CONTENTS Message from the Chairman Board of Directors Financial Highlights
6 8 9
Section1: Corporate Review Performance Review Financial Review Market Review Projects Review CSR Review Audit Committee Report
10 13 16 19 24 25
Section2: Corporate Information Corporate Structure 27 General Information on the Company, its Subsidiaries, 28 and Other Relevant Companies Shareholder and Capital Structure 31 Management 33 Internal Control 51 Connected Transactions 52 Risk Factors 53
Section3: Financial Statements Auditor’s Report Consolidated Financial Statements Notes to Consolidated Financial Statements
59 60 69
5
Message from the Chairman Raimon Land PLC posted record financial results for the year 2012, with a landmark net profit of Baht 496 million (USD 16.6 million). The company’s 2012 EBITDA reached its highest level ever, at Baht 1.058 billion (USD 35.46 million). Confirming further its sound financial situation, with a secured backlog at the end of 2012 of Baht 16.3 billion (USD 546 million) and unrecognized sales in its current projects valued at Baht 28 billion (USD 939 million), the company saw its gross profit margin jump to 33%. The Company delivered a new project in 2012 namely The River Bangkok, Raimon Land’s largest condominium project to date including 837 units located alongside the Chao Phraya river, in the heart of the city’s exclusive 5 star hotel precinct. Excellent progress was also recorded at Raimon Land’s new condominium projects. 185 Rajadamri located on the last remaining plot of freehold land on Rajadamri Road, in the heart of Bangkok’s CBD, is due for completion towards the end of 2013. The 268-unit project is 75% sold out with prices of up to Baht 398,000 per square meter, the highest value ever achieved for a condominium in Bangkok. Zire Wongamat and Unixx South Pattaya also performed well in 2012 with both projects well on track for completion in 2014 and 2015 respectively. On 1 February, 2013, the Singapore-based Lee family became Raimon Land’s largest shareholder, after acquiring a 24.98% equity stake from IFA Hotels & Resorts 3 Limited. Consequently, five new directors were appointed to the company’s Board, including Lionel Lee, his brothers Adrian and Johnson Tan Chin Kwang as well as Khun Nuch Kalyawongsa as Chief Financial Officer and myself as Chairman of the Board. However, Raimon Land’s management team remains essentially the same. Looking forward, Raimon Land will continue to focus on high-end property development in Bangkok and resort destinations in Thailand, which has been instrumental to Raimon Land’s success. The Company also intends to diversify its activities by developing additional income-generating sources, such as rentals from commercial properties, hotel management fees and revenue from food & beverage outlets. And as always, Raimon Land’s commitment to its customers and its dedication to the highest standards of property development remains steady. As Chairman of the Board of Directors, I would like to thank our shareholders, management, staff and other stakeholders for their tremendous support throughout 2012. The path is now laid for a very rewarding year ahead.
Mr. Pradit Phataraprasit Chairman of the Board of Directors
6
BOARD OF DIRECTORS
1 4
5
7
8
2
3 6
Raimon Land has assembled a strong and respected Board of Directors with a wealth of property-related experience across a diverse range of markets and disciplines. The Board is well equipped to guide executive management towards long term value creation for all shareholders and stakeholders.
9 1. Mr. Pradit Phataraprasit Chairman of the Board of Directors, Independent Director and Audit Committee Member 2. Mr. Lee Chye Tek Lionel Director 3. Mr. Lee Chye Cheng Adrian Director 4. Mr. Tan Chin Kwang Johnson Director 5. Mr. Jason Goh Hseng Wei Director 6. Ms. Nuch Kalyawongsa Director 7. Mr. Roland Pang Tze Vu Director 8. Mr. Kitti Gajanandana Director, Independent Director and Chairman of Audit Committee 9. Mr. Jirawud Kuvanant Director, Independent Director and Audit Committee Member
8
FINANCIAL HIGHLIGHTS
Unit
2012
2011
2010
Total Revenue
Million Baht
5,520
1,228
3,492
Revenue from Sale of Condominium Units
Million Baht
5,435
1,151
3,241
EBITDA
Million Baht
1,058
(116)
257
Net Profit
Million Baht
496
(474)
63
Total Asset
Million Baht
14,997
15,299
12,404
Total Liabitlites
Million Baht
13,441
14,696
11,005
Total Shareholders’ Equity
Million Baht
1,556
603
1,399
Gross Profit Margin (from Core Revenue)
Percentage
32.82
28.88
28.60
Net Profit Margin
Percentage
8.98
-38.62
1.82
Times
4.00
11.01
3.27
Earnings per Share
Baht
0.14
(0.15)
0.02
Book Value per Share
Baht
0.43
0.18
0.43
Interest-Bearing Debt to Equity
EBITDA (Million Baht)
Net Profit (Million Baht)
14,997
Total Revenue (Million Baht)
2010
2011
2012
(474)
(116)
63
257
496
1,058
1,228
3,492
5,520
12,404
15,299
Total Asset (Million Baht)
Remark : Financial figures are based on the consolidated financial statements
9
PERFORMANCE REVIEW
In 2012, the company achieved a new record level of net profit of Baht 496 million, and historically its highest ever EBITDA of Baht 1,058 million. In addition, a backlog of Baht 16.3 billion has reinforced the strong financial health of the company, whilst the company also has unrecognized revenue from ongoing projects to the value of Baht 28 billion which is going to be recognized in the near future. Compared to 2011’s gross profit, gross profit margin has increased 33 percent.
Profit and Loss Summary (as Consolidated Financial Statement) 2012 (Million Baht)
2011 (Million Baht)
Change (%)
5,520
1,228
350%
(4,462)
(1,344)
232%
1,058
(116)
n.a.
(38)
(41)
-7%
EBIT
1,020
(157)
n.a.
Finance cost
(261)
(114)
129%
Corporate income tax
(263)
(209)
26%
-
6
n.a.
Net income (loss)
496
(474)
n.a.
Basic earnings (loss) per share
0.14
(0.15)
n.a.
Total revenue Net operating expenses EBITDA Depreciation & Amortisation
Minority interest
10
In 2012, the Company and its subsidiaries gained a net profit of Baht 496 million compared to a net loss of Baht 474 million in 2011 due to the following major factors;
1. The Company and its subsidiaries recognized income from the sales and transfers of properties increased by approximately 372 percent or Baht 4,283 million compared to 2011. This is due to the transfers of properties from The River project to the value of approximately Baht 5 billion. 2. Gross profit margin of the company and its subsidiaries increased from 29 percent in 2011 to 33 percent in 2012. Earnings per share is at 0.14 Baht per share (2011: loss (0.15) Baht per share)
Revenue In 2012, the company recognized revenue of Baht 5,435 million, which represents an increase from 2011 revenue of Baht 4,283 million, or an increase of 372 percent, due to the transfer volume of The River project to the value of approximately Baht 5 billion. By comparison, in 2011 the company could recognize revenue of only Baht 1,152 million, of which 92 percent came from the Northpoint project. In 2012, 99 percent of the total revenue was recognised from two real estate projects; The River, to the value of Baht 5,008 million, or 91 percent of total revenue; and Northpoint Pattaya, to the value of Baht 427 million, or 8 percent of total revenue. 2012
Projects
2011
Revenue (million Baht)
%
Revenue (million Baht)
%
The River
5,008
91%
-
-
Northpoint
427
8%
1,062
87%
-
-
90
7%
85
1%
76
6%
5,520
100%
1,228
100%
The Heights Phuket Others* Total
* This includes revenue realised from rental and service income, commission, interest, and others.
11
Cost of Goods Sold In 2012, the cost of goods sold increased by approximately 346 percent compared to that of last year which increased proportionally due to additional revenue from the transfer of property. 2012
Projects
2011
Cost of goods sold (million Baht)
%
Cost of goods sold (million Baht)
%
The River
3,327
91%
-
-
Northpoint
324
9%
757
92%
-
-
62
8%
3,651
100%
819
100%
The Heights Phuket Total
Gross Profit The gross profit margin of the Company and its subsidiaries is on an upwards trajectory. While gross profit margin was at 33 percent in 2012, gross profit margin in 2011 and 2010 was maintained at 29 percent. This demonstrates the profitability of Raimon Land and the company’s good financial health.
Selling and Administrative Expenses Selling and administrative expenses were the second major expense for Raimon Land, accounting for 19 percent of the total expenses in 2012. The selling and administrative expenses increased from Baht 577 million in 2011 to Baht 850 million in 2012, which is a 47 percent increase. The increase was due largely to additional special business tax and transfer fees, which amounted to Baht 195 million, resulting from the transfer process of The River project, for a total of approximately Baht 5 billion. Selling and administrative expenses
2012 (Million Baht)
2011 (Million Baht)
Percentage Change
Salary and staff benefits
97.1
89.4
8.61%
Management remuneration
97.3
53.7
81.19%
Depreciation and amortisation
38.6
41.0
-5.85%
Special business tax & transfer fees
241.4
46.4
420.26%
Other selling expenses
189.9
142.0
33.73%
37.1
61.7
-39.87%
148.4
142.6
4.06%
849.8
576.8
47.33%
Other administrative expenses Other expenses Total
Finance Expenses Most of the finance expenses from project development loans had to be capitalised as a project development cost until completion of the projects. Therefore in 2012, the Company had greater finance expenses than 2011 because after a number of units from The River project had been transferred, financial expenses could not be capitalized and were instead recorded as finance costs on the Statement of comprehensive income. 12
FINANCIAL REVIEW Summary Statements of Financial Position (as Consolidated Financial Statement) 2012 (Million Baht)
2011 (Million Baht)
% Change
Cash and cash equivalent
1,431
662
116%
Project development cost
11,295
12,620
-10%
Other current assets
877
614
43%
Fixed asset*
413
200
107%
Other non-current assets
981
1,203
-18%
Total assets
14,997
15,299
-2%
Current liabilities
10,812
7,887
37%
2,629
6,809
-61%
13,441
14,696
-9%
1,556
603
158%
14,997
15,299
-2%
Non-current liabilities Total liabilities Total shareholders’ equity Total liabilities & shareholders’ equity *Fixed assets include Investment properties, Leasehold right and Land awaiting development.
Assets Raimon Land’s total assets as of 31 December 2012 decreased 2 percent compared to the previous year. Significant changes in assets were as follows; 1. Cash and cash equivalent has increased Baht 769 million due to additional sales from 4 existing projects, which resulted in an increase of cash-instalments received from customers compared to 2011. 2. The transfer of The River was a significant factor causing a decrease in project development costs of Baht 1,325 million compared to 2011. 3. A high level of progression in terms of project development led to an increase of advance payments to contractors and a deposit for the purchase of land of Baht 114 million and Baht 106 million respectively.
Liabilities At the end of year 2012, total liabilities of the company and its subsidiaries decreased by Baht 1,255 million, or 9 percent, from Baht 14,696 million in 2011 to Baht 13,441 million in 2012. This can be divided to total interest bearing liabilities of Baht 416 million and total non-interest bearing liabilities of Baht 839 million. Since a number of The River’s units were transferred to customers, this enabled the company to make a certain amount of repayments and simultaneously recognize the deposits received from customers into the sale of residential condominium units in 2012. 13
Shareholders’ Equity At the end of 2012, the shareholders’ equity of the Company was valued at Baht 1,556 million, which represents an increase of Baht 953 million or 158 percent from 2011 due to the following factors; 1. The Company issued 325,038,556 additional ordinary shares to two long-term investors by private placement, at a price of Baht 1.4058 per share, or for the total of Baht 457 million. 2. The Company and its subsidiaries achieved a net profit of Baht 496 million in 2012.
Cash flows In 2010, 2011, and 2012, the Company and its subsidiaries’ net cash flows from operating activities was Baht 349 million, Baht (1,043) million, and Baht 803 million, respectively. In 2012, the Company achieved Baht 803 million in net cash flow from operating activities mainly due to the transfer of units from The River project. This resulted in the Company’s subsidiary receiving the transfer balance from transfer of ownership to the clients. During 2010-2012, the Company’s net cash from investment activities was Baht 988 million, Baht (503) million and Baht (16) million, respectively. As such, net cash from investment activities is on a downward trend. As for the company’s net cash from financing activities, during 2010-2012 the company received net cash flow of Baht (1,090) million, Baht 1,627 million and Baht (17) million respectively. Even though the company was able to issue additional ordinary shares by private placement to the value of Baht 457 million, the transfer volume of The River caused the company to make a repayment to financial institutions of Baht 636 million, resulting in a decrease of net cash from financing activities of Baht 17 million.
Liquidity Overall, the Company’s liquidity in 2012 improved drastically from that of the previous year. The Company received Baht 803 million from operating activities, spent Baht 16 million on investing activities and another Baht 17 million from financing activities. In summary, the Company’s net cash position has increased by Baht 770 million from 2011 and the Company’s quick ratio improved from 0.16 in 2011 to 0.21 in 2012. In addition, the ability to transfer a number of The River’s units resulted in a decrease of Interest-Bearing Debt of Baht 416 million and a record net profit of Baht 496 million. This resulted in a decrease in Interest-Bearing Debt to Equity ratio from 11.01 in 2011 to 4.00 in 2012.
14
Summary of key financial ratios (from consolidated financial statement) 2012
2011
Current ratio
1.26
1.76
Quick ratio
0.21
0.16
32.82%
28.88%
Net profit margin (%)
8.98%
-38.62%
Return on equity (%)
46.11%
-47.60%
Return on assets (%)
3.27%
-3.42%
Total assets turnover (times)
0.36
0.08
Fixed assets turnover (times)
72.20
25.36
Debt to equity ratio (times)
8.64
24.37
Interest-bearing debt to Equity (times)
4.00
11.01
Interest coverage ratio (2) (times)
3.91
-1.37
Book value per share (3) (Baht)
0.43
0.18
Earning per share (Baht)
0.14
-0.15
Total asset growth (%)
-1.98%
23.34%
Total liabilities growth (%)
-8.54%
33.54%
Total shareholder’s equity growth (%)
157.99%
-56.87%
Total revenues growth (%)
349.42%
-64.83%
Total expenses growth (%)
222.48%
-51.15%
Liquidity Ratios
Profitability Ratios Gross profit margin (1) (%)
Efficiency Ratios
Leverage Ratios
Per Share Ratios
Percentage of Growth (% per year)
(1)
Gross profit margin = (total sales – cost of sales)/total sales, whereas total sales consists of sale of residential condominium units Interest coverage ratio = Income before finance cost and income tax/ finance cost, finance cost means interest and other charges associated with financing activities, e.g. front end fee (3) Book value does not include equity attributable to minority shareholders (2)
15
MARKET SUMMARY 2012 Overview The early part of the year was dedicated to flood recovery and the passing of a significant budget to deal with water management in order to avoid a repeat of the 2011 floods – Baht 350 billion was committed by Royal Decree for water resource management. Concerns over losing foreign confidence and investment in the production system quickly faded and most businesses and factories affected by the floods were back in full operation in the second quarter of the year. Additionally, the promised raise in minimum wages did not have any significant impact on the production sector – at least for now. The impact of the European meltdown was quite limited (Thai exports to the EU reduced by 9 percent YoY but this was compensated for by exports to Asian markets). Tourism performed exceptionally well with 22 million arrivals in 2012. The policy of the government to reduce corporate tax from 30 percent to 23 percent was successfully implemented in 2012 and is to be further reduced to 20 percent in 2013. Exports grew by 3.2 percent in 2012, and the trade balance was still positive – despite being lower than usual. Budgets for infrastructure were committed, and construction of the mass transit system is moving ahead with extensions to existing lines opened in 2012 and an additional 2 lines to open in 2013 and 2014. In addition, there is a relatively ambitious railway system plan in place, which intends to position Thailand as a logistics hub for the upcoming ASEAN Economic Committee (AEC). Banks in Thailand remained solid, and continued to fuel the economy and finance homebuyers. Inflation was kept under control at 3 percent in 2012, however, some recent concerns over the Thai Baht appreciation could become a challenge in 2013. The general consensus is that Thailand, which now relies on 70 percent of GDP coming from exports, is at a turning point in its history, with a shift to focus on purchasing power and domestic consumption on the horizon. Looking forwards, we have a positive outlook for the residential market in Thailand. We see tremendous opportunities in central Bangkok, along new mass transit lines and in other Thai cities. The upper end market shall continue, as in most real estate markets in the world, to follow the growth of the Thai economy and continue to attract both domestic and international interest in quality projects located in prime locations.
Condominium Market in 2012 New housing registrations in Bangkok and its vicinity represented 111,875 units in 2012 versus 81,735 units in 2011. The growth is mainly a result of a lower base in 2011 and is showing a 10 percent growth from the amount of registrations recorded in 2010. Again, the apartment and condominium segment represented the majority of new registrations with a total of 64,716 units in 2012 – 57.8 percent of total registrations. 16
2012 was a year of new explorations in upcountry cities from listed developers. This included already established markets such as Hua Hin, Pattaya, and Phuket as well as other cities such as Khao Yai, Chiang Mai, Khon Khaen, Udonthani and Hat Yai. Raimon Land has been a strong player in the Pattaya market since 2005 and can be considered
New Housing Registrations in Bangkok and Vicinity
111,875 81,735
100,000
106,893
120,000
94,977
Units
85,579
80,000 60,000 40,000 20,000
2012
2011
2010
0 2009
Our research shows that a total of 80 condominium projects with 47,797 units were launched by Thai listed developers in 2012, with a combined value of Baht 111,184 million. Also of note was that data reported by developers to analysts shows that 2012 saw presales generate sales to the value of Baht 116,728 million. In terms of positioning, 60 percent of the new launches were for units priced below Baht 2 million (entry market), 34 percent between Baht 2 million and Baht 5 million (mid-market), and only 6 percent were priced above Baht 5 million (high end market) where Raimon Land is active. Bangkok represented 80 percent of the new launches, still the majority, but there is definitely a trend developing for new projects in other cities in Thailand.
a market leader - with 1,650 units currently under development there. The Pattaya market today is driven by Thai nationals, mainly purchasing units as a second home and as investments for rent and future capital appreciation. 32 condominium projects were launched in Pattaya in 2012 with 12,154 units. 81 percent of the new launches were priced below Baht 2 million – mainly inland projects – and another 15 percent in the Baht 2-5 million bracket mainly for sea view condominiums. The high-end segment is barely represented with only 4 percent of total launches - mainly beachfront properties.
2008
The interest from Bangkok residents to purchase condominiums as opposed to landed houses is a result of several factors such as the recent floods, affordability, maintenance costs, and petrol costs. We also see a rising trend of Generation Y looking to find a residence outside the family home, in hassle free locations, close to offices, retail and dining venues. This mainly drives the studio and 1-bedroom market as opposed to family size condominiums.
Self - Buit Housing Apartment and Condominium Housing Project
17
Raimon Land’s Customers
Outlook for 2013 Land prices in Bangkok’s city centre rose to a point where only few developers with appropriate branding and quality achievements can still build and sell – tapping into the high end and luxury markets. These segments, a little underplayed in the past 3 years, have shown great recovery and certainly call for new products in 2013. Most land transactions are still expected to take place along the extended lines of the mass transit system i.e. Purple line from Bang Sue to Bang Yai, Light Red line from Bang Sue to Taling Chan and the extension of the Silom line to Bang Wa. We believe this market will become very competitive and price sensitive. Early reports from listed developers also show that 2013 will call for more projects outside Bangkok and we expect to see more developers testing upcountry markets.
Raimon Land’s Customers Raimon Land has maintained its leadership in selling condominiums to foreigners in Thailand, achieving 40 percent of sales for foreigners in 2012. Raimon Land has also successfully tapped into the Thai market, representing the remaining 60 percent of sales. Foreign markets are still led by Western Europeans (42 percent of foreign sales), then Asians (with 28 percent) and followed by Eastern Europeans (18 percent). The remaining 12 percent are from the rest of the world, covering 33 nationalities in total. The company’s recent diversification into the mid and high end markets – as opposed to luxury – with 11 percent of Raimon Land’s sales from condominium units priced for less than Baht 5 million and another 16 percent from Baht 5 – 10 million has been driven by the implementation of new brands i.e Unixx, Zire. These brands have helped Raimon Land tap into a new group of customers without affecting its leadership in the luxury segment. Geographically, Raimon Land is also diversified with 30 percent of Raimon Land’s sales in 2012 generated outside of Bangkok. Additional income is generated from operating assets including a community mall on Charoennakorn Road, a Private Residence Club at Northpoint Pattaya and the upcoming Serviced Residences at The River Bangkok.
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By Nationality 2% 11%
7% America Asia 60%
17%
E.Europe Europe ROW
3%
Thailand
By Unit Types 12%
0% 5%
4%
19% Studio 1BR 2BRs
25%
3BRs 4BRs Dplx+Loft 35%
Home office
By Unit Price 3% 8%
16% 52%
Less than 2.0MB From 2.0 to 4.99MB From 5.0 to 9.99MB From 10.0 to 19.99MB
21%
More than 20MB
By Age 7%
9%
24% 25% Less than 30 From 30 to 39 From 40 to 49 From 50 to 59 More than 60 35%
PROJECTS REVIEW Raimon Land Public Company Limited is a commercial property developer, specializing in residential project developments for sale and/or rent from the middle to top-end markets in Thailand. The Company has a long history of delivering customer satisfaction and winning premium awards for its condominiums. Over the years, Raimon Land has raised the bar in terms of design standards and construction quality in Bangkok and resort locations. During the Annual Thailand Property Awards 2012, Raimon Land won two awards for The River. The property was awarded the “Best Luxury Condo Development (Bangkok)” in the Development category and the “Best Condo Development Thailand” in the Architecture/Interior Design category. Receiving these awards for The River is further proof of the product quality that is well accepted by the market.
Raimon Land project details as of 31 December, 2012 Project
Type
Launch year (Q/Year)
Land area (Rai-NganWah)
Saleable area (sq.m.)
No.of units
Project sale value (Million Baht)
Average price per sq.m.
Completion year
Completed Projects The Lofts Sathorn
Townhouse
Q1/2003
3-0-64
3,486
25
400
115,000
2004
The Lakes Condominium
Condominium
Q3/2003
1-2-90.5
26,062
165
1,685
65,000
2005
The Legend Saladeang
Condominium
Q1/2004
1-1-40
9,672
75
842
87,000
2005
Northshore
Condominium
Q3/2004
2-1-51
21,271
193
1,490
71,000
2006
Kata Gardens
Condominium
Q4/2004
5-0-59.4
6,767
33
447
66,000
2006
The Lofts Yennakart
Condominium
Q3/2005
3-0-19.1
17,240
176
1,234
72,000
2007
The Heights Phuket
Condominium
Q4/2005
14-0-41.2
13,337
51
1,205
90,500
Q4/2008
Northpoint
Condominium
Q4/2006
12-0-54
40,133
376
4,850
125,000
2010
The River
Condominium
Q1/2007
12-3-41
108,738
837
14,950
145,000
2012
19
Raimon Land project details as of 31 December, 2012 (continued) Project
Type
Launch year (Q/Year)
Land area (Rai-NganWah)
Saleable area (sq.m.)
No.of units
Project sale value (Million Baht)
Average price per sq.m.
Completion year
Ongoing projects 185 Rajadamri
Condominium
Q3/2010
4-1-62.9
38,000
268
9,600
250,000
Q4/2013
Zire Wongamat
Condominium
Q1/2011
5-3-70
28,500
480
2,800
100,000
2014
Unixx South Pattaya
Condominium
Q4/2011
7-0-16
46,155
1,200
2,950
65,000
2015
Since 2005, Raimon Land has completed nine new properties with a total sales value of over Baht 17 billion: four in central Bangkok (under three brand names: The Lofts, The Lakes, and The Legend), two in Pattaya (Northshore and Northpoint), two in Phuket (Kata Gardens and The Heights Phuket), and in 2012 the company transferred ownership of units at The River project to the value of approximately Baht 5 billion. The remaining value of the project of approximately Baht 10 billion will be delivered in the forthcoming steps. The Company currently has a portfolio of three on-going projects with a total value of Baht 15.35 billion. These three projects include 185 Rajadamri, the last freehold residential development on Rajadamri Road in Bangkok; Zire Wongamat and Unixx South Pattaya in Pattaya.
Projects in 2012 In 2012, Raimon Land Public Company Limited developed, sold, and/or rented the following 6 projects:
The River Located on the banks of the Chao Phraya river, The River is Raimon Land’s largest project to date and was developed under the subsidiary Taksin Property Company Limited. From its launch to date, the project has received good customer response. With a total project value of Baht 14,950 million, by the end of 2012 the value of sold units amounted to Baht 11,567 million or approximately 82 percent of the total saleable area. In mid-2012, the project started to transfer units to the owners, making the total transfer value of Baht 5,008 million for the year 2012. 20
14,950 Million Baht
51%
(c)
100%
Remarks:
82%
(a) Saleable area contracted / total saleable area 65%
6,559
(b) Cash received / total contracted value
(b)
(c) Cash received / total project value (d) Completed cost / total development cost
Sold Value 11,567
Recognized sales value
5,008
Unrecognized sales value Project value not sold % % % (a) (d) Received Constructed Contracted
Project Value
The River is now known to be the tallest riverside residential building in Bangkok. During the Annual Thailand Property Awards 2012, the River was awarded the “Best Luxury Condo Development (Bangkok)” in the Development category and the “Best Condo Development Thailand” in the Architecture/Interior Design category.
185 Rajadamri
9,600 Million Baht
26%(c)
Remarks: (a) Saleable area contracted / total saleable area
74%
6,432
Sold Value 6,432
(b) Cash received / total contracted value 38%(b)
48%
(c) Cash received / total project value (d) Completed cost / total development cost Recognized sales value Unrecognized sales value
Project Value
% % % (a) (d) Received Constructed Contracted
185 Rajadamri is a luxury project comprising 268 units and is the last freehold project on Rajadamri Road. The property is surrounded by the central business district, premium shopping malls, top schools, consulates, five-star hotels, Lumpini Park, and the Royal Bangkok Sports Club. By the end of 2012, the project had sold approximately 74 percent of the total saleable area.
Project value not sold
21
Northpoint Northpoint is Raimon Land’s second top-grade condominium development in Pattaya. With 80 metres of beach frontage on Wongamat Beach, the property boasts uninterrupted views over the Gulf of Thailand and provides extensive facilities. The project is complete and ownership of the majority of the sold units has been transferred to customers. Northpoint consists of 376 condominium units and about 95 percent of the total saleable area was sold by the end of 2012. Currently, only 4 units of the project remain unsold. 4,850 Million Baht
90% 95%
219
(c)
100%
96%(b)
Remarks: (a) Saleable area contracted / total saleable area (b) Cash received / total contracted value
4,330
(c) Cash received / total project value
Sold Value 4,549
(d) Completed cost / total development cost Recognized sales value Unrecognized sales value Project value not sold % % (a) Received Contracted
Project Value
% Constructed(d)
Zire Wongamat Zire Wongamat is Raimon Land’s third residential project in Pattaya, located adjacent to Northpoint and only 90 minutes by car from Bangkok. The company purchased over 5 Rai of land to develop Zire Wongamat with the project uniquely designed to contain two towers of 37 and 53 floors offering panoramic views of the Gulf of Thailand. Zire Wongamat consists of 480 units with various unit types including studio, 1 - 2 bedrooms and multi-leveled units. By the end of 2012, the project sold about 74 percent of the total saleable area and the North Tower has already sold out. 22
2,800 Million Baht
14%
(c)
Remarks: (a) Saleable area contracted / total saleable area
74%
(b) Cash received / total contracted value (c) Cash received / total project value
1,968
Sold Value 1,968
(d) Completed cost / total development cost 19%(b)
19%
Recognized sales value Unrecognized sales value Project value not sold
Project Value
% % % (a) Received Constructed(d) Contracted
Unixx South Pattaya Unixx South Pattaya is Raimon Land’s forth residential project in Pattaya. The project is targeted at the middle-end market, and at both Thai and foreign nationals residing in Pattaya as well as Bangkok residents looking for weekend or second homes. The project occupies over 7 Rai on Pratumnak Road that belongs to one of Raimon Land’s subsidiaries and consists of 1,200 units with an average price of Baht 65,000 per square meter and an average unit size of not more than 40 square meters. By the end of 2012, the project sold about 37 percent of the total saleable area. The project is expected to complete by the end of 2015. 2,950 Million Baht
7%
(c)
Remarks: (a) Saleable area contracted / total saleable area (b) Cash received / total contracted value (c) Cash received / total project value (d) Completed cost / total development cost
37% 1,116
Project Value
20%
Sold Value 1,116
Recognized sales value
(b)
2%
Unrecognized sales value Project value not sold
% % % (a) Received Constructed(d) Contracted
Vue Vue is a lifestyle shopping centre 4,000 square meters in size and located in front of The River Project on Charoennakorn Road. The project area covers approximately 3 Rai and features a 4-level building, inclusive of basement. The main tenant is a supermarket, named Max Valu, while other tenants include a restaurant, café, bakery shop, ice cream shop, and spectacle shop amongst others.
Future projects Moving forward, Raimon Land intends to maintain its continuous growth by developing at least 1-2 new projects every year. The new projects will be valued at around Baht 2 – 5 billion (depending on the land size and legal regulations) with potential locations in both Bangkok and resort destinations. The focus will remain on mid-tohigh-end projects. 23
CSR REVIEW In keeping with its corporate motto “…developing a better environment”, Raimon Land continued to support a range of projects under its Corporate Social Responsibility (CSR) program. For the fifth consecutive year, Raimon Land lent its support to the Plant-A-Tree-Today Foundation (PATT), by funding the development of a tree nursery in Khao Yai. Raimon Land employees and clients headed to Nakhon Rachasima to transplant hundreds of young trees from the sapling nursery facility. This cooperation with PATT was started in 2008 to help preserve the natural ecology of the area, educate children on environmental issues and show the local community how to implement a sustainable reforestation programme. Since its birth in 2008, the company has been supporting its adopted female calf elephant, Pand Raimon, who has been placed in a natural habitat at the Anatara Elephant camp in Chiang Rai province. Our long-term sponsorship commitment to supporting Pand Raimon ensures that one of Thailand’s national symbols and one of the world’s most threatenened species remains in proper care for the rest of her life. The company also supported Mercy Center, a foundation under the Royal Patronage of HRH Princess Srirasmi that aids children and residents of Bangkok’s slum areas by providing education, protection and shelter. Proceeds of Raimon Land’s event to celebrate Loy Krathong at The River were channeled to low income families and communitiesthrough Mercy Center. The company continues to focus on a variety of CSR projects and drive sustainable efforts to help improve society and the environment. Moving forward, Raimon Land is renewing its commitment in all of important areas.
24
AUDIT COMMITTEE REPORT 2012 Attention: Shareholders of Raimon Land Public Company Limited The Audit Committee of Raimon Land Public Company Limited is comprised of three independent directors qualified under the Code of Best Practice Guidelines of the Stock Exchange of Thailand. In 2012, the members of the Company’s Audit Committee are Mr. Kitti Gajanandana serving as the Chairman of the Audit Committee and Mr. Sompoch Intranukul and Mr. Jirawud Kuvanant, both serving as Members of the Audit Committee. The Audit Committee has performed its duties in accordance with the scope, duties and responsibilities as assigned by the Board of Directors which are consistent with the relevant rules of the Stock Exchange of Thailand. There were four Audit Committee meetings in the 2012 accounting year and one Audit Committee meeting in 2013 for a total of five meetings. The Audit Committee held the meetings with the Company’s Management and external and internal auditors as appropriate. A summary of the aforementioned meetings is as follows:
1. Review of Quarterly Financial Statements and 2012 Financial Statements The Financial Statements were reviewed during the Meeting of the Company’s Management exclusively by the Auditors and the panel of the Audit Committee. Inquiries were addressed and recommendations about various issues concerning the Company’s Financial Statements were made before presenting to the Board of Directors for consideration and approval to disclose information to the Stock Exchange of Thailand and the Securities Exchange Commission. Moreover, the Board of Directors has acknowledged the accounting audit plan for 2012 has agreed with the external auditors that the Company’s Financial Statements were correctly prepared in all material respects in accordance with generally accepted accounting policy.
2. Review of the Company’s Operation and Internal Control Systems The review is conducted to assess the adequacy, appropriateness and effectiveness of Internal Control Systems which help to encourage successful operations by referring to and considering the 2012 Internal Audit Report following the approved framework covering the Company’s important operating systems. The management continually followed the recommendations of the internal auditor. At the same time, the Audit Committee has reviewed the Internal Control Systems in relation to the assessment of the Stock Exchange of Thailand and they determined that the Company employed accurate Internal Control Systems and maintained adequate and effective supervision and follow-up systems in respect of the operation of the Company and its subsidiaries.
3. Review of Internal Audit The Internal Audit was conducted considering missions, scopes, duties, responsibilities, independence, headcount, internal audit budget and the annual audit plan. The Audit Committee determined that the Company has accurately operated the Internal Audit process and maintained adequate and effective supervision and follow-up.
4. Review of Law Compliance The Audit Committee found no material issues in relation to non-compliance with relevant laws, the rules of the Stock Exchange of Thailand or any other laws concerning the Company’s business including agreements between the Company and third parties. 25
5. Review of Risk Management System The review of the Risk Management System is done to coincide with the Internal Control Systems of the company’s risk management plan. The Audit Committee reviewed policies, risk management models and its progress in which the Company is developing a risk management system to enhance its effectiveness and efficiency.
6. Review of Connected Transactions and Disclosure of Relevant Information The review is conducted in accordance with the requirements of the Stock Exchange of Thailand and the Securities and Exchange Commission. The auditor determined that information relating to commercial transactions between the Company and related parties has been fully disclosed in the Company’s financial statements and notes to the financial statements in all material respects. The Audit Committee agrees with the auditor’s views and further believes that such transactions are reasonable and have been made in the best interests of the Company’s business operations and that the relevant disclosures have been correct and complete in nature.
7. Consideration of Selection and Nomination of the Auditor and Auditor’s Remuneration for 2013 This process is done in order to gather information to propose to the Board of Directors for approval by the 2013 Annual General Meeting of Shareholders. The Audit Committee has taken into account the performance, independence and appropriateness of auditor’s remuneration and determined that Ms. Siraporn Ouaanunkun, certified public accountant no. 3844 and/or Mr. Narong Puntawong, certified public accountant no. 3315 and / or Mr, Supachai Phanyawattano, certified public accountant no. 3930 of Ernst & Young Office Limited should be re-appointed to be the Company’s auditor, together with the auditor’s remuneration not exceeding Baht 1,380,000. The Audit Committee’s opinion on the re-appointment of the auditors is as follows: In the last fiscal year, the auditor has performed his or her duties with knowledge and to professional standards. The recommendations relating to the internal control system and risks including independence have been made. In performing their works, the Securities and Exchange Commission’s requirements relating to the rotation of the auditor who certifies the financial statements every five fiscal years have been in compliance. If the appointment of the auditor for 2013 is approved, it will be the third fiscal year out of the required five year rotation. The auditor has no relationship with the Company and its subsidiaries.
Opinion on Performance of Duties The Audit Committee has completely performed its duties as specified in the Audit Committee Practice Code which has been approved by the Board of Directors. The Audit Committee is of the view that the Company has maintained accurate financial, internal audit, operations and internal control systems and that the Company has been in compliance with the relevant laws, requirements and agreements. The disclosures relating to connected transactions have been accurately made, and operations are consistent with transparent and reliable good corporate governance.
1 March 2013 For and on behalf of The Audit Committee
------------------------------------- 26
Mr. Kitti Gajanandana Chairman of the Audit Committee
CORPORATE STRUCTURE OF RAIMON LAND PUBLIC COMPANY LIMITED IN 2012 RAIMON LAND PLC Inactive Subsidiaries
Active Subsidiaries
11%
Contemporary Property Co., Ltd. Develop The Lofts Yennakart
The River Co., Ltd.
98.59%
99.99%
88.99%
95%
Northpoint PRC Co., Ltd.
Raimon Land Planner Co., Ltd.
99.99% 99.99%
Taksin Properties Co., Ltd. Develop The River
Raimon Land Park View Development Co., Ltd.
Raimon Land Resorts Co., Ltd. Investment and Service
99.93%
99.99%
Raimon Land Development Co., Ltd. Develop Zire Wongamat
99.99%
100%
Raimon Land Development (d) (Singapore) Pte. Ltd.
99.99%
100%
Raimon Land Properties (d) (Singapore) Pte. Ltd.
Raimon Land Residences Co., Ltd.
Raimon Land Sukhumvit Co., Ltd.
(c)
10.20% Raimon Land Unixx Co., Ltd. Develop Unixx South Pattaya
(a)
89.80%
Raimon Land Services Co., Ltd. Service Business
Raimon Land Ekkamai Co., Ltd. Develop The Lofts Ekkamai
(b)
99.94%
99.99%
Remarks (a)
In May 2012, the Company invested in 400,000 additional ordinary shares of Raimon Land Unixx Company Limited at a par value of Baht 100 each, totaling Baht 40 million, representing a 100 percent of the additional ordinary shares. This investment increased the Company’s shareholding from 49.0 percent to 89.8 percent of the subsidiary’s registered share capital.
(b)
In November 2012, the Company incorporated Raimon Land Ekkamai Company Limited. The Company invested 99.99 percent shareholding of the registered share capital.
(c)
In December 2012, the Company incorporated Raimon Land Sukhumvit Company Limited. The Company invested 99.99 percent shareholding of the registered share capital.
(d)
In February 2013, the Company incorporated Raimon Land Development (Singapore) Pte. Ltd., and Raimon Land Properties (Singapore) Pte. Ltd., The Company invested 2 ordinary shares, which represents 100 percent shareholding of the registered share capital.
27
GENERAL INFORMATION OF THE COMPANY, SUBSIDIARIES AND OTHER RELATED COMPANIES Company (Registration No.) 1)
Raimon Land Public Co. Ltd. (0107536001508)
Authorised Capital (baht)
Paid-up Capital (baht)
% of Investment
Property development
4,469,280,156
3,575,424,125
-
1,232,030,000
1,232,030,000
99.84%
Address
Business
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614 E-mail: info@raimonland.com Website: www.raimonland.com
Subsidiaries
28
1)
The River Co., Ltd. (0105534045182)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development and/or investing in subsidiary company for property project development
2)
Taksin Properties Co., Ltd. (0105530057879)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development
375,000,000
375,000,000
99.84%
3)
Contemporary Property Co., Ltd. (0105526003476)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Investment and property development
200,000,000
200,000,000
98.59%
4)
Raimon Land Resorts Co., Ltd. (0105550123958)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Investment and service
1,000,000
250,000
99.93%
5)
Raimon Land Planner Co., Ltd. (0105543094441)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Business Reorganization
2,000,000
2,000,000
95.00%
6)
Raimon Land Park View Development Co., Ltd. (0105549121467)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development
100,000,000
100,000,000
99.99%
7)
Northpoint PRC Co.,Ltd. (0105551107123)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development
10,000,000
2,500,000
99.99%
Company (Registration No.)
Address
Business
Authorised Capital (baht)
Paid-up Capital (baht)
% of Investment
500,000,000
500,000,000
99.99%
8)
Raimon Land Development Co., Ltd. (0105549013966)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development
9)
Raimon Land Residences Co., Ltd. (0105551069892)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development and/or investing in subsidiary company for property project development
10,000,000
10,000,000
99.99%
10)
Raimon Land Unixx Co.,Ltd. (0105551070491)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development
50,000,000
50,000,000
99.99%
11)
Raimon Land Services Co.,Ltd. (0105553005034)
The Millennia Tower, 22/F, Unit 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development and/or investment and/or operation
500,000
500,000
99.94%
12)
Raimon Land Ekkamai Co.,Ltd (0105555172779)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development
10,000,000
5,000,000
99.99%
13)
Raimon Land Sukhumvit Co.,Ltd. (0105555182481)
The Millennia Tower, 22/F, Units 2201-3, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66 (0) 2651 9601-4, 66 (0) 2651 9615-6 Fax: 66 (0) 2651 9614
Property development
10,000,000
5,000,000
99.99%
14)
Raimon Land Development (Singapore) Pte. Ltd.
1S Hoe Chiang Road, #19-01 Tower Fifteen Singapore (089316)
Property development
2 SGD
2 SGD
100%
15)
Raimon Land Properties (Singapore) Pte. Ltd
1S Hoe Chiang Road, #19-01 Tower Fifteen Singapore (089316)
Property development
2 SGD
2 SGD
100%
Other Relevant Parties 1)
Ernst & Young Office Ltd.
33/F, Lake Rajada Office Complex, 193/136-137 Rajadapisek Road, Klongtoey, Bangkok 10110 Tel: 66(0) 2264 0777 Fax: 66(0) 2264 0789-90 Website: www.ey.com
Auditor of Raimon Land Plc, and Subsidiaries
N/A
N/A
N/A
2)
Allen & Overy (Thailand) Co., Ltd.
22/F, Sindhorn Building III, 130-132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Tel: 66(0) 2263 7600 Fax: 66(0) 2263 7699 Website: www.allenovery.com
Legal Advisor of Raimon Land Plc.
N/A
N/A
N/A
29
Company (Registration No.)
30
Address
Business
Authorised Capital (baht)
Paid-up Capital (baht)
% of Investment
3)
Bangkok Jurist Ltd.
SSP Building 3, 19/F Silom Road, Suriyawong, Bangrak, Bangkok 10500 Tel: 66(0) 2267 2460 Fax: 66(0) 2267 2464 Website: www.bangkokjurist.com
Legal Advisor of Raimon Land Plc.
N/A
N/A
N/A
4)
Bunchong and Vidhya Law Office Ltd.
33/35, 33/39-40, Wall Street Tower, 9/F Surawongse Road, Suriyawong, Bangrak, Bangkok 10500 Tel: 66(0) 22361950, 66(0) 22366163 Fax: 66(0) 2236 3916 Website: www.bcvidhya.com
Legal Advisor of Subsidiaries
N/A
N/A
N/A
5)
Thailand Securities Depository Co., Ltd.
62 Stock Exchange of Thailand Building Ratchadapisek Road Klongtoey, Bangkok 10110 Tel: 66(0) 2229 2800 Fax: 66(0) 2654 5427 TSD Call center: 0 2229 2888 Website: www.tsd.co.th
Securities Registrar of Raimon Land Plc.
N/A
N/A
N/A
SHAREHOLDERS AND CAPITAL STRUCTURE Raimon Land Plc’s capital structure comprises both equity and debt financing. Equity Financing: Ordinary Shares (RML) At the Annual General Meeting of the Company’s shareholders held on 25 April 2012, the following resolutions were passed. a) To issue and offer up to 893,856,031 warrants to existing shareholders (free of charge). These warrants are exercisable for a period of 3 years from the issued date in a ratio of warrant for 1 ordinary share and at an exercise price of Baht 2.75 each. b) To increase the Company’s registered share capital by Baht 1,218,894,587, from Baht 3,250,385,569 (3,250,385,569 ordinary shares of Baht 1 each) to Baht 4,469,280,156 (4,469,280,156 ordinary shares of Baht 1 each), through the issue of 1,218,894,587 additional shares at Baht 1 each. This additional registered share capital is to be allotted as follows: - 325,038,556 new ordinary shares to be offered by private placement. - No more than 893,856,031 new ordinary shares to be reserved for the exercise of warrants. On 26 April 2012, a meeting of the Company’s Board of Directors No. 4/2012 passed a resolution to approve offering 325,038,556 additional ordinary shares to two long-term investors by private placement, at a price of 1.4058 per share, or for a total of Baht 457 million, comprising of a paid up share capital amounting to Baht 325 million and a share premium amounting to Baht 132 million. The Company registered the paid up share capital of Baht 3,575 million with the Ministry of Commerce on 2 May 2012. As of 31 December 2012, the company has registered capital and paid up capital (ordinary shares) as the following:
Total registered capital (million shares)* Total registered and paid up capital (million shares) Remark: * par value at 1 Baht each
1 January 2012
3,250.4 3,250.4
31 December 2012 4,469.3 3,575.4
Warrants (RML-W3) On 17 May 2012, the Company issued the warrants (RML-W3) of 893,840,315 warrants. The warrants can be exercised to subscribe to newly issued ordinary shares in a ratio of 1 warrant per 1 ordinary share, at an exercise price of Baht 2.75 each, and exercised on the last business day of each March, June, September and December which start first period on 29 June 2012 and the final period is on 15 May 2015.
31
As at 31 December 2012, there was no warrant holder exercised the right to purchase ordinary share as follows: Number (Unit)
Unit of warrant as of 17 May 2012
893,840,315
Unit of warrant exercised
-
Remaining unit of warrant
893,840,315
Shareholders Names of the top 10 majority shareholders shown in the Company’s share register book as at 11 February 2013 are as follows: Names of shareholders
% Shareholding
JS Asset Management Pte., Ltd
24.98%
Thailand Prosperity Fund II
6.99%
Thai NVDR Co., Ltd.
3.77%
Mr. Surachai Bunyapratheprat
2.42%
Mr. Narat Sukthinthai
1.25%
Mr. Narit Jirawongprapha
0.98%
Mr. Chaowarit Poonpuemsuwan
0.96%
Ms. Waraiporn Sompakdee
0.86%
SOMERS (U.K.) Limited
2.74%
Mr. Nathapat Rungsun
0.98%
Total
45.93%
Debt Financing The second component of Raimon Land Plc.’s capital structure is debt financing. Details are as follows: Type of Liabilities Short term loan from financial institutions
Long term loan from financial institutions*
As at 31 December 2012 As at 31 December 2011 30 250
Total interest bearing liabilities Remark * Include the current portion of these facilities
5,971
6,221
6,607
6,637
Dividend Policy: The Company’s dividend policy requires that the dividend in the form of cash shall be paid no greater than 50 percent of net profit after tax and legal reserve when the Company has net profit and there is no accumulated loss. The dividend policy of the Company’s subsidiaries is subject to the resolution of the majority shareholders meeting at each subsidiary.
32
MANAGEMENT Management Structure of Raimon Land Public Company Limited as of 1 March 2013
Board of Directors
Executive Committee
(on the process of establishing)
Audit Committee
Internal Auditor
Chief Executive Officer
Mr. Hubert Romary Bertrand Viriot
Chief Financial Officer Ms. Nuch Kalyawongsa
Vice President Corporate Finance
Vice President Project Development
Vice President Human Resources
Ms. Lamai Pittrakul
Mr. Gerard Conor Healy
Mrs. Walapa Poolsap
Deputy Vice President Business Development & Marketing
Deputy Vice President Sale Department
Mr. Simon Derville
Ms. Chatuporn Supayong
33
Board of Directors As of 4 February 2013, the Board of Directors of Raimon Land Plc. comprises nine Directors as follows: 1. Mr. Pradit Phataraprasit(1) 2. 3. 4. 5. 6. 7. 8.
Mr. Lee Chye Tek Lionel (1) Mr. Tan Chin Kwang Johnson (1) Mr. Lee Chye Cheng Adrian (2) Ms. Nuch Kalyawongsa(2) Mr. Jason Goh Hseng Wei (2) Mr. Roland Pang Tze Vu (3) Mr. Kitti Gajanandana
9. Mr. Jirawud Kuvanant
Chairman of the Board of Directors, Independent Director and Audit Committee Member Director Director Director Director Director Director Director, Independent Director and Chairman of Audit Committee Director, Independent Director and Audit Committee Member
Attendance at Board of Directors Meetings in 2012 There were seven Board of Directors meetings in 2012. The table below gives the attendance details: Name
Number of Attendances
Number of Absences
1) Mr. Sompoch Intranukul
7
-
2) Mr. Talal J M A Al Bahar
-
7
3) Mr. Werner Johannes Burger
1
6
4) Mr. Hubert Romary Bertrand Viriot
7
-
5) Mr. Numan Mohamed Numan Mohamed
1
6
6) Mr. Roland Pang
2
-
7) Mr. Kitti Tungsriwong
7
-
8) Mr. Kitti Gajanandana
5
2
9) Mr. Jirawud Kuvanant
4
3
(1) Mr. Lionel Lee, Mr.Johnson Tan and Mr.Pradit Phataraprasit were appointed as new directors of the company according to the resolution of the Board of Directors’ meeting No.3/2013 on 1 February 2013, replacing Mr. Talal J M A Al Bahar, Mr.Werner Johannes Burger and Mr.Sompoch Intranukul. (2) Mr. Jason Goh, Mr. Adrian Lee and Ms. Nuch Kalayawongsa were appointed as new directors of the company according to the resolution of the Board of Director’s meeting No.4/2013 on 4 February 2013, replacing Mr. Kitti Tungsriwong and Mr.Hubert Romary Bertrand Viriot, acknowledged resignation of Mr.Numan Mohamed Numan Mohamed on 4 February 2013. (3) Mr. Roland Pang were appointed as new director of the company according to the resolution of the Board of Director’s meeting No.5/2012 on 15th May 2013, replacing Mr. Piaras Rodrigo Moriarty Alvarez on 16 May 2013.
Director authorisation and restriction
Two signatures of the following five directors, Mr. Lionel Lee or Mr. Johnson Tan, Mr. Adrian Lee or Mr. Jason Goh or Ms.Nuch Kalyawongsa, with the affixing of the official company seal. Scope of Authority of the Company’s Board of Directors
34
The Company’s directors are required to perform their duties in compliance with all relevant laws and regulations as well as with the Company’s objectives and articles of association and the resolutions of shareholders meetings in good faith. The Company’s directors are prohibited from carrying out any business of the same nature as and in competition with the Company’s business and from being partners or shareholders or directors of other juristic persons carrying out a similar and competitive business, unless the shareholders are informed of such in a shareholders meeting prior to his/her appointment. If a director has direct or indirect interests in any agreements to be entered into with the Company or increases or decreases his/her shareholding or debenture holding in the Company and its affiliates or debenture, the director must inform the Company without delay.
Executive Committee Members of the Executive Committee Currently, Executive committee is on the process of establishing. Scope of Authority, Duties and Responsibilities of the Executive Committee 1) 2) 3) 4)
To manage the company in all respects on a day-to-day basis; To decide management emphasis and to draw up company policies, business plans, budget and administrative structure; To submit suggested operational guidelines responsive to change in economic conditions to the Board of Directors for consideration. To review the Company’s operating results and monitor the operations undertaken in accordance with policy;
The Executive Committee has no authority to approve a transaction that may create a conflict of interest or approve a transaction that would benefit a member of the Executive Committee or connected person or which could conflict with the Company or its subsidiaries under Stock Exchange of Thailand regulations. Such transaction must be submitted to the Company Board of Directors and/or shareholders meeting for approval, as required by the Company’s Articles of Association and relevant laws.
Audit Committee Members of the Audit Committee 1) 2) 3)
Mr. Kitti Gajanandana Mr. Jirawud Kuvanant Mr. Pradit Phataraprasit
Chairman of Audit Committee Audit Committee Member Audit Committee Member (member with accounting background)
Scope of Authority, Duties and Responsibilities of the Audit Committee 1) 2) 3) 4) 5)
6) 7) 8) 9)
To perform joint evaluation with the auditor and/or management to ensure efficiency and adequacy of the internal control system and the standards of the internal audit system. To review the Company’s financial statements to ensure that it maintains accurate financial reports and provides for adequate disclosure prior to submission to the regulators. To review the Company‘s compliance with all laws pertaining to its business and the regulations of the Securities Exchange Commission and the Stock Exchange of Thailand. To disclose adequately and accurately all information pertaining to connected transactions or transactions that may have conflict of interest as required by rules and regulations. To prepare the Audit Committee Report to be published in the company’s annual report and to give an opinion on the procedures for preparing and disclosing information in financial reports and opinion concerning the company’s internal control system, to be signed by the Chairman of Audit Committee. To propose a list of auditors to the Board of Directors together with suggested remuneration each year for appointment by the Annual General Meeting of shareholders and to review and evaluate the auditors’ performance. To report to the Board of Directors the work carried out by the Audit Committee at least once each quarter. To give a joint opinion during the consideration of the appointment, dismissal, performance of the internal auditor. To perform any other tasks as assigned by the Board of Directors and agreed by the Audit Committee. 35
The term an Audit Committee member is four years. In the case of vacancy due to any reason other than expiration of the term, the Company Board of Directors is to appoint a qualified person to be the Audit Committee member. The replacement will then complete the term remaining of the replaced member of the Audit Committee.
Management Team List of the Company’s management 1) 2) 3) 4) 5)
Mr. Hubert Romary Bertrand Viriot Ms. Nuch Kalyawongsa Ms. Lamai Pittrakul Mr. Gerard Conor Healy Mrs. Walapa Poolsap
Chief Executive Officer Director and Chief Financial Officer Vice President, Corporate Finance Vice President, Project Development Vice President, Human Resources
Scope of Authority of the Chief Executive Officer According to the resolution of the Board of Directors Meeting of Raimon Land Plc. No. 9/2006 held on 11 August 2006, the Chief Executive Officer has the following scope of authority: The Chief Executive Officer is authorised to carry out normal business practice in approving the investment budget, operating expenses, purchase of fixed assets, sale of inventory and other operation including delegating administrative authority to the responsible persons at a lower level which is approved by the Board of Directors. The administrative power and delegation will not include the administration and authorisation which gives the power to the Chief Executive Officer and the authorised person to approve a transaction in which the Chief Executive Officer and the authorised person or possible person may have a conflict of interest or interest or other type of conflict of interest with the Company and/or its subsidiaries.
Selection of Directors and Executives Selection of Directors An appointment of directors must be approved by the general shareholders’ meeting except when the appointment is made necessary by a reason expiration of term. In that case, the Board of Directors will appoint a person to fill the vacancy. The replacement may only serve the remaining term. The selection of directors does not require a nominating committee process. The Board of Directors has the responsibility of selecting an individual who is qualified, knowledgeable, capable, and experienced in relevant fields. In addition, the person will have no prohibited traits as defined in the Public Companies Act and notifications of the Securities and Exchange Commission. The requirements and procedures for selection of company directors are given below. According to Section 4 of the Company’s Articles of Association, the Board of Directors comprises at least five directors and at least half of the directors must reside in Thailand. The appointment of directors must be carried out at the shareholders’ meeting in accordance with the following requirements and procedures: 1)
Each shareholder has one vote to one share.
3)
The directors will be selected based on the total number of votes; in the case of a tie, the Chairman will cast the deciding vote.
2)
36
In appointing directors, each shareholder may exercise the votes to elect one or more candidates to be the director(s) and the voting requirement in item no. 1 above must apply. However, the votes are indivisible (the voting for appointment of directors shall be non-cumulative voting).
4) 5)
At every Annual General Shareholders’ Meeting, one third of the directors - or the number nearest to one-third - must retire from the board. The retiring directors may be re-elected.
There must be drawing by lots to determine the directors retiring by rotation on the first and second years following a conversion into a public company. In each subsequent year, the directors who have been directors for the longest period must retire. In addition to the retirement by rotation, director vacates from the post upon: a. Death
b. Resignation
c. Disqualifications or possessing prohibited traits according to the Public Companies Act
d. Removal by a resolution of the shareholders at the general shareholders’ meeting 6)
e. Dismissal by a court order
Any director wishing to resign is required to submit a resignation letter to the Company. The resignation is effective immediately upon the letter being received by Company. The director may notify the registrar of the resignation.
Selection of Independent Directors The Company realises the importance of independent directors, who are in charge of auditing and supervising the transparency and the performance of the Executive Committee under appropriate internal control systems, laws and regulations of relevant regulators as well as improving the Company’s operational efficiency. An independent director must be knowledgeable, competent and experienced. Independent directors are selected according to criteria set by the Company in having a committee set up by the Board of Director to submit a short-list of candidates to the Board for consideration. Once approved, the selections are proposed to the shareholders for approval at a shareholders’ meeting, as outlined in the Company’s Articles of Association. To qualify as an independent director, an individual must meet the following criterias: 1)
Holding less than one percent of the Company’s total voting shares;
3)
Having no involvement in any business relationship in terms of financial and management with the Company, affiliates, joint venture or connected person of the amount equal to or more than 3 percent of total net tangible assets. This includes relationship as a customer, a supplier, a trade creditor/debtor, or a financial creditor/debtor without receiving benefits from the Company; and
2)
4)
Having no involvement in Company management, nor being an employee or a consultant on the Company’s payroll or must not have power to exert control in the Company, its affiliates, associated companies or connected person. The individual may not possess a potential conflict of interest for at least two years prior to appointment. In addition, an independent director must not have any juristic relationship with the legal consultant or external auditor of the Company or its affiliates;
Not having close family relationship with management, major shareholders of the Company or its affiliates and associated companies nor someone that may create a conflict of interest; and shall not be appointed to represent interests of particular directors or major shareholders.
37
Management Remuneration Directors’ Remuneration Name 1)
Remuneration in 2012 (Baht) 2,210,000
Mr. Sompoch Intranukul
2)
Total
Mr. Kitti Gajanandana
1,040,000
3,250,000
Management’s remuneration Type of Remuneration Salary
For 2012 (Baht) 43,252,915
Bonus
34,174,230
Employee Joint Investment Program
14,781,686
Contribution to Provident Fund
1,805,828
Total
94,014,659
Summary of Employee Joint Investment Program (EJIP)
Contribution from employee
Contribution from company
A deduction from employee’s payroll on regularly basis (Voluntarily)
A grant from company to its employees to buy company’s stock
Representative A securities company represents to... • Buy company’s stock periodically as specifed • Allocate stock to individual employee account each time
Objective of program In an EJIP, employees, management, and directors of a listed company join on a voluntary basis to regularly invest only in their company’s stock, using the dollar costaveraging method. EJIP is an alternative compensation to employees, management, and directors of the Company to be a long-term incentive for HR to build up motivation and create a sense of ownership.
38
Board Meeting Date Program Duration Eligible Company Eligible Participants Contribution Ratio Frequency to Invest Condition for Holding (Silent Period)
Representative Benefits in securities
Related Taxes
13 May 2011 and 27 January 2012 4 Years 3 Months Raimon Land Plc. Managements approved by the Board of Directors 50 : 50 (Company : Employee) Monthly basis as identified in advance • No right to sell shares during the first year. • Right to sell 20% of shares after 1 year (except: CEO is not allowed.) • Right to sell 30% of shares after 2 years. • Right to sell 30% of shares after 3 years. • Right to sell 20% of shares after 4 years (except: CEO is allowed to sell 40% of shares) Phillip Securities (Thailand) Pcl. • EJIP participants will directly receive dividend payment • EJIP participants will directly receive capital gain when they sell securities. • EJIP participants will directly have other rights such as right issues, warrant and shareholders’meeting. • EJIP participants must pay personal income taxes on the contribution amount received from the Company. • The Company can claim tax deductible on the contribution amount.
Corporate governance policy Raimon Land Plc has set out policies for corporate governance that adhere to the Principles of Good Corporate Governance for Listed Companies promoted by the Stock Exchange of Thailand. The Company ensures transparency, integrity and accountability in line with international standards by setting up an Audit Committee with three qualified individuals who are tasked with the independent auditing and monitoring performance of the Board of Directors. To further ensure good corporate governance, it appointed an internal auditor at the end of 2003 to improve the supervision. The Audit Committee and internal auditor are structured in a way to ensure their independence from the Company’s Executive Committee. The Board has committed itself to compliance with the Code of Best Practice for Directors of Listed Companies and the five Principles of Good Corporate Governance 2003 as follows: (1)
Rights of shareholders:
¡
¡
The Board of Directors holds that good corporate governance is vital both for its business operations and its investors and thus has set up policies and procedures to ensure transparency under relevant laws and business ethics for its business operation bearing in mind the best interests of shareholders and preventing conflicts of interest, exerting appropriate risk management, and having proper internal control systems in place as well as having internal audit system reviewed by Independent Directors/Audit Committee Members.
The Company discloses up-to-date information to the public via its corporate profile, corporate website and company newsletter, all of which are in both English and Thai. Shareholders are notified at least seven days in advance of each shareholder’ meeting in a letter that specifies the date, time and venue of the meeting, and also provided with a detailed agenda. The Board of Directors’ opinion is provided on each item on the agenda in order to ensure shareholders receive adequate and timely information for decision making at each meeting.
39
¡
(2)
Equitable treatment of shareholders
¡
¡
¡ ¡
(3)
¡
The chairman at the shareholders’ meeting provides shareholders an opportunity during the meeting to express opinions and ask questions related to the agenda items or the Company as a whole. The Board of Directors provides an opportunity for shareholders to elect directors on an individual basis.
The Board of Directors uses voting cards for important agenda items such as election of directors, related party transactions, acquisitions or disposals of core assets, etc.
The Company values to the rights of all stakeholders who are involved with the Company, e.g., employees, management, suppliers, creditors, joint venture partners, and auditors, as well as the community and government sector. Upon the occurrence of events that concern the right of those parties, the Company will take into account fair treatment for all parties concerned within the scope of the law and regulations of relevant regulators. The Board of Directors has established clear policies on fair treatment to each group of stakeholders for implementation and measurement of policy effectiveness in order to prevent infringement of stakeholder right and to redress violations of stakeholders’ legal rights.
Disclosure and transparency
¡
¡
¡
40
All shareholders have equal rights to attend and vote at meetings as specified in the Articles of Association. Should a shareholder be unable to attend a meeting, the shareholder is encouraged to appoint a proxy to attend the meeting or assign an independent director to voice his/her opinions. All shareholders are treated equally with respect to their rights.
Role of stakeholders
¡
(4)
The Company has fully complied with the right of shareholders to access information and the Company is open in receiving comments and ideas from shareholders. The Company arrange for representatives of the Executive Committee, management, Audit Committee and auditors to attend each meeting. Complete and accurate minutes are taken at each meeting and shareholders are given access to the minutes, a copy of which is filed with the Stock Exchange of Thailand within 14 days following the meeting. The minutes of the last meeting will be presented to shareholders for acceptance at the next meeting.
The Company recognises the importance of accurate, complete, transparent and timely disclosure financial reporting, general information as well as other information that may affect the price of the company’s securities. Although there is no Investors Relation Unit, the Finance Department has been assigned to handle communication with investors and analysts with an emphasis on complete, transparent and timely disclosures.
The Company’s Board of Directors is responsible for the accuracy of the Company’s and its subsidiaries’ consolidated financial statements and related information as shown in the annual reports, which are prepared in accordance with generally accepted Thai accounting principles. Conservative judgments and best estimates have been used to prepare the financial statements to ensure adequate and proper disclosure in the notes to the financial statements. The Company’s Board of Directors has arranged for an efficient internal control system to ensure that financial information is recorded accurately, completely and adequately in order to maintain the Company’s assets and to help identify deficiencies to enable preventive measures in relation to fraud and material operation irregularities.
¡
¡
(5)
The Board is satisfied with the overall effectiveness of its internal control system and that it ensures the reliability of the financial statements of the Company and its subsidiaries as at 31 December, 2012.
The Company determines directors’ remuneration clearly, transparently and appropriately by comparison with other companies in the same industry. Directors’ remuneration is approved by shareholders at the general meeting and management remuneration is discussed and approved by the Board of Directors or the Executive Committee, which will take into account the Company’s operating results and achievements of the management.
Responsibilities of the Board of Directors
¡
The Board of Directors of the Company consists of nine directors as follows: a)
b)
Directors
Independent Directors
6 persons
3 persons
There are three independent directors, the Audit Committee Chairman, and two audit committee members, representing for at least one-third of the Board of Directors, which is considered appropriate. The Independent Directors/Audit Committee are encouraged to express their views and maintain an independent review of the operations and transactions and are also involved in evaluating audit and internal control systems. The Company has made a clear outline defining the authority and responsibility of its Board of Directors, Executive Committee, Audit Committee and the CEO. Chairman of the Board of Directors also acts as an independent director and has no relationship with management nor is a representative of major shareholders or is the same person with the CEO.
¡
Raimon Land's directors perform their duties in the best interests of the Company, all stakeholders and shareholders as detailed below: a)
b) c) d)
Review and approve key business matters such as the vision and mission, strategy, financial targets, risks and company master plan Monitor implementation by management to ensure efficiency and effectiveness.
Set and approve a written corporate governance policy and review the policy to ensure consistency at least annually.
Ensure that an internal control system and financial control is consistent with policy control and review the system at least annually.
Supervision of the usage of inside information The Company is conscious of the importance of protecting sensitive internal information. It has established policies and procedures to supervise management with regard to the misuse of inside information for their own benefit, and will take legal action against any individual, who misuses inside information to the extent of criminal prosecution. The Company also limits the access to such information by management and officers to the extent possible. The Company ensures that relevant management and officers adhere to the restrictions on trading the Company’s shares using inside information and/or forbids any inappropriate use of information in case the Company enters into a transaction which may have impact on security price. The management and officers are fully aware that they must not trade the Company’s securities or cause others to trade on non-public information. Such information must not be disclosed to any other party prior to notification to the Stock Exchange of Thailand.
41
In addition, the Company also requires management to report any changes in their holdings in the Company’s securities to the Securities and Exchange Commission, as outlined in Section 59 of Securities and Exchange Act B.E. 2535. An executive is required to provide a copy of the report to the Company on the date that the executive reports it to the Securities Exchange Commission.
Human Resources Number of employees As at 31 December, 2012, the company had 165 employees, excluding nine directors. The number of employees in each function is as follows: Department 1) Executive Office 2) Finance and Accounting 3) Human Resources 4) Transfer and Purchasing 5) Administration 6) Research & Development 7) Project Development 9) Customer Relations Management 10) Marketing 11) Sales 12) Information Technology 13) Legal Total
No. of employees 6 17 4 3 13 5 16 40 27 28 4 2 165
Employee remuneration Type of remuneration Salary, overtime Bonus Commission Provident fund Others
42
Total
For 2012 (Baht) 72,781,452 9,115,381 14,437,481 2,913,868 12,321,253 111,569,435
43
1
No.
Mr. Pradit Phataraprasit
Name/Surname Position
57
Age
Franklin Pierce University, USA
Bachelor’s Degree in Economics
Thammasat University
Master of Arts(Government)
Masters Degree in Economics
Education
None
(RAIMON)
- Ordinary Shares
Shareholding Proportion (%) -
Family’s relationship between management
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013
Chairman of the Board
Present
Chief Executive Officer Chairman Chief Executive Officer Managing Director Chief Executive Officer Vice Chairman
2001 - 2004 1993 - 2007 1988 - 2007 1988 - 1995 1988 - 1995 1985 - 1988
Member
Audit Committee
Independent Director/
Chairman of the Board
Chairman
Chief Executive Officer
Position
Present
Present
Present
Period
- Investment
- Department store
The Mall group Co.,Ltd.
- Banking
Bank of Asia Co.,Ltd.
- Investment
Siam Chao Pra Ya Holdings Co.,Ltd.
- Porcelain Tableware
Patra Porcelain Co.,Ltd.
- Investment
Phataraprasit Holdings Co.,Ltd.
- Alcohol Beverages
Sangsom Co., Ltd.
- Property development
Raimon land Co.,Ltd.
- Central Agricultural Market
Thai Argo Exchange Co.,Ltd.
- Porcelain Tableware
Patra Porcelain Co.,Ltd.
Winvestment Co.,Ltd.
Company/Type of business
Working experience in the last 5 years
44
Mr. Lee Chye Tek Lionel (Authorized Director)
Name/Surname Position
40
Age
Graduate Diploma in Business Administration, Western Sydney International College
Education
- Ordinary Shares (RAIMON) None
Shareholding Proportion (%)
Note: (1) Raimon Land’s subsidiaries *(1) Raimon Land Development (Singapore) Pte. Ltd registered company and business in Singapore on 18th February 2013 *(2) Raimon Land Properties (Singapore) Pte. Ltd registered company and business in Singapore on 26th February 2013
2
No.
Older Brother of Mr.Lee Chye Cheng Adrian
Family’s relationship between management Position
Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director
Present Present Present Present Present Present Present Present Present Present Present Present Present Present Present Present
- Property development Raimon Land Properties (Singapore) Pte. Ltd. (2) - Property development
Ezra Holdings Limited, Group - Investment Macquarie Limited - Investment Raimon Land Plc. - Property development The River Co., Ltd. - Property development Taksin Properties Co., Ltd. - Property development Contemporary Property Co., Ltd. - Property development Raimon Land Resorts Co., Ltd. - Investment and services Raimon Land Planner Co., Ltd. - Business reorganization Raimon Land Park View Development Co., Ltd. - Property development Northpoint PRC Co., Ltd. - Property development Raimon Land Residences Co., Ltd. - Property development Raimon Land Unixx Co., Ltd. - Property development Raimon Land Development Co., Ltd. - Property development Raimon Land Services Co., Ltd. - Property development and/or investment Raimon Land Ekkamai Co.,Ltd. - Property development Raimon Land Sukhumvit Co.,Ltd. - Property development Raimon Land Development (Singapore) Pte. Ltd.(1)
Company/Type of business
Working experience in the last 5 years
Managing Director
Present
1996 - Present
Period
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013 (Continued)
45
3
No.
(Authorized Director)
Mr. Tan Chin Kwang Johnson
Name/Surname Position
51
Age
University Singapore
Science Economics, National
Bachelor of Arts and Social
Education
None
(RAIMON)
- Ordinary Shares
Shareholding Proportion (%) -
Family’s relationship between management
Director Director Director Director Director Director Director Director Director Director Director
Present Present Present Present Present Present Present Present Present Present Present
2006-2009
Managing Director
South East Asia
of Corporate Finance
Director
Present
Position
- Investment
Macquarie Limited
- Investment
BNP Paribas Capital (S) Pte. Ltd.
- Property development
Raimon Land Sukhumvit Co.,Ltd.
- Property development
Raimon Land Ekkamai Co.,Ltd.
- Property development and/or investment
Raimon Land Services Co., Ltd.
- Property development
Raimon Land Development Co., Ltd.
- Property development
Raimon Land Unixx Co., Ltd.
- Property development
Raimon Land Residences Co., Ltd.
- Property development
Northpoint PRC Co., Ltd.
- Property development
Raimon Land Park View Development Co., Ltd.
- Business reorganization
Raimon Land Planner Co., Ltd.
- Investment and services
Raimon Land Resorts Co., Ltd.
- Property development
Contemporary Property Co., Ltd.
- Property development
Taksin Properties Co., Ltd.
- Property development
The River Co., Ltd.
- Property development
Raimon Land Plc.
- Investment (Private Equity Investor)
IB Partners Pte Ltd.
Company/Type of business
Working experience in the last 5 years
CEO & /Regional Head
Director
Present
2009
Director
Director
Present
2009 - Present
Period
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013 (Continued)
46
(Authorized Director)
Mr. Lee Chye Cheng Adrian
Name/Surname Position
33
Age
Glasglow
University of Strathclyde
Bachelor’s Degree in Finance
Education
None
(RAIMON)
- Ordinary Shares
Shareholding Proportion (%)
Note: (1) Raimon Land’s subsidiaries *(1) Raimon Land Development (Singapore) Pte. Ltd registered company and business in Singapore on 18th February 2013 *(2) Raimon Land Properties (Singapore) Pte. Ltd registered company and business in Singapore on 26th February 2013
4
No.
Tek Lionel
Mr. Lee Chye
Brother of
Younger
Family’s relationship between management Position
Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director
Present Present Present Present Present Present Present Present Present Present Present Present Present Present Present
- Property development
Raimon Land Properties Pte. Ltd.(2)
- Property development
Raimon Land Development (Singapore) Pte. Ltd.(1)
- Property development
Raimon Land Sukhumvit Co.,Ltd.
- Property development
Raimon Land Ekkamai Co.,Ltd.
- Property development and/or investment
Raimon Land Services Co., Ltd.
- Property development
Raimon Land Development Co., Ltd.
- Property development
Raimon Land Unixx Co., Ltd.
- Property development
Raimon Land Residences Co., Ltd.
- Property development
Northpoint PRC Co., Ltd.
- Property development
Raimon Land Park View Development Co., Ltd.
- Business reorganization
Raimon Land Planner Co., Ltd.
- Investment and services
Raimon Land Resorts Co., Ltd.
-Property development
Contemporary Property Co.,Ltd.
- Property development
Taksin Properties Co., Ltd.
- Property development
The River Co., Ltd
- Property development
Raimon Land Plc.
- Investment
Jit Sun Investment Pte. Ltd.
Company/Type of business
Working experience in the last 5 years
Managing Director
Present
Present
Period
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013 (Continued)
47
5
No.
(Authorized Director)
Miss Nuch Kalyawongsa
Name/Surname Position
60
Age
Chulalongkorn University
Bachelor’s Degree in Accounting
None
(RAIMON)
- Ordinary Shares
Masters of Science in Accouting
Thammasat University
Shareholding Proportion (%)
Education
-
Family’s relationship between management
Director Director Director Director Director Director Director Director Director Director
Present Present Present Present Present Present Present Present Present Present
- Sea freight Forwarder
- Sea freight Forwarder Finance and Accounting
General Manager, 1990
Thoresen & Company (Bangkok) Limited
Thoresen & Company (Bangkok) Limited Finance and Accounting
Director, Group of
2006 - 2009
- Sea freight Forwarder
K2 Shipping Asia Limited
- Property development
Raimon Land Sukhumvit Co.,Ltd.
- Property development
Raimon Land Ekkamai Co.,Ltd.
- Property development and/or investment
Raimon Land Services Co., Ltd.
- Property development
Raimon Land Development Co., Ltd.
- Property development
Raimon Land Unixx Co., Ltd.
- Property development
Raimon Land Residences Co., Ltd.
- Property development
Northpoint PRC Co., Ltd.
- Property development
Raimon Land Park View Development Co., Ltd.
- Business reorganization
Raimon Land Planner Co., Ltd.
- Investment and services
Raimon Land Resorts Co., Ltd.
- Property development
Contemporary Property Co., Ltd.
- Property development
Taksin Properties Co., Ltd.
- Property development
The River Co., Ltd.
- Property development
Raimon Land Plc.
Company/Type of business
Accounting Manager
Finance and
Director
Present
Director Director
2012 - Feb 2013
Position
Working experience in the last 5 years
Chief Financial Officer
Director
Present
Present
Present
Period
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013 (Continued)
48
6
No.
(Authorized Director)
Mr. Jason Goh Hseng Wei
Name/Surname Position
36
Age
University of Southampton
Accounting (First Class)
Law(Second Upper) and
BSC (Double Honours) in
Education
None
(RAIMON)
- Ordinary Shares
Shareholding Proportion (%) -
Family’s relationship between management Position
Director Director Director Director Director Director Director Director Director Director Director Director Director Director
Present Present Present Present Present Present Present Present Present Present Present Present Present
- Property development
Raimon Land Sukhumvit Co.,Ltd.
- Property development
Raimon Land Ekkamai Co.,Ltd.
- Property development and/or investment
Raimon Land Services Co., Ltd.
- Property development
Raimon Land Development Co., Ltd.
- Property development
Raimon Land Unixx Co., Ltd.
- Property development
Raimon Land Residences Co., Ltd.
- Property development
Northpoint PRC Co., Ltd.
- Property development
Raimon Land Park View Development Co., Ltd.
- Business reorganization
Raimon Land Planner Co., Ltd.
- Property development
Raimon Land Resorts Co., Ltd.
- Property development
Contemporary Property Co., Ltd.
- Property development
Taksin Properties Co., Ltd.
- Property development
The River Co., Ltd.
- Property development
Raimon Land Plc.
-Investment
Ezra Holding Limited
Company/Type of business
Working experience in the last 5 years
General Manager
Present
2009 - Present
Period
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013 (Continued)
49
Mr. Kitti Gajanandana
Mr. Jirawud Kuvanant
Mr. Roland Pang Tze Vui
8
9
Name/Surname Position
7
No.
35
53
61
Age
London School of Economics
Bachelor’s degree in Economics
University of Manchester
Master’s in Finance
(DCP 43/2004)
Directors Certification Program
Thammasat University
tion, Marketing
Bachelor of Business Administra-
City, USA
College of Insurance, New York
Master’s Degree(MBA) , The
Chulalongkorn University
Bachelor’s Degree in Accounting
North Texas State University
Administration (MBA)
Master Degree in Business
Education
None
(RAIMON)
- Ordinary Shares
None
(RAIMON)
- Ordinary Shares
None
(RAIMON)
- Ordinary Shares
Shareholding Proportion (%)
-
-
-
Family’s relationship between management
2000 - 2003
2003 - 2004
2004 - Present
2012 - Present
1987 - Present
2002 - Present
2003 - Present
2004 - 2011
2001 - Present
2004 - Present
Period
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013 (Continued)
Management
- Brunei Darussalam
Baiduri Bank Corporate Client
(International division)
- Brunei Darussalam
Brunei Economic Development Board
- Investment
Thai Prosperity Advisory Co.,Ltd.
- Property development
Raimon Land Plc.
-Automobile
Kowyuha Motor Group
- Property development
Raimon Land Plc.
- Property development
Raimon Land Plc.
-Research and consulting business
Fiscal Policy Research Institute
Development Committee
Member of Economic
Investment Manager
Director
Executive Director
Independent Director
Director/Audit Committee
Independent
Advisor
Committee
-Financing advisory services
CINMIT Co., Ltd.
Director/ Audit
Audit Committee
- Property Development
Raimon Land Plc.
Company/Type of business
Director/Chairman of
Independent
Position
Working experience in the last 5 years
50
Mr. Gerard Conor Healy
Ms. Lamai Pittrakul
Mrs. Walapa Poolsap
11
12
13
Viriot
Mr. Hubert Romary Bertrand
Name/Surname Position
10
No.
45
42
52
35
Age
University
Major in English, Thammasat
Bachelor Degree of Liberal Arts,
University
Major in English, Thammasat
Master Degree of Liberal Arts,
Accountancy, Bangkok University
Administration, Faculty of
Bachelor of Business
University
Accountancy, Thammasat
Faculty of Commence and
Master Degree in Accounting,
Dublin, Ireland
( B.Arch ) University College
Bachelor Degree in Architecture
Hotel School, Switzerland
and Tourism Management, Glion
Bachelor Degree in Hospitality
ment, University of Wales
None
(RAIMON)
- Ordinary Shares
None
(RAIMON)
- Ordinary Shares
96 Shares
(RAIMON)
- Ordinary Shares
None
(RAIMON)
- Ordinary Shares
Bachelor of Science in Interna-
tional Hospitality and Manage-
Shareholding Proportion (%)
Education
-
-
-
-
Family’s relationship between management
- Design and decoration
2005 - 2008
2008 - 2011
2011 - Present
General Affairs Director
Human Resources &
Management Manager
Human Resources
Resources
Vice President Human
Destination Properties Co.,Ltd.
Director of Finance
2001 - 2007
- Advertising agency
Chuo Senko (Thailand) Co., Ltd.
- Quick service restaurant chains
Yum Restaurants International (Thailand) Co., Ltd.
- Property development
Raimon Land Plc.
- Hotel & property development
- Property development
Major Development Plc.
- Property development
Raimon Land Plc.
Director of Finance
Corporate Finance
Vice President
Wood Bagot (Thailand) Co.,Ltd.
Research Manager
Development &
- Property development
Raimon Land Plc.
- Property development
Raimon Land Plc.
Company/Type of business
Project Development
Vice President
Chief Executive Officer
Position
Working experience in the last 5 years
2007 - 2008
2008 - Present
1996 - 2002
2002 - Present
2006 - Present
Period
DETAILS OF EXECUTIVE OFFICERS AND PERSONS IN CONTROL OF THE COMPANY AS AT 4 FEBRUARY 2013 (Continued)
INTERNAL CONTROL Raimon Land Public Company Limited (the “Company”) is fully aware that internal control is one of the most important processes and that good internal control will ensure that the Company’s management system is correct, transparent and verifiable and can reduce or prevent possible damages. The Company has continuously developed its internal control system to be effective and efficient and has established the Internal Audit Department to be responsible for reviewing the effectiveness and adequacy of the internal control system. The Company’s Internal Audit Department is independent from management in auditing and reviewing the performance of various departments in the Company and its subsidiaries to ensure that they have complied with the Company’s internal control system. The Department focuses on preventive auditing which will bring concrete benefits to all departments. Moreover, the Department provides advice and information to support good and transparent internal control and also includes reviewing the company performance in compliance with corporate governance principles, maintaining suitable, effective, and wellrecognized internal control and audit systems. The Internal Audit Department Manager must directly report to the Audit Committee every quarter, while the Audit Committee reports to the Board of Directors every quarter to evaluate the adequacy and appropriateness of the Company’s overall internal control system. In 2012, the Audit Committee and the Internal Audit Department evaluated the adequacy and appropriateness of the Company’s internal control system with consideration to high internal control standards and environment for good internal control. The Company’s risks were evaluated and managed to be at acceptable levels. The work processes were appropriately controlled to prevent possible risks. The information system was effective, resulting in good communication of information. There was also a continuously effective monitoring and evaluation system. All these contributed to accurate and reliable financial reporting. In addition, all departments adhered to related laws and regulations. The results of the evaluation of the Audit Committee according to the report of the Internal Audit Department and the results of the evaluation of the internal control system conducted by the external auditor indicate that the Company has an adequate and appropriate internal control system for its operations and all departments complied with the set procedures and regulations. There was no material weakness in the Company’s internal control system.
51
CONNECTED TRANSACTION During the financial year ended on 31 December 2012, the company and its subsidiaries had no inter-related transaction with major shareholders, directors, and related persons other than disclosure in Note 6 to financial statements. Necessity and reasonableness of transactions In entering into such connected transactions, the Company considered that such transactions were necessary and reasonable. The transactions were carried out in the best interests of the Company and generally in line with normal business practice. The relevant consideration, fee and commercial terms were based on the fair market price of the like transactions between the Company and other non-related parties. There was no transfer of benefits between the Company and any person with potential conflict of interest or interested party. The Company’s Audit Committee acknowledged and agreed with the decision made and the action of the Board of Directors and/or the management by taking into account the appropriateness of entering into all connected transactions in 2012. Measurement and Procedures for Approval of Connected Transactions The approval for the connected transactions has fully complied with the Securities and Exchange Act, regulations, notifications, orders and requirements of the Stock Exchange of Thailand. Any interested director or person who may have conflict of interest with the Company in any particular transaction will not be allowed to participate in considering and approving the transaction, unless the nature of such conflict of interest is waived by the laws concerning Securities and Exchange Act, regulations, notifications, orders or rules of the Stock Exchange of Thailand regarding Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546. Policy and Tendency of Future Connected Transactions In the future, the Company may enter into a connected transaction if such transaction will benefit most to the Company. The Company has set out policy for future connected transaction to be in line with normal commercial business practices with a fair market price which is comparable to the transactions between the Company and other non-related parties. The Company is determined to comply with the Securities and Exchange Act, regulations, notifications, orders or requirements of the Stock Exchange of Thailand, including abiding by disclosure requirement of connected transaction and assets acquisition and disposition transaction. In addition, the Audit Committee shall attend the Board of Directors meeting held to consider the approval of any connected transaction, in order to opine on appropriateness of transaction price and reasonableness in entering into the transaction.
52
RISK FACTORS Business Risks Risk of land acquisition for project development Raimon Land does not employ a land bank policy for further development unless it is land which the Company determines has a high potential for development with reasonable prices to provide a satisfactory level of return. While seeking and acquiring land in prime areas at reasonable prices is a risk, but also a key success factor of the Company. The Company mitigates the risk of acquiring land for project development through its extensive network of brokers, the Company’s website, directors and executives. This powerful network enables the Company to seek or acquire land in prime areas at reasonable prices. In addition, the Company minimises this risk by making use of extensive market research and surveys. Effective market research and surveys permit the Company to analyse relevant data in order to both consider, and mitigate the risk of land acquisition. Risk of project development Raimon Land minimises risk associated with the volatility of construction material costs by employing only one construction contractor to a turnkey construction contract, which permits Raimon Land to effectively control construction costs. In addition, in order to reduce costs, the Company purchases various construction materials directly from suppliers including steel and tiles. Moreover, in some cases, the Company reduces risk by proactively fixing the delivered price of construction materials which has a direct impact on the costs of construction in order to eliminate volatility. In addition to the fluctuation of construction material costs, finding qualified contractors is another challenge which may impact project quality as well as the delivery schedule. The Company adheres to the following three risk management guidelines: (1)
Raimon Land utilizes a project development risk management review and audit system for every project, which includes strictly monitoring contractor selection guidelines, conducting performance tests of key materials (steel, windows, glass and bricks), seeking new technology, focusing on developing quality construction materials, and improving the construction management system to ensure optimisation of cost and negotiation of material prices to retain consistent or even better product quality. When hiring contractors, the Company routinely enters into a fixed lump sum price contract in order to reduce the risk of cost overruns. In some cases, the Company also makes advance payments should opportunities for cost savings or risk mitigation of costs arise.
(2)
Raimon Land manages project development risk by hiring external consultants with appropriate capabilities, skills and expertise suited for each project. The criteria for selecting these consultants is based on their specific skills, resources, reputation, ability to apply modern technology and materials for quality control and cost savings, and improving the effectiveness of work visa efficient and effective construction methods. The consultants recommend a list of qualified contractors/suppliers for the Company to select from and the project manager will then control and monitor the contractor, report construction progress as well as negotiate costs. 53
(3)
For every project, the Company will select the main contractor from leading international construction contractors. Contractors are chosen based on their reliability to be solely accountable for the project’s management, construction, design coordination, and their overall ability to sub-contract or co-ordinate, financial, technological and organisational resources, staff competency, past experience, and reputation and reliability in delivering completed work on time and within budget.
Risk of Sales The pace of sales at each project is critical for a condominium developer like Raimon Land. Faster sales help lower the Company’s financial risk and other burdens. Also, this enables the Company to manage the project’s risk easier because the Company’s projects have a construction period of between 2-4 years each. Therefore, Raimon Land focuses on effective sales management techniques, construction control to ensure project completion and transfer of ownership to customers as scheduled, and cash flow management. In order to boost sales, the Company adjusts its marketing strategy through advertising, public relations, and promotional activities as needed taking into account the current economic environment. Also, to reach Raimon Land’s customers, the Company has set up a customer relationship department to disseminate construction progress information and assure a systematic payment process. The competitive environment of the property segment, the volatility of economic environment and political uncertainty also affect the sales pace of the Company’s projects. Raimon Land focuses on sales risk management by developing projects on prime sites, brand building, initiating new ideas in project development, understanding the market, and expanding its customer base. The Company believes that the right location is the most important factor in minimizing sales risk. As a result, the Company has aggressively invested in research and feasibility studies which include the assessment of project locations, market environment, competition, target customers as well as current and future infrastructure and public transportation systems. Investment in the Company’s brand building is beginning to pay dividends as the Company is now known as a major player in the premium residential market. Raimon Land projects are well accepted domestically and internationally resulting from the value delivered to customers which meet or exceeds their expectations. Consequently, Raimon Land has a large number of repeat customers who perceive value the Company’s projects both in terms of investment assets and as a residence.
54
In the past, since 50% of the Company’s clients were international buyers, the Company’s sales were heavily exposed to economic downturns in foreign countries. As a result, Raimon Land now focuses on the domestic market, especially Thai nationals to mitigate risk or sales volatility. In 2012, the Company successfully expanded its Thai national market which represented 60% of the Company’s sold value. At the same time however, the Company realigned is traditional foreign buyer base in 2012 to reflect market realities including the weakness in European currencies and the lingering effects of the global financial crisis. As a result, the Company increased the number of buyers from non-traditional countries including Singapore, South Korea, China, Taiwan, and Russia. Further, the expansion of the Company’s customer base will create the need to continuously develop new projects which can help the Company to mitigate risks arising from competition and changes in customers’ behaviour because the Company will be able to adjust its business strategies to suit the changing environment and economic volatility while developing projects to meet customers’ needs. Furthermore, the Company is confident that the expansion to the domestic customer base will help to mitigate risks arising from international economic uncertainties.
Risk from regulatory changes The Company minimises risks from amendments to related government agencies’ acts, codes and regulations including city planning acts, building control acts, building design and related ministerial regulations like open space ratio OSR, floor area ratio FAR, BMA code, Land Department code, Treasury Department code as well as regulations on environmental permits, especially regarding large and highrise building by closely monitoring the amendments with the relevant government agencies. At the same time, the Company performs project feasibility studies by thoroughly and strictly abiding by acts, codes and regulations of the related authorities. Therefore, the Company can be confident that projects strictly comply with relevant acts, codes and regulations. Moreover, in project design, the Company also embraces innovation and technology which are environmentally friendly. The flooding in Bangkok and other parts of Thailand in 2011 greatly impacted the real estate market. While there were some indirect effects on labour supplies etc., Raimon Land’s projects avoided being directly impacted as they were located in flood-free areas. In addition, the flooding created significant demand for condominiums located in the preferred areas including Pattaya. Sale values of Nothpoint, Zire Wongamat and Unixx in Pattaya increase significantly. Because of the flooding the government may be forced to issue or amend related policies, acts, codes, and city planning acts to solve and prevent future floods which will impact the Company’s location finding activities for future projects. In order to mitigate the risk from changes in related government agencies’ acts, codes, and regulations, Raimon Land will closely monitor events as they progress. Financial Risk and Other Potential Risks Risks of obtaining funds for project development Due to the nature of condominium development projects, they usually require substantial funding in the initial stages with a payback period between 3-5 years. Therefore, the Company’s ability to access a low-cost financial source is among the key factors in determining the project’s success, both from a profitability perspective and a liquidity perspective. At the same time, the Company focuses on actively managing Thailand’s rising construction costs, both the cost of raw materials and the cost of land. This also includes quality control throughout construction to assure projects are completed as scheduled. In general, developers have three major funding sources: their own working capital, borrowing from financial institutions and installments received from customers including down payments and payments received on the transfer date of condominium units. Any difficulty in obtaining financial support usually arises from sluggish sales, installment delinquency and lack of support from financial institutions. Raimon Land minimizes sales risk by selecting good locations, developing quality projects by combining innovation and technology that accounts any environmental impact. As a result, Raimon Land has been praised both domestically and overseas while the Company’s understanding of its customers has lead to the expansion of its customer base. The Company receives down payments between 25-40 percent of the selling price which is above the industry norm which helps mitigate risk from the collection of instalments. In addition, Raimon Land has been considered a premium customer and has received excellent support from many local financial institutions which is expected to continue. Raimon Land also maintains a strong relationship with investors and many private investment funds which support the Company by both funding projects and jointly investing in projects. 55
Risk from interest rate volatility Most of the Company’s borrowings have been subject to floating interest rates or MLR which varies depending on market conditions. Hence, interest rate volatility can potentially impact the Company’s operating results and cash flows. Nevertheless, to date, such interest rate volatility has had a negligible impact on the Company’s operating results and cash flows. However, the upward trend of interest rates may reduce demand due to our clients’ ability to secure credit from financial institutions. Risk from major shareholder having control over resolutions at the shareholders meeting and over the Company’s management As of 1 February 2013,JS Asset Management Pte. Ltd is the Company’s major shareholder and they exercise control over the Company’s management, the appointment of directors as well as control the majority of the shareholder voting rights for resolutions which require majority ruling. However, JS Asset Management may not vote in the agenda as it is a party with interest. For the sake of transparency, the ability to be audited and maintain operational checks and balances the Company has appointed independent individuals to serve as the Company’s independent directors and audit committee members to comply with the good corporate governance principles of the Stock Exchange of Thailand. Risk from providing financial assistance to subsidiaries and affiliates Raimon Land has provided financial support by way of loans and guarantees to its subsidiaries and affiliates which may create a risk in terms of expenses or liabilities if those subsidiaries or affiliates fail to repay those debts. Nonetheless, the Company’s financial assistance is specifically granted to those entities which the Company has control over and manages. To minimize this risk, the Company has strictly complied with the criteria outlined by the Stock Exchange of Thailand regarding connected transactions. That is, the Company will request the opinion of the audit committee and the approval of the Company’s board of directors and/or from its shareholders meeting, if the matter meets the requirements set forth by the Stock Exchange of Thailand. Additionally, if the Company and/or its subsidiaries have any surplus liquidity, the Company and/or its subsidiaries will, by way of inter-company loans, manage to gain maximum returns and benefits to the group both directly and indirectly, given that the Company is their major shareholder. Risk from unpaid dividend As of 31 December 2012, the Company has retained losses of Baht 712 million which has not allowed the Company to pay dividends in accordance with the law. Under Raimon Land’s policy, shareholders bear the risk of no dividends until the accumulated retained losses are covered. Risk from warrants (RML-W3) As of 31 December 2012, the Company issued the warrants (RML-W3) of 893,840,315 warrants. In case that all warrants were exercised by non-existing shareholders, impacts from earning per share dilution and control dilution would be decreased no greater than 20 percent, compared to the number of outstanding 4,469,280,156 shares (Paid-up capital after all warrants were exercised and additional shares were offered to private equity). 56
Risk from the attrition of key personnel The real estate development business relies heavily on the knowledge and capabilities of personnel. To this end, the Company has selected and employed qualified and competent employees who have a high potential for advancement. The Company recognizes the importance of its personnel and constantly strives to increase morale and enable the personal and professional growth of its personnel through suitable levels of remuneration, benefits, and opportunities for training. As a result, the Company believes that it has minimised the risk of key personnel leaving the Company.
57
Financial Statements
58
INDEPENDENT AUDITOR'S REPORT To the Shareholders of Raimon Land Public Company Limited I have audited the accompanying consolidated financial statements of Raimon Land Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2012, and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Raimon Land Public Company Limited for the same period. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Raimon Land Public Company Limited and its subsidiaries and of Raimon Land Public Company Limited as at 31 December 2012, their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.
Siraporn Ouaanunkun Certified Public Accountant (Thailand) No. 3844 Ernst & Young Office Limited Bangkok: 27 February 2013 59
Raimon Land Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2012 (Unit: Baht) Consolidated financial statements Note
2012
Separate financial statements
2011
2012
2011
Assets Current assets Cash and cash equivalents
7
1,431,262,404
661,618,586
771,785,858
438,296,803
Restricted bank deposits
16
25,100,000
25,100,000
25,100,000
25,100,000
Trade and other receivables
8
35,247,416
-
701,450,476
335,655,440
Short-term loans to related parties and interest receivable
6
-
-
609,083,657
439,005,874
Project development cost
9
11,294,866,636
12,620,106,370
3,897,402,759
3,347,304,667
Advance payment to contractors
628,438,464
514,025,124
273,833,572
304,904,508
Deposits for purchase of land
106,360,010
-
106,360,010
-
3,641,260
14,657,915
-
14,651,807
78,275,254
60,322,724
12,883,814
10,641,258
13,603,191,444
13,895,830,719
6,397,900,146
4,915,560,357
-
-
1,763,964,176
1,713,964,476
14,670,181
14,670,181
13,715,589
14,670,181
Withholding tax deducted at source Other current assets Total current assets Non-current assets Investments in subsidiaries
10
Land awaiting development Investment properties
11
269,275,088
38,076,330
36,430,961
38,076,330
Property, plant and equipment
12
49,939,951
65,016,499
40,296,843
53,487,180
Deferred tax assets
13
859,080,036
1,050,084,032
309,730,679
268,209,075
Leasehold right
79,166,667
82,500,000
-
-
Deposits
15,368,112
23,954,723
2,454,913
4,723,033
Withholding tax deducted at source
76,781,379
98,913,026
14,651,807
36,789,492
Other non-current assets
29,248,173
30,404,281
8,969,890
9,995,335
1,393,529,587
1,403,619,072
2,190,214,858
2,139,915,102
14,996,721,031
15,299,449,791
8,588,115,004
7,055,475,459
Total non-current assets Total assets
The accompanying notes are an integral part of the financial statements.
60
Raimon Land Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2012 (Unit: Baht) Consolidated financial statements Note
2012
Separate financial statements
2011
2012
2011
Liabilities and shareholders' equity Current liabilities Short-term loans from financial institutions
14
250,000,000
30,000,000
250,000,000
30,000,000
Trade and other payables
15
997,695,403
981,216,091
312,377,302
429,210,233
Accrued expenses
108,639,117
51,534,353
54,487,490
38,704,881
Retention payables
124,810,452
89,639,738
51,411,877
50,410,948
-
57,494,746
-
57,494,746
Current portion of additional purchase of investment in subsidiary payable Current portion of income tax payable
13
95,216,218
143,547,441
-
-
Deposits and advance received from customers
17
5,632,446,656
6,370,082,392
2,514,856,612
1,526,345,659
Current portion of long-term loans from financial institutions
16
3,494,547,376
15,000,000
20,000,000
15,000,000
Short-term loans from related parties and accrued interest
6
-
-
243,237,855
567,708,957
Accrued income tax
57,974,010
100,510,819
27,919,720
-
Other current liabilities
50,322,442
48,306,261
31,335,637
33,969,295
10,811,651,674
7,887,331,841
3,505,626,493
2,748,844,719
Total current liabilities Non-current liabilities Income tax payable, net of current portion
13
27,172,493
29,614,791
-
-
Long-term loans from financial institutions, net of current portion
16
2,476,700,866
6,592,229,691
2,028,544,607
1,609,059,748
Deferred tax liabilities
13
102,914,366
172,021,575
-
-
Provision for long-term employee benefits
18
16,913,731
14,097,506
16,913,731
14,097,506
5,507,750
1,081,427
4,934,404
552,929
2,629,209,206
6,809,044,990
2,050,392,742
1,623,710,183
13,440,860,880
14,696,376,831
5,556,019,235
4,372,554,902
Other non-current liabilities Total non-current liabilities Total liabilities
The accompanying notes are an integral part of the financial statements.
61
Raimon Land Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2012 (Unit: Baht) Consolidated financial statements Note
2012
Separate financial statements
2011
2012
2011
Shareholders' equity Share capital
19
Registered 4,469,280,156 ordinary shares of Baht 1 each (31 December 2011: 3,250,385,569 ordinary shares of Baht 1 each)
4,469,280,156
3,250,385,569
4,469,280,156
3,250,385,569
3,575,424,125
3,250,385,569
3,575,424,125
3,250,385,569
131,900,646
-
131,900,646
-
-
-
36,131,233
36,131,233
(711,360,235)
(603,596,245)
Issued and paid up 3,575,424,125 ordinary shares of Baht 1 each (31 December 2011: 3,250,385,569 ordinary shares of Baht 1 each) Share premium
19
Excess of investment in subsidiary arising as a result of additional purchase of investment in the subsidiary at a price higher than the net book value of the subsidiary at the acquisition date
(564,048,205)
(564,048,205)
36,131,233
36,131,233
Retained earnings (deficits) Appropriated - statutory reserve
20
Unappropriated
(1,627,867,875)
Equity attributable to owners of the Company Non-controlling interests of the subsidiaries Total shareholders' equity Total liabilities and shareholders' equity
The accompanying notes are an integral part of the financial statements.
Directors
62
(2,123,638,729)
1,551,539,924
598,829,868
3,032,095,769
2,682,920,557
4,320,227
4,243,092
-
-
1,555,860,151
603,072,960
3,032,095,769
2,682,920,557
14,996,721,031
15,299,449,791
8,588,115,004
7,055,475,459
Raimon Land Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements Note
2012
Separate financial statements
2011
2012
2011
Profit or loss: Revenues Sales of residential condominium units Rental and service income
5,434,819,851
1,151,397,885
426,895,924
1,151,397,885
13,741,090
12,010,578
8,869,671
7,150,098
Other income Project management fee income
6
-
-
52,478,183
30,728,182
Marketing commission income
6
6,568,589
35,904,918
86,915,018
89,491,958
Guarantee fee income
6
-
-
49,936,351
31,623,406
Interest income
6
11,076,626
13,299,367
41,959,615
17,566,134
53,754,703
15,632,994
16,112,984
9,444,307
5,519,960,859
1,228,245,742
683,167,746
1,337,401,970
3,651,031,783
818,878,641
323,868,777
818,878,641
Selling expenses
445,095,777
202,217,472
89,844,254
138,705,021
Administrative expenses
404,657,403
374,575,907
307,370,846
300,828,287
4,500,784,963
1,395,672,020
721,083,877
1,258,411,949
Others Total revenues Expenses Cost of residential condominium units sold
Total expenses Profit (loss) before share of profit from investments in joint ventures, finance cost and income tax expenses
1,019,175,896
Share of profit from investments in joint ventures
-
Profit (loss) before finance cost and income tax expenses
1,019,175,896
Finance cost Profit (loss) before income tax expenses Income tax expenses
13
Profit (loss) for the year Other comprehensive income for the year Total comprehensive income for the year
(167,426,278) 10,610,535
(37,916,131) -
78,990,021 -
(156,815,743)
(37,916,131)
78,990,021
(260,604,140)
(114,710,310)
(75,137,915)
(81,111,188)
758,571,756
(271,526,053)
(113,054,046)
(2,121,167)
(262,724,067)
(208,794,869)
495,847,689
(480,320,922)
495,847,689
(480,320,922)
5,290,056 (107,763,990) (107,763,990)
(133,577,988) (135,699,155) (135,699,155)
The accompanying notes are an integral part of the financial statements.
63
Raimon Land Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements Note
2012
2011
Separate financial statements 2012
2011
Profit (loss) attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries
495,770,854
(474,305,996)
76,835
(6,014,926)
495,847,689
(480,320,922)
495,770,854
(474,305,996)
76,835
(6,014,926)
495,847,689
(480,320,922)
0.14
(0.15)
(107,763,990)
(135,699,155)
(107,763,990)
(135,699,155)
(0.03)
(0.04)
Total comprehensive income attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries
Earnings per share
22
Basic earnings (loss) per share Profit (loss) attributable to equity holders of the Company
The accompanying notes are an integral part of the financial statements.
64
65
The accompanying notes are an integral part of the financial statements.
3,575,424,125
-
Increase in investments in subsidiaries
Balance as at 31 December 2012
-
Total comprehensive income for the year
325,038,556
3,250,385,569
Increase share capital
Balance as at 1 January 2012
3,250,385,569
Balance as at 31 December 2011
Total comprehensive income for the year
3,250,385,569
share capital
-
131,900,646
-
-
131,900,646
-
-
-
-
(564,048,205)
-
-
-
(564,048,205)
(564,048,205)
-
(321,108,667)
(242,939,538)
at the acquisition date
of the subsidiary
in the subsidiary at a price higher
additional purchase of investment
than the net book value
Share premium
Excess of investment in subsidiary arising as a result
paid-up
-
19
Note
Consolidated financial statements
36,131,233
-
-
-
36,131,233
36,131,233
-
-
36,131,233
Appropriated
(1,627,867,875)
-
495,770,854
-
(2,123,638,729)
(2,123,638,729)
(474,305,996)
-
(1,649,332,733)
Unappropriated
Retained earnings (deficits)
Equity attributable to owners of the Company
Issued and
Additional purchase of investment in the subsidiary
Balance as at 1 January 2011
For the year ended 31 December 2012
Statement of changes in shareholders' equity
Raimon Land Public Company Limited and its subsidiaries
1,551,539,924
-
495,770,854
456,939,202
598,829,868
598,829,868
(474,305,996)
(321,108,667)
1,394,244,531
the Company
owners of
attributable to
Total equity
4,320,227
300
76,835
-
4,243,092
4,243,092
(6,014,926)
6,108,667
4,149,351
the subsidiaries
interests of
to non-controlling
Equity attributable
1,555,860,151
300
495,847,689
456,939,202
603,072,960
603,072,960
(480,320,922)
(315,000,000)
1,398,393,882
equity
shareholders'
Total
(Unit: Baht)
66
3,575,424,125
-
325,038,556
The accompanying notes are an integral part of the financial statements.
Balance as at 31 December 2012
Total comprehensive income for the year
Increase share capital
3,250,385,569
Balance as at 1 January 2012
-
3,250,385,569
share capital
3,250,385,569
19
Note
paid-up
Issued and
Balance as at 31 December 2011
Total comprehensive income for the year
Balance as at 1 January 2011
For the year ended 31 December 2012
Statement of changes in shareholders' equity (continued)
Raimon Land Public Company Limited and its subsidiaries
-
-
-
-
131,900,646
-
131,900,646
Share premium
36,131,233
-
-
36,131,233
36,131,233
-
36,131,233
Appropriated
(711,360,235)
(107,763,990)
-
(603,596,245)
(603,596,245)
(135,699,155)
(467,897,090)
Unappropriated
Retained earnings
Separate financial statements
3,032,095,769
(107,763,990)
456,939,202
2,682,920,557
2,682,920,557
(135,699,155)
2,818,619,712
Total
(Unit: Baht)
Raimon Land Public Company Limited and its subsidiaries Cash flow statement For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements 2012
Separate financial statements
2011
2012
2011
Cash flows from operating activities Profit (loss) before tax
758,571,756
(271,526,053)
(113,054,046)
(2,121,167)
Depreciation and amortisation
38,569,614
40,971,317
27,269,934
30,376,561
Loss (gain) on disposal/ written - off of equipment
(1,134,609)
7,766,065
(1,084,610)
7,670,287
Adjustments to reconcile profit (loss) before tax to net cash provided by (paid from) operating activities:
Unrealised loss on exchange
-
2,773,599
Gain on sales of land awaiting development
-
-
Share of profit from investments in joint ventures
-
Provision for long-term employee benefits Interest income
(10,610,535)
(525,408)
2,773,599 -
-
-
2,816,225
3,385,922
2,816,225
3,385,922
(11,076,627)
(13,299,367)
(41,959,615)
(17,566,134)
493,930,870
386,723,236
170,892,147
161,196,506
1,281,677,229
146,184,184
44,354,627
185,715,574
(365,795,036)
(67,214,359)
(550,098,092)
509,448,668
31,070,936
(299,531,684)
Interest expenses (consist of interest expenses for operating and interest capitalised as part of project development cost) Profit from operating activities before changes in operating assets and liabilities Operating assets decrease (increase) Trade and other receivables Project development cost
(35,247,416) 1,092,395,607
Advance payment to contractors
(114,413,340)
Deposits for purchase of land
(106,360,010)
Other current assets Deposits Other non-current assets
(1,890,737,979) (295,162,674)
(106,360,010)
-
(2,901,012)
(1,355,481)
444,482
8,586,611
(12,626,690)
2,268,120
295,000
135,596
(809,912)
4,933
3,238,619
(17,065,455)
-
The accompanying notes are an integral part of the financial statements.
67
Raimon Land Public Company Limited and its subsidiaries Cash flow statement (continued) For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements 2012
Separate financial statements
2011
2012
2011
Operating liabilities increase (decrease) Trade and other payables
(29,041,683)
207,484,424
(140,376,362)
88,396,706
Accrued expenses
55,548,803
7,785,204
15,130,641
12,847,310
Retention payable
35,170,714
11,950,775
1,000,929
(7,044,702)
1,231,389,330
988,510,953
Deposits and advance received from customers
(737,635,736)
428,398,699
Other current liabilities
2,016,591
9,692,157
(2,633,658)
5,924,139
Other non-current liabilities
4,426,323
(1,001,342)
4,381,475
(1,094,585)
1,440,193,835
(588,753,535)
Cash flows from (used in) operating activities Cash received from interest income Cash paid for interest expenses Cash refund from withholding tax deducted at source Cash paid for corporate income tax Net cash flows from (used in) operating activities
11,076,627
4,814,741
(79,896,024) 24,103,485
859,823,867 2,302,248
(447,740,990)
(368,711,611)
(157,054,926)
(119,724,703)
36,789,492
11,382,813
36,789,492
11,325,493
(237,778,910) 802,540,054
(101,578,503)
(8,311,828)
(14,651,807)
(1,042,846,095)
(184,369,801)
739,075,098
(152,221,653)
2,890,700
Cash flows from investing activities Decrease (increase) in short-term loans to related parties
-
-
Cash received from sales of land awaiting development
-
-
Cash paid for acquisition of equipment Cash received from sales of building and equipment Cash paid for purchase of investments in subsidiaries
1,480,000
-
(18,438,952)
(12,710,580)
(12,358,815)
(11,791,773)
2,079,709
16,187,477
2,029,709
16,187,477
-
(315,499,700)
(49,999,700)
(315,499,704)
-
(201,341,041)
-
-
10,226,693
-
Net cash paid for purchase of investment in subsidiary and rights of claim in debts Cash received from purchase of investments in subsidiaries Net cash flows used in investing activities
(16,359,243)
(503,137,151)
(211,070,459)
(280,000,000) (588,213,300)
Cash flows from financing activities Increase in short-term loans from financial institutions Increase (decrease) in short-term loan from related party Increase (decrease) in long-term loans from financial institutions
220,000,000
-
220,000,000
-
-
(315,000,000)
315,000,000
424,484,859
(193,725,819)
(57,494,746)
(160,631,346)
(635,981,449)
Cash paid for purchase of investment in subsidiary payable
(57,494,746)
Proceed from increase in share capital
456,939,202
Net cash flows from (used in) financing activities
(16,536,993)
Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year
1,787,418,507 (160,631,346)
-
-
456,939,202
-
1,626,787,161
728,929,315
(39,357,165)
769,643,818
80,803,915
333,489,055
111,504,633
661,618,586
580,814,671
438,296,803
326,792,170
1,431,262,404
661,618,586
771,785,858
438,296,803
232,844,127
-
-
-
Supplemental disclosure of cash flows information Non-cash transactions: Transferred project development cost to investment properties
The accompanying notes are an integral part of the financial statements.
68
Raimon Land Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2012
1.
General information Raimon Land Public Company Limited (“the Company�) is a public company incorporated and domiciled in Thailand. Its major shareholder is IFA Hotels & Resorts 3 Ltd., a company existing under Kuwait laws. The Company is principally engaged in the property development. The registered office of the Company is at 62 The Millennia Tower, 22nd Floor, Unit 2201-3, Langsuan Road, Lumpini, Pathumwan, Bangkok. On 1 February 2013, the Company‘s major shareholder changed to JS Oil Pte Ltd., a company existing under Singapore laws.
2.
Basis of preparation
2.1
The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547, and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.
1 69
2.2
Basis of consolidation a)
The consolidated financial statements include the financial statements of Raimon Land Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”): Company’s name
Nature of business
Country of
Percentage of
incorporation
shareholding 2012
2011
Percent
Percent
Contemporary Property Company Limited
Property development
Thailand
98.59
98.59
Raimon Land Planner Company Limited
Plan and planner
Thailand
95.00
95.00
Property development
Thailand
99.84
99.84
Raimon Land Property Company Limited
Dissolution
Thailand
-
-
Raimon Land Park View Development
Dissolution
Thailand
99.99
99.99
Raimon Land Resorts Company Limited
Investment and service
Thailand
99.93
99.93
Northpoint PRC Company Limited
Property development
Thailand
99.99
99.99
Raimon Land Residences Company Limited
Property development
Thailand
99.99
99.99
Raimon Land Unixx Company Limited
Property development
Thailand
99.99
99.99
Raimon Land Development Company Limited
Property development
Thailand
99.99
99.99
Raimon Land Services Company Limited
Services
Thailand
99.94
99.94
Raimon Land Ekkamai Company Limited
Property development
Thailand
99.99
-
Raimon Land Sukhumvit Company Limited
Property development
Thailand
99.99
-
administrator The River Company Limited and its subsidiary (Held by the Company 88.99% and indirect held by Contemporary Property Company Limited 10.85%)
Company Limited
(Held by the Company 89.8% and indirect held by Raimon Land Residences Company Limited 10.2%) (2011: Held by the Company 49% and indirect held by Raimon Land Residences Company Limited 51%)
In May 2012, the Company invested in 400,000 additional ordinary shares of Raimon Land Unixx Company Limited at a par value of Baht 100 each, totaling Baht 40 million, representing a 100 percent of the additional ordinary shares. This investment increased the Company’s direct shareholding from 49.0 percent to 89.8 percent of the subsidiary’s registered share capital. In November 2012, the Company incorporated Raimon Land Ekkamai Company Limited and holds 99.99 percent of the registered share capital of this subsidiary.
70
2
In December 2012, the Company incorporated Raimon Land Sukhumvit Company Limited and holds 99.99 percent of the registered share capital of this subsidiary. b)
Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.
c)
The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company.
d)
Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements.
e)
Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position.
2.3
The separate financial statements, which present investments in subsidiaries under the cost method, have been prepared solely for the benefit of the public.
3.
New accounting standards not yet effective The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12
Income Taxes
TAS 20 (revised 2009)
Accounting for Government Grants and Disclosure of Government Assistance
TAS 21 (revised 2009)
The Effects of Changes in Foreign Exchange Rates
Financial Reporting Standard: TFRS 8
Operating Segments
Accounting Standard Interpretations: SIC 10
Government Assistance - No Specific Relation to Operating Activities
SIC 21
Income Taxes - Recovery of Revalued Non-Depreciable Assets
SIC 25
Income Taxes - Changes in the Tax Status of an Entity or its Shareholders
The management of the Company and its subsidiaries believe that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied. However, the Company and its subsidiaries have early adopted TAS 12 “Incomes Taxes� before the effective date. 3
71
In addition, the Federation of Accounting Professions has issued Notification No.
30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of accounting treatment guidance and accounting standard interpretations as follows.
Effective date Accounting Treatment Guidance for Transfers of Financial Assets Accounting Standard Interpretation: SIC 29
Service Concession Arrangements: Disclosures
1 January 2013 1 January 2014
Financial Reporting Standard Interpretations: TFRIC 4
Determining whether an Arrangement
1 January 2014
TFRIC 12
Service Concession Arrangements
1 January 2014
TFRIC 13
contains a Lease
Customer Loyalty Programmes
1 January 2014
The management of the Company and its subsidiaries have assessed the effect of these
standards and believe that Accounting Treatment Guidance for Transfers of Financial
Assets, SIC 29, TFRIC 4 and TFRIC 12 are not relevant to the business of the Company
and its subsidiaries. Management is still evaluating the first-year impact to the financial statements of the adoption of TFRIC 13 and has yet to reach a conclusion.
4.
Significant accounting policies
4.1
Revenue recognition Sales of residential condominium units Revenues from sales of residential condominium units are recognised as revenues when
significant risks and rewards are transferred to the buyer. Rental and related service income
Rental and related service income of units in office buildings and residential buildings
are recognised on an accrual basis. Interest income
Interest income is recognised on an accrual basis based on the effective interest rate. 4.2
Cost of residential condominium units sold In determining the cost of residential condominium units sold, the total development costs are attributed to units sold on the basis of the sale value.
4.3
Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid
investments with an original maturity of three months or less and not subject to withdrawal restrictions. 72
4
4.4
Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging.
4.5
Project development cost Project development cost is stated at cost less allowance for loss on diminution in value of projects. The details of cost calculation are as follows:
4.6
Land
-
The Company and its subsidiaries record cost of land separately for each project.
Construction in progress
-
Construction in progress consists of the cost of design, cost of construction, public utility costs and interest capitalised to cost of projects. The Company and its subsidiaries record cost of design, construction and public utilities based on the actual cost incurred.
Borrowing costs Borrowing costs directly attributable to the acquisition, construction of the projects that necessarily takes a substantial period of time to get ready for its intended sale are capitalised as part of the cost of the respective projects and will be ceased when the projects are completed or when the construction is suspended until active development resumes. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
4.7
4.8
Investments a)
Investments in joint ventures are accounted for in the consolidated financial statements using the equity method.
b)
Investments in subsidiaries and joint ventures are accounted for in the separate financial statements using the cost method.
Investment properties Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and allowance for loss on impairment (if any). Depreciation of investment properties is calculated by reference to their costs on the straight-line basis over estimated useful lives of 20 years and over the leasehold remaining period of 24 years. Depreciation of the investment properties is included in determining income. On disposal of investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period when the asset is derecognised. 5
73
4.9
Property, plant and equipment and depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated
depreciation and allowance for loss on impairment of assets. Depreciation of buildings
and equipment is calculated by reference to their costs on a straight-line basis over the following estimated useful lives:
Buildings and building improvement Temporary show building
Furniture, fixtures and office equipment Motor vehicles
20 years 3 years
3, 5 years
5 years
Depreciation is included in determining income. No depreciation is provided on land and land improvement. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
disposal of an asset is included in profit or loss when the asset is derecognised. 4.10 Leasehold right and amortisation
Leasehold right is stated at cost less accumulated amortisation. Amortisation of
leasehold right is calculated by reference to its cost on a straight-line basis over the
leasehold period.
4.11 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company.
They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors, and officers with authority in the planning and direction of the Company’s operations. 4.12 Long-term leases Leases of equipment which transfer substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease
payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the
lease period. The asset acquired under finance leases is depreciated over the useful
life of the asset.
Leases of plant or equipment which do not transfer substantially all the risks and
rewards of ownership are classified as operating leases. Operating lease payments
are recognised as an expense in profit or loss on a straight line basis over the lease term. 74
6
4.13 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated into Baht at the exchange rate ruling at the end of reporting period.
Gains and losses on exchange are included in determining income. 4.14 Impairment of assets At the end of each reporting period, the Company performs impairment reviews in
respect of the property, plant and equipment and other assets whenever events or
changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying
amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information
available, reflects the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.
An impairment loss is recognised in profit or loss. 4.15 Employee benefits Short-term employee benefits Salaries, wages, bonuses, contributions to the social security fund and employee joint investment program are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company and its employees have jointly established a provident fund. The fund is
monthly contributed by employees and by the Company. The fund’s assets are held in a separate trust fund and the Company’s contributions are recognised as expenses when incurred.
Defined benefit plans The Company has obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company treats these severance payment obligations as a defined benefit plan.
The obligation under the defined benefit plan is determined by a professionally
qualified independent actuary based on actuarial techniques, using the projected unit credit method.
7
75
Actuarial gains and losses arising from post-employment benefits are recognised immediately in profit or loss. 4.16 Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax. Current tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Company and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they recognises deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised. At each reporting date, the Company and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Company and its subsidiaries record deferred tax directly to shareholders' equity if the tax relates to items that are recorded directly to shareholders' equity.
5.
Significant accounting judgments and estimates The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgments and estimates are as follows: Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of the Company’s plant and equipment and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the temporary differences and losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimate future taxable profits.
76
8
Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Litigation The Company and its subsidiaries have contingent liabilities as a result of litigation. The management of the Company and its subsidiaries have used judgement to assess of the results of the litigation and believes that no loss will result. Therefore no contingent liabilities are recorded as at the end of reporting period.
6.
Related party transactions During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties. (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
Transfer Pricing Policy
2012
2011
2012
2011
Project management fee income
-
-
52
31
As stipulated in agreements
Marketing commission income
-
-
80
54
At prices charged to the third
Transactions with subsidiaries (Eliminated from the consolidated financial statements)
parties Guarantee fee income
-
-
50
32
At 1% of average outstanding guarantee per annum
Interest income
-
-
35
7
Interest rate of 3-10% per annum
Interest expenses
-
-
14
24
Interest rate of 3% per annum and average MLR-0.75% per annum (2011: Interest rate of 5% per annum)
Transactions with jointly controlled entities Interest income
-
8
-
8
Marketing commission income
-
30
-
30
Interest rate of 7.5% per annum At prices charged to the third parties
Transactions with related company (Related by the way of common directors) Service fee expenses
9
2
1
1
Similar to market price
15
-
-
-
Similar to market price
Transactions with directors and employees Sales of residential condominium units
9
77
As at 31 December 2012 and 2011, the balances of the accounts between the Company and those related parties are as follows:
(Unit: Thousand Baht)
Consolidated financial
Separate financial
statements
2012
Amounts due from related parties (Note 8) Subsidiaries
statements
2011
2012
2011
- Taksin Properties Company Limited
-
-
669,972
314,115
- Raimon Land Unixx Company Limited
-
-
2,670
-
- Raimon Land Development Company Limited
-
Related company
- Cha-am Campus City Company Limited
-
Net
Less: Allowance for doubtful debts
-
28,808
21,540
19,200
-
(19,200)
-
-
701,450
335,655
29,983
29,983
-
-
-
(19,200)
19,200
Amounts due to related parties (Note 15) Major shareholder
- IFA Hotels & Resorts 3 Ltd. Related company
- The Siam Administrative Management Company Limited
5,850
564
135
41
35,833
30,547
135
41
15,294
3,712
10,111
-
11,808
34,541
11,808
6,962
27,102
38,253
21,919
6,962
Deposits and cash received from customers related parties
- Directors and employees
- Related companies (related by the way of common directors)
Loans to related parties and loans from related parties As at 31 December 2012 and 2011, the balance of loans to and related interest
receivable, and loans from and related accrued interest between the Company and those related companies and the movement are as follows:
(Unit: Thousand Baht)
Consolidated financial statements Balance as at
Increase
Decrease
Balance as at
2011
the year
the year
2012
31 December
during
during
31 December
Short-term loans to related parties and interest receivable
Related company
- Cha-am Campus City Company Limited Loans
Interest receivable
Less: Allowance for doubtful debts Net
78
427,319
-
(427,319)
-
(829,315)
-
829,315
-
401,996
-
-
(401,996)
-
-
-
10
(Unit: Thousand Baht) Separate financial statements Balance as at
Increase
Decrease
Balance as at
31 December
during
during
31 December
2011
the year
the year
2012
Short-term loans to related parties and interest receivable Subsidiaries - Raimon Land Property Company Limited Loans
285,500
-
-
285,500
16,700
-
1,178
799
6,060
4,600
(260)
10,400
576
470
(13)
1,033
Loans
294,500
20,000
(108,922)
205,578
Interest receivable
110,358
16,601
(61,497)
65,462
Loans
-
300,000
(300,000)
-
Interest receivable
-
4,626
(4,626)
-
Loans
-
300,000
Interest receivable
-
12,808
256,899
-
-
256,899
87,850
-
-
87,850
Loans
427,319
-
(427,319)
-
Interest receivable
401,996
-
(401,996)
-
1,888,936
659,904
(1,319,141)
1,229,699
- Raimon Land Park View Development Company Limited Loans Interest receivable
(1,700) -
15,000 1,977
- Raimon Land Resorts Company Limited Loans Interest receivable - Raimon Land Development Company Limited
- Taksin Properties Company Limited
- Raimon Land Unixx Company Limited -
300,000
(12,808)
-
- Raimon Land Residences Company Limited Loans Interest receivable Related company - Cha-am Campus City Company Limited
Less: Allowance for doubtful debts Net
(1,449,930)
-
829,315
(620,615)
(489,826)
609,084
439,006
659,904
182,500
-
-
182,500
55,248
5,490
-
60,738
315,000
-
(315,000)
-
14,961
8,490
(23,451)
-
567,709
13,980
(338,451)
243,238
Short-term loan from related parties and accrued interest
Subsidiaries - Contemporary Property Company Limited Loan Accrued interest - Taksin Properties Company Limited Loan Accrued interest
11
79
Directors and management’s benefits During the years ended 31 December 2012 and 2011, the Company and its subsidiaries had employee benefit expense payable to their directors and management as below. (Unit: Million Baht)
Short-term employee benefits Post-employment benefits Total
Consolidated financial
Separate financial
statements
statements
2012
2011
2012
2011
97
52
97
52
1
1
1
1
98
53
98
53
Guarantee obligations with related parties The Company and a subsidiary have outstanding guarantee obligations with their related parties, as described in notes 16 and 24.3 to the financial statements. Amount due from, short-term loans and interest receivable from related company During the current year, the Company wrote off amount due from and short-term loans and interest receivable from Cha-am Campus City Company Limited, which had already recorded full allowance for doubtful accounts, as bad debt totaling Baht 849 million. Short-term loans to subsidiaries Loans to subsidiaries are unsecured loans carrying interest at rates of 3.0-7.5 percent per annum and due at call. During the current year, the Company entered into short-term loan agreements with subsidiaries as follows: a)
On 3 April 2012, the Company entered into a loan agreement to provide a loan facility of Baht 1,535 million to Raimon Land Unixx Company Limited. The unsecured loan carries interest at a rate of MLR-1.75 percent per annum and is due at call.
b)
On 8 June 2012, the Company entered into a loan agreement to provide a loan facility of Baht 5 million to Raimon Land Resorts Company Limited. The unsecured loan carries interest at a rate of 3 percent per annum and is due at call.
c)
On 20 June 2012, the Company entered into a loan agreement to provide a loan facility of Baht 200 million to Raimon Land Development Company Limited. The unsecured loan carries interest at a rate of 5 percent per annum and is due at call.
d)
On 27 June 2012, the Company entered into a loan agreement to provide a loan facility of Baht 300 million to Taksin Properties Company Limited. The unsecured loan carries interest at a rate of the average MLR-0.75 percent per annum and is due at call.
80
12
Short-term loans from subsidiaries Loans from subsidiaries are unsecured loans carrying interest at rates of the average MLR-0.75 and 3 percent per annum and due at call. During the current year, the interest rate on the short-term loan from Contemporary Property Company Limited was changed from 5 percent per annum to 3 percent per annum.
7.
Cash and cash equivalents Consolidated financial statements Cash Bank deposits
2012
Total
(Unit: Thousand Baht) Separate financial statements
2011
290 1,430,972
2012
540 661,079
1,431,262
105 771,681
661,619
771,786
2011
165 438,132 438,297
As at 31 December 2012, bank deposits in saving accounts and fixed deposits carried interests between 0.50 and 2.25 percent per annum (2011: between 0.50 and 1.25 percent per annum).
8.
Trade and other receivables (Unit: Thousand Baht) Separate financial statements
Consolidated financial statements Trade accounts receivable unrelated parties Other receivables - related parties Other receivables - unrelated parties Total trade and other receivables
9.
2012
2011
2012
2011
10,266 24,981
-
701,450 -
335,655 -
35,247
-
701,450
335,655
Project development cost Consolidated financial statements Land and construction under development Developed land and construction Total project development cost
2012
2011
(Unit: Thousand Baht) Separate financial statements 2012
2011
4,639,472 6,655,395
11,868,334 751,772
3,463,281 434,122
2,600,376 746,929
11,294,867
12,620,106
3,897,403
3,347,305
During 2012 and 2011, the Company and its subsidiaries capitalised interest of approximately Baht 275 million and Baht 345 million, respectively (the Company only: Baht 105 million and Baht 90 million, respectively) as part of project development cost. The capitalisation rate on project development cost is approximately 7 percent per annum (2011: 7 percent per annum). 13
81
The Company and its subsidiaries have mortgaged their land and construction thereon with banks and financial institutions to secure the Company’s and its subsidiaries’ loans from these banks and financial institutions.
10. Investments in subsidiaries Details of investments in subsidiaries as presented in separate financial statements are as follows: (Unit: Thousand Baht) Shareholding Company’s name
2012 Contemporary Property Company Limited Raimon Land Planner Company Limited Raimon Land Park View Development Company
percentage
Paid-up capital 2011
2012
2011
(%)
(%)
Cost 2012
2011
200,000
200,000
98.59
98.59
196,126
196,126
2,000
2,000
95.00
95.00
1,900
1,900
100,000
100,000
99.99
99.99
100,000
100,000
1,232,030
99.84
99.84
1,121,994
1,121,994
Limited The River Company Limited and its subsidiary 1,232,030 (Held by the Company 88.99% and indirect held by Contemporary Property Company Limited 10.85%) Raimon Land Resorts Company Limited
250
250
99.93
99.93
250
250
2,500
2,500
99.99
99.99
2,500
2,500
Raimon Land Residences Company Limited
10,000
10,000
99.99
99.99
5,099
5,099
Raimon Land Unixx Company Limited
50,000
10,000
99.99
99.99
40,000
-
500,000
500,000
99.99
99.99
390,695
390,695
Raimon Land Services Company Limited
500
500
99.94
99.94
500
500
Raimon Land Ekkamai Company Limited
5,000
-
99.99
-
5,000
-
Raimon Land Sukhumvit Company Limited
5,000
-
99.99
-
5,000
-
1,869,064
1,819,064
Northpoint PRC Company Limited
(Held by the Company 89.8% and indirect held by Raimon Land Residences Company Limited 10.2%) (2011: Held by the Company 49% and indirect held by Raimon Land Residences Company Limited 51%) Raimon Land Development Company Limited
Total Less: Allowance for loss on diminution in value of investments in subsidiaries Investments in subsidiaries, net
(105,099) 1,763,965
(105,099) 1,713,965
The Company pledged the ordinary shares of The River Company Limited and Raimon Land Development Company Limited as collateral of subsidiaries’ long-term loans from banks.
82
14
Raimon Land Unixx Company Limited On 21 May 2012, the Extraordinary General Meeting of Raimon Land Unixx Company Limited’s shareholders approved an increase in its registered share capital from Baht 10 million to Baht 50 million through the issuance of 400,000 ordinary shares with a par value of Baht 100 per share and registered the additional share capital with the Ministry of Commerce on 22 May 2012. On 29 May 2012, the Company invested in 400,000 additional ordinary shares of Raimon Land Unixx Company Limited at a par value of Baht 100 each, totaling Baht 40 million, representing a 100 percent of the additional ordinary shares. This investment increased the Company’s shareholding from 49.0 percent to 89.8 percent of the subsidiary’s registered share capital. Raimon Land Ekkamai Company Limited On 22 November 2012, the Company incorporated Raimon Land Ekkamai Company Limited, with a registered capital of Baht 10 million, comprising 100,000 ordinary shares with a par value of Baht 100 each. The Company invested 99,997 ordinary shares, which represents 99.99 percent shareholding of the registered share capital. The Company paid for share capital total amount of Baht 5 million, which are called by that company 50 percent of its registered share capital. Raimon Land Sukhumvit Company Limited On 14 December 2012, the Company incorporated Raimon Land Sukhumvit Company Limited, with a registered capital of Baht 10 million, comprising 100,000 ordinary shares with a par value of Baht 100 each. The Company invested 99,997 ordinary shares, which represents 99.99 percent shareholding of the registered share capital. The Company paid for share capital total amount of Baht 5 million, which are called by that company 50 percent of its registered share capital. Raimon Land Development (Singapore) Pte. Ltd. On 18 February 2013, the Company incorporated Raimon Land Development (Singapore) Pte. Ltd., with a registered capital of 2 Singapore Dollars, comprising 2 ordinary shares with a par value of 1 Singapore Dollars each. The Company invested 2 ordinary shares, which represents 100 percent shareholding of the registered share capital.
15
83
11. Investment properties The net book value of investment properties as at 31 December 2012 and 2011 is presented below. (Unit: Thousand Baht) Land and building for rent Consolidated
Separate
financial statements
financial statements
31 December 2012: Cost
286,322
53,478
Less Accumulated depreciation
(17,047)
(17,047)
Net book value
269,275
36,431
53,478
53,478
(15,402)
(15,402)
38,076
38,076
31 December 2011: Cost Less Accumulated depreciation Net book value
A reconciliation of the net book value of investment properties for the years 2012 and 2011 is presented below. (Unit: Thousand Baht)
Net book value at beginning of year Transferred assets from project
Consolidated
Separate
financial statements
financial statements
2012
2011
2012
2011
38,076
39,724
38,076
39,724
232,844
-
-
-
development cost Depreciation charged Net book value at end of year
(1,645) 269,275
(1,648)
(1,645)
(1,648)
38,076
36,431
38,076
As at 31 December 2012, a subsidiary transferred a building amounting Baht 233 million which was recorded as a project development cost to investment property. The subsidiary is assessing the fair value of this building. As at 31 December 2012 and 2011, an office building with a net book value of Baht 36 million (2011: Baht 38 million) has a fair value amounting to Baht 72 million (2011: Baht 72 million). The fair value was determined based on valuations performed by an accredited independent valuer, using the market approach. The Company has pledged investment properties as collateral against credit facilities received from banks and financial institutions. 84
16
12. Property, plant and equipment (Unit: Thousand Baht) Consolidated financial statements Land and
Building and
land
building
Furniture
Office
Motor
improvement
improvement
and fixtures
equipment
vehicles
13,388
88,369
62,508
20,954
30,007
215,226
Additions
-
-
9,262
2,129
1,319
12,710
Disposals/ Written-off
-
(6,005)
(39,756)
Total
Cost: 1 January 2011
(30,000)
(2,859)
(892)
Equipment of subsidiary as -
-
3,924
1,314
2,750
7,988
13,388
58,369
72,835
23,505
28,071
196,168
Additions
-
-
4,564
6,126
7,749
18,439
Disposals/ Written-off
-
-
-
(4,867)
(5,390)
13,388
58,369
77,399
29,108
30,953
209,217
1 January 2011
-
17,740
38,719
14,801
18,219
89,479
Depreciation for the year
-
15,201
11,867
2,724
5,213
35,005
-
(7,081)
(1,898)
(819)
(6,005)
(15,803)
at acquisition date 31 December 2011
31 December 2012
(523)
Accumulated depreciation:
Depreciation on disposals/ written-off Accumulated depreciation of equipment of subsidiaries as -
-
1,783
751
1,741
4,275
31 December 2011
-
25,860
50,471
17,457
19,168
112,956
Depreciation for the year
-
13,799
9,516
3,327
5,928
32,570
-
-
-
(3,934)
(4,444)
-
39,659
59,987
20,274
21,162
141,082
1 January 2011
13,288
4,907
-
-
-
18,195
31 December 2011
13,288
4,907
-
-
-
18,195
31 December 2012
13,288
4,907
-
-
-
18,195
1 January 2011
100
65,722
23,789
6,153
11,788
107,552
31 December 2011
100
27,602
22,364
6,048
8,903
65,017
31 December 2012
100
13,803
17,412
8,834
9,791
49,940
at acquisition date
Depreciation on disposals/ written-off 31 December 2012
(510)
Allowance for impairment loss:
Net book value:
Depreciation for the year: 2011 (all included in selling and administrative expenses)
35,005
2012 (all included in selling and administrative expenses)
32,570
17
85
(Unit: Thousand Baht) Separate financial statements Land and
Building and
land
building
Furniture
Office
Motor
improvement
improvement
and fixtures
equipment
vehicles
13,388
88,369
44,041
15,174
19,540
180,512
Additions
-
-
9,621
2,170
-
11,791
Disposals/ Written off
-
(30,000)
(2,493)
13,388
58,369
51,169
Additions
-
-
1,296
Disposals/ Written off
-
-
-
13,388
58,369
52,465
19,499
16,417
160,138
1 January 2011
-
17,740
27,661
11,508
12,111
69,020
Depreciation for the year
-
15,201
8,001
1,664
2,877
27,743
-
(7,081)
(1,627)
31 December 2011
-
25,860
34,035
12,353
8,983
81,231
Depreciation for the year
-
13,799
5,829
1,955
3,021
24,604
-
-
-
-
39,659
39,864
14,054
8,069
101,646
Allowance for impairment loss:
,.
1 January 2011
13,288
4,907
-
-
-
18,195
31 December 2011
13,288
4,907
-
-
-
18,195
31 December 2012
13,288
4,907
-
-
-
18,195
1 January 2011
100
65,722
16,380
3,666
7,429
93,297
31 December 2011
100
27,602
17,134
4,099
4,552
53,487
31 December 2012
100
13,803
12,601
5,445
8,348
40,297
Total
Cost: 1 January 2011
31 December 2011
31 December 2012
(892)
(6,005)
(39,390)
16,452
13,535
152,913
3,314
7,749
12,359
(267)
(4,867)
(5,134)
Accumulated depreciation:
Depreciation on disposals/ written off
(819)
(6,005)
(15,532)
Depreciation on disposals/ written off 31 December 2012
(254)
(3,935)
(4,189)
Net book value:
Depreciation for the year: 2011 (all included in selling and administrative expenses)
27,743
2012 (all included in selling and administrative expenses)
24,604
As at 31 December 2012, certain equipment and motor vehicles items of the Company and its subsidiaries have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those assets amounted to approximately Baht 60 Million (2011: Baht 41 million) (the Company only: Baht 45 million, 2011: Baht 40 million).
86
18
13. Income tax Income tax expenses for the years ended 31 December 2012 and 2011 are made up as follows: (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2012
2011
140,481
170,995
2012
2011
Current income tax: Current income tax charge
36,232
-
Adjustment in respect of current income tax 346
(6,462)
79,796
(234,122)
(50,656)
42,101
278,384
9,134
134,104
262,724
208,795
(5,290)
133,578
of previous year
-
(9,293)
Deferred tax: Relating to origination and reversal of temporary differences Effects of changes in the applicable tax rates Income tax expenses reported in the statement of comprehensive income
8,767
Reconciliation between income tax expenses and the product of accounting profit (loss) multiplied by the applicable tax rates for the years ended 31 December 2012 and 2011. (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2012
2011
2012
758,572
(271,526)
(113,054)
23%
30%
23%
30%
174,472
(81,458)
(26,002)
(636)
346
(6,462)
-
(9,293)
42,101
278,384
9,134
(10,704)
(9,218)
-
-
12,756
12,107
-
-
-
8,339
-
8,339
Non-deductible expenses
22,345
7,103
11,578
1,064
Total
45,805
18,331
11,578
9,403
Accounting profit (loss) before tax Applicable tax rate
2011 (2,121)
Accounting profit (loss) before tax multiply by applicable tax rate Adjustment in respect of current income tax of previous year Effects of changes in the applicable tax rates
134,104
Effects of: Elimination of related transactions Deferred tax assets which were not recognised during the year - Tax losses of subsidiaries - Allowance for doubtful account
Income tax expenses reported in the statement of comprehensive income
262,724
208,795
(5,290)
133,578
19
87
As of 31 December 2012 and 2011, the components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2012
2011
2012
2011
Deferred tax assets Unused tax loss
85,579
95,517
-
19,372
Provision for long-term employee benefits
3,383
2,820
3,383
2,820
Allowance for diminution of investments
23,020
23,020
23,020
23,020
135,723
135,723
135,723
135,723
611,375
793,004
147,605
87,274
859,080
1,050,084
309,731
268,209
102,914
172,022
-
-
102,914
172,022
-
-
Allowance for doubtful accounts Cash received from customers and project development cost from the difference between tax and accounting of revenue recognition Total deferred tax assets Deferred tax liabilities Surplus of project development cost Total deferred tax liabilities
In October 2011, the cabinet passed a resolution to reduce the corporate income tax rate from 30 percent to 23 percent in 2012, and then to 20 percent from 2013. In addition, in order to comply with the resolution of the cabinet, in December 2011, the decreases in tax rates for 2012 - 2014 were enacted through a royal decree. The Company reflected the changes in tax rates in its deferred tax calculation, as presented above. As at 31 December 2012, the Company and its subsidiaries have deductible temporary differences and unused tax losses totaling Baht 306 million (2011: Baht 536 million) (the Company only: Baht 12 million, 2011: Baht 222 million), on which deferred tax assets have not been recognised as the Company and its subsidiaries believe future taxable profits may not be sufficient to allow utilisation of the temporary differences and unused tax losses. A subsidiary’s corporate income tax for the years 2010 and 2011 are payable in installments until May 2014 and corporate income tax for the half-year of 2012 is payable in installments until April 2014. The liabilities are presented as “Income tax payable� in the statements of financial position as at 31 December 2012 and 2011.
14. Short-term loans from financial institutions As at 31 December 2012, the Company has a balance of bill of exchange amounting to Baht 250 million (2011: Baht 30 million) from a financial institution, which carries interest at a rate similar to market price and is due in January 2013. 88
20
15. Trade and other payables Consolidated
(Unit: Thousand Baht) Separate
financial statements
financial statements
2012
2012
2011
2011
Trade payables - unrelated parties
655,313
798,808
157,630
278,513
Other payables - unrelated parties
306,549
151,861
154,612
150,656
Total trade and other payables
997,695
981,216
312,377
429,210
Other payables - related parties
35,833
30,547
135
41
16. Long-term loans from financial institutions Consolidated financial statements
Long-term loans
Less: Current portion Long-term loans, net of current portion
2012
2011
(Unit: Thousand Baht)
Separate financial statements
2012
2011
5,971,248
6,607,230
2,048,545
1,624,060
2,476,701
6,592,230
2,028,545
1,609,060
(3,494,547)
(15,000)
(20,000)
(15,000)
The Company and its subsidiaries have credit facilities from banks totaling Baht
12,088 million (2011: Baht 9,770 million) (the Company only: Baht 4,992 million, 2011:
Baht 3,090 million) under numerous agreements, carrying interest rates reference to
MLR. Loan repayments are due when condominium units are transferred to customers, as
specified in the loan agreement, and full settlement due within dates between June 2013
to June 2016 (2011: June 2012 to September 2015) (the Company only: June 2013 to
June 2016 (2011: June 2012 to September 2015)).
These loans are secured by the mortgage of the condominium units of the projects, the
land and construction thereon of the projects, the land and investment properties thereon,
the transfer of beneficiary rights under purchase and sale agreements for the project’s condominium units, the transfer of beneficiary rights under insurance policies for the projects, the transfer of the beneficiary rights under the performance bonds of
construction agreements with the major project contractors, the pledge of a saving
account of Baht 25 million, the transfer of rights in bank accounts, leasehold rights, the pledge of share certificates of the subsidiaries and guarantee provided by the Company and the subsidiaries.
The loan agreements of the Company contain covenants as specified in the
agreements that, among other things, require the Company to maintain certain debt to equity ratio according to the agreements.
As at 31 December 2012, the long-term credit facilities of the Company and its subsidiaries which have not yet been drawn down amounted to Baht 5,349 million (2011: Baht 3,039 million) (the Company only: Baht 2,852 million, 2011: Baht 1,409 million).
21
89
Raimon Land Public Company Limited 1.
On 3 April 2012, the Company entered into two long-term loan agreements with a local financial institution, which grant the following facilities: - Loan facilities totaling Baht 867 million are to be used to repay an existing longterm loan from another bank, to purchase a land and as expense of land acquisition and working capital. - Loan facilities of Baht 1,365 million are to be used to repay an existing long-term loan of a subsidiary, and fund construction and working capital for the subsidiary’s projects.
2.
On 24 April 2012, the Company entered into a long-term loan agreement with a local financial institution, granting a Baht 50 million to be used as working capital.
Taksin Properties Company Limited (a subsidiary of The River Company Limited) On 20 November 2012, Taksin Properties Company Limited (the subsidiary) entered into long-term loan agreements with a new group of lenders formed by two local banks, to change loan facilities totaling Baht 5,480 million for loan facilities totaling Baht 6,260 million. The loan facilities are to be used to repay the existing long-term loans from banks, repay the loan from the Company, fund construction and working capital for the subsidiary’s project and fund the acquisition of additional land for related parties.
17. Deposits and cash received from customers As at 31 December 2012, the Company and a subsidiary have residential condominium units’ sales agreements with two major buyers (1 local buyer and 1 foreign buyer), amounting to Baht 357 million (2011: Baht 953 million) (the Company only: Baht 57 million, 2011: Baht 342 million) and received deposits of Baht 83 million (2011: Baht 228 million) (the Company only: Baht 18 million, 2011: Baht 108 million), which are recorded as “Deposits and cash received from customers” in the statements of financial position. These agreements appoint the Company to help the buyers sell on their units at an agreed price and grant the buyers an option to sell some units to the Company’s major shareholder. In January 2013, the Company and the subsidiary paid all remaining deposits to the two major buyers because the contracted obligation to these buyers to help to sell on their units had ended and the buyers terminated the relevant residential condominium units’ sales agreements.
90
22
18. Provision for long-term employee benefits Provision for long-term employee benefits, which is compensations on employees’ retirement, was as follows:
(Unit: Thousand Baht)
Consolidated and separate financial statements
Defined benefit obligation at beginning of year
2012
2011
14,098
Current service cost
10,712
2,252
Interest cost
2,958
564
Defined benefit obligation at end of year
428
16,914
14,098
Long-term employee benefit expenses included in the profit or loss was as follows: (Unit: Thousand Baht) 2012 Current service cost
2011
2,252
2,958
2,816
3,386
564
Interest cost Total expense recognised in profit or loss
428
All expenses are included in administrative expenses. Principal actuarial assumptions at the valuation date were as follows: Consolidated and
separate financial statements 2012
Discount rate
Future salary increase rate
2011
(% per annum)
(% per annum)
4
4
4
4
19. Share capital 19.1 At the Annual General Meeting of the Company’s shareholders held on 25 April 2012, the following resolutions were passed.
a) To issue and offer up to 893,856,031 warrants to the shareholders, free of charge. These warrants are exercisable for a period of 3 years from the issued date in a
ratio of 1 warrant for 1 ordinary share and at an exercise price of Baht 2.75 each. b) To increase the Company’s registered share capital by Baht 1,218,894,587, from Baht 3,250,385,569 (3,250,385,569 ordinary shares of Baht 1 each) to Baht
4,469,280,156 (4,469,280,156 ordinary shares of Baht 1 each), through the issue
of 1,218,894,587 additional shares of Baht 1 each. The additional registered share capital is to be allotted as follows: -
325,038,556 new ordinary shares to be offered by private placement. 23
91
-
No more than 893,856,031 new ordinary shares to be reserved for the exercise of warrants.
The Company registered the increase in its share capital with the Ministry of Commerce on 26 April 2012. 19.2 On 26 April 2012, a meeting of the Company’s Board of Directors No. 4/2012 passed a resolution to approve the offering 325,038,556 additional ordinary shares to two longterm investors by private placement, at a price of 1.4058 per share, or for a total of Baht 457 million. The period for the offering and payment of the additional ordinary shares is 27 April 2012 to 2 May 2012. On 27 April 2012 and 2 May 2012, the Company received the subscription for the additional ordinary shares amounting to Baht 457 million (a paid up share capital amounting to Baht 325 million and a share premium amounting to Baht 132 million). The Company registered the paid up share capital of Baht 3,575 million with the Ministry of Commerce on 2 May 2012. 19.3 On 17 May 2012, the Company issued the warrants (RML-W3) of 893,840,315 warrants as described in 19.1. The warrants can be exercised to subscribe to newly issued ordinary shares in a ratio of 1 warrant per 1 ordinary share, at an exercise price of Baht 2.75 each, and exercised on the last business day of each March, June, September and December which start first period on 29 June 2012 and the final period is on 15 May 2015. As at 31 December 2012, there was not exercised for these warrants.
20. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.
21. Expenses by nature Significant expenses by nature are as follow: Consolidated financial statements Cost of residential condominium units sold Salary and other employee benefits Management’s benefit expenses Depreciation and amortisation expenses Special business tax and transfer fees Other selling expenses 92
(Unit: Thousand Baht) Separate financial statements
2012 3,651,032
2011 818,879
2012 323,869
2011 818,879
97,132 97,265 38,570
89,438 53,677 40,971
93,894 97,265 27,270
89,438 53,677 30,377
241,426 189,870
46,383 142,035
17,049 58,996
46,383 78,523
24
22. Earnings per share Basis earnings (loss) per share is calculated by dividing profit (loss) for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year. Diluted earnings (loss) per share is calculated by dividing profit (loss) for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued. However, warrants was not included in calculation of diluted earnings (loss) per share for the year 2012 since the exercise price plus the balance of fair value of each warrants is higher than the average market price for the year. Consolidated financial statements
2012 Profit (loss) attributable to equity holders of the parent (Thousand Baht) Weighted average number of ordinary shares (shares) Earnings (loss) per share (Baht/share)
2011
Separate financial statements
2012
2011
495,771 (474,306) (107,764) (135,699) 3,468,103,057 3,250,385,569 3,468,103,057 3,250,385,569 0.14
(0.15)
(0.03)
(0.04)
23. Provident fund The Company and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The fund is monthly contributed to by employees, at the rate of 3 percent or 5 percent of their basic salaries, and by the Company at the rate of 5 percent of employees’ basic salaries. The fund, which is managed by Kasikorn Thai Asset Management Company Limited will be paid to employees upon termination in accordance with the fund rules. During the year 2012, the Company contributed Baht 5 million (2011: Baht 4 million) to the fund.
24. Commitments and contingent liabilities 24.1 Capital commitments a)
As at 31 December 2012, the Company and its subsidiaries had capital commitments of approximately Baht 2,970 million (2011: Baht 3,461 million) (the Company only: Baht 1,520 million, 2011: Baht 2,132 million) relating to design and construction contracts of their projects.
b)
As at 31 December 2012, the Company had capital commitment of approximately Baht 485 million, relating to purchase of land.
24.2 Long-term service commitments The Company and its subsidiaries had commitment in respect of agency fees of the projects to pay under the “Sole Agency Agreement” at the rate of 1 to 4 percent of project units’ gross sale price. 25
93
24.3 Guarantee As at 31 December 2012, the Company has guaranteed bank credit facilities of its subsidiaries amounting to Baht 7,096 million (2011: Baht 6,680 million). 24.4 Tax assessment During the year 2012, a subsidiary received letters of corporate income tax and special business tax assessment from the Revenue Department, whereby significant tax was assessed on the mortgage value to be included in value of land sales of the subsidiary. The subsidiary submitted a letter appealing the assessment to the Tax Appeal Committee of the Revenue Department. The Company’s management believes that the subsidiary will be able to oppose this assessment and that there will be no significant effect to the consolidated statement of financial position and consolidated statement of comprehensive income. Even if the subsidiary loses the case, the Company’s management believes that losses resulting from this tax assessment will be incurred only by the subsidiary, which ceased its operations in 2010 and has total assets amounting to Baht 21.8 million included in the consolidated financial statements, of which Baht 21.6 million is withholding tax that the subsidiary has requested be refunded.
25. Segment information The Company’s and its subsidiaries’ business operations involve principally a single industry segment, property development, and are carried on in the single geographic area of Thailand. As a result, all of the revenues, operating income (losses) and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.
26. Financial instruments 26.1 Financial risk management The Company and the subsidiaries’ financial instruments, as defined under Thai Accounting Standard No.107 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, restricted bank deposits, trade and other receivables, loans to, investments, trade and other payables, payable from purchase investment in subsidiary, short-term and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade and other receivables and loans to. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk involved the real estate business since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade and other receivables and loan to as stated in the statements of financial position. 94
26
Interest rate risk The Company and the subsidiaries’ exposure to interest rate risk relates primarily to
their cash at banks, trade and other receivables, loans to, trade and other payables,
payable from purchase investment in subsidiary, short-term loans and long-term loans. Most of the Company and the subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate.
Significant financial assets and liabilities classified by type of interest rate are
summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.
(Unit: Million Baht)
Consolidated financial statement As at 31 December 2012 Fixed interest rates Within
1-5
1 year
Over
Years
Non-
Floating
5 years
interest rate
interest
bearing
Effective
Total
interest rate (% p.a.)
Financial Assets
Cash and cash equivalent
-
-
-
1,431
-
1,431
Trade and other receivables
-
-
-
-
35
35
Restricted bank deposits
-
-
-
25
-
25
-
-
-
1,456
35
1,491
250
-
-
-
-
250
Financial Liabilities
Short-term loans from
financial institutions
Trade and other payables
-
Long-term loans from financial institutions
-
-
-
998
998
-
-
-
5,971
-
5,971
250
-
-
5,971
998
7,219
0.50 – 2.25 0.70 -
Reference to MLR -
Reference to MLR
(Unit: Million Baht)
Consolidated financial statement As at 31 December 2011 Fixed interest rates Within
1-5
1 year
Financial Assets
Cash and cash equivalent
Over
Years
Non-
Floating
5 years
interest rate
interest
bearing
Effective
Total
interest rate (% p.a.)
-
-
-
659
3
662
-
-
-
684
3
687
Short-term loans from
-
-
-
30
-
30
Reference to
Trade and other payables
-
-
-
-
981
981
-
subsidiary payable
-
-
-
-
58
58
institutions
-
-
-
6,607
-
6,607
-
-
-
6,637
1,039
7,676
Restricted bank deposits Financial Liabilities
financial institutions
Purchase of investment in Long-term loans from financial
-
-
-
25
-
25
0.50 - 1.25 0.75
MLR
-
Reference to MLR
27
95
(Unit: Million Baht) Separate financial statement As at 31 December 2012 Fixed interest rates NonWithin
1-5
Over
Floating
interest
1 year
Years
5 years
interest rate
bearing
Effective Total
interest rate (% p.a.)
Financial Assets Cash and cash equivalent
-
-
-
772
-
772
0.70 - 1.40
Restricted bank deposits
-
-
-
25
-
25
0.70
Trade and other receivables
-
-
-
-
701
701
-
531
-
-
-
78
609
and MLR-0.75
531
-
-
797
779
2,107
250
-
-
-
-
250
MLR
-
-
-
-
312
312
-
183
-
-
-
60
243
MLR-0.75
-
-
-
2,049
-
2,049
433
-
-
2,049
372
2,854
Short-term loans to related company and interest receivable
3.00 - 7.50
Financial Liabilities Short-term loans from financial institutions
Reference to
Trade and other payable Short-term loan from related parties and accrued interest
3.00 and
Long-term loans from
Reference to
financial institutions
MLR
(Unit: Million Baht) Separate financial statement As at 31 December 2011 Fixed interest rates NonWithin
1-5
Over
Floating
interest
1 year
Years
5 years
interest rate
bearing
Effective Total
interest rate (% p.a.)
Financial Assets Cash and cash equivalent
-
-
-
437
1
438
0.50 - 0.75
Restricted bank deposits
-
-
-
25
-
25
0.75
Trade and other receivable
-
-
-
-
336
336
-
317
-
-
-
122
439
3.50 - 10.00
317
-
-
462
458
1,238
Short-term loans to related company and interest receivable Financial Liabilities Short-term loans from
Reference to
financial institutions
-
-
-
30
-
30
MLR
Trade and other payable
-
-
-
-
429
429
-
-
-
-
-
58
58
Purchase of investment in subsidiaries payable Short-term loan from related parties and accrued interest
183
-
-
315
70
568
Long-term loans from financial institutions
96
MLR - 0.75 and 5.00 Reference to
-
-
-
1,624
-
1,624
183
-
-
1,969
557
2,709
MLR
28
Foreign currency risk The Company has a significant foreign currency risk in respect of purchase of investment payable denominated in foreign currencies. The Company manages its exposure to foreign currency risk by considering purchase/sale of forward contracts from time to time so as to reduce exposure to the foreign currency risk which may incur. As at 31 December 2012, the Company and the subsidiaries had no outstanding of purchase of investment payable (2011: USD 1.8 million). 26.2 Fair values of financial instruments Since the majority of the Company’s financial instruments are short-term in nature or bear floating interest rates, their fair value is not expected to be materially different from the amounts presented in the statements of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instruments or by using an appropriate valuation technique, depending on the nature of the instrument.
27. Capital management The primary objective of the Company’s capital management is to ensure that it has an appropriate capital structure in order to support its business and maximise shareholder value.
28. Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 27 February 2013.
29
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