the Company is the one who has obtained the permission in the mean of Administrative Court’s consideration. On 2 September 2010, the Central Administrative Court has rendered a judgement. In case any projects or activities which received the permit license after the effective date of Constitution of Thailand of the year 2007 and have been in the list of seriously harmful projects or activities effecting to local community according to Ministry of Natural Resource and Environment announcement dated August 31, 2010, and have not yet conducted completely in term of the Section 67 Paragraph 2 of Constitution of Thailand of the year 2007, such projects or activities would be withdrawn the permit license. The injunction order of the Central Administrative Court shall end on the date of judgment except those harmful projects or activities as mentioned above, which the injunction order shall continue to be in effect until the case is final or until the Supreme Administrative Court will order otherwise. As the result of the Central Administrative Court’s order and the letter of IEAT was informed that as 2 expansion project of the Company’s group were not within those projects in the meaning of seriously harmful projects impacting to local community according to Ministry of Natural Resource and Environment dated August 31, 2010, therefore, it shall be able to procede normally.
157
1.3 Adoption of new accounting standards
In May 2009, the Federation of Accounting Professions (FAP) has issued Notifications No. 12/2552 regarding the renumbering of Thai Accounting Standards to match correspondingly with the International Accounting Standards. Therefore the numbers of Thai Accounting Standards as used in these financial statements are corresponding to those according to this notification. During the current year, the Federation of Accounting Professions (FAP) has issued a number of revised and new accounting standards which have been published in the Royal Gazette as follows : 1) An accounting standard which is effective for the current year as follows : Framework for the Preparation and Presentation of Financial Statements (revised 2009)
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However, the management has considered the effect of this accounting standard that it does not have any significant effect on the financial statements for the current year. 2) Accounting standards and financial reporting standards which are not effective for the current year as follows :
Effective date
Accounting Standard No. 1 (revised 2009) Presentation of Financial Statements January 1, 2011 Accounting Standard No. 2 (revised 2009) Inventories January 1, 2011 Accounting Standard No. 7 (revised 2009) Statement of Cash Flows January 1, 2011 Accounting Standard No. 8 (revised 2009) Accounting Policies, Changes in January 1, 2011 Accounting Estimates and Errors Accounting Standard No. 10 (revised 2009) Events after the Reporting Period January 1, 2011 Accounting Standard No. 11 (revised 2009) Construction Contracts January 1, 2011 Accounting Standard No. 12 Income Taxes January 1, 2013 Accounting Standard No. 16 (revised 2009) Property, Plant and Equipment January 1, 2011 Accounting Standard No. 17 (revised 2009) Leases January 1, 2011 Accounting Standard No. 18 (revised 2009) Revenue January 1, 2011 Accounting Standard No. 19 Employee Benefits January 1, 2011 Accounting Standard No. 20 (revised 2009) Accounting for Government Grants and January 1, 2013 Disclosure of Government Assistance Accounting Standard No. 21 (revised 2009) The Effects of Changes in January 1, 2013 Foreign Exchange Rates Accounting Standard No. 23 (revised 2009) Borrowing Costs January 1, 2011 Accounting Standard No. 24 (revised 2009) Related Party Disclosures January 1, 2011 Accounting Standard No. 26 Accounting and Reporting by January 1, 2011 Retirement Benefit Plans Accounting Standard No. 27 (revised 2009) Consolidated and Separate January 1, 2011 Financial Statements Accounting Standard No. 28 (revised 2009) Investments in Associates January 1, 2011 Accounting Standard No. 29 Financial Reporting in January 1, 2011 Hyperinflationary Economies Accounting Standard No. 31 (revised 2009) Interests in Joint Ventures January 1, 2011 Accounting Standard No. 33 (revised 2009) Earnings per Share January 1, 2011 Accounting Standard No. 34 (revised 2009) Interim Financial Reporting January 1, 2011 Accounting Standard No. 36 (revised 2009) Impairment of Assets January 1, 2011 Accounting Standard No. 37 (revised 2009) Provisions, Contingent Liabilities and January 1, 2011 Contingent Assets Accounting Standard No. 38 (revised 2009) Intangible Assets January 1, 2011 Accounting Standard No. 40 (revised 2009) Investment Property January 1, 2011 Financial Reporting Standard No. 2 Share - based Payments January 1, 2011 Financial Reporting Standard No. 3 (revised 2009) Business Combinations January 1, 2011 Financial Reporting Standard No. 5 (revised 2009) Non - current Assets Held for Sale January 1, 2011 and Discontinued Operations Financial Reporting Standard No. 6 Exploration for and Evaluation of January 1, 2011 Mineral Resources Financial Reporting Interpretation No. 15 Agreements for the Construction of January 1, 2011 Real Estate
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• Annual Report 2010
The Company will apply the related Accounting Standards, Financial Reporting Standards and Financial Reporting Interpretation on the effective date, except for the Financial Reporting Standard No. 3 (revised 2009) that the Company early applied before the effective date. The management of the Company has considered that 1. Accounting Standard No. 20 (revised 2009), Accounting Standard No. 31 (revised 2009), Financial Reporting Standard No. 2 and Financial Reporting Standard No. 6 are not relevant to the Company’s business. 2. Accounting Standard No. 12, Accounting Standard No. 16 (revised 2009), Accounting Standard No. 18 (revised 2009), Accounting Standard No. 19, Accounting Standard No. 40 (revised 2009) and Financial Reporting Interpretation No. 15 are still considered the effect to the financial statements for the year in which they are initially applied. 3. The other Accounting Standards and Financial Reporting Standards are considered not having material effect on the financial statements.
159
1.4 Transfer fee and specific business tax
The Royal Decree issued pursuant to the Revenue Code relating to the reduction of tax (No. 472 B.E. 2551 and No. 488 B.E. 2552), Announcement of Interior Ministry relating to collection of fees for registration and transfer pursuant to the Land Law in case of the promotion of sale and purchase of real estates according to the criteria set by the cabinet and Announcement of Interior Ministry relating to the collection of fees for registration of condominium unit in case of the promotion sale and purchase of condominium unit according to the criteria set by the cabinet declare to reduce specific business tax from 3.3% to 0.11% for registration made during March 28, 2008 until March 28, 2010 and reduce registration fees for transfer real estates from 2% to 0.01% % for registration made during March 28, 2008 until June 30, 2010.
2. BASIS OF CONSOLIDATED FINANCIAL STATEMENT PRESENTATION
2.1 Basis for preparation of financial statements
2.2 Basis for preparation and presentation of consolidated financial statements
The financial statements of the company have been prepared in accordance with generally accepted accounting standards including related interpretations and guidelines promulgated by the Federation of Accounting Professional. The Company’s financial statements are prepared in the Thai language as required by Thai law, and translated into English for the convenience of a reader of the financial statements. Certain amounts in the 2009 financial statements have been reclassified to conform to the 2010 financial statement presentation, without effect on previously reported net profit and shareholders’ equity. The consolidated financial statements incorporate the financial statements of the Company and its majority owned directly and indirectly (over 50% of their paid-up capital) in subsidiaries and are prepared on the same basis as the consolidated financial statements for the year ended December 31, 2009. All subsidiaries were registered and incorporated in Thailand except H-International (BVI) Company Limited and Hemaraj International Limited which were incorporated in British Virgin Islands and Cayman Islands, respectively. In addition, the consolidated and the Company’s financial statements for the years ended December 31, include share of profits (losses) from associates as follows:
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MILLION BAHT
2010
2009
Cofely (Thailand) Company Limited * (Formerly known as “Elyo-H Facilities Management Limited”) Hemaraj Saraburi Industrial Land Company Limited ** (Formerly known as “SIL Industrial Land Company Limited”) (Consolidated financial statements) (Note 10) GHECO - One Company Limited ** Houay Ho Thai Company Limited ** (Consolidated financial statements) Total
3.63
3.60
14.81
14.85
393.51 10.01
74.25 (12.08)
421.96
80.62
* Based on the information from the financial statements which were provided by the management and were not audited by an auditor. ** Based on the information from the financial statements which were audited by other auditors.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 The measurement bases used in preparing the financial statements
3.2 Cash and cash equivalents
Inventories are valued at the lower of cost (the average cost method) or net realizable value.
3.6 Cost of real estate developments
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Trade account receivables are stated at net realizable value. The Company and subsidiaries provide allowance for doubtful accounts for estimated losses that may incurred in collection of receivables. The allowance for doubtful accounts is generally considered from collection experience and aging analysis. Allowance for doubtful accounts is based on receivables from services which are overdue by more than 90 days.
3.5 Inventories
Available-for-sale securities consist of investments in marketable securities, which are stated at fair value (net of allowance for investments revaluation). Gain (loss) on investment revaluation is included in the equity.
3.4 Trade account receivables and allowance for doubtful accounts
Cash and cash equivalents represent cash on hand and at banks, and temporary investments net of cash at banks pledged as collateral.
3.3 Temporary investments
Other than those disclosed in other topics, significant accounting policies and other notes to the financial statements, the financial statements are prepared on the historical cost basis.
Cost of real estate developments consists of land costs, development costs, pre-fabricated factory costs, condominium construction costs, and finance costs on loans 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.
• Annual Report 2010
3.7 Capitalization of borrowing costs
Investments A. Investments in subsidiaries and associates are recorded by using the cost method in the separate financial statements. Investments in associates are recorded by using equity method in the consolidated financial statements. B. Other investments represent investments in related and other companies which are stated at cost net of provision for impairment loss. Impairment loss on other investments is included in the statements of income. Loans The Company and its subsidiaries have recorded allowance for doubtful debts by using uncollectible amounts, based on a review of the current financial status and the repayment ability. The recognition of interest income is ceased when overdue by more than 180 days.
Land for rent is stated at cost. Assets for rent, excepted land, are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 15 years for pipe rack and 20 years for building. No depreciation is provided for land for rent.
3.10 Property, plant and equipment
161
3.9 Assets for rent
Borrowing costs are expensed in the period in which they are incurred, except borrowing costs of long term loan and loan from other parties in relation to the cost of real estate should be treated as part of the cost of the relevant assets. Capitalization should cease when substantially all of the activities necessary to prepare the asset for its intended use or sale are completed and should be suspended during periods in which active development is interrupted. The Company and its subsidiaries will recognize impairment loss when the carrying amount of an asset exceeds its recoverable amount.
3.8 Investments and loans
Cost of real estate developments is stated at the lower of cost or net realizable value. Loss on projects revaluation is included in the statements of income.
Land is stated at cost. Property, plant and equipment are stated at cost less accumulated depreciation and provision for impairment loss. Motor vehicles under financial lease are stated at fair value less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 5 years for equipment and 20 years for building and structures. No depreciation is provided for land.
3.11 Leasehold right and land held for commercial purposes
Leasehold right and land held for commercial purposes consist of land leasehold right, land costs, development costs and capitalized finance costs on loans for undeveloped projects and projects which were temporarily suspended from development. Leasehold land and land held for commercial purposes are stated at the lower of cost or net realizable value. Loss on projects revaluation is included in the statements of income.
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3.12 Sinking fund
3.13 Deferred interest expense on hire-purchase agreement
Salaries, wages, bonuses, contributions to the social security fund and provident fund and other benefits are recognized as expenses when incurred. The Company and its subsidiaries do not recognize liabilities in respect of employee benefit potentially payable under the Thai Labour Law.
3.17 Deferred leasehold right income
Unearned income and income received in advance represents the amounts received from real estate and condominium sales contracts, in excess of the revenue recognized by using the percentage of completion method, and from utilities and rental income received in advance.
3.16 Employee benefits
The Company and its subsidiaries have evaluated the impairment of properties, plant and equipment and other assets when the event is occurred or there is the situational change, which indicates that the recoverable amount of assets will be lower than their book value. The Company and its subsidiaries will recognize the loss from impairment as an expense in the statements of income.
3.15 Unearned income and income received in advance
Deferred interest expense on hire-purchase agreement, which is amortized according to the effective rate, presented net from hire-purchase payable.
3.14 Impairment of assets
The Company and its subsidiaries have recorded a fund for the major maintenance and replacement of utilities systems and facilities for the customers in the industrial estate, under the joint operating agreements with the Industrial Estate Authority of Thailand (“IEAT”) to be Deferred Sinking Fund and has recorded amortization to be cost of services by the straightline method over 20 years of useful lives.
Deferred leasehold right income represents leasehold right received from rental of land, building, pipe rack and leasehold right income to produce and distribute the industrial water which are recognized as revenue over the period of rental contract.
3.18 Revenue and expense recognition
Other than those disclosed in other topics, the policy of the Company and its subsidiaries on revenue and expense recognition are as follows: A. Recognition of revenue and cost of land sales Revenue from land sales are recognized upon signing of contract and receiving of installments by the percentage of completion method, using the ratio of actual development costs incurred to total estimated development costs for each projects excluding land cost. Cost of sales is calculated from the realized sales contracts based on the ratio of total estimated project costs to total estimated project sales of each projects. Total estimated costs and sales of each project shall be revised when there are significant changes in the estimated costs and expected sales price of each project.
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• Annual Report 2010
B. C.
D.
E.
Recognition of revenue and cost of pre-fabricated factory sales Revenue and cost of pre-fabricated factory sales are recognized upon signing of sales contract on the percentage of completion method. Recognition of revenue and cost of condominium sales The Company recognizes the revenue and cost of condominium sales by the percentage of completed work which is based on the proportion of actual costs (excluding cost of land) to the total estimated costs which are estimated by the Company’s engineer advisor. The Company recognizes revenue when sales contracts have been executed not less than 40% of the area opened for sales and collection received exceeds 20% of each contract value, and the progress of completed construction work is more than 10%. Recognition of income and cost of services 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 plaza, 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. Revenue and cost from mini and micro pre-fabricated factory construction are recognized upon signing of contract and receiving of installments by the percentage of completion method. The recognition of income from public utilities service is ceased when the customers cease their business operations and have payment difficulties. Other incomes and expenses. Other incomes, selling and administration expense, finance costs and other expenses are recognized on the accrual basis.
163
3.19 Accounts in foreign currency
A.
The financial statements of our overseas subsidiary are translated into Baht for consolidation purposes using rates of exchange as follows: A.1 Assets and liabilities are translated at the average selling and purchasing price of exchange rate at the end of the year. A.2 Revenues and expenses are translated at the average selling and purchasing price of exchange rate at the end of each month. A.3 Share capital is translated at the exchange rate on the transaction date. Translation of financial statements differences of foreign financial statements are included under shareholders’ equity. B. Other foreign currency transactions occurring during the year are converted into Baht at the rates prevailing on the dates of the transactions. Assets and liabilities at the end of the year are converted into Baht at the rates of exchange on that date. Gain and loss on exchange rate is included in the statements of income.
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3.20 Corporate income tax
3.21 Earnings per share
Corporate income tax is recognized on the accrual basis. Basic earnings per share is computed by dividing net profit attributable to ordinary shareholders for the year by the weighted average number of ordinary shares issued and paid up during the year.
4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ.
5. TRANSACTIONS WITH RELATED PARTIES
The Company has certain transactions with its related parties. Significant balances and intercompany transactions are eliminated from the consolidated financial statements. Such transactions, which have been concluded on the term and the basis agreed between the relevant parties. Certain loans between each party are related to the business jointly operated. Enterprises that directly or indirectly through one or more intermediaries, control, or under common control with the Company by through same shareholders and co-directors as at December 31, were as follows:
COMPANY NAME
TYPE OF BUSINESS RELATIONSHIP
Subsidiaries Eastern Industrial Estate Company Limited Industrial Estate Development Common shareholders and co-directors Eastern Seaboard Industrial Estate Industrial Estate Development ,, (Rayong) Company Limited Hemaraj Eastern Seaboard Industrial Industrial Estate Development ,, Estate Company Limited Hemaraj Saraburi Industrial Land Industrial Estate Development ,, Company Limited (Formerly known as “SIL Industrial Land Company Limited”) Hemaraj Rayong Industrial Land Industrial Estate Development ,, Company Limited (Formerly known as “RIL Industrial Land Company Limited”) Eastern Pipeline Services Company Limited Pipe Rack Rental ,, H-International (BVI) Company Limited Holding Company ,, Hemaraj International Limited Holding Company ,, H-Construction Management and Design and Construction ,, Engineering Company Limited Supervision Service The Park Residence Company Limited Real Estate Development ,, and Service Management Hemaraj Water Company Limited Water Resources Development ,, and Management
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• Annual Report 2010
PERCENTAGE OF HOLDING 2010 2009 99.99
99.99
60.00
60.00
99.99
99.99
99.99
-
99.99
-
99.99 100.00 100.00 99.99
99.99 100.00 100.00 99.99
99.99
99.99
99.99
99.99
COMPANY NAME
TYPE OF BUSINESS RELATIONSHIP
SME Factory Company Limited Sell and Lease of Factory Common shareholders and co-directors H - Phoenix Property Company Limited Condominium office ,, for sales, rent and services Hemaraj Clean Water Company Limited Produce and distribute ,, the industrial water Associates Cofely (Thailand) Company Limited Facilities Management Common (Formerly known as “Elyo-H Facilities Service shareholders Management Limited”) and co-directors GHECO - One Company Limited Electricity and Power ,, Generation Hemaraj Saraburi Industrial Land Industrial Estate Development ,, Company Limited (Formerly known as “SIL Industrial Land Company Limited”) Hemaraj Rayong Industrial Land Industrial Estate Development ,, Company Limited (Formerly known as “RIL Industrial Land Company Limited”) Houay Ho Thai Company Limited Holding Company ,, Houay Ho Power Company Limited Electricity and Power ,, Generation Related Companies Sriracha Harbor Public Company Limited Port Service and Common Transportation shareholder and co-directors Eastern Fluid Transport Company Limited Pipe Rack Maintenance ,, Steel Top Company Limited Steel Manufacturer Relationship through and Distributor director Siam Food Products Public Company Processing Agriculture Co-investors Limited Producer Teo Hong Silom Company Limited Facilities Management Service ,, Cementhai Holding Company Limited Holding Company ,, Glow Energy Public Company Limited Energy ,, Glow IPP2 Holding Company Limited Holding Company ,, Cofely South East Asia Pte Ltd. Energy ,,
PERCENTAGE OF HOLDING 2010 2009 99.99
99.99
99.99
99.99
99.99
99.99
39.99
39.99
35.00
35.00
-
25.00
-
25.00
51.00 12.75
51.00 12.75
6.40
6.40
15.00 -
15.00 -
-
-
- - - - -
-
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• Annual Report 2010
166
As at December 31, balances with related parties, which were shown in the balance sheets, were as follows:
ASSETS
THOUSAND BAHT
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS INTERCOMPANY
2010
2009
2010
2009
Short - term loans and advance to related parties: Subsidiaries: Eastern Industrial Estate - - 110,684 - Company Limited Eastern Seaboard Industrial Estate - - 4,270 55,138 (Rayong) Company Limited Hemaraj Eastern Seaboard Industrial - - 124,000 321,169 Estate Company Limited Hemaraj Saraburi Industrial Land - - 380,000 - Company Limited (Formerly known as “SIL Industrial Land Company Limited”) Eastern Pipeline Services Company - - 30,778 20,067 Limited SME Factory Company Limited - - 29,192 27,268 Hemaraj Clean Water Company Limited - - 128,940 24,353 H - Phoenix Property Company Limited - - 220,275 270,829 Associates: Cofely (Thailand) Company Limited 5,629 5,628 5,629 5,628 (Formerly known as “Elyo-H Facilities Management Limited”) Related company : Sriracha Harbor Public Company 11,355 11,355 11,355 11,355 Limited * Total 16,984 16,983 1,045,123 735,807 Less Allowance for doubtful debts (11,355) (11,355) (11,355) (11,355) Net 5,629 5,628 1,033,768 724,452
TERM
MLR - 0.50% and dividend receivable Advance and dividend receivable MLR - 0.50% and dividend receivable MLR - 0.50%
MLR - 0.50% and dividend receivable MLR - 0.50% MLR - 0.50% and dividend receivable MLR - 0.50% MLR
Rate as mentioned in business reorganization plan
• Sriracha Harbor Public Company Limited’s balance had incurred since 1997 affected from the economic crisis which the Company provided the provision for doubtful debt in full amount as the Company’s basis. This company entered into the Business Reorganization Plan under the Bankruptcy Court, and now is under the process of the Business Reorganization Plan. The Company has not yet adjusted the provision for the receivable under the Business Reorganization Plan and will adjust accordingly when obtaining the settlement from it as the Plan
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• Annual Report 2010
Balance of assets with related parties and its movement for the year 2010 were as follows:
THOUSAND BAHT As of 31st December, 2009
Consolidated financial statements Short - term loans and advance to related parties: Associates (1) Related company Total Less Allowance for doubtful debts Net Separate financial statements Short - term loans and advance to related parties: Subsidiaries Associates Related company Total Less Allowance for doubtful debts Net
5,628 11,355 16,983 (11,355) 5,628
During the year Increase Decrease
394,305 113 394,418 - 394,418
As of 31st December, 2010
(394,304) (113) (394,417) - (394,417)
5,629 11,355 16,984 (11,355) 5,629
718,824 1,198,125 (888,810) 5,628 394,305 (394,304) 11,355 113 (113) 735,807 1,592,543 (1,283,227) (11,355) - - 724,452 1,592,543 (1,283,227)
1,028,139 5,629 11,355 1,045,123 (11,355) 1,033,768
167
(1) The movement during the year 2010 of associates included loan to Hemaraj Saraburi Industrial Land Company Limited (HSIL) in the amount of Baht 380 million (Note 10.2), interest income in the amount of Baht 0.39 million and dividend income in the amount of Baht 13.91 million.
Liabilities
THOUSAND BAHT
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS INTERCOMPANY 2010 2009 2010 2009 TERM Short - term loans and advance from related parties: Related company : Glow Company Limited (1) - 237,394 - 237,394 Siam Food Products Public - 30,000 - - Company Limited Total - 267,394 - 237,394 Long - term loans from related party: Subsidiary: H-International (BVI) Company Limited - - 988,693 1,058,559 Deferred leasehold right income: Subsidiary: Hemaraj Clean Water Company Limited (2) Deferred leasehold right income - - 62,100 62,100 Less Accumulated amortization - - (6,220) (3,736) Deferred leasehold right income, net - - 55,880 58,364
MLR – 2% Dividend payable
-
Rate mutually agreed between both parties
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(1) The company had entered into the Short Term Loan Agreement with Glow Company Limited for the purpose of acquisition and subscription of share capital increase in Houay Ho Thai Company Limited (51% share holding) which is already repaid in 2010. (2) The Company and its 3 subsidiaries have entered into 25-year leasehold right contracts, in the total amount of Baht 559 million, for production and distribution of industrial water with Hemaraj Clean Water Company Limited (a subsidiary). Balance of Liabilities with related parties and its movement for the year 2010 were as follows:
THOUSAND BAHT
st
As of 31 December 2009 Consolidated financial statements Short - term loans and advance from related parties: Related parties Separate financial statements Short - term loans and advance from related parties: Subsidiaries Related parties Long - term loans from related party: Subsidiary
As of 31st December 2010
267,394
74,399
(341,793)
-
- 237,394
467,153 2,399
(467,153) (239,793)
-
1,058,559
-
(69,866)
988,693
The significant transactions with related parties for the years ended December 31, were as follows:
MILLION BAHT
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS INTERCOMPANY 2010 2009 2010 2009 COST POLICY
During the year Increase Decrease
Service income 1.02 0.01 14.59 11.53 Interest income 0.50 0.25 24.28 10.66 Commission and 23.13 33.18 76.54 67.00 management income Cost of service 13.15 12.18 1.27 1.21 Finance costs 2.40 5.34 2.92 24.24 Deferred leasehold right income - - 2.48 2.48
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• Annual Report 2010
Market price MLR – 0.5% and MLR 5% - 10% of contract price and 5% of service income received Market price MLR – 2.00% and MLR – 0.50% Rate mutually agreed between both parties
6. CASH AND CASH EQUIVALENTS
For the purpose of preparation of the statements of cash flows in accordance with the relevant Accounting Standard, as of December 31, cash and cash equivalents consisted of:
THOUSAND BAHT
Cash and deposits at financial institutions Current investments - Time deposits Deposit at financial institutions with commitment Total Less Deposit at financial institutions with commitment Cash and cash equivalents
169
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 563,033 2,953,581 766,177 4,282,791
904,334 5,096 2,059,901 2,969,331
247,737 2,753,500 766,177 3,767,414
525,111 17 2,059,901 2,585,029
(766,177) 3,516,614
(2,059,901) 909,430
(766,177) 3,001,237
(2,059,901) 525,128
7. TRADE ACCOUNT RECEIVABLES, NET
As of December 31, trade account receivables, net consisted of:
THOUSAND BAHT
Related parties Service receivables Accrued service income - Subsidiaries Accrued service income - Related parties Accrued service income Less Allowance for doubtful accounts Service receivables, net Trade account receivables - related parties, net Other parties Service receivables Accrued service income Less Allowance for doubtful accounts Service receivables, net Real estate sales contracts receivables Total value of contracts signed Installments due Less Installments received Installments receivables, net Trade account receivables - other parties, net
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 - 7,476 7,476 (7,405) 71 71
- 9,691 9,691 (7,405) 2,286 2,286
34,259 - 34,259 - 34,259 34,259
26,907 2,268 29,175 29,175 29,175
156,579 (22,116) 134,463
107,211 (22,445) 84,766
34,892 (17,257) 17,635
28,854 (19,586) 9,268
31,001,064 30,616,442 (30,555,658) 60,784 195,247
28,859,504 28,294,718 (28,246,504) 48,214 132,980
8,414,177 8,335,266 (8,335,266) - 17,635
7,879,676 7,690,249 (7,690,249) 9,268
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As at December 31, unbilled completed work and unearned income comprised:
THOUSAND BAHT
Accumulated amount recognised as revenue on percentage of completion basis Less Installments due Net The balance comprises : Unbilled completed work Unearned income Net
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 30,214,752 (30,616,442) (401,690)
27,998,012 (28,294,718) (296,706)
8,413,334 (8,335,266) 78,068
7,736,000 (7,690,249) 45,751
365,485 (767,175) (401,690)
215,483 (512,189) (296,706)
78,961 (893) 78,068
63,381 (17,630) 45,751
As of December 31, trade account receivables - other parties, net classified by aging were as follows:
THOUSAND BAHT
Accrued service income 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 Accrued service income, net Real estate sale contracts receivables Less than 3 months Over 3 months to 6 months Over 6 months to 12 months Over 12 months Total real estate sale contracts receivables Trade account receivables - other parties, net
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CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 134,463 2,383 199 19,534 156,579 (22,116) 134,463
84,766 868 1,423 20,154 107,211 (22,445) 84,766
17,635 - - 17,257 34,892 (17,257) 17,635
9,268 526 1,357 17,703 28,854 (19,586) 9,268
60,784 - - - 60,784 195,247
48,214 - - - 48,214 132,980
- - - - - 17,635
9,268
For the allowance for doubtful accounts of related party receivables in the amount of Baht 7.40 million and other parties in the amount of Baht 16.71 million, which obtain facility services in the industrial estate, are provided and charged by the Company. With the economic crisis in 1997 in Thailand, these companies have encountered with operation problem and the Company provided the provision for doubtful debt in full amount as the Company’s basis. Consequently, these companies entered into the Debt Restructure under CDRAC or Business Reorganization Plan under the Bankruptcy Court. The Company has not yet adjusted the provision for these receivables under the Business Reorganization Plan until obtaining the settlement as the Plan or debt restructure from each receivable.
• Annual Report 2010
Trade account receivables, net (Continued)
Balance of Allowance for doubtful accounts and its movement for the years ended December 31, were as follows:
THOUSAND BAHT
Related parties Beginning balance Additional allowance during the year Received during the year Ending balance Other parties Beginning balance Additional allowance during the year Received during the year Ending balance
171
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 7,405 - - 7,405
7,405 - - 7,405
- - - -
-
22,445 4,853 (5,182) 22,116
21,089 2,353 (997) 22,445
19,586 - (2,329) 17,257
18,028 1,944 (386) 19,586
8. UNEARNED INCOME AND INCOME RECEIVED IN ADVANCE
As of December 31, unearned income and income received in advance consisted of:
THOUSAND BAHT
Unearned income Sales contracts value Less Installments received Installments receivables Less Deferred income Unearned income Deposit for real estate Income received in advance – service and rental Total unearned income and income received in advance
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 (9,407,409) 9,236,825 (170,584) 920,998 750,414 23,917 87,552
(10,834,878) 10,739,822 (95,056) 607,245 512,189 2,000 85,494
(211,459) 211,509 50 843 893 7,156 3,656
(211,459) 225,509 14,050 3,580 17,630 2,000 549
861,883
599,683
11,705
20,179
รายงานประจํ า ปี 2553
• Annual Report 2010
9. COST OF REAL ESTATE DEVELOPMENTS, NET
172
As at December 31, cost of real estate developments, net consisted of:
THOUSAND BAHT
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009
Land cost under developments 8,757,844 Project development costs 14,476,996 Capitalized finance costs 2,604,139 Additional utility costs 7,192 Advance for constructions 22,236 Total 25,868,407 Less Accumulated costs transferred to cost of land sales (17,101,081) Accumulated costs transferred to assets for rent (1,576,960) Accumulated costs transferred for debt settlement (143,838) Cost of real estate developments, net 7,046,528 Capitalized finance costs for the year ended December 31 included in cost of real estate developments
32,538
7,682,741 13,491,101 2,571,601 7,751 3,023 23,756,217
1,909,333 4,293,424 750,000 7,022 154 6,959,933
1,909,333 4,285,231 750,000 7,581 1,150 6,953,295
(15,729,303) (1,511,095) (143,838) 6,371,981
(5,282,927) (46,774) (143,838) 1,486,394
(4,878,285) (46,774) (143,838) 1,884,398
64,041
-
4,125
Information of cost of real estate developments of Hemaraj Land and Development Public Company Limited, Eastern Industrial Estate Company Limited, Eastern Seaboard Industrial Estate (Rayong) Company Limited, Hemaraj Eastern Seaboard Industrial Estate Company Limited, Hemaraj Saraburi Industrial Land Company Limited, Hemaraj Rayong Industrial Land Company Limited and SME Factory Company Limited is as follows:-
Valuation Stated in the Financial Statements
As at December 31, 2010 and 2009, cost of real estate developments is stated at the lower of cost and net realisable value for the projects in the same area.
Obligation of Assets
รายงานประจํ า ปี 2553
As at December 31, 2010 and 2009, the portion of land in the projects of the Company and the subsidiaries has been mortgaged as collateral for loans from local financial institutions, other companies and other person.
• Annual Report 2010
รายงานประจํ า ปี 2553
Company
Paid-up Capital (Million Baht) 2010 2009
- - - - -
- - - - -
17.15 0.25 - 37.00 480.00 645.00 3,935.04
- 56.34 0.07 0.03
1,003.44
1,080.96
214.80
400.00
17.15 0.25 - 37.00 480.00 645.00 2,931.60
- 56.34 0.07 0.03
-
1,080.96
214.80
400.00
16.65 1.92 126.04 36.02 484.88 668.36 7,703.42
1,007.29 83.16 997.48 0.03
1,015.01
2,224.18
549.36
493.04
17.86 1.34 118.15 37.21 483.57 663.72 5,647.97
- 108.85 1,074.29 0.03
-
2,076.97
550.13
515.85
- 0.90 - - 2.40 63.85 534.30
- 23.25 - -
-
248.90
108.00
87.00
5.00 0.05 6.40 50.31 651.35
17.59 -
-
50.00
60.00
462.00
Net booked value in the Dividend for the year ended portion of investments December 31, 2010 2009 2010 2009
* The financial statements of those 2 subsidiaries were audited by other auditor. The consolidated financial statements as at December 31, 2010 of the company included the financial statement of those 2 subsidiaries with the total assets as at December 31, 2010 in the amount of Baht 1,499.92 million and the total revenue as from October 1, 2010 to December 31, 2010 in the amount of Baht 29.42 million.
-
-
- - - - - - -
-
-
- - - - - - -
-
-
Investments (Million Baht) Percentage of shares held Consolidated financial Separate financial by the Company (Percent) statements statements (at Cost) 2010 2009 2010 2009 2010 2009
Subsidiaries: Common shareholders and co-directors Eastern Industrial Estate Company Limited 400.00 400.00 99.99 99.99 Eastern Seaboard Industrial Estate (Rayong) Company Limited 358.00 358.00 60.00 60.00 Hemaraj Eastern Seaboard Industrial Estate Company Limited 1,000.00 1,000.00 99.99 99.99 Hemaraj Saraburi Industrial Land Company Limited (*) (Formerly known as “SIL Industrial Land Company Limited”) (1) 500.00 - 99.99 - Hemaraj Rayong Industrial Land Company Limited (*) (Formerly known as “RIL Industrial Land Company Limited”) (2) 1,000.00 - 99.99 - Eastern Pipeline Services Company Limited (3) 100.00 100.00 99.99 99.99 H-International (BVI) Company Limited (4) 0.08 0.08 100.00 100.00 Hemaraj International Limited (5) 0.03 0.03 100.00 100.00 H-Construction Management and Engineering Company Limited 17.15 17.15 99.99 99.99 The Park Residence Company Limited 0.25 0.25 99.99 99.99 Hemaraj Water Company Limited (6) 100.00 100.00 99.99 99.99 SME Factory Company Limited 37.00 37.00 99.99 99.99 H - Phoenix Property Company Limited (7) 480.00 480.00 99.99 99.99 Hemaraj Clean Water Company Limited 645.00 580.50 99.99 99.99 Investments in subsidiaries
As at December 31, the Company’s investments in subsidiaries and associates were as follows:
10.1 Investments in subsidiaries and associates
10. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES
173
• Annual Report 2010
รายงานประจํ า ปี 2553
• Annual Report 2010
Company
Paid-up Capital (Million Baht) 2010 2009
Investments (Million Baht) Percentage of shares held Consolidated financial Separate financial by the Company (Percent) statements statements (at Cost) 2010 2009 2010 2009 2010 2009
INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES (Continued)
7.87 9.27 660.62 651.35 9.27 34.92 695.54
10.50 - - 1.62 - 13.92 548.22 534.30 13.92 63.12 611.34
(1) In 2010, the Company has paid for investment acquisition in Hemaraj Saraburi Industrial Land Company Limited (HSIL) to Cementhai Holding Company Limited (CHC) in the amount of Baht 763.69 million (Note 10.2). (2) 99.99% indirectly held by Hemaraj Saraburi Industrial Land Company Limited. (3) 74.99% directly held by the Company and 25% indirectly held by Eastern Industrial Estate Company Limited. (4) H-International (BVI) Company Limited was registered in the British Virgin Islands (US. currency is used for business operation). No Thai income tax has been accrued for undistributed net income of the overseas subsidiary, since the net income are intend to be retained by the subsidiary for reinvestment purposes. (5) Hemaraj International Limited was registered in the Cayman Islands (US. currency is used for business operation). The Company obtained the information from the financial statements which were prepared by the subsidiary’s management and were not audited by an auditor. Nevertheless, its total assets and net profit presented in the financial statements were immateriality to the consolidated financial statements.
1.40
1.80
Net booked value in the Dividend for the year ended portion of investments December 31, 2010 2009 2010 2009
Associates: Common shareholders and co-directors Cofely (Thailand) Company Limited (Formerly known as “Elyo-H Facilities Management Limited”) 50.00 50.00 39.99 39.99 26.97 25.14 20.00 20.00 26.97 25.15 Hemaraj Saraburi Industrial Land Company Limited (Formerly known as “SIL Industrial Land Company Limited”) (1) - 500.00 - 25.00 - 276.01 - 239.75 - 265.03 Hemaraj Rayong Industrial Land Company Limited (Formerly known as “RIL Industrial Land Company Limited”) (2) - 1,000.00 - 25.00 - - - - - - GHECO – One Company Limited (8) 7,719.00 324.00 35.00 35.00 3,188.88 207.12 2,701.65 113.40 3,188.88 207.12 Houay Ho Thai Company Limited (9) 527.69 527.69 51.00 51.00 263.53 255.14 267.22 267.22 285.39 277.17 Houay Ho Power Company Limited (9) 50.00 50.00 12.75 12.75 - - - - - - (Million USD) (Million USD) Investments in associates 3,479.38 763.41 2,988.87 640.37 3,501.24 774.47 Total investments 3,479.38 763.41 6,923.91 3,571.97 11,204.66 6,422.44 Dividend income for the years ended December 31 Subsidiaries Associates Other companies Total
174
INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES (Continued) (6) 99.99% indirectly held by Hemaraj Clean Water Company Limited (7) In 2009, H – Phoenix Property Company Limited had called for fully paid up capital and registered to decrease share capital to Baht 480 million. (8) 35% directly held by the Company in GHECO – One Company Limited. In 2010, the Company had paid the share capital increase to GHECO – One Company Limited, in the total amount of Baht 2,588.25 million to maintain the existing proportion of shareholding structure. (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). The Company did not include the financial statements of Houay Ho Thai Company Limited in the consolidated financial statements since the Company is the strategic partner. Other investor has capability to operate the power plant and provides financial support for the Company to invest in Houy Ho Thai Company Limited which was already repaid in 2010.
175
10.2 Acquisition
On October 1, 2010, the Company has paid for 75% investment acquisition in Hemaraj Saraburi Industrial Land Company Limited (HSIL) to Cementhai Holding Company Limited (CHC) in the amount of Baht 763.69 million, resulting in shareholding from previous 25% to 99.99% investment in HSIL. HSIL held 99.99% investment in Hemaraj Rayong Industrial Land Company Limited (HRIL) resulting in the Company to be parent company of both HSIL and HRIL. As a result, the Company’s consolidated financial statements have already included those two subsidiaries’ balance sheets as of December 31, 2010 and statements of income from October 1, 2010 to December 31, 2010. In addition to the investment by exercising the option to acquire the remaining shares of 75%, the Company granted loan to HSIL in the amount of Baht 380 million in order to repay the long term loan to CHC. On October 1, 2010, the Company’s payment of Baht 763.69 million for the additional investment acquisition of those two subsidiaries resulted in a gain from a bargain purchase presenting a profit of Baht 144.15 in the consolidated statements of income for the year ended December 31, 2010. The details of the acquisitions were as follows: (Unit : Thousand Baht)
Net fair value of assets and liabilities Assets Cash and cash equivalents 34,731 Trade account receivables 19,452 Cost of real estate developments 1,504,000 Other current assets 2,091 Property, plant and equipment, net 52,909 Other non - current assets 25 Liabilities Trade account payables 10,343 Short - term loans from related parties 380,000 Accrued income tax 10,778 Other current liabilities 22,676 Net assets value Cash paid for acquisition and fair value of equity as held before acquisition Fair value of equity as held before acquisition ( 25%) 280,314 Cash paid for acquisition on October 1, 2010 (75%) 763,689 Gain from bargain purchase
1,613,208
423,797 1,189,411
1,044,003 145,408
รายงานประจํ า ปี 2553
• Annual Report 2010
176
The 2 subsidiaries contributed consolidated revenues of Baht 29.32 million and consolidated net loss of Baht 1.87 million to the Consolidated financial statement of the company for the period from October 1, 2010 to December 31, 2010. If the acquisition had occurred on January 1, 2010, consolidated revenue and consolidated net profit for the year ended December 31, 2010 of 2 subsidiaries would have been Baht 252.57 million and Baht 92.23 million respectively.
11. OTHER LONG - TERM INVESTMENTS, NET
As at December 31, other long-term investments, net consisted of:
THOUSAND BAHT
Investments in related parties Sriracha Harbor Public Company Limited Eastern Fluid Transport Company Limited Total Less Provision for impairment loss on investments Other long-term investments - related parties, net Others Glow IPP Company Limited Other company Total Less Provision for impairment loss on investment Other long-term investments - others, net Other long-term investments, net
รายงานประจํ า ปี 2553
• Annual Report 2010
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 15,000 1,500 16,500 (15,000) 1,500
15,000 1,500 16,500 (15,000) 1,500
- - - - -
-
142,500 1,000 143,500 (717) 142,783 144,283
142,500 1,000 143,500 (717) 142,783 144,283
142,500 - 142,500 - 142,500 142,500
142,500 142,500 142,500 142,500
รายงานประจํ า ปี 2553
Consolidated financial statements Land (*) Buildings (*) Building improvements Furniture and fixture Pipe rack Construction in progress Assets for rent, net Separate financial statements Land (*) Buildings (*) Building improvements Assets for rent, net
- - - -
32,740 70,897 884 104,521
(891) (1,324) - (2,215)
(2,144) 20,381 (145) - 25,040 (25,040) 18,092 31,849 69,573 884 102,306
386,380 1,937,432 14,236 3,989 298,858 - 2,640,895 - 13,129 68 13,197
- 392,263 7,220 891 111,754 - 512,128 - 3,526 44 3,570
- 96,338 1,588 781 18,874 - 117,581
117,581
2010
113,494
2009
- 16,474 112 16,586
- 478,795 8,780 1,672 130,628 - 619,875
Consolidated financial statements
- (181) - (181)
- (9,806) (28) - - - (9,834)
3,570
2010
3,589
2009
31,849 53,099 772 85,720
386,380 1,458,637 5,456 2,317 168,230 2,021,020
Ending
Separate financial statements
32,740 57,768 816 91,324
388,524 1,524,788 6,217 2,516 130,310 25,040 2,077,395
Beginning
Net Book Value
(Unit : Thousand Baht)
(*) Land and Buildings were transferred from real estate development cost. As at December 31, 2010 and 2009, the assets for rent of the Company and the subsidiaries have been mortgaged as collateral for loans from local financial institutions and other person.
Depreciations which included in statements of income for the years ended December 31: Cost of services
- - 944 582 31,754 - 33,280
388,524 1,917,051 13,437 3,407 242,064 25,040 2,589,523
Ending
Changes in Accumulated Depreciation
Disposal/ Disposal/ Transfer Ending Beginning Depreciation Transfer
Changes in Cost
As at December 31, 2010 and 2009, assets for rent, net consisted of:
Beginning Addition
12. ASSETS FOR RENT, NET
177
• Annual Report 2010
รายงานประจํ า ปี 2553
Changes in Cost
As at December 31, 2010 and 2009, property, plant and equipment, net consisted of: Changes in Accumulated Depreciation
• Annual Report 2010
4,579 87,761 3,225 74,839 30,853 116,538 19,482 88,060 24,946 450,283 (10,166) 440,117
Consolidated financial statements Land 4,579 1,420 - 5,999 - - - - Buildings and structure 138,815 73,229 44,373 256,417 51,054 53,571 - 104,625 Building improvements 8,876 373,165 2,583 384,624 5,651 368,777 - 374,428 Furniture, fixture and equipment 196,738 277,936 3,865 478,539 121,899 281,505 - 403,404 Vehicles 96,803 17,765 (419) 114,149 65,950 16,525 (419) 82,056 Raw water pipe 129,167 13,281 74,309 216,757 12,629 11,433 - 24,062 Reservoir 26,315 - - 26,315 6,833 3,230 - 10,063 Potable water production system 100,506 - - 100,506 12,446 5,222 - 17,668 Construction in progress 24,946 117,437 (125,130) 17,253 - - - - Total 726,745 874,233 (419) 1,600,559 276,462 740,263 (419) 1,016,306 Less Reserve for impairment loss of assets * Property, plant and equipment, net
5,999 151,792 10,196 75,135 32,093 192,695 16,252 82,838 17,253 584,253 (10,166) 574,087
Ending
• Inclusive of assets from acquisition in cost of Baht 713.46 million and accumulated depreciation of Baht 676.81 million. In case of exclusive of such assets, for the year ended December 31, 2010, the additional consolidated assets was Baht 160.77 million and consolidated depreciation was Baht 63.45 million.
Beginning
Net Book Value
(Unit : Thousand Baht)
Ending
Disposal/ Disposal/ Beginning Addition (*) Transfer Ending Beginning Depreciation (*) Transfer
13. PROPERTY, PLANT AND EQUIPMENT, NET
178
รายงานประจํ า ปี 2553
763,692
Cost of the property, plant and equipment which have been fully depreciated but are still in use
113,859
32,399 24,067 56,466
2009
81,438
2,021 14,975 16,996
2010
65,830
1,905 16,522 18,427
2009
(724) 91,495
2,983 57,251 138 13,552 15,378 2,193 724 92,219
Ending
Separate financial statements
(724) 94,124
2,983 62,967 192 16,694 8,695 2,593 724 94,848
Beginning
Net Book Value
(Unit: Thousand Baht)
* Reserve for impairment loss of assets is provided for the ceased construction in progress. As at December 31, 2010 and 2009, the land with building and structure of the Company and the subsidiaries have been mortgaged as collateral for loans from local financial institutions.
41,488 21,965 63,453
Depreciations which included in statements of income for the years ended December 31: Cost of services Selling and administrative expenses Total Depreciation for the years
2010
Consolidated financial statements
Separate financial statements Land 2,983 - - 2,983 - - - - Buildings and structure 88,874 - - 88,874 25,907 5,716 - 31,623 Building improvements 3,482 - - 3,482 3,290 54 - 3,344 Furniture, fixture and equipment 78,166 3,026 - 81,192 61,472 6,168 - 67,640 Vehicles 44,927 11,341 - 56,268 36,232 4,658 - 40,890 Raw water pipe 6,008 - - 6,008 3,415 400 - 3,815 Construction in progress 724 - - 724 - - - - Total 225,164 14,367 - 239,531 130,316 16,996 - 147,312 Less Reserve for impairment loss of assets * Property, plant and equipment, net
Ending
Changes in Accumulated Depreciation
Disposal/ Disposal/ Transfer Ending Beginning Depreciation Transfer
Changes in Cost
Property, plant and equipment, net (continued)
Beginning Addition
179
• Annual Report 2010
14. LEASEHOLD LAND AND LAND HELD FOR COMMERCIAL PURPOSES, NET
180
As at December 31, leasehold land and land held for commercial purposes, net consisted of:
THOUSAND BAHT
Land bank Land cost of projects suspended from developments Suspended development project costs Capitalized finance costs Leasehold land Total Less Accumulated cost of sales Accumulated costs transferred for debt settlement Loss on projects evaluation Leasehold land and land held for commercial purposes, net
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 10,201 1,135,711 268,452 556,119 77,077 2,047,560 (841,514)
10,201 1,135,711 268,452 556,119 77,077 2,047,560 (841,514)
10,201 1,135,711 268,452 556,119 77,077 2,047,560 (841,514)
10,201 1,135,711 268,452 556,119 77,077 2,047,560 (841,514)
(645,413) (245,696)
(645,413) (245,696)
(645,413) (245,696)
(645,413) (245,696)
314,937
314,937
314,937
314,937
Information of leasehold land and land held for commercial purpose is as follows:-
Valuation Stated in the Financial Statements
Obligation of Assets
In 2008, the leasehold land and land held for commercial purposes have been appraised by an independent appraisal company which caused diminution from assets appraisal in 2006. The Company recorded such decline as “Provision for loss on diminution in value of real estate development cost” amounting to Baht 11.20 million in statements of income for the year ended December 31, 2008. As at December 31, 2010 and 2009, portion of land in the projects of the Company and the subsidiaries has been mortgaged as collateral for loans from local financial institutions.
15. SINKING FUND, NET
รายงานประจํ า ปี 2553
As disclosed in the Note 29 to the financial statements, the Company and its subsidiaries had entered into the joint operating agreements with the Industrial Estate Authority of Thailand (“IEAT”). The Company and its subsidiaries are committed to be a provider and to set up a fund (“Sinking Fund”) for major maintenance and replacement of utilities systems and facilities for the customers in the industrial estate. The Company and its subsidiaries had made the payment by cash and by transferring of partial piece of land for the Sinking Fund, and in addition, the Company and its subsidiaries had transferred the withdrawal rights over the Sinking fund to IEAT per the terms and conditions of such agreements. The Company and its subsidiaries have recorded the cash paid and land transferred to IEAT for the fund under Sinking Fund accounts. The amortization period of 20 years is applied on the useful future economic life of Sinking Fund under the joint contract agreements with IEAT.
• Annual Report 2010
As at December 31, sinking fund, net consisted of:
Sinking Fund Less Accumulated amortization Sinking fund, net
THOUSAND BAHT
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 183,777 (103,468) 80,309
180,423 (98,063) 82,360
52,405 (32,721) 19,684
181
52,405 (31,191) 21,214
16. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS
Short-term loans from local financial institutions
As at December 31, 2009, the Company had short-term loans from several local financial institutions in the amount of Baht 450 million, with interest rate as at December 31, 2009 ranging between 4.40% to 5.375% per annum.
Bank overdraft
As at December 31, 2010 and 2009, the Company and its subsidiaries have overdraft credit limit from local financial institutions in the amount of Baht 160 million and Baht 140 million, respectively. The interest rate is charged at MOR and MOR+0.50% per annum. Such overdraft is guaranteed by the mortgage on partial land and structure in the projects of real estate development of the Company and its subsidiaries.
17. SHORT-TERM LOANS FROM OTHER PARTIES AND OTHER PERSONS
As at December 31, short-term loans from other parties and other persons consisted of:
THOUSAND BAHT
Bill of exchange discounted at 2.90-3.75 % without collateral - Other parties - Other persons Promissory note at 4.75% - 5.50% interest rate - Other person Total short-term loans from other parties and other persons
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 - -
380,000 40,000
- -
380,000 40,000
30,000
30,000
-
-
30,000
450,000
-
420,000
รายงานประจํ า ปี 2553
• Annual Report 2010
18. Debentures
182
In 2010, the Company had issued unsubordinated and unsecured debentures in the amount of Baht 6,000 million (6,000,000 units at Baht 1,000 each) with principal amount of Baht 1,000 by private placement, institution investors and high net worth individual as follows:-
No. Date Maturity date Interest rate Amount (Thousand Baht) 1/2010 March 5, 2010 March 5, 2013 4.50% 450,000 2/2010 April 8, 2010 April 8, 2013 4.50% 562,000 April 8, 2010 April 8, 2014 4.90% 400,000 3/2010 May 25, 2010 May 25, 2013 4.50 % 150,000 May 25, 2010 May 25, 2015 Year 1-3 : 4.90%, 1,500,000 Year 4 : 5.80% and Year 5 : 6.50% 4/2010 July 21, 2010 July 21, 2017 Year 1-3 : 4.90%, 2,300,000 Year 4-6 : 6.00% and Year 7 : 6.50% 5/2010 October 5, 2010 October 5, 2019 Year 1-3 : 4.90%, 638,000 Year 4-6 : 6.00%, Year 7 : 6.50% and Year 8-9 : 6.75% Total 6,000,000
19. LONG-TERM LOANS AND ADVANCE FROM RELATED PARTY
รายงานประจํ า ปี 2553
As at December 31, 2010, the Company had loans and advance from H-International (BVI) Company Limited, an oversea subsidiary, amounting to USD 21.66 million and Baht 332.38 million (2009 : USD 21.66 million and Baht 332.48 million) which do not have the maturity date and the interest charge.
• Annual Report 2010
As at December 31, other long-term loans consisted of:
Hemaraj Land and Development Public Company Limited A. Loan from local commercial bank consisted of: A.1 450 June 2008 - 28 quarterly installments, commencing from the 9th End of month December 2015 month after the first drawdown. Installment 1-12 : Bath 12.50 million each; Installment 13-20 : Bath 15.00 million each; Installment 21-27 : Bath 22.50 million each; and Installment 28 : repaid all remaining balance A.2 500 December 2008 - 16 quarterly installments, commencing from March 2010. End of month December 2013 Installment 1-8 : Bath 12.50 million each; Installment 9-12 : Bath 37.50 million each; and Installment 13-16 : Bath 62.50 million each. A.3 700 March 2009 - Repayment when mortgage of condominium is released. End of month March 2012 A.4 436 December 2009 - six-month installments, commencing from the 13rd End of month December 2014 month after the first drawdown. Installment 1 : Bath 92.00 million each; Installment 2-7 : Bath 53.00 million each; Installment 8 : Bath 13.00 million each; and Installment 9 : repaid all remaining balance Or repayment when mortgage of land is released.
450.00
328.75
MLR+0.50
Year 1 MLR-1.00, Year 2 MLR-0.75, Year 3 MLR-0.50 MLR
-
350.00
2010
280.00
589.81
500.00
400.00
2009
Balances (Million Baht)
Year 1-2: MLR-1.50, Year 3-4: MLR-1.125, Year 5: MLR–1.00
Loan condition Interest payment Credit line Interest rate (Million Baht) Credit period Principal repayment Term per annum (%)
20. OTHER LONG-TERM LOANS
183
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• Annual Report 2010
Other long-term loans (continued)
รายงานประจํ า ปี 2553
• Annual Report 2010
-
-
1,769.81
17.34 200.00
1,346.09
2009 -
2010
Balances (Million Baht)
(*) Current portion of long term loans in the separate financial statements for the years then ended December 31, 2010 and 2009 is Baht 353.75 million and Baht 389.81 million, respectively. Current portion of long - term loans by scheduled transfer in the separate financial statements for the years then ended December 31, 2010 and 2009 is Baht 17.34 million and Baht 244.89 million, respectively.
A.5 1,000 Not yet started Six-month installments, commencing from the 13rd End of month MLR the first drawdown month after the first drawdown. Installment 1 : Bath 208.00 million each; Installment 2-7 : Bath 122.00 million each; Installment 8 : Bath 30.00 million each; and Installment 9 : repaid all remaining balance Or repayment when mortgage of land is released. A.6 332 February 2010 - One time repayment on the 60th month after the first End of month MLR February 2015 drawdown. Or repayment when mortgage of land is released. A.7 800 December 2010 - Quarterly installments, commencing from the year 2012. End of month MLR – 1.50 March 2017 Year 2012 : Installment Bath 38.50 million each; Year 2013-2015 : Installment Bath 43.25 million each; Year 2016 : Installment Bath 31.75 million each; and Year 2017 : repaid all remaining balance Or repayment when mortgage of land is released. Total 4,218 (*)
Loan condition Interest payment Credit line Interest rate (Million Baht) Credit period Principal repayment Term per annum (%)
184
รายงานประจํ า ปี 2553
Other long-term loans (continued)
Eastern Seaboard Industrial Estate (Rayong) Company Limited A. Loan from local commercial banks consisted of: A.1 300 January 2009 - Quarterly installments, Baht 12.00 million each, End of month MLR-0.75 December 2011 commencing from March 2009. Or repayment when mortgage of land is released. December 2003 - Repayment when mortgage of land is released. End of month Year 1-3: MLR-2.00, December 2008 Year 4-5: MLR-1.00 A.2 50 July 2005 - 60 months installments, Baht 0.84 million each, End of month Year 1-2: MLR-1.75, July 2011 commencing from the 13th month after the first Year 3-4: MLR-1.25, drawdown, and the remaining will be repaid in the Year 5-6: MLR-1.00 last period. A.3 80 December 2006 - Quarterly installments, Baht 5 million each, commencing End of month Year 1: MLR-1.00, December 2011 from the 15th month after the first drawdown. Year 2: MLR-0.75, Year 3: MLR-0.50, Year 4-5: MLR A.4 175 September 2008 - 25 quarterly installments, Baht 7.0 million each, End of month MLR-1.50 September 2015 commencing from the 13th month after the first drawdown and the remaining will be repaid in the last period. Or repayment when mortgage of land and construction is released. B. Loans from other persons consisted of: B.1 63 March 2008 - Quarterly installments, Baht 3 million each, commencing End of month MLR-0.875 of March 2011 from September 2008. Kasikornbank Plc. Total 668
Loan condition Interest payment Credit line Interest rate (Million Baht) Credit period Principal repayment Term per annum (%)
163.75
18.00
90.00
-
0.69
55.06
2010
292.49
45.00
118.00
15.73
10.70
103.06
2009
Balances (Million Baht)
185
• Annual Report 2010
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• Annual Report 2010
228.30 196.92
232.91 658.13 129.81 129.81 40.02 40.02 2,890.26 (719.48) (311.64) 1,859.14
115.24
125.73 392.32 54.81 54.81 23.94 23.94 1,980.91 (656.43) (93.50) 1,230.98
2009 151.35
2010
Balances (Million Baht)
Such other long-term loans are guaranteed by the mortgage of most of land in the real estate development projects and assets for rent of the Company and its subsidiaries. * Current portion of long - term loans by scheduled transfer is estimated from the loans payments to the financial institutions for the land title deed to be transferred in accordance with the loans contracts.
Hemaraj Eastern Seaboard Industrial Estate Company Limited A. Loan from local commercial bank consisted of: A.1 800 December 2005 - Repayment when mortgage of land is released. End of month MLR-1.00 December 2010 A.2 245 June 2007 - 2 years grace period, quarterly installments, Baht 20.42 End of month MLR-1.00 June 2012 million each, commencing from year 3. The debt must be fully repaid within 5 years since the contract date. Or repayment when mortgage of land is released. A.3 245 November 2008 - 24 quaterly installments, Baht 12.09 million each, commencing End of month MLR-1.00 November 2015 from the 13th month after contract date. Or repayment when mortgage of land and construction is released. Total 1,290 Eastern Industrial Estate Company Limited A. Loan from local commercial bank consisted of: A.1 300 May 2009 - 12 quaterly installments, Baht 37.50 million each. Or End of month Year 1 MLR-1, May 2012 repayment when mortgage of land is released. Year 2-3 MLR-0.75 Total 300 Hemaraj Water Company Limited A. Loan from local commercial bank consisted of: A.1 80 December 2006 - 60 months installments, Baht 1.34 million each, End of month Year 1-2: MLR-0.50, December 2012 commencing from the 13th month after the contract signed Year 3 onwards: date, and the remaining will be repaid in the last period. MLR–0.25 Total 80 Grand total 6,556 Less Current portion of other long-term loans Current portion of long - term loans by scheduled transfer * Other long-term loans, net
Other long-term loans (continued)
Loan condition Interest payment Credit line Interest rate (Million Baht) Credit period Principal repayment Term per annum (%)
186
21. WARRANTS
According to the resolutions of the Annual General Meeting of Shareholders dated April 30, 1999, the Company issued 141,531,150 warrants to the existing shareholders and specific investors, at the unit price of Baht 0.1. Total cash received from offer of warrants was in the approximate amount of Baht 14.15 million. The Company registered its warrants with the Stock Exchange of Thailand (“SET”) as listed securities and the warrants were approved by the SET to be listed securities from December 15, 1999 onwards. The Extraordinary Ordinary Meeting of Shareholders No. 1/2001 of the Company held on December 28, 2001 approved the extension of exercised period to 10 years from the issuing date, which will be ended within September 30, 2009 and for the adjustment of exercised price to Baht 3 per share. Subsequently, the Board of Directors’ Meeting No. 1/2002 held on February 20, 2002 approved the adjustment to the numbers of the existing warrants with the additional ratio of 2.33333 units per each 1 existing warrant, in accordance with the announcement of the Office of the Securities and Exchange Commission regarding guidelines on the adjustment to the exercise price/exercise ratio of warrants. The warrants after the adjustment were 471,686,471 units with the exercise ratio of 1 ordinary share per each warrant and exercise price of Baht 3 per share. The Board of Directors’ Meeting No. 7/2003 held on September 15, 2003 had passed the resolution in accordance with the provision for the adjustments of warrant exercise ratio as stipulated by the Prospectus that would be changed from 1:1 to be one warrant exercisable to 1.05918 ordinary shares. The Company did not adjust the exercise price, however the Company brought forward the adjustment to be included in following adjustments of rights. The above adjustments would take immediate effect on the first date of the ordinary shares offering. Accordingly, the Extra-Ordinary Meeting of Shareholders held on October 16, 2003 had passed the resolution of the adjustments of the Company’s par value, resulting in the exercise ratio changing from 1 : 1.05918 to be one warrant exercisable to 10.5918 ordinary shares at the exercise price of Baht 0.283 per share. According to the SEC’s Notification regarding guideline relating to adjustments of the exercise price/ratio of warrants, it allows the Company to adjust the number of warrants rather than to adjust the exercise ratio. Therefore, the Company chose to adjust the number of warrants which resulting that the number of warrants increased from 427,084,638 to 4,527,831,794. Consequently, the warrants had the same exercise ratio at one warrant exercisable to purchase one ordinary share at Baht 0.283 per share. As at September 30, 2009, there were outstanding 4,202,737 units of unexercised warrants which is no longer being registered security in the Stock Exchange of Thailand since September 16, 2009 and can no longer be exercised.
187
22. STATUTORY RESERVE AND DIVIDEND
Statutory Reserve of the Company
Under the Public Limited Company Act B.E. 2535, the Company is required to set aside as a statutory reserve at least 5% of its net profit after deducting accumulated deficit brought forward (if any) until the reserve reaches 10% of the registered share capital. The statutory reserve is not available for dividend distributions. As at December 31, 2010 and 2009, the Company had allocated profit amount of Baht 31.36 million and Baht 29.83 million, respectively as a statutory reserve.
Statutory Reserve of the Subsidiaries
Under the Civil and Commercial Code, the subsidiaries are required to set aside as a statutory reserve at least 5% of its net profit every dividend declaration until the reserve reaches 10% of the registered share capital. The statutory reserve is not available for dividend distributions. As at December 31, 2010 and 2009, the subsidiaries had allocated profit amount of Baht 21.22 million and Baht 37.98 million as a statutory reserve, respectively.
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• Annual Report 2010
188
Dividend
Dividend
Approved by
2010 Interim dividend for The Board of Directors’ Meeting year 2010 held on August 10, 2010 Dividend from the profit of The Board of Directors’ Meeting year 2009 held on February 26, 2010 and the 2010 Annual General Meeting of Shareholders on April 29, 2010 Total dividend paid during year 2010 2009 Dividend from the profit The Board of Directors’ Meeting of year 2008 on February 27, 2009 and the 2009 Annual General Meeting of Shareholders on April 29, 2009 Total dividend paid during year 2009
Dividend paid
Dividend
(Million Baht) per share
Payment date
242.58
0.025
September 8, 2010
291.15
0.030
May 17, 2010
533.73
0.055
328.36
0.035
328.36
0.035
May 15, 2009
23. DIRECTORS’ REMUNERATION
For the years ended December 31, directors’ remuneration consisting of meeting fee and annual compensation of director and sub-committee were as follows:
MILLION BAHT
Hemaraj Land and Development Public Company Limited Eastern Seaboard Industrial Estate (Rayong) Company Limited Total
2010
2009
16.15 8.54 24.69
15.80 8.54 24.34
24. PROVIDENT FUND The Company and its 5 subsidiaries which are Eastern Industrial Estate Company Limited, Eastern Seaboard Industrial Estate (Rayong) Company Limited, Eastern Pipeline Services Company Limited, H - Construction Management and Engineering Company Limited and H - Phoenix Property Company Limited, jointly established the provident fund under the Provident Fund Act B.E. 2530, named “Tisco Secured Fixed Income Fund”, to provide membership for their employees. According to regulations of the fund, member and the Company contributes 4% - 10% of employees’ monthly salaries, depending on the working period. Members are entitled to their whole contributions plus net benefit thereon, and the Company’s contributions plus benefits thereon at the rates, depending on their working period. The provident fund is managed by Tisco Asset Management Company Limited. During 2010 and 2009, the Company and the above subsidiaries had contributed to provident fund in the total amount of Baht 9.53 million and 9.01 million (Separate financial statements: Baht 4.35 million and Baht 4.09 million), respectively.
รายงานประจํ า ปี 2553
• Annual Report 2010
The 2 subsidiaries which are Hemaraj Saraburi Industrial Land Company Limited and Hemaraj Rayong Industrial Land Company Limited, jointly established the provident fund under the Provident Fund Act B.E. 2530, named “Management of The Siam Cement Public Company Limited Provident Fund and Cement Thai Group Provident Fund”, to provide membership for their employees. According to regulations of the fund, member and the Company contributes 3% - 10% of employees’ monthly salaries, depending on the working period. Members are entitled to their whole contributions plus net benefit thereon, and the Company’s contributions plus benefits thereon at the rates, depending on their working period. The provident fund is managed by ING Asset Management Company Limited. During 2010, the above 2 subsidiaries had contributed to provident fund in the total amount of Baht 0.14 million.
189
25. EXPENSE BY NATURE
The major expenses by nature for the years ended December 31, were as follows:
MILLION BAHT
Changes in cost of real estate developments Investment in cost of real estate developments Capitalized finance costs Investment in cost of real estate developments and capitalized Employee related expenses Depreciation and amortization Transfer fee and specific business tax Consulting fee Loss (gain) from exchange rate
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 (674.55) 2,085.53 32.54
(385.37) 800.89 64.04
398.00 7.20 -
(160.97) 142.76 4.12
(29.96) 240.21 186.44 62.41 81.42 0.17
(79.17) 216.31 175.04 1.32 18.60 (0.03)
- 118.24 22.10 13.14 70.05 (69.58)
105.41 23.55 (0.06) 11.98 (33.98)
26. CORPORATE INCOME TAX
The Company and its subsidiaries record corporate income tax for real estate business according to the accounting principle on basis of the percentage of completion for recognition of real estate sales and cost, and compute the corporate income tax in compliance with the Revenue Code on the basis of installments due. The company and subsidiaries will review the difference at the end of fiscal year. Corporate income tax for the years ended December 31, were as follows:
MILLION BAHT
Corporate income tax in compliance with the accounting purposes Corporate income tax in compliance with the Revenue Code
CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009 46.90
(46.79)
(44.05)
(102.30)
68.28
87.90
-
34.32
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• Annual Report 2010
รายงานประจํ า ปี 2553
Domestic
• Annual Report 2010
Cost of real estate developments, net Leasehold land and land held for commercial purposes, net Assets for rent, net Property, plant and equipment, net Other assets Total Assets
- - 168.23 293.63 134.66 596.52
7,046.53 314.94 1,852.79 280.46 8,610.57 18,105.29
2010 Domestic
- - - 13.59 13.59
- 314.94 2,021.02 574.09 8,758.82 18,715.40
7,046.53 314.94 1,922.04 244.19 4,340.96 13,194.11
6,371.98 - 155.35 195.93 114.72 466.00
-
Holding Company Total Real Estate Others
Overseas
MILLION BAHT
2009
- - - 20.56 20.56
-
Holding Company
Overseas
As of December 31, business segment information in the consolidated balance sheets classified by domestic and overseas business was as follows:
Real Estate Others
27. BUSINESS SEGMENT INFORMATION
6,371.98
Total
314.94 2,077.39 440.12 4,476.24 13,680.67
190
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Domestic
Domestic
80.62 (143.76) 46.80 598.88 (23.64) 575.24
Total
421.95 80.62 - - (284.07) (140.94) (2.82) - (46.90) 62.40 (15.60) - 1,287.41 316.81 287.32 (5.25) (71.49) 1,215.92
- - - 423.82 423.82 305.14 0.60 - - -
Holding Company
Overseas
688.62 42.78 (57.47) 1,375.83 2,049.76 467.71 172.92 0.03 (25.44)
688.62 42.78 (57.47) 952.01 1,625.94 167.82 172.32 - 0.03 (25.44)
2009
- - - - - (5.25) - - - -
1,486.18 272.18 493.72 1,433.17 3,685.25 886.34 189.55 145.41 (0.18) (24.69)
Holding Company Total Real Estate Others
Overseas
Sales of land 1,486.18 - - Sales of pre-fabricated factories 272.18 - - Sales of condominiums 493.72 - - Service income 921.79 511.38 - Total Sales and Services income 3,173.87 511.38 - Profit (loss) from operations 522.88 368.66 (5.20) Other income 188.46 1.09 - Gain from bargain purchase 145.41 - - Gain (loss) on exchange rate (0.18) - - Director remuneration (24.69) - - Share of profit from investments for using the equity method - associates 421.95 - - Finance costs (282.18) (1.89) - Income tax expenses (25.85) (21.05) - Profit (loss) after tax 945.81 346.81 (5.20) Net profit attributable to minority interests Net profit attributable to equity holders of the parent
2010
MILLION BAHT
Business segment information (continued) The operation information of the consolidated statements of income, for the years ended December 31, classified by domestic and overseas business were as follows:
Real Estate Others
191
• Annual Report 2010
28. PLEDGED ASSETS
192
As of December 31, 2010, pledged assets were as follows:
Hemaraj Land and Development Public Company Limited
2.
3.
4.
5.
6.
7.
Eastern Industrial Estate Company Limited
Eastern Seaboard Industrial Estate (Rayong) Company Limited
1.
Time deposit of Baht 766.18 million has been pledged as collateral against shareholders’ agreement of the Company with financial institution for the project of GHECO - One Company Limited. The ordinary shares of Hemaraj Eastern Seaboard Industrial Estate Company Limited, a subsidiary, have been pledged with lenders secured for loans obtained by that subsidiary. 221.34 million ordinary shares of GHECO - One Company Limited have been pledged with the lender secured for loan obtained by that company. 14.25 million ordinary shares of Glow IPP Company Limited have been pledged with the lender secured for loan obtained by that company. The partial land and attachments have been mortgaged as collateral for loans from local commercial banks and financial institution. The Company had mortgaged their residential condominium in the Company’s project as collateral for the Company’s loan from a local commercial bank. The Company had mortgaged their condominium office units as collateral for the Company’s loan from a local commercial bank.
The Company’s majority land has been mortgaged as collateral for long-term loans from a local commercial bank.
1. Time deposit of Baht 0.05 million has been pledged as security for public utility services. 2. The majority of the Company’s land and pre-fabricated factories has been mortgaged as collateral for overdrafts and loans from one commercial bank. 3. Partial land and micro pre-fabricated factories of the company have been mortgaged as collateral for loans from other person.
Hemaraj Eastern Seaboard Industrial Estate Company Limited
The Company’s partial land and pre-fabricated factories has been mortgaged as collateral for the Company and Parent company’s long-term loans from local commercial bank.
H - Phoenix Property Company Limited
The Company had mortgaged their condominium office units as collateral for the Parent company’s loan from a local commercial bank.
Hemaraj Saraburi Industrial Land Company Limited
Hemaraj Rayong Industrial Land Company Limited
รายงานประจํ า ปี 2553
The Company had mortgaged the majority of land as collateral for the Parent company’s loan from a local commercial bank. The Company had mortgaged the majority of land as collateral for the Parent company’s loan from a local commercial bank.
• Annual Report 2010
29. COMMITMENTS UNDER AGREEMENTS
As of December 31, 2010, commitments under agreements were as follows: The Company and its subsidiaries have participated in the establishment industrial estate 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 July 5 and December 29, 1989 respectively. On October 31, 2001, the Company entered into the amendment to such joint operation agreements with IEAT. On March 29, 2005, the Company combined such agreement into one joint operation agreement. 2) Hemaraj Eastern Industrial Estate (Map Ta Phut) according to the joint operation agreement dated December 27, 1989. On October 31, 2001, the subsidiary entered into the amendment to such joint operation agreements with IEAT. On March 29, 2005, the Subsidiary 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) Hemraj Eastern Seaboard Industrial Estate according to the joint operation agreement No. 1/ 2542 (TS 21). The major conditions are summarized 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”).
193
Hemaraj Land and Development Public Company Limited
1. The Company’s investment in the amount of Baht 142.5 million in Glow IPP Company Limited and has to maintain the 5% investment ratio to comply with the conditions with Electricity Generating Authority of Thailand. 2. The Company acquired 35% investment in the amount of Baht 2,701.65 million in GHECO-One Company Limited. The Company has commitment to pay for capital increase and grant loan to that company in proportion to the shareholders’ participation. GHECO-One Company Limited entered into a power sale and purchase agreement (PPA) with EGAT on September 10, 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. The electricity generating plant is in the process of construction and guarantee by the Company in the portion of investment. The total project cost of GHECO-One 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 provided deposit or bank letter of credit in the amount of Baht 966.18 million 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 loan.
Eastern Industrial Estate Company Limited
The Company has commitment under construction and infrastructure contracts utilities system, with the remaining commitment balance amounting to Baht 127.33 million.
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• Annual Report 2010
194
Eastern Seaboard Industrial Estate (Rayong) Company Limited
Hemaraj Eastern Seaboard Industrial Estate Company Limited
Hemaraj Clean Water Company Limited
SME Factory Company Limited
The Company has obligations, under a joint-investment agreement with Hemaraj Land and Development Public Company Limited and another company, that the company has to pay commission on sales of land and management fee to Hemaraj Land and Development Public Company Limited based on revenues from sales of land, public utility service providing and lease of factories. The Company has commitment under construction contracts to construct pre-fabricated factories and utilities system, with the remaining commitment balance amounting to Baht 211.33 million. The Company has commitment under construction contracts in utilities system, with the remaining commitment balance amounting to Baht 7.20 million.
The Company has commitment under construction contracts to construct pre-fabricated factories, with the remaining commitment balance amounting to Baht 69.68 million.
30. COMMITMENTS AND CONTINGENT LIABILITIES
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As of December 31, 2010, commitments and contingent liabilities consisted of: 1. The Company and its subsidiaries have entered into land sale and purchase contracts, which the contract term requires the Company and its subsidiaries 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 Company and its subsidiaries have obligation regarding guarantee of the loan agreement of the Company and its subsidiaries in the total credit line of Baht 7,032 million. (Separate financial statements : Baht 2,434 million) 3. The Company and its subsidiaries have obligations regarding guarantee of the hire purchase agreements of its related companies in the total credit line of Baht 4.03 million. (Separate financial statements : Baht 0.67 million) 4. The Company and its subsidiaries 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 833.36 million. (Separate financial statements : Baht 212.20 million). 5. The Company has a dispute with a contractor (the “Claimant”) who has submitted the dispute to the Thai Arbitration Institute for claiming of outstanding payment of works in the amount of Baht 82 million and other expenditures including the damage for loss of benefit in business in the amount of Baht 510 million, in which the Company is not the defaulting party and has no outstanding payment of works as claimed by the Claimant. In the other way, the Claimant was not able to perform the agreed works described by the contractor agreement. As the company has submitted the defense and claim for the compensation and the advance payment which the company had paid more than amount under the contractor agreement to Thai Arbitration Institute.
• Annual Report 2010
31. PROMOTIONAL PRIVILEGES
The Company and its 7 subsidiaries have been granted promotional certificates under the Investment Promotion Act, B.E. 2520 as follows: Date obtained for promotional privilege
Area/units obtained for promotional privilege
Major Privileges Exemption from corporate Reduction of 50% of income tax (***) corporate income tax (****)
Hemaraj Land and Development Public Company Limited A. Industrial Estate Business A.1 December 29, 1988 1,500 Rai A.2 February 15, 1990 2,000 Rai A.3 July 25, 2001 1,282 Rai B. Industrial Factory Development Business B.1 June 21, 2000 11 Units
7 years (*) 7 years (*) 7 years (**)
5 years (*) None None
7 years (*)
None
Eastern Industrial Estate Company Limited A. Industrial Estate Business A.1 May 8, 1989 626 Rai September 23, 1992 1,850 Rai (Extension) A.2 November 27, 2002 1,240 Rai A.3 March 17, 2009 576 Rai
5 years (*) 8 years (*)
5 years (*) 5 years (*)
8 years 8 years
5 years 5 years
Eastern Seaboard Industrial Estate (Rayong) Company Limited A. Industrial Estate Business A.1 June 21, 1995 2,063 Rai 8 years (*) August 9, 1996 1,532 Rai 8 years (*) (Extension) A.2 October 27, 1997 2,466 Rai 8 years (*) July 31, 2000 325 Rai 8 years (*) (Extension) A.3 July 25, 2001 716 Rai 7 years A.4 December 8, 2004 1,020 Rai 8 years A.5 October 17, 2007 520 Rai 8 years B. Industrial Factory Development Business B.1 January 19, 2000 22 Units 8 years (*) B.2 June 21, 2000 13 Units 8 years (*) B.3 November 29, 2000 12 Units 8 years (*) B.4 January 16, 2002 51 Units 8 years B.5 March 27, 2002 22 Units 8 years B.6 September 7, 2006 6 Units 8 years B.7 March 23, 2007 7 Units 8 years
195
5 years (*) 5 years (*) 5 years 5 years None 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years
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• Annual Report 2010
196
Promotional privileges (continued)
Date obtained for promotional privilege
Area/units obtained for promotional privilege
Major Privileges Exemption from corporate Reduction of 50% of income tax (***) corporate income tax (****)
Hemaraj Eastern Seaboard Industrial Estate Company Limited A. Industrial Estate Business A.1 May 22, 1997 1,407 Rai 8 years A.2 May 22, 1997 1,375 Rai 8 years A.3 May 22, 1997 1,485 Rai 8 years A.4 September 26, 1996 1,653 Rai 8 years A.5 January 23, 2008 1,500 Rai 8 years B. Industrial Factory Development Business B.1 August 14, 2007 13 Units 8 years B.2 December 29, 2008 1 Unit 8 years B.3 December 30, 2009 1 Unit 8 years B.4 December 30, 2009 1 Unit 8 years B.5 December 30, 2009 1 Unit 8 years B.6 January 4, 2010 1 Unit 8 years
5 years 5 years 5 years 5 years 5 years 5 years
Hemaraj Saraburi Industrial Land Company Limited A. Industrial Zone A.1 November 21, 1991 1,450 Rai A.2 August 25, 1994 1,200 Rai A.3 April 27, 2005 890 Rai
7 years (*) 7 years (*) 7 years
-
Hemaraj Rayong Industrial Land Company Limited A. Industrial Zone A.1 January 26, 1996 1,600 Rai A.2 August 16, 2000 520 Rai A.3 March 14, 2001 1,343 Rai
8 years (*) 8 years (*) 8 years
5 years (*) 5 years 5 years
8 years
5 years
7 years
None
Hemaraj Water Company Limited A. Utility and Other Services Business A.1 October 25, 2005 12.27 million cubic meters
5 years 5 years 5 years 5 years 5 years
SME Factory Company Limited A. Industrial Factory Development Business A.1 May 21, 2007 3 Units
รายงานประจํ า ปี 2553
* ** *** ****
Major Privilege was expired. Major Privilege still not started because the Company has not earned the revenues yet. Starting from the first revenue recognised date. Starting from the exemption from corporate income tax is expired.
• Annual Report 2010
For the years ended December 31, domestic revenues were classified into the promoted and the nonpromoted businesses as follows:
THOUSAND BAHT
2010
BOI
2009
NON-BOI
2010
Consolidated financial statements Revenue from sales Lands 1,245,492.96 653,624.67 240,690.52 Industrial factories 213,538.48 42,776.20 58,636.63 Condominiums - - 493,722.50 Service income 514,389.41 551,466.54 918,786.27 Total 1,973,420.85 1,247,867.41 1,711,835.92 Separate financial statements Revenue from sales Lands - - 183,832.52 Industrial factories - - - Condominiums - - 493,722.50 Service income - - 156,492.20 Total - - 834,047.22
2009
2010
TOTAL
197
2009
34,993.72 1,486,183.48 688,618.39 - 272,175.11 42,776.20 (57,472.77) 493,722.50 (57,472.77) 824,365.13 1,433,175.68 1,375,831.67 801,886.08 3,685,256.77 2,049,753.49 1,199.91 - (57,472.77) 156,260.76 99,987.90
183,832.52 - 493,722.50 156,492.20 834,047.22
1,199.91 (57,472.77) 156,260.76 99,987.90
32. FINANCIAL INSTRUMENTS
Risk Management Policy
Exposure to interest rate and currency risk arises in normal course of the Hemaraj Group’s business. These are subject to the risk of market rates changing subsequent to the transaction date. The Hemaraj Group’s policy on interest rate risk and currency risk hedging is as follows: A. B. C.
Maintaining proportions of domestic and foreign borrowings; Borrowing loans at fixed and floating interest rates; Pledging assets as collateral against loans.
The Hemaraj Group has no policy to speculate on or engage in the trading of any off-balance-sheet derivative financial statements.
Fair Value of Financial Instruments
Except as disclosed in Note 3 to the financial statements, fair value of significant financial instruments consists of: A. Fair value of cash and cash equivalents, deposits for investment, account receivables, bank overdrafts and loans from financial institutions, account payables and accrued expenses are approximately equal to the carrying amount because of short maturity of these instruments. B. Fair value of short-term investments in available-for-sale securities is equal to the market value. C. Fair value of short-term loans and advances to related parties, loans to related parties, other loans, short-term loans and advances from related parties, amount due to and loans from related parties could not be determined since the repayment period is not specified.
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• Annual Report 2010
33. SUBSEQUENT EVENTS
198
The Board of Directors’ Meeting of Hemaraj Land and Development Public Company Limited No. 1/ 2011 held on February 28, 2011 recommended payment of a final dividend of another Baht 0.03 per share, including the interim payment of Baht 0.025 per share, the total dividend for 2010 is Baht 0.055 per share to be considered and approved at the Annual General Meeting of Shareholders of the Company.
34. APPROVAL OF FINANCIAL STATEMENTS
รายงานประจํ า ปี 2553
These financial statements have been approved by the Company’s Board of Directors on February 28, 2011.
• Annual Report 2010
Shareholding & Organization Structure
199
Top Ten of Hemaraj Land and Development’s Shareholders as at 25/8/10 No. Major Shareholders No. of Shares
1 2 3 4 5 6 7 8 9 10
Miss Phenpunnee Horrungruang Chase Nominees Limited 42 Credit Agricole (Suisse) SA, Singapore Branch Nomura Singapore Limited – Customer Segregated Account EFG Bank Mrs. Kanokkarn Siriratanapan Mr. Sombat Tepsatist Mr. Abdhulor Kanda Miss Kanda Korakochsakulwong Thai NVDR Company Limited
% of Total Issued Share
1,068,725,770 871,192,312 849,906,389 643,484,500 617,377,000 437,910,100 417,567,600 407,954,200 374,782,700 368,914,221
11.01 8.98 8.76 6.63 6.36 4.51 4.30 4.20 3.86 3.80
Shareholders Board of Directors Nominating Committee
Audit Committee
Corporate Governance Committee Executive Committee President & CEO Internal Audit Executive Vice President
Industrial Customer Development
Small Power and Water Project Planning
Industrial Estate Operations
Senior Vice President
Information System & Services
Industrial Estate Development
Corporate Marketing Corporate Planning & Investor Relations
Residential Customer Development
Finance
Accounting & Legal
Procurement
Residential Project Planning
รายงานประจํ า ปี 2553
• Annual Report 2010
รายงานประจํ า ปี 2553
• Annual Report 2010
1. Associated Companies: 1.1 Cofely (Thailand) Company - The Company holds 39.99% 1,017 333 13,149 - The Company provides Utilities - Utilities Rate is at the Market Limited - There are 3 Company’s Services to the Associated Rate. (Previously named Elyo-H Executive Directors to be the Company: Facilities Management Limited) Directors and the Executive - In 2009, the Company as a - Loan from the Company is Facilities Management Services Directors in this Associated Shareholder provided Baht 5.6 proportionate to shareholding such as Airconditioning System, Company and one Company. million of Loan to the Associated portion. Cooling System. This is according to the Company’s Company for the working capital policy for joint venture investment. according to the shareholding portion with an interest at MLR of a commercial bank and monthly interest payment - The Company obtains Preventive Maintenance and repairing Industrial Estates from the Associated Company.
Related Transactions in the Year 2010 between the Company, Subsidiaries and Associated Companies, Related Companies, are as follows : Names of Company with Description of Transactions (Unit: Thousand Baht) Description Necessity / Opinion Related Transactions Relationship Service Interest Commission Cost of Financial of Audit Committee Income Income and Service Costs Management 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 top 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
200
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Necessity / Opinion of Audit Committee
1.2 Hemaraj Saraburi - The Company held 25 % as an 57 19,764 - The Company provided Loan to - Interest Rate at the Market Industrial Land Company Associated Company, and sice SIL Industrial Land Company Rate of MLR-0.5% Limited (Previously named October 1, 2010, the Company Limited in order to repay the SIL Industrial Land invested the remaining of 75%, long term loan from Cementhai Company Limited) resulting in HSIL being a Holding Company Limited, in Industrial Zone Developer subsidiary of the Company accordance with the terms and - There are 2 Company’s condition to exercise the option Executive Directors to be the to purchase the remaining of Director and the Executive 75% of SIL’s shares. Director in this Associated - The Company provides - Management Fee at 5%-8% Company. Management Services. of Revenue. This is according to the Company’s - A Subsidiary Company provides - Management Fee is at the policy for joint venture investment. Design and Construction Market Rate. Management Services. 1.3 Hemaraj Rayong Industrial - The Company held 25% 3,368 - The Company provides - Management Fee at 5%-8% Land Company Limited (indirectly) through HSIL and Management Services. of Revenue. (Previously name Rayong since October 1, 2010, the - A Subsidiary Company provides - Management Fee is at the Industrial Land Company Company invested in the Design and Construction Market Rate. Limited) remaining 75%, resulting in Management Services. Industrial Zone Developer HRIL being a subsidiary of the Company. - There are 2 Company’s Executive Directors to be the Director and the Executive Director in this Associated Company. This is according to the Company’s policy for joint venture investment.
Names of Company with Description of Transactions (Unit: Thousand Baht) Description Related Transactions Relationship Service Interest Commission Cost of Financial Income Income and Service Costs Management Income
201
• Annual Report 2010
รายงานประจํ า ปี 2553
Necessity / Opinion of Audit Committee
2. Related Companies : 2.1 Sriracha Harbor Public - The Company holds 6.40% 113 In 1996, the Company as a - The loan amount is a result Company Limited - There are 2 Company’s Directors, Shareholder (15% holding) provided from the loan granted as deem Port Services and Transportation Mr. Vikit Horrungruang and Baht 20 million loan. During the necessary at that time and the Mr.Chavalit Sethameteekul, 1997 crisis, Sriracha Harbor was Related Company has been who are the Executive Directors unable to repay the debt and went operated under the in the Related Company. under the rehabilitation plan. Rehabilitation Plan. The repayment plan follows the Rehabilitation Plan (in 2003). - The Company has fully reserved the total amount of doubtful account according to the Company’s procedures. However, the Company has not adjusted the reserve under the rehabilitation plan which will be adjusted upon receiving from the debtor. According to the rehabilitation plan, the Company will receives the interest at the rate of 1% p.a. and the principal will be repaid in full within 10 years.
Names of Company with Description of Transactions (Unit: Thousand Baht) Description Related Transactions Relationship Service Interest Commission Cost of Financial Income Income and Service Costs Management Income
202
• Annual Report 2010
รายงานประจํ า ปี 2553
Necessity / Opinion of Audit Committee
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
2.2 Glow Company Limited - The Company has jointly invested 2,399 - The Company raised short - Interest Rate at the Market Power Business in power projects with Glow. term loan from Glow Rate of MLR-2% for the purpose of acquisition and subscription of share capital increase in Houay Ho Thai Company Limited (51% share holding) which is an Holding Company in Houay Ho Hydro Power Project in Laos. The loan was due and fully repaid in 2010.
Names of Company with Description of Transactions (Unit: Thousand Baht) Description Related Transactions Relationship Service Interest Commission Cost of Financial Income Income and Service Costs Management Income
203
• Annual Report 2010
รายงานประจํ า ปี 2553
Hemaraj Land And Development 18th Floor, UM Tower, Public Company Limited 9 Ramkhamhaeng Rd., Suanluang, Registration No. Bormorjor 0107536000676 Bangkok 10250, Thailand Share Capital 15,000,000,000 shares Tel.(662) 719-9555 Issued 9,705,186,191 shares Fax (662) 719-9546-7 www.hemaraj.com E-mail: invest@hemaraj.com Subsidiary Companies Hemaraj International Limited (1) Scotia Centre, 4th Floor P.O.Box 2804, George Town, Grand Cayman, Cayman Islands H-International (BVI) Company Limited (2) Romasco Place, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola British Virgin Islands. Eastern Industrial Estate Company Limited 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand Eastern Pipeline Services Company Limited (3) 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand Eastern Seaboard Industrial Estate 18th Floor, UM Tower, (Rayong) Company Limited 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand H-Construction Management 18th Floor, UM Tower, and Engineering Company Limited 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand The Park Residence Company Limited 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand Hemaraj Eastern Seaboard Industrial 18th Floor, UM Tower, Estate Company Limited 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand Hemaraj Water Company Limited (4) 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand SME Factory Company Limited 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand H-Phoenix Property Company Limited 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand Hemaraj Clean Water Company Limited (5) 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand Hemaraj Saraburi Industrial Land 111 Moo 7, Nong Pla Mao Sub-District Company Limited * Nong Khae District, Saraburi (Formerly known as “SIL Industrial Land 18140, Thailand Company Limited” )
• Annual Report 2010 0.03 0.08 400 100 358 17.15 0.25 1,000 100 37 480 645 500
Holding Company Holding Company Industrial Estate Developer Pipe Rack Rental Industrial Estate Developer Design and Construction and Supervision Service Real Estate Development and Service Management Industrial Estate Developer Water Resource Development and Management Factory for Sale and Rental Office for Sale and Rental Produce and distribute the industrial water Industrial Estate Developer
1,133.78
99.99
99.99
99.99
99.99
99.99
99.99
99.99
99.99
60
99.99
99.99
21.92
220.91
96.32
1.31
185.11
1,242.93
3.31
12.02
663.70
94.45
336.97
100 -
100
3,882
Industrial Estates, Utilities and Property Developer
240.85
1%
5%
2%
0%
4%
28%
0%
0%
15%
2%
8%
178.24
91.60
21.13
147.71
300.24
7.43
23.09
317.37
75.38
819.66
0% -
26%
649.00
67.51
899.58
5.64
34.12
8%
4%
1%
6%
84.36
80.28
4.09
94.39
13% 1,847.48
0%
1%
14% 1,216.06
3%
36%
0% -
11%
2%
2%
0%
2%
37%
0%
1%
24%
1%
18%
0%
13%
Name Address Nature of Business Paid Revenue (Mil. Baht) Capital % of (Mil.Baht) Investment 2010 % 2009 % 2008 %
Holding Structure and Revenue of The Company, Subsidiaries and Associated Companies
204
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(11.89)
2,303.32
0% 0% 0% 9% 0% 0%
3.63 13.67 1.14 393.51 (0.10) 10.10
4,442.17 100%
(0.19)
74.25
11.30
3.55
3.60
0%
7.49
19.69
(6.50)
12.64
2.76
100% 5,011.10
-1%
0%
3%
1%
0%
0%
100%
0%
0%
0%
0%
Remark 1) Incorporated in the Cayman Islands 2) Incorporated in the Territory of the British Virgin Islands 3) Held 74.99 % directly and 25% indirectly through Eastern Industrial Estate Company Limited 4) Held 99.99 % indirectly held by Hemaraj Clean Water Company Limited 5) In 2009, Hemaraj Clean Water Company Limited had called for fully paid up capital.( In 2008 Hemaraj had established Hemaraj Clean Water Company Limited, which had the registered capital in the amount of Baht 645 million and had paid up for share capital in the amount of Baht 580.50 million) 6) 99.99% indirectly held by Hemaraj Saraburi Industrial Land Company Limited. 7) In 2010 The company has paid for investment acquisition in Hemaraj Industrial Land Company Limited (HSIL) to Cementhai Holding Company Limited (CHC) 8) 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). 9) In 2008 Share of (profits) losses from investments by using the equity method in Associated Companies was presented as an expenses in Statement of Income * The consolidated financial statement as at December 31, 2010 of the company included the total revenue of those 2 subsidiaries as from October 1, 2010 to December 31, 2010
Hemaraj Rayong Industrial Land 18th Floor, UM Tower, Industrial Estate Developer 1,000 99.99 Company Limited *(6) 9 Ramkhamhaeng Road, Suanluang, (Formerly known as “RIL Industrial Land Bangkok 10250, Thailand Company Limited” ) Associated Companies (9) Cofely (Thailand) Company Limited. 107/1 Moo 4, Eastern Seaboard Facilities Management Services 50 40 (Formerly known as “Elyo-H Facilities Industrial Estate (Rayong), Management Limited” ) Pluakdeang, Rayong, Thailand Hemaraj Saraburi Industrial Land 111 Moo 7, Nong Pla Mao Sub-District Industrial Estate Developer 500 25 Company Limited (7) Nong Khae District, Saraburi (Formerly known as “SIL Industrial Land 18140, Thailand Company Limited” ) Hemaraj Rayong Industrial Land 18th Floor, UM Tower, Industrial Estate Developer 1,000 25 Company Limited (6) 9 Ramkhamhaeng Road, Suanluang, (Formerly known as “RIL Industrial Land Bangkok 10250, Thailand Company Limited” ) GHECO-One Company Limited 195 Empire Tower, 38th Floor Electricity and Power 7,719 35 Park Wing, South Sathorn Road Generation Bangkok 10120, Thailand Houay Ho Thai Company Limited 10 / 190-193 , Trendy Tower, 26th Floor, Holding Company 527.69 51 Soi Sukhumvit 13, Sukhumvit Road, Kwaeng Klongtoeynua,Khet Wattana, Bankok Houay Ho Power Company Limited (8) P.O.Box 5464, Nong Bone Road Electricity and Power 50 12.75 Bane Fai, Xaysetta District, Vientiane Generation (Million USD) Lao People’s Democratic Republic Related Companies Eastern Fluid Transport Company Limited 618 Nimom Makkasan Road Management and 10 15 Makkasan, Ratchthewi Maintenance of Pipe Rack Bangkok 10400, Thailand Glow IPP Company Limited 195 Empire Tower, 38th Floor Electricity and Power 2,850 5 Park Wing, South Sathorn Road Generation Bangkok 10120, Thailand Total Revenue : Hemaraj Land And Development PLC. and Subsidiaries
Name Address Nature of Business Paid Revenue (Mil. Baht) Capital % of (Mil.Baht) Investment 2010 % 2009 % 2008 %
205
• Annual Report 2010
• Annual Report 2010
/, // /, //
/, //
/
/ /, //
/
/
3 Mr. Thongchai Srisomburananont 4 Mr. David Richard Nardone
5 Mr. Vivat Jiratikarnsakul
6 Mr. Peter John Edmondson
7 Mrs. Punnee Worawuthichongsathit 8 Ms. Pattama Horrungruang
9 Mr. Somphong Wanapha
10 Mr. Vikit Horrungruang
11 Mr Sunthorn Kongsunthornkitkul 12 Mr. Khamhoung Ratsamany
13 Mr. Tanin Subboonrueng
14 Mr. Sirisak Kijraksa
Eastern Industrial Estate Co., Ltd.
/
/
X /
Eastern Seaboard Industrial Estate (Rayong) Co., Ltd
/, //
/, //
/, // /, //
/
/
X /
Hemaraj Eastern Seaboard Industrial Estate Co., Ltd.
/ = Director X = Chairman // = Executive Director
/
2 Mr. Sudhipan Charumani
Notes:
/, X
Hemaraj Land And Development Plc.
1 Mr. Chavalit Sethameteekul
Name
Eastern Pipeline Services Co., Ltd.
/
/
/ X
The Park Residence Co., Ltd.
/
/
X /
H-Construction Management and Engineering Co., Ltd /
/
/
X
Hemaraj Water Co., Ltd.
/
/
X /
SME Factory Co., Ltd.
/
/
X /
H-Phoenix Property Co., Ltd.
/
/
X /
Hemaraj Clean Water Co., Ltd.
/
/
X /
H-International (BVI) Co., Ltd.
/
/
Hemaraj International Co., Ltd.
/
/ /
Hemaraj Saraburi Industrial Land (Saraburi) Co., Ltd.
/
/
/
X /
/
/
/
X /
GHECO-One Co., Ltd.
/
/
/
/
/
/
X
Cofely (Thailand) Co., Ltd.
ASSOCIATED COMPANIES
/
/
/
Houay Ho Thai Co., Ltd.
SUBSIDIARY COMPANIES
/
/
Houay Ho Power Co., Ltd.
รายงานประจํ า ปี 2553
Hemaraj Rayong Industrial Land Co., Ltd.
INFORMATION OF DIRECTORS AND MANAGEMENT IN COMPANY, SUBSIDIARIES AND ASSOCIATED COMPANIES
206
The remuneration of the Auditor of company 207 Audit Fee
The company and its subsidiary(ies) has made a payment for Audit Fee to A.M.T. Associates which it is the regular office of the auditor(s) in the latest accounting year in the total amount money of 4.10 Million Baht and Audit Fee of subsidiaries were audit by other auditor amount money of 0.50 Million 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 A.M.T. Associates which it is the regular office of the auditor(s) in the latest accounting year in the total amount money of 110,000 Baht.
รายงานประจํ า ปี 2553
• Annual Report 2010
Other References
208 Share Registrar
Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Bldg. 4th Floor 6-7th Floor, Rachadapisek Road, Klongtoey Bangkok 10110, Thailand Tel. 0-2229-2800 Fax 0-2654-5427
Auditor Mrs. Natsarak Sarochanunjeen CPA No. 4563 A.M.T & Associates 491/27 Silom Plaza, Silom Road, Bangruk Silom Road, Bangruk Bangkok 10500, Thailand Tel. 0-2234-1676, 0-2234-1678 Fax 0-2237-2133 Attorney
Allen & Overy (Thailand) Co., Ltd. 130 Sindhorn Building III, 22nd Floor, Wireless Road Bangkok 10330, Thailand Tel. 0-2263-7600 Fax 0-2263-7699
Per Project
Financial Advisor
รายงานประจํ า ปี 2553
• Annual Report 2010