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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ANNUAL REPORT 2007
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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
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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.
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X
/
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/ = 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
/
/
/
/
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6. Mrs. Punnee Worawuthichongsathit
/
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/
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
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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
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