Hemraj 07

Page 1

รายงานประจํ า ปี 2550 Annual Report 2007

Hemaraj Land and Development Public Company Limited

e-mail : marketing@hemaraj.com, invest@hemaraj.com www.hemaraj.com, www.theparkresidence.co.th Registration No. : BORMORJOR.0107536000676 ทะเบียนเลขที่ : บมจ.0107536000676

Annual Report 2007 Hemaraj Land and Development Public Company Limited

ชัน้ 18 อาคารยูเอ็มทาวเวอร์ เลขที่ 9 ถนนรามคำแหง สวนหลวง กรุงเทพมหานคร 10250 โทรศัพท์ : 66-2719-9555 โทรสาร : 66-2719-9546-7 18th Fl., UM Tower, 9 Ramkhamhaeng Rd., Suangluang, Bangkok 10250 THAILAND Tel : 66-2719-9555 Fax : 66-2719-9546-7

บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน) รายงานประจำปี 2550

บริษทั เหมราชพัฒนาทีด่ นิ จำกัด (มหาชน)

1988 2008 บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน)

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED A-W Cover Ar.Hemeraj'07-ok-1.ind1 1

4/5/08 4:40:36 PM


สารบัญ

Contents

1 2 3 4 5

10 12 19 20 22 33 34 35 45 85 86 87

Corporate Vision, Mission & Strategy Financial Highlights Message from the Board of Directors Audit Committee’s Report Information of Board of Directors, Audit Committee and Management The Company’s Business Profile Major/Significant Events in 2007 Economic & Competitive Condition Management Analysis Management Structure Report on Responsibilities of the Board of Directors Towards the Financial Report Independent Certified Public Accountants’ Report Financial Statements Notes to Financial Statements Shareholding & Organization Structure General Information Other References

88 จุดเด่นทางการเงิน 89 สาส์นจากคณะกรรมการบริษัทฯ 90 รายงานคณะกรรมการตรวจสอบ 91 ข้อมูลของคณะกรรมการบริษัทฯ

96 98 105 106 108 119 120 121 131 171 172 174

คณะกรรมการตรวจสอบ และคณะผู้บริหาร ลักษณะการดำเนินธุรกิจ พัฒนาการที่สำคัญในปี 2550 ภาวะเศรษฐกิจและการแข่งขัน บทรายงานและการวิเคราะห์ของฝ่ายบริหาร โครงสร้างการจัดการ รายงานความรับผิดชอบของคณะกรรมการ ในการจัดทำรายงานทางการเงินประจำปี รายงานของผู้สอบบัญชีรับอนุญาต งบการเงิน หมายเหตุประกอบงบการเงิน โครงสร้างผู้ถือหุ้นและโครงสร้างองค์กร ข้อมูลทั่วไปของบริษัทฯ ข้อมูลอ้างอิงอื่นๆ


CORPORATE VISION, MISSION

& STRATEGY ANNUAL REPORT 2007

1

Corporate Vision

Mission

To be “The World Class Developer in Thailand�

Hemaraj Strategy

1. Developing complementary property, utility and infrastructure customer solutions that have predictable growing revenue and superior profit opportunities in order to optimize shareholder value from our three main business lines. 1.1 Industrial Estates 1.2 Utilities 1.2.1 Industrial Estate Utilities 1.2.2 Power 1.2.3 Water 1.2.4 Other Utilities 1.3 Property 1.3.1 SME Factories for Rent and Sale 1.3.2 Selective Property - Condominium - Office 2. Leveraging management expertise in property, utilities infrastructure and environmental competence. 3. Utilizing company financial resources selectively for competing investment opportunities.

Hemaraj Land and Development Public Company Limited

To create long-term shareholder value achieved through focused appropriate strategic, business, governance, and financial disciplines. This long-term value can be realized by demonstrating and communicating respect for our customers, shareholders, employees, and stakeholders while consistently behaving in a manner that is communally, ethically, and environmentally responsible.


Hemaraj Land and Development Public Company Limited

Financial Highlights

Key Financial Figures

Key Financial Ratios

(Million Baht)

2005

2006

2007

2005

2006

2007

Sales and Services Revenue

2,930

3,776

5,172

Current Ratio (Times)

4.86

6.23

2.40

Industrial Estate Land Sales

1,117

959

2,081

Net Debt to Equity (Times)

0.41

0.45

0.75

Industrial Estate Utility

458

585

661

Return on Assets

7%

9%

8%

SME Factory (Sales)

201

178

123

Return on Equity

12%

15%

15%

SME Factory (Rental)

153

161

191

Net Profit Margin

21%

29%

22%

94

141

219

Book Value per Share (Baht)

0.91

0.78

0.81

907

1,720

1,821

Other Land Sales

32

77

6,090.75

9,036.93

9,354.21

3,010

4,079

5,238

-

86

-

637

1,191

1,164

Total Assets

8,960

11,453

13,897

Total Liabilities

3,390

4,368

6,279

Total Shareholder’s Equity

5,570

7,085

7,618

Earning Per Share (Baht)

0.11

0.16

0.12

Par (Baht)

1.00

1.00

0.40

Other Utility and Services Residential Sales Total Revenue Gain from Extraordinary Items Net Income

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Message from the Board of Directors

Sawasdi Horrungruang Chairman of the Board of Directors 17 March 2008

We are pleased to report that Hemaraj Land And Development Public Company Limited ended the Year

2007 with broad revenue growth in all operating areas and profitability improving with operating leverage. For the Year 2007, Hemaraj Total Operating Revenue from core businesses was Baht 5,172 million versus

ANNUAL REPORT 2007

David R. Nardone President & Chief Executive Officer 17 March 2008

Baht 3,775 million in 2006, or a 37 % improvement demonstrating the breadth of the revenue. Total Revenue reported for the Year 2007 was 5,238 million versus Baht 4,079 million, an increase of 28%.

2007 Total Net Income was Baht 1,164 million, a decrease of 2 % in total from the previous year. Net

Operating Income, excluding non-operating items was Baht 1,119 million, representing a 15% improvement

over the previous year. Operating Gross Margin was 44% while the EBITDA Margin was to 34 %, both levels exceeding average industry margins.

Financially, Hemaraj has maintained a strong balance sheet and cash flexibility to fund our growth

cash. Total Liabilities were Baht 6,279 million with Total Shareholders Equity of Baht 7,618 million. The Net Debt to Equity ratio was 0.75 to 1 times.

For Industrial Estate Land Sales, Hemaraj ended the Year 2007 being # 1 in End-User Market Share

with 1,264 rai, 32 new customers and 16 project expansions from existing customers. Hemaraj’s 6 industrial estates of 32,000 rai (12,800 acres) include 367 distinct global customers, 524 contracts, with estimated USD 14 billion of customer investment and comprises a petrochemical cluster as well as the “Detroit of the East” antomotive cluster with over 120 auto customers to date. The year 2007 also witnessed continued petrochemical investments as well as electronics, logistics, metal, plastics and others, despite both uncertain global conditions and local political constraints.

Thailand is benefiting from years of infrastructure investment and industrial cluster development in

the automotive, petrochemical, and other industrial sectors, particularly at Hemaraj’s “Detroit of the East” automotive cluster in the Eastern Seaboard.

Hemaraj’s expanded revenue base with significant industrial estate growth, increases in utilities rev-

enue, SME factory rental & sales and measured property contributions provide superior profit opportunities. Hemaraj remains well positioned to increase revenue, to continue to leverage our development skills, thus reducing risks, and to increase predictable returns to shareholders.

Hemaraj seeks to optimize the shareholder values. The Management and the Board of Directors are

grateful to our stakeholders for entrusting us with this responsibility.

Hemaraj Land and Development Public Company Limited

plans. Hemaraj reported 2007 Year-end Total Assets of Baht 13,897 million including Baht 575 million in


Hemaraj Land and Development Public Company Limited

Audit Committee’s Report

ANNUAL REPORT 2007

Sudhipan Charumani Chairman of the Audit Committee 24 March 2008

The Audit Committee of Hemaraj Land Development Public Company Limited was established, together with its charter, by the Shareholders’ Extraordinary General Meeting No.1/1999, with the following non-executive Independent Directors as its members : 1) Mr. Sudhipan Charumani Audit Committee Chairman 2) Mr.Peter J. Edmondson Audit Committee Member 3) Mrs. Punnee Worawuthichongsathit Audit Committee Member In relation to its 2007 chartered duties, the Audit Committee met on 5 occasions, 4 of which being joint quarterly meetings with the statutory External Auditor, the outsourced professional Internal Auditor, relevant Management representatives including the CFO and Director of Accounting, as well as such persons as the Company’s CEO and external professional advisors as appropriate. From such reviewing sessions, the Audit Committee members, who all have experience in accounting and financial matters, unanimously conclude that the Company’s individual and consolidated financial statements for 2007 with 2006 comparative data, as presented in the 2007 Annual Report, show a true and fair view in accordance with legal requirements and the generally accepted accounting principles, especially with regard to correct and full disclosure of related-party and conflict-of-interest transactions and contingent liabilities. Moreover, the said quarterly discussions have assured the Audit Committee that the Company and its subsidiaries are equipped with adequate system of internal control, of which the outsourced internal audit function constitutes an important integral part, and that appropriate attention has been given both to the official guidelines as well as to the practical promotion of corporate governance principles. With regard to auditors’ findings in respect of the Company’s and its subsidiaries’ financial statements and activities for the 2007 financial period, an unqualified external audit report has been received from Mrs. Natsarak Sarochanunjeen of A.M.T. & Associates, while the internal audit work has revealed no material weakness or error. The Company has obtained an “A-” credit rating from TRIS Rating agency in January 2008. This represents an upgrade from the previous “BBB+” rating, based upon the Company’s successful record of industrial land sales, increasing contributions from utilities and service income, and a strong balance sheet with healthy capital structure. The Company is further considered to have a “stable outlook”, reflecting expectations as to its ability to maintain satisfactory performance in the medium to long terms. Apart from the long-establish Executive and Audit Committees, a Corporate Governance Committee and a Nomination Committee have been set up in the course of the 2007 financial year as part of the Company’s continuing commitment to enhance transparency of its activities. The Audit Committee has recommended to the Board of Directors, for proposal to the Annual General Meeting of Shareholders that Mrs. Natsarak Sarochanunjeen (Certified Public Accountant No.4563) of A.M.T. & Associates be re-appointed as the Company’s External Auditor for the financial year ending December 31st, 2008, with Mrs.Suvanee Kittipanyangam (Certified Public Accountant No.2899) of Banchi-Kit Company Limited as the alternative External Auditor. The proposed remuneration in respect of the Company and consolidation work is Baht 1,130,000 (Baht 1,070,000- in 2007), with an additional amount of Baht 2,480,000.- (Baht 2,210,000.- in 2007) being proposed for audit work on subsidiary companies. The respective increments from the 2007 level result partly from an adjustment for inflation and partly from additional work due to expansion of activities.


Information of Board of Directors, Audit Committee and Management Mr. Sawasdi Horrungruang

ANNUAL REPORT 2007

Chairman of the Board, Chairman of the Executive Committee and Chairman of the Nomination Committee Age: 67 Years Education / IOD Trainning: Honorary Doctorate Degree, Bachelor Degree of Business Administration Humanity Faculty, Burapha University DAP certificate from The Thai Institute of Directors Association (IOD) Present Positions: • President Thai Industrial Estate Association. • Chairman Sriracha Harbour PCL. • Chairman The Park Residence Co., Ltd. • Chairman Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. • Chairman Eastern Industrial Estate Co.,Ltd. • Vice Chairman / Eastern Seaboard Industrial Estate(Rayong) Co.,Ltd. Executive Director • Director Eastern Pipeline Services Co.,Ltd. • Chairman Hemaraj International Co., Ltd. • Director H-International (BVI) Co., Ltd. • Chairman Hemaraj Water Co., Ltd. • Chairman SME Factory Co., Ltd. • Chairman GHECO-One Co., Ltd. • Chairman H-Phoenix Property Co., Ltd. % Hemaraj Stock Held as of 31/12/2007: 0.69%

Mr. Thongchai Srisomburananont Director, Vice Chairman of Executive Committee and Member of Nomination Committee 55 Years Junior High School, Rojseri-Anusorn School Hemaraj International Co., Ltd. Eastern Industrial Estate Co., Ltd. Eastern Pipeline Services Co.,Ltd. The Park Residence Co., Ltd. Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. Hemaraj Water Co., Ltd. SME Factory Co., Ltd. Leave Smart Co., Ltd. H-Phoenix Property Co., Ltd. 0.03%

Mr. David Richard Nardone Director and Executive Director Age: Education / IOD Trainning:

52 Years MBA, Northeastern University, Boston, USA DCP certificate from The Thai Institute of Directors Association (IOD)

Present Positions: • Chairman Elyo-H Facilities Management Ltd. • Chairman Eastern Pipeline Services Co.,Ltd. • Chairman H-Construction Management and Engineering Co.,Ltd • Director The Park Residence Co., Ltd. • Director and Executive Director Eastern Seaboard Industrial Estate(Rayong) Co.,Ltd. • Director Eastern Industrial Estate Co.,Ltd.

Hemaraj Land and Development Public Company Limited

Age: Education : Present Positions: • Director • Director • Director • Director • Director • Director • Director • Director • Director % Hemaraj Stock Held as of 31/12/2007:


Hemaraj Land and Development Public Company Limited

• Director • Director • Director • Director • Director • Director • Director • Director • Director • Director % Hemaraj Stock Held as of 31/12/2007:

Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. Glow Co.,Ltd. Hemaraj International Co., Ltd. H-International (BVI) Co., Ltd. Hemaraj Water Co., Ltd. SME Factory Co., Ltd. Rayong Industrial Land Co., Ltd. S I L Industrial Land (Saraburi) Co., Ltd. GHECO-One Co., Ltd. H-Phoenix Property Co., Ltd. 0.44%

Mr. Sudhipan Charumani Independent Director, Chairman of the Audit Committee and Member of the Nomination Committee Age: Education / IOD Trainning: Present Positions: • Independent Director • Director % Hemaraj Stock Held as of 31/12/2007:

64 Years Institute of Chartered Accountants in England and Wales DAP,DCP and Audit Committee certificates from The Thai Institute of Directors Association (IOD) Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. Vasupak Associates Co., Ltd. 0.00%

Mr. Peter John Edmondson

ANNUAL REPORT 2007

Independent Director and Member of the Audit Committee Age: Education : Present Positions: • Investor Consultant % Hemaraj Stock Held as of 31/12/2007:

58 Years Bachelor of Science in Chemistry (Honor), University of Sheffield, England Private Sector 0.05%

Mrs. Punnee Worawuthichongsathit Independent Director, Member of the Audit Committee and Member of the Good Corporate Governance Committee Age: Education / IOD Trainning:

56 Years Master in Accounting, Chulalongkorn University DAP,DCP and Audit Committee certificates from The Thai Institute of Directors Association (IOD)

Present Positions: • Independent Director/ TT&T PCL. Member of the Audit Committee • Independent Director/ The Brooker Group PCL. Member of the Audit Committee % Hemaraj Stock Held as of 31/12/2007: 0.00%


Mr. Vivat Jiratikarnsakul Director and Executive Director Age: Education / IOD Trainning:

52 Years Bachelor of Sanitary, Faculty of Engineering, Chulalongkorn University DAP and DCP certificates from The Thai Institute of Directors Association (IOD)

Present Positions: • Director Eastern Industrial Estate Co.,Ltd. • Director and Executive Director Eastern Seaboard Industrial Estate (Rayong) Co.,Ltd. • Director Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. • Director Elyo-H Facilities Management Ltd. • Director H-Construction Management and Engineering Co.,Ltd

ANNUAL REPORT 2007

• Director The Park Residence Co., Ltd. • Director Eastern Pipeline Services Co.,Ltd. • Director Hemaraj International Co., Ltd. • Director H-International (BVI) Co., Ltd. • Director Hemaraj Water Co., Ltd. • Director SME Factory Co., Ltd. • Director and Executive Director Rayong Industrial Land Co., Ltd. • Director and Executive Director S I L Industrial Land (Saraburi) Co., Ltd. • Director GHECO-One Co., Ltd. • Director H-Phoenix Property Co., Ltd. % Hemaraj Stock Held as of 31/12/2007: 0.09%

Ms. Pattama Horrungruang Director and Executive Director, Member of the Good Corporate Governance Committee Age: Education / IOD Trainning:

46 Years MBA, Thammasat University DAP and DCP certificates from The Thai Institute of Directors Association (IOD)

• Director • Director • Director • Director % Hemaraj Stock Held as of 31/12/2007:

Hemaraj Water Co., Ltd. SME Factory Co., Ltd. Eastern Pipeline Services Co.,Ltd. H-Phoenix Property Co., Ltd. 0.00%

Mr. Somphong Wanapha Independent Director and Chairman of the Good Corporate Governance Committee Age: Education / IOD Trainning:

64 Years MBA, Finance, Michigan State University, USA (Royal Thai Government Scholarship) DCP certificate from The Thai Institute of Directors Association (IOD)

Present Positions: • Chairman of the Audit committee Government Savings Bank • Chairman of the Audit committee Prasit Patana PCL.

• Chairman • Chairman • Director • Director Previous Position : • Secretary General % Hemaraj Stock Held as of 31/12/2007:

Executive Board on M.B.A. Program, Thammasat University Public Warehouse Organization, Ministry of Commerce State Enterprise Performance agreement Evaluation Committee, Ministry of Finance Sahapatana Interholding PCL. Thailand Board of Investment 0.00%

Hemaraj Land and Development Public Company Limited

Present Positions: • Director Eastern Industrial Estate Co.,Ltd. • Director Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. • Director and Executive Director Eastern Seaboard Industrial Estate(Rayong) Co.,Ltd. • Director The Park Residence Co., Ltd. • Director Elyo-H Facilities Management Co., Ltd


5

6

7

8

Hemaraj Land and Development Public Company Limited

4

9

2

10

11 12

1

13

14

15

3

Left to Right

1. Mr. David Richard Nardone Education MBA, Northeastern University, Boston, USA Position at Hemaraj • Director / Executive Director / Managing Director Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

2. Mr. Vivat Jiratikarnsakul

Age 52

1993 0.44% Age 52

Education Bachelor of Sanitary, Faculty of Engineering, Chulalongkorn University Position at Hemaraj • Director / Executive Director / Senior Vice President / Executive Vice President 1989 Year Joined Hemaraj 0.09% Hemaraj Stock Held as of 31/12/2007:

3. Ms. Pattama Horrungruang

Age 46

ANNUAL REPORT 2007

Education MBA, Thammasat University Position at Hemaraj • Director / Executive Director / Senior Vice President / Chief Financial Officer 2003 Year Joined Hemaraj 0.00% Hemaraj Stock Held as of 31/12/2007:

4. Mr.Sunthorn Kongsunthornkitkul Education Bachelor of Engineering, Chulalongkorn University Position at Hemaraj • Vice President Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

5. Mr.Preeprem Malasitt Education MBA, Northern Illinois University, USA Position at Hemaraj • Director - IE Training Center and New Projects Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

6. Mr. Sirisak Kijruksa Education Bachelor of Accounting, Bangkok University Position at Hemaraj • Director - Accounting and Legal Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

7. Mr. Khamhoung Ratsamany Education MBA, Bangkok University Position at Hemaraj • Director - Water and Small Power Project Planning Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

8. Ms. Ladda Rojanavilaivudh

Age 57

2007 0.00% Age 56

2007 0.00% Age 47

1990 0.00% Age 41

1995 0.00% Age 40

Education MBA, Bangkok University and MA, Nara Women University, Nara, Japan Position at Hemaraj • Director - Industrial Customer Development 2001 Year Joined Hemaraj 0.00% Hemaraj Stock Held as of 31/12/2007:

9. Ms. Anchalee Parsertchand

Age 38

Education MBA, Assumption University and MA, Japanese, Keio University, Tokyo, Japan Position at Hemaraj • Director - Industrial Customer Development 2001 Year Joined Hemaraj 0.00% Hemaraj Stock Held as of 31/12/2007:

10. Ms. Somjai Wachiraha

Age 47

Education Bachelor of Business Administration, General Affairs, Ramkhamhaeng University Position at Hemaraj • Director - Finance Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

11. Ms. Jinnapat Tongviseskul

Age 38

Education MBA, Economic & Administration, Chulalongkorn University Position at Hemaraj • Director - Residential Customer Development Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

12. Ms. Chantana Hinkaew

2004 0.00%

13. Mr. Apichat Trongsukson

Age 43

Education MBA, Nida University Position at Hemaraj • Assistant Director - Information System & Services Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

14. Mr. Tanin Subboonrueng

15. Mr. Paopitaya Smutrakalin

1996 0.00% Age 37

Education MS, Finance, Drexel University, Philadelphia, USA Position at Hemaraj • Director - Corporate Planning & Investor Relations Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007: (Not in the picture)

Mr. Niphone Harnpatanapanich

1994 0.00% Age 44

Education MBA, Business Administration, Assumption University Position at Hemaraj • Director - Industrial Estate Development Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

Education MBA, Chulalongkorn University Position at Hemaraj • Director - Residential Project Planning Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

1993 0.00% Age 38

ducation E MBA, University of Nottingham, UK Position at Hemaraj • Director - Corporate Marketing Year Joined Hemaraj Hemaraj Stock Held as of 31/12/2007:

1990 0.00%

(Not in the picture)

1996 0.00% Age 50

2003 0.00%


Hemaraj Land and Development Plc.

Hemaraj International Co., Ltd.

/

/

/

/

/ /

/

/, //

/, //

/

/

/

/

/

/

/

/ /

/ /

/

/

/ /

/

/

/

/

X

/

/

/

/ = Director

// = Executive Director

Hemaraj Land and Development Public Company Limited

Notes: X = Chairman

20. Mr. Apichat Trongsukson

19. Ms. Chantana Hinkaew

18. Ms. Anchalee Parsertchand

17. Ms. Ladda Rojanavilaivudh

16. Ms. Jinnapat Tongviseskul

15. Mr. Paopitaya Smutrakalin

14. Mr. Niphone Harnpatanapanich

13. Ms. Somjai Wachiraha

12. Mr. Sirisak Kijruksa

11. Mr. Tanin Subboonrueng

10. Mr. Khamhoung Ratsamany

9. Mr. Somphong Wanapha

/, //

/

8. Ms. Pattama Horrungruang

/

/, //

7. Mr. Vivat Jiratikarnsakul

/

/

/

/

/, //

6. Mrs. Punnee Worawuthichongsathit

/

/

/

X

X

/

/

X

X

X

5. Mr. Peter John Edmondson

/

/

/

X

/

/

/

Eastern Industrial Estate Co.,Ltd.

4. Mr. Sudhipan Charumani

/

Eastern Pipeline Services Co.,Ltd.

/

Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd.

X

SME Factory Co., Ltd.

/, //

X

Eastern Seaboard Industrial Estate (Rayong) Co.,Ltd.

/, //

H-Construction Management and Engineering Co.,Ltd.

/

The Park Residence Co., Ltd.

X

H-Phoenix Property Co., Ltd.

3. Mr. David Richard Nardone

/

H-International (BVI) Co., Ltd.

/

X

Elyo-H Facilities Management Ltd.

/, //

/, //, X

GHECO-One Co., Ltd.

2. Mr. Thongchai Srisomburananont

1. Mr. Sawasdi Horrungruang

Name

Rayong Industrial Land Co., Ltd.

Associated Companies S I L Industrial Land (Saraburi) Co., Ltd.

Subsidiary Companies

Hemaraj Water Co., Ltd.

ANNUAL REPORT 2007


Hemaraj Land and Development Public Company Limited

The Company’s Business Profile Founded in 1988 and listed on the Stock Exchange of Thailand in 1992, Hemaraj Land And Development Public Company Limited has been Thailand’s leading developer of industrial estates, utilities, and property customer solutions for 20 years. Hemaraj’s 6 industrial estates of 32,000 rai (12,800 acres) include 367 distinct global customers, 524 contracts with estimated USD 14 billion of customer investment and comprises a petrochemical cluster as well as the “Detroit of the East” automotive cluster with over 120 auto customers to date. In addition, Hemaraj is a leading utility provider with award winning water, wastewater, and environmental expertise. Property projects include offices for rent, SME factory rental and sale, as well as luxury condominiums “The Park Chidlom”. Hemaraj Strategy is to create a long-term shareholder values achieved through focused appropriate strategic, business, governance, and financial disciplines. This long-term value can be realized by demonstrating and communicating respect for our customers, employees, and stakeholders while consistently behaving in a manner that is communally, ethically, and environmentally responsible.

Hemaraj’s Industrial Estates as of December 31, 2007

10 ANNUAL REPORT 2007

Industrial Estates

Industrial Estates/ Industrial Land Location BOI Zone

Gross No. of No. of Land Sales Area Customers Contracts in 2007 (rai) (rai)

1. Hemaraj Chonburi Industrial Estate

3,993

Chonburi

2

73

66

2. Hemaraj Eastern Industrial Estate

Rayong*

3

2,976

39

49

329

3. Eastern Seaboard Industrial Estate (a)

Rayong*

3

8,628

203

322

198

4. Hemaraj Eastern Seaboard

Rayong*/

2 and 3

9,476

9

10

637

3,619

47

50

33

Industrial Estate

Chonburi

5. SIL Industrial Land (b)

Saraburi

2

6. Rayong Industrial Land (b)

Rayong*

3

Total Notes:

50

3,438

19

20

32,130

367

524

(a) 60:40 Joint Venture with Siam Food Products Plc. (b) 25:75 Joint Venture with Cementhai Property (2001) Plc., a subsidiary of The Siam Cement Plc. * with BOI Zone 3 grandfathered privilege until 2009

Utilities

Industrial Estate: As an industrial estate utility service provider, Hemaraj provides dependable utility solutions to industrial customers around the clock, 24 hours 7 days a week. Hemaraj manages the industrial estate property and private utilities to allow customers to optimize their efforts in manufacturing. In water including raw water, treated potable water, and clarified water provision, Hemaraj is Thailand’s largest private provider with more than 145,000 cubic meters per day provided as well as 70,000 cubic meters per day of waste water treated. In industrial estate management, Hemaraj achieved ISO 14001, ISO 9001:2000 and the Best Environmental Management EIA awards from the Ministry of Sciences, Technology and Environment.

1,264


Power: 1 GHECO-One Company Limited, a 35/65 Joint Venture in a 660 MW IPP with Thailand’s largest private power provider of 1,670 MW, Glow Energy, a Suez Energy Group, formally named Tractebel, Belgium to supply power to Electricity Generating Authority of Thailand (EGAT). 1 Hemaraj holds 5% equity in Glow IPP, the 713 MW IPP Power Project locating in Hemaraj Chonburi Industrial Estate. 1 A joint study of 150 MW Power Project at Eastern Seaboard Industrial Estate or Hemaraj Eastern Seaboard Industrial Estate also to pursue Cogen Power Expansion or SPP Power in Hemaraj’s Industrial Estates.

Property

SME Factories for Rent and Sales: Hemaraj designs and develops turnkey and expandable SME factories sizing from 750 square meters to 7,500 square meters for rent and sales located in both General Industrial Zone and Duty Free Zone in multiple industrial estates/zones of Hemaraj. H-Construction Management and Engineering, Hemaraj’s subsidiary company, also manages the utility and fit-out requirements to fit customers needs. This rental of SME factories provides customers flexibility on investment and financing as well as a growth path to larger buildings or developed land as their business expands. Hemaraj has built 99 units with over 211,000 square meters to date in its multiple industrial estate locations. Selective Property: 1 H-Phoenix Property Company Limited: a 100% subsidiary company established on June 7, 2007 for commercial property lease or sale and management with a registered capital of Baht 50 million, fully paid-up.

11 Hemaraj Land and Development Public Company Limited

Other Utilities and Services: Utilities and Industrial Services assist the customers in benefiting from the shared resources and utility expertise of Hemaraj and its global partners. These capabilities extend beyond Hemaraj’s industrial estates and leverage technical resources. 1 Elyo-H Facilities Management Limited: a 40/60 Joint Venture with Suez Energy and Teo Hong Silom to provide utility and facility management services to industrial customers. Major customers are ESSO, Shell, Caltex, GE Plastic, Glow IPP, Glow SPP, Toyoda, Vinythai, Lite On and Saint-Gobain Sekurit. 1 Eastern Pipeline Services Company Limited: a 100% subsidiary company to provide piping distribution for Chemical, Stream and Industrial Gas for Heavy Industrial Users with a total investment of Baht 163 million. 1 H-Construction Management and Engineering Company Limited: a 100% subsidiary company to provide design, construction supervision, project and construction management services.

ANNUAL REPORT 2007

Water: 1 Hemaraj Water Company Limited: a 100% subsidiary company to develop and manage Water Resources to provide treated water and waste water treatment to industrial customers.


Hemaraj Land and Development Public Company Limited

Major/Significant Events in 2007

GHECO-One

Glow Hemaraj Joint Venture (65/35) was selected as the preferred bidder for the 660 MW coal fired IPP Project.

The total project cost estimate is Baht 40 billion. The commercial operation is expected to start around the end of 2011 in Map Ta Phut Industrial Estate, Rayong. This plant would be one of the cleanest coal-fired power plants in the world with the emissions significantly below the World Bank Guidelines and Thai regulations and also will meet statutory limits required for coal-fired plants of even the most stringent international regulations such as the European Union regulations.

The PARK CHIDLOM

The total target revenue has increased to Baht 6,150 million with the sales

contract value up to Baht 4,876 million as of December 2007.

To December 2007, Hemaraj has realized Baht 4,759 million of revenue. The

unit transfer has started in October 2007 with a plan to complete the transfer within 2008.

12

Industrial Estate Land Sales

Since the economic crisis in 1998, Hemaraj Industrial Estate land sales have been increasing every year and

reached nine years record high in 2007 at 1,264 rai with 48 contracts from 32 new customers and 16 project expansions

ANNUAL REPORT 2007

from existing customers including 8 new leased SME Factories contracts and 4 new sold SME Factories contracts. One of the key Industrial Estate land sales was from Thai Summit Group, Thailand’s leading auto parts manufacturer who signed two contract agreements to purchase 424 rai at Hemaraj Eastern Seaboard Industrial Estate Phase II.

Hemaraj Eastern Seaboard Industrial Estate continues Hemaraj’s Detroit of

the East auto manufacturing cluster concept and is Thailand’s key expansion area for auto manufacturing with over 8,200 rai. Hemaraj Eastern Seaboard Industrial Estate recently opened adjacent to its well established Eastern Seaboard Industrial Estate (Rayong), the flagship industrial estate of Hemaraj home to GM, Ford, Mazda, 25 Toyota group companies and over 116 automotive customers on approximately 8,600 rai of land.

UM Tower Acquisition

H-Phoenix Property Company Limited, a 100% subsidiary of Hemaraj, has acquired the majority ownership of office

units in UM Tower and an additional adjacent freehold land area of 1 rai 3 ngan 31 square wah (731 square wah or 2,924 square meters) in June 2007 as foresee the upside opportunities in improving the building tenancy performance and thus enhancing the asset return.

UM Tower is a 31-storey juristic office building, set on two rai of land with a total net lettable or salable area of

35,500 square meters. The building is located at 9 Ramkhamhaeng Road, which is close to the expressway, airport,


linking the Eastern Seaboard, and downtown as well as next to the Airport Express Station under construction. The current occupancy rate is approximately 75%. Hemaraj intends to use 1,500 square meters for its own use and to rent the remaining 26,000 square meters. The adjacent land will provide Hemaraj with future property development opportunities.

Upgrade Company Rating By TRIS to “A-/Stable”

TRIS Rating Co., Ltd. has upgraded the company rating of Hemaraj Land and

Development PLC (Hemaraj) at “A-” from “BBB+” with “stable” outlook in January 25, 2008. The upgrade is based upon the company’s successful record of industrial land sales, its increasing contributions from utilities and service incomes, and a healthy balance sheet. The rating also

The “stable” outlook reflects the expectation that Hemaraj will be able to maintain land sales and service income

from industrial estate development. Though the IPP Project investment will require approximately Baht 4,000 million in new equity, the project will provide reliable income to the company in the medium term.

Major Customer Development

1 Danieli Far East in Operation at Hemaraj’s Eastern Seaboard Industrial Estate

Danieli Far East Co., Ltd. was officially inaugurated on Saturday,

July 7, 2007 by Prime Minister Surayud Chulanont with the opening

ANNUAL REPORT 2007

takes into consideration the volatile nature of the industrial property market.

13

of the company’s full production facilities worth Baht 3 billion at Hemaraj’s Eastern Seaboard Industrial Estate (Rayong). The first Thai company supplying the international steel industry, Danieli Far East the top three steel suppliers of the world with a turnover of 2 billion Euro and 6,000 employees worldwide. DFE President Mr. Ferdinando Tedesco disclosed that the Rayong facilities employ 1,200 people while 800 more job opportunities will be created by the end of this year as the company further expands its operations. 1 PTT Phenol Expands Production in Hemaaj Eastern Industrial Estate (Map Ta Phut)

PTT Phenol Company Limited has signed an agreement to purchase an 18 Rai plot of land in the Hemaraj

Eastern Industrial Estate (Map Ta Phut) to develop the new Bisphenol A project. Bisphenol A or BPA is the main feedstock used to produce Polycarbonate (PC), a high value Engineering Plastic Polymer, which is used to further produce CD, DVD, medical equipment, automobile parts, etc. BPA from the new plant will primarily supply the growing local demand, with the remaining balance exporting to other Asian market.

PTT Phenol Co., Ltd., the first Phenol plant in Thailand, is a

joint venture among PTT Plc., PTT Chemical Plc. and The Aromatics (Thailand) Co., Ltd.

Hemaraj Land and Development Public Company Limited

(DFE) is an affiliate of Danieli & C. Officine Meccaniche S.p.A., one of


1 Thai Summit 318 Rai Purchase at Hemaraj Eastern Seaboard Industrial Estate

Hemaraj Land and Development Public Company Limited

Thai Summit Group, Thailand’s leading auto parts manufacturer, signed an agreement for the sale of 318 rai

of land at Hemaraj’s newest industrial estate, Hemaraj Eastern Seaboard Industrial Estate. (Hemaraj ESIE), dubbed the Detroit of the East continues.

The industrial estate land purchase, which is the largest

purchase to date at Hemaraj ESIE, is Thai Summit’s second large land purchase with Hemaraj Land And Development

Thai Summit Group was established in 1977. As a

prominent player in Thailand’s automotive parts industry, it serves the automotive, motorcycle, agricultural machinery and electrical appliance industries. The company operates over 30 subsidiaries, has a yearly combined turnover of 32 billion baht, and more that 17,000 employees, with business diversification and expansion plans in Malaysia, India and Indonesia and many more sites across Asia in the future. 1 TT Techno-Park Strengthens Hemaraj Value-Added Service Portfolio

Hemaraj has signed its latest MOU with TT Techno Park

to provide value-added services targeted at Japanese customers

14

operating on Hemaraj industrial estates. TT Techno-Park is a service provider with expertise in transportation, catering, recruitment, legal and administrative office support with a focus on law, taxation and accounting. It specializes in serving the needs of Japanese clients.

ANNUAL REPORT 2007

1 BOI Holds Investors Meeting at Hemaraj’s Eastern Seaboard Industrial Estate (Rayong)

The Board of Investment (BOI) held Consultative Meeting

with investors in Eastern Seaboard Industrial Estate (Rayong) of Hemaraj Land And Development Plc. The objectives were to give BOI’s updates on investment promotion policy and discuss issues of industrial investors’ interests. The session was warmly welcomed by around 100 factory representatives.

Social Contributions

1 Hemaraj Presents Armored Trucks to the Royal Thai Army

Hemaraj, led by Mr. Sawasdi Horrungruang, Chairman of

the Board and the executives of Hemaraj Land And Development Plc, recently presented 18 armored one ton pickups (Ford Ranger) to the Royal Thai Army for the operation in the three southernmost provinces of Thailand. The presentation was presided over by Army Commander General Anupong Phaochinda.


1 Hemaraj & AMCHAM in “Adopt A School Program” in Rayong Province

Hemaraj together with the AMCHAM Thailand Charitable

Foundation, organized an “Adopt a School Program” dedication trip to Sugar Mill School, located nearby Hemaraj Eastern Seaboard Industrial Estate. The donation involves replacing a new roof for a building and provision of computers and books. The “Adopt a School” program is one of Hemaraj’s Corporate Social Responsibility (CSR) programs, which has been implemented for over 10 years. 1 Hemaraj Donates Scholarship Cash to Rayong Technical College Hemaraj donates 374,000 Baht to Rayong Technical College

as full board scholarships to support underprivileged students to further their studies in Por Vor Chor and Por Vor Sor levels.

The donation was made during the recent Hemaraj Job Fair,

organized by Hemaraj Land And Development Plc. and the Vocational Education Commission, at Rayong Technical College. At the fair, more

ANNUAL REPORT 2007

than 3,000 positions were offered from 41 leading companies located at Hemaraj-managed industrial estates in Rayong, Chonburi and Saraburi. Over 8,000 people attended the event. 1 Hemaraj Donates 10 Rai of Land to PEA Rayong

15

Hemaraj donated 10 rai of land in Hemaraj Eastern Seaboard

Industrial Estate to the Provincial Electricity Authority (PEA), Pluak Daeng District, Rayong. The land will be used as location for future benefit industrial investors and nearby communities with increased power reliability. 1 Hemaraj Donates Baht 500,000 to Teacher Plus Foundation

Hemaraj donated Baht 500,000 to the Teacher Plus

Foundation in order to set up the first Educational Center at Trakan Phut Phon District, Ubonratchathani Province. The donation is part of Hemaraj’s continuing social contribution programs.

The Teacher Plus Foundation is a charity organization.

The objective of the foundation is to promote teaching and learning methods for non-urban teachers in order to help develop the thinking and analytical skills of non-urban students which can be applied for local community development.

Hemaraj Land and Development Public Company Limited

PEA’s substation. The upcoming power substation in this area will


1 Hemaraj & Samitivej Sriracha Hospital Join in Mobile Medical

Hemaraj Land and Development Public Company Limited

Unit Trip

16

Hemaraj joined hands with Samitivej Sriracha Hospital

organize free of charge mobile medical unit trip to local communities surrounding Hemaraj Eastern Seaboard Industrial Estate in Rayong Province. Apart from general medical service, there were also checks up for breast cancer, blood sugar and fat levels. This annual activity is part of Hemaraj’s Corporate Social Responsibility efforts in Thailand. 1 Rayong Industrial Land and its Customers Support Schools in Rayong

Rayong Industrial Land by Hemaraj Land And Development,

in coordination with its customers, donated scholarships and school supplies to students in Rayong Province during a ceremony at “Nhong La Lok” Rayong Sub-District Administration Organization (Aor Bor Tor). The donations are part of Hemaraj’s continuing social contribution programs. 1 Hemaraj Presents Annual Scholarships to Underprivileged Students on Eastern Seaboard

Hemaraj granted seven scholarships to high achieving students so they could continue their studies at

universities and vocational colleges. As part of its Social Contribution Programs, Hemaraj aims to benefit the communities around its industrial estates in Chonburi and Rayong.

Under the scholarship program, which has been in effect for 5 years, Hemaraj provides fully-paid four-year

ANNUAL REPORT 2007

scholarships and expense stipends to local secondary school graduates providing them the opportunity to study at universities and vocational colleges. Currently, seven students are covered under the program. For 2007, Hemaraj’s scholarship amount totals 300,000 Baht. 1 Hemaraj unveils success of “Wet Land” wastewater treatment following His Majesty the King’s initiative

Hemaraj announces the success of “Wet Land”, a biological wastewater treatment system, originated

from His Majesty the King’s great talent. Through initial support from National Science Technology Development Agency, Hemaraj cooperated with the Asian Institute of Technology (AIT) on further research and development of “Wet Land” for wastewater treatment in Hemaraj’s industrial estate. Throughout years of implementation Hemaraj found that “Wet Land” is more efficient than the existing energy-based system, in term of shock load capacity, environmental friendliness and energy saving.


1 S I L Industrial Land Receives Sustainable Development Recognition

Mr. Aree Wong-araya, Minister of Interior recently presented

a consolation prize of Sustainable Development Recognition to S I L Industrial Land (Saraburi) managed by Hemaraj Land And Development Plc at the “Sufficient People Day 2007” event. The award is part of Saraburi Province “Year of Sustainable Economy – 2007” campaign to encourage industrial sector to apply HM the King’s initiative of sustainable economy philosophy in its operation. 1 Blood Donation at Hemaraj’s Industrial Estate

ESIE HR Club in association with Industrial Estate Authority

organized a blood donation activity at Eastern Seaboard Industrial Estate (Rayong). A lot of people working in the industrial estate turned up the camp site to render their kind support.

ANNUAL REPORT 2007

of Thailand, Pluak Daeng District and the Rayong Red Cross,

1 Hemaraj Organizes Blood Donation

Hemaraj organized a blood donation activity at its Hemaraj

Eastern Industrial Estate in Map Ta Phut as part of its social contribution programs. Hemaraj’s employees and its customers’

17

representatives numbering as many as 170 donated blood at the camp organized by the Eastern Safety and Environmental Club in association with the Thai Red Cross Society at the industrial estate.

Rayong Province

Hemaraj presented a motorcycle to Huay Pong Police Station,

Rayong Province for use in the police services in industrial estate and nearby communities. The presentation is part of Hemaraj’s continuing social contribution programs.

1 Hemaraj and Customers Distribute School Kits to 37 Schools in Chonburi and Rayong

Hemaraj, in coordination with customers and suppliers

in its industrial estates, distributed school supplies and “We Love the King” T-shirts to some 10,500 students in 37 schools in Rayong and Chonburi under its Annual School Contribution Program. The company has been implementing the project for over 10 years.

Hemaraj Land and Development Public Company Limited

1 Hemaraj Presents Motorcycle to Huay Pong Police Station,


Hemaraj Land and Development Public Company Limited

Environmental Responsibilities

Hemaraj Land And Development Plc. and its subsidiaries

firmly take pride in our commitment towards the environment and society by acting in accordance to our green policy, which has been proclaimed to the public. Hemaraj bears in mind that industry and community shall grow in parallel. Environmental improvement programs and funds have been made to enhance all the industrial activities to be harm-free to the communities and natures co-exist in a sustainable manner. With a continuous

1 January 2007 – Hemaraj firefighter team and two fire engines put out the fire at the factory outside Hemaraj’s industrial estate.

commitment for environmental care, Hemaraj‘s industrial estates have achieved and firmly applied international environmental standard of ISO 14001 from BVQI (Bureau Veritas Quality International) on day-to-day operation.

Through out 2007, all the environmental related activities

has been examined and audited by private third party. Each

18

audition, a set of document and reports are declared, showing the fulfillment, which Hemaraj has done to meet the established environmental standard. Hemaraj’s staff is proud to be part in conserving the environment and they’ve made continuity attempt

ANNUAL REPORT 2007

to prevent any destruction on the nature and communities.

Hemaraj also emphasizes on safety concerns in parallel

to ecosystem. Together with companies within the industrial estates, Hemaraj organizes safety activities, which involve annual safety practices. The practice includes fire fighting and chemical leakage control. Each industrial estate also has Safety Club who organizes Safety Week. Students and neighboring communities are invited to participate Safety Week where talks on safety are held and safety exhibitions are displayed.

Significantly, all Hemaraj’s safety staff is well trained

on advanced skills and equipment; therefore they are familiar to various new technologies and ready to take any action when required.

19 October 2007- Presentation on Eastern Seaboard Industrial Estate’s Environmental Management to a group of teacher and students from the Faculty of Environmental and National Resources, Mahasarakarm University.


Economic & Competitive Condition

The 2007 Thai economy grew modestly, mostly due to growth of export and the public spending. The 2007

Gross Domestic Production (GDP) projected to grow by 4.5% compared to 5.1% in 2006.

In 2007, the Private Consumption Index expanded only by 1.5% while Manufacturing production continued

to grow by 8.2% and the capacity utilization rate increased to 76.1%. For the year 2007, the Private Investment Index grew only by 0.2%. Export volumes for Thailand were increased to US$ 151 billion, an 18.1% increase due to export growth of computer, vehicles, chemical, and petrochemical products. Imports increased by 9.6% to US$ 139 billion. Service, income and transfer account remained surplus with US$ 2.9 billion. Current account ended the year with a surplus of US$ 14.9 billion due to the trade balance surplus. The balance of payments was US$ 17.1 billion significantly increased from last year’s surplus of US$ 12.7 billion. Condominium and industrial sectors were the best performers for Thai property market in 2007. The industrial

property market sector increased by 61%, from 2,865 rai in 2006 to 4,617 in 2007 as a result of the significant increased in Foreign Direct Investment (FDI). The Board of Investment (BOI) project approval significantly increased to Baht 744 billion compared with Baht 373 billion in 2006, or 99% increase. The number of projects approved was 1,342 projects, a 10% increase from 2006.

Thailand remained a growing regional production hub in the ASEAN automotive industry, particularly for

ANNUAL REPORT 2007

one-ton pickups and small passenger cars, with the production has reached 1.29 million vehicles in 2007. Domestic vehicle sale in 2007 was 631,250 vehicles and 690,100 vehicles for export.

GDP

Capacity Utilization %

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19


Hemaraj Land and Development Public Company Limited

Management Analysis

Operating Performance

For 2007, Hemaraj reported Net Income of Baht 1,163.6 million compared with Baht 1,190.8 million of the

same period of last year, representing a decrease of 2 %. The prior year 2006 earnings also included gain from debt compromise of Baht 86.4 million and dividend from Glow IPP of Baht 112.4 million. Earnings per share of Baht 0.13 Baht per share represented a decrease of 23 % from the same period of last year, mostly due to the increase in number of new shares converted from warrants.

For the Year 2007, Hemaraj’s Total Revenue was Baht 5,238.2 million compared with Baht 4,079.2 million for

the same period of 2006, representing a 28 % increase. Total Operating Revenue from core businesses was Baht 5,172.3 million, improved by 37% from the same period of 2006.

Industrial Land Sales were Baht 2,157.7 million, a 117% increase. There is an additional industrial estate

land deferred revenue of over Baht 1,500 million, due to percentage of completion method, from new phases of development to be realized over the next 3 to 18 months.

1

Industrial Estate Land Sales were # 1 in End-User Market Share for 2007, or 26% with 1,264 rai, 47 contracts,

32 new customers and 15 project expansions from existing customers.

20

Operating Revenue from Utilities increased to Baht 660.9 million, an increase of 15%. SME Factory Rental

increased to Baht 191.2 million, an 18 % increase while SME Factory Sales decreased to Baht 122.9 million, a 31% decrease. Residential revenue from The Park Chidlom increased to Baht 1,821.2 million, representing an increase of 6 % compared with the same period of 2006.

ANNUAL REPORT 2007

Financial Status

The consolidated Balance Sheet in 2007 is summarized as follows.

Total Assets in 2007 were Baht 13,897 million, a 20% increase from Baht 11,453 million in 2006. Total Current

Assets in 2007 were Baht 10,611 million compared to Baht 9,133 million in 2006, or an increase of 16%. This includes Cash on Hand of Baht 575 million, Account Receivable of Baht 3,953 million and Land held for Real Estate development of Baht 6,022 million.

Other Assets were Baht 3,285 million in 2007. This includes Land held for commercial purposes not under

development of Baht 326 million, assets for rent of Baht 1,975 million, and long-term investment in other companies of Baht 464 million which includes the 25% holding in S I L Industrial Land Co., Ltd., a joint investment with the company in Siam Cement Group, and 5% direct holding in Glow IPP, a 713MW IPP with Glow Energy.

Total Liabilities in 2007 were Baht 6,279 million, a 43% increase from Baht 4,368 million in 2006. The increase

was mainly from the increase of loan for industrial estate development and the loan for the Park Chidlom, reflecting the increase of business activities.

1

Source : CB Richard Ellis


Total Shareholders Equity in 2007 was Baht 7,618 million versus Baht 7,085 million in 2006, or an 8% increase

due to Net Operating Profit of 2007 and the exercise of the warrants. During the Year 2007, 317.29 million units of warrants were exercised to common shares with the amount of 89.8 Million Baht. As of December 31, 2007, there were 9,354.21 million common shares and 355.16 million warrants outstanding. The 2007 Net Debt to Equity ratio was at 0.75 to 1.

Risk Factors & Others

External Risks

The company faces investment and management risks associated with Thai government and Bank of Thailand

policies as well as external political and economic environment in neighboring and other countries. In addition Foreign Direct Investment, rising oil price, interest rates, land cost, construction cost, delays in construction, and

The company is aware of the risks and effects associated with such factors and try to have a systematic

monitoring and analytical measurement to prevent and minimize such risks. The Board of Directors and Management have also implemented the business strategy with appropriate adjustments based on situation as witnessed from growing broadened operating revenue and improve profit margins. Increases in revenue from industrial estates, utilities and SME factory rental, which are recurring and predictable, have balanced our revenue structure. Our

ANNUAL REPORT 2007

shortages of skilled labor are factors that could affect the company businesses.

multiple-locations industrial estates with high percentage of repeat customers and the niche selective property project have also reduced our risk profile.

Financial Risks

21

The operating performance, financial status, economic environment in Thailand and other countries, access

to financial and capital market, foreign exchange and interest rates are risk factors to the companies financial management. An appropriate and sufficient source of funds with a reasonable cost of capital and appropriate financial

structure will support the company’s competitiveness. Since the economic crisis, the company’s financial structure has been continuously strengthening resulting in improving in net debt to equity ratio. In 2007 the net debt to equity ratio was 0.75 to 1 times with cash balance of Baht 575 million. With strong balance sheet and low debt level, high level of cash on hands to avoid foreign currency, debts, broader lending sources, TRIS rating upgrade to A- from BBB+ for potential Baht bonds and reflecting an improving company credit, and available credit line from various financial institutions, these will provide the company more flexibility to grow the business expansion, yet to minimize the financial risks.

Hemaraj Land and Development Public Company Limited


Hemaraj Land and Development Public Company Limited

Management Structure

Board of Directors

As of December 31, 2007, Board of Directors consists of 9 members as follows:

1. Mr. Sawasdi Horrungruang

Chairman of the Board of Directors

2. Mr. Thongchai Srisomburananonta

Director

3. Mr. David Richard Nardone

Director

4. Mr. Sudhipan Charumani

Director (Independent)

5. Mr. Peter John Edmondson

Director (Independent)

6. Mrs. Punnee Worawuthichongsathit

Director (Independent)

7. Mr. Vivat Jiratikarnsakul

Director

8. Ms. Pattama Horrungruang

Director

9. Mr. Somphong Wanapha

Director (Independent)

22

With Mr. Sirisak Kijraksa

as Company Secretary

The Company’s Board of Directors consists of 4 Independent Directors whose have additional qualifications

for independence according to such prescribed in regulation of SET and SEC as follows:

1. holding share not exceeding 3% of paid up capital of the company, subsidiaries, associates or

related companies including also share held by related persons.

2. uninvolved in management, not being an employee, staff, consultant earning permanent salary in the

ANNUAL REPORT 2007

company, subsidiaries, associates or related companies nor being major shareholder of the company.

3. no any benefit nor being a stakeholder regardless directly or indirectly of the company, subsidiaries,

associates nor major shareholder of the company.

4. not being related person nor close relative of the management or major shareholder.

5. not being the director who is appointed to safeguard benefit of the company director, major shareholder

or shareholder who is related to the major shareholder of the company.

6. Able to perform his duties and express comment independently.

Basic Scope of Board of Directors’ Responsibility The Board of Directors’ prime responsibility is to formulate corporate visions, overall policies and major

strategies with ability, integrity and care, so as to achieve continuous and long lasting benefits for the Shareholders. This responsibility includes effective control and supervision of the Management to assure that Board instructions are put into practice with efficiency and in line with relevant rules of law and supervising authorities’ regulations, with the Company’s own requirements, as well as with good corporate governance principles. In discharging its responsibility, the Board may appoint or assign one or more specific directors or any other persons to act on its behalf, and can revoke such appointments or assignments, as it considers necessary or appropriate.


Executive Committee

As of December 31, 2007, Executive Committee consists of 5 members as follows:

1. Mr. Sawasdi Horrungruang

Chairman of the Executive Committee

2. Mr. Thongchai Srisomburananonta

Vice Chairman of the Executive Committee

3. Mr. David Richard Nardone

Member of the Executive Committee

4. Mr. Vivat Jiratikarnsakul

Member of the Executive Committee

5. Ms. Pattama Horrungruang

Member of the Executive Committee

The Executive Committee has been assigned by the Board of Directors to help formulate the Company’s

operation policy and strategies, and to supervise and ensure that such approved policy and strategies are followed through by the Management with efficiency and safety, so that the Company successfully attains its desired goals.

Scope of the Executive Committee’s Authority and Responsibility

1. To screen and review business plans, investment plans, together with the relevant budgets, as prepared

by the Management, prior to submitting the said data to the Board of Directors for consideration and approval.

2. To monitor and review the Company’s work progress, in order to ensure that the Company’s operations

ANNUAL REPORT 2007

are in line with what the authorizing or assigning Board would expect.

3. To consider granting permission to commence important activities, as well as to authorize payments in

excess of Management authority, in accordance with the Company’s authorization rules and the approved budgets.

4. To set the Company’s organization chart, authority of the Management and the remuneration policy for

23

Board consideration.

5. To assign one or more specific persons to act on behalf of the Executive Committee, or to revoke such

assignments as the Executive Committee may consider appropriate. 6. To perform any other tasks, as assigned by the Board of Directors.

The above-stated scope of authority would not apply where a vested interest or a conflict of interest concerning

a related-party transaction under SEC regulations is at issue. In such a case, the Executive Committee would need to refer the matter to the Board of Director or to a Shareholders’s Meeting, as the case may be, for consideration and approval, unless appropriate pre-set permission is already in evidence.

Audit Committee

As of December 31, 2007, Audit Committee consists of 3 members as follows:

1. Mr. Sudhipan Charumani

Audit Committee Chairman

2. Mr. Peter John Edmondson

Audit Committee Member

3. Mrs. Punnee Worawuthichongsathit

Audit Committee Member

The Audit Committee Charter endows the Audit Committee with the following duties and responsibilities to

the Company’s Board of Directors:

1. To review that the Company’s financial reports are correct and sufficient;

2. To review that the Company has appropriate and efficient internal control and internal audit systems;

Hemaraj Land and Development Public Company Limited


3. To review that the Company complies with laws relating to securities and securities markets, as well as

Hemaraj Land and Development Public Company Limited

with SET’s rules and regulations and any other laws relating to the Company’s business;

24

4. To consider, select and propose the appointment of the Company’s statutory auditor and to propose his

/her professional fees;

5. To consider whether the Company discloses correct and adequate information with regards to third-

party transactions or any transactions with a conflict-of-interest tendency;

6. To include in the Company’s annual report the Audit Committee’s own review result, expressing opinion

on the Company’s internal control system, as well as on the preparatory procedure and data disclosure of the financial statements. This review report shall be signed by the Audit Committee Chairman;

7. To report the Audit Committee’s performance to the Company’s Board of Directors at least on a quarterly

basis;

8. To participate in the appointment, removal, work assessment and remuneration-granting of the internal

auditor; and

9. To perform any other work that the Audit Committee agrees to, as may be assigned by the Company’s

Board of Directors.

The Audit Committee has 3 years period.

Remuneration Committee

The Company has not formed a Remuneration Committee to date. Compensations for staff below the top-

executive level are determined by the Management under the CEO, while compensations for the top executive level, including those of the CEO, are determined by the Executive Committee, taking into account such factors as the

ANNUAL REPORT 2007

basic in-house rates, the prevailing employment environments, work performance or contribution to the Company, the degree of dedication shown and the Company’s own specific needs. These consideration factors are deemed to provide a suitable package for the recruitment and retention of quality personnel for the Company’s benefits. As for Directors’ compensations, they are considered and proposed by the Board of Directors for Shareholders’ consideration and approval at the Annual General Meeting, as in relevant cases of joint-venture and subsidiary companies. Such compensation proposals would also be based on the general market trend, individual responsibility levels and work results, as well as on the Company’s actual performance and prevailing financial strength.

Good Corporate Governance Committee

As of December 31, 2007, the Good Corporate Governance Committee consists of three members as

follows:

1. Mr. Somphong Wanapha

Good Corporate Governance Chairman

2. Mrs. Punnee Worawuthichongsathit

Good Corporate Governance Member

3. Ms. Pattama Horrungruang

Good Corporate Governance Member

The Board of Directors’ Meeting on February 27th,2007 resolved to set up the Corporate Governance

Committee, which consisted of 3 directors, to enhance the Company’s GCG development in accordance with the SET’s and SEC including other institutions. For this year, the Company with the instructions and guidelines from the


Corporate Governance Committee has issued the Company’s Corporate Governance Policy and Code of Business Conduct as written manual, which were reviewed by Corporate Governance Committee and already approved by the Board of Directors Meeting to be effective. The Corporate Governance Committee has 3 years period.

Nomination Committee

1. Mr. Sawasdi Horrungruang

Nomination Committee Chairman

2. Mr. Thongchai Anankusri

Nomination Committee Member

3. Mr. Sudhipan Charumani

Nomination Committee Member

In 2007, the Board of Directors has set up a Nomination Committee to handle preliminary selections, as well

candidates, together with relevant background information, would be submitted in advance by current directors and/or shareholders for formal consideration in a Board meeting. Such a meeting would first concentrate on the Company’s specific requirements, before proceeding to discuss each candidate in depth on issues of reputation, experience, reliability, known ability and vision, as well as other relevant aspects. Those chosen by the Board would have their names proposed to the forthcoming Shareholders’ Meeting for consideration and approval. The

ANNUAL REPORT 2007

as to compile relevant data, of suitable candidates for Board’s formal consideration. A short list of suitable Director

Nomination Committee has 3 years period.

25

Company Management

The Company Management consists of

President & Chief Executive Officer

2. Mr. Vivat Jiratikarnsakul

Executive Vice President

3. Ms. Pattama Horrungruang

Senior Vice President & Chief Financial Officer

4. Mr. Sunthorn Kongsunthornkitkul *

Vice President - Industrial Estate Operations

5. Mr. Tanin Subboonrueng

Director - Industrial Estate Development

6. Mr. Sirisak Kijraksa

Director - Accounting and Legal

7. Ms. Somjai Wachiraha

Director - Finance

8. Mr. Niphone Harnpatanapanich

Director - Residential Project Planning

9. Mr. Khamhoung Ratsamany

Director - Water & Small Power Project Planning

10. Mr. Paopitaya Smutrakalin

Director - Corporate Planning and Investor Relations

11. Ms. Jinnapat Tongviseskul

Director - Residential Customer Development

12. Ms. Ladda Rojanavilaivudh

Director - Industrial Customer Development

13. Ms. Anchalee Parsertchand

Director - Industrial Customer Development

14. Ms. Chantana Hinkaew

Director - Corporate Marketing

15. Mr.Preeprem Malasitt **

Director - IE Training Center and New Projects

16. Mr. Apichat Trongsukson

Assistant Director - Information System & Services

Note : * Being appointed on September 1, 2007.

** Being appointed on October 1, 2007.

Hemaraj Land and Development Public Company Limited

1. Mr. David Richard Nardone


The President & CEO has the responsibility in assigning each management member with appropriate duties

Hemaraj Land and Development Public Company Limited

and authority in order to enable the Company to implement its policy and strategies, together with its business

ANNUAL REPORT 2007

26

plans, in an efficiently effective manner and in accordance with the targets and budgets as determined or approved by the Board and/or the Executive Committee.

Remuneration for Directors and Management

1. Total remuneration for the 9 Directors in 2007 was Baht 16,815,000 (Baht 17,545,000 in 2006), being

Board and Committee Meeting Fees and being Compensations, as per following individual details:

Directors’ Remuneration (Baht)

Name

Position Meeting Fees

Compensations

Total

1. Mr. Sawasdi Horrungruang

Chairman of Board of Directors / Chairman of Executive and Nomination Committees

430,000

2,500,000

2,930,000

2. Mr. Thongchai Srisomburananonta

Director / Vice Chairman of Executive Committee / Member of Nomination Committee

300,000

1,850,000

2,150,000

3. Mr. Sudhipan Charumani

Independent Director/Chairman of Audit Committee/ Member of Nomination Committee

500,000

1,000,000

1,500,000

4. Mr. David Richard Nardone

Director/ Member of Executive Committee

280,000

1,750,000

2,030,000

5. Mr. Peter John Edmondson

Independent Director/ Member of Audit Committee

260,000

1,000,000

1,260,000

6. Mrs. Punnee Worawuthichongsathit

Independent Director/ Member of Audit and GCG Committees

490,000

1,000,000

1,490,000

7. Mr. Vivat Jiratikarnsakul

Director/ Member of Executive Committee

280,000

1,750,000

2,030,000

8. Ms. Pattama Horrungruang

Director/ Member of Executive and GCG Committees

340,000

1,750,000

2,090,000

9. Mr. Somphong Wanapha

Director/ Chairman of GCG Committee

335,000

1,000,000

1,335,000

3,215,000

13,600,000

16,815,000

Total

2. Total remuneration for the Company’s Executives and Management by way of salaries, bonuses, and

provident fund contributions for 20 persons in 2007 was Baht 130,757,069.31

3. Other Remuneration

-None-


Good Corporate Governance

The Board of Directors of the Company is subject to the awareness on the importance of good corporate

governance, have thus adopted Good Corporate Governance of the Stock Exchange of Thailand (SET) as practical guidelines and tried to continuously improve those perfect practices to achieve good standards, efficiency and transparency in our business operation and enhance confidence to all shareholders, investors and other related parties based on important contents as follows:

1. Rights and equitable treatment of the Shareholders

The company have well realized to safeguard rights and benefits of the shareholders by effectively

operating our business to build permanent growth and provide suitable remuneration to the shareholders including to encourage the shareholders to exercise their rights in the Shareholders’ Meeting and shall not infringe nor

All shareholders shall be invited to join in Annual Ordinary Meeting or Extraordinary Meeting (if any) as

the company shall serve invitation letter and related agendas for consideration prior to all Meetings. Besides, prior to the Meeting, the Company does publish the invitation in the local media to ensure the disclosure of the Meeting schedule and shareholders could contact the Company anytime through the Investor Relations Department and the Company website. The shareholders, as the investors are entitled to vote according to the number of shares holding

ANNUAL REPORT 2007

prejudice the shareholders’ rights whatsoever.

and each of them shall exercise all votes to conclude the resolution and maintain their benefits and comment toward important decisions, such as, profit allocation and dividend payment, appointment of auditor, prescription of compensation and election the Board of Directors, amendment of Articles of Association and increasing of capital, etc. All shareholders are entitled to receive correct, open, sufficient and update information. The shareholder can

27

appoint any person as its proxy to join in the meeting as deemed appropriate or may appoint Chairman of Audit Committee who is an independent director according to the instruction of the Securities and Exchange Commission (SEC). In such meeting, the company shall provide the shareholders an equal opportunity to inquire company

Board of Directors and related senior Managements join in each Shareholder’s Meeting to jointly clarify

related details of the agendas and answer all inquiries of the shareholders. In case of it is necessary and unable to join in the meeting, notice must be given to the Chairman of the Board or Office of the Secretary of the company in advance.

The company have correctly, adequately and clearly recorded Minutes of Meeting for material content

and after submitting to SET and SEC sent to the shareholder after 14 days of the Meeting and further publicized such minutes on company’s website.

The company have prescribed written guidelines to maintain and safeguard internal information related

to the good corporate governance for fairness to the shareholders and to prevent the directors, employees and related persons, such as, spouse, under legal age child from using internal information which is an important content on changing of share price and still undisclosed to the public to sell and purchase share. In this regard, pursuant to the Securities and Exchange Act, B.E. 2535, the directors and Managements must report the possession of company’s securities upon first admission and further report all securities transaction to SEC within 3 working days and the company shall compile such report as agendas to regularly inform the Board of Directors’ Meeting.

Hemaraj Land and Development Public Company Limited

related business as deemed reasonable.


2. Roles of the Stakeholders

Hemaraj Land and Development Public Company Limited

The company have realized to the rights of all groups of stakeholders, i.e. shareholder, employee,

customer, debtor, supplier and competitor, environment and society and government agencies to receive appropriate care of rights and free from any infringement according to related laws or agreements by prescribing rules on treatment of stakeholders in each group to the Corporate Governance Policy.

Besides disclosure of important information to the shareholder correctly, adequately, equally and in time,

the company also provides equitable and appropriate compensation to the employee and provide them to know policy and their entitled welfare such as a provident fund. The company responses to all customer concern and related society sincerely. In social respect, the company has policy to promote participation with other social organizations, communities and neighboring establishments.

3. Disclosure of Information and Transparency

3.1 The company have disclosed financial information and other information related to business and operating result in correct, sufficient, regular, update and credible manner via the Stock Exchange in the Annual Information Form (Form 56-1) and Annual Report (56-2) and on www.hemaraj.com and invest@hemaraj.com both in update Thai and English version to enable the investor to clearly know and/or study about the company. In addition, the senior management also held seminar between senior management and investment facilitator, analyst and economic reporter both domestic and

28

abroad regularly and invite all interesting parties from several important sectors to visit industrial estate of the company.

In addition, the company also established “Investor Relations Department� to directly publicize information beneficial to the investors, shareholders, related parties, general publics, financial institute and securities analysts.

ANNUAL REPORT 2007

3.2 Important information of the company is consisted of financial and non-financial information, particularly, the financial statements of the company has been reviewed/audited from the auditor that it is correct in according to the general certified accounting principles and duly approved from the Audit Committee/Board of Directors before disclosing to the shareholders. The Board of Directors have disclosed their responsibilities toward such financial report in the annual report. For the disclosure of non-financial information, the company have disclosed interrelated items, discussion of management and risk management including good corporate governance report in annual report and Form 56-1.

3.3 The company has disclosed details of roles and responsibilities of Board of Director, sub-committee, frequency of the Meeting and frequency of participation of each director, comment of the Board on business operation and also disclosed compensation payment policy for directors and senior managements in the annual disclosure form (form 56-1) and annual report of the company.


4. Responsibilities of the Board of Directors

4.1 Structure of the Board of Directors

4.1.1 The Board of Directors can be divided into 2 groups as follows:

- Directors who are not independent.

- Directors who are independent.

4.1.2 At least 1/3, but not less than 3 members, of the Board of Directors must be independent directors.

4.1.3 The Board of Directors shall assume their positions for 3 years where by 1/3 directors shall be resigned in every Annual Ordinary Meetings. In case it is undividable, the resigned director must be as close to 1/3 and such resigned director may be re-elect to assume the same position. 4.1.4 The Company have prescribed qualification of independent director who have well knowledge in Finance, Economic, Accounting, public administration and other field of businesses suitable as standard factors to safeguard benefit of the shareholders and others. Additionally, to have qualification according to such prescribed in regulation of SET and SEC for shares holding, uninvolved in management, no any benefits etc as mentioned the qualifications in the Board of Directors section.

4.1.5 The Company has policy to allow the director to assume as director in other companies as deemed appropriate. In case of being the director in the same business, information about position of each director must be disclosed to the shareholders.

ANNUAL REPORT 2007

4.1.6 The Company do not allow Chief Executive Officer or senior management to assume the same

29

position in other companies at too high degree until resulting inefficient performance. In case of being the chief executive officer or senior management in other companies in the same business, information about position of each director must be disclosed to the shareholders. 4.1.7 The Company has clearly separated Chairman of the Board, the Chief Executive Officer and their duties.

4.1.8 The Company has appointed a Company Secretary to provide advices on legal aspect, rules and regulations of SEC, SET and other laws which should be known and coordinate to comply with resolution of the Board and take care of activities of the Board.

4.2 Roles and Responsibilities of the Board of Directors and Subcommittees

The roles and responsibilities of the Board of Directors are as prescribed by the relevant laws, rules and regulations while the roles and responsibilities of the committees are also clearly defined. This allows the Board and the committees to review and provide appropriate advice within the scope of its roles and responsibilities.

The Company’s directors must be knowledgeable, capable and experienced. They must also have an interest in the business of the company in which they are directors, as well as having honesty and integrity in conducting such businesses.

The Directors must perform their duties with honesty and care according to the relevant laws, The SET’s and SEC’s roles and regulation as well as with good corporate governance principles. They must also protect the rights of the Company, in addition to being accountable to the Company’s shareholders.

Hemaraj Land and Development Public Company Limited


4.3 Corporate Governance Policy

Hemaraj Land and Development Public Company Limited

The Board of Directors have launched the Good Corporate Governance Policy, complied with and regularly reviewed such policy once a year.

4.4 Code of Business Conduct

The Company has established Code of Business Conduct as manual for Board of Directors, executive officer and employee to understand and comply with such code thoroughly.

4.5 Conflict of Interest

The Company’s Board of Directors and Management have been acknowledged and realized the importance of legal and ethical conflict of interest and related transactions guidelines. The company has disclosed, in accordance with the regulations of Stock Exchange of Thailand, such information, detail and reason/necessity, if any in the company’s Annual Report and the 56-1 Form. The Company further uses the Audit Committee, internal auditors, external auditors, and external lawyers to review compliance.

4.6 Internal controlling system and internal audit

The Audit Committee is aware of the importance of internal control system, the Company establishes the Company’s internal control system to be applied adequately and appropriately for operations in order to protect any potential damanges to the Company. The audit committee is responsible to review that the Company has appropriate and efficient internal control and internal audit systems.

30

Through its basic quarterly discussions with the outsourced professional internal Auditor, the experienced External Auditor, and appropriate Management representatives, the Audit Committee, whose members are also well acquainted with accounting and financial issues, is confident that the Company, together with its subsidiaries, are equipped with a dependable system of internal

ANNUAL REPORT 2007

control, of which the outsourced internal audit function constitutes an important integral part. Such satisfactory findings have been reported for Board acknowledgement subsequent to each quarterly meeting of the Audit Committee.

4.7 Risk Management

The Company gives very high priority to the risk management by assign the Company always evaluates business risk and analyze the impacts on those risks and implement the measures to counter those risks an regularly report to the management.

4.8 Usage of internal information

The company have measures to respond SET’s policy to prevent unauthorized use of internal material information of the company by its personnel (or related party) or leakage to specific individual or group of the outsiders before generally publicized by the company. In this regard, the Company has announced to all personnel especially at Management level about ethics, reputation and image of the company including rules and methods of SET and SEC regarding such matter and duties to disclose and report about share holding or changing thereof.


4.9 The Board of Directors’ Meeting

The Board shall prescribe Meeting date in advance which shall be held at least 4 times a year to certify quarterly financial statement of the company. In this regard, the Audit Committee shall review correctness and completeness of information disclosed in financial statements and further report to the Board of Directors on quarterly basis.

In addition to those above mentioned Meetings, the company also hold the Meeting to consider about business operation as deemed necessary. In each meeting, the Chairman of the Board and Chief Executive Officer shall jointly consider several matters to be included in the agendas. For other matters, each director can propose the matter as he deemed important and necessary to the meeting.

The company shall serve invitation letter, agendas and supporting details to the Board for consideration Meeting. The Chairman of Board of Directors shall allocate times for the Management to propose its concerned matter and the directors shall sufficiently, carefully and thoroughly debate all problems.

The Board shall invite senior executives to join in the Meeting to provide information, details and additional information related to those problems to enable the Meeting to know all information.

The company allows non-management independent directors to hold the meeting to jointly discuss

ANNUAL REPORT 2007

in advance before each meeting. For matter of nondisclosure agendas shall be discussed in the

all possible issues without participation of the Management.

During the period from January to December 2007, the Company held 8 Board of Directors’ Meetings of both regular and emergency natures which most Board of Directors attended the Meetings except on urgent business or on the oversea business trips. Good Corporate Governance Committee

Mr. Sawasdi Horrungruang

8/8

-

1/1

-

Mr. Thongchai Srisomburananonta

8/8

-

1/1

-

Mr. David Richard Nardone

8/8

-

-

-

Mr. Sudhipan Charumani

8/8

5/5

1/1

-

Mr. Peter John Edmondson

4/8

4/5

-

-

Mrs. Punnee Worawuthichongsathit

8/8

5/5

-

3/3

Mr. Vivat Jiratikarnsakul

8/8

-

-

-

Ms. Pattama Horrungruang

8/8

-

-

3/3

Mr. Somphong Wanapha

7/8

-

-

3/3

Hemaraj Land and Development Public Company Limited

Name of Director Board Audit Nomination of Directors Committee Committee

31


4.10 Self-assessment of Board of Directors

Hemaraj Land and Development Public Company Limited

The Board of Directors shall regularly conduct self-assessment according to the form of the company to jointly consider their performances and problems to find out appropriate improvement.

4.11 Remuneration of Directors and Management

Remuneration of the Board of Directors including subcommittees have been considered by the Board of Directors and then proposed for an approval in the Annual General Shareholder’s Meeting. Such compensation proposals are based on market trend including data from SET, individual responsibility level and Board performance, as well as the Company’s actual performance and prevailing financial strength. For the top executives level and CEO, compensations are determined by the Executive Committee, taking into account such factors as the basic in-house rates, the prevailing employment environments, work performance or contribution to the Company, the degree of dedication shown and the Company’s own specific needs. These consideration factors are deemed to provide a suitable package for the recruitment and retention of quality personnel for the Company’s benefits.

4.12 Board of Directors and Managements Development

4.12.1 The Board of Directors has policy to promote training and education to the directors, audit committee, management, and secretary of the company about corporate governance,

32

business ethics and compliance with quality management system standard ISO 9001:2000 to continuously improve their performances. The company shall, especially, promote the directors and secretary to attend several training courses of Institute of Directors. 4.12.2 The company will provide director manual that included all important information about nature and business operation of the company for new director to study and as guidelines

ANNUAL REPORT 2007

for proper implementation.


Report on Responsibilities of the Board of Directors Towards the Financial Report

The Board of Directors of Hemaraj Land and Development Public Company Limited realizes its role and

responsibility as the Directors of a listed company in supervising the Company to have sufficient, relevant and transparent fiscal year 2007 financial statements. Appropriate accounting policies have been put in place and adhered to on a consistent basis according to the generally accepted accounting principle while due consideration has been placed on the process of preparing the Company’s and the consolidated fiscal year 2007 financial statements including other information that have been included in this year’s annual report. To enhance the confidence in the Financial Report, the Company’s Board of Directors establishes the Audit Committee comprising review and ensure accuracy and sufficiency of the financial report including accurate and complete disclosure of connected transactions or transactions with possible conflict of interest. Also, to have internal control and internal audit system, risk management and appropriate corporate governance and to be compliance with the requirement of the Stock Exchange of Thailand and relevant rules and regulations.

ANNUAL REPORT 2007

of independent directors fully qualified in accordance with the requirement of the Stock Exchange of Thailand to

The Company’s Board of Directors is of the opinion that the financial statements for the year 2007 of the

Company and the Subsidiary, which have been reviewed by the Audit Committee in conjunction with the management, and audited by the Company’s auditors, reflect accurate financial status and operational results as appropriate in material aspect in accordance with generally accepted accounting standards.

(Mr.Sawasdi Horrungruang)

President & CEO

Chairman of the Board of Directors

Hemaraj Land and Development Public Company Limited

(Mr.David Richard Nardone)

33


Hemaraj Land and Development Public Company Limited

Independent Certified Public Accountants’ Report

To the Shareholders of Hemaraj Land and Development Public Company Limited

I have audited the consolidated balance sheets of Hemaraj Land and Development Public Company Limited and

its subsidiaries as of December 31, 2007, and the related consolidated statements of changes in shareholders’ equity, income and cash flows for the year then ended. I have also audited the separate financial statements for the same year of Hemaraj Land and Development Public Company Limited. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit. The consolidated financial statements of Hemaraj Land and Development Public Company Limited and its subsidiaries and the separate financial statements of Hemaraj Land and Development Public Company Limited for the year ended December 31, 2006, presented here in for comparison, were audited, in accordance with generally accepted auditing standards, by another auditor in my office who, under her report dated February 14, 2007, expressed an unqualified opinion on these statements.

I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

34

financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position

ANNUAL REPORT 2007

of Hemaraj Land and Development Public Company Limited and its subsidiaries and of Hemaraj Land and Development Public Company Limited as of December 31, 2007, the results of their operations, and cash flows for the year then ended in conformity with generally accepted accounting principles.

Without qualifying my opinion on the financial statements referred to above, I draw attention to the matter as

mentioned in the Note 4 to the financial statements that beginning the 1st quarter in year 2007, the Company had changed its accounting policy for its investments in subsidiaries and associates in the separate financial statements from the equity method to the cost method in accordance with the Accounting Standard No.44 “Consolidated and Separate Financial Statements” (revised 2007), the change had been applied retrospectively for the separate financial statements for the year ended December 31, 2006. In my audit, the adjustments made to the separate financial statements are appropriate and have been properly applied.

Natsarak Sarochanunjeen

C.P.A (THAILAND)

Registration No. 4563

A.M.T. & ASSOCIATES Bangkok, Thailand February 29, 2008


Balance Sheets

Hemaraj Land and Development Public Company Limited and its Subsidiaries As at December 31, 2007 and 2006 (Unit : In Baht)

NOTE

2007

2006

2007

2006

Restated

CONSOLIDATED

THE COMPANY ONLY

ASSETS

CURRENT ASSETS Cash and deposits at financial institutions

6

574,478,740.52 1,149,829,513.29

288,647,663.87

685,449,979.46

Current investments Time deposits

Marketable securities, net

6 and 29

92,859.45

90,376.54

16,228.31

15,950.23

1,700,432.90

3,537,466.46

1,700,432.90

3,537,466.46

1,214.71

1,041.15

2,054,400.00

1,027,200.00

159,676,762.25

89,791,215.49

24,434,805.45

8,206,155.94

Trade account receivables

Related parties, net

7

Other parties, net

7

Unbilled completed work

7

Short - term loans and advance to related parties

5

17,136,213.54

Inventory

`

13,440,000.00

Cost of real estate developments, net

9, 29 and 30

3,793,106,100.30 1,736,415,916.48 3,013,341,436.92 1,485,488,566.32 13,183,144.03 -

520,115,432.65 1,386,682,542.06 13,440,000.00

-

6,010,082,614.92 6,119,907,823.95 1,538,827,695.73 1,676,371,288.51

Other current assets

Receivable from sales of investment in associate

20,092,203.04

Others

21,448,719.00

Total Current Assets

- 20,094,216.92

20,092,203.04 6,040,525.18

-

10,611,255,860.63 9,132,850,714.31 5,428,710,824.05 5,251,575,072.94

2 and 5

- 318,857,313.58

- 334,758,774.34

2,666,595,178.50 1,389,845,301.00 294,749,970.00

314,749,970.00

Other long - term investments

Related parties, net

5

Other parties, net

10, 29 and 30

Assets for rent, net Property, plant and equipment, net

11 and 29

1,500,000.00

1,500,000.00

142,783,002.50

142,783,002.50

1,975,306,705.08 1,107,015,368.61

-

-

142,500,002.50

142,500,002.50

71,588,495.21

61,428,632.59

12

359,979,562.97

272,463,903.05

118,865,306.60

34,174,393.85

13 and 29

326,136,500.00

325,719,200.00

326,136,500.00

325,719,200.00

14 and 30

70,629,550.24

65,557,524.08

24,275,335.74

25,863,328.97

30

32,829,875.00

32,829,875.00

32,829,875.00

32,829,875.00

3,091,926.04

25,191,331.54

Other non - current assets

Leasehold land and land held for

Sinking fund, net

Deposit for land purchase

Advance for provincial electricity authority

commercial purposes, net

Advance payment for right

Others

Total Non - Current Assets

TOTAL ASSETS

30

40,367,551.44

13,843,120.11

- 12,509,127.41

- 40,367,551.44 4,282,740.19

5,183,406.96

3,285,325,106.96 2,320,328,106.53 3,722,190,955.18 2,332,294,110.87

13,896,580,967.59 11,453,178,820.84 9,150,901,779.23 7,583,869,183.81

The accompanying notes to financial statements are an integral part of these statements.

Hemaraj Land and Development Public Company Limited

Investments in associates

4, 5 and 29

35

4,795,923.96

NON - CURRENT ASSETS Investments in subsidiaries

ANNUAL REPORT 2007


Balance Sheets (Continued) Hemaraj Land and Development Public Company Limited

Hemaraj Land and Development Public Company Limited and its Subsidiaries As at December 31, 2007 and 2006 (Unit : In Baht)

NOTE

2007

2006

2007

2006

Restated

CONSOLIDATED

THE COMPANY ONLY

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES Short-term loans from financial institutions

15

360,000,000.00

380,000,000.00

360,000,000.00

380,000,000.00

Trade account payables

Related parties, net

2,359,803.00

1,777,226.13

9,180,182.60

209,809.88

Other parties, net

254,330,125.96

328,026,873.85

61,028,846.07

115,914,612.23

Current portion of long - term loans

17

1,950,309,653.56

150,420,000.00 1,624,389,595.86

-

17

475,650,952.75

233,086,999.14

Short - term loans and advance from related parties 5

79,904,027.90

26,800,000.00

62,322,215.22

56,017,665.06

240,406,267.60

134,231,215.67

20,685,612.95

8,901,121.80

Current portion of long - term loans by

scheduled transfer

-

167,251,404.14

Other current liabilities

ANNUAL REPORT 2007

36

Unearned income and income received in advance 8

Accrued interest expenses

4,810,912.77

7,428,246.59

4,761,613.05

7,428,246.59

Accrued expenses

41,636,466.45

26,390,905.72

19,448,070.35

13,007,362.29

Other account payables

Accrued income tax

Accrued specific business tax and transfer fee

Dividend payable

Others

Total Current Liabilities

26,448,448.74

3,104,913.61

6,171,546.86

1,285,636.39

26

359,837,412.55

208,475,786.80

297,368,693.10

167,114,753.13

276,915,585.03

133,782,420.57

188,713,620.87

108,553,176.76

22

284,359,602.03

5,804,525.00

284,359,602.03

5,804,525.00

60,746,469.93

59,170,341.55

24,401,796.69

30,489,166.83

4,417,715,728.27 1,698,499,454.63 2,962,831,395.65 1,061,977,480.10

NON - CURRENT LIABILITIES Long - term loans from related party Other long - term loans, net

5 and 16 17

-

-

1,584,565,172.31 2,459,937,986.82

1,100,406,976.21 1,153,196,016.67 -

978,148,595.86

Other non - current liabilities

Retention payables

171,782,956.78

119,345,603.25

90,731,508.78

61,602,725.93

Guarantee received

89,045,738.26

73,045,787.50

4,634,100.00

5,105,100.00

Deferred leasehold right income

8,559,584.31

9,932,092.41

Others

6,904,823.29

7,557,383.62

Total Non - Current Liabilities

1,860,858,274.95 2,669,818,853.60 1,200,874,005.91 2,202,941,442.94

6,278,574,003.22 4,368,318,308.23 4,163,705,401.56 3,264,918,923.04

Total Liabilities

The accompanying notes to financial statements are an integral part of these statements.

- 5,101,420.92

4,889,004.48


Balance Sheets (Continued)

Hemaraj Land and Development Public Company Limited and its Subsidiaries As at December 31, 2007 and 2006 (Unit : In Baht)

CONSOLIDATED

THE COMPANY ONLY

NOTE

2007

2006

2007

2006

Restated

SHAREHOLDERS’ EQUITY Share capital - Baht 0.40 par value (2006 : Baht 1 par value) Authorized share capital

Issued and paid-up share capital

Common stocks 9,354,210,496 shares

for the year 2007 and 9,036,927,495

Common stocks 15,000,000,000 shares

Warrants

shares for the year 2006

19 and 21

6,000,000,000.00 15,000,000,000.00 6,000,000,000.00 15,000,000,000.00

19 and 21

3,741,684,198.40 9,036,927,495.00 3,741,684,198.40 9,036,927,495.00

20

Premium (Discount) on common stocks, net

21

1,005,898.58

1,904,573.51

1,005,898.58

1,904,573.51

478,762,877.78 (4,907,170,183.03)

478,762,877.78 (4,907,170,183.03)

(31,738,154.44)

(33,382,780.88)

(31,738,154.44)

4

(28,663,381.84)

(27,893,720.65)

422,722,610.39

386,776,978.92

ANNUAL REPORT 2007

Unrealized loss from changes in carrying amount of

available-for-sale securities

Currency translation differences

-

(33,382,780.88) -

Retained earnings Appropriated - legal reserve

22

Unappropriated

22

Less : Cumulative effect of the change in

accounting policy

Total Equity of Parent Company’s Shareholders

Minority interest

Total Shareholders’ Equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

4

307,571,646.27

271,626,014.80

2,492,758,503.82 2,012,202,535.49 2,165,184,969.11 2,127,353,499.61 -

-

(1,675,275,058.03) (2,178,308,358.24)

7,076,532,552.69 6,469,364,898.36 4,987,196,377.67 4,318,950,260.77 541,474,411.68

615,495,614.25

-

-

7,618,006,964.37 7,084,860,512.61 4,987,196,377.67 4,318,950,260.77

13,896,580,967.59 11,453,178,820.84 9,150,901,779.23 7,583,869,183.81

The accompanying notes to financial statements are an integral part of these statements.

Hemaraj Land and Development Public Company Limited

37


Statements of Income Hemaraj Land and Development Public Company Limited

38

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006 (Unit : In Baht)

NOTE

2007

2006

2007

2006

Restated

CONSOLIDATED

THE COMPANY ONLY

2,157,681,530.63

990,408,588.64

122,062,087.20

178,318,411.52

REVENUES Sales of land

Sales of pre-fabricated factory

148,966,118.04 -

71,256,482.33 11,718,875.00

Sales of condominium

1,821,177,934.37 1,719,705,228.19 1,821,177,934.37 1,719,705,228.19

Services income

5

1,051,380,639.99

Income from increase of salable area

23

-

889,284,698.48 55,604,501.77

141,236,228.91 -

140,578,052.07 55,604,501.77

Other income

Profits from sales of investments

Interest income

5

11,505,002.58

23,934,376.97

72,332,550.92

Management income

5

13,835,652.31

10,953,121.04

40,514,866.58

37,042,795.77

Commission income

5

49,678.09

759,365.12

34,090,614.52

Dividend income

5

601,003.50

Gain on exchange rate

-

Adjustment of loss on decline in value of

13

-

real estate development cost

-

Reversal of impairment on asset

25,181,324.26

Others

34,687,964.41

Share of profits from investments for using

ANNUAL REPORT 2007

the equity method - associates

Total Revenues

2 and 5

-

9,231,546.15

- 112,404,107.17 - 44,654,950.00 - 20,335,170.96

-

9,231,546.15 91,221,554.08

246,683,070.67

272,548,033.17

52,686,647.39

110,560,807.20

- 25,181,324.26 8,949,785.62

44,654,950.00 5,996,834.87

24,315,307.56

-

-

5,238,162,817.34 4,079,150,008.45 2,558,487,891.88 2,604,210,275.12

1,216,826,292.54

540,852,296.74 135,405,248.28

EXPENSES Cost of land sales

119,958,933.42

Cost of pre-fabricated factory sales

90,466,295.81

Cost of condominium sales

1,078,807,895.20

Cost of services

5

623,024,022.35

501,437,580.56

96,481,678.86

91,924,033.63

590,427,607.31

464,841,191.42

291,127,082.93

242,537,596.05

Director remuneration

24

25,425,000.00

26,505,000.00

16,675,000.00

17,545,000.00

Loss from sales of investments

5

8,744,993.66

2,393.07

Selling and administrative expenses

-

54,538,918.44

930,718,969.27 1,078,807,895.20

-

13,423,248.04

5,703,443.34 931,251,541.53

-

Other expenses

Loss on exchange rate

525,928.85

-

-

-

-

Share of losses from investments for using

the equity method - associates

Total Expenses

2 and 5

579,715.14

-

3,634,304,215.08 2,600,286,215.12 1,616,473,838.45 1,343,500,532.99

The accompanying notes to financial statements are an integral part of these statements.


Statements of Income (Continued)

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006 (Unit : In Baht)

CONSOLIDATED

NOTE

2007

2006

2007

2006

Restated

PROFIT BEFORE INTEREST AND INCOME TAX EXPENSES

THE COMPANY ONLY

1,603,858,602.26 1,478,863,793.33

942,014,053.43 1,260,709,742.13

INTEREST EXPENSES

5

71,747,742.83

39,878,579.58

54,126,682.80

17,644,966.33

INCOME TAX EXPENSES

26

282,395,420.22

275,289,347.34

168,974,741.30

207,952,135.85

PROFIT AFTER TAX

PROFIT FROM ORDINARY ACTIVITIES

EXTRAORDINARY ITEM

- Gain from debt compromise NET PROFIT

BASIC EARNINGS PER SHARE

18 27

1,249,715,439.21 1,163,695,866.41 (86,075,037.73)

(59,354,856.96)

1,163,640,401.48 1,104,341,009.45

718,912,629.33 1,035,112,639.95 -

-

718,912,629.33 1,035,112,639.95

-

86,425,205.46

1,163,640,401.48 1,190,766,214.91

-

86,425,205.46

718,912,629.33 1,121,537,845.41

Profit from ordinary activities

0.13

0.15

0.08

0.14

Extraordinary item, net

-

0.01

-

0.01

Net profit

0.13

0.16

0.08

0.15

DILUTED EARNINGS PER SHARE Profit from ordinary activities

27

0.12

0.14

0.13

-

0.01

-

0.01

0.12

0.15

0.08

0.14

The accompanying notes to financial statements are an integral part of these statements.

Hemaraj Land and Development Public Company Limited

Extraordinary item, net

39

0.08

Net profit

ANNUAL REPORT 2007

MINORITY INTEREST


- as previously reported

available-for-sale securities

- as previously reported

9,036,927,495.00

2,946,178,071.00

-

-

-

-

6,090,749,424.00

-

6,090,749,424.00

3,741,684,198.40

293,021,761.00

-

-

-

-

-

478,762,877.78

(202,331,996.79)

-

-

-

-

-

5,588,265,057.60

-

-

-

-

-

1,904,573.51 (4,907,170,183.03)

(8,344,778.60) (2,104,064,898.32)

-

-

-

-

10,249,352.11 (2,803,105,284.71)

-

10,249,352.11 (2,803,105,284.71)

1,005,898.58

(898,674.93)

-

-

-

-

-

-

1,904,573.51 (4,907,170,183.03)

-

(33,382,780.88)

-

-

-

-

(14,794,720.71)

(18,588,060.17)

-

(18,588,060.17)

(31,738,154.44)

-

-

-

-

-

1,644,626.44

-

(33,382,780.88)

-

(33,382,780.88)

Premium (discount) Unrealized on common gain (loss) from stocks, net changes in carrying amount of available-for-sale securities

1,904,573.51 (4,907,170,183.03)

Warrants

The accompanying notes to financial statements are an integral part of these statements.

20

Exercise of warrant

Ending balance as of December 31, 2006 - Restated

22 22

Appropriated - legal reserve

Dividend paid

available-for-sale securities

Net profit

Unrealized loss from changes in carrying amount of

4

for investments in subsidiaries and associates

Beginning balance as of January 1, 2006 - as restated

Cumulative effect of the change in accounting policy

Ending balance as of December 31, 2007

Beginning balance as of January 1, 2006

5 20

Dividend received from subsidiaries

Exercise of warrant

22 22

Appropriated - legal reserve

Dividend paid

Net profit

-

19 and 21

Unrealized loss from changes in carrying amount of

(5,588,265,057.60)

Capital decrease during the year

9,036,927,495.00

4

-

9,036,927,495.00

Issued and paid-up share capital

for investments in subsidiaries and associates

Beginning balance as of January 1, 2007 - as restated

Cumulative effect of the change in accounting policy

NOTE

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006

Beginning balance as of January 1, 2007

-

-

-

-

-

-

-

24,922,881.78

(24,922,881.78)

-

-

-

-

-

-

-

-

-

27,893,720.65

(27,893,720.65)

Currency translation differences Unappropriated

-

6,469,364,898.36

Total

(2,178,308,358.24) (2,150,414,637.59)

-

Cumulative effect of the change in accounting policy

(Unit : In Baht)

-

-

(647,138,801.68)

(35,945,631.47)

720,915,902.65

-

-

-

505,036,573.53

-

-

(2,003,273.32)

-

-

89,791,089.28

505,036,573.53

(647,138,801.68)

-

718,912,629.33

1,644,626.44

-

-

4,974,599,170.31 (2,109,079,988.74) (2,084,157,106.96)

-

-

-

(512,003,321.36)

(59,538,310.75)

1,190,766,214.91

-

(14,794,720.71)

-

-

-

833,768,394.08

(512,003,321.36)

-

(69,228,369.50) 1,121,537,845.41

271,626,014.80 2,127,353,499.61 (2,178,308,358.24) 4,318,950,260.77

-

-

59,538,310.75

-

-

212,087,704.05 1,508,128,916.81 (2,109,079,988.74) 2,890,442,063.35

-

212,087,704.05 1,508,128,916.81

307,571,646.27 2,165,184,969.11 (1,675,275,058.03) 4,987,196,377.67

-

-

-

35,945,631.47

-

-

-

271,626,014.80 2,127,353,499.61 (2,178,308,358.24) 4,318,950,260.77

-

271,626,014.80 2,127,353,499.61

Appropriated legal reserve

THE COMPANY ONLY Retained earnings

Hemaraj Land and Development Public Company Limited

Statements of Changes in Shareholders’ Equity

ANNUAL REPORT 2007

40


Ending balance as of December 31, 2007

Beginning balance as of January 1, 2006

-

Ending balance as of December 31, 2006

9,036,927,495.00

2,946,178,071.00

-

-

-

-

-

-

-

-

-

1,904,573.51 (4,907,170,183.03)

(8,344,778.60) (2,104,064,898.32)

- -

-

-

- -

- -

-

-

- -

- -

-

-

(27,893,720.65)

- -

- - (33,382,780.88)

- -

-

-

- -

- -

-

(2,970,838.87)

(2,970,838.87)

-

(14,794,720.71)

-

(14,794,720.71)

(24,922,881.78)

(18,588,060.17)

10,249,352.11 (2,803,105,284.71)

-

(28,663,381.84)

(31,738,154.44)

478,762,877.78

1,005,898.58

- -

- -

(202,331,996.79)

- -

- -

- -

-

-

- -

-

(769,661.19)

(769,661.19)

-

(27,893,720.65)

-

1,644,626.44

-

1,644,626.44

(33,382,780.88)

-

-

-

-

-

(647,138,801.68)

(35,945,631.47)

1,163,640,401.48

-

-

-

-

-

-

-

-

(512,003,321.36)

(59,538,310.75)

1,190,766,214.91

-

-

386,776,978.92 2,012,202,535.49

-

-

-

-

-

59,538,310.75

-

-

-

-

327,238,668.17 1,392,977,952.69

422,722,610.39 2,492,758,503.82

-

-

-

-

-

35,945,631.47

-

-

-

-

-

386,776,978.92 2,012,202,535.49

Retained earnings Appropriated Unappropriated legal reserve

CONSOLIDATED Currency translation differences

(898,674.93)

-

- -

- - -

- -

- -

-

-

5,588,265,057.60

- -

- - -

Premium (discount) Unrealized on common gain (loss) from stocks, net changes in carrying amount of available-for-sale securities

1,904,573.51 (4,907,170,183.03)

Warrants

The accompanying notes to financial statements are an integral part of these statements.

20

Dividend from subsidiaries paid to minority

Exercise of warrants

Increase in minority

Minority interest

22

Dividend paid

-

22

Net profit

Appropriated - legal reserve

-

Net loss not recognized in the statements of income

-

-

6,090,749,424.00

3,741,684,198.40

293,021,761.00

-

-

-

-

-

-

(5,588,265,057.60)

-

-

available-for-sale securities

Issued and paid-up share capital 9,036,927,495.00

Currency translation differences

Unrealized loss from changes in carrying amount of

20

Dividend from subsidiaries paid to minority

Exercise of warrant

Increase in minority

Minority interest

22 22

Appropriated - legal reserve

Dividend paid

Net profit

19 and 21

Net loss not recognized in the statements of income

Capital decrease during the year

available-for-sale securities

Currency translation differences

Unrealized loss from changes in carrying amount of

NOTE

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006

Beginning balance as of January 1, 2007

Hemaraj Land and Development Public Company Limited

Statements of Changes in Shareholders’ Equity

ANNUAL REPORT 2007

41

Total

89,791,089.28

(160,096,362.80)

86,075,037.73

122.50

(647,138,801.68)

-

1,163,640,401.48

-

874,965.25

(769,661.19)

1,644,626.44

833,768,394.08

(40,096,074.00)

59,354,856.96

95.00

(512,003,321.36)

-

1,190,766,214.91

(17,765,559.58)

(2,970,838.87)

(14,794,720.71)

615,495,614.25 7,084,860,512.61

-

(40,096,074.00)

59,354,856.96

95.00

-

-

-

-

-

-

596,236,736.29 5,570,835,906.60

541,474,411.68 7,618,006,964.37

-

(160,096,362.80)

86,075,037.73

122.50

-

-

-

-

-

-

-

615,495,614.25 7,084,860,512.61

Minority interest

(Unit : In Baht)


Statements of Cash Flows Hemaraj Land and Development Public Company Limited

ANNUAL REPORT 2007

42

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006 (Unit : In Baht)

CONSOLIDATED

THE COMPANY ONLY

NOTE

2007

2006

2007

2006

Restated

CASH FLOWS FROM OPERATING ACTIVITIES Net profits

1,163,640,401.48 1,190,766,214.91

718,912,629.33 1,121,537,845.41

Adjustments to reconcile net profit to net

cash provided by (used in)

Allowance for doubtful accounts

Share of (profits) losses from investments for using the equity method - associates

Reversal of impairment on asset

2 and 5

Gain on exchange rate

Gain from sales of equipment

Loss (gain) from sales of investments

Depreciation of assets

Amortization of sinking fund

Loss on written off withholding tax

Provision for maintenance

Gain from debt compromise

Adjustment of loss on decline in value

Realization of deferred leasehold right income

Net profit of minority interests

11 and 12 14

1,010,564.13

1,124,214.39

579,715.14

(24,315,307.56)

(25,181,324.26) - (687,843.60)

568,292.05 -

20,218.20 -

-

(25,181,324.26)

-

-

(52,689,040.46) (111,086,736.05)

(371,875.87)

(164,484.98)

8,744,993.66

(9,231,546.15)

13,423,248.04

(9,231,546.15)

114,082,042.37

80,304,921.35

16,536,231.40

12,200,760.39

3,633,805.19

1,587,993.23

3,983,477.23 - 19,650,148.10

(273,746.03)

1,464,719.02

4,547,575.40

-

3,774,163.16

2,682,830.00

-

2,682,830.00

(86,425,205.46)

-

(86,425,205.46)

14

-

Dividend income

5

-

Income from increase of salable area

23

-

(55,604,501.77)

-

(55,604,501.77)

12

-

(44,654,950.00)

-

(44,654,950.00)

(1,372,508.10)

(1,372,507.54)

-

-

86,075,037.73

59,354,856.96

-

-

of real estate development cost

-

1,370,524,703.88 1,120,438,523.85

(246,607,063.67) (160,143,926.00)

426,386,480.68

674,259,924.72

Decrease (increase) in operating assets :

Account receivables - related parties

(173.56)

421,302.28

(1,027,200.00)

(1,027,200.00)

Account receivables - other parties

(70,896,110.89)

(25,836,452.98)

(16,796,941.56)

13,224,624.83

Unbilled completed work

Inventory

Cost of real estate developments

Other current assets

(1,416,357.98)

Deposit for land purchase

Other non - current assets

(2,056,690,183.82) (1,102,873,181.30) (1,527,852,870.60) (1,328,682,372.02) (13,440,000.00)

-

(141,601,166.57) (1,173,623,512.46)

(13,440,000.00)

-

8,626,292.78

(125,041,988.72)

12,766,710.06

(1,244,601.22)

17,967,175.16

128,500,000.00

15,031,843.75

128,500,000.00

15,031,843.75

(28,433,435.96)

(31,296,011.50)

(43,895,107.36)

5,735,336.18

582,576.87

1,435,311.91

8,970,372.72

(1,420,870.12)

Increase (decrease) in operating liabilities :

Trade account payables - related parties

Trade account payables - other parties

(73,696,747.89)

19,163,684.85

(54,885,766.16)

(17,911,381.15)

Unearned income and income received advance

106,175,051.93

7,198,930.14

11,784,491.15

(15,260,858.31)

Accrued interest expense

(2,617,333.82)

(847,232.88)

(2,666,633.54)

4,110,438.36

The accompanying notes to financial statements are an integral part of these statements.


Statements of Cash Flows (Continued)

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006 (Unit : In Baht)

CONSOLIDATED

THE COMPANY ONLY

NOTE

2007

2006

2007

2006

Restated

CASH FLOWS FROM OPERATING ACTIVITIES (Continued) Accrued expense

15,245,560.73

(23,823,587.07)

6,440,708.06

(25,034,760.76)

Other account payables

6,689,180.00

(1,894,702.78)

4,885,910.47

200,000.00

Accrued income tax

160,254,778.97

209,469,782.69

134,682,162.66

167,645,729.31

Accrued specific business tax and transfer fee

143,133,164.46

67,178,623.41

80,160,444.11

63,740,146.13

Other current liabilities

(18,074,019.72)

14,942,551.12

(6,087,370.14)

155,646.65

Retention payables

62,250,168.66

49,735,654.24

29,128,782.85

28,474,651.86

Guarantee payable

22,841,490.76

(1,888,728.50)

(471,000.00)

68,600.00

Other non - current liabilities

(652,560.33)

(4,169,298.54)

212,416.44

(3,669,559.48)

Net Cash Provided by (Used in) Operating Activities

(391,321,414.28) (848,469,789.71) (828,589,428.66) (527,434,873.61)

CASH FLOWS FROM INVESTING ACTIVITIES Cash received from sales of the investments in securities

1,483,320.00

64,258,056.00

(3,953,069.51)

(8,075,001.21)

1,483,320.00

64,258,056.00

986,423,081.51

(621,477,120.56)

(Increase) decrease in short - term loans and advance

to related parties

Increase in investments in subsidiaries

-

Increase in investments in associate

Decrease in other long term investment

-

32,500,000.00

-

32,500,000.00

Decrease in long - term loans to other party

-

12,264,871.47

-

537,835.37

Dividend received from subsidiaries

(76,055,970.00)

- (50,000,000.00)

- 64,538,858.92

Cash received from sales of building and equipment

687,848.60

-

631,787,665.10

-

64,538,858.92

160,143,926.00 -

164,485.98

285,046.73

(93,174,398.89) (150,753,964.49)

(73,836,372.01)

(7,171,608.08)

Increase in assets for rent

(829,024,245.01)

(19,964,749.63)

Increase in sinking fund

(9,055,503.39)

(6,956,176.77)

Net Cash Provided by (Used in) Investing Activities

(50,000,000.00)

383,177.57

Increase in building and equipment

(76,055,970.00)

(12,369,311.50) -

(944,553,159.28) (126,343,787.06)

245,385,880.50

(20,000,000.00) (244,750,000.00)

(20,000,000.00)

(534,761,259.54)

CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in bank overdrafts and short-term

loans from financial institutions

Cash repaid to debt under conpromising agreement

-

(156,095,342.49)

-

5,250,000.00 (156,095,342.49)

Increase (decrease) in short - term loans and advance

from related parties

Decrease in long - term loans from related party

(26,800,000.00)

-

Decrease in long - term loans from related persons

-

(5,241,424.66) - (6,400,000.00)

4,460,534.63

(100,000.00)

(100,000.00)

Increase in other long - term loans

Proceeds from exercise of warrants

Cash paid for dividend

Dividend paid to minority interest

(80,192,334.90)

(40,096,074.00)

-

Cash received from minority interest

122.50

95.00

-

Net Cash Provided by (Used in) Financing Activities

1,167,080,792.66 1,164,095,480.66

6,304,550.16 -

89,791,089.28

833,768,394.08

-

478,989,595.86

753,800,000.00

89,791,089.28

833,768,394.08

(368,583,724.65) (509,569,430.06) (368,583,724.65) (509,569,430.06)

761,295,944.89 1,035,711,698.53

The accompanying notes to financial statements are an integral part of these statements.

186,401,510.65

43

931,514,156.16

Hemaraj Land and Development Public Company Limited

Cash received from sales of investment in associate

(1,276,749,877.50) (113,837,395.00)

ANNUAL REPORT 2007


Statements of Cash Flows (Continued) Hemaraj Land and Development Public Company Limited

ANNUAL REPORT 2007

44

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006 (Unit : In Baht)

CONSOLIDATED

THE COMPANY ONLY

NOTE

2007

2006

2007

2006

Restated

CASH FLOWS FROM FINANCING ACTIVITIES (Continued) Adjustments from financial statement translations

Increase (decrease) in cash and cash equivalents, net Cash and cash equivalents, beginning of periods

(769,661.19)

(2,970,838.87)

(575,348,289.86)

57,927,282.89

1,149,871,889.83 1,061,545,698.98

-

(396,802,037.51) (130,681,976.99) 685,465,929.69

Cash at banks pledged as collateral, beginning of periods

48,000.00

30,446,907.96

-

Cash at banks pledged as collateral, end of periods 6 and 29

(48,000.00)

(48,000.00)

-

Cash and cash equivalents, end of periods

6

574,523,599.97 1,149,871,889.83

-

288,663,892.18

793,180,630.68 22,967,276.00 685,465,929.69

OPERATING ACTIVITIES, INVESTING ACTIVITIES AND FINANCING ACTIVITIES NOT AFFECTING CASH

Revaluation of available-for-sale securities

Decrease (increase) in marketable securities

(1,644,626.44)

14,003,451.55

(1,644,626.44)

14,003,451.55

Increase (decrease) in unrealized loss from change in

1,644,626.44

(14,003,451.55)

1,644,626.44

(14,003,451.55)

Increase among cost of real estate development,

asset for rent, and property, plant and equipment

carrying amount of available-for-sale securities

Decrease in cost of real estate development

122,509,079.60

22,932,178.22

-

8,939,447.49

Increase in assets for rent

(122,509,079.60)

(19,882,632.12)

-

(8,939,447.49)

Increase in property, plant and equipment

(3,049,546.10)

-

Reversal of provision for impairment of fixed asset

Reversal of impairment on asset

Decrease in provision for impairment of fixed asset

Off-set long-term loan to other party and

long-term loan from related party

-

-

25,181,324.26

-

25,181,324.26

-

(25,181,324.26)

-

(25,181,324.26)

-

Decrease in long-term loan to other party

-

-

-

11,727,036.10

Decrease in long-term loan from related party

-

-

-

(11,727,036.10)

Receivable from capital decrease of other party

Decrease in long-term investment - other party

-

32,500,000.00

-

32,500,000.00

Increase in receivable from capital decrease

-

(32,500,000.00)

-

(32,500,000.00)

Decrease in investment in associated company

from its book value decrease at acquired date

Decrease in investment in associated company

-

10,250,000.00

-

10,250,000.00

Decrease in promissory note

-

(10,250,000.00)

-

(10,250,000.00)

Receivable from sale investment in associated company

Decrease in investment in associated company

Increase in receivable from sales of investment

in associate

20,092,203.04

-

20,092,203.04

-

(20,092,203.04)

-

(20,092,203.04)

-

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

Cash paid during the period for :

Interest expenses

243,858,837.51

121,492,017.68

112,288,599.06

36,703,991.84

Income tax expenses

145,145,020.35

83,674,976.61

38,875,627.52

47,583,090.08

The accompanying notes to financial statements are an integral part of these statements.


Notes to Financial Statements

Hemaraj Land and Development Public Company Limited and its Subsidiaries For the years ended December 31, 2007 and 2006

1. General Information

1.1 General Matter

On August 15, 1988, Hemaraj Land and Development Public Company Limited (“the Company”) was incorporated under the Civil and Commercial Code of Thailand and was subsequently listed on the Stock Exchange of Thailand and transformed as a Public Company Limited on July 10, 1992 and July 12, 1993, respectively.

The Company, which is the parent company of Hemaraj Group, operates its business as a real estate developer as follows:

1.

Industrial estate development projects located in the Eastern Seaboard of Thailand. The projects are operating under the joint operation agreements with the Industrial Estate Authority of Thailand (“IEAT”), in the names of the Company and its 3 subsidiaries as follows:

Company Name

Industrial Estate

Site Location

Hemaraj Land and Development Plc.

Hemaraj Chonburi

Sriracha district, Chonburi province

Eastern Industrial Estate Co., Ltd.

Hemaraj Eastern (Map Ta Phut) Muang district, Rayong province

Eastern Seaboard Industrial Estate (Rayong)

Eastern Seaboard (Rayong)

Pluak Daeng district, Rayong province

Hemaraj Eastern Seaboard

Pluak Daeng district,Rayong province

Co., Ltd.

Hemaraj Eastern Seaboard Industrial Estate

2.

A condominium for sale being developed under the Company’s name is called “The Park of Chidlom”, which located

3.

Service business related to the mentioned industrial estates consisting of service providing for public utilities, in Industrial Estates, building contractor and others.

Hemaraj Group’s head office is located at 18th floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang subdistrict, Suanluang district, Bangkok, Thailand 10250.

As at December 31, 2007 and 2006, Hemaraj Group employs 267 and 242 staffs, respectively.

1.2 Adoption of new accounting standards

The Federation of Accounting Professions (FAP) has issued Notifications No. 9/2550, No. 38/2550 and No. 62/2550 regarding Thai Accounting Standards, and these have been published in the Royal Gazette. The Notifications mandate the use of the Thai Accounting Standards (Revised 2007) in place of the previous versions, which are cancelled. Thai Accounting Standards (revised version) which are not effective for the current period are as follows:

Accounting Standards No. 25

Cash Flows Statements (revised 2007)

Accounting Standards No. 29

Leases (revised 2007)

Accounting Standards No. 31

Inventories (revised 2007)

Accounting Standards No. 33

Borrowing Costs (revised 2007)

Accounting Standards No. 35

Presentation of Financial Statements (revised 2007)

Hemaraj Land and Development Public Company Limited

office building and prefabricated factory for sale and lease, land rental, commercial plaza rental, pipe rack rental

45

Co.,Ltd.

at Chidlom Road, Bangkok.

ANNUAL REPORT 2007


Hemaraj Land and Development Public Company Limited

Accounting Standards No. 39

Accounting Policies, Changes in Accounting Estimates and Errors (revised 2007)

Accounting Standards No. 41

Interim Financial Reporting (revised 2007)

Accounting Standards No. 43

Business Combinations (revised 2007)

Accounting Standards No. 49

Construction Contracts (revised 2007)

Accounting Standards No. 51

Intangible Assets

These accounting standards will become effective for the financial statements for fiscal years beginning on or after 1 January 2008.

However, the management has assessed the effect of these revised accounting standards and believes that they will not have any significant impact on the financial statements for the period in which they are initially applied.

2. BASIS OF CONSOLIDATED FINANCIAL STATEMENT PRESENTATION

2.1 Basis for preparation and presentation of financial statements

The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act B.E. 2535.

The Company’s financial statements are prepared in the Thai language as required by Thai law, and translated into English for the convenience of a reader of the financial statements.

46

Certain amounts in the 2006 financial statements have been reclassified to conform to the 2007 financial statement presentation, without effect on previously reported net profit and shareholders’ equity.

2.2 Basis for preparation and presentation of consolidated financial statements

The consolidated accounts incorporate the accounts of the Company and its majority owned directly or indirectly in

ANNUAL REPORT 2007

subsidiaries (over 50 % of their paid-up capital).

All subsidiaries were registered and incorporated in Thailand except H-International (BVI) Company Limited and Hemaraj International Limited which were incorporated in British Virgin Islands and Cayman Islands, respectively.

In addition, the consolidated and the Company’s financial statements for the year ended December 31, 2007 and 2006, include share of profits (losses) from associates as follows:

MILLION BAHT

2007

2006

Elyo-H Facilities Management Limited

2.01

2.30

SIL Industrial Land Company Limited (consolidated)

0.31

23.86 (1.84)

Glow Hemaraj Energy Company Limited

(2.68)

GHECO - One Company Limited

(0.22)

Total

(0.58)

Based on the information from the financial statements which were audited by other auditor.

24.32


3. Summary of Significant Accounting Policies

3.1 The Measurement Bases Used in Preparing the Financial Statements

Other than those disclosed in other topics, significant accounting policies and other notes to the financial statements, the financial statements are prepared on the historical cost basis.

3.2 Cash and Cash Equivalents

Cash and cash equivalents represent cash on hand and at banks, and temporary investments net of cash at banks pledged as collateral.

3.3 Current Investments

Available-for-sale securities consist of investments in marketable securities, which are stated at fair value (net of allowance for investments revaluation).

Gain (loss) on investment revaluation is included in the equity.

3.4 Trade Account Receivables and Allowance for Doubtful Accounts

Trade account receivables represent real estate sale contract receivables under contract price, net of installments received and deferred income. Public utilities service receivables are presented net of allowance for doubtful accounts.

Allowance for doubtful accounts is based on receivables which are overdue by more than 90 days.

3.5 Inventories

3.6 Cost of Real Estate Developments

Inventories are valued at the lower of cost (the average cost method) or net realizable value.

ANNUAL REPORT 2007

47

Cost of real estate developments consists of land costs, development costs, pre-fabricated factory costs, condominium construction costs, and interest expenses on loans for projects development, pre-fabricated factory, condominium construction, land deposits and advances for construction costs. These costs are transferred to cost of sales when

Cost of real estate developments is stated at the lower of cost or net realizable value.

Loss on projects revaluation is included in the statements of income.

3.7 Capitalization of Borrowing Costs

The Company and its subsidiaries have accounting policy to record interest expenses and fees on long-term loans and loan from related persons for development projects by capitalizing to cost of real estate developments. The capitalization will be suspended or ceased when the development projects are interrupted or completed.

3.8 Investments and Loans

Investments

A. Investments in subsidiaries and associates are recorded by using the cost method.

B. Other investments represent investments in related and other companies which are stated at cost net of provision for impairment loss.

Impairment loss on other investments is included in the statements of income.

Loans

The Company and its subsidiaries have recorded allowance for doubtful debts by using uncollectible amounts, based on a review of the current financial status and the repayment ability. The recognition of interest income is ceased when overdue of more than 180 days.

Hemaraj Land and Development Public Company Limited

revenue from sales is recognized.


Hemaraj Land and Development Public Company Limited

3.9 Assets for Rent

Land for rent is stated at cost. Assets for rent, excepted land, are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 15 years for pipe rack and 20 years for building. No depreciation is provided for land for rent.

3.10 Property, Plant and Equipment

Land is stated at cost. Property, plant and equipment are stated at cost less accumulated depreciation and provision for impairment loss. Motor vehicles under financial lease are stated at fair value less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 5 years for equipment and 20 years for building and structures. No depreciation is provided for land.

3.11 Leasehold Right and Land Held for Commercial Purposes

Leasehold right and land held for commercial purposes consist of land leasehold right, land costs, development costs and capitalized interest on loans for undeveloped projects and projects which were temporarily suspended from development.

Leasehold land and land held for commercial purposes are stated at the lower of cost or net realizable value.

Loss on projects revaluation is included in the statements of income.

3.12 Sinking Fund

The Company and its subsidiaries have recorded a fund for the major maintenance and replacement of utilities systems and facilities for the customers in the industrial estate, under the joint operating agreements with the Industrial Estate Authority of Thailand (“IEAT�) to be Deferred Sinking Fund and has recorded amortization to be cost of services by the

48

straight-line method over 20 years of useful lives.

3.13 Deferred Interest Expense on Hire-Purchase Agreement

Deferred interest expense on hire-purchase agreement, which is amortized according to the effective rate, presented

ANNUAL REPORT 2007

net from hire-purchase payable.

3.14 Impairment of Assets

The Company and its subsidiaries have evaluated the impairment of properties, plant and equipment and other assets when the event is occurred or there is the situational change, which indicates that the recoverable amount of assets will be lower than their book value. The Company and its subsidiaries will recognize the loss from impairment as an expense in the statements of income.

3.15 Unearned Income and Income Received in Advance

Unearned income and income received in advance represents the amounts received from real estate and condominium sales contracts, in excess of the revenue recognized by using the percentage of completion method, and from utilities and rental income received in advance.

3.16 Deferred Leasehold Right Income

Deferred leasehold right income represents leasehold right received from rental of land, building and pipe rack, and is recognized as revenue over the period of rental contract.

3.17 Revenue and Expense Recognition

Other than those disclosed in other topics, the policy of the Company and its subsidiaries on revenue and expense recognition are as follows:

A. Recognition of Revenue and Cost of Land Sales

Revenue from land sales are recognized upon signing of contract and receiving of installments by the percentage of completion method, using the ratio of actual development costs incurred to total estimated development costs


for each projects excluding land cost. Cost of sales is calculated from the realized sales contracts based on the ratio of total estimated project costs to total estimated project sales of each projects.

Total estimated costs and sales of each project shall be revised when there are significant changes in the estimated costs and expected sales price of each project.

B. Recognition of Revenue and Cost of pre-fabricated Factory Sales

Revenue and cost of pre-fabricated factory sales are recognized upon signing of sales contract on the percentage of completion method.

C. Recognition of Revenue and Cost of Condominium Sales

The Company recognizes the revenue and cost of condominium sales by the percentage of completed work which is based on the proportion of actual costs (excluding cost of land) to the total estimated costs which are estimated not less than 40% of the area opened for sales and collection received exceeds 20% of each contract value, and the progress of completed construction work is more than 10%.

D. Recognition of Income and Cost of Services

Income and cost of services are recognised on the accrual basis. Service income represents income received from providing of public utilities, potable water, raw water and reused water, waste water treatment processing,

ANNUAL REPORT 2007

by the Company’s engineer advisor. The Company recognizes revenue when sales contracts have been executed

additional work in building construction and rental services in respect of land, commercial plaza, warehouse, factory, resident and pipe rack to the Industrial Estate, training center and business center. Cost of services represents cost incurred from providing of such services.

Revenue and cost from mini and micro pre-fabricated factory construction are recognized upon signing of contract

49

and receiving of installments by the percentage of completion method.

The recognition of income from public utilities service is ceased when the customers cease their business operations and have payment difficulties.

E.

Gain from Compromising Debt

The Company has recorded the difference between the aggregate amount of debt and related accrued interest expenses, which have been compromised under the Restructuring Agreements, as revenue in the statements of income in full after the execution of the Restructuring Agreement.

F.

Other Incomes and Expenses. Other incomes, selling and administration expense, interest expense and other expenses are recognized on the accrual basis.

3.18 Accounts in Foreign Currency

A. The financial statements of our overseas subsidiary are translated into Baht for consolidation purposes using rates of exchange as follows:

A.1 Assets and liabilities are translated at the average selling and purchasing price of exchange rate at the end of the year.

A.2 Revenues and expenses are translated at the average selling and purchasing price of exchange rate at the end of each month.

A.3 Share capital is translated at the exchange rate on the transaction date.

Currency translation differences of foreign financial statements are included under shareholders’ equity.

Hemaraj Land and Development Public Company Limited


B. Other foreign currency transactions occurring during the year are converted into Baht at the rates prevailing on

Hemaraj Land and Development Public Company Limited

the dates of the transactions. Assets and liabilities at the end of the year are converted into Baht at the rates of exchange on that date.

Gain and loss on exchange rate is included in the statements of income.

3.19 Corporate Income Tax

3.20 Earnings per Share

Corporate income tax is recognized on the accrual basis.

Basic earnings per share is computed by dividing net profit attributable to ordinary shareholders for the year by the weighted average number of ordinary shares paid up and issued during the year.

Diluted earnings per share is computed by dividing net income attributable to ordinary shareholders for the year, as adjusted for the effect of dilutive ordinary shares, by the weighted average number of ordinary shares paid up and issued during the year plus the number of dilutive ordinary shares.

4. The Change in Accounting Policy

Beginning the first quarter in year 2007, the Company had changed its accounting policy for its investments in subsidiaries and associates in the separate financial statements from the equity method to the cost method in accordance with the Accounting Standard No.44 “Consolidated and Separate Financial Statements� (revised 2007). The change in accounting

50

policy is recorded retrospectively to the years in which the investments were made, resulted in

-

The investments in subsidiaries and associates as of December 31, 2006 decreased by approximately Baht 2,150.41 million.

-

Retained earnings as of December 31, 2006 and 2005 decreased by approximately Baht 2,178.31 million and Baht

ANNUAL REPORT 2007

2,109.08 million, respectively.

-

Currency translation differences as of December 31, 2006 and 2005 decreased by approximately Baht 27.89 million and Baht 24.92 million, respectively.

-

The net income for the year ended December 31, 2006 decreased by Baht 69.23 million.

-

The basic earnings per share for the year ended December 31, 2006 decreased by Baht 0.01 per share.

-

The diluted earnings per share for the year ended December 31, 2006 decreased by Baht 0.01 per share.

Such change in accounting policy affects only the accounts related to investments in subsidiaries and associates in the Company’s separate financial statements with no effect to the consolidated financial statements of the Company and its subsidiaries.

5. Transactions with Related Parties

The Company has certain transactions with its related parties. Significant inter-company transactions are eliminated from the consolidated financial statements. Such transactions, which have been concluded on the term and the basis agreed between the relevant parties. Certain loans between each party are related to the business jointly operated.

Enterprises that directly or indirectly through one or more intermediaries, control, or under common control with the Company by through same shareholders and co-directors as at December 31, were as follows:


COMPANY NAME

PERCENTAGE OF HOLDING

TYPE OF BUSINESS

RELATIONSHIP

Eastern Industrial Estate Company

Industrial Estate Development

Common shareholders

Limited

Eastern Seaboard Industrial Estate

Industrial Estate Development Industrial Estate Development

2007

2006

Subsidiaries 99.99

99.99

,,

60.00

60.00

,,

99.99

99.99

Eastern Pipeline Services Company Limited Pipe Rack Rental

,,

99.99

99.99

H-International (BVI) Company Limited

Holding Company

,,

100.00

100.00

Hemaraj International Limited

Holding Company

,,

100.00

100.00

,,

99.99

99.99

,,

99.99

99.99

,,

99.99

99.99

and co-directors

(Rayong) Company Limited Hemaraj Eastern Seaboard Industrial Estate Company Limited

Design and Construction Supervision Service

The Park Residence Company Limited

Real Estate Development and

Service Management

Hemaraj Water Company Limited

Water Resources Development

and Management

SME Factory Company Limited

Sale and Lease of Factory

,,

99.99

99.99

H - Phoenix Property Company Limited

Condominium for sales, rent

,,

99.99

-

and services

Common shareholders

39.99

39.99 49.99

Associates Elyo-H Facilities Management Limited

Facilities Management Service

,,

-

GHECO - One Company Limited

Electricity and Power Generation

,,

35.00

-

SIL Industrial Land Company Limited

Industrial Estate development

,,

25.00

25.00

Rayong Industrial Land Company Limited Industrial Estate development

,,

25.00

25.00

Common shareholder

6.40

6.40

15.00

15.00

Related Companies

and co-directors

Eastern Fluid Transport Company Limited Pipe Rack Maintenance Steel Top Company Limited

,,

Steel Manufacturer and Distributor

Apex Development Public Company Limited Real Estate Development,

Co-directors

-

-

Relationship through

-

-

(Formerly known as Sun Tech Group

Agriculture and Scrap Steel

Public Company Limited)

Business

Metal Star Company Limited

Steel Manufacturer and Distributor

,,

-

-

Siam Food Products Public Company Limited Processing Agriculture Producer

directors

Co-investors

-

-

Teo Hong Silom Company Limited

Facilities Management Service

,,

-

-

Cementhai Property (2001) Public

Holding Company

,,

-

-

Cementhai Holding Company Limited

Holding Company

,,

-

-

Glow Energy Public Company Limited

Energy

,,

-

-

Tractebel Asia Company Limited *

Energy

,,

-

-

Related Person

-

Directors

-

-

Company Limited

Hemaraj Land and Development Public Company Limited

Electricity and Power Generation

51

and co-directors

Glow Hemaraj Energy Company Limited

Sriracha Harbour Public Company Limited Port Service and Transportation

ANNUAL REPORT 2007

H-Construction Management and Engineering Company Limited


Hemaraj Land and Development Public Company Limited

As at December 31, balances with related parties, which were shown in the balance sheets, were as follows:

Assets THOUSAND BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

INTERCOMPANY

2006

TERM

Short - term loans and advance to related parties: Subsidiaries: Eastern Industrial Estate Company Limited

-

-

-

Eastern Seaboard Industrial Estate

-

-

128,443

227,573 MLR -0.50%, MLR, MLR +1% 38,915 5%-10% of contract price and

(Rayong) Company Limited

5% of service income received

and dividend

-

-

335,643

1,013,038 MLR -0.50%, MLR, MLR +1% 15,931 MLR -0.50%, MLR, MLR +1%

Hemaraj Eastern Seaboard Industrial Estate Company Limited Eastern Pipeline Services Company Limited

-

-

-

H-Construction and Engineering Company Limited

-

-

2,536

Hemaraj Water Company Limited

-

-

1

SME Factory Company Limited

-

-

36,356

92

2,328

92

16,250

10,552

16,250

794

303

794

11,355

11,355

11,355

- MLR -0.50% 75,032 MLR -0.50%, MLR, MLR +1% 3,011 MLR -0.50%, MLR

Associates: Elyo-H Facilities Management Company Limited

52

SIL Industrial Land Company Limited Rayong Industrial Land Company Limited

2,328 MLR -0.50%, MLR, MLR +1% 10,552 5% of service income received

and MLR -1% 303 5% of service income received

Related company : Sriracha Harbour Public Company Limited*

ANNUAL REPORT 2007

11,355 Rate mutually agreed between both parties

Total

28,491

24,538

531,470

1,398,038

Less Allowance for doubtful debts

(11,355)

(11,355)

(11,355)

(11,355)

Net

17,136

13,183

520,115

1,386,683

* The Company provided the provision for doubtful debt in full amount as the Company’s basis. This company entered into the Business Reorganization Plan under the Bankruptcy Court, and now is under the process of the Business Reorganization Plan. The Company has not yet adjusted the provision for the receivable under the Business Reorganization Plan and will adjust accordingly when obtaining the settlement from it as the Plan.


Balance of assets with related parties and its movement for the year 2007 were as follows:

THOUSAND BAHT

During the year

As of 31

As of 31st

December , 2006

Increase

Decrease

December , 2007

st

Consolidated Short - term loans and advance to related parties: Associates

13,183

7,049

(3,096)

17,136

Related company

11,355

113

(113)

11,355

24,538

7,162

(3,209)

28,491

(11,355)

-

-

(11,355)

13,183

7,162

(3,209)

17,136

502,979

Total Net

The Company Only Short - term loans and advance to related parties:

Subsidiaries

1,373,500

892,667

(1,763,188)

Associates

13,183

7,049

(3,096)

17,136

Related company

11,355

113

(113)

11,355

1,398,038

899,829

(1,766,397)

531,470

Less Allowance for doubtful debts

Total

(11,355)

-

-

(11,355)

1,386,683

899,829

(1,766,397)

520,115

Net

Liabilities

ANNUAL REPORT 2007

Less Allowance for doubtful debts

53

THOUSAND BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

INTERCOMPANY

2006

TERM

Subsidiaries: Hemaraj Water Company Limited

-

-

57,039

Eastern Industrial Estate Company Limited

-

-

5,283

Eastern Seaboard Industrial Estate (Rayong)

-

-

-

-

26,800

-

- MLR – 0.50%, MLR - MLR – 0.50%, MLR 56,018

-

Company Limited Associate: Glow Hemaraj Energy Company Limited

-

Related company : Siam Food Products Public Company Limited

79,904

-

-

79,904

26,800

62,322

56,018

-

-

1,100,407

1,153,196

Total

- Dividend

Long - term loans from related party: Subsidiary: H-International (BVI) Company Limited

-

Hemaraj Land and Development Public Company Limited

Short - term loans and advance from related parties:


Balance of Liabilities with related parties and its movement for the year 2007 were as follows:

Hemaraj Land and Development Public Company Limited

54

THOUSAND BAHT

As of 31

As of 31st

December , 2006

Increase

Decrease

December , 2007

During the year st

Consolidated Short - term loans and advance from related parties

26,800

160,096

(106,992)

79,904

56,018

265,433

(259,129)

62,322

1,153,196

-

(52,789)

1,100,407

The Company Only Short - term loans and advance from related parties: Subsidiaries

Long - term loans from related party: Subsidiary

The significant transactions with related parties for the years ended December 31, were as follows:

MILLION BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

2006

Service income

1.93

2.61

0.92

Interest income

0.97

0.57

65.96

Commission and Management Income Cost of service

ANNUAL REPORT 2007

Interest expenses

12.87

9.97

41.27

10.49

9.07

1.47

-

0.82

5.68

INTERCOMPANY COST POLICY

1.62 Market price 69.97 MLR+1%, 4.50% , MLR and MLR–1.00% 70.15 5% - 10% of contract price and 5% of service income received 1.52 Market price - MLR – 0.50%, 4.50% and 5.25%


Company

400.00 358.00 595.00 100.00 0.08 0.03 17.15 0.25 25.00 0.25 -

50.00 110.00 - 500.00 1,000.00

358.00 1,000.00 100.00 0.08 0.03 17.15 0.25 100.00 37.00 785.00

50.00 - 100.00 500.00 1,000.00

2006

400.00

2007

Paid-up Capital (Million Baht)

39.99 - 35.00 25.00 25.00

99.99 99.99 99.99 99.99 99.99

99.99 99.99 100.00 100.00

60.00

99.99

2007

- - - - - - - - - - - -

21.19 - 34.78 262.89 - 318.86 318.86

60.00 99.99 99.99 100.00 100.00 99.99 99.99 99.99 99.99 -

39.99 49.99 - 25.00 25.00

2007

400.00 214.80 1,080.96 56.34 0.06 0.04 17.15 0.25 75.00 37.00 785.00 2,666.60

20.00 - 35.00 239.75 - 294.75 2,961.35

- - - - - - - - - - -

19.18 53.00 - 262.58 - 334.76 334.76

2007

-

2006

20.00 55.00 - 239.75 - 314.75 1,704.60

17.15 0.25 25.00 0.25 - 1,389.85

675.96 56.34 0.06 0.04

214.80

400.00

2006

Investments (Million Baht) The Company only Consolidated (at Cost)

99.99

2006

Percentage of shares held by the Company (Percent)

As at December 31, the Company’s investments using the equity method were as follows:

Subsidiaries: Common shareholders and co-directors Eastern Industrial Estate Company Limited Eastern Seaboard Industrial Estate (Rayong) Company Limited Hemaraj Eastern Seaboard Industrial Estate Company Limited (1) Eastern Pipeline Services Company Limited (2) H-International (BVI) Company Limited (3) Hemaraj International Limited (4) H-Construction Management and Engineering Company Limited (5) The Park Residence Company Limited Hemaraj Water Company Limited (6) SME Factory Company Limited (7) H – Phoenix Property Company Limited (8) Investments in Subsidiaries Associates: Common shareholders and co-directors Elyo-H Facilities Management Limited Glow Hemaraj Energy Company Limited (9) GHECO – One Company Limited (10) SIL Industrial Land Company Limited (11) Rayong Industrial Land Company Limited (12) Investments in Associates Total Investments Dividend income for the year ended December 31 Subsidiaries presented in the statement of changes in shareholders’ equity Subsidiaries presented in the statement of income Other companies presented in the statement of income Total

Hemaraj Land and Development Public Company Limited

ANNUAL REPORT 2007

55

21.19 - 34.78 251.92 - 307.89 5,212.98

10.54 2.37 108.25 39.58 782.91 4,905.09

1,313.39 98.84 1,096.93 0.03

812.21

640.04

2007

19.18 53.00 - 251.61 - 323.79 3,937.85

7.14 0.75 24.73 0.21 - 3,614.06

665.22 83.69 1,164.80 0.04

923.24

744.24

2006

Net booked value in the portion of investments

0.07 246.68

246.61

(505.03)

- - - - - - 751.64

- - - - - 751.64

- - - -

240.14

511.50

2007

112.41 272.55

160.14

-

160.14

160.14

-

60.14

100.00

2006

Dividend for the year ended December 31


(1) In 2007, the Company had paid the share capital increase to Hemaraj Eastern Seaboard Industrial Estate Company

Hemaraj Land and Development Public Company Limited

Limited in the total amount of Baht 405 million.

(2) 74.99% directly held by the Company and 25% indirectly held by Eastern Industrial Estate Company Limited.

In 2006, the Company and Eastern Industrial Estate Company Limited had paid the share capital increase to Eastern Pipeline Services Company Limited in the total amount of Baht 96.25 million.

(3) H-International (BVI) Company Limited was registered in the British Virgin Islands (US. currency is used for business operation).

(4) Hemaraj International Limited was registered in the Cayman Islands (US. currency is used for business operation). In 2006, the Company obtained the information from the financial statements which were prepared by the subsidiary’s management and were not audited by an auditor. Nevertheless, its total assets and net profit presented in the financial statements were immateriality to the consolidated financial statements.

(5) In 2006, the Company had paid up the existing share capital and the share capital increase to H-Construction and Engineering Company Limited in the total amount of Baht 16.90 million from the registered capital of Baht 20 million.

(6) 74.99% directly held by the Company and 25% indirectly held by Eastern Industrial Estate Company Limited.

In 2007, the Company and Eastern Industrial Estate Company Limited had paid up the existing share capital and the share capital increase to Hemaraj Water Company Limited in the total amount of Baht 75 million.

56

In 2006, the Company had paid up the existing share capital and the share capital increase to Hemaraj Water Company Limited in the total amount of Baht 24.75 million.

(7) In 2007, the Company had paid up the existing share capital and the share capital increase to SME Factory Company Limited in the total amount of Baht 36.75 million.

(8) In 2007, the Company had established H – Phoenix Property Company Limited, which had the initial capital share in

ANNUAL REPORT 2007

the amount of Baht 50 million and had paid the share capital increase to H – Phoenix Property Company Limited, in the total amount of Baht 735 million. The Company paid for capital in the total amount of Baht 785 million from the registered capital of Baht 800 million.

(9) In 2007, the Company had paid the share capital increase to Glow Hemaraj Energy Company Limited in the amount of Baht 52.06 million. On 15 October 2007 Hemaraj has sold all shares of 39.99% held in Glow Hemaraj Energy Company Limited to Glow Energy Public Company Limited resulted loss from sales of investment in the amount of Baht 11.42 million.

In 2006, the Company had paid the share capital increase to Glow Hemaraj Energy Company Limited in the amount of Baht 50 million in respect of share increase to maintain the existing proportion of shareholding.

(10) 35% directly held by the Company in GHECO – One Company Limited.

In 2007, the Company had invested in GHECO – One Company Limited, which had the initial capital share in the amount of Baht 10 million and the Company had paid the share capital increase to GHECO – One Company Limited, in the total amount of Baht 35 million.

(11) In 2005, the Company acquired 25% investment from the shareholders’ equity in the amount of Baht 1,000 million presented in the Proforma Balance Sheet as of April 30, 2005 which was regularly prepared by the management of SIL Industrial Land Company Limited. Later, the Company obtained the reviewed financial statements as of April 30, 2005 reviewed by other auditor which presented the shareholders’ equity in the amount of Baht 915.10 million. The discrepancy of the shareholders’ equity was adjusted to decrease the investment in that company in 2006.

(12) 25% directly held by the Company in SIL Industrial Land Company Limited that has held 99.99% in Rayong Industrial Land Company.


Other long-term investments - related parties, net

THOUSAND BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

2006

Investments in related parties Sriracha Harbour Public Company Limited

75,300

75,300

75,300

75,300

Eastern Fluid Transport Company Limited

1,500

1,500

-

-

76,800

76,800

75,300

75,300

Less Provision for impairment loss on investments

(75,300)

(75,300)

(75,300)

(75,300)

1,500

1,500

-

-

Total

Other Long-term Investments - Related Parties, net

For the purpose of preparation of the statements of cash flows in accordance with the relevant Thai Accounting Standard, as of December 31, cash and cash equivalents consisted of:

THOUSAND BAHT

Cash and deposits at financial institutions

CONSOLIDATED

2007

574,479

THE COMPANY ONLY

2006

2007

2006

1,149,830

288,648

685,450

93

90

16

16

Current investments

- Time deposits

ANNUAL REPORT 2007

6. Cash and Cash Equivalents

57

Less Cash at banks pledged as collateral and deposits

with maturity dates longer than 3 months

(48)

(48)

-

-

574,524

1,149,872

288,664

685,466

Cash and Cash Equivalents

As of December 31, trade account receivables, net consisted of:

THOUSAND BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

2006

Related parties Service receivables

Accrued service income

7,406

7,406

2,054

1,027

Less Allowance for doubtful accounts

(7,405)

(7,405)

-

-

Service receivables, net

1

1

2,054

1,027

Trade Account Receivables - Related Parties, net

1

1

2,054

1,027

Other parties Service receivables

Accrued service income

98,887

102,517

29,323

25,071

Less Allowance for doubtful accounts

(20,786)

(20,045)

(17,722)

(17,154)

78,101

82,472

11,601

7,917

Service receivables, net

Hemaraj Land and Development Public Company Limited

7. Trade Account Receivables, Net


Hemaraj Land and Development Public Company Limited

THOUSAND BAHT

CONSOLIDATED

2007

2006

25,743,375

22,665,684

THE COMPANY ONLY 2007

2006

Real estate sales contracts receivables

Total value of contracts signed

7,760,510

7,523,753

Installments due

20,555,854

18,387,496

4,638,687

4,190,735

Less Installments received

(20,474,278)

(18,380,177)

(4,625,853)

(4,190,446)

Installments receivables, net

81,576

7,319

12,834

289

Trade Account Receivables -Other Parties, net

159,677

89,791

24,435

8,206

As at December 31, unbilled completed work and unearned income comprised:

THOUSAND BAHT

CONSOLIDATED 2006

THE COMPANY ONLY

2007

2007

2006

percentage of completion basis

24,144,971

20,001,802

7,639,690

5,669,546

Less Installments due

(20,555,854)

(18,387,496)

(4,638,687)

(4,190,735)

3,589,117

1,614,306

3,001,003

1,478,811

Unbilled completed work

3,793,106

1,736,416

3,013,341

1,485,488

Unearned income

(203,989)

(122,110)

(12,338)

(6,677)

3,589,117

1,614,306

3,001,003

1,478,811

Accumulated amount recognised as revenue on

ANNUAL REPORT 2007

58

Net

The balance comprises :

Net

For the allowance for doubtful accounts of related party receivables and other parties, which obtain facility services in the industrial estate, are provided and charged by the Company. With the economic crisis in 1997 in Thailand, these companies have encountered with operation problem and the Company provided the provision for doubtful debt in full amount as the Company’s basis. Consequently, these companies entered into the Debt Restructure under CDRAC or Business Reorganization Plan under the Bankruptcy Court. The Company has not yet adjusted the provision for these receivables under the Business Reorganization Plan until obtaining the settlement as the Plan or debt restructure from each receivable.


As of December 31, trade account receivables - other parties, net classified by aging were as follows:

THOUSAND BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

2006

Accrued service income Less than 3 months

78,101

82,472

11,601

7,917

Over 3 months to 6 months

165

20

-

7

516

7

338

7

20,105

20,018

17,384

17,140

98,887

102,517

29,323

25,071

Less Allowance for doubtful accounts

(20,786)

(20,045)

(17,722)

(17,154)

78,101

82,472

11,601

7,917

81,576

7,319

12,834

289

Total

Accrued service income, net

Real estate sale contracts receivables Not yet due

Less than 3 months

-

-

-

-

Over 3 months to 12 months

-

-

-

-

Over 12 months

-

-

-

-

81,576

7,319

12,834

289

159,677

89,791

24,435

8,206

Total real estate sale contracts receivables

Trade Account Receivables - Other Parties, net

ANNUAL REPORT 2007

Over 6 months to 12 months Over 12 months

59

8. Unearned income and INCOME RECEIVED IN ADVANCE

As of December 31, unearned income and income received in advance consisted of: THOUSAND BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

2006

Unearned income Land and condominium sale contracts

(7,767,685)

(7,128,177)

(590,772)

(146,602)

Less Installments received

7,577,898

6,427,002

590,269

134,459

Installments receivables

(189,787)

(701,175)

(503)

(12,143)

Less Deferred income

393,776

823,285

12,841

18,820

Unearned income

203,989

122,110

12,338

6,677

Land sales deposit

6,343

-

6,343

-

Income received in advance – service and rental

Total Unearned Income and Income Received in Advance

30,074

12,121

2,005

2,224

240,406

134,231

20,686

8,901

Hemaraj Land and Development Public Company Limited


Hemaraj Land and Development Public Company Limited

9. Cost of Real Estate Developments, Net

As at December 31, cost of real estate developments, net consisted of:

THOUSAND BAHT

CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

2006

Land cost under developments

6,843,533

6,589,241

1,648,529

1,643,313

Project development costs

11,356,778

9,217,820

3,825,291

2,635,531

Capitalized interest expenses

2,448,632

2,225,654

739,066

680,965

Additional utility costs

7,722

8,875

7,437

8,400

Advance for constructions

78,246

395,486

65,972

386,337

Advance for land purchases

128,500

-

128,500

-

20,863,411

18,437,076

6,414,795

5,354,546

(13,528,343)

(11,115,581)

(4,711,025)

(3,513,233)

Total

Less Accumulated costs transferred to cost of land sales

Accumulated costs transferred to assets for rent

Accumulated costs transferred for debt settlement

Cost of Real Estate Developments, net

(1,181,147)

(1,057,749)

(21,104)

(21,104)

(143,838)

(143,838)

(143,838)

(143,838)

6,010,083

6,119,908

1,538,828

1,676,371

171,495

127,757

58,101

32,422

Capitalised interest expense for the year ended

60

December 31 included in cost of real estate developments

Information of cost of real estate developments of Hemaraj Land and Development Public Company Limited, Eastern Industrial Estate Company Limited, Eastern Seaboard Industrial Estate (Rayong) Company Limited and Hemaraj Eastern

ANNUAL REPORT 2007

Seaboard Industrial Estate Company Limited is as follow:

Valuation Stated in the Financial Statements

As at December 31, 2007 and 2006, cost of real estate developments is stated at the lower of cost and net realisable value for the projects in the same area.

Obligation of Assets

As at December 31, 2007 and 2006, the portion of land in the projects of the Company and the subsidiaries has been mortgaged and delivered as collateral for loans from local financial institutions, other companies and other persons.

10. Other Long-term Investments, Net

THOUSAND BAHT

CONSOLIDATED

THE COMPANY ONLY

2007

2006

2007

2006

(Formerly : Bowin Power Company Limited)

142,500

142,500

142,500

Other company

1,000

1,000

-

-

143,500

143,500

142,500

142,500

Glow IPP Company Limited

Total

142,500

Less Provision for impairment loss on investment

(717)

(717)

-

-

142,783

142,783

142,500

142,500

Other Long-Term Investments, Net

In 2006, Glow IPP Company Limited registered to decrease its share capital by 65,000,000 shares at the par value of Baht 10. The Company received cash from such 3,250,000 shares decreased with the par value of Baht 10, totaling Baht 32,500,000.


12,369

1,338 2,289,053

28,582 49,385 117 78,084

(25,446)

- - - -

Cost of services

179,184

12,410

2,900 16,229

1,769,255

(23,345)

(16,229)

326,866

(5,001)

Depreciations which included in statements of income for the years ended December 31:

65,715

-

10,227

2,142

967,607

1,649

-

656

835,493

129,809

Transfer

Hemaraj Land and Development Public Company Limited

(*) Land and Buildings were transferred from real estate development cost.

Total

117

39,158

Buildings (*)

Building improvements

26,440

1,346,892

15,918

162,955

Land (*)

The Company only

Total

Construction in progress

Pipe rack

8,854

957,107

Buildings (*)

Building improvements

202,058

Land (*)

Consolidated

Ending

Disposal/

Addition

Beginning

As at December 31, 2007 and 2006, assets for rent, net consisted of:

Changes in Cost

11. Assets for Rent, Net

- 70,455 1,011 11,777 - 83,243

- 2,204 6 2,210

- 163,792 3,460 72,625 - 239,877

- 4,279 7 4,286

Beginning Depreciation

6,496

83,243

2007

13

6,483

-

313,746

-

84,402

4,469

224,875

-

Ending

57,903

2006

Consolidated

-

-

-

-

(9,374)

-

-

(2)

(9,372)

-

Transfer

Disposal/

Changes in Accumulated Depreciation

ANNUAL REPORT 2007

61

71,588

104

42,902

28,582

1,975,307

1,338

94,782

7,941

1,544,380

326,866

Ending

2,210

2007

1,330

2006

The Company Only

61,429

110

34,879

26,440

1,107,015

15,918

90,330

5,394

793,315

202,058

Beginning

Net Book Value

(Unit : Thousand Baht)


83,395

20,910

-

-

-

8,465

10,448

-

43,525

47

Property, Plant and Equipment, net

(4,458)

(209,833)

100,506

26,315

33,658

(2,463)

47,359

-

-

-

Transfer

Reserve for loss of possessive right over the land and office buildings **

475,980

Total

Less Reserve for impairment loss of assets *

200,037

-

Potable water production system

Construction in progress

-

6,522

73,641

Reservoir

Raw water pipe

Vehicles

100,563

5,271

Furniture and fixture and equipment

85,414

Building improvements

4,532

Buildings and structure

Land

Consolidated

Addition

Beginning

Disposal/

554,917

11,114

100,506

156,394

-

-

-

2,246

40,180

80,947

3,012

29,931

-

40,258

26,315

30,840

-

1,989

356

1,416

12,300

8,871

757

5,151

-

Beginning Depreciation

(2,463)

-

-

-

-

(2,463)

-

-

-

-

Transfer

Disposal/

184,771

-

1,989

356

3,662

50,095

89,818

3,769

35,082

-

Ending

Changes in Accumulated Depreciation

272,464

(36,956)

(10,166)

319,586

200,037

-

-

4,276

33,383

19,616

2,259

55,483

4,532

Beginning

359,980

-

(10,166)

370,146

11,114

98,517

25,959

36,518

29,548

68,552

1,502

93,857

4,579

Ending

Net Book Value

(Unit : Thousand Baht)

Hemaraj Land and Development Public Company Limited

79,643

158,370

5,271

128,939

4,579

Ending

As at December 31, 2007 and 2006, property, plant and equipment, net consisted of:

Changes in Cost

12. Property, Plant And Equipment, Net

ANNUAL REPORT 2007

62


Selling and administrative expenses

Total Depreciation for the years

Cost of the property, plant and equipment which have been fully depreciated but are still in use

Cost of services

Depreciations which included in statements of income for the years ended December 31:

Property, Plant and Equipment, net

218,729

(1,166)

46,775

(580)

926

69,951

11,997

6,008

3,212

-

-

88,874

-

(12,583)

2,983

-

- 3,148 359 3,674 6,745 401 - 14,327

- 11,328 2,413 45,026 24,414 2,212 - 85,393

Beginning Depreciation

89,755

30,840

20,154

10,686

2007

80,501

22,402

16,829

5,573

2006

99,140

-

2,613

30,579

48,700

2,772

14,476

-

Ending

Consolidated

(580)

-

-

(580)

-

-

-

-

Transfer

Disposal/

Changes in Accumulated Depreciation

118,865

51,606

14,327

13,664

663

2007

-

(724)

119,589

926

3,395

16,196

21,251

440

74,398

2,983

Ending

41,385

10,870

10,350

520

2006

The Company Only

34,174

(36,956)

(724)

71,854

5,845

3,796

15,825

8,632

799

34,021

2,936

Beginning

Net Book Value

(Unit: Thousand Baht)

Hemaraj Land and Development Public Company Limited

Company might not receive the transfer of such possessive right.

** In 2006, reserve for loss of the possessive right over the land and office building in the amount of Baht 36.96 million as the management of the Company considered that the

* Reserve for impairment loss of assets is provided for the ceased construction in progress.

62,648

7,664

-

7,116

4,296

-

43,525

47

Ending

Transfer

Reserve for loss of possessive right over the land and office buildings **

Less Reserve for impairment loss of assets *

157,247

5,845

Total

6,008

Construction in progress

40,239

Vehicles

Raw water pipe

53,658

3,212

Furniture and fixture and equipment

45,349

Building improvements

2,936

Buildings and structure

Land

The Company Only

Addition

Beginning

Disposal/

Changes in Cost

ANNUAL REPORT 2007

63


Hemaraj Land and Development Public Company Limited

13. Leasehold Land and Land Held for Commercial Purposes, Net

64

As at December 31, leasehold land and land held for commercial purposes, net consisted of:

THOUSAND BAHT

Land bank

CONSOLIDATED 2007

2006

THE COMPANY ONLY 2007

2006

10,201

10,201

10,201

10,201

Land cost of projects suspended from developments

1,135,711

1,135,711

1,135,711

1,135,711

Suspended development project costs

268,452

268,034

268,452

268,034

Capitalized interest expenses

556,119

556,119

556,119

556,119

Leasehold land

77,077

77,077

77,077

77,077

2,047,560

2,047,142

2,047,560

2,047,142

Total

Less Accumulated cost of sales

(841,514)

(841,514)

(841,514)

(841,514)

Accumulated costs transferred for debt settlement

(645,413)

(645,413)

(645,413)

(645,413)

Loss on projects evaluation

(234,496)

(234,496)

(234,496)

(234,496)

326,137

325,719

326,137

325,719

Leasehold Land and Land Held for Commercial Purposes, net

Information of leasehold land and land held for commercial purpose is as follows:-

Valuation Stated in the Financial Statements

In 2006, the leasehold land and land held for commercial purposes have been appraised by an independent appraisal company which caused surplus from assets appraisal in 2004. The Company recorded such surplus as “Adjustment of loss on decline in value of real estate development cost” amounting to Baht 44.65 million in statements of income for the year

ANNUAL REPORT 2007

then ended December 31, 2006.

Obligation of Assets

As at December 31, 2007 and 2006, portion of land in the projects of the Company and the subsidiaries has been mortgaged as collateral for loans from local financial institutions.

14. Sinking Fund, Net

As disclosed in the Note 30 to the financial statements, the Company and its subsidiaries had entered into the joint operating agreements with the Industrial Estate Authority of Thailand (“IEAT”). The Company and its subsidiaries are committed to be a provider and to set up a fund (“Sinking Fund”) for major maintenance and replacement of utilities systems and facilities for the customers in the industrial estate. The Company and its subsidiaries had made the payment by cash and by transferring of partial piece of land for the Sinking Fund, and in addition, the Company and its subsidiaries had transferred the withdrawal rights over the Sinking fund to IEAT per the terms and conditions of such agreements. The Company and its subsidiaries have recorded the cash paid and land transferred to IEAT for the fund under Sinking Fund accounts. The amortization period of 20 years is applied on the useful future economic life of Sinking Fund under the joint contract agreements with IEAT.


As at December 31, sinking fund, net consisted of:

THOUSAND BAHT

2007

2006

159,077

150,021

52,405

52,405

Less Accumulated amortization

(88,447)

(84,464)

(28,130)

(26,542)

70,630

65,557

24,275

25,863

Sinking Fund

Sinking Fund, net

CONSOLIDATED

THE COMPANY ONLY 2007

2006

15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

Short-term loans from local financial institutions

As at December 31, 2007 and 2006, the Company had short-term loans from 2 local financial institutions in the amount of Baht 360 million and Baht 380 million, respectively, at maximum interest rate as at December 31, 2007 at 4.60% and 5.875% per annum. (2006: 6.15% and 6.00% per annum)

Bank overdraft

As at December 31, 2007 and 2006, the Company and its subsidiaries have overdraft credit limit from local financial institutions in the amount of Baht 140 million. The interest rate is charged at MOR and MOR+0.50% per annum. Such

ANNUAL REPORT 2007

overdraft is guaranteed by the mortgage portion of land in the projects of real estate development of the Company and its subsidiaries.

16. LONG-TERM LOANS FROM RELATED PARTY

65

As at December 31, 2007, the Company had loans from H-International (BVI) Company Limited, an oversea subsidiary, amounting to USD 22.46 million and Baht 339.31 million (2006 : USD 22.46 million and Baht 339.42 million) which did not

Hemaraj Land and Development Public Company Limited

have the maturity date and the interest charge.


(Million Baht)

Credit period

Total

1,800

1,800

June 2008

June 2004 -

Principal repayment

the first drawdown.

debt must be fully repaid within 4 years since

less than Baht 53,000 per square meter. The

60 % of condominium contract value but not

Repayment when mortgage are released at

Loan condition

End of month

Term

Year 4: MLR–1.50

Year 2-3: MLR-1.75,

Year 1: 3.85,

Interest rate per annum (%)

Interest payment

1,624.39

1,624.39

2007

1,145.40

1,145.40

2006

(Million Baht)

Balances

Hemaraj Land and Development Public Company Limited

amount of Baht 978.15 million.

As at December 31, 2006, the Company had current portion of long - term loan by scheduled transfer in the amount of Baht 167.25 million and other long - term loan in the

A.1

A. Loan from local commercial bank consisted of:

Company Limited

Hemaraj Land and Development Public

Credit line

As at December 31, other long-term loans consisted of:

17. OTHER LONG-TERM LOANS

ANNUAL REPORT 2007

66


(Million Baht)

Credit line

Credit period

Total

354

354

December 2010

December 2006 –

A.1

Total

80

80

December 2012

December 2006 –

A. Loan from local commercial bank consisted of:

Hemaraj Water Company Limited

A.1

A. Loan from local commercial bank consisted of:

Eastern Industrial Estate Company Limited

Principal repayment

will be repaid in the last period.

the contract signed date, and the remaining

each, commencing from the 13th month after

60 months installments, Baht 1.34 million

signed date.

fully repaid within 4 years since the contract

Baht 5,000 per square wah. The debt must be

Term

Year 3 onwards: MLR–0.25

Year 1-2: MLR-0.50,

Year 3 onwards: MLR–0.50

Year 1-2: MLR-1.00,

Interest rate per annum (%)

Interest payment

End of month

End of month

50 % of land contract value but not less than

Repayment when mortgage are released at

Loan condition

Hemaraj Land and Development Public Company Limited

ANNUAL REPORT 2007

67

70.85

70.85

172.35

172.35

2007

-

-

-

-

2006

(Million Baht)

Balances


(Million Baht)

Credit line

Credit period

A.5

A.6

A.7

A.3

A.4

A.2

A.1

86

200

50

121

325

300

320

August 2011

August 2006 -

August 2011

August 2006 -

July 2011

July 2005 -

March 2011

March 2005 -

December 2008

December 2004 -

December 2008

December 2003 -

February 2007

February 2003 -

A. Loan from local commercial banks consisted of:

Company Limited

Eastern Seaboard Industrial Estate (Rayong)

Principal repayment

End of month

End of month

End of month

End of month

End of month

Term

less than Baht 1.1 million per rai

not less than 50% of land selling price, but not

Repayment on the date of mortgage released,

less than Baht 1.25 million per rai.

not less than 50% of land selling price, but not

End of month

Repayment on the date of mortgage released, End of month

be repaid in the last period.

the first drawdown, and the remaining will

each, commencing from the 13th month after

60 months installments, Baht 0.84 million

Baht 6,000 per square meter will be repaid.

of land and buildings is released, minimum

repaid in the last period. In case of mortgage

the first drawdown, and the remaining will be

each, commencing from the 13th month after

60 months installments, Baht 2.02 million

less than Baht 1 million per rai.

not less than 50% of land selling price, but not

Repayment on the date of mortgage released,

not less than Baht 0.28 million per rai.

Repayment on the date of mortgage released,

not less than Baht 0.85 million per rai.

Repayment on the date of mortgage released,

Loan condition

ANNUAL REPORT 2007

68 Year 3-5: MLR-0.50

Year 1-2: MLR-1.00,

Year 3-5: MLR-0.50

Year 1-2: MLR-1.00,

Year 5-6: MLR-1.00

Year 3-4: MLR-1.25,

Year 1-2: MLR-1.75,

12 month fixed deposit +3.75

Year 4 onwards:

Year 1-3: 12 month fixed deposit +2.75,

fixed deposit rate+2.75

MLR-1.00 but not less than 12 month

Year 3 onwards:

Year 1-2: MLR-2.00,

Year 4-5: MLR-1.00

Year 1-3: MLR-2.00,

Year2 onwards: MLR

Year 1: MLR-0.50,

Interest rate per annum (%)

Interest payment

66.92

153.67

30.74

45.98

-

151.06

-

2007

66.92

85.78

40.77

85.97

7.78

151.06

72.95

2006

(Million Baht)

Balances

Hemaraj Land and Development Public Company Limited


A.8

A.9

A.10

A.11

Credit line

255

80

120

63

(Million Baht)

July 2012

July 2007 –

December 2011

December 2006 -

June 2011

June 2006 -

April 2012

April 2006 -

Credit period

Principal repayment

Year 1-2: MLR-1.00,

End of month

commencing from the 15th month after the

not less than Baht 6,000 per square meter.

less than Baht 1 million per rai, construction

period. In case of mortgage released, land not

each, commencing from the month of grace

48 months installments, Baht 5.32 million

first drawdown.

End of month

Year 1: MLR-1.00,

End of month

Quarterly installments, Baht 5 million each,

million per rai.

selling price, but not less than Baht 0.24

Year 3-5: MLR-0.50

Year 1-2: MLR-1.00,

Year 4-5: MLR

Year 3: MLR-0.50,

Year 2: MLR-0.75,

Year 3-5: MLR-0.50

mortgage released, not less than 50% of land

commencing from grace period. In case of

Quarterly installments, Baht 7.5 million each,

per square meter.

per rai, construction not less than Baht 6,000

released, land not less than Baht 0.25 million

repaid in the last period. In case of mortgage

Year 5-6: MLR-0.75

the first drawdown, and the remaining will be

Year 3-4: MLR-1.00,

Year 1-2: MLR-1.50,

Interest rate per annum (%)

Interest payment

End of month

Term

each, commencing from the 13th month after

60 months installments, Baht 1.05 million

Loan condition

Hemaraj Land and Development Public Company Limited

ANNUAL REPORT 2007

69

136.51

55.73

59.81

48.64

2007

-

80.00

74.81

57.04

2006

(Million Baht)

Balances


(Million Baht)

Credit line

Credit period

B.5

B.6

B.8

B.9

Total

B.4

B.7

B.3

B.2

B.1

2,110

7

25

6

10

14

10

30

63

25

Principal repayment

December 2008

January 2003 -

December 2008

January 2003 -

May 2008

November 2007 -

August 2007

August 2002 -

May 2008

November 2007 -

August 2007

August 2002 -

May 2008

November 2007 -

December 2007

Term

Quarterly installment, Baht 0.35 million each.

Quarterly installment, Baht 1.25 million each.

promissory note.

One time payment at the maturity date of the

period.

totally 48 months commencing from grace

Monthly installments, Baht 0.21 million each,

promissory note.

One time payment at the maturity date of the

period.

totally 48 months commencing from grace

Monthly installments, Baht 0.21 million each,

promissory note.

One time payment at the maturity date of the

commencing from January 2006.

End of month

End of month

End of month

End of month

End of month

End of month

End of month

End of month

Quarterly installments, Baht 1.25 million each. End of month

Loan condition

September 2005 - Quarterly installments, Baht 5 million each,

January 2008

January 2003 –

B. Loans from other persons consisted of:

ANNUAL REPORT 2007

70

MLR of Kasikornbank Plc.

MLR of Kasikornbank Plc.

MLR-0.75 of Kasikornbank Plc.

MLR+1.00 of Kasikornbank Plc.

MLR-0.75 of Kasikornbank Plc.

MLR+1.00 of Kasikornbank Plc.

MLR-0.75 of Kasikornbank Plc.

Krungthai Bank Plc.

Bangkok Bank Plc. and

Average MLR-0.50 of Kasikornbank Plc.,

MLR of Kasikornbank Plc.

Interest rate per annum (%)

Interest payment

799.06

-

-

6.00

-

14.00

-

30.00

-

-

2007

830.84

1.40

5.00

6.00

1.68

14.00

1.68

30.00

43.00

5.00

2006

(Million Baht)

Balances

Hemaraj Land and Development Public Company Limited


(Million Baht)

Credit line

Credit period

A.2

245

800

June 2012

June 2007 –

1,845

6,189

Total

Grand total

November 2011

November 2004 - at Baht 0.20 million per rai or 10 installments

commencing from May 2007.

every 6 months, Baht 80 million each,

1,343.88 4,010.53 (1,950.31) (475.65) 1,584.57

425.58

237.76

680.54

2007

Hemaraj Land and Development Public Company Limited

with the loans contracts.

* Current portion of long - term loans by scheduled transfer is estimated from the loans payments to the financial institutions for the land title deed to be transferred in accordance

2,459.94

(233.08)

(150.42)

2,843.44

867.20

440.93

-

426.27

2006

(Million Baht)

Balances

Such other long-term loans are guaranteed by the mortgage of most of land in the real estate development projects of the Company and its subsidiaries.

MLR+1.00

Repayment on the land title deed transfer date End of month

5 years since the contract date.

year 3. The debt must be fully repaid within

Baht 20.42 million each, commencing from

grace period, 12 quarterly installments,

not less than Baht 1 million per rai or 2 years

not less than 50% of sale contract price, but

first drawdown.

must be fully repaid within 5 years since the

not less than Baht 1 million per rai. The debt

not less than 50% of sale contract price, but

MLR-1.00

Interest rate per annum (%)

Repayment on the land title deed transfer date, End of month

Term

Interest payment

MLR-1.00

Principal repayment

Loan condition

Repayment on the land title deed transfer date, End of month

Current portion of long - term loans by scheduled transfer *

Other long-term loans, net

Less Current portion of other long-term loans

800

B.1

December 2010

December 2005 -

B. Loans from other company consisted of:

A.1

A. Loan from local commercial bank consisted of:

Company Limited

Hemaraj Eastern Seaboard Industrial Estate

ANNUAL REPORT 2007

71


Hemaraj Land and Development Public Company Limited

18. GAIN FROM DEBT COMPROMISE

As at December 31, 2005, the Company has recorded the maximum loss reserve in the amount of Baht 242.52 million, which arose from the lawsuit against Thai Asset Management Corporation (TAMC). This lawsuit was the result from the Company entering into security pledged agreement for a related company before the Company being listed in Securities Exchange of Thailand in 1992.

In 2006, the Company has agreed to a debt compromise in order to finalise such lawsuit. The Company will repay the principal amount of Baht 100 million and interest at MLR rate (the rate as of the date TAMC approved the debt compromise at 6.8% per annum). The approximately aggregated amount of Baht 156.10 million will be divided into 2 installments: the first installment of Baht 15 million has been paid at the agreement date; the second one of Baht 141.10 million was settled on September 4, 2006. This resulted in a gain from debt compromise for the Company in the amount of Baht 86.43 million presented under the extraordinary item in the statements of income.

19. SHARE CAPITAL

The Extraordinary General Meeting of Shareholders of Hemaraj Land and Development Public Company Limited no 1/2550 on September 11, 2007 had resolved the decrease of the registered capital by reducing the registered capital from Baht 15,000,000,000 and paid-up capital Baht 9,189,289,495 to registered capital Baht 6,000,000,000 and paid-up capital Baht 3,675,715,798 by reducing the existing par value from Baht 1.00 to Baht 0.40 per share.

72

On September 27, 2007, the Company registered to increase the paid-up capital to be in total Baht 9,313,775,096 after the warrants exercise which was more than earlier approved by the Extraordinary General Meeting of Shareholders no. 1/2007 and after reduction of registered capital, the paid-up capital was Baht 3,725,510,038.40.

The Company had registered the decrease of its share capital with the Ministry of Commerce on November 23, 2007

ANNUAL REPORT 2007

20. WARRANTS

According to the resolutions of the Annual General Meeting of Shareholders dated April 30, 1999, the Company issued 141,531,150 warrants to the existing shareholders and specific investors, at the unit price of Baht 0.1. Total cash received from offer of warrants was in the approximate amount of Baht 14.15 million. The Company registered its warrants with the Stock Exchange of Thailand (“SET”) as listed securities and the warrants were approved by the SET to be listed securities from December 15, 1999 onwards.

The Extraordinary Ordinary Meeting of Shareholders No. 1/2001 of the Company held on December 28, 2001 approved the extension of exercised period to 10 years from the issuing date, which will be ended within September 30, 2009 and for the adjustment of exercised price to Baht 3 per share.

Subsequently, the Board of Directors’ Meeting No. 1/2002 held on February 20, 2002 approved the adjustment to the numbers of the existing warrants with the additional ratio of 2.33333 units per each 1 existing warrant, in accordance with the announcement of the Office of the Securities and Exchange Commission regarding guidelines on the adjustment to the exercise price/exercise ratio of warrants. The warrants after the adjustment were 471,686,471 units with the exercise ratio of 1 ordinary share per each warrant and exercise price of Baht 3 per share.

The Board of Directors’ Meeting No. 7/2003 held on September 15, 2003 had passed the resolution in accordance with the provision for the adjustments of warrant exercise ratio as stipulated by the Prospectus that would be changed from 1:1 to be one warrant exercisable to 1.05918 ordinary shares. The Company did not adjust the exercise price, however the Company brought forward the adjustment to be included in following adjustments of rights. The above adjustments would take immediate effect on the first date of the ordinary shares offering.


Accordingly, the Extra-Ordinary Meeting of Shareholders held on October 16, 2003 had passed the resolution of the adjustments of the Company’s par value, resulting in the exercise ratio changing from 1 : 1.05918 to be one warrant exercisable to 10.5918 ordinary shares at the exercise price of Baht 0.283 per share. According to the SEC’s Notification regarding guideline relating to adjustments of the exercise price/ratio of warrants, it allows the Company to adjust the number of warrants rather than to adjust the exercise ratio. Therefore, the Company chose to adjust the number of warrants which resulting that the number of warrants increased from 427,084,638 to 4,527,831,794. Consequently, the warrants had the same exercise ratio at one warrant exercisable to purchase one ordinary share at Baht 0.283 per share.

As at December 31, 2007 and 2006 there were outstanding 355,178,432 and 672,461,433 units of unexercised warrants, respectively.

21. PREMIUM (DISCOUNT) ON COMMON STOCKS, NET

On April 27, 2007, the Federation of Accounting Professions had issued the Announcement No. 8/2007 regarding the accounting record to compensate the deficit of the public company limited to comply with the accounting standard conceptual framework that defines the conservatism principles, the concepts of capital and capital maintenance for the purpose to maintain the capital in full value and to fairly present the financial statements. On September 11, 2007, the resolutions of the extraordinary general meeting no 1/2007 to process the decrease of the registered share capital and paid up share capital by reducing the existing par value from Baht 1.00 to Baht 0.40 per share. The purpose of the reduction is to use the

ANNUAL REPORT 2007

premium in excess of par value to eliminate the current and future discount on common stock, which had no effect on the Company’s number of shares and book value per share. The Company had recorded the decrease of the capital and shares discount in the amount of Baht 5,588.27 million.

The Company had registered the decrease of its share capital with the Ministry of Commerce on November 23, 2007

73

22. STATUTORY RESERVE AND DIVIDEND

Statutory Reserve

Under the Public Limited Company Act B.E. 2535, the Company is required to set aside as a statutory reserve at least 5% of its net profit after deducting accumulated deficit brought forward (if any) until the reserve reaches 10% of the registered share capital. The statutory reserve is not available for dividend distributions.

As at December 31, 2007 and 2006, the Company had allocated profit amount of Baht 35.95 million and Baht 59.54 million, respectively as a statutory reserve.

Dividend

Dividend paid

Dividend

Dividend

Approved by

(Million Baht)

per share

Payment date

Dividend from the profit of

The 2007 Annual General Meeting

366.53

0.040

May 15, 2007

year 2006

of Shareholders on April 27, 2007

Interim dividend for year 2007

The Board of Directors’ Meeting

280.61

0.030

January 23, 2008

on December 24, 2007

Total dividend paid during

647.14

0.070

2007

year 2007

Hemaraj Land and Development Public Company Limited


Hemaraj Land and Development Public Company Limited

Dividend paid

Dividend

Dividend

Approved by

(Million Baht)

per share

Payment date

240.99

0.035

May 16, 2006

271.01

0.030

October 27, 2006

512.00

0.065

2006 Dividend for the profit of year 2005 The 2006 Annual General Meeting

of Shareholders on April 27, 2006

Interim dividend for year 2006

The Board of Directors’ Meeting

on September 29, 2006

Total dividend paid during year 2006

23. Income from Increase of Salable Area

In 2006, the Company has recorded income since IEAT approved to increase the salable area. The amount was realized as revenue and cost in the past, in the amount of Baht 55.60 million. As the result of this change, the over cost realization in previous accounting period has been adjusted and presented as income in the statements of income.

24. Directors’ Remuneration and Personnel Expenses

ANNUAL REPORT 2007

74

For the years ended December 31, directors’ remuneration consisting of meeting fee and annual compensation were as follows:

MILLION BAHT

2007

2006

Hemaraj Land and Development Public Company Limited

16.67

17.55

Eastern Seaboard Industrial Estate (Rayong) Company Limited

8.75

8.96

25.42

26.51

Total

For the years ended December 31, personnel expenses included in selling and administrative expenses and cost of services in the statements of income were as follows:

MILLION BAHT

2007

2006

Consolidated

220.90

204.78

The Company only

85.75

81.92

25. Provident Fund

The Company and its 5 subsidiaries which are Eastern Industrial Estate Company Limited, Eastern Seaboard Industrial Estate (Rayong) Company Limited, Eastern Pipeline Services Company Limited, H - Construction Management and Engineering Company Limited and H - Phoenix Property Company Limited, jointly established the provident fund under the Provident Fund Act B.E. 2530, named “Hemaraj Provident Fund”, to provide membership for their employees. According to regulations of the fund, member and the Company contributes 4% - 10% of employees’ monthly salaries, depending on the working period. Members are entitled to their whole contributions plus net benefit thereon, and the Company’s contributions plus


benefits thereon at the rates, depending on their working period. The provident fund is managed by Tisco Asset Management Company Limited. During 2007 and 2006, the Company and the above subsidiaries had contributed to provident fund in the total amount of Baht 7.39 million and 6.59 million (The Company Only: Baht 3.36 million and Baht 2.96 million), respectively.

26. Corporate Income Tax

The Company recorded corporate income tax according to the accounting purposes on the basis of a percentage of completion basis for recognition of real estate sales and compute the corporate income tax in compliance with the Revenue Code on the basis of installments due. Corporate income tax as presented in the statements of income is, therefore, complied with matching concept.

Corporate income tax amount on each basis for the years ended December 31, were as follows:

MILLION BAHT CONSOLIDATED

2007

THE COMPANY ONLY

2006

2007

2006

Corporate income tax in compliance with the accounting purposes

Corporate income tax in compliance with the Revenue Code

282.40

275.29

168.97

207.95

119.45

138.99

12.93

69.66

27. Earnings Per Share Computation

Earnings per share computation in the consolidated and the Company’s financial statements for the years ended December

ANNUAL REPORT 2007

75

31, consisted of:

CONSOLIDATED

Weighted average

Net earnings

number of ordinary shares

2007

2006

Thousand Baht

2007

2006

Thousand Baht Thousand Shares Thousand Shares

2007

2006

Baht

Baht

Basic earnings per share Profit from ordinary activities Extraordinary item, net Net profit

1,163,640

1,104,341

-

86,425

1,163,640

1,190,766

9,180,778

7,277,340

265,982

482,155

1,163,640

1,104,341

-

86,425

1,163,640

1,190,766

9,446,760

7,759,495

0.13

0.15

-

0.01

0.13

0.16

0.12

0.14

-

0.01

0.12

0.15

The effect of potential ordinary shares warrants Number of shares that would have been issued without consideration on the average fair value of ordinary shares in excess of the exercise price Diluted earnings per share Net profit attributable to ordinary shareholders in case of convertible bonds being converted and all warrants being exercised before extra ordinary item Extraordinary item, net Net profit

Hemaraj Land and Development Public Company Limited

Earnings per share


Hemaraj Land and Development Public Company Limited

Weighted average

Net earnings

number of ordinary shares

2007

ANNUAL REPORT 2007

2006

Thousand Baht

2007

2006

Thousand Baht Thousand Shares Thousand Shares

Earnings per share 2007

2006

Baht

Baht

Basic earnings per share Profit from ordinary activities Extraordinary item, net Net profit

718,913

1,035,113

-

86,425

718,913

1,121,538

9,180,778

7,277,340

265,982

482,155

718,913

1,035,113

0.08

0.14

-

0.01

0.08

0.15

0.08

0.13

The effect of potential ordinary shares warrants Number of shares that would have been issued without consideration on the average fair value of ordinary shares in excess of the exercise price Diluted earnings per share Net profit attributable to ordinary shareholders in case of convertible bonds being converted and all warrants being exercised before extra ordinary item Extraordinary item, net

76

THE COMPANY ONLY

Net profit

-

86,425

718,913

1,121,538

9,446,760

7,759,495

-

0.01

0.08

0.14


326.14

5,172.62 13,649.27

Total Assets

261.24

1,879.19

Other assets

Property, plant and equipment, net

Assets for rent, net

Leasehold land and land held for commercial purposes, net

6,010.08

Real Estate

Domestic

0.50

51.95 246.81

173.81 3,581.44 11,201.65

13,896.58

235.54

30.64

98.65

- 0.50

98.74

- 359.98

- 106.25

325.72 1,000.77

326.14 1,975.31

-

-

5,225.07

-

6,119.91

-

6,010.08

Others

Real Estate

Total

Holding Company

96.12

-

Others

Domestic

Overseas

2007

MILLION BAHT Overseas

15.99

15.99

-

-

-

-

Holding Company

2006

As of December 31, business segment information in the consolidated balance sheets classified by domestic and overseas business was as follows:

Cost of real estate developments, net

Hemaraj Land and Development Public Company Limited

28. BUSINESS SEGMENT INFORMATION

ANNUAL REPORT 2007

77

11,453.18

3,628.07

272.46

1,107.02

325.72

6,119.91

Total


Hemaraj Land and Development Public Company Limited

-

Gain (loss) on exchange rate

Extraordinary item - Gain from debt compromise

Net profit

Profit (loss) after tax

1,238.70

Income tax expenses

Net profit of minority interest

(69.41) (282.40)

Interest expenses

(0.58) (25.43)

Director remuneration

-

the equity method - associates

Share of profit from investments for using

real estate development cost

Adjustment of loss on decline in value of

25.18

(8.74)

Gain on sales of investment

Reversal of impairment on assets

60.12

1,539.96

Profit (loss) from operations

Other income

5,023.29

-

922.37

1,821.18

122.06

2,157.68

Total Sales and Services income

Income from increase of salable area

Service income

Sales of condominiums

Sales of pre-fabricated factories

Real Estate

Domestic

25.99

-

(2.34)

-

-

-

-

-

-

0.37

27.96

129.01

-

129.01

-

-

-

Others

Overseas

(14.97)

-

-

-

-

-

-

-

-

0.19

(15.16)

-

-

-

-

-

-

Holding Company

2007

1,163.64

-

(86.08)

1,249.72

(282.40)

(71.75)

(25.43)

(0.58)

-

25.18

-

(8.74)

60.68

1,552.76

5,152.30

-

1,051.38

1,821.18

122.06

2,157.68

Total

1,173.11

(275.29)

(39.87)

(26.51)

24.32

44.65

-

(0.53)

9.23

165.49

1,271.62

3,782.78

55.60

838.74

1,719.71

178.32

990.41

Others

5.77

-

(0.01)

-

-

-

-

-

-

1.68

4.10

50.54

-

Overseas

(15.19)

-

-

-

-

-

-

-

-

0.46

(15.65)

-

-

-

-

-

-

Holding Company

2006

50.54

-

-

-

Domestic Real Estate

MILLION BAHT

1,190.77

86.43

(59.35)

1,163.69

(275.29)

(39.88)

(26.51)

24.32

44.65

-

(0.53)

9.23

167.63

1,260.07

3,833.32

55.60

889.28

1,719.71

178.32

990.41

Total

The operation information of the consolidated statements of income, for the years ended December 31, classified by domestic and overseas business were as follows:

Sales of land

ANNUAL REPORT 2007

78


29. PLEDGED ASSETS

As of December 31, 2007, pledged assets were as follows:

Hemaraj Land and Development Public Company Limited

1.

The partial land and attachments have been mortgaged as collateral for loans from local commercial banks and financial institutions and is in the process of withdrawing the pledged assets.

2.

The ordinary shares of Hemaraj Eastern Seaboard Industrial Estate Company Limited, a subsidiary, have been pledged with lenders secured for loans obtained by that subsidiary.

3.

14.25 million ordinary shares of Glow IPP Company Limited have been pledged with the lender secured for loan obtained by that company.

Eastern Industrial Estate Company Limited

The Company’s partial land has been mortgaged as collateral for long-term loans from a local commercial bank.

Eastern Seaboard Industrial Estate (Rayong) Company Limited

1. Time deposit of Baht 0.05 million has been pledged as security for public utility services.

2.

The majority of the Company’s land has been mortgaged as collateral for overdrafts and loans from one commercial bank.

3.

Partial land, mini and micro pre-fabricated factories of the company have been mortgaged as collateral for loans from related persons.

Hemaraj Eastern Seaboard Industrial Estate Company Limited

1.

The Company’s partial land has been mortgaged as collateral for long-term loans from a local commercial bank.

2.

The Company’s partial land title deeds have been pledged with lenders for loan security.

As of December 31, 2007, commitments under agreements were as follows:

The Company and its subsidiaries have participated in the establishment industrial estate with the Industrial Estate Authority of Thailand (“IEAT”) as the joint operation agreements as follows:

1)

Hemaraj Chonburi Industrial Estate in Phase 1 and Phase 2 according to the joint operation agreements dated July 5 and December 29, 1989 respectively. On October 31, 2001, the Company entered into the amendment to such joint operation agreements with IEAT. On March 29, 2005, the Company combined such agreement into one joint operation agreement.

2)

Hemaraj Eastern Industrial Estate (Map Ta Phut) according to the joint operation agreement dated December 27, 1989. On October 31, 2001, the subsidiary entered into the amendment to such joint operation agreements with IEAT. On March 29, 2005, the Subsidiary combined such agreement into one joint operation agreement.

3)

Eastern Seaboard Industrial Estate (Rayong) according to the joint operation agreement No. 1/2539 and 1/2540.

4)

Hemraj Eastern Seaboard Industrial Estate according to the joint operation agreement No. 1/2542 (TS 21).

The major conditions are summarized as follows:

1)

The Company shall provide utilities systems and facilities to the entrepreneurs in the industrial estate with payment of expenses on its participation in the procedures to the IEAT.

79 Hemaraj Land and Development Public Company Limited

30. COMMITMENTS UNDER AGREEMENTS

ANNUAL REPORT 2007


2)

The Company shall not transfer assets, component part and equipment as well as utilities systems and facilities to

Hemaraj Land and Development Public Company Limited

the IEAT.

3)

The Company shall provide a fund for the maintenance and construction of utilities systems and facilities in the industrial estate (“Sinking Fund”).

Hemaraj Land and Development Public Company Limited

1.

The Company acquired 5% investment in the amount of Baht 142.5 million in Glow IPP Company Limited and has to maintain the 5% investment ratio to comply with the conditions with Electricity Generating Authority of Thailand.

2.

The Company has commitment under construction and infrastructure contracts for the Company’s condominium project, with the remaining commitment balance amounting to Baht 221.50 million.

3.

The Company has commitment from entering a repurchase and resale contract in a project according to the land transferred for debt settlement with a financial institution in amount of Baht 257.00 million. The Company has already paid Baht 128.50 million deposits.

4.

The Company has commitment from entering a purchase and sale contract in a project in amount of Baht 328.30 million. The Company has already paid Baht 32.83 million deposits.

5.

In 2007 The Company has entered the partnership agreement to purchase golf member to support the marketing activities of the company with the remaining commitment balance amounting to Baht 80.80 million. Such memberships have to be transferred within 3 years from the contract date.

80

6.

The Company acquired 35% investment in the amount of Baht 35 million in GHECO-One Company Limited. The Company has commitment to pay for capital increase or grant loan to that company in proportion to the shareholders’ participation. Where GHECO-One Company Limited was selected for the negotiation of the Power Purchase Agreement with Electricity Generating Authority of Thailand, there may be some additional limited investment before the Power Purchase Agreement as agreed by the shareholders. In addition to investment made to date, the liability would be

ANNUAL REPORT 2007

to a portion 35% of the bid bond of USD 10 million, which the shareholders could elect to forfeit and discontinue the project.

Eastern Industrial Estate Company Limited

The Company has commitment under construction contracts to construct utilities system of the Company’s project, with the remaining commitment balance amounting to Baht 4.99 million.

Eastern Seaboard Industrial Estate (Rayong) Company Limited

1. The Company has obligations, under a joint-investment agreement with Hemaraj Land and Development Public Company Limited and another company, that the company has to pay commission on sales of land and management fee to Hemaraj Land and Development Public Company Limited based on revenues from sales of land, public utility service providing and lease of factories.

2. The Company has commitment under construction contracts to construct pre-fabricated factories and utilities system, with the remaining commitment balance amounting to Baht 82.26 million.

Hemaraj Eastern Seaboard Industrial Estate Company Limited

The Company has commitment under construction contracts to construct pre-fabricated factories and utilities system, with the remaining commitment balance amounting to Baht 165.50 million.

SME Factory Company Limited

The Company has commitment under construction contracts to construct pre-fabricated factories and utilities system, with the remaining commitment balance amounting to Baht 1.74 million


31. Commitments and Contingent Liabilities

As of December 31, 2007, commitments and contingent liabilities consisted of:

1.

The Company and its subsidiaries have entered into land sale and purchase contracts, which the contract term requires the Company and its subsidiaries to contingently liable to repay deposits and installments in the event that buyers are unable to obtain satisfactory approvals from the Board of Investment and/or the IEAT to set up their operations.

2.

The Company has obligation regarding guarantee of the loan agreement of subsidiaries in the total credit line of Baht 1,644 million.

3.

The Company and its subsidiaries have obligations regarding guarantee of the hire purchase agreements of its related companies in the total credit line of Baht 10.01 million. (The Company Only: Baht 2.24 million)

4.

The Company and its subsidiaries have obligations under condition of the letters of guarantee issued by the banks compliance with the agreement made with the Customs House in the free tax area, the construction of utilities under land sale contract, the construction of utility and power substation, and their performance under the raw water purchase agreement and others in the total amount of Baht 221.51 million. (The Company Only: Baht 22.29 million).

32. The Extraordinary General Meeting of Shareholders Resolution about Debentures

The Extraordinary General Meeting of Shareholders of Hemaraj Land and Development Public Company Limited no 1/2550 on September 11, 2007 had resolved to issue and sale of debentures with the primary details as follows was approved:

Primary Details

Type :

Secured or unsecured debentures with/without trustee.

Denomination

: Thai Baht and/or any other currencies.

Total value

: Up to Baht 6,000,000,000 or in other currency equivalent to it.

Term

: Up to 10 years from the date of issue.

Offering

: Public offering and/or private placement and/or offering to institutional investors in one or several tranches from time to time pursuant to the relevant notifications of the Securities and Exchange Commission.

Early redemption

: The early redemption of debentures is an option for both the debenture holders and the Company (as the issuer) this is subject to the terms and conditions of each offering.

Other details and conditions relating to the issue and offer of debentures, such as type, number of debentures to be offered in each tranche, term, offering method, face value, purpose and use of process, offering price, interest rate, and interest payment shall be determined at the discretion of the Board of Directors.

81 Hemaraj Land and Development Public Company Limited

ANNUAL REPORT 2007

for their performance under the joint operation agreements with the Industrial Estate Authority of Thailand, their


Hemaraj Land and Development Public Company Limited

33. Promotional Privileges

82

The Company and its 3 subsidiaries have been granted promotional certificates under the Investment Promotion Act, B.E. 2520 as follows:

Area/units obtained

Date obtained for promotional

for promotional

Exemption from corporate

Major Privileges Reduction of 50% of

privilege

privilege

income tax (***)

corporate income tax (****)

1,500 Rai

7 years *

5 years *

Hemaraj Land and Development Public

Company Limited

A. Industrial Estate Business

A.1

December 29, 1988

A.2

February 15, 1990

2,000 Rai

7 years *

None

A.3

July 25, 2001

1,282 Rai

7 years **

None

11 Units

7 years

None

626 Rai

5 years *

5 years *

1,850 Rai

8 years *

5 years *

1,240 Rai

8 years

5 years

2,063 Rai

8 years

5 years

1,532 Rai

8 years

5 years

2,466 Rai

8 years

5 years

325 Rai

8 years

5 years

716 Rai

7 years

None

1,020 Rai

8 years

5 years

520 Rai

8 years

5 years

B. Industrial Factory Development Business

B.1

June 21, 2000

Eastern Industrial Estate Company Limited A. Industrial Estate Business

A.1

May 8, 1989

September 23, 1992

A.2

November 27, 2002

(Extension)

Eastern Seaboard Industrial Estate (Rayong)

Company Limited

ANNUAL REPORT 2007

A. Industrial Estate Business

A.1

June 21, 1995

August 9, 1996

A.2

October 27, 1997

July 31, 2000

A.3

July 25, 2001

A.4

December 8, 2004

A.5

October 17, 2007

(Extension)

(Extension)

B. Industrial Factory Development Business

B.1

January 19, 2000

22 Units

8 years

5 years

B.2

June 21, 2000

13 Units

8 years

5 years

B.3

November 29, 2000

12 Units

8 years

5 years

B.4

January 16, 2002

51 Units

8 years

5 years

B.5

March 27, 2002

22 Units

8 years

5 years

B.6

September 7, 2006

6 Units

8 years

5 years

B.7

March 23, 2007

7 Units

8 years

5 years


Area/units obtained

Major Privileges

Date obtained for promotional

for promotional

Exemption from corporate

Reduction of 50% of

privilege

privilege

income tax (***)

corporate income tax (****)

1,407 Rai

8 years

5 years

Hemaraj Eastern Seaboard Industrial Estate

Company Limited

A. Industrial Estate Business

A.1

May 22, 1997

A.2

May 22, 1997

1,375 Rai

8 years

5 years

A.3

May 22, 1997

1,485 Rai

8 years

5 years

A.4

September 26, 1996

1,332 Rai

8 years

5 years

13 Units

8 years

5 years

8 years

5 years

7 years

None

B. Industrial Factory Development Business

B.1

August 14, 2007

ANNUAL REPORT 2007

Hemaraj Water Company Limited A. Utility and Other Services Business

A.1

October 25, 2005

12.27 million

cubic meters

SME Factory Company Limited A. Industrial Factory Development Business

A.1

May 21, 2007

3 Units

*

Major Privilege was expired.

**

Major Privilege still not started because the Company has not earned the revenues yet.

***

Starting from the first revenue recognised date.

****

Starting from the exemption from corporate income tax is expired.

83

For the years ended December 31, domestic revenues were classified into the promoted and the non-promoted businesses

THOUSAND BAHT

BOI

2007

NON-BOI 2006

2007

TOTAL

2006

2007

2006

Consolidated Revenue from sales Lands Industrial factories Condominiums Service income Total

1,613,954.57

811,384.16

88,769.96

134,992.90

- 414,357.85

- 334,080.62

543,726.96 33,292.13

179,024.43 2,157,681.53 43,325.51

122,062.09

990,408.59 178,318.41

1,821,177.93 1,719,705.23 1,821,177.93 1,719,705.23 637,022.79

555,204.08 1,051,380.64

889,284.70

2,117,082.38 1,280,457.68 3,035,219.81 2,497,259.25 5,152,302.19 3,777,716.93

The Company Only Revenue from sales Lands

-

Industrial factories

-

-

Condominiums

-

-

Service income

-

1,024.45

Total

-

11,718.88

148,966.12 -

71,256.48 -

148,966.12 -

71,256.48 11,718.88

1,821,177.93 1,719,705.23 1,821,177.93 1,719,705.23 141,236.23

139,553.60

141,236.23

140,578.05

12,743.33 2,111,380.28 1,930,515.31 2,111,380.28 1,943,258.64

Hemaraj Land and Development Public Company Limited

as follows:


Hemaraj Land and Development Public Company Limited

34. Financial Instruments

84

Risk Management Policy

Exposure to interest rate and currency risk arises in normal course of the Hemaraj Group’s business. These are subject to the risk of market rates changing subsequent to the transaction date.

The Hemaraj Group’s policy on interest rate risk and currency risk hedging is as follows:

A. Maintaining proportions of domestic and foreign borrowings;

B. Borrowing loans at fixed and floating interest rates;

C. Pledging assets as collateral against loans.

The Hemaraj Group has no policy to speculate on or engage in the trading of any off-balance-sheet derivative financial statements.

Fair Value of Financial Instruments

Except as disclosed in Note 3 to the financial statements, fair value of significant financial instruments consists of:

A. Fair value of cash and cash equivalents, deposits for investment, account receivables, bank overdrafts and loans from financial institutions, account payables and accrued expenses are approximately equal to the carrying amount because of short maturity of these instruments.

B. Fair value of short-term investments in available-for-sale securities is equal to the market value.

C. Fair value of short-term loans and advances to related parties, loans to related parties, other loans, short-term loans and advances from related parties, amount due to and loans from related parties could not be determined since the repayment period is not specified.

ANNUAL REPORT 2007

35. Approval of Financial Statements

These financial statements have been approved by the Company’s Board of Directors on February 29, 2008.

36. Subsequent Events

The Board of Directors’ Meeting of Hemaraj Land and Development Public Company Limited No. 1/2008 held on February 29, 2008 recommended payment of a final dividend of another Baht 0.04 per share , including the interim payment of Baht 0.03 per share , the total dividend for 2007 is Baht 0.07 per share to be considered and approved at the Annual General Meeting of Shareholders of the Company.


Shareholding & Organization Structure

Top Ten of Hemaraj Land and Development’s Shareholders as at 29/08/07

Major Shareholders

No. of Shares

% of Total

No.

1

Miss Phenpunnee Horrungruang

966,115,170

10.51

2

CREDIT AGRICOLE (SUISSE) SA, SINGAPORE BRANCH

872,406,389

9.49

3

THAI NVDR Co., Ltd.

675,463,150

7.35

4

Mr. Sumeth Horrungruang

314,623,120

3.42

5

SOMER (U.K.)LTD.

311,094,200

3.39

6

CHASE NOMINEES LIMITED 42

271,639,700

2.96

7

Miss Kanokthip Nuamcharoen

264,152,230

2.87

8

Mrs. Netranapit Phitukvanich-udom

260,369,910

2.83

9

HSBC (SINGAPORE) NOMINEES PTE LTD

347,739,600

2.70

HSBC BANK PLC-CLIENTS GENERAL A/C

245,651,700

2.67

Issued Share

ANNUAL REPORT 2007

10

Shareholders

85 Board of Directors

Nominating Committee

Hemaraj Land and Development Public Company Limited

Audit Committee Good Corporate Governance Committee

Executive Committee

President & CEO

Internal Audit

Executive Vice President

Industrial Customer Development

I.E. Operations

Senior Vice President

I.E. Development

* From 1/2/2007

Information Sys & Services

Water Project Planning

Corporate Planning & Investor Relations

Corporate Marketing

Residential Planning

Residential Customer Development

Residential Development*

Finance

Account

Legal


Hemaraj Land and Development Public Company Limited

General Information

ANNUAL REPORT 2007

86

Name

Address

Nature of Business

3,742

Revenue (Mil. Baht)

2007

%

2006

%

2005

%

2,166.82

41%

2,203.93

54%

1,197.06

40%

Hemaraj Land And Development Public Company Limited Registration No. Bormorjor 0107536000676 Share Capital 15,000,000,000 shares Issued 9,036,927,495 shares

18th Floor, UM Tower, 9 Ramkhamhaeng Rd., Suanluang, Bangkok 10250, Thailand Tel.(662) 719-9555 Fax (662) 719-9546-7 www.hemaraj.com E-mail: invest@hemaraj.com

Subsidiary Companies

Hemaraj International Limited (1)

Scotia Centre, 4th Floor P.O.Box 2804, George Town, Grand Cayman, Cayman Islands

Holding Company

0.03

100

H-International (BVI) Company Limited (2)

Romasco Place, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola British Virgin Islands.

Holding Company

0.08

100

0.19

0%

0.46

0%

0.39

0%

Eastern Industrial Estate Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Industrial Estate Developer

400

99.99

1,309.81

25%

794.75

20%

709.30

24%

Eastern Pipeline Services Company Limited (3)

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Pipe Rack Rental

100

99.99

49.78

1%

46.21

1%

30.00

1%

Eastern Seaboard Industrial Estate (Rayong) Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Industrial Estate Developer

358

60

909.94

17%

993.51

24%

1,066.38

35%

H-Construction Management and Engineering Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Engineering Project and Construction Service

17

99.99

51.33

1%

6.00

0%

0.40

0%

The Park Residence Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Property Development and Marketing and Service Management

0.25

99.99

3.27

0%

1.65

0%

Hemaraj Eastern Seaboard Industrial Estate Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Industrial Estate Developer

1,000

99.99

675.97

13%

8.32

0%

5.45

0%

Hemaraj Water Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Industrial Water Utilities

100

99.99

28.27

1%

SME Factory Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Factory for Sale and Rental

37

99.99

2.06

0%

H-Phoenix Property Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand

Office for Sale and Rental

785

99.99

40.72

1%

Industrial Estate, Utilities and Property Developer

Paid Capital % of (Mil.Baht) Investment

Associated Companies (6) Elyo-H Facilities Management Limited

107/1 Moo 4, Eastern Seaboard Industrial Estate (Rayong), Pluakdeang, Rayong, Thailand

Facilities Management Services

50

40

2.01

0%

2.30

0%

2.14

0%

Rayong Industrial Land Company Limited (4)

1 Siam Cement Road, Bangsue Bangkok 10800, Thailand

Industrial Estate Developer

1,000

25

(0.61)

0%

20.57

1%

3.20

0%

S I L Industrial Land (Saraburi) Company Limited

111 Moo 7, Nong Pla Mao Sub-District Nong Khae District, Saraburi 18140, Thailand

Industrial Estate Developer

500

25

0.92

0%

3.29

0%

(4.22)

0%

Glow Hemaraj Energy Company Limited (5)

195 Empire Tower, 38th Floor Park Wing, South Sathorn Road Bangkok 10120, Thailand

Electricity and Power Generation

-

-

(2.68)

0%

(1.84)

0%

(0.16)

0%

GHECO-One Company Limited

195 Empire Tower, 38th Floor Park Wing, South Sathorn Road Bangkok 10120, Thailand

Electricity and Power Generation

100

35

(0.22)

0%

(1.84)

0%

(0.16)

0%

Eastern Fluid Transport Company Limited

618 Nimom Makkasan Road Makkasan, Ratchthewi Bangkok 10400, Thailand

Management and Maintenance of Pipe Rack

10

15

Glow IPP Company Limited

195 Empire Tower, 38th Floor Park Wing, South Sathorn Road Bangkok 10120, Thailand

Electricity and Power Generation

2,850

5

5,237.58

100%

4,077.31

100%

3,009.78

100%

Related Companies

Total Revenue : Hemaraj Land And Development PLC. and Subsidiaries

Remark 1) Incorporated in the Cayman Islands 2) Incorporated in the Territory of the British Virgin Islands 3) Held 74.99 % directly and 25% indirectly through Eastern Industrial Estate Company Limited 4) Held 25% direct in S I L Industrial Land (Saraburi) Company Limited and also S I L held 99.99% in Rayong Industrial Land Company Limited 5) On 15 October 2007 Hemaraj sold all shares in Glow Hemaraj Energy Company Limited to Glow Energy Public Company Limited 6) In 2007 Share of (profits) losses from investments by using the equity method in Associated Companies was presented at Expenses in Statement of Income


Other References

Share Registrar

Thailand Securities Depository Co., Ltd.

62 The Stock Exchange of Thailand Bldg. 4th Floor

6-7th Floor, Rachadapisek Road, Klongtoey

Bangkok 10110, Thailand

Tel. 0-2359-1200-1

Auditor

A.M.T & Associates

491/27 Silom Plaza, Silom Road, Bangruk

Silom Road, Bangruk

Bangkok 10500, Thailand

Tel. 0-2234-1676, 0-2234-1678

Fax 0-2237-2133

- Mrs. Natsarak Sarochanunjeen CPA No. 4563

Attorney

Allen & Overy (Thailand) Co., Ltd.

130 Sindhorn Building III, 22nd Floor, Wireless Road

Bangkok 10330, Thailand

Tel. 0-2263-7600

Financial Advisor

Per Project

87 Hemaraj Land and Development Public Company Limited

ANNUAL REPORT 2007


รายงานประจํ า ปี 2550 Annual Report 2007

Hemaraj Land and Development Public Company Limited

e-mail : marketing@hemaraj.com, invest@hemaraj.com www.hemaraj.com, www.theparkresidence.co.th Registration No. : BORMORJOR.0107536000676 ทะเบียนเลขที่ : บมจ.0107536000676

Annual Report 2007 Hemaraj Land and Development Public Company Limited

ชัน้ 18 อาคารยูเอ็มทาวเวอร์ เลขที่ 9 ถนนรามคำแหง สวนหลวง กรุงเทพมหานคร 10250 โทรศัพท์ : 66-2719-9555 โทรสาร : 66-2719-9546-7 18th Fl., UM Tower, 9 Ramkhamhaeng Rd., Suangluang, Bangkok 10250 THAILAND Tel : 66-2719-9555 Fax : 66-2719-9546-7

บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน) รายงานประจำปี 2550

บริษทั เหมราชพัฒนาทีด่ นิ จำกัด (มหาชน)

1988 2008 บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน)

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED A-W Cover Ar.Hemeraj'07-ok-1.ind1 1

4/5/08 4:40:36 PM


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